SAN LUIS DEL CORDERO PROJECT

TECHNICAL REPORT ON THE SAN LUIS DEL CORDERO PROJECT DURANGO STATE. MEXICO

LOCATION CENTERED NEAR NAD27 MEXICO UTM ZONE 13 567524E 2812900N

Lat: 25°25 ‘58”N Long: 104°17’20”W

PREPARED FOR

PROSPERO SILVER CORP. 300 ROYAL CENTRE-1055 WEST GEORGIA STREET VANCOUVER. B.C. V6E 3R3

PREPARED BY

PETER A. CHRISTOPHER P.ENG. PHD PAC GEOLOGICAL CONSULTING INC. 3707 WEST 34 AVENUE VANCOUVER B C V6N 2K9

AUGUST 22, 2008

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 SAN LUIS DEL CORDERO PROJECT

3.0 SUMMARY...... 5 3.1 Property Description ...... 5 3.2 Property Location, Infrastructure and Access...... 5 3.3 Property Ownership & Terms of Agreement...... 5 3.4 Property Geology and Mineralization...... 6 TABLE 3.1. CHECK SAMPLES SAN LUIS DEL CORDERO PROJECT, DURANGO, MEXICO (080502)...... 6 3.5 Deposit Type & Exploration Concept...... 6 3.6 Status of Exploration Development and Operations...... 7 3.7 Conclusions and Recommendations ...... 7 3.6 Opinion of Merit ...... 7 4.0 INTRODUCTION AND TERMS OF REFERENCE ...... 7 4.1 Terms of Reference and Purpose ...... 7 4.2 Source of Information and Data...... 7 4.3 Field Involvement of the Qualified Person (Author)...... 8 5.0 Reliance on Other Professionals ...... 8 6.0 PROPERTY DESCRIPTION AND LOCATION (Figures 6.1, 6.2 & 6.3) ...... 8 6.1 Property Area (Figures 6.1, 6.2, & 6.3; Table 6.1)...... 8 6.2 Property Location (Figures 6.1, 6.2 & 6.3)...... 9 6.3 Description of Claims (Fig. 6.3 & Table 6.1)...... 9 6.4 Claim Title and Agreements (Tables 6.2 & 6.3)...... 9 6.5 Legal Survey ...... 9 6.7 Environmental Liabilities...... 9 6.8 Working on the Property...... 9 Table 6.1 Pertinent Claim (Mining Concession) Data for San Luis Project...... 10 Table 6.2 Prospero Shares Issueable to Altiplano Under Section Schedule “C” of Option Agreement...... 10 Table 6.3 Summary of Cash Payments and Work Commitments to Retain SLDC Option..... 11 Figure 6.1 Location Plan for San Luis Del Cordero Project, Durango State, Mexico...... 12 Figure 6.2 General Locations of SLDC Project, Mexico...... 13 Figure 6.3 Location of SLDC Project Mining Concessions Durango State, Mexico...... 14 7.0 ACCESSIBILITY, LOCAL RESOURCES, CLIMATE, AND PHYSIOGRAPHY ...... 15 7.1 Access to the Property and Proximity to Population Center(s) ...... 15 7.2 Topography, Elevation and Vegetation ...... 15 7.3 Relevant Climate and Length of Operating Season...... 15 7.4 Availability of Surface Rights, Power, Water and Mining Personnel ...... 15 7.5 Potential Areas for Tailings Disposal, Heap Leach Pads and Plant Sites...... 16 8.0 HISTORY ...... 16 8.1 Previous Ownership...... 16 8.2 Previous Exploration...... 16 8.3 Historic Production and Resource Estimates...... 17 Figure 8.1 Geology of the SLDC showing locations of veins and Apex and HC drill holes. A number of adits and shafts were used to exploit the Santa Rosa and India Bonita structures (Prepared by Prospero, 2008)...... 18

