nwt_2007

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2007 EXPLORATION RESULTS FOR THE LOS COCHIS BULK- TON SILVER-ZINC PROSPECT, and 2008 EXPLORATION BUDGET, “PICACHOS” PROPERTY, SAN DIMAS, DURANGO, MEXICO

Reverse circulation drill on Hole 8 and D6N tractor preparing site for Hole 9

by M. Robinson, MASc., P.Eng

Lic. # 23559, APEGBC. for

NWT URANIUM CORP. (NWT) and

YAMANA Gold Inc. (YRI)

May 6, 2008

PICACHOS 2007 TECHNICAL REPORT

NORTHWEST MINERAL MEXICO S.A. DE C.V.

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1.0 SUMMARY ..................................................................................................................... 4

2.0 INTRODUCTION AND TERMS OF REFERENCE ............................................................ 6

3.0 DISCLAIMER .................................................................................................................. 6

4.0 PROPERTY DESCRIPTION AND LOCATION ................................................................ 6

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ................................................................................................................. 9

6.0 HISTORY ....................................................................................................................... 9

7.0 GEOLOGICAL SETTING ............................................................................................... 11

7.1 REGIONAL GEOLOGY ......................................................................................................................................... 11 7.2 GEOLOGY OF THE PICACHOS PROPERTY ....................................................................................................... 13 7.3 LOS COCHIS ........................................................................................................................................................ 14

Rhyolite Tuff (Unit 10BFX) ............................................................................................................................. 14 Andesitic flows or dikes (Unit 11C) ............................................................................................................. 14 Andesitic wackes (Unit 1C) ............................................................................................................................ 15 Quartz feldspar porphyritic monzonite dikes (Unit 21) ...................................................................... 15

8.0 DEPOSIT TYPES--INTERMEDIATE SULFIDATION EPITHERMAL AG-AU DEPOSITS . 16

9.0 MINERALIZATION ...................................................................................................... 17

9.1 LOS COCHIS ......................................................................................................................................................... 18 9.2 EL PINO ................................................................................................................................................................. 20 9.3 GUADALUPE ......................................................................................................................................................... 23

10.0 EXPLORATION .......................................................................................................... 25

10.1 SOIL GEOCHEMISTRY ....................................................................................................................................... 25 10.2 3-D IP, RESISTIVITY AND MAGNETIC SURVEY ............................................................................................. 27

11.0 REVERSE CIRCULATION DRILLING .......................................................................... 30

11.1 SITE PREPARATION AND MOBILIZATION ...................................................................................................... 30 11.2 RC DRILLING RESULTS ..................................................................................................................................... 31

11.2.1 Calasancio (Section 18000E) ............................................................................................................ 33 11.2.2. Calerita (Section 18100 E) ............................................................................................................... 34 11.2.3 La Tolva (Section 18200E) ................................................................................................................ 36 11.2.4 Reyes (Section 18300E) ..................................................................................................................... 37 11.2.5 Hole 13 (Section UTM 419 390E) ................................................................................................. 38 11.2.6 El Fresno (Section 18400E) .............................................................................................................. 39 11.2.7 Canuto (Section 18500E) ................................................................................................................. 40 11.2.8 Andres (Between Sections 18900 E and 18800E) ................................................................... 41

SAMPLING METHOD AND APPROACH............................................................................ 43

12.1 SOIL SAMPLES .................................................................................................................................................... 43 12.2 SURFACE AND UNDERGROUND ROCK SAMPLES .......................................................................................... 43 12.3 DRY RC DRILLING ............................................................................................................................................. 44



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12.4 WET RC DRILLING ........................................................................................................................................... 44

13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY ............................................... 44

14.0 DATA VERIFICATION ............................................................................................... 45

15.0 ADJACENT (INTERNAL) PROPERTIES ...................................................................... 45

16.0 MINERAL PROCESSING AND METALLURGICAL TESTING ....................................... 45

17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES .................................... 45

18.0 OTHER RELEVANT DATA AND INFORMATION ...................................................... 45

19.0 INTERPRETATION AND CONCLUSIONS ................................................................. 45

20.0 RECOMMENDATIONS .............................................................................................. 47

21.0 REFERENCES .............................................................................................................. 59

LIST OF FIGURES Fig. 4.1 Map showing the location of the Picachos Property. ........................................................................... 7 Fig. 4.2 Map of the Picachos Property Concessions. ........................................................................................... 8 Fig. 7.1 Regional Geology of the Western SMO province. ............................................................................ 12 Fig. 7.2. Stratigraphy of two siliceous volcanic centers in the Mexican Ignimbrite Belt. ....................... 13 Fig. 7.3. Surface geological map of the Picachos Property. ........................................................................... 14 Fig. 7.4 Photomicrograph of least-altered rhyolite tuff ................................................................................... 15 Fig. 7. 5. Photomicrograph of andesitic flow. ...................................................................................................... 15 Fig. 7.6 Photomicrograph of Unit 1C. .................................................................................................................... 15 Fig. 7.7 Photomicrograph of quartz-feldspar porphyritic monzonite dike.. ............................................ 15 Fig. 9.1. Map of Los Cochis ....................................................................................................................................... 19 Fig. 9.2 El Fresno.. ......................................................................................................................................................... 20 Fig. 9.3. La Chivas. ........................................................................................................................................................ 20 Fig. 9.4 Propylitic altered andesite ......................................................................................................................... 20 Fig. 9.5 Photo of roughly flat-lying sphalerite manto ....................................................................................... 20 Fig. 9.6 Catalina showing of the El Pino Vein. ..................................................................................................... 21 Fig. 9.7.Upper Stope. .................................................................................................................................................. 21 Fig. 9.8. Prepared drill pads that were not drilled in 2003. ........................................................................... 21 Fig. 9.9 Photo of drill core from Hole Pino 2.. .................................................................................................... 21 Fig 9.11 Cross section of El Pino showing Diamond drill Holes 1 and 2. ................................................... 23 Fig. 10.1. Map of silver geochemistry in soils for the Picachos Property.. ................................................. 26 Fig. 10.3 Surface exposure of the lithocap that causes the strong IP response.. .................................... 28 Fig. 10.4 Photomicrograph of lithocap ................................................................................................................. 28 Fig.11.1. Photo of D6N tractor preparing Site #10 ......................................................................................... 30 Fig.11.2 Mobilization of Layne Drilling’s tire-mounted “buggy style” reverse circulation drill. ......... 30 Fig. 11.3. Level plan of reverse circulation drill holes. ................................................................................... 31 Fig. 11.4. Cross-section of COCH18 (Section 18000 E). ................................................................................ 34 Fig. 11.5 Calerita: Section 18100 E, looking northwest. ................................................................................. 36 Fig. 11.6. Section 18200, La Tolva. ........................................................................................................................ 37



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Fig. 11.7 Section 18300, Reyes. ............................................................................................................................... 38 Fig.11.8. Microphotograph of sample 30795 ..................................................................................................... 38 Fig.11.9. Microphotograph of sample 30795. .................................................................................................... 38 Fig. 11.10 Section 419 390 E.. .................................................................................................................................. 39 Figure 11.12 Cross-section of drilling results from Section 18500 E. ......................................................... 41 Fig.11.13. Microphotograph of sample 31014 .................................................................................................. 41 Fig.11.14. Microphotograph of sample 31053. ................................................................................................. 41 Fig. 11.15. Cross-section Andres ........................................................................................................................... 42 Fig. 11.16. Photomicrograph of the mineralization in Hole 15 (sample 31229). .................................. 43 Fig. 20.2 Map of Drilling Plan for El Pino. ............................................................................................................. 50 Fig. 20.3. Cross-Section showing Proposed Holes 3 and 4 ........................................................................... 51 Fig. 20.5 Cross-Section of Proposed Holes Pino 6 to 11 ................................................................................ 54 Fig. 20.6 Cross-Section of Proposed Holes Pino 8 and 9. .............................................................................. 54 Fig. 20.7 Cross Section of Proposed Hole10. ..................................................................................................... 55 Fig. 20.8 Drilling Plan for Guadalupe ..................................................................................................................... 56 Fig. 20.9 Cross Section of Proposed Hole 39 ..................................................................................................... 57 Fig. 20.10 Cross Section of Proposed Hole 40 .................................................................................................. 58

1.0 SUMMARY The Picachos Property, in the southwestern part of the state of Durango, is centered about 100 km west-southwest of Durango City, and occurs north-northwest of the Durango--Mazatlán highway about 8 km from Puerto Espinazo del Diablo (23o43’ north, and 105o48’ west; Fig. 4.1). The Project area is in the Sierra Madre Occidental (SMO) Ignimbrite Belt, one of the largest silicic volcanic fields in the world. The Belt is host to numerous epithermal gold and silver deposits such as Tayoltita and Rosario. The Picachos Property occurs in the Zona Minera La Ventana, south of Districto Minero Ventanas. The largest past producer in the immediate area is La Libertad with 300 000 tonnes of 0.6 g/t Au and 235 g/t Ag mined by Luismin between 1975 and 1985 along a high-grade vein. Luismin defined a reserve on the Mala Noche vein of 326 000 tonnes of 365 g/t Ag and 2.52 g/t Au, but they did not put the Project into production. On the Picachos Property, four significant epithermal precious metal districts have been defined: Guadalupe, El Pino, Los Cochis and El Toro. In 2005, Northwest Mineral Ventures completed a regional-scale soil geochemical survey covering about 60% of the Property. Based on the results of the survey, Los Cochis was selected as a priority target for its bulk-tonne potential and straightforward logistics. In late 2006 and early 2007, a 3-D IP and resistivity survey identified at least two chargeable horizons, and several moderately chargeable zones of disseminated sulfide. Ore grade mineralization is closely related to the resistivity features, whereas the strong chargeability occurs in barren quartz-pyrite lithocaps that occur in permeable, reactive vitric tuff horizons. In the fall of 2007, 3125.25 meters of drilling in 21 reverse circulation holes were completed, mainly in the strong soil geochemical anomaly defined in 2005, and in one of the chargeability



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anomalies. The samples were sent to ACME Laboratories 4 Dec. 2007, and the last certificate was received 27 April 2008 (Table 1.1). The drilling program was designed to test a “steeply dipping epithermal vein” model for Los Cochis. The results actually imply that the principal control on the mineralization might be stratigraphic. A second stage of reverse circulation drilling is recommended to better constrain the geometry of the Los Cochis deposit as specified in the Figures of Section 11. The objective of this stage of work would be to identify a body of about 600 meters strike length, 80 meters width and 200 meters in the down-dip direction representing perhaps 27 million tonnes of mineralized rock. Further work on the El Pino Vein is also recommended, as the exploration model implies a steeply dipping high grade body on the order of 2.5 million tonnes, and most of the infrastructure is already in place (road, camp and cement water tank). Finally, a few exploration holes on the nearby Guadalupe deposit are also recommended to expand the development of this exciting new precious metal camp. The drilling plan for a total of 5020 meters is in Table 20.1, and maps are in Section 20. An additional 3.4 kilometers of road development are required for Los Cochis, and about 800 meters for Guadalupe. Road development should start at least six weeks prior to drilling. In addition to the drilling, air photography of the entire Property and detailed topographic mapping of El Pino and Los Cochis should be completed. Overall costs of the work are estimated at about $1.01 million. Table 1.1 Principal Results from 2007 reverse circulation drill holes. Bulk tonne intercepts are in blue, and high-grade intervals are in red. HOLE_ID FROM

