Pachapaqui MinePachapaqui MineDeveloped Peruvian Silver – Base Developed Peruvian Silver – Base

Metal MineMetal Mine

OverviewOverview Substantial underground workingsSubstantial underground workings

proven & probable reserves of 8 million ounces silver proven & probable reserves of 8 million ounces silver + lead, zinc, copper+ lead, zinc, copper

43 million oz. silver resource43 million oz. silver resource Little or no exploration conductedLittle or no exploration conducted

many zones remain openmany zones remain open

Fully operational 800 tpd millFully operational 800 tpd mill Good infrastructure – power and road Good infrastructure – power and road Hydro power generation plants on-siteHydro power generation plants on-site

HistoryHistory

Mine operated from 1981 to 1994Mine operated from 1981 to 1994 1.6 million tonnes mined with a grade of:1.6 million tonnes mined with a grade of:

Silver - 9.9 oz/tonne, Lead - 2.1%, Zinc - 3.0%, Copper - Silver - 9.9 oz/tonne, Lead - 2.1%, Zinc - 3.0%, Copper - 0.61%0.61%

Mine reopened in 1997 - production to Mine reopened in 1997 - production to 2004 of 106,000 tonnes averaging:2004 of 106,000 tonnes averaging: Silver - 6.55 oz/tonne, Lead - 7.51%, Zinc - 4.46%, Copper - Silver - 6.55 oz/tonne, Lead - 7.51%, Zinc - 4.46%, Copper -

0.6%0.6%

The Pachapaqui Minesite is located near the town of Pachapaqui, Peru, 240 kms north of

Lima in the province of Bolognesi, department of

Ancash.

Pachapaqui Mine Pachapaqui Mine Location Location MapMap

Pachapaqui Pachapaqui Mining ClaimsMining Claims

48 claim blocks2,537 Hectares

Annual renewalSecure titles

Developed ZonesProven and Probable Reserves

Only two exploration holes on the five zones. Holes drilled at Requiza intersected mineralization 200 metres below workings.

Zone Ag oz/tonne %PB %Zn %Cu Tonnes

Arabia 9.74 7.05 7.73 0.86 237,280

Riqueza 21.04 2.67 4.37 1.61 191,790

Sinchi Rocha 5.54 6.96 7.73 0.90 58,053

San Antonio 6.16 7.23 5.70 1.31 91,729

Mantos 5.02 4.46 7.59 0.72 83,210

Tonnes 662,062

Reserves Metric Tonnes Ag. oz/tonne % Pb % Zn % Cu

Proven 402,111 11.51 5.46 6.38 1.11Probable 259,951 11.62 5.50 6.56 1.15

Total 662,062 11.56 5.47 6.46 1.13

Resources Metric Tonnes Ag. oz/tonne % Pb % Zn % Cu

Measured 3,210,438 4.70 2.19 3.92 0.59Indicated 1,878,014 5.23 2.58 4.54 0.66

Total 5,088,452 4.89 2.44 4.15 0.61

Resources Metric Tonnes Ag. oz/tonne % Pb % Zn % Cu

Inferred 1,613,000 6.70 4.10 6.20 0.70

Summary of Resources at Pachapaqui Mine

Projected Economic ParametersProjected Economic Parameters

NSR US $63.56/tonne

Cash Operating Cost: US $39.58/tonne

Net Profit : US $23.99/tonne

At 1000 tpd the mine will produce approx. 3.0 million ounces of silver per year.

Minimal capex is required to produce at 1,000 tpd

Workers’ Camp (looking north)

Mining CampMining Camp

Mining Camp

Offices and Engineers Camp (looking east)

San Martin & San Martin & San JudasSan Judas

Hydro StationsHydro Stations

Current Capacity = 2.5 MWCurrent Capacity = 2.5 MW supplies power to operations and townsupplies power to operations and town

Main Main AguaytiaAguaytia transmission line crosses the transmission line crosses the propertyproperty

Possibility to upgrade plants to generate Possibility to upgrade plants to generate 12 MW12 MW

Excess power could be sold into main lineExcess power could be sold into main line

Hydro Electric Power GenerationHydro Electric Power Generation

ConcentratorConcentrator

800 tonne/day capacity

Pachapaqui Mining ZonesPachapaqui Mining Zones

Pachapaqui Mining ZonesPachapaqui Mining Zones

Arabia and Requiza zones contain two-Arabia and Requiza zones contain two-thirds of the proven and probable reservesthirds of the proven and probable reserves

Both zones are fully developedBoth zones are fully developed Exploration limited to two holes on Exploration limited to two holes on

Requiza Requiza both holes intersected the structure both holes intersected the structure 200 200

metres below workingsmetres below workings grades similar to proven reserve gradegrades similar to proven reserve grade

Arabia Zone Located in NW limb of Pachapaqui syncline Consists of E-W and NW-SE trending

brecciated veins and larger breccia bodies Veins vary from 1-2 meters in width Breccia bodies up to 25 x 15 x 200 m Average grade 10.71 oz/t Ag, 7.45% Zn,

6.78% Pb & 0.85% Cu.