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Figure 8.2. SW-NE Section in the Plane of Apex Drill Holes SL-0-1 & 2...... 19 Figure 8.3. NE-SW Section in the Plane of Apex Drill Holes SL-0-3...... 20 Figure 8.4 N-Section in the in the Plane of HC Drill Hole HCSR-2 Testing Santa Rosa Structure (Prepared by Prospero, 2008)...... 21 Figure 8.5 N-S Section in Plane of HC Drill Holes HCIB-1 and HCIB-2 Testing India Bonita Vein System...... 22 Figure 8.6 NW-SE Section Showing Santa Rosa Workings and Altiplano Sampling Above Water Table...... 23 9.0 GEOLOGICAL SETTING ...... 23 9.1 Regional Geological Setting ...... 23 9.2 Property Geology (Figures 9.1 & 9.2) ...... 24 Figure 9.1 Generalized Geology of SLDC, Durango State, Mexico...... 25 Figure 9.2 Stratigraphic Section for the SLDC Project Area...... 26 10.0 DEPOSIT TYPES (Figure 10.1)...... 27 10.1 Mineral Deposit Type/Model for the Property ...... 27 10.2 Geological Concepts Used For Exploration of the Property ...... 27 11.0 MINERALIZATION (Figures 11.1) ...... 27 11.1 Mineralized Zones Encountered ...... 27 Figure 10.1 Section Showing Vein, Replacement and Skarn Type Targets for Ag-Cu-Zn-Pb Mineralization on the SLDC...... 28 Figure 11.1 Figure Showing Silicification or Jasperoid Mineralization Trending WNW in Santa Rosa Mine Area...... 29 12.0 EXPLORATION BY THE ISSUER ...... 30 12.1 Geochemical Sampling ...... 30 Table 12.1 Further Analysis by Prospero of ½ Core from Historic Hole HCSR2...... 31 12.2 Induced Polarization Geophysical Program (Figure 12.1, 12.2, 12.3 & 21.1) ...... 32 12.2 Discussion of Induced Polarization Results...... 32 Figure 12.1 Sampling of India Bonita Mine by Prospero and Altiplano (Prospero, 2008). .... 34 Figure 12.2 Location Plan for Surveyed IP Grid...... 35 Figure 12.3 3D Distribution of Resistivity (from Rastad & Dobrescu, 2008)...... 36 Figure 12.4 3D Distribution of Chargeability (from Rastad & Dobrescu, 2008)...... 37 13.0 DRILLING...... 38 14.0 SAMPLING METHOD AND APPROACH...... 38 14.1 Sampling by Prospero...... 38 14.2 Prospero Rock Sampling Procedures...... 38 Table 14.2 Supplier for Analytical Standards...... 41 15.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 42 15.1 Sampling Personnel and Security ...... 42 15.2 Sample Preparation and Analytical Procedures...... 42 16.0 DATA VERIFICATION ...... 42 16.1 Quality Control and Data Verification...... 42 16.2 Verification of Sampling and Analytical Data by Author (Table 15.1) ...... 43 Table 16.1 Writer’s Check Samples from the San Luis Property...... 43 17.0 ADJACENT PROPERTIES`...... 43 17.1 Relevant Data on Adjacent & Nearby Properties ...... 43 18.0 MINERAL PROCESSING AND METALLURGICAL TESTING...... 44

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18.1 Mineral Processing and Metallurgical Testing ...... 44 19.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES...... 44 19.1 Mineral Resource Estimates ...... 44 20.0 OTHER RELEVANT DATA AND INFORMATION ...... 44 21.0 INTERPRETATION AND CONCLUSIONS...... 44 21.1 Conclusions and Recommendations (Table 21.1) ...... 44 Table 21.1 Proposed Phase 1 Drill Holes...... 46 22.0 WORK RECOMMENDATIONS...... 46 22.1 Summary Recommendation Phase One Work Program...... 46 22.2 Recommendation of Phase Two Work Program ...... 46 22.3 Opinion that Property is of Sufficient Merit to Justify Work Recommended ...... 46 TABLE 22.1 RECOMMENDED WORK PROGRAM AND BUDGET FOR PHASE 1 ON SAN LUIS PROPERTY, DURANGO STATE, MEXICO...... 47 TABLE 22.2. WORK PROGRAM AND BUDGET FOR PHASE 2 ON SAN LUIS PROPERTY, DURANGO STATE, MEXICO (Success Contingent)...... 47 23.0 REFERENCES AND SOURCES OF INFORMATION...... 48 24.0 SIGNATURE, STAMP AND DATE ...... 50 25.0 CERTIFICATE...... 51