(meters) TO (meters)

Interval (m)

Copper (ppm)

Lead (%)

Zinc (%)

Silver (g/t )

Gold (ppb)

COCH1 0.00 15.20 15.20 55 0.11% 0.25% 9 3

COCH3 0.00 59.28 59.28 52 0.22% 0.48% 67 1

Including

COCH3 1.52 12.16 10.64 89 0.44% 0.90% 172 1

COCH3 18.24 27.36 9.12 141 0.66% 1.15% 198 1

COCH4 0.00 36.48 36.48 35 0.08% 0.23% 7 1

Including

COCH4 4.56 6.08 1.52 112 0.19% 0.99% 50 1

COCH6 0.00 72.96 38.00 65 0.17% 0.32% 50 1

Including

COCH6 1.52 16.72 15.20 171 0.54% 1.02% 196 1

COCH6 27.36 28.88 1.52 87 0.27% 0.60% 86 1

COCH8 130.72 147.44 16.72 329 0.36% 0.72% 74 25

Including

COCH8 138.32 141.36 3.04 1573 1.65% 3.11% 377 108

COCH8 185.44 218.88 33.44 237 0.55% 1.38% 34 383

Including

COCH8 186.96 190.00 3.04 373 0.33% 2.00% 32 85

COCH8 194.56 202.16 7.60 673 1.97% 4.51% 126 1528

COCH10 0.00 62.32 62.32 27 0.06% 0.16% 6 1



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COCH13 0.00 62.32 62.32 55 0.15% 0.37% 36 1

Including 0.00% 0.00%

COCH13 0.00 3.04 3.04 122 0.23% 0.50% 65 1

COCH13 18.24 22.80 4.56 128 0.80% 1.49% 264 1

COCH15 6.06 7.58 1.52 283 0.28% 1.76% 8 127

COCH20 0.00 47.12 47.12 65 0.15% 0.27% 71 1

Including

COCH20 0.00 12.16 12.16 100 0.33% 0.61% 97 1

COCH20 22.80 24.32 1.52 116 0.28% 0.51% 95 1

COCH20 27.36 30.40 3.04 369 0.32% 0.24% 509 2

2.0 INTRODUCTION AND TERMS OF REFERENCE This report was prepared by M. Robinson of Northwest Mineral Mexico S.A. de C.V. at the request of Mr. Marek Kreczmer, President of NWT Uranium Corporation (NWT) to document the exploration results of 2007. Annual Technical Reports are required under the terms of the Agreement between NWT and YRI. The author has been directly involved with most of the field operations on the Property since 1998. In late 2006 and 2007, geophysical surveys completed by SJ Geophysics were checked in the field by the author. In the fall, M. Robinson directly supervised the reverse circulation drilling campaign between 3 Nov. 2007 and 26 Nov 2007.

3.0 DISCLAIMER The information, conclusions, opinions and estimates contained herein are based on information available at the time of preparation of this report.

4.0 PROPERTY DESCRIPTION AND LOCATION The Picachos Property, in the southwestern part of the state of Durango, is centered about 100 km west-southwest of Durango City, and occurs north-northwest of the Durango-Mazatlán highway, about 8 km from Puerto Espinazo del Diablo (23o43’ north, and 105o48’ west; Fig. 1). The Property consists of four concessions overlapping a contiguous surface area of 7778 Ha. The concessions are owned by Minera Tango S.A. de CV. (“Tango”), a subsidiary of Seafield Resources Ltd (SFF). Seafield purchased Minera Tango from Yamana Gold Inc. (YRI) 31 Dec. 2006. NWT has the right to acquire a direct 70% interest in the Picachos property portfolio by: (i) investing US$3,000,000 in exploration over three years, (ii) making cash payments in installments totaling US$400,000.00 to YRI, and (iii) issuing 1,000,000 common shares (also to YRI) over a three-year period.



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Fig. 4.1 Map showing the location of the Picachos Property.



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Fig. 4.2 Map of the Picachos Property Concessions. Camp is located at Las Aguilillas. Mining concessions remain valid for 50 years from the date of title as long as bi-annual mining duties are paid in July and January of every year, and minimum annual work requirements are met. In 2008, mining duties of approximately $59,000 US are due in two installments, and the minimum annual work requirement is approximately $500,000 US. As the concessions age, the duties and work requirements increase according to schedules published by the Dirección General de Minas every 6 months. Table 4.1 Estimated schedule of tax payments required to maintain the Picachos Property (MEX $ PESOS). Concession Title

Number Title Date

Surface area in Hectares.

Jan-Jun 2008 Jul-Dec 2008

Jan-Jun 2009

Jul-Dec 2009

Picachos 211194 11-Apr-2000

4225.4414 $241,948.77 $241,948.77 $241,948.77 $241,948.77

Camargo 217367 9-Jul-2002 2561.871 $73,371.99 $73,371.99 $73,371.99 $73,371.99

Camargo-2 226380 13-Jan-2006

865.6426 $5,955.62 $5,955.62 $ 5,955.62 $5,955.62

La Cruz 227828 22-Aug-2006

122 $839.36 $839.36 $839.36 $839.36

Total in Pesos

$322,115.74 $322,115.74 $322,115.74 $322,115.74

Total in US$ $29,551.90 $29,551.90 $ 29,551.90 $ 29,551.90



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Table 4.2 Estimated minimum work requirements for the Picachos Property ($MEX PESOS). Concession Title Date Surface area

in Ha. 2007 2008 2009

Picachos 11-Apr-00 4225.4414 $ 3,319,211.77 $ 3,319,211.77 $ 3,319,211.77

Camargo 9-Jul-02 2577.4593 $ 510,316.29 $ 2,026,584.05 $ 2,026,584.05

Camargo-2 15-Jan-06 865.6426 $ 83,077.10 $ 83,077.10 $ 83,077.10

La Cruz 22-Aug-06 122 $ 12,779.15 $ 12,779.15 $ 12,779.15

Total in Pesos $ 3,925,384.32 $ 5,441,652.07 $ 5,441,652.07

Total in US$ $ 360,127.00 $ 499,234.14 $ 499,234.14

There are no known environmental liabilities. Drilling and road building operations for Los Cochis have been authorized by SEMARNAT under Permit Number SG/130. 2.1/001879. This Permit is valid until 18 September 2010. Work outside the Los Cochis area requires additional permits, or modifications to the existing permit.

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY Access to the Property is via the Durango-Mazatlan highway, and a network of country roads that links the villages of La Mesa, Huizar, La Ventana, Picachos, El Durazno, Neveros and Los Desmontes. A 230 KV electrical transmission line runs parallel to Highway 40, and a branch line to La Mesa de Los Negros. Rural satellite phones are installed in all of the villages. Water is readily available from mountain streams that are re-charged in the summer rainy season between July and October. Elevations range from 1900 meters in the village of La Mesa to about 500 meters in the Rio Los Tanques. Vegetation ranges from pine and oak above 1500 meters, to tropical brush and cactus in the valleys. Cattle ranching, logging and subsistence farming are the main economic activities in the region. The rainy season is from July to September, with intermittent winter storms. Temperatures range from freezing at higher elevations in the winter, to more than 45ºC in the valleys in summer. The closest major city is the port of Mazatlán in southern Sinaloa, and the nearest industrial city is Durango, Durango.

6.0 HISTORY Picachos was one of the larger historic mining towns within Property and is located about 8 km north of La Mesa de Los Negros. The Spanish reportedly built a smelter facility on the north bank of the arroyo Picachos, just below one of the trails to the village of La Ventana. Smelter feed was mainly from several stopes located in the El Toro target area, and perhaps from the mines on the south flank of Copo El Pino (Pine Peak). Slag has also been found at a historic smelter site west of the Las Chivas adit (Los Cochis area). In 1997, Canamera Geological of Vancouver staked the 50, 000 Ha Flora concession. Between 20 April 1998 and 5 June 1998, over 200 rock samples were taken from the Flora claim. Of these, 151 occur within a caldera structure north of the Espinazo del Diablo on the northwest corner of the



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Flora Property. In the summer of 1998, a reconnaissance-style soil geochemistry grid was completed over Los Cochis, one of the most promising polymetallic epithermal precious metal deposits in the caldera. A total of 116 rock samples and 489 soil samples were collected. The program finished in November of 1998, but the assay results were never released from the lab due to non-payment of assay bills incurred by Canamera on its Canadian projects. In June of 1999, Minera Camargo was incorporated, and negotiations were opened with Eastern Meridian Mining Corporation to start a joint venture in the Picachos area, a few kilometers north of the Los Cochis prospects. During the negotiating period, the Picachos claim was staked. An option agreement was signed with Eastern Meridian 31 July 1999. Between 1 October 1999 and 25 February 2000, detailed mapping and sampling was done on the larger stopes and tunnels, including El Toro, Los Angeles and El Pino. Overall, 135 chip-channel samples were cut and sent to Bondar Clegg for analysis. All were fire-assayed for gold and silver, and those with base metal mineralization were also assayed for Cu, Pb and Zn. Some of the best overall results were from El Pino, where chip-channel samples from all three stopes imply an average grade of 1.7 g/t Au and 364 g/t Ag across an average width of 7 m. Although El Pino had clear potential to host a significant deposit, Eastern Meridian was unable to re-finance due to weak precious metal prices. Their option agreement with Camargo defaulted 31 January 2002. In late 2001, the Flora Property was cancelled by the Mexican Government. In March of 2002, Southern Africa Minerals and Minera Camargo started negotiating a deal for a joint venture on the Picachos property, and the Camargo claim was staked as an addition to the joint venture area. The Camargo Property hosts the Los Cochis and Guadalupe deposits (the Flora title was cancelled in October of 2001 due to non-payment of mining duties). Southern Africa Minerals changed its name to Tango Mineral Resources to reflect the new Latin American focus for the Company. In the summer of 2002, a limited soil sampling program was completed over the central part of the El Pino deposit area, and additional prospecting was done along strike of the known vein. In the fall, a permanent camp and road to the El Pino deposit was constructed, and two diamond core holes were drilled to depths of 216 m and 171 m in early 2003. Although both holes intercepted the vein, the drilling program was aborted pre-maturely due to mechanical problems with the drill. The average result of two holes was 108 g/t Ag and 1.1 g/t Au across a true width of 4.2 m, and continuity of the structure was proved for 70 meters down-dip. In late 2002, a deal was negotiated with Chemex Laboratories to release the Los Cochis assays, and those results were compiled in the first half of 2003. Geochemical results from El Pino and Los Cochis were clearly starting to define the extents of several epithermal Districts on the Picachos Property. Unfortunately, the lack of performance by the drillers did not deliver results, and Tango Mineral Resources was taken over by RNC Gold in late 2003. In early 2004, RNC Gold optioned the Property to Northwestern Mineral Ventures. To earn the first 50%, NWT agreed to: (i) invest $500 000 in Year 1, (ii) $1,000,000 in Year 2, and (iii) produce a feasibility study for a minimum of 25,000 ounces of gold per year. NWT hired Watts, Griffiths and McOuat to write an NI-43-101 Report and recommend the Work program. Their main recommendations were:



