Cerro Jumil Project | Geology and Discovery of the Cerro Jumil Gold Skarn

Denver Region Exploration Geologists' Society

November 3, 2008

Technical Presentation: Geology and Discovery of the Cerro Jumil Gold Skarn, Morelos, Mexico (Bill Bond and Paul Bartos)

The Cerro Jumil deposit, located 12 km SW of the city of Cuernavaca, represents a new grass roots discovery. The resource estimate contains 642,000 gold-equivalent ounces (measured and indicated) and 442,000 inferred gold-equivalent ounces. The geology consists of an erosional window of Cretaceous carbonate rocks intruded by a multi-phase feldspar porphyry stock.

Approaching the intrusive contact, the limestone typically shows the following progression: 1) recrystalization but retaining the original grey color, commonly with interbeds of fine to medium-grained marble, 2) medium to coarse-grained white marble (locally brecciated), 3) wollastonite and/or tremolite, both +/- garnet, and 4) garnet (+/- pyroxene). Jasperoid and retrograde alteration occur locally within the skarn zone. Within the intrusive, there is pervasive clay alteration of feldspars near the contact that diminishes rapidly deeper into the intrusive. Prograde exoskarn alteration appears to be controlled by pre-mineral faults, fractures, and bedding planes, forming bodies that are generally sub-parallel to the intrusive contact. Gold mineralization closely mimics the distribution of prograde metasomatism. Retrograde alteration, resulting in the development of actinolite tremolite, epidote, calcite, clay, and jasperoid at the expense of the primary skarn minerals, tends to accompany higher grade (> 1g/t Au) values. Our interpretation is of a second, richer retrograde Au event superimposed upon initial lower grade primary mineralization. Subsequent pervasive supergene oxidation has converted all sulphide minerals to oxides; metallurgical recoveries are very good.

At present, there two partially delineated gold skarn zones (West and Southeast Zones) that parallel the intrusive contact along its contacts. A new area connecting these zones, called Cerro Calabasas, has recently been discovered. These zones have variable thicknesses of gold skarn mineralization which range from 3 meters to over 60 meters in width. At a 0.3 g/t Au-eq cut-off, the measured and indicated resource is 23.2 million tonnes, averaging 0.85 g/t Au, 0.6 g/t Ag. Exploration is continuing.