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3.0 SUMMARY

3.1 Property Description Prospero Silver Corp. (“Prospero” or “The Company”) through its Mexican subsidiary Minera Fumarola, S.A. De C.V. (“Fumarola”) holds the San Luis Del Cordero Project (“SLDC”) which covers about 2,778 hectares in Durango State, Mexico. On March 25, 2008, Prospero signed a letter of agreement with Exploraciones Del Altiplano, S.A. Del C.V. (“Altiplano”) and an option agreement was finalized providing an option for Prospero to earn a 100% interest in Altiplano’s San Luis del Cordero project. The SLDC covers a contact zone between granodioritic or dioritic and quartz feldspar porphyry intrusive rocks and siltstone, limestone and shale. The zone has vein type copper-silver- zinc mineralization in the Santa Rosa, India Bonita and Veta NE systems with potential for skarn and replacement of limestone and limy sediments. Surface exploration work and drilling conducted by previous operators has concentrated on the Santa Rosa Vein, the India Bonita Vein and Veta NE target. The writer was retained by Prospero to examine the setting of the SLCD to qualify for preparation of an independent technical report on the SLDC in the form required by NI 43-101. A field examination was conducted on May 2nd, 2008 during which three check samples were collected (Table 3.1) and historic core stored at the secured core splitting and storage facility in San Luis Del Cordero was examined. This NI 43-101 technical report was prepared for Prospero for supporting documentation to be submitted to the TSX Venture Exchange.

3.2 Property Location, Infrastructure and Access The SLDC Project is located about 150 kilometers NNE of Durango City, Durango State, Mexico and about 65 kilometres west of Torreon, State of Coahuila, Mexico. The project area can be reached from Durango City or Torreon via Federal highways 40 (Durango-Torreon) and then westerly on Highway 34 (also Highway 39 on Durango map) to Nazas and northerly for 23km on a secondary paved road that passes through the town of San Luis del Cordero, Durango Mexico. Local mine and ranch roads provide access to the project area with the old Santa Rosa mine approximately 1km northwest of the village of San Luis del Cordero.

3.3 Property Ownership & Terms of Agreement The SLDC property, consisting of 6 claims covers about 2,825 ha near San Luis del Cordero in Durango State, Mexico. The terms of the Option Agreement provide Prospero the ability to earn a 100% interest in the San Luis del Cordero property. Prospero will pay US$25,000 and issue 20,000 shares on acceptance for filling of the agreement by the TSX Venture Exchange. To earn its 100% interest, Prospero has to pay US$450,000 in cash and issue a maximum of 1,980,000 shares and incur US$1,650,000 in property expenditures over a four year period. The Mexican partner (Altiplano) will receive 2% NSR which can be bought down to 1.5% by paying US$500,000 within 3 years of the decision to exercise the option.

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3.4 Property Geology and Mineralization The SLDC area is underlain by a multiphase interbedded siltstone and limetstone of the Cretaceous Cuesta del Cura, Caracol and La Casito Formations. The sedimentary rocks are as roof pendants or irregular wedges in a granodioritic intrusive complex and are cut by quartz feldspar porphyry bodies. Prospero’s mapping has shown that large areas have been skarnfied and that jasperoid has deposited along structures and replaced limy sedimentary rocks. The writer examined the Santa Rosa and India Bonita areas of the prospect and collected three samples to verify the presence of significant mineralization in veins and check results from Prospero’s and Altiplano’s sampling. A grab sample from siliceous material in a small dump obtained from a shaft in Santa Rosa structure contained 1.436% Cu and 990 g/t Ag and a 0.2m continuous chip sample from the Santa Rosa workings, at sample station 20388, contained 1.183% Cu and 251 g/t Ag and verifies an Altiplano sample containing 0.96% Cu and 239 g/t Ag over 0.4m. A chip sample from the India Bonita structure contained 104 g/t Ag and 1.06% Pb over a 2.0m width. The writer’s samples verify the presence of significant copper and silver mineralization in the Santa Rosa and India Bonita vein zones. The Santa Rosa and India Bonita vein structures has been traced for over a kilometer with trends varying up to 30° from the main east-west trend. Multiple veins occur in each structure with vein varying in width to several meters and silicified structural zone up to 100m wide and veins dipping southerly 60-80°.

