A)GOLD ZONES

Andacollo Zone -   is a 150 to 300 metre wide lens shaped area of multi-directional auriferous limonite-hematite fractures, quartz-sericite-iron oxide veins, stockworks and breccias which occupies the southern 1,200 metres of the 4 kilometre long Andacollo-Atacama-Churque structure zone. There are more than 100 pits, trenches and shallow underground workings along a 150 x 500 metre corridor in the southwest half of the zone. Gold assays from chip samples from these workings range from 0.5 gpt over 1.2 metres to 11.45 gpt over 3.2 metre width. Wallrock samples generally contain greater that 0.3 gpt gold with highs up to 21.37 gpt gold over 1.9 metre width. The average of over 60 vein and wall rock samples is 2.16 gpt gold.

A strong gold-in-soil geochemical anomaly covers the zone. The strongest soil values, peaking at 850 ppb gold, cluster in a 350 x 800 metre core zone encompassing the extensive old workings. his anomaly has two main components, a 100 to 150 metre wide and 800 metre long, 010-degree zone of greater than 100 ppb gold and a 300 x 400 metre triangular zone of greater than 75 ppb gold. The former encompasses and extends the main zone of workings 300 metres to the north. The latter covers an area of few workings but good alteration, diking and fine stockwork veining.

Assuming a gold grade of half the average sample grade i.e. 1.08 gpt, the extensively stockwork veined corridor area, to an average depth of 75 metres, could contain approximately 580,000 ounces of gold. The zone is at least 1,200 metres long hence the upside potential could be in excess of 1 million ounces of gold.

Escondida - Vein System is a 100 to 150 metre wide zone of argillic alteration containing numerous, multi-directional, gold-bearing quartz-iron oxide "veins". The central 15-20 metre wide core zone contains five persistent 1-3 metre wide veins on which there are numerous old near surface workings. The main system trends north-northeast and has been mapped and sampled along 1,000 metres of strike length. At the mid-point the system branches to the Northwest. This branch has been mapped and sampled along 500 metres of strike.

Chip sample assays from old workings in the main system returned gold values ranging from 2.76 gpt over 1.5 metres to 42.1 gpt over 1.7 metres. A 500-metre stretch of workings on the same "vein" in the southern half of the main system averages 12.62 gpt gold over an average width of 1.65 metres. The contiguous 400-metre stretch of the northwest branch averages 7.2 gpt gold over 2.1 metres width. This vein is one of five veins within a 15-metre wide core zone. Assuming the wall rock carries no gold, the average grade of the core vein zone could range from 5.0 to 6.9 gpt. Hence to 150 metres depth the potential resource of the 900 metre stretch of the "vein" sampled in detail could be over 1 million ounces of gold.

The most recent assay returns are from a 200-metre stretch of the main system north of the branch point. Chip sampling of old workings here returned gold values ranging from 1.35 gpt over 3 metres to 8.3 gpt over 1.5 metres width. The system in this area is a multi-directional "vein" stockwork similar to the Andacollo system 400 metres to the west. Continuous chip sampling of outcrop in an old road cut which exposes the west half of the system prior to entering the main area of workings returned a weighted average gold content of 0.81 gpt over 49.5 metres true width. The system has been traced for over 1 kilometre northwards from the Sierra Chanchero boundary fault. At its northern end it appears to merge with the Andacollo-Atacama-Churque structure zone.

Boton de Oro - Vein System is the least well documented section of the former Central Gold Zone and apparently forms its western boundary. Deep workings occur here along 300 metres of one prominent north-westerly trending vein structure. Gold assays from chip sampling of these workings range in value from 1.69 gpt over 1.4 metres to 6.5 gpt over 2.1 metres and average 3.75 gpt over 1.7 metres. Soil geochemical gold anomalies up to 650 ppb suggest several other sub-parallel veins forming a zone possibly 200 metres wide. On the eastern margin of the zone where it merges with the Andacollo zone, prominent workings along 50 metres of a similar striking vein grade from 1.6 gpt gold over 3.1 metres to 18.0 gpt gold over 2 metres width.

