Indiana Exploration Update

The drill program at Indiana is designed to test for extensions of known mineralization along strike and down-dip at the Bondadosa and Flor de Espino veins, new mineralized structures not exposed at surface, high-grade mineralization at structural intersections, and provide confirmatory grade and geotechnical information for underground mine design.

Twelve (12) exploration drill holes totaling 4,852 metres and one infill drill hole of 208 metres at the Flor de Espino vein have been completed to date (see Figure 1). Very few assays have been received due to a combination of back-up in the laboratory and flooding with subsequent loss of electric power due to heavy rains in the Coquimbo region of Chile. The Company is taking steps to remedy these delays, including sending samples to different certified laboratories in Chile, and will report assay results as soon as they are available.

Visual sulphide mineralization in drill core, trenches and outcrops indicates potential for new styles of mineralization in addition to the vein-hosted mineralization hosting the current mineral resource, which may expand the target concept(s) at Indiana.

Mario Stifano, the Company's CEO, commented: "We are very encouraged by these observations, which support our belief that Indiana is a fertile area for discovery of additional gold-copper mineralization and expansion of the current mineral resource. For the first time at Indiana, disseminated sulphide mineralization, including molybdenite, has been recognized in drill core. The significance of this disseminated mineralization is being assessed, as is the significance of the hypogene (primary) chalcocite and bornite associated with intense alteration. Surface exploration has identified new targets in a large land package of approximately 8 km by 10 km within a major IOCG belt which we expect will merit drill testing."

Note: In the absence of assays, visually observed mineralization is not necessarily an indication of significant grade or of economic mineralization. Widths are reported as drilled. True widths are unknown.

Drill Program

Twelve of the 13 drill holes completed to date intersected the Bondadosa or Flor de Espino veins within metres of targeted depth. The only one that did not was Drill Hole IN26009, which targeted the Bondadosa vein. As these veins commonly pinch and swell, it is assumed that this drill hole simply intersected a zone where the vein was pinched. Visual evidence in the recognized veins comprises visible sulphide mineralization (pyrite and chalcopyrite) usually associated with magnetite, over drilled widths similar to the vein mineralization comprising the current mineral resource.

In addition, 12 new visually mineralized structures have been identified in 10 of the drill holes completed to date (see Table 1 below), each displaying pyrite and chalcopyrite (+/- magnetite) mineralization in discrete and identifiable structures. Some of these structures may have been intersected in more than one drill hole but their geometry is not yet fully understood. Assay results have not been received to indicate potential grade.

Figure 1: Plan view showing drill holes completed to date at Indiana project.

In addition to the vein-hosted mineralization, for the first time at Indiana, disseminated sulphide (pyrite and chalcopyrite) mineralization has been recognized in intrusive and volcanic rocks near their contact. Two such intervals have been identified (see Photo 1): At Drill Hole IN26008 over 26.2 metres (from 500.4 to 526.6 metres) and in IN26014 over 4.25 metres (from 216.0 to 220.25 metres). True widths are unknown and until assay results are received, grades are unknown.

In Drill Hole IN26010, significant disseminated molybdenite was observed in intrusive rock over a drilled width of about one meter in two locations, at 306.5 metres and at 329.5 metres (see Photo 2). The significance of this is not yet understood. While minor amounts of molybdenite in veinlets are not uncommon in Andean IOCG (iron oxide - copper - gold) deposits like Indiana, disseminated molybdenite within intrusive rocks is rare in typical IOCG systems, though it may occur in districts with porphyry-style mineralization or transitional IOCG - porphyry characteristics.

Photo 1: (a) IN26008 / 520.68m, disseminated sulphide in intrusive (monzodiorite); (b) IN26008 / 524.00m disseminated sulphide mineralization in volcanic (andesite); (c) IN26014 / 218.00m disseminated sulphide mineralization in monzodiorite; and (d) IN26014 / 208.30m disseminated sulphide mineralization in andesite.

In Drill Hole IN26014, hypogene (primary) chalcocite and bornite were identified within a narrow interval at a depth of 398.1 metres (see Photo 3). The significance of this is not yet understood, though it does generally indicate a higher-temperature zone of mineralization and may indicate a vertical zonation of the mineralizing system. This primary chalcocite and bornite occur within an interval of intense calcsilicate alteration, visually similar to skarn mineralization.

Ongoing work will assess the significance of the disseminated sulphides, molybdenite and chalcocite-bornite mineralization, and whether the exploration target concept(s) at Indiana need to be modified.

Photo 2: Drill Hole IN26010 at 329.50m, disseminated molybdenite in intrusive monzodiorite.

Photo 3: Drill Hole IN26014 at 398.1m, exposes bornite and chalcocite associated with monzodiorite with strong calcsilicate alteration.

Table 1: Mineralized structures identified in drill holes completed to date (py=pyrite, cpy=chalcopyrite, Fe-ox=iron oxides, and Cu-ox=copper oxides).

New Targets

Ongoing surface mapping and sampling has identified new targets. The most significant of these is La Maravilla, located along the newly identified Zeus structure (Figure 2).

Figure 2: Plan of the Zeus N-S Structural system, La Maravilla Target, and their location with respect to the Flor de Espino Vein.

The Zeus structure was identified in trenches excavated across a newly identified prominent North-South trending structure. The trenches each expose about 35 metres of intensely altered and fractured intrusive rock with abundant iron oxides after sulphides. Photo 4 shows the alteration and mineralization in the northernmost trench and illustrates an important point about exploration potential at Indiana. The altered rock is covered by gravels which totally obscure the alteration and mineralization. It is reasonable to expect further such targets remain to be discovered. The trenches are being mapped to characterize lithologies and alteration and will be channel sampled. Additional trenches along this new trend will be excavated and sampled.

Approximately 500 metres north of the trench, the Zeus structure intersects the northwest projection of the Flor de Espino vein at the La Maravilla target, approximately 1.1 km from the historic Flor de Espino mine workings. At this intersection, a road cut has exposed about 75 metres of intensely altered and fractured andesitic volcanic rocks in contact with altered intrusive rocks. Visual mineralization includes magnetite and iron oxides after sulphides (including goethite and jarosite), as well as blood-red silicified hematite which is called "sangre de toro" ("bull blood") by local miners and is commonly associated with gold mineralization in the Indiana district. Alteration includes silicification as well as kaolinization presumed to result from the oxidation of pyrite. This road cut has been channel sampled.

Photo 4: Trench across a major N-S trending structure (Zeus System) containing copper oxides, magnetite veins with sulphides and alteration to garnet, epidote, and actinolite. This zone is hosted within monzodioritic to granodioritic intrusive rocks.

Qualified Person

Scientific and technical disclosures in this news release have been reviewed and approved by Mr. Dorian L. (Dusty) Nicol (P. Geo., Chartered Geo., FAusIMM), the Company's exploration consultant, who is considered, by virtue of his education, experience and professional association, a "qualified person" as defined by National Instrument 43-101 and the AIM Rules for Companies.