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(i) Complete a Property-wide soil geochemical survey to provide continuity between the

different epithermal districts. (ii) Explore the El Pino Vein by diamond drilling from an underground exploration adit. (iii) Acquire LandSAT and IKONOS imagery to help identify regional controls on

mineralization. (iv) Complete an airborne magnetometer survey, also to help identify structures and

intrusions of potential economic interest. A budget of $526 000 was recommended to complete the work. In late 2004, Northwest Mineral Ventures acquired the satellite imagery and Minera Camargo started the Property-wide soil geochemical program on behalf of Northwestern. In May of 2005, NWT announced it would be acquiring 100% of the Property from RNC for 100 000 shares, and $20,000,000 (twenty million) USD in staged payments starting at feasibility. The soil geochemistry was completed by June of 2005. About 2000 meters of hand-trenching under some of the geochemical anomalies west of Guadalupe and across the Los Angeles Stope area was completed in July 2005, prior to the summer rains. Results of the field work were evaluated over the summer, and an exploration drilling campaign of about 8400 meters was proposed in October of 2005 to test all four epithermal districts delineated as part of the soil geochemical program. YRI took over RNC Gold in late 2005, and field work was suspended pending re-negotiation of all the Agreements. In late 2006, NWT hired SJ Geophysics to complete a 3-D IP survey of Los Cochis. Los Cochis was selected as a priority target as the logistics of working from La Mesa are straightforward, and geochemical results from some outcrops imply the presence of disseminated mineralization that may be amenable to bulk mining. The geophysical results were prepared by March of 2007, and NWT authorized 3000 meters of reverse circulation drilling to test some of the most compelling geochemical targets near the existing road 21 Sept 2007. The road required to test the main geophysical anomalies would have required additional funds beyond the $400,000 Budget specified by NWT for 2007.

7.0 GEOLOGICAL SETTING

7.1 REGIONAL GEOLOGY The Picachos Property is in the Sierra Madre Occidental (SMO), one of the largest silicic volcanic fields in the world. The Belt is host to numerous epithermal gold and silver deposits such as Tayoltita and Rosario (Fig. 4.1). The SMO formed between the Cretaceous and the Tertiary when the last remnants of the Farallon plate were consumed below the western margin of Mexico, and the Sea of Cortez opened between Baja California and continental Mexico. The SMO consists of five igneous complexes (Ferrari et al., 2005): (1) Late Cretaceous to Paleocene volcanic and plutonic rocks, (2) Eocene rhyolites and andesites, (3) bimodal Oligocene ignimbrites (32-28 Ma) and basaltic lavas, (4) bimodal Miocene ignimbrites (24-20 Ma) and basaltic lavas, and (5) late Miocene bimodal alkaline basalts and ignimbrites. These new divisions are a modern refinement of McDowell’s and Clabaugh’s (1979) work which divided the SMO into a “Lower Volcanic Complex” dominated by andesitic rocks of Cretaceous to Tertiary ages deposited in a compressive tectonic environment, and an “Upper Volcanic Series” of Oligocene to Miocene age



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dominated by ignimbrites related to extensional tectonics. According to McDowell and Keizer (1977), most of the mineralization of the SMO province was in the “Lower Volcanic Complex” (Volcanic Complex 2 of Ferrari et. al, 2005). It is now recognized that all five Volcanic Complexes are mineralized, and work is on-going to better understand the metallogeny of each Complex. In the Property area, regional stratigraphic correlations imply that the geology of the Picachos Property is similar to the geology of Tayoltita, one of the largest precious metal districts in the world (Fig. 7.2).

Fig. 7.1 Regional Geology of the Western SMO province in the area of the Picachos Property.



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Fig. 7.2. Stratigraphy of two siliceous volcanic centers in the Mexican Ignimbrite Belt. At Tayoltita, the Buelna andesite is a water-lain tuff. At the Espinazo del Diablo, peperites and hyaloclastites in the feldspar-phyric ignimbrite and co-genetic La Ventana Flow-dome complex indicate that part of the volcanic sequence there was also deposited subaqueously.

7.2 GEOLOGY OF THE PICACHOS PROPERTY From the base upwards, units within the supracrustal rock column are: (i) densely feldspar porphyritic andesite flows and breccias, (ii) feldspar-phyric felsic lapilli tuff, (iii) the La Ventana flow-dome complex, and (iv) feldspar-phyric andesite flows and breccias. These rocks are intruded by: (i) a quartz monzonite batholith, (ii) quartz-feldspar porphyry dikes and stocks, (iii) clinopyroxene phyric diorite dikes, (iv) hornblende phyric diorite porphyry, (v) aphyric mafic dikes, and (vi) quartz-phyric “ignimbrite dikes” (Fig. 7.3). Detailed descriptions of these lithologic units are provided in Robinson, 2005. Los Cochis is hosted mainly in feldspar phyric andesitic volcaniclastic rocks and flows with local intrusions of quartz-feldspar porphyritic monzonite.



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Fig. 7.3. Surface geological map of the Picachos Property.

7.3 LOS COCHIS

Four geological units were intercepted in the drilling: (i) rhyolite tuff, (ii) andesitic flows or dikes, (iii) andesitic volcaniclastics and wackes (iv), and quartz-feldspar porphyritic dikes.

RHYOLITE TUFF (UNIT 10BFX)

One horizon of rhyolite tuff about 25 meters thick was intercepted in Holes 15 (97.26-120.6 m), 19 (177.84-188.48 m), and 21 (60.8-121.6m). These rocks are composed of angular lapilli, feldspar phenocrysts, pumice fragments and vitric shards. Spherulites and perlite, both de-vitrification textures, are locally apparent. Volcanic glass is easily replaced by secondary minerals, and this horizon is mostly replaced by quartz, phyllosilicates and pyrite (Holes 15 and 21). A three-point solution of the top of the tuff horizon based on the drill hole intercepts yields a true bedding orientation of 226º/48ºNW.

ANDESITIC FLOWS OR DIKES (UNIT 11C)

Andesitic flows or dikes are maroon when not altered, and green where altered to propylite in the vicinity of mineralized zones. They are porphyritic, with 1-3% very small, sub millimeter sized hornblende and feldspar phenocrysts. Amygdules filled with epidote, quartz and/or chlorite are



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common in this unit, and not present in fragmental equivalents (e.g. Unit 1C). The thickest intercept of Unit 11C occurs in Hole 9 (74.48-176.32 meters).

ANDESITIC WACKES (UNIT 1C)

Most of the host rocks to the Los Cochis deposit are immature to slightly re-worked wackes and sandstones of the same composition as Unit 11C. The texture is most obvious in slightly altered rocks where unaltered maroon fragments are supported in a muddy, silicified matrix of greenish color (Fig. 7.7). In unaltered rocks, the matrix is also maroon, and it can be difficult to distinguish the fragments.

Fig. 7.4 Photomicrograph of least-altered rhyolite tuff with secondary silica between fragments. Sample 32052, Hole 19, 185.44-186.96 meters.

Fig. 7. 5. Photomicrograph of andesitic flow. Sample 31164, Hole 9, 91.2 to 92.72 meters.

Fig. 7.6 Photomicrograph of Unit 1C. Sample 31115, Hole 9, 19.76-21.28 meters.

Fig. 7.7 Photomicrograph of quartz-feldspar porphyritic monzonite dike. Sample 31111; Hole 9; 13.68-15.2 meters.

QUARTZ FELDSPAR PORPHYRITIC MONZONITE DIKES (UNIT 21)

QFP dikes are most abundant in Hole 16 and the top of Hole 9 where they probably intrude a major northwest trending fault zone. In this area, the dikes range from 1 meter to 10 meters thick. No surface outcrops were found, mainly due to thick overburden in this area. The rocks are characterized by 3-5% quartz phenocrysts 0.5 to 2 mm across, and small feldspar phenocrysts .5-2 mm long. The feldspars are mostly altered to clay, and the rock matrix is silicified to a white color.



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8.0 DEPOSIT TYPES--INTERMEDIATE SULFIDATION EPITHERMAL AG-AU DEPOSITS Most of the known economic epithermal precious metal deposits occur in Tertiary volcanic rocks, both in arcs and in post-arc extensional settings. Important characteristics of epithermal deposits in general include:

(i) High grades of Au and Ag. (ii) Anomalous concentrations of Sb, As, Hg, Pb, Zn, Cu, Mo and other metals. (iii) Ore minerals include native gold, electrum, acanthite, tetrahedrite, ruby silver,

sphalerite, galena and chalcopyrite. (iv) Gangue minerals include quartz, calcite, barite, clay, sericite, epidote. (v) Most known deposits are vetiform, but stockworks, breccias and disseminated

deposits also occur. (vi) They are associated with significant alteration zones (“color anomalies”) and lithocaps. (vii) Exposure of ore zones is usually poor as the dominant dimension is down-dip or down

plunge of the ore shoot. (viii) Minerals are deposited in open spaces, and have characteristic textures (e.g. colloform

banded and cockscomb textures are typical). (ix) Alteration mineral assemblages indicate temperatures of deposition between 100 and

300ºC. Typical alteration types include: (i) proximal propylite, (ii) distal zones of clay alteration and (iii) unmineralized, but related zones of steam-heated alteration or “lithocaps”.

Several sub-classes of epithermal deposits are recognized (Hedenquist, 2000): (i) low sulfidation, (ii) intermediate sulfidation and (iii) high sulfidation. Table 8.1 Some defining characteristics of the different sub-classes of epithermal deposits (Hedenquist, 2000). Low Sulfidation Intermediate Sulfidation High Sulfidation

Tectonics Extension Transpression-Neutral Compression Host Rocks Bimodal rhyolite and basalt.

Alkalic rocks common. Calc-alkalic to subalkaline rhyodacite

Andesitic rocks

Fluids Near neutral, weakly saline (<1% NaCl), high CO2, H2S

Moderately saline (10-20% NaCl), somewhat acid

Variably saline (1-40% NaCl), strong acid (pH=1)

Characteristic gangue minerals

Illite, clay, chalcedony, adularia, calcite

Sericite, quartz, rhodochrosite, barite, anhydrite

Residual quartz, alunite, barite, anhydrite

Characteristic ore Minerals

Gold, electrum, tellurides in alkalic rocks.

Electrum, tetrahedrite, sphalerite, galena.

Enargite, gold, tennantite.

Relationship to intrusions

Distal, sometimes none. Magmatic fluids important. Magmatic fluids important.

Size of orebodies 100-300 m deep (small) Up to 1200 meters deep (robust)

Mostly small high grade bodies, but some large disseminated bodies.

Examples Sleeper, Hishikari Comstock, Tayoltita El Indio, Yanacocha

The Picachos Property overlaps rhyodacitic rocks of the SMO province, and is considered to have significant potential for intermediate sulfidation epithermal Ag-Au deposits.