Atacama Zone - although close to the northern edge of the Chanchero alteration zone, was only recently discovered while prospecting. The zone is a 50 to 100 wide, 500-metre long area of alteration and structurally controlled fissure veins similar to those in the Escondida Zone. Several of these veins have been extensively trenched and pitted along strike for lengths of 25 to 150 metres. Recent chip sampling of these workings and intervening wall rocks returned gold values for the veins ranging from 7.1 gpt over 1.5 metres to 0.9 gpt over 3.1 metres and for the wall rocks 0.49 gpt over 2.5 metres to 0.53 gpt over 6.6 metres. The zone lies within the Andacollo-Atacama-Churque structural zone approximately 1,300 metres north of the Andacollo zone. More detailed work is required in this zone before its significance can be established.

Cuchara Zone - appears to occur in a splay of the Andacollo-Atacama-Churque structural zone. It lies approximately 300 metres west of the Atacama zone and may be localised by a northwest trending cross structure. Large pits and trenches occur in typical iron oxide rich fissure veins and fault breccia zones over an area of 100 x 250 metres. This zone is also a recent prospecting find. Limited recent sampling has returned gold values from 1.8 gpt over 2 metres to 2.24 gpt over 6.6 metres width.

Fe-Skarn Zone - is currently a 200 - 500 metre wide 3,000+ metre long zone of anatamosing and bifurcating altered and mineralized shear zones and skarn with coincident high soil gold and copper values and IP anomalies encompassing numerous old surface and underground vein workings plus extensive placers. Trenching of one part of this zone has returned gold values up to 2.2 gpt over 42 metres width. Drilling 200 metres along strike from the trench intersected 15 metres of 1.9 gpt gold at 85 metres vertical depth below surface chip sample values averaging 2.7 gpt gold over 13 metres width. This sub-zone can be traced via scattered outcrop and old workings for at least 500 metres in either strike direction from the area of drilling. The zone at large can be traced at least a kilometre to the northeastwhere a 25 metre section of 27 gpt gold has been found, and may merge with the Bella Ester Zone one kilometre to the Southwest. More extensive drilling and trenching is required to evaluate the full potential of this extensive area of mineralization.

Bella Ester Zone - is 200 x 1000 metre area of high soil gold and copper values encompassing old workings on a gold bearing manto horizon grading up to 2.43 gpt over 6 metres. The soil anomaly contains gold values up to 10.2 gpt. Additional surface work and drilling is also planned to test this zone during the next phase of exploration.

Venchuca Zone - is a 100 x 200-metre area altered skarn, old workings and strong gold soil geochemistry lies 300 metres west of the Fe-Skarn zone boundary fault. The main workings are on a sub-parallel fault at its junction with a prominent north-westerly trending cross fault. Preliminary recent chip sampling from the old workings here returned gold values from 1.8 gpt over 4.3 metres to 2.1 gpt over 3 metres width.

Rosario Zone - is a north-easterly trending structure zone at least 1,500 metres long and 50 to 100 metres wide, which to date has only been outlined by limited prospecting and sampling. The current southern end of the zone is crossed by 1996 trench # 1 and grades 2.2 gpt gold over 48 metres width. This section contains a structure zone grading 5.34 gpt gold over 16-metre width. This structure has now been traced to the Northeast into the Rosario Mine area. The Rosario Mine area is approximately 450 metres along strike from the trench area and consists of a 50-metre wide zone of faulting and alteration forming the contact between diorite and hornblende monzonite. Five or six strong hematite-limonite-quartz-carbonate fault veins here have previously been worked by piquineros. Chip sample assays from these workings range from 2.04 gpt gold over 1 metre to 4.63 gpt over 2 metres . The easternmost set of three closely spaced veins has been worked over a strike length of 125 metres and grades 2.5 gpt gold over 6 metres. A further 350 metres along strike to the northeast of the Rosario Mine is another set of old workings in the same structure zone. Assays from this area have similar gold grades up to 2.62 gpt over 6 metres. More detailed work is required in this zone before its significance can be established.

