HispanicBusiness

At the current time, limited production emphasizes recovery and sale of high grade copper ore having an average minimum grade of 9% Cu ("Direct Shipping" ore). In addition to increasing the current level of production of direct shipping ore, the Company proposes to undertake metallurgical testing of the high grade mineralized material currently being produced from the active drifts. The purpose of the proposed metallurgical testing is to determine the character of the material, identify expected and possible primary (i.e. Cu) and secondary (i.e. Au and Ag) commodities, as well as potential by-products (Co, Mo, Fe, Rare Earth Elements) available through further processing.

A total of six drifts, each approximately 3 m wide x 4 m high, have been driven on three separate, high grade copper mineralized veins. Three drifts (the "Exploration," "Veta Gruesa Centre" and "Veta Gruesa East" drifts), separated by a minimum of 150 m, were driven at a high angle into, or along, what is believed to be the same well mineralized, copper-bearing vein (Veta Gruesa). The vein has a variable thickness, between 2 and 4 m, of moderate to high grade copper ore. Production on the "Exploration" drift has been temporarily halted as the ore has been found to be an approximately 50:50 mix of sulphide and oxide ore, totaling approximately 3% copper and, therefore, unsuitable to meet the 9% ENAMI minimum for Direct Shipping ore.

Four of the drifts have been developed since February, 2012, as follows:

•The "Veta Gruesa East" vein was developed on the Veta Gruesa vein, located approximately 190 m east of the "Veta Gruesa Centre" Drift. •A drift was developed on what was thought to be the Estaca Vein, but has since been interpreted as a splay off the Estaca (the "False Estaca"). •Two drifts, Descubridora I and II, have been developed on the interpreted western continuation of the Descubridora vein ("Descubridora" drift), both of which have returned very high grade copper mineralized, vein material from initial near surface exposures.

With the exception of the two recently developed Descubridora drifts, the drifts are a minimum of 30 m in length, with the "Veta Gruesa Centre" drift reported to approach 100 m in length. The Descubridora I Drift was exposed in early December, 2012 and consists of very high grade copper ore grading up to 46.58% Cu. Given the high grade nature of this near surface ore, the Descubridora II Drift was developed, exposed beneath sandy overburden at a slightly lower elevation and approximately 40 m farther west than the Descubridora I Drift.

Results from two separate Due Diligence property evaluations (February and December, 2012) are interpreted to indicate there is a significant opportunity to further develop the mineral potential of the Property and increase the current level of production.

Management believes there exists a tremendous opportunity to develop a state of the art processing facility designed to recover a copper concentrate from low grade (i.e. below 3.0%) copper mineralized material. Design of the proposed facility would emphasize production of copper concentrate from ore having a copper grade possibly as low as 0.7% (currently treated as "waste"), with possible additional circuits for secondary and by-product metals, further increasing the economic potential of the Property.

The Property is believed to have excellent potential for identification and subsequent development of additional high grade copper-bearing veins. Exploration in the short term will be undertaken with an emphasis on developing existing and/or newly discovered, well mineralized, high grade copper veins into small scale production operations with which to develop a cash flow for the Company.