TABLE 3.1. CHECK SAMPLES SAN LUIS DEL CORDERO PROJECT, DURANGO, MEXICO (080502). Sample # Location Type/ Width Pb Cu % Ag COMMENTS UTM E/N KG % g/t (Elevation) IB080502-1 0572907E Chip/ 2.0m 1.06 0.214 104 @▲32 LIMY SED; Zn 2813832N 1.99 0.14% (1578m) SR080502-2 0571700E Chip/ 0.2m 0.04 1.183 251 @▲20388 50m into adit; 2812854N 0.85 checks 0.4m @ 239 g/t Ag; (1531m) 0.96% Cu; 0.02% Pb & portal 0.19% Zn. SR080502-3 0572077E Grab/ na 0.03 1.436 990 Siliceous rocks; secondary 2812817N 0.71 copper stained in small, 1-2 (1519m) tonne dump

3.5 Deposit Type & Exploration Concept The San Luis Project area has a number of old shafts, adits and drifts that exploited argentiferous tetrahedrite and base metal bearing vein structures. The veins are situated in hornfels, silicified and skarnified sedimentary rocks that are adjacent to granodiorite or quartz feldspar porphyry intrusive. A number of silver bearing replacement and skarn bodies occur in similar settings near the eastern edge of the Sierra Madre. Prospero used geophysical methods to define conductive areas covered by soil and post-mineral or un-mineralized cover that may conceal sulphide bearing veins or skarn deposits.

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3.6 Status of Exploration Development and Operations Exploration by Prospero, costing in excess of Cdn$100,000 has consisted of verification geological mapping, and 104 rock samples from historical core and India Bonita workings and a 23 line-km 3D induced polarization (“IP”) survey with qualifying work used to evaluate the mineral potential in covered areas and provide information to assist in defining viable targets for future drilling. Previous exploration programs by Altiplano, Apex Silver, and Minera Hochschild Mexico and included drilling of 9 core holes with 3 used to test the India Bonita vein structure, 5 used to test the Santa Rosa and one used to test a NE anomalous area.

3.7 Conclusions and Recommendations Previous exploration and the sampling and drilling by previous operators have confirmed the presence of significant grades of silver-copper-zinc mineralization in limy Mesozoic sediments near their contact with intrusive bodies. The mineralized zones are associated with IP chargeability and rock geochemical anomalies. The presence of a prospective environment for precious metal enhanced base metal vein, skarn and replacement mineralization provides justification for a Phase 1 drilling program. The historical drilling programs have also indicated significant silver and base metal mineralization that requires further drill definition.

A Phase 1 program of further drilling is justification on the basis of Prospero’s qualifying exploration program consisting of mapping, sampling and geophysical exploration. A recommended Phase 1, 1,500 meter drill will satisfy the year 1 work and expenditure requirements with the program estimated to cost US$300,000. A success contingent Phase 2, 3,000 meter drill program and associated supervision, site preparation and reporting is estimated to cost US$600,000.

3.6 Opinion of Merit In the writer’s opinion, the character of the property is of sufficient merit to justify the recommended Phase 1 program. 4.0 INTRODUCTION AND TERMS OF REFERENCE

4.1 Terms of Reference and Purpose This Technical Report, requested by Prospero Silver Corp. (“Prospero” or “The Company”), is to propose further exploration to define mineralization on the SLDC in Durango State, Mexico. The report has been prepared in compliance with the requirements of National Instrument 43-101 and Form 43-101F1, and is for supporting documentation to be filed with the relevant securities commissions and the TSX Venture Exchange.

