Las Margaritas

The Las Margaritas property totals approximately 925 hectares and is located directly adjacent to the El Aguila Project. In 2012, the Company conducted a geochemical stream sediment sampling program on Las Margaritas. A total of 300 samples were collected. Six rock samples were also collected from this property and submitted for fluid inclusion study. The result of this survey indicated a number of areas were appropriate for further investigation by diamond drilling from surface.

The Company completed a series of access roads after consultation with the local community to help facilitate a drill program. In 2012, fifteen surface diamond drill holes totaling 5,002 meters (16,410 feet) were completed on the Las Margaritas property. High-grade mineralization was encountered with drill intercepts including 27.90 grams per tonne gold and 2,600 grams per tonne silver over a core length of 2.85 meters. In 2013, exploration on the property included the property-wide airborne geophysical survey.

The Las Margaritas property is mentioned in the well-known 1905 Mexican government publication by J.R. Southworth entitled The Mines of Mexico as "...the place in which has been found some of the richest ores in Mexico, some of the ores having reached the value of 18,000 ounces (silver) to the ton, and ores are frequently found which assay 4,000 and 5,000 ounces (silver) to the ton."

The Company believes it may be the first to have ever drilled this prospective high-grade property.