HispanicBusiness

Antofagasta Gold planned exploration

The Company intends to initiate an exploration program covering the Property as soon as possible. In general, exploration will initially focus on the areas with identified north-south epithermal veins that have only been explored at or near surface. The program is designed to initially identify the veins by surface mapping and geophysical surveys (primarily ground magnetic & CSAMT surveys). Once the veins, or potential veins if not outcropping, have been identified diamond drilling will commence. Diamond drilling is anticipated to occur in "fences", where sections are drilled off down to a depth of at least 400 metres below surface on regular spacing.

Terms of the Deal

The Pampas El Penon Property has been divided into two groups of claims, the Worked Claims and the Greenfield Claims, based on the mineral exploration work completed by the Vendor.

The Worked Claims have an aggregate surface area of 4,300 hectares. Within these claims significant work has been performed, including, but not limited to, trenching and diamond drilling.

The Greenfield claims have an aggregate surface area of 14,900 hectares. Within these claims there has been very little work completed.

Pursuant to the Option Agreement entered into between the Company and the Vendor with respect to the 4,300 hectares of Worked Claims, the Company may acquire a 100% interest in the Property by paying to the Vendor, on a per hectare basis, as follows: (i) USD$10 per hectare on signing; (ii) USD$20 per hectare on or before February 11, 2014; (iii) USD$50 per hectare on or before February 11, 2015; (iv) USD$130 per hectare on or before February 11, 2016; and (v) USD$240 per hectare on or before February 11, 2017. The initial payment on signing has been made.

In addition, the Company has committed to incur exploration and development expenditures on the Worked Claims over the option term as follows: (i) USD$150 per hectare by February 11, 2014; (ii) an additional USD$250 per hectare by February 11, 2015; (iii) an additional USD$325 per hectare by February 11, 2016; and (iv) an additional USD$350 per hectare by February 11, 2017. The Vendor shall retain a sliding scale royalty with respect to the precious metals produced from the Pampas El Penon Property.

The Company may reduce the land position by any number of hectares it chooses at its sole discretion during the term of the Option Agreement, thus reducing the size of its Worked Claims property package, future payments and exploration commitments.

In addition, pursuant to the Option Agreement entered into between the Company and the Vendor with respect to the 14,900 hectares of Greenfield Claims, the Company may acquire an 85% interest in the Property by paying to the Vendor, on a per hectare basis, as follows: (i) USD$1 per hectare on signing; (ii) USD$3 per hectare on or before February 11, 2014; (iii) USD$6 per hectare on or before February 11, 2015; (iv) USD$15 per hectare on or before February 11, 2016; and (v) USD$40 per hectare on or before February 11, 2017. The initial payment on signing has been made.

In addition, the Company has committed to incur exploration and development expenditures on the Greenfield Claims over the option term, as follows: (i) USD$10 per hectare by February 11, 2014; (ii) an additional USD$20 per hectare by February 11, 2015; (iii) an additional USD$50 per hectare by February 11, 2016; and (iv) an additional USD$290 per hectare by February 11, 2017. The Vendor shall retain a sliding scale royalty with respect to the precious metals produced from the Pampas El Penon Property.