SAN GREGORIO MINE GEOLOGY AND DEPOSITS

Veta Sur & Veta A

Summary: The Veta Sur and Veta A deposits are related only in that they are both mineralized shear structures with similar size and geometry hosted in the hanging wall of the main San Gregorio Shear Zone (SGSZ). Both deposits have been an important source of mill feed from F2007 to date. The Veta A pit was completed in Sept, 2008 and mining continues at Veta Sur. To date more than 600Kt @ >2g/t has been mined from the two deposits producing over 50K oz Au.

Geology: Both Veta Sur and Veta A deposits are hosted in oblique, low angle shear structures in the hanging wall of the SGSZ and are called "vetas" due to their vein like appearance. Gold mineralization is hosted in typical diorite to monzonite rocks that are altered from chlorite to sericite adjacent to quartz-carbonate-pyrite +/- galena lodes up to 20m wide. The lodes are deposited along a principal, narrow shear structure or fault that dip moderately to the SE and have either suffered syn-mineral folding or post-mineral faulting..

Resource: Mine Development Associates (MDA) completed resource estimates for Veta A and Veta Sur in July, 2007. The estimated measured and indicated resources for Veta A at that time were 0.51Mt @ 2.07g/t for 33.7Koz au and for Veta sur 0.65Mt @ 1.58g/t for 33Koz Au. Infill and step-out drilling continued on and off through in 2008 and 2009 attempting to find the limits to the deposit. In-house updates of the Resource model have been completed as results were added with the most driving an additional cut-back to the NE of the current pit; Veta Sur (2) scheduled to commence in H2F2009.

Exploration & Development plans: Additional resource definition drilling is underway where required to prove up resources scheduled for mining in H2F2009.