Location and Claims

The Oteros property consists of three claims totaling 1,130 hectares in the southeastern part of the Uruachic camp. It is subject to the option agreement with Fresnillo PLC.

Oteros Claim Map

Geology

The Oteros property is underlain by altered volcanic rocks from the basal section of the Lower Volcanics, with some intrusive bodies as well as some schists and sedimentary rocks of underlying Paleozoic sequence.

Exploration Program

Initial exploration efforts including geological mapping, geochemistry and an Induced Polarization geophysical survey, outlined two drill target areas at Oteros/Esperanza. The first area is about 350 metres long by 150 metres wide and is located on the southeast quadrant of the Oteros claim. The second area is significantly larger and is located west of Oteros on the Bufalo claim.

The southeast target, or River Zone has a subtle geophysical response but has excellent geochemistry. Outcrop sampling in this area has returned up to 3,076 g/t silver (99 ounces!) with 3 g/t gold. Soil samples returned up to 91.8 g/t silver. This target lies very close to the existing road across Oteros. An old small shaft, about 14 metres deep, lies a few hundred metres northwest of this very high silver target.

The second Oteros target is about 700 by 500 metres, is open in two directions and it has never been drilled. This zone, called the Red Mountain Zone due to its distinctive colour, has a strong IP anomaly and has outcrop rock samples with much higher gold/silver ratios than those found at the River Zone. Values of 7.49 g/t gold with 40 g/t silver and 5.8 g/t gold with 109 g/t silver come from opposite ends of this zone. Mineralization is related to steeply dipping structures, quartz veins and lenses, and contact between sandstone/siltstone and dacitic intrusive rock. Multiple rock samples collected over an area of approximately 200m by 500m confirm the presence of widely spread mineralization. Several samples returned multi gram gold assays. In the central part of the Red Mountain Zone, a high chargeability zone is coincident with the target area. This very attractive target lies about 1000 metres west of the Oteros road and will be drill tested.

Drilling Results

Only the River Zone target on Oteros has been drilled. Preliminary drilling of this target returned some encouraging results but indicated limited depth potential.

The most significant intersections from the River Zone are summarized below.

Hole ID

Width (m)

Silver (g/t)

OT-02-2

7.20

14.78

OT-02-6

27.55

33.23

OT-02-8

6.40

27.95

OT-02-9

12.20

48.87

OT-02-11

8.90

10.53

OT-02-14

5.55

47.64

The Oteros property lies just 8.5 kilometres west of the new world class gold discovery at Orisyvo and is situated at the approximately the same topographic level as the mineralized zone at Orisyvo. These new developments and models require a review and re-interpretation of the past results at the River Zone as well as the Red Mountain Zone, which has yet to be drilled.