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9.0 MINERALIZATION Over 100 prospects and mine workings occur on the Picachos Property, but most historic production is from El Toro, Guadalupe, Buenas Aires, La Tolva, Los Angeles, Las Palomas and El Pino (Table 9.1). Most of these workings have been mapped, sampled and documented in previous Reports (Robinson 2000, 2002, 2005). Mineralization along the El Toro Fault corridor is polymetallic, with significant lead, zinc and copper values as well as gold and silver. To the east, the Guadalupe and El Pino Veins mainly carry gold and silver as native gold, electrum and acanthite, with very little pyrite or other base metal sulfides. Only targets drilled on 2007 or slated for drilling in 2008 are discussed briefly here. Table 9.1. List of historic mine workings and results from chip-channel sampling. Name Type of

Working Length

(m) Tonnes Mined (ESTIMATED)

Vein Orientation

Width1 No. of Samples

Au g/t

Ag g/t

Pb %

Zn %

Magistral Small Stope 18 500 235º/65º NW

1 2 1.1 777 2.1 1.9

Macedonio I Prospect 4 20 245º/78º NW

0.6 1 5.2 560 N/A N/A

Mina de La Paz Open Stope 22 1500 236º/75º NW

0.3 1 0.7 639 0.1 0.3

Macedonio II Prospect 10 60 237º/57º NW

0.5 1 0.2 185 0.3 0.2

El Cochi Prospect 6 30 251º/68º NW

0.5 1 0.3 59 2.9 3.2

Santa Anita Prospect 12 250 230º/52º NW

2.5 4 2.2 94 <0.1 <0.1

La Escondida Small Stope 8 200 264º/74º NW

1.8 4 0.5 55 0.3 0.4

La Descubriadora

Exploration Tunnel

38 240 N/A N/A 1 - 2.3 - -

Surface Pit Surface Mine 20 800 045º/75º SE 1.3 2 1 157 N/A N/A

(Main Vein)

Surface Pit Prospect N/A N/A 328º/45º NE 4.6 2 0.7 196 N/A N/A

(Veta Polin)

Los Angeles Open Stope 41 12 000 042º/80º SE 2.7 3 0.5 214 0.2 0.02

(Main Vein)3

La Chinakatera Exploration Tunnel

194 1300 250º/75º NW

10 6 3.1 94 0.34 0.29

El Carrizal Exploration Tunnel

81 500 045º/62º SE 1.2 6 0.2 35 0.15 0.24

Los Murciélagos

Open Stope 27 800 265º/35º NW

3.5 1 0.3 173 1.28 1.23

034º/80º SE

Las Palomas3 Open Stope 32 7 000 240º/70º NW

2.5 3 0.1 46 N/A N/A

El Toro Open Stope 58 16 500 240º/75º NW

>4.24 7 1.2 501 0.08 0.1

El Toro Prospects

6 Prospects in > 100 m wide zone

34 200 210º to 263º/ steep NW

dip

0.7 3 0.6 300 0.07 0.06



18

Prospecto del Mundo

Prospect 4 10 245º/90º 0.7 1 0.4 145 0.19 0.11

Veta de la Niña Prospect 8 50 242º/77º NW

1.5 1 6.8 471 1.58 0.02

Los Pajaritos Prospect 12 160 215º/75º NW

1.5 1 0.4 42 0.03 0.04

Prospecto 4900 Prospect 12 220 024º/84º SE 1.7 1 0.4 76 0.58 0.06

Mina de la Luz Surface pit N/A N/A 205º/50º NW

0.4 1 0.6 531 1.78 0.02

Main Stope Open Stope 52 5000 350º/80º NE 3.5 5 0.7 205 N/A N/A

Upper Stope Open Stope 21 1800 340º/70º NE >5.2 5 2.6 462 N/A N/A

El Pino Exploration Tunnel

Exploration Tunnel

55 350 N/A 1.5 N/A -- -- N/A N/A

Test Pit #1 Prospect 4 30 350º/85º NE 1.5 1 11.1 810 N/A N/A

Test Pit #2 Prospect 2 2 350º/85º NE 1.8 1 <0.17 28 N/A N/A

Prospect #3 Prospect 4 30 340º/78º NE 2 1 0.5 42 N/A N/A

Prospect #1 Small prospect tunnel

10 90 345º/70º NE 3 1 5.9 508 N/A N/A

El Pino Trench Prospect 6 65 346º/65º NE 1.8 1 0.9 94 N/A N/A

Guadalupe North Stope

Access Tunnel, Open Stope

77 2000 350º/65º NE 1.1 6 2.2 609 N/A N/A

Guadalupe South Stope

Open Stope 75 8100 340º/60º NE 1.2 6 3.1 565 N/A N/A

La Gloria Prospect N/A N/A 50º/68º NE 1.2 2 8 53 0.8 6.4

La Tolva Access Tunnel, Open Stope

78 2000 290º/86º NE 1.2 1 N/A 169 0.74 0.58

El Fresno Open Stope 56 2100 290º/60º NE 13 25 N/A 303 0.47 0.64

Las Chivas Access Tunnel and stopes

97 2000 295º/70º NE 47 41 N/A 72 0.47 1.4

Buenas Aires Open Stope 50 8100 340º/70º NE 1.2 1 2.1 416 N/A N/A

TOTAL 1243 38,757

9.1 LOS COCHIS Historic production from Los Cochis perhaps totals 6000 tonnes between El Fresno, La Tolva and Las Chivas mines. Recent work, however, has shown that the best silver grades do not always occur in the base-metal rich veins targeted by the gambusinos, but often occur in incipiently altered wall rocks. Specifically, results in excess of 300 g/t Ag have been obtained from samples cut across clay-altered zones with no veining at El Fresno, El Pinito and the Tajos de Don Canuto (Fig 9.1 and 9.2).



19

Fig. 9.1. Map of Los Cochis showing the principal historic workings, silver-in-soil>5 ppm (DASHED line), lead-in-soil >100 ppm (RED line) and near-surface resistivity anomalies (BLUE DASHED lines).



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Fig. 9.2 El Fresno. A sample cut across the back of the adit (above the geologist) yielded values of 915 g/t Ag, 0.7% Pb, 0.2% Zn and 0.03% Cu across 2 meters (sample P009).

Fig. 9.3. La Chivas. A continuous chip-channel sample of the entire adit averages 54 g/t Ag, 1% Zn and 0.3% Pb/46m

Fig. 9.4 Propylitic altered andesite cross-cut by poorly developed discontinuous stock work veinlets of quartz-carbonate with traces of galena, sphalerite, and sulfosalt exposed in a small creek west of El Fresno. A 2.5 meter wide chip-channel sample across this outcrop grades 97.2 g/t Ag, 1.4% Zn, 0.4% Pb and 0.03% Cu (sample P011).

Fig. 9.5 Photo of roughly flat-lying sphalerite manto exposed on the southwest bank of the Arroyo Los Cochis. This style of mineralization was exposed in a hurricane in 2001.

9.2 EL PINO El Pino is a major vein-breccia system hosted in andesitic fragmental rocks that outcrops locally from the ridge leading to Copo El Pino at 1670 m elevation more than 1200 m along strike to the arroyo Faisan at 950 m elevation. Historic production at El Pino comes from a vertical open stope on the steep south flank of Copo El Pino (Pine Peak). The stope is about 50 m long and is accessed on three levels centered at about 1500 meters elevation over a vertical elevation range of 40 to 50 meters. At these levels, the vein is actually a multi-stage breccia with large blocks of potassic-altered andesite in a dense network of anastomosing cockscomb and colloform quartz veins. The geometry is typical of a high-level epithermal deposit open to surface. Chip-channel samples from all three stopes imply an average grade of 1.7 g/t Au and 364 g/t Ag across an average width of 7 m. Within the overall structure, there are higher grade zones characterized by a higher percentage of quartz veining. For example, sample 4483 from the Upper Stope returned values of 578 g/t Ag and 4.9 g/t Au across 2.3 m.



21

Two holes totaling 387 of 1000 planned meters were diamond drilled in early 2003. However, the initial drill program was never completed due to a series of mechanical problems with the rig.

Fig. 9.6 Catalina showing of the El Pino Vein. Matt Gray’s sample returned values of 611 g/t Ag, 9.4 g/t Au across 2 m (P005).

Fig. 9.7.Upper Stope. Sample 4483, cut below the red line, carries 578 g/t Ag and 4.9 g/t Au across 2.3 m

Fig. 9.8. Prepared drill pads that were not drilled in 2003. Fig. 9.9 Photo of drill core from Hole Pino 2. This intercept carries 163 g/t Ag and 1.3 g/t Au across 4.2 m, and proves continuity of one of the structures for more than 70 meters down-dip.

The potential of El Pino is considerable. Mineralization has been mapped on surface over a strike length of about 500 m. Assuming an average width of 5 meters for one of the veins, and down-dip extent of 400 meters, a body of 2.5 million tonnes of high-grade silver and gold is implied.



22

Fig. 9.10 Plan Map of El Pino showing historic workings, drill holes and road that was built in 2003.



23

Fig 9.11 Cross section of El Pino showing Diamond drill Holes 1 and 2.

9.3 GUADALUPE The Guadalupe oreshoot is partly exposed by two small underground stopes 200 m apart. The North stope is accessed by a 50 m long tunnel driven to the east, whereas the South stope was driven along a fault that marks the trace of the vein from surface. Eight channel samples across



24

both stopes yield average values of 3.2 g/t Au and 808 g/t Ag across an average width of 1.4 m. Values of up to 28.9 g/t Au and 2628 g/t Ag across 0.25 m occur in smaller, sub-parallel structures within a few meters of the main vein (e.g. Veta Cocina). The vein is hosted in propylitic-altered andesite with some potassium feldspar in the vein envelope. Ore minerals are mainly electrum, specularite, pyrite and acanthite, and generally comprise less than 2% of the rock. Soil samples taken above the Guadalupe oreshoot have precious metal values of 5-40 ppb Au and 4 to 9 ppm Ag. Soil sampling and rock sampling results show that the Guadalupe Vein is just one of several northwest trending veins within a broad, easterly trending silver-in-soil anomaly that extends for more than 2 kilometers between the Arroyo Los Rincones and the Arroyo Las Vegas. The oreshoots do not actually outcrop on surface, but the locations of the Buenas Aires and Guadalupe oreshoots are known from underground workings, and the occurrence of at least two additional veins at depth are implied by anomalous silver concentrations in rock samples from surface.

Fig. 9.12 Map of the Guadalupe group of veins.