Despreciada Zone - is a system of northerly trending mineralised structures is in part a splay of the Andacollo-Atacama structure zone and cuts the southern nose of the Chanchero alteration system. This 200 x 500-metre area contains strong gold and copper soil anomalies and a series of old workings on quartz-carbonate--iron oxide fissure veins, breccias and stockworks. Chip sample assays from the old workings range in gold grade from 2.0 to 2.7 gpt over 1.3 to 1.7-metre widths. The eastern vein system has been worked along 100 metres of strike. This system appears to correlate with similar trending structures on the north side of the Chanchero alteration zone 700 metres away giving a possible strike length to the zone of 1,500 metres.

Fluorite Breccia Zone - is of a 020-degree trending swarm of feldspar and quartz porphyritic dykes invading coarse andesite agglomerates. The dykes are uniformly altered, extensively fractured and limonite stained. Quartz-carbonate-Fe oxide veins, as at Churque, are common in the dykes and host andesites. The veins are commonly banded but where brecciated also contain pale fluorite. Assays from the breccia veins range from 0.3 to 9.2 gpt gold over 1.3 to 2.1-metre widths. The dyke swarm, associated alteration and veining is 200 to 300 metres wide and 1 kilometre long. This zone is a recent prospecting discovery and is open to expansion in both strike directions.

Cortez Zone - consists of a 300 to 600-metre wide NNE trending zone of quartz prophyritic dykes and altered volcanics marginal to a diorite porphyry intrusion. The dykes and volcanics are highly fractured, quartz veined and clay altered. Within this zone a prominent band of strong clay alteration and one to two metre wide quartz-sulphide breccia veins, 100 to 200 metres wide and at least 1000 metres long returned values of 0.3 to 0.9 gpt gold with 0.6 to 2.7% copper and 7.7 to 22.3 gpt silver. This zone is also a recent prospecting discovery and also remains open to expansion in both strike directions.

Chanchero Zone - is a 1000 x 2000 metre area of partially coincident high gold and copper values, which overlies an equally large area of gold and copper bearing, porphyry style alteration. Assays from old workings and outcrop range from 0.5 to 16.7 gpt. The soil anomaly and known mineralization are included within a larger strong IP anomaly. Several holes were drilled in this zone during the first drill program. Two were lost due to heavy water inflow before reaching their targets. The third, on the north edge of the system, cut disseminated pyrite and trace chalcopyrite in propylitically altered intrusives. There still remains sufficient room in the system to host a deposit of several hundred million tonnes.

Inca Gold Zone - is a 100 to 400 metre wide, 1200 metre long, northerly trending zone of strong argillic alteration and auriferous quartz veining which crosscuts the northeast end of the Chanchero Zone. Extensive vein workings occur throughout the zone. Several have been mined to depths of over 75 metres and strikes of several hundred metres. Gold assays from these veins consistently grade 4 to 7 gpt over widths of 1 to 2 metres. The only trench crossing the zone returned 1.1 gpt over 114 metres and terminated in 2.2 gpt material on the west side. Several trenches across this zone close to the old workings returned 150 metres of almost 1gpt gold and suggest a 100-200m x 400+m open ended area of 1+gpt gold at surface i.e. to a depth of 75 metres possibility for approximately 400,000 oz of gold.

Churque Gold Zone - is a recently discovered, 300-400 metre wide north-south zone of altered monzonite porphyry that has been invaded by later andesite prophyry dykes and extensive quartz-carbonate-iron oxide veins. Assays from the veins range from 1.76 to 4.95 gpt gold over 1.5 to 2.5 metre widths. Samples from the intervening host rocks range from 0.13 to 0.41 gpt gold. The larger (0.5 metre plus veins) are fairly regularly spaced at 2 to 5 metre intervals but between them are numerous smaller veins and stringers. The zone appears to be in part the northern extension of the Inca Zone at its confluence with the north-easterly trending Andacollo-Atacama structure. Upside potential may be similar to this latter zone.

