MINERALIZATION

The El Copal Project Consists Of Several Sub-Parallel Quartz Veins And Breccias Which Intermittently Outcrop Along A Two Km Strike Length In The Northern Concession Block. The Veins Are Mainly Hosted By The Rocks Of The Upper Volcanic Supergroup Of The Sierra Madre Occidental But Mineralization Lies Along The Contact Between The Lower And Upper Volcanic Series Of The Sierra Madre Occidental, Being Hosted By Andesitic Rocks In The Lower Parts And By Rhyolitic Rocks In The Upper Areas Of The Mountain Range.

The El Copal Project is a vein type mineral deposit related to an intermediate sulphidation epithermal system with polymetallic mineralization. It mainly occurs as structurally controlled quartz fissure fillings but also appears as mineralization disseminated in sheared and brecciated zones. Typically mineralized structures appear as Quartz breccia-veins, in most cases averages 2.5-3 meters in width but in places are in excess 5 meters in width, with surface tested lengths equal to or greater than 1.5 kilometers. Vertically, high-grade mineralization has been recognized from the bottom of the El Lambedero Stream, where it crosses the La Libertad Vein (El Nicho Mine), with 450 meters above sea level, up to altitudes of 650 meters above sea level in the open works of the La Libertad Mine on the top of the hill. The mineralization occurs in the form of disseminated sulfides in the breccia, in the quartz and rock clasts and in the cementing material of the breccia, and usually presents one or several thin high-grade mineralized threads of ore (less than 1meter wide) with semi-massive sulfides. The mineralization in the El Copal Project has high values of lead, zinc and silver, with associated gold and copper. The main mining developments are in the La Libertad, La Plomosa, El Palmar, La Belen and La Minita mines. Previous grab and chip sampling from surface outcrops and within the mine workings provided values of up to 1.61% copper, 4.77% lead, 15.92% zinc, 1639 g/ton silver and 6.022 g/ton gold. The largest mining development known to date on the Property is that of the La Libertad Mine. In this zone there is a mineralized veins-system that includes at least three subparallel structures in an area of 800 by 100 meters oriented east-west to WNW-ESE. All these veins include old mining works or showings from small (trench type) to regular size underground mining developments. The La Libertad underground mine includes a 60-meter-long tunnel from the mine portal to the south until reaching the development of a 150-meter-long stope in a WNW-ESE direction along the previously mined structure. The mine workings are open to surface in places estimated to be at 40meter depth from surface. Usually the structure is 2.5 to 3 meters wide but in some places it reaches up to 7 meters wide. Other minor mining workings in the La Libertad Vein System are La Esperanza, El Nicho and El Nicho 2 mines, being La Esperanza about 20 meters below the exploitation level of the La Libertad Structure (level-0), and El Nicho and El Nicho-2 about 150 meters below the same zero level of the old-mining works.

The El Palmar mineralized structure consists of a quartz breccia-vein oriented east-west to WNW-ESE, with at least 1.3 kilometers in length. It presents three important mining developments, from west to east, the La Belen, El Palmar and La Minita mines. El Palmar mine includes as a portal an inclined shaft about 15 meters deep that cuts development works and stopes about 30 meters long made along the strike of the vein. There is a collapsed hauling work made along the vein that possibly came to the surface about 10 meters to the west. The La Belen mine includes a development face of at least 20 meters made to vein strike and almost at the portal there is an inaccessible shaft that leads to a second level of unknown depth and length. La Minita mine has a front with more than 30 m of development made along the vein strike. Close from its portal it has a shaft which gives access to a level of exploration-exploitation that, according to comments from older people in the region, communicates to two more levels but its total development has not been defined because it is inaccessible. There is another collapsed front with the same course as the one mentioned above. The La Plomosa Vein is a single mineralized structure with semi-massive sulphides oriented NE40SW and presents mining development at an inaccessible level. Personal communication with a highly experienced Geologist who visited this site years ago when the mining works were accessible indicates that the mineralization at this mine includes massive sulphides with zinc, lead and copper, which can be corroborated by observing a small dump present outside the portal of the mine. The main characteristic of this vein is that it has a completely different orientation than the other known structures in the project, which implies the existence of a mineralized system with NE-SW orientation in the area which is also visible along a narrow vein at a small level of exploitation in the El Nicho Mine as well as at La Belén Mine The Capomo Alto and Ana Luisa Creek disseminated mineral showings consist of large outcrops with evidence of mineralization in an irregular shape, with sulphide leaching cavities, originating hematite and limonite, hosted by a brecciated andesite the first, and in strongly fractured-sheared rhyolite the second, with silicification and supergene oxidation. They do not present any type of mining works.