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10.0 EXPLORATION

10.1 SOIL GEOCHEMISTRY As recommended by WGM, a regional-scale soil survey was undertaken over about 60% of the Picachos property in 2005 both to: (a) prospect parts of the property with little or no geological information, and (b) better define and characterize the mineral potential of the hydrothermal centers already identified at El Pino, El Toro, Los Cochis and Guadalupe. Figure 10.1 shows the extent of the survey. As expected from the rock geochemistry, Los Cochis and El Toro are characterized by high base metal as well as precious metal concentrations in soil, whereas El Pino and Guadalupe are delineated mainly by anomalous Ag-Au values in soil. Detailed results of the survey are discussed in Robinson, 2005. Table 10.1. Summary results for 10096 soil samples from the Picachos Property. ELEMENT Maximum Mean ACA* Mode 50th 75th 90th 95th 98th

Mo_ppm 109.1 1.2 1.1 0.4 0.6 1.0 2.3 4.0 7.3 Cu_ppm 1695.85 16.0 68.1 7.0 12.1 19.9 29.2 38.3 55.1 Pb_ppm 27300 91.0 10.0 16.0 25.7 55.1 143.8 300.6 697.3 Zn_ppm 4440 141.4 79.0 81.0 86.0 131.0 232.0 396.6 836.1 Ag_ppm 1780 1.7 0.1 0.1 0.4 0.9 2.2 4.1 8.5 Mn_ppm 23711 1385.5 1100.0 0.0 1068.0 1652.3 2716.5 3749.5 5312.0 As_ppm 635.3 17.4 11.0 10.0 11.3 19.6 35.6 50.9 75.5 Au_ppb 2424 7.8 3.0 0.5 1.8 4.8 12.0 24.7 58.0 Cd_ppm 51.5 1.0 1.3 0.1 0.3 0.7 2.0 3.7 7.8 Sb_ppm 832.27 2.1 1.3 0.6 1.1 2.0 3.3 5.2 8.9 Bi_ppm 32.6 0.4 1.2 0.1 0.1 0.3 0.8 2.0 2.0 Ba_ppm 2317.1 173.3 340.0 120.0 139.0 208.0 315.7 401.0 525.0



26

Fig. 10.1. Map of silver geochemistry in soils for the Picachos Property. El Toro is the largest anomaly with a core area of more than 2.5 km2.



27

Table 10.2. Summary of exploration data for four significant epithermal precious metal districts on the Picachos Property.

El Toro El Pino Los Cochis Guadalupe

Area of core anomaly in km2

2.5 0.5 1 0.5

Avg. metal values in core anomaly area

7.7 ppm Ag 53.3 ppb Au 414 ppm Pb, 366 ppm Zn

3.6 ppm Ag 19.9 ppb Au 118 ppm Pb, 97 ppm Zn

26.1 ppm Ag, 11 ppb Au,

1045 ppm Pb, 921 ppm Zn

5.0 ppm Ag 25 ppb Au 68 ppm Pb, 175 ppm Zn

Avg. Ag/Au ratio in soils 145 546 2439 200

Best gold value in soil 2424 ppb Au 171 ppb Au 641 ppb Au 436 ppb Au

Best gold value in rocks 17 g/t Au/1.4 m 9.4 g/t Au/2 m 3.9 g/t Au/2 m 62 g/t Au/0.15m

Best silver value in soil >100 ppm Ag 13.2 ppm Ag 1696 ppm Ag 23.7 ppm Ag

Best silver value in rocks 1080 g/t Ag/1.3m 611 g/t Ag/2 m 954 g/t Ag/3.5 m 4653 g/t Ag/0.2 m

Deposit Geometry Sheeted Vein Complex

2 subparallel epithermal vein breccia zones

Manto 4 subparallel epithermal veins and

breccia zones

10.2 3-D IP, RESISTIVITY AND MAGNETIC SURVEY In the fall of 2006, a 3-D Induced Polarization (IP) and Resistivity survey was undertaken for Northwestern Mineral Ventures Inc. by SJ Geophysics Ltd. of Vancouver, B.C. The survey area consisted of two grids, Los Cochis and Guadalupe. The IP survey area at Los Cochis consisted of 25 northeast trending lines with 100m spacing and with line length of 1800m. On the Guadalupe grid, there are 5 northeast trending lines with 100m line spacing and with a line length of 950m. IP data collection finished 6 December 2007, and magnetic data was collected on just the Los Cochis Grid between12 and 24 February 2007. Figure 10.2 is a level plan of inverted chargeability values plotted 75 meters below topography. The range of inverted chargeability values measured at Los Cochis is between 2 and 24 ms (moderately to weakly chargeable). Drilling in the vicinity of Don Andres has proven that the anomaly is co-incident with vitric tuff horizons that have been replaced by quartz, calcite and pyrite. On Figure 10.2, structure contours on the top of the vitric tuff horizon were intersected with the topography, and the result almost perfectly matches the strong IP anomaly. A second strong IP anomaly occurs in the vicinity of La Tijera and El Cobre. Field traverses confirm that the cause of this is also quartz-pyrite alteration. Assays of drill hole intercepts of the altered tuff returned non-anomalous metal values. Zones of quartz-pyrite alteration or “lithocaps” occur in epithermal camps where descending hydrothermal fluids and gases condense—commonly at or near the water table, and rarely carry significant precious metal. The strongest silver geochemistry on the grid is co-incident with an area of moderate inverted chargeability (6-7ms or blue-green on Fig. 10.2). Mineralization there is dominated by sphalerite, galena and tetrahedrite, mainly as disseminations and stockworks. While pyrite is present, there is much less in the principal mineral zone than in the lithocap.



28

Fig. 10.2. Map of inverted IP, Los Cochis Grid. 75 meter level plan with overlay of silver geochemistry in rocks. Chargeable areas are in magenta, weak IP anomalies are in green. The purple dotted line is the outcrop pattern of the top of quartz-pyrite replaced vitric tuff horizon determined by intersecting the calculated orientation of the horizon with the topography.

Fig. 10.3 Surface exposure of the lithocap that causes the strong IP response. Photo taken 30 meters south of Don Andres. Sample 5698 , cut across this face, carries no significant metal values.

Fig. 10.4 Photomicrograph of lithocap in sample 32117 (Hole 21, 92.72-94.24)

Figure 10.5 is a plan of inverted resistivity values. The strongest feature on this map is the northeast trending resistive zone between the chargeable horizons . This feature is co-incident with a wide zone of quartz veining and brecciation. The average results of 21 chip-channel samples from quartz veins within this zone are 205 ppb Au and 2.1 g/t Ag. Visually, the quartz is



29

white, with very “cool” colloform textures. Based on the mineralogy, this zone might have ore potential 100 meters below surface, and possibly closer to 300 meters below surface. Moderate resisitivity anomalies are at least partially co-incident with some of the best rock and soil geochemistry on the Property. Average silver values of 298 g/t Ag, as well as 1.4% Pb, 2.3% Zn and 625 ppm Cu occur in 80 rock samples within Area “A”, centered on Nacario. Colloform quartz float on surface implies the elevated resistivity is due to silicification. Southeast of the historic mine workings, there is no bedrock exposure as the area is covered by deep talus related to a historic landslide, but geophysical data imply continuity of the zone at greater depth (Area “B”, Fig. 10.5). Other areas of known mineralization and geochemical response are perhaps better correlated to weakly conductive clay-pyrite alteration. Some of these zones, such as that exposed between El-Fresno and El Pinito (on the southwest edge of one resistivity feature) are very high grade, with average values of 501 g/t Ag, 1.3% Zn, 0.9% Pb, and 454 ppm Cu in 45 rock samples from this zone. Limited bedrock exposure shows that mineralization occurs in calcite-quartz barite patches and veinlets (Fig. 9.4).

Fig. 10.3. Map of inverted resistivity, Los Cochis Grid. 75 meter level plan with overlay of silver geochemistry in rocks. Resistive areas are dark blue, somewhat less resistive areas are yellow-magenta. The top of the high chargeability horizons are in purple.



30

11.0 REVERSE CIRCULATION DRILLING

11.1 SITE PREPARATION AND MOBILIZATION A D6N tractor was mobilized to the Property 28 September 2007, prior to the end of the rainy season. By 12 October, the 10 kilometer long section of road between the Highway and Camp Aguilillas was repaired and upgraded. At camp, sites were prepared for additional buildings, and the tractor moved on to the Los Cochis access roads and drill pads 14 October. At camp, a 4 room cabin was constructed next to the kitchen for office and bunk space. Construction was mostly complete by 8 November 2007, although work on the camp continued throughout the drilling period.

Fig.11.1. Photo of D6N tractor preparing Site #10.

Fig.11.2 Mobilization of Layne Drilling’s tire-mounted “buggy style” reverse circulation drill from the Highway to Los Cochis 2 Nov 2007.

All drilling was conducted, utilizing a “Buggy-type” reverse circulation drill rig contracted from Layne de Mexico in Hermosillo, Sonora. Drilling was done with one shift per day, ranging in length from 10.0-11.5 hours. About 30% of the drilling was conducted dry, with only air circulation. Water injection was utilized where ground conditions or the abundance of groundwater mandated the change. Drilling rates were extremely good, averaging about 135 meters per day. A crew of 5 people were on the drill site to manage the overall sample collection effort. Table 11.1. Collar location table for 21 reverse circulation holes at Los Cochis. HOLE_ID WGS84_E WGS84_N ELEV

(m) AZIMUTH DIP DEPTH_m Date_Started Date_Finished

COCH1 419378 2618570 1579 215 -80 145.92 Nov 8 2007 Nov 8 2007

COCH2 419385 2618572 1574 180 -50 133.76 Nov 9 2007 Nov 9 2007

COCH3 419388 2618431 1578 225 -50 139.84 Nov 6 2007 Nov 7 2007

COCH4 419476 2618515 1599 225 -50 191.52 Nov 5 2007 Nov 6 2007

COCH5 419378 2618570 1579 215 -55 145.92 Nov 7 2007 Nov 8 2007

COCH6 419387 2618433 1579 359 -90 91.2 Nov 10 2007 Nov 10 2007

COCH7 419336 2618490 1568 140 -50 103.36 Nov 14 2007 Nov 14 2007

COCH8 419677 2618439 1609 219 -45 267.52 Nov 17 2007 Nov 19 2007

COCH9 419737 2618341 1608 225 -45 176.32 Nov 20 2007 Nov 21 2007



31

COCH10 419513 2618414 1627 225 -49 228 Nov 3 2007 Nov 4 2007

COCH11 419598 2618492 1597 221 -45 158.08 Nov 14 2007 Nov 15 2007

COCH12 419598 2618492 1597 360 -90 188.48 Nov 15 2007 Nov 16 2007

COCH13 419391 2618431 1577 175 -50 97.28 Nov 9 2007 Nov 10 2007

COCH14 419233 2618571 1524 215 -50 139.84 Nov 12 2007 Nov 12 2007

COCH15 420026 2618234 1595 220 -45 121.58 Nov 21 2007 Nov 22 2007

COCH16 419753 2618516 1555 225 -45 179.36 Nov 22 2007 Nov 23 2007

COCH17 419538 2618615 1561 170 -45 66.88 Nov 11 2007 Nov 11 2007

COCH18 419256 2618687 1507 225 -50 145.92 Nov 13 2007 Nov 14 2007

COCH19 420069 2618341 1547 31 -45 190 Nov 24 2007 Nov 25 2007

COCH20 419392 2618429 1579 135 -60 85.12 Nov 10 2007 Nov 11 2007

COCH21 420062 2618333 1555 122 -45 121.6 Nov 25 2007 Nov 25 2007

Plan9 419593 2618662 1537 225 -45 8 Nov 11 2007 Abandoned

3125.5

Fig. 11.3. Level plan of reverse circulation drill holes. Cross-section lines are also shown.

