Potoni Grouping

Property Description and Location:

The Potoni Grouping is located to the west of the Princesa grouping and is composed of 8 mining concessions belonging to Solex Del Peru (5 claims) and Alpaca Exploration (3 claims). Very little information is known about these concessions and none of them has been the subject of a recent and modern exploration program. They have been acquired in 2010 following some regional interpretation outlining a new rich and fertile Pb-Zn+/-Ag metallogenical belt known as the Pilunani-Princesa Belt.

Accessibility, Climate, Local Resources, Infrastructure and Physiography:

Access roads include the Transoceanic Highway which connects Brazil to the Pacific Ocean and a series of well maintained paved and dirt roads which connect Potoni, the closest village from the property, to Juliaca, one of the most important midsized cities of the southern part of Peru. Travel time is estimated to 3 hours. Juliaca offers all services including a regional airport that services the Lima-Juliaca route. Local manpower is available nearby but is not trained for modern exploration and mining techniques. Qualified personnel, heavy equipment and contractors for completing project exploration and development are available out of Juliaca.

The morphology of the region is dominated by the Peruvian altiplano sitting approximately at an altitude of 4,200 metres above sea level. The altiplano is surrounded by gently sloping, poorly vegetated mountains and moderate incised valleys where elevations range from 4,275 to 4,500 masl. The slopes of the mountains are naturally covered by small brush and grass which constitute natural pasture for live-stock farming.

The region is characterized by a dry and cold season occurring between May to October where temperatures below 0˚C are registered at night, while from November to April, the climate is warmer with frequent rain and/or snow falls.

History:

The Potoni Project hosts seven polymetallic showings of which some have been subjected to artisanal mining in the 1950-60 years. The company is currently compiling all available geological data in order to launch a comprehensive exploration program this fall.

Here are some extracts of the old data that is currently under compilation:

Quenari showing:

Sampling over a mineralized limestone covering 1200 m X 800 m:

  • 1m X 1m panel sample: 7.32% Zn & 2.42% Pb;

  • 2m X 2m panel sample: 26.5 ppm Ag, 4.31% Zn & 4.58% Pb;

  • Composite chip across 5 m: 18.8% Zn & 0.71% Pb;

  • 1m X 1m panel sample: 90.6 ppm Ag, 1.78% Zn & 7.4% Pb;

  • 4m long tunnel sample: 14.6 ppm Ag, 6.18% Zn & 1.03% Pb;

Parcuyo showing:

Mineralized diatreme

  • Composite from outcrop: 34.4% Zn & 5.33% Pb;

  • Composite chip from old trenches: 28.1% Zn & 18.85% Pb; 16.05% Zn & 12.6% Pb; 13.5% Zn & 9.14% Pb; 15.1% Zn & 7.05% Pb; 14.35% Zn & 9.82% Pb.

  • Chip Sample taken in 2010 by Vachon and Hirtz: 8.54% Zn & 11.95% Pb (Trench), 24.07% Zn 9.43% Pb (outcrop);

  • Chip samples taken from shear zone 800 m south of mineralized zone in diatreme: 2.48% Zn & 1.48 Pb, 4.37% Cu & 0.8 % Mo, 0.63% Zn & 8.98% Cu

Los Tres Aventuros showing:

Chip from mineralized veins

  • Vein A: 35.1 oz/t Ag, 1.82% Cu & 23.41% Pb over 0.86 m true width in a drift at 4880 masl;

  • Vein B: 4.1 oz/t Ag & 1% Pb over 0.90 m true width;

  • 1973 Banco Minero del Peru samples: 1.4 oz/t Ag, 8.80% Pb, 0.12% Cu; 14.5 oz/t Ag, 8.55% Pb & 4.8% Cu; 61.2 oz/t Ag, 28.8% Pb & 0.88% Cu; 29.1 oz/t Ag, 31.1% Pb & 0.16% Cu; 7.6 oz/t Ag, 11.95% Pb & 3.4% Cu

Geological Setting:

Regionally, the rocks surrounding the property are part of the eastern cordillera geological region of Peru which is mainly comprised of rocks ranging from the Paleozoic to Tertiary age including recent sediments

Mineralization:

No details yet

SAE-Solex Exploration:

No work has been done yet on these claims. The company is actually compiling all geological data and will be ready to launch its exploration program sometimes in September 2011. The program will consist of regional and detailed mapping of the showing area, extensive sampling, Induced Polarization survey and drilling will happen most likely in the first quarter of 2012.

Old trench area of the Parcuyo concession

Mineralized diatreme at Parcuyo (red color part)