4.2 Source of Information and Data The majority of the information for this report comes from reports and documents listed under the References and Sources of Information section of this report. Data was collected mainly by geological and geophysical contractors and employees of Prospero, previous operators and Consejo de Recursos Minerales (CRM) personnel. The writer review of mapping, drill sites and

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 7 SAN LUIS DEL CORDERO PROJECT core handling and storage indicated that previous operators used competent personnel for fieldwork and sampling and HC used certified laboratories for analytical work. The Induced Polarization geophysical program conducted by SJ Geophysics Ltd. for Prospero is outlined in a report entitled “Logistical Report for Prospero Silver Corp. Induced Polarization Survey on the San Luis Del Cordero Project” (Dobrescu and Ko, 2008) and interpreted in a draft report entitled, “3D Induced Polarization on the San Luis del Cordero Project” (Rastad and Dobrescu, 2008).

The writer personally examined the geological setting of the SLDC area on May 2nd, 2008 and reviewed the geological setting with Prospero’s exploration manager, geological engineer Martin Soto Moran. The writer examined core at the company’s core splitting and storage facility in San Luis on May 2nd, 2008. The writer has prepared several NI 43-101 technical reports on other properties in the Mexican States of Sinaloa, Durango and Zacatecas and participated in tours of the Tayoltita Mine and Basis Mine that provided the writer insights into geological and structural controls of mineralization in the region. The writer collected independent check samples to verify mineralization on the SLDC property. The writer has no previous exploration experience in the SLDC property area.

4.3 Field Involvement of the Qualified Person (Author) The author of this report spent May 2nd, 2008 traveling from Mexico City to Torreon and then to the San Luis Property for a 4 hour property examination with geologist Martin Soto Moran. The writer collected two chip samples and one dump sample to verify the presence of significant copper and silver mineralization. The writer examined core at Prospero’s secured core splitting and storage facility in San Luis Del Cordero. The writer has examined a number of properties in Durango, Sinaloa and Zacatecas states, Mexico for other TSX and TSX venture companies but has no previous experience on the SLDC.

5.0 Reliance on Other Professionals The writer is required by NI 43-101 to include description of the property title and terms of legal agreements that are presented in the following sections. The writer reviewed property agreements and title documents provided by Prospero in order to provide summaries of title and ownership. Property agreements and title documents are legal matters and should be reviewed by Prospero’s legal counsel. In Mexico, claim locations are established by a registered Mexican mineral claim surveyor and his plan should be equivalent to a legal survey of the claim area. However, knowing the exact location of a concession does not guarantee clear title.

6.0 PROPERTY DESCRIPTION AND LOCATION (Figures 6.1, 6.2 & 6.3) 6.1 Property Area (Figures 6.1, 6.2, & 6.3; Table 6.1) The SLDC, consisting of 6 exploration concessions covering about 2,825 hectares (6,980 acres) (Table 6.1; Figures 6.1, 6.2 & 6.3) is situated in Durango State and centered near NAD27 MEXICO UTM ZONE 13 coordinates 567524E and 2812900N and geographic coordinates o o 25 25’58”N latitude and 104 17’20”W longitude.

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6.2 Property Location (Figures 6.1, 6.2 & 6.3) The SLDC Project is located about 150 kilometers NNE of Durango City, Durango State, Mexico and about 65 kilometres west of Torreon, Coahuila State, Mexico. The project area can be reached from Durango City or Torreon via Federal highways 40 (Durango-Torreon) and then westerly on Highway 34 (also Highway 39 on Durango map) to Nazas and northerly for 23km on a secondary paved road that passes through the town of San Luis del Cordero, Durango Mexico. Alternately, Highway 45 north from Durango for about 160km to Hildago de San Antonio and east on Highway 34 to Nazas, avoids the toll road.

6.3 Description of Claims (Fig. 6.3 & Table 6.1) The SLDC, consisting of 6 claims or mining concessions covers about 2,825 ha in the Municipality of San Luis del Cordero, State of Durango, Mexico was optioned by Prospero in 2008 (Table 6.1) .