11.2 RC DRILLING RESULTS A total of 21 reverse circulation (RC) holes, representing 10,254 feet (3,125 meters), were drilled in November 2007. Of the 21 holes drilled, 18 targeted the main silver soil geochemical anomaly



32

on seven lines spaced 100 meters apart, with most holes dipping to the southwest. Of particular note, Holes COCH3, 6, 13 and 20 were drilled from the same location in four different directions as a preliminary shape investigation of the orebody. Additionally, two holes tested an IP anomaly located 250 meters east of the main zone while one hole (COCH15) tested a gold soil anomaly. Highlights include a 47.1-meter intercept of 83 grams per tonne (g/t) silver and 0.84% combined zinc-lead, which starts at surface. The richest silver intercept returned 509 g/t silver and 0.56% zinc-lead over 3.0 meters. Significant gold and zinc-lead results included a 1.52-meter interval of 6.2 g/t gold, 348 g/t silver and 19.9% zinc-lead. Table 11.2 Principal Results from 2007 reverse circulation drill holes. Bulk tonne intercepts are in blue, and high-grade is in red. HOLE_ID FROM


Interval (m)

Copper (ppm)

Lead (%)

Zinc (%)

Silver (g/t )

Gold (ppb)

COCH1 0.00 15.20 15.20 55 0.11% 0.25% 9 3

COCH3 0.00 59.28 59.28 52 0.22% 0.48% 67 1

Including

COCH3 1.52 12.16 10.64 89 0.44% 0.90% 172 1

COCH3 18.24 27.36 9.12 141 0.66% 1.15% 198 1

COCH4 0.00 36.48 36.48 35 0.08% 0.23% 7 1

Including

COCH4 4.56 6.08 1.52 112 0.19% 0.99% 50 1

COCH6 0.00 72.96 38.00 65 0.17% 0.32% 50 1

Including

COCH6 1.52 16.72 15.20 171 0.54% 1.02% 196 1

COCH6 27.36 28.88 1.52 87 0.27% 0.60% 86 1

COCH8 130.72 147.44 16.72 329 0.36% 0.72% 74 25

Including

COCH8 138.32 141.36 3.04 1573 1.65% 3.11% 377 108

COCH8 185.44 218.88 33.44 237 0.55% 1.38% 34 383

Including

COCH8 186.96 190.00 3.04 373 0.33% 2.00% 32 85

COCH8 194.56 202.16 7.60 673 1.97% 4.51% 126 1528

COCH10 0.00 62.32 62.32 27 0.06% 0.16% 6 1

COCH13 0.00 62.32 62.32 55 0.15% 0.37% 36 1

Including 0.00% 0.00%

COCH13 0.00 3.04 3.04 122 0.23% 0.50% 65 1

COCH13 18.24 22.80 4.56 128 0.80% 1.49% 264 1

COCH15 6.06 7.58 1.52 283 0.28% 1.76% 8 127

COCH20 0.00 47.12 47.12 65 0.15% 0.27% 71 1

Including

COCH20 0.00 12.16 12.16 100 0.33% 0.61% 97 1

COCH20 22.80 24.32 1.52 116 0.28% 0.51% 95 1

COCH20 27.36 30.40 3.04 369 0.32% 0.24% 509 2



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11.2.1 CALASANCIO (SECTION 18000E)

Hole COCH18 was designed to test the strong silver-in-soil geochemistry northwest of the Los Cochis workings. In particular, soil sample 55097 returned values of 2067 ppm Pb, 2265 ppm Zn and 38.4 ppm Ag, metal values that are of direct economic interest. On surface, the anomaly area is covered by overburden, and no sulfide or quartz float was apparent. A cross-section of the inverted chargeability values implies the presence of a moderately dipping sulfide horizon rather than a vein. Hole 18 collared in weak mineralization hosted in andesitic volcaniclastic rocks (wackes), and intercepted three zones with sparse pyrite and no obvious base metal sulfides:

• 27.1 g/t Ag, 0.022% Cu/1.52 m from 13.68 to 15.2 m • 9.4 g/t Ag, 0.034% Cu/3.04 m from 28.88 to 33.44 m • 22.8 g/t Ag, 0.038% Cu/1.52 m from 123.12 to 124.64 m

Based on the cross-section in Figure 11.4, Hole 18 did not intercept the source of the strong silver-in-soil geochemistry. However, the anomaly might be explained by a gently dipping manto or replacement horizon, as implied by the IP survey. PDH 28 is designed to test this possibility.



34

Fig. 11.4. Cross-section of COCH18 (Section 18000 E). Hole 18 was designed to test for a steeply dipping zone under the soil geochemical anomaly as shown by the area between the red dashed lines. Anomalous soil samples in magenta. A manto, as implied by the red dotted line, may actually be the cause of the geochemical anomaly.

11.2.2. CALERITA (SECTION 18100 E)

Hole COCH14 was drilled to test strong silver and base metal geochemistry in soil and rocks on a small ridge west of La Tolva. Bedrock exposure is generally poor, but there are abundant quartz-



35

sulfide fragments in recessive-weathering, clay altered rock. A select sample of the sulfides carries values of 709 g/t Ag, 5% Pb, 4.1% Zn and 0.3% Cu (sample 5219). A sample of the wall rocks that deliberately excludes the sulfides carries values of 42.9 g/t Ag, 1.7% Zn and 0.22% Pb (sample P012; Cambior, 2003). Hole 14 collared into weakly disseminated sphalerite, but stayed in largely unmineralized andesitic volcaniclastic rocks for the entire length. Near the bottom of the hole, there is a 13.8 meter long intercept of propylitic alteration with weakly disseminated pyrite. No significant base metal sulfides besides pyrite were observed, although zinc values are weakly anomalous. As implied by Figure 11.5, a gently dipping manto would explain the spectacular surface geochemistry and lack of results in Hole 14. Two short holes, PDH 26 and 27 are proposed to test a flatter orientation for the mineralization.



36

Fig. 11.5 Calerita: Section 18100 E, looking northwest.

11.2.3 LA TOLVA (SECTION 18200E)

Holes Coch 1 and Coch 5 were targeted below the Tolva Open Stope and Campamento showing. The Campamento showing is a stock work zone hosted in propylitic altered andesitic volcaniclastic rocks. Values of 600 g/t Ag, 6.8% Zn and 2.5% Pb were returned from sample 4891, a 3 meter



37

long chip-channel sample across the zone. La Tolva is an adit about 75 meters long that has been stoped out at the eastern end. Values of 169 g/t Ag, 0.57% Zn and 0.74% Pb were returned from a 1 meter wide chip channel sample across the back of the adit. The best results were from Hole 1, which intercepted 15.2 meters of 9.2 g/t Ag, 0.25% Zn and 0.11% Pb from surface. No evidence for a steeply dipping vein was found further downhole, although disseminated pyrite and sphalerite occur in most samples.

Fig. 11.6. Section 18200, La Tolva. Anomalous soil samples are in magenta.

11.2.4 REYES (SECTION 18300E)

Holes 3, 4 and 6 were drilled to test an area of strong silver geochemistry in soil between the El Pinito and Las Chivas prospects. Results were:

• Hole 3: 66.9g/t Ag, 0.48% Zn and 0.22% Pb/59.28 meters from surface • Hole 4: 7.3 g/t Ag, 0.22% Zn and 0.06% Pb/36.48 meters from surface • Hole 6: 49.6 g/t Ag, 0.32% Zn and 0.17% Pb/72.96 meters from surface.

The mineralization is not spectacular in appearance, and consists mostly of pale green, propylitic altered andesite with perhaps 3% quartz-calcite-sulfide patches (Fig. 11.8).



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Fig. 11.7 Section 18300, Reyes.

Fig.11.8. Microphotograph of sample 30795, Hole 3, 21.28 to 22.8 m. Mineralization consists of calcite-quartz-sulfide patches in propylitic altered andesite.

Fig.11.9. Microphotograph of sample 30795, Hole 3, 21.28 to 22.8 m. This sample carries values of 202 g/t Ag, 1.1% Zn, 0.7% Pb and 0.02% Cu. “SILVER” = an unidentified silver mineral.

11.2.5 HOLE 13 (SECTION UTM 419 390E)

Holes 13 and 20 were drilled from the same station as Hole 3, oriented to the south between El Pinito and El Fresno (Hole 13), and to the southeast (Hole 20). Hole 13 intercepted 62.32 meters of 36.0 g/t Ag, 0.37% Zn, 0.15% Pb from surface. Hole 20 intercepted 47.12 meters of 70.6 g/t Ag,



39

0.28% Zn and 0.15% Pb, including 1.52 meters of 924 g/t Ag, 0.31% Zn, 0.49% Pb and 0.07% Cu, the best silver intercept in the 2007 drilling.

Fig. 11.10 Section 419 390 E. North-South section through Holes 13, 6 and 2.

11.2.6 EL FRESNO (SECTION 18400E)

Hole COCH10 was designed to test the down-dip potential of several high grade silver results from various channel samples across the old El Fresno mine workings. Important surface results include 2 m of 915 g/t silver cut across disseminated mineralization exposed by the adit (e.g. Fig. 9.2). Most structures exposed by the mine dip moderately to the northeast, and it was expected that Hole 10 would intercept El Fresno at about 115 meters depth. However, if the mineralization has a fairly flat geometry as implied by the previous Sections, then Hole 10 did not intercept the target as intended, and additional drilling is warranted (PDH 24 and 29, Fig. 11.8).



40

Fig. 11.11. Cross-section of drilling results from Section 18400 E.

11.2.7 CANUTO (SECTION 18500E)

Hole 8 was designed to test under markedly anomalous silver geochemistry in soil with values as high as 1740 ppm Ag. Two important zones were intercepted:

• Hole 8: 74g/t Ag, 0.72% Zn and 0.36% Pb/16.72 meters (130.72 m -147.44 m) • Hole 8: 34 g/t Ag, 0.4 g/t Au, 1.38% Zn and 0.55% Pb/33.44 (185.44 m – 218.88 m).

The second interval contains 1.52 meters of 348 g/t Ag, 16.6% Zn, 3.4% Pb , 0.2% Cu and 6.21 g/t Au across 1.52 m between196.08 and 197.60 meters depth (Fig. 11.11). In general, Hole 8 is mineralized for most of its length, and values averaging 19.2 g/t Ag, 0.11 g/t Au, 0.51% Zn and 0.2% Pb occur over a 132.24 meter interval between 130.72 and 262.96 meters. Initially, the mineralization was thought to be dipping northeasterly, but that possibility seems to have been eliminated with Holes 16 and 19. Holes 30, 31 and 32 are proposed to better constrain the geometry of the mineralization, and clarify whether a steeply dipping vein or manto better models the shape of the mineralized body.



41

Figure 11.12 Cross-section of drilling results from Section 18500 E. Anomalous soil samples in magenta. Drillholes required to constrain the geometry are PDH 30, 31 and 32.

Fig.11.13. Microphotograph of sample 31014, Hole 8, 138.32 to 139.84 m. Mineralization consists of calcite-quartz-sulfide in propylitic altered andesite This sample contains 559 g/t Ag, 4.96% Zn, 2.73% Pb and 0.2 g/t Au across 1.52 m.

