The 2,020 hectares Don Roman project, acquired in 2006, comprises of an extensive area of hydrothermal alteration that hosts numerous base and precious metal occurrences along the western part of the Northern Sierra Madre Gold Belt. The property lies 15 km SW of the historically prolific La Reforma Pb-Zn-Ag District that is now the focus of concerted exploration by Peñoles. The concessions contains gold/zinc/lead/silver mineralization.

Acquisition Logic

• There were many old workings and outcrops in the general region.
• Vein #1 - 309 g/t silver, 9% zinc, and 3% lead. #2 - 770 g/t silver, 27% zinc, and 11% lead.
• Knowledge of the area, the richness of the visible veins and the recognition of the structure over substantial length and height resulted in a decision that enough tonnage was available to justify a mill.
• Envisioned a centralized mill with several parallel processing circuits that can be adopted to process multiple sources.
• Mining began in 2009 from a 25m thick zone dipping at approximately 30 degrees.

Value Proposition

• Entered long-term sales contract with Glencore.
• Discovered gold/silver vein just 1.5 km from the mill in Oct. 2009 (San Felipe).
• Outlined San Felipe to 850m length, 400m at depth, open in all directions.
• Channel samples averaged 10.06 g/t gold and 149.85 g/t silver.
• The mill currently has a capacity to process 240 t/d over 2 circuits. Improving recovery rates and enhancing mill capacity to 360 t/d.
• Considering outsourcing mill processing.
• Costs are estimated at less than $55/t with net revenue at $200+/t. Potential to make net profit of $14+ million year 1.