Resource

The feasibility study commenced at the end of May 2011 and is progressing steadily, with a decision to mine expected to be made in the fi rst quarter of 2012. The objective is to have this project commence production in 2013. The target is an open-pit mine producing 100,000 to 120,000 gold equivalent ounces per year, using conventional agitation cyanide leaching in tanks.

The conceptual Nueva Esperanza mining complex has four pits: Arqueros, Huantajaya, Chimberos and Teterita. The feasibility study only considers Arqueros, with Chimberos and Teterita yet to be integrated. Huantajaya has not yet been assessed in detail. The fi nal location of mine infrastructure has yet to be confi rmed, and will be subject to geotechnical and environmental assessment.

The feasibility study is currently only considering the Arqueros deposit, with the Chimberos and Teterita deposits to be incorporated following completion of further drilling later this year. However, based on current information, it is likely that Teterita (and potentially Chimberos) will supply the mill feed for the fi rst 2 – 3 years of production given a likely lower strip ratio and the ability to defer the required pre-strip from the Arqueros deposit. Given negligible gold content in these deposits, metal production during this phase will be primarily silver.