Fig.11.14. Microphotograph of sample 31053, Hole 8, 196.08 to 197.60 m. This sample contains 348 g/t Ag, 16.6% Zn, 3.4% Pb , 0.2% Cu and 6.21 g/t Au across 1.52 m.

11.2.8 ANDRES (BETWEEN SECTIONS 18900 E AND 18800E)

Three holes were drilled in the Andres area—Holes 15, 19 and 21. Hole 15 was positioned under a 255 ppb Au-in-soil anomaly, and Holes 19 and 21 were drilled to test the high chargeability IP anomalies in the arroyo Los Cochis. As expected from the surface sampling, the IP response was



42

caused by a barren quartz-pyrite lithocap hosted in vitric tuffs. In Hole 15, 13.66 meters of 2.3 g/t Ag, 0.47% Zn and 0.07% Pb was intercepted from surface. The hole was oriented to intercept a steeply northeast dipping vein, but the geochemical data imply that the mineralization is flatter, and Hole 15 probably did not provide a full test of the mineralization. Additional drilling is warranted as this area carries gold as well as silver.

Fig. 11.15. Cross-section Andres showing Holes 15 and 19. If the mineralization is in a manto, as implied by some of the surface exposures (Fig. 9.5), then a reversal of the dip is implied by this section.



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Fig. 11.16. Photomicrograph of the mineralization in Hole 15 (sample 31229). This intercept carries 1.76% Zn, 0.28% Pb, 0.03% Cu, 8 g/t Ag and 0.12 g/t Au across 1.52 meters. In this sample, a later stage of quartz veining cross-cuts early calcite.

SAMPLING METHOD AND APPROACH

12.1 SOIL SAMPLES Soil samples were collected by cleaning the organics off the sample site, then digging a small pit with a shovel to a depth of about 30 cm into the B-horizon. This depth is generally below the zone of strongest surface leaching, and ensured the collection of material that was as in-situ as possible, an important consideration in steeper terrain. In the winter, the samples were damp, but as the weather dried out in the spring, samplers were able to screen the samples on-site to remove any rock chips About 1 kg of material was collected from the bottom of the sample pit and put in a Kraft soil sample envelope with a numbered tag.

12.2 SURFACE AND UNDERGROUND ROCK SAMPLES Several types of rock samples were used in the evaluation of the Picachos Property. These are listed in Table 12.1. For all types of samples, about 2 kilograms of rock chips were collected in a double-bagged plastic sample bag with a numbered tag.



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Table 12.1 Types of surface rock samples used to evaluate mineral occurrences. SAMPLE TYPE DESCRIPTION AND COLLECTION METHOD

Grab Samples A sample taken from an outcrop, but not oriented across a structure, and not necessarily representative.

Float Samples A rock sample from loose material, usually stream boulders or colluvium. Dump Samples Material collected from a mine dump. These are not usually representative. Chip Samples Oriented samples taken across a width by chipping pieces of rock approximately every 10 cm. Chip-Channel Samples Oriented samples cut across a representative part of a mineralized structure using a sledgehammer

and chisel to form a continuous channel. Most channel samples were cut only after the working face had been cleared of soil and debris, and the oxidized material removed using a hammer if at all possible. After cleaning, 5-20 kg of material was collected on a large rice bag laid under the working face. This material was then crushed to a medium gravel size between two rock hammers, and homogenized by rolling the gravel in the rice bag. From the homogenized sample, about 2 kg of rock, and ½ kg of fines were put into a doubled plastic sample bag and sealed with a plastic tie. Where possible, chip channel samples were used to evaluate the grade of veins exposed on surface and underground.

12.3 DRY RC DRILLING Drill samples were routinely collected on five-foot intervals. 100% of the dry samples were sent through the cyclone and collected in a Jones splitter. The sample was then split in half or quartered. Part of the sample was bagged in a plastic bag and stored in camp. The other part was bagged in a Tyvek bag, the re-bagged in thin plastic bag for shipment to the lab. Powder from the dry samples were analyzed immediately for silver and base metals using a field portable Niton XRF analyzer. There was a problem on Hole 4 and part of Hole 3 where the samplers did not understand the procedure for inserting the QA/QC samples, and instead threw out the samples in those spots. To estimate the grade of the missing intervals, the average result of the sample above and below the missing sample was calculated, and used in that spot.

12.4 WET RC DRILLING Wet samples were routinely collected on 5-foot intervals. The entire sample was funneled from the cyclone into a circulating splitter. Pan blocks were placed on alternate openings in the splitter to cut sample size down to approximately a 1/2 split. Water and cuttings were then run through the Jones splitter again to sample ¼ split. After collecting a sample of the cuttings, some of the water and fines were added to the sample bag, and the excess water seeped through the permeable Tyvek bag as it was dried off in the sun. X-ray analysis could not be performed immediately on the wet samples as water suppresses the results. Instead, these samples were dried first, then X-rayed two or three days later. At that time, the sample was split into two parts: half for the lab, and the other half as a back-up for storage in camp.

13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY RC sample powders were assayed on-site with a field portable Niton X-ray analyser, and values for silver, zinc and lead used to guide on-site drilling decisions. After analysis, the samples were stored in a secure building at camp, then shipped at the end of the job via Transportes Castores to ACME’s prep lab in Guadalajara for preparation. Soil samples were screened to –80 mesh. Rock and drilling samples were crushed and pulverized to –150 mesh. The prepared pulps were then shipped to Vancouver, where 15 gram splits were digested in warm aqua regia for 1 hour, diluted to 300 mL with demineralised water, and analysed for gold, silver and base metals using an Inductively Coupled Plasma Mass Spectrometer (ICP-MS; 1DX package). Rocks and drill samples



45

containing more than 0.3 g/t Au, 50 g/t Ag or more than 1% base metals were re-analysed using a 30 gram fire assay for Au-Ag (Group 6 Fire Assay; 3-acid digestion), and high-grade multi-element ICP methods (Group 7 ICP). Fire-assaying is a highly precise and accurate method for the total determination of Au and other precious metals in samples. Samples are: (i) mixed with fluxes including lead-oxide, (ii) fused at 1050°C, (iii) cupeled to recover a dore bead, (iv) nitric acid parted to separate the precious metal, then (v) analysed by an Inductively Coupled Plasma - Atomic Emission Spectrometer (ICP-ES).

14.0 DATA VERIFICATION Blind standard pulps were inserted into the sample stream roughly every 25 samples to check for within-batch analytical precision. A total of 88 drilling samples were selected from both mineralized and non mineralized intercepts from the back-up splits in camp, and sent to SGS Labs in Durango for gold and silver analysis. As these samples were split directly from the drill cuttings, the analyses provide a good estimate of within-sample variation, as well as overall measurement error. Most check samples do not contain measurable gold, so only silver values were reviewed. Of the 88 samples, only 2 report significant differences between ACME and SGS; a difference more likely caused by within-sample variation than laboratory error. Discounting these two results, the correlation coefficient between the two data sets is very close to one. A similar analysis of the Niton X-ray data with ACME’s analytical data implies that the X-ray values are generally 35% lower than the assay data.

15.0 ADJACENT (INTERNAL) PROPERTIES There is no relevant information under this Section.

16.0 MINERAL PROCESSING AND METALLURGICAL TESTING No metallurgical studies have been done.

17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES The Picachos Property is an exploration-phase project. No mineral reserve estimates have been calculated. One more stage of drilling at both Los Cochis and El Pino is required to constrain the geometry of the mineralization enough to prepare a resource estimate.

18.0 OTHER RELEVANT DATA AND INFORMATION None.

19.0 INTERPRETATION AND CONCLUSIONS The objective of the first phase of drilling was to determine if the “bulk tonne” concept could be used to develop the Los Cochis Prospect, a polymetallic deposit in an area of the world better known for silver-gold veins. Results to date include 10 intercepts that could logically be included in an open pit design (Table 19.1). None of these except perhaps Hole 8 can be considered complete transects of the deposit, as it appears that that controls on the geometry of the mineralization are related to stratigraphy as much as or more than they are to faulting.



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Table 19.1 Bulk-tonne intercepts from Los Cochis 2007 drilling HOLE_ID FROM


Interval (meters)

Copper(ppm)

Lead(ppm)

Zinc(ppm)

Silver(ppm)

Gold(ppb)

In‐Situ Metal Value ($/tonne)

COCH1 0.00 15.20 15.20 55 1126 2508 9 3 $ 14.56

COCH3 0.00 59.28 59.28 52 2222 4754 67 1 $ 54.60

COCH4 0.00 36.48 36.48 35 812 2285 7 1 $ 11.88

COCH6 0.00 72.96 38.00 65 1729 3185 50 1 $ 40.17

COCH8 130.72 147.44 16.72 329 3622 7247 74 25 $ 71.48

COCH8 185.44 218.88 33.44 237 5506 13795 34 383 $ 79.21

COCH10 0.00 62.32 62.32 27 566 1588 6 1 $ 8.72

COCH13 0.00 62.32 62.32 55 1510 3654 36 1 $ 32.80

COCH15 0.00 13.66 13.66 60 671 4671 2.3 35 $ 15.45

COCH20 0.00 47.12 47.12 65 1487 2748 71 1 $ 50.14

Within the wider bulk tonne envelopes, there are several robust higher grade sections as specified in Table 19.2. Table 19.2 High-grade intercepts from Los Cochis 2007 drilling. HOLE_ID FROM


Interval (meters)

Copper(ppm)

Lead(ppm)

Zinc(ppm)

Silver(ppm)

Gold(ppb)

In‐Situ Metal Value ($/tonne)

COCH3 1.52 12.16 10.64 89 4386 9000 172 1 $128.93

COCH3 18.24 27.36 9.12 141 6579 11533 198 1 $155.79

COCH4 4.56 6.08 1.52 112 1872 9922 50 1 $56.52

COCH6 1.52 16.72 15.20 171 5400 10180 196 1 $148.54

COCH6 27.36 28.88 1.52 87 2700 6000 86 1 $69.65

COCH8 138.32 141.36 3.04 1573 16450 31050 377 108 $342.401

COCH8 186.96 190.00 3.04 373 3300 19950 32 85 $78.2227

COCH8 194.56 202.16 7.60 673 19720 45100 126 1528 $279.414

COCH13 0.00 3.04 3.04 122 2300 4950 65 1 $54.5376

COCH13 18.24 22.80 4.56 128 7967 14933 264 1 $203.7

COCH15 6.06 7.58 1.52 283 2814 17600 8 127 $58.9

COCH20 0.00 12.16 12.16 100 3325 6125 97 1 $77.8122

COCH20 22.80 24.32 1.52 116 2800 5100 95 1 $73.1085

COCH20 27.36 30.40 3.04 369 3150 2400 509 2 $298.974



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20.0 RECOMMENDATIONS El Toro is the largest (five times larger than Los Cochis) and most gold-rich mineral district on the Property, but development costs of working in that topographically challenged area will be substantial. At this stage, it will be more cost effective for NWT to delineate mineral resources at Los Cochis, El Pino and Guadalupe. However, at least one campaign of exploration should be completed at El Toro (say in 2009) prior to making important decisions such as where to locate the mineral processing plant. For 2008, the following work will provide the data needed to advance El Pino and Los Cochis from “mineral prospects” to “mineral resources”

• A second stage of reverse circulation drilling to better constrain the geometry of the Los Cochis deposit as specified in the Figures of Section 11. The objective of this stage of work would be to identify a body of about 600 meters strike length, 80 meters width and 200 meters in the down-dip direction representing perhaps 27 million tonnes of mineralized rock. About 2305 meters of drilling in 16 holes are should be an adequate test of the “manto” concept.