6.4 Claim Title and Agreements (Tables 6.2 & 6.3) The SLDC property, consisting of 6 claims covers about 2,825 ha in Durango State, Mexico. Prospero acquired an option to obtain 100% interest in the concessions from Altiplano for payments totaling US$450,000 and shares of Prospero (Tables 6.2 & 6.3) over four years. The 2005 Mexican Mining Regulations, effective January 2006, provide for all concessions to be valid for a period or 50 years. Annual taxes, due in January and June of each year, vary from about US$0.40 in the first year to US$8.50 per hectare in the sixth year of exploration. Property holding costs for 2008 are about US$17,000 and will increase to about US$25,000 as titles mature.

6.5 Legal Survey Mexican mining law requires a mineral claim be established by a registered Mexican Mineral Claim Surveyor. Prospero compiled a plan of the SLDC property concessions (Figure 6.3) from the registered surveyor’s plots. Monuments were observed in the field establish the location of the property as shown on Figure 6.3 claim locations but no attempt was made to evaluate the legal title to claims shown on Figure 6.3.

6.7 Environmental Liabilities The writer is not aware of any environmental liabilities related to the San Luis Project area. The area is used for grazing by local ranchers and care must be taken to insure safety of livestock. No permits are required for normal surface exploration and drilling.

6.8 Working on the Property A small shaft and a number of pits and trenches have been constructed along the main intrusive contact by previous operators. The old workings have been sampled by Altiplano and three check samples collected by writer to verify the presence of significant silver and copper mineralization. The location of vein structures, shafts and historical drill holes is shown on Figures 8.1 and 9.1. Figure 8.6 is a section showing underground workings at the Santa Rosa Mine and Figure 12.1 is a section showing underground workings at the India Bonita Mine.

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Table 6.1 Pertinent Claim (Mining Concession) Data for San Luis Project. Name Title Number Hectares Issued Expiry Annual Taxes in Pesos Tecolotes 194984 25.0000 30 July 1992 29 July 2042 5,040.00 Cordero III 223678 129.0000 02 Feb. 2055 01 Feb. 2055 26,112.66 Cordero 222485 320.0000 16 July 2004 15 July 2054 50,493.26 Cordero III 221970 129.0000 22 Apr. 2004 21 Apr. 2054 22,950.87 Cordero II 218972 175.0000 28 Jan. 2003 27 Jan. 2053 35,132.80 Cordero IV 228447 2,047.0000 22 Nov. 2006 21 Nov. 2056 28,186.00 Total 2,825.0000

Table 6.2 Prospero Shares Issuable to Altiplano Under Section Error! Reference source not found.“C” of Option Agreement. THE NUMBER OF PROSPERO SHARES REQUIRED TO BE ISSUED SHALL BE DETERMINED BY THE MARKET PRICE ON THE ISSUE DATE AS FOLLOWS:

MARKET PRICE** ISSUE DATE* < $1.25 $1.25 - $2.499 $2.50 - $7.50 > $7.50 (# of months after the date of the Agreement) 6 30,000 25,000 20,000 15,000 12 30,000 25,000 20,000 15,000 18 50,000 40,000 35,000 25,000 24 50,000 40,000 35,000 25,000 30 100,000 80,000 70,000 50,000 36 100,000 80,000 70,000 50,000 42 100,000 100,000 100,000 100,000 48 1,500,000 1,100,000 600,000 450,000 * The column entitled ISSUE DATE in the table above sets out the dates on which Prospero shall issue shares under the Option, being the end of the six month, twelve month, eighteen month, twenty-four month, thirty month, thirty-six month periods, forty-two month and forty-six month periods respectively, after the date of this Agreement. ** The number of Prospero Shares required to be issued under the Option on a given Issue Date shall be determined by reference to the MARKET PRICE set out in the table above as of the applicable Issue Date.

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Table 6.3 Summary of Cash Payments and Work Commitments to Retain SLDC Option.

Date US Cash Payment * Required Expenditure/ Required Work Type Cumulative Exp. US$

September 1, 2008 $25,000 NA

March 1, 2009 $12,500 NA

September 1, 2009 $12,500 $250,000 1,500 metres Diamond Drilling

March 1, 2009 $12,500

September 1, 2009 $12,500 $400,000/$650,000

March 1, 2010 $12,500

September 1, 2010 $12,500 $400,000/$1,050,000

March 1, 2010 $150,000

September 1, 2010 $200,000 $600,000/$1,650,000 * A 2% NSR payable to Altiplano on Commercial Production. After exercise of option Prospero may, within 3 years, purchase 0.5% of the NSR for a payment of US$500,000. Altiplano shall receive NSR of 0.75% from third party claim within 5km of SLDC perimeter (Area of Interest).

