NUEVA ESPERANZA PROJECT

Field operations at the Nueva Esperanza project has focused on the completion of resource and geotechnical drilling at Teterita and completion of sterilisation drilling over proposed sites for mine infrastructure (plant, waste dump and tailings dam).

At Arqueros, 50 metallurgical samples were collected from RC chips, diamond drill core and underground workings for continued recovery testwork as part of the de-risking of the project. Samples are now being collected from Teterita to be dispatched for testing.

Resource drilling at Teterita was completed with 4,354 metres drilling (reverse circulation and diamond) in 43 drill holes.

With the completion of Teterita resource modelling, the contained silver has increased by 30% to over 17 million ounces. The total Mineral Resource at Teterita is hosted in 6 million tonnes of ore at an average grade of 89 g/t silver (cut-off 22.5 g/t silver). At a gold/silver price ratio of 45, this is equivalent to about 380,000 ounces of gold (cut-off 0.5 g/t gold).

This resource is based on 2,364 metres of reverse circulation (22 holes) and 1,990 metres of diamond drilling (21 holes) by Laguna Chile, and 8,888 metres in 69 drill holes by the previous operator, for a total of 11,252 metres of drilling in 114 holes, and 7376 samples assayed.

The new Mineral Resource Estimate for Nueva Esperanza, including Teterita, is 75.3 million ounces of silver and 227,000 ounces of gold hosted in almost 30 million tonnes at 0.24 g/t gold and 79 g/t silver. This is equivalent to 1.9 million ounces of gold at a gold/silver price ratio of 45, or 85 million ounces of silver.

Mine planning is currently underway, which will allow the incorporation of Teterita into the feasibility study.

Fieldwork was planned to commence on Chimberos with a Resource and validation drilling program to start in April 2012. Unfortunately, severe winter storms have delayed the program which is now scheduled to commence in September 2012. This program will provide an opportunity to upgrade and potentially expand mineral resources at Chimberos into Measured and Indicated categories. This will allow this deposit to be brought into the commercial development for the combined Nueva Esperanza project.

Feasibility Study

The feasibility study for Nueva Esperanza continues to advance, with the final report for the Arqueros sector due at the end of April 2012. With the inclusion of the Teterita deposit into the feasibility study, the final bankable document is now expected to be delivered in the September quarter 2012.

The new integrated mine plan (Arqueros plus Teterita) being prepared is expected to enhance the project by putting low strip Teterita and Arqueros North into production first with resulting financial benefits of delaying a pre-strip at the larger Arqueros South orebody.

Environmental Licensing & Community Consultation

The application for the environmental mining license is being assessed by the authorities in Chile. Finalisation is expected between September and December 2012.

REGIONAL EXPLORATION – AUSTRALIA

Wynberg (100%)

All approvals were finally received and a drilling program has commenced at Wynberg in the Cloncurry district of Queensland. This drilling campaign is designed to test the potential for depth and strike extensions of a wellmineralised gold and copper system that remains open from limited historical drilling.