Arabia Zone Potential Arabia Zone Potential

Arabia Zone Potential Arabia Zone Potential

Historical Ore Development: 3,458 t/vertical m.

200 m depth = 691,600 tonnes at 9.5 oz/tonne = 6,570,200 silver ounces

400 m depth = 1,383,200 tonnes at 9.5 oz/tonne = 13,140,400 silver ounces

Riqueza Vein PotentialRiqueza Vein Potential

4280 level Additional 9,000,000 Silver oz

4000 level Additional 6,500,000 Silver oz

Current 4660 level 4660 level 6,769,745 oz

380 meters

280 meters

Total 22,269,745 Silver oz,

DDH #3-96

DDH #1-96

Riqueza Mining Zone Located in NE flank of Pachapaqui syncline Consists of E-W trending vertically dipping

“fault-fill” `silver rich veins Veins vary from 0.2-2.0 meters in width Veins runs vertically from 4100 m to 4900

m Average grade 22.39 oz/t Ag, 3.94% Zn,

2.33% Pb & 1.64% Cu.

Sinchi RocSinchi RochhaaMining ZoneMining Zone

Sinchi Roca Mining Zone 1-2 meter wide base metal vein

sub parallel to a fault zone associated with a distinct synclinal axis

Cross- faulting has produced two prominent zones or bolsonados

Three Pipe shaped bolsonados 40 * 20 m, 25 * 20 m and 10 * 30 m

Average grade 5.54 oz/t Ag, 7.73% Zn, 6.96% Pb & 0.90% Cu.

Mantos MiningMantos Mining Zone Zone

Four Mantos or bedded type replacement bodies Providencia, Matter, Intermedio and

Esperanza 1-10 meter width

Greater widths potentially allow for bulk mining methods

Traced down dip 280 m Average grade 5.18 oz/t Ag, 7.22% Zn,

4.57% Pb & 0.77% Cu.

Mantos Mining Zone

San Antonio ZonesSan Antonio Zones

Consists of two principle veins Trending 80 0 and 330 0 - Strike 500m San Cipriano vein averages 0.8 m width Average grade of 4.22 oz/t Ag, 9.28 %

Zn, and 9.05 % Pb & 0.17% Cu. Dona Jimena vein varies in width from

1.2-1.8 m Average grade of 7.86 oz/t Ag, 3.68% Zn, 7.28% Pb, & 1.91 % Cu

San Antonio VeinsSan Antonio Veins

Pachapaqui Mine:Pachapaqui Mine: Total Silver Ounces Total Silver Ounces

Silver OuncesProven and Probable 7,653,436Measured and Indicated 24,882,530Sub Total 32,535,966Inferred 10,807,100Total 43,343,066

The Town of PachapaquiThe Town of Pachapaqui

Laboratory & Analytical AnalysisLaboratory & Analytical Analysis

Fines Stock Pile Fines Stock Pile and Ball Milland Ball Mill

Lead Flotation CellsLead Flotation Cells

Zinc Flotation Cells

Recoveries 80 %Pb Grade 52 %

Ag Grade 80-100 oz/t

Recoveries 83 %Zn Grade 54 %Ag Grade 10 oz/t

Recoveries 45%Cu Grade 26%

Ag Grade 300oz/t

Copper Flotation CellsCopper Flotation Cells

800 tpd Mill

National power grid

Requiza Camp

Arabia Deposit

Valuation ParametersValuation Parameters

Public Market MultiplesPublic Market MultiplesMarket Capitalization per ounce (MC/oz) of Market Capitalization per ounce (MC/oz) of

silver resource for development companies or silver resource for development companies or small producers is US$0.75 – US$1.00small producers is US$0.75 – US$1.00

MC/oz for companies with resources under MC/oz for companies with resources under 100 million ounces of silver is US$0.80100 million ounces of silver is US$0.80

Transaction multiplesTransaction multiples Over the last twelve months they have ranged from Over the last twelve months they have ranged from

US$0.50 to US$1.50 per ounce of resourceUS$0.50 to US$1.50 per ounce of resource

Pachapaqui Mine: Operating CostsPachapaqui Mine: Operating Costs

Average Value of Ore $63.56/tonne

Mine Operating Cost: $??/tonneMill Operating Cost: $ ??/tonne

Total Project Cost: $30.69/tonne

Ore Reserve and Mine Dilution = 30%

Mine will produce min 2,600,000 ounces / year Silver

Ken Booth

Brian FlowerPresident and CEO, Director

Chief Financial Officer, Director

Philip Jamieson

Greg PeeblesDirector

Director

Management and Directors

George Babcock

Steve Babcock

Senior Consultant, Peru

Vice President, Operations

Alfonso BrazziniDirector

Pachapaqui MineDeveloped Peruvian Silver – Base

Metal Mine