B) COPPER ZONES

Las Lomitas Zone - is a 700 to 1600 x 3000 metre arcuate zone of high copper silver soil values overlying altered andesitic fragmentals on the flanks of a 12 km long dome with a dioritic intrusive core. Numerous oxide Cu workings on stratabound mantos and sub-vertical structure zones are present throughout the zone. Assays from these workings consistently average 0.5 to 2.5% Cu over 2 to 30 m widths. The surface oxide mineralization is partly underlain by a large IP anomaly, which suggests a deeper intrusive related sulphide source. Several holes drilled on the edge of this chargeability anomaly intersected disseminated chalcopyrite and pyrite in propyplitically altered andesites and diorite porphyry dykes. The core of the zone remains to be tested in future phases of exploration.

Cobalt Horizon - is a 100 - 400 x 2500 metre copper-in-soil high throughout which are mineralized outcrops of altered andesite breccia. Assays from the southwestern half of the horizon range from 1 to 4.5% copper, 10 to 220 gpt silver and 0.02 to 0.2% cobalt. Two shallow holes were drilled in the first phase program to test a strong chargeability high at the southwest end of the zone. Extensive disseminated and vein chalcopyrite and pyrite associated with a silicified diorite porphyry sill was intersected over widths of 30 to 50 metres. Two stronger zones of copper mineralization are indicated by the assays, the upper ranges from 7 metres of 0.56% copper plus 10.3 gpt silver to 8 metres of 0.47% copper plus 14.0 gpt silver. The lower (cobalt) zone was intersected in only one hole and graded 0.37%copper, 0.27% cobalt and 14.3 gpt silver. Additional surface work and drilling is required to test the remaining 2.3 kilometres of this zone.

North Contact Zone - is a 100 to 200 metre wide, 1500-metre long copper soil anomaly located at the intersection of the intrusive-volcanic contact and series of strong northwest trending structures. Limited exploitation has taken place in a number of trenches and pits scattered along 400 meters of strike length. Mineralization is exposed on both sides of the pediment cover and could be substantially wider beneath it. Samples from the principle workings on this zone returned average values of 1.7% copper with 7 gpt silver over 3 metres width. Additional detailed surface work followed by drilling is required to fully evaluate this zone.

San Juan - This zone of copper-silver mineralization is located in an area close to the intrusive-volcanic contact along strike to the northeast of the Northern Contact Zone but a higher stratigraphic level. Oxide copper mineralization has been mined here from one large pit in a bedded cherty limestone and limy siltstone sequence. Mineralization is dominantly stratabound within this unit and occurs as disseminations and fracture coatings. Although mined at only one spot, test pits and rusty mineralized outcrop cover an area of at least 0.75 sq. km. Rock chip assays from the pit average 1.5% copper and 44.3 gpt silver over the accessible 6 metres of the 10 metre mined width. This zone to date has only been outlined by prospecting and requires detailed geological, geochemical and geophysical surveys to confirm its significance.

Teresa Zone - this 4 sq kilometre area of oxide copper-silver workings occurs on the axis of the Lomitas anticline six kilometres northeast of the Lomitas Zone. Numerous old workings on multi-directional mineralized structures and mantos occur throughout the zone in massive, epidotised and vesicular andesites. The andesites contain the most extensive workings wherein grades of 2 to 3% copper over 3 to 5 metre widths are found where copper oxides fill the vesicles in the andesites. As with San Juan, this zone to date has only been outlined by prospecting and requires the same detailed follow up surveys.

In conclusion the size significance of the target zones defined to date cannot be overstated. Any one of the gold zones is more than big enough to host a million-ounce deposit. Similarly, the surface extent of the copper-silver zones is more that sufficient to enclose near surface oxide deposits of 10 to 20 million tonnes. In addition, several have the larger potential of underlying sulphide sources of several hundred million tonnes.