ARQUEROS

Laguna re-established the Arqueros exploration camp and
commenced underground diamond drilling in December 2010,
and surface reverse circulation drilling in February 2011.

The objective of the drilling is to lift the remaining Inferred
Resource into Indicated category as well as expanding the
resource base of the project, in preparation for the
commencement of a Feasibility Study.

The underground drilling programme comprises a 2,000
metre diamond drilling programme which is testing the goldrich
structures of the Arqueros mineralisation to increase the
resource base as well as improve quality control on historical
drilling (100,000 metres) through parallel drilling of some well
-constrained historical holes. At the end of the quarter, 1200
metres had been completed in 15 holes.

A surface programme of 3,000 metres of reverse circulation
drilling began mid-February, with the same objectives, and was
completed by mid-March: 3,019 metres was drilled in 33 holes.

Assay results from the two programmes will be compiled as
they are received from the laboratory, and are expected in the
June quarter.

Surface diamond drilling for a geotechnical study of the open
pit is in progress with 700 metres drilled in three holes.

Also in the quarter, the first part of the four-seasonal base line
study of an Environmental Impact Assessment for an open pit
mine and processing facility was completed by an
independent environmental group with broad experience of
mining projects in the Maricunga district.

Other activities in progress included bulk density studies,
metallurgical testwork, site infrastructure and water studies
and refinement of the resource model for open pit
development.

Scoping work for a feasibility study is well advanced.