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.