The Quimsacocha project has probable reserves of 8.1 million tonnes, at an average grade of 6.5 grams of gold per tonne of ore containing 1.7 million ounces of gold, within an indicated resource of 9.9 million tonnes, at an average grade of 6.6 grams of gold per tonne of ore containing 2.1 million ounces of gold.

The requisite permits and authorization to advance feasibility work have been obtained, and dialogue is ongoing with senior government officials in order to obtain needed clarity on fiscal and other matters, including the analysis of the model mining contracts recently released by the Ecuadorian government. The Company is also closely following the progress of mining contract negotiations involving three projects in Ecuador, which may serve to clarify certain key items.

Assessment of the project's financial viability continues as the Company works to clarify key fiscal and other applicable dimensions. Evaluation expenditures expected in 2011 of $3.0 million are based on continuing with the current level of activity. The Company continues to assess whether the new contract model and the government's position offer sufficient flexibilities that will allow advancement of the project.

Outlook

A final feasibility study, at a cost of $14 million, is expected to be completed within 15 months of the mining regulations being in place.
Estimated annual production is 202,000 ounces at a cash cost of $272 per ounce.