• A minimum of 1860 meters of drilling in 9 holes are recommended to test the high-grade

potential of El Pino. A single structure in this zone might have as much as 2.5 million tonnes of high grade silver and gold ore. Most of the drill pads are already built, and the road, camp and water tank are already in-place.

• About 855 meters of drilling in three exploration holes are warranted to test the high-

grade oreshoots at Guadalupe. The drilling plan for a total of 5020 meters is in Table 20.1. Maps and cross-sections are in Figures 20.1 to 20.10. An additional 3.4 kilometers of road development are required for Los Cochis, about 700 meters for Guadalupe and perhaps a few hundred meters at most for El Pino. Road development should start about six weeks prior to drilling. In addition to the drilling, air photography of the entire Property and detailed topographic mapping of Los Cochis and El Pino should be completed. Overall costs of the 2008 work are estimated at about $1.01 million. While the 2008 campaign is in-progress, a powder license should be obtained from the National Dept. of Defense to put NWT in a position to deal with El Toro in 2009. Table 20.1 2008 Drilling Plan for Los Cochis, Guadalupe and El Pino HOLE_ID WGS84_E WGS84_N ELEV AZIMUTH DIP DEPTH_m NOTES

PDH24 419391.7 2618278.57 1637 355 -75 130 DOWN dip of COCH 13

PDH22 419323.3 2618368.09 1600 45 -75 100 Down-Dip of Coch 3, El Pinito

PDH23 419231.2 2618274.32 1684 45 -75 210 Down Dip of PDH22

PDH25 419275.7 2618459.96 1621 45 -70 100 Test of Resistivity Target, 18.7 ppm Ag

PDH26 419207.9 2618535.87 1539 45 -70 40 Between 128 ppm Ag in soil, 708 g/t Ag in rock

PDH27 419144.9 2618471.06 1562 45 -70 80 Down-dip of PDH 26

PDH28 419115.3 2618596.53 1577 45 -70 130 Down dip of up to 38.4 ppm Ag in soil



48

PDH29 419330.4 2618210.24 1672 45 -75 175 Down Dip of El Fresno

PDH30 419626.8 2618385.87 1647 225 -45 210 To check the possibility that high grade of Coch 8 might be a vein

PDH31 419560.2 2618318.16 1622 45 -75 230 Test wide low-grade intercept of Coch 8

PDH32 419495.5 2618262.46 1667 45 -75 300 Down Dip tests of Bulk ton intercept in Coch 8

PDH33 420138.4 2618476.11 1600 225 -80 120 Collared near 12 ppm Ag, 58 ppb Au in soil

PDH34 420226.5 2618281.57 1640 225 -80 110 > 1500 ppm Zinc in soil

PDH35 419947.5 2618144.58 1710 225 -80 100 Collared near 255 ppb Au in soil, Zinc>1000 ppm

PDH36 420975.6 2618290.31 1755 225 -80 150 Strong Zn, Ag to 177 ppm in soil

PDH37 419720.9 2618195.58 1700 1 -90 120 Exploration of strong Zinc anomaly in soil

PDH38 419666.4 2621202.45 1525 250 -65 300 South extension of Guadalupe; 43.4 g/t Ag, 0.2 g/t Au/4.5m (surface)

PDH39 419355.1 2621362.48 1485 250 -70 280 Guadalupe North

PDH40 419354.9 2621360.17 1485 210 -65 275 Guadalupe Sur

PINO3 418998.7 2624834.71 1645 267 -50 175 Down-dip of Catalina, 611 g/t Ag, 9.4 g/t Au across 2 m

PINO4 418998.3 2624834.77 1645 267 -75 230 Down Dip of Catalina; 611 g/t Ag, 9.4 g/t Au/2m

PINO5 418997.9 2624833.28 1645 290 -60 250 Down dip of 6422; 212 g/t Ag, 3.2 g/t Au across 3m

PINO6 418928.7 2624646.45 1590 257 -50 125 Cut under 6327 with 511 g/t Ag, 2.9 g/t Au across 3m

PINO7 418928.9 2624646.22 1590 257 -75 165 Cut Under Pino 6 and Main Stope

PINO8 418928.8 2624646.23 1590 225 -65 125 Below El Pino Stope

PINO9 418928.6 2624646.07 1590 225 -80 200 Below El Pino Stope

PINO10 418779.1 2624776.01 1560 63 -50 330 Depth Test of Catalina

PINO11 418825.1 2624593.67 1520 70 -60 260 Under El Pino Stope

5020



49

Fig. 20.1 Map of drilling plan for Los Cochis



50

Fig. 20.2 Map of Drilling Plan for El Pino.



51

Fig. 20.3. Cross-Section showing Proposed Holes 3 and 4



52

Fig. 20.4 Cross-section of Proposed Holes 4 and 5



53



54

Fig. 20.5 Cross-Section of Proposed Holes Pino 6 to 11

Fig. 20.6 Cross-Section of Proposed Holes Pino 8 and 9.



55

Fig. 20.7 Cross Section of Proposed Hole10.



56

Fig. 20.8 Drilling Plan for Guadalupe



57

Fig. 20.9 Cross Section of Proposed Hole 39



58

Fig. 20.10 Cross Section of Proposed Hole 40



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21.0 REFERENCES

Albinson, T., Norman, D.I., Cole, D., Chomiak, B., 2001, Controls on the Formation of Low-Sulfidation deposits in Mexico: Constraints from Fluid Inclusion and Isotopic Data, Economic Geology, Spec. Pub. No. 8, p. 1-32.

Aguirre-Diaz, G.J., Labarthe-Hernandez, G. (2003) Fissure Ignimbrites: Fissure-source origin for voluminous ignimbrites of the Sierra Madre Occidental and its relationship with Basin and Range faulting: Geology, V.31 p. 773-776.

Camprubi. A., Ferrari L., Coscsa, M., Cardellach, E., Canals, A. (2003) Ages of Epithermal Deposits in Mexico: Regional Significance and Links with the Evolution of Tertiary Volcanism: Economic Geology, V. 98, p. 1029-1037

Chen, B., 2007, 3D Induced Polarization and Magnetometer Survey on the Los Cochis and Guadalupe Grids for Northwestern Mineral Ventures Inc.; SJV Consultants, Ltd., 27 pages.

DiPrisco, G., 2002, Ore Characterization of Hand Samples from the Picachos Property, Mexico, Terra Mineralogical Services, 30 pages.

Elston W.E. (1994) Siliceous Volcanic Centers as Guides to Mineral Exploration: Review and Summary: Economic Geology, V. 89, p. 1662-1686

Enriquez, E. and Rivera, R., 1998, Geology of the Santa Rita Ag-Au deposit, San Dimas district, Durango, Mexico. Abstract, Association of Mining Engineers, Metallurgists and Geologists of Mexico (AIMMGM), Convention Acapulco, January 17-20, 1998.

Enriquez, E. and Rivera, R., 1997, Timing of magmatic and hydrothermal activity at the San Dimas District, Durango, Mexico. Abstract, Association of Mining Engineers, Metallurgists and Geologists of Mexico (AIMMGM), Convention Acapulco, October 14-17, 1997.

Enriquez, E. 1995, Trace Element zonation and Temperature Controls of the Tayoltita Ag-Au Fossil Hydrothermal System, San Dimas District, Durango Mexico, Unpublished MSc. thesis; Colorado School of Mines, Golden, Colorado.

Heald, P., Foley, N.K. and Hayba, D.O., 1987, Comparative Anatomy of Volcanic-Hosted Epithermal Deposits: Acid-sulfate and Adularia-sericite Types; Economic Geology, v. 82, p. 1-26

Hedenquist, J.W., Arribas R., A., Gonzalez-Urien E., 2000, Exploration for Epithermal Gold Deposits, SEG Reviews, p. 245-277.

Ferrari, L., Valencia Moreno. M., Bryan, S., 2005, Magmatismo y tectónica en la Sierra Madre Occidental y su relación con la evolución de la margen occidental de Norteamérica, Boletin de la Sociedad Geologica Mexicana Volumen Conmemorativo del Centenario Temas Selectos de La Geologia Mexicana Tomo LVII, N. 3, 343-378.

Fletcher, W.K., 1988, Analysis of Soil Samples, Exploration Geochemistry: Design and Interpretation of Soil Surveys; Reviews in Economic Geology, v. 3, p.79-96.

Heinrich, C.A., 2005, The Physical and Chemical Evolution of low-salinity magmatic fluids at the porphyry to epithermal transition: a thermodynamic study: Mineralium Deposita, v. 39 pp. 864-889.



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Horner, J.T., 1998, Structural geology and exploration in the San Dimas District, Durango, Mexico-An alternative geologic model; Unpublished PhD. thesis; Institute of Geology and Paleontology; University of Salzburg, Austria, 203 p.

McDowell, F.W., Clabaugh, S.E., 1979, Ignimbrites of the Sierra Madre Occidental and their relation to the tectonic history of western Mexico: Geological Society of America Special Paper, 180, 113-124.

McDowell, F.W., Keizer, R.P., 1977, Timing of mid-Tertiary volcanism in the Sierra Madre Occidental between Durango City and Mazatlan, Mexico: Geological Society of America Bulletin, v. 88, p. 1479-1486.

McPhie, J., Doyle, M., Allen, R., 1993, Volcanic Textures: A guide to the interpretation of textures in volcanic rocks; CODES Key Centre, Tasmania, 191 pages.

Sillitoe, R.H., 2004, Musings on Future Exploration Targets and Strategies in the Andes; Andean Metallogeny: New Discoveries, Concepts and Updates: Society of Economic Geologists, Special Publication 11, 2004, p. 1-14.

Staude, J., 2001, Jurassic to Holocene tectonics, magmatism and metallogeny of Northwestern Mexico, GSA Bulletin, v. 113, 1357-1374.

Robinson, 2005, Soil Geochemical and Trenching Results for the Picachos and Camargo Concessions, Durango, Mexico, Minera Tango S.A. de C.V., 91 pages.

Robinson, 2002, Soil geochemical and Prospecting results for the Camargo Concession Durango, Mexico, Minera Tango S.A. de C.V, 48 pages.

Robinson, 2000, Geological Report, Picachos Concession E. 24465, Southwestern Duranago, Mexico, internal Company report, 50 pages.

Ross, K.V., 2000, Petrographic Study for Minera Camargo S.A. de C.V., Ore samples from the Picachos claim in Durango, Mexico; Panterra Geoservices Inc. 30 pages

Sillitoe, R.H., 2004, Musings on Future Exploration Targets and Strategies in the Andes; Andean Metallogeny: New Discoveries, Concepts and Updates: Society of Economic Geologists, Special Publication 11, 2004, p. 1-14.

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