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BIZMARK

TERRAZAS STA. EULALIA

NAICA

PARRAL

INDE SAN LUIS DEL CORDERO PLATOSA

PITARRILLA MAPIMI

VELARDEÑA

SAN SAN JUAN AGUSTIN AVINO PRECIOSA MAIN FEATURES SALADILLO 050 9 Within the Mexican Altiplano KMS Megallogenic Province

9 Three styles of Mineralization: Ë Polymetallic Ag-Cu-Zn-Pb veins, carbonate Ë # Ë Ë Ë Ë ## replacements and skarns # replacements and skarns Ë # # Ë Ú

9 100% rights of claims can be optioned from Exploraciones del Altiplano, S.A. de C.V.

Figure 6.1 Location Plan for San Luis Del Cordero Project, Durango State, Mexico. (Prepared by Prospero, 2008)

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105° 104°

SAN LUIS DEL CORDERO

25° 25°

050 24° KMS 24° 105° 104°

Figure 6.2 General Locations of SLDC Project, Mexico.

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Figure 6.3 Location of SLDC Project Mining Concessions Durango State, Mexico. (Prepared by Prospero, 2008)

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7.0 ACCESSIBILITY, LOCAL RESOURCES, CLIMATE, AND PHYSIOGRAPHY

7.1 Access to the Property and Proximity to Population Center(s) The project area can be reached from Durango City via Federal highways 40 (Durango- Torreon) and then westerly about 50km on highway 39 to Nazas and then northerly for 23km on a good secondary road to San Luis del Cordero (Figure 6.2). Access to the project area requires two-wheel drive but local trails and tracks require four wheel drive truck or ATV. Permission for local access may be required from local ranchers that should be kept informed of exploration activity.

7.2 Topography, Elevation and Vegetation The SLDC project is located in the Eastern Sierra Madre Occidental Physiographic sub- province near the eastern edge of the Mesa Central Province (Central Plateau Province) near the boundary with the Sierra Madre Madre Oriental. In the SLDC area jasperoid alteration and dioritic and granodioritic bodies form resistant areas which result in modest relief of about 200 meters with elevations ranging from about 1500 meters and 1700 meters with old workings mainly between 1500m and 1600m. San Luis is situated in an area with various bushes, shrubs and cactus. Natural grass meadows are used to graze cattle and other livestock. Wild fauna is not abundant but wild turkeys and several other varieties of birds, rabbits, coyote, lizards, white tail deer, and rattlesnakes are seen.

7.3 Relevant Climate and Length of Operating Season The climate in the region is characterized by elevated temperatures during the summer months with cooler temperatures in the winter months producing some freezing from December through February. The area is semi-arid with maximum temperatures over 30ºC during the summer season. The rainy season extends from June through October with occasional rain during December and January. The average annual precipitation is about 50mm but during wet years rainfall reaches 250 mm.

7.4 Availability of Surface Rights, Power, Water and Mining Personnel The SLDC is not part of an environmental reserve or protected area and permits are not required for early stage exploration and drilling. Surface rights are controlled by local ranchers and farmers and they should be kept informed of planned exploration. Roads should be planned to assist locals with access and gated and/or cattle guarded as necessary. Drilling companies and mining contractors are available in Durango, Zacatecas and Fresnillo and other areas of Mexico and San Louis del Cordero provides a local labor pool. The

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SJDC area is used for grazing cattle but many of the ranchers and hands would quickly switch to better paying jobs at a local mine. Mining personnel are available and they have been trained to work at local mines in Zacatecas and Durango States.

7.5 Potential Areas for Tailings Disposal, Heap Leach Pads and Plant Sites A number of meadows provide flat or basin areas for tailings disposal and plant sites. Land is relatively inexpensive and sufficient areas could be purchased for all mining needs. 8.0 HISTORY Systematic mining in the Altiplano of Mexico started in pre-colonial times with mines in the Velardena mining district and in the Mapimi mining district located or re-located by Spanish prospectors late in the 16th century. The presence of mineralization near San Luis del Cordero was probably also known to the early Spanish prospectors. The mineralization at the SLDC would have generated minimal interest because it was not amenable to silver recovery by simple amalgamation. The first formal operation on the SLDC took place in the Santa Rosa Mine and was carried out by Torreon-based Compañia Minera del Carmen, SA de CV with records suggesting extraction in the order of 70,000 tons during the 1950’s and 1960’s with 300 tons lots, shipped directly to the now inactive Industrial Minera Mexico SA (IMMSA) smelter at San Luis Potosi, yielding 600-700 g/t Ag and 2% to 2.5% copper. At some uncertain date during the 1960’s or 1970’s IMMSA carried out at least two diamond drill holes of EW diameter aimed at the Sta. Rosa vein but the results and details are unknown.

8.1 Previous Ownership Compania Minera del Carmen controlled the property in the 1960’s and 1970’s and following completion of mining in the Santa Rosa Mine, the concessions were relinquished. The Tecolotes concession, covering the Santa Rosa Mine has been held since July 1992 and Exploraciones del Altiplano, SA de CV initially filed claims in the district in 1996 and the “Tecolotes” claim was optioned in 1999 and purchased in 2002. Altiplano finalized consolidation of all ground in the district by claiming of the Cordero IV concession in November 2006. On May 12, 2006 Minera Hochschild Mexico, SA de CV (“HC”) and Altiplano signed an exploration option agreement allowing HC to obtain rights to the project by spending US$2,700,000 in four years. After completing sampling of workings, geological assessment, and 6 diamond drill holes totaling 1,477.40m, the property was returned to Altiplano in 2007.

8.2 Previous Exploration At some uncertain date during the 1960’s or 1970’s IMMSA carried out at least two diamond drill holes of EW diameter aimed at the Sta. Rosa vein but the results are unknown. During the year 2000 Apex Silver Mines Ltd. executed diamond drill holes SL-001, SL-002, SL-003 under the Sta. Rosa mine (Figures 8.1, 8.2, and 8.3), and commissioned detailed mapping of the central and western portion of the district. During 2007 Minera Hochschild

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Mexico, SA de CV (“HC”) carried out a 6 hole diamond drill program (Figure 8.1) both at the Sta. Rosa mine area (2 holes; Figure 8.4), as well as in the India Bonita target zone (3 holes; Figures 8.4 & 8.5) and NE vein structure (1 hole). Altiplano conducted underground sampling of the Santa Rosa workings above the water table at about 40m shaft depth (Figure 8.6).

8.3 Historic Production and Resource Estimates Altiplano, the vendor, used production records to estimate historic production of about 70,000 tons yielding 650 g/t Ag and 2.5% Cu. The records are no longer available to Prospero and the vendor’s historic production figures, presented as property information, have not been verified by the writer or Prospero and should not be relied upon. Workings and dumps present at the Santa Rosa Mine and India Bonita Mines suggest that the 70,000 tons is a reasonable estimate of material removed from the property and it is reasonable to expect that higher grade material was removed, resulting in lower grades for material left in the Santa Rosa Mine (Figure 8.6) and India Bonita Mine (Figures 12.1). In 2000 sampling of the Santa Rosa working and 3 diamond drill holes that intersected the Santa Rosa structure up to 200m below the workings allowed Altiplano (reported by HC) to estimate a small inferred resource of 81,000 tons @460 g/t Ag, 1.2% Cu and 2,5% Zn in the Santa Rosa vein (Perez Corona, 2007). The estimate is vendor generated and does not contain information regarding methods used by Altiplano. The estimate is presented as historic information and is not supported by a technical report. The historical estimate has not been confirmed by the writer or Prospero and should not be relied upon or used for economic evaluation.

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DDH’S APEX SILVER

Figure 8.1 Geology of the SLDC showing locations of veins and Apex and HC drill holes. A number of adits and shafts were used to exploit the Santa Rosa and India Bonita structures (Prepared by Prospero, 2008