Geological Resources

In March 2008, independent consultants NCL Brasil Ltda updated the geological resource and ore reserve estimate for the Palito Operations. NCL Brasil Ltda issued a further report in December 2010 in connection with the listing of the ompany’s shares on the Toronto Stock Exchange which confirmed that as of March 2008, the Comany had Canadian Securities Administrators National Instrument 43-101 (“NI 43-101”) compliant measured and indicated mineral resources of 224,272 ounces (gold equivalent) and inferred mineral resources of 443,965 ounces (gold equivalent) after which time some 22,528 ounces (gold equivalent) were produced from a combination of underground and near surface oxides of which the latter did not form part of the resource calculation.

Resources Tonnage Gold g/t Copper % Contained Gold ounces Contained Gold Equivalent Ounces(b)
Measured 97,448 9.51 0.26 29,793 32,045
Indicated 753,745 7.29 0.23 176,673 192,228
TOTAL Measured + Indicated 851,193 7.54 0.23 206,466 224,272
Total Inferred Resources 2,087,741 5.85 0.27 392,817 443,956

a. Mineral resources are reported at a cut-off grade of 1.0 g/t
b. Equivalent gold is calculated using an average long-term gold price of US$700 per ounce, a long-term copper price of US$2.75 per pound, average metallurgical recovery of 90.3% for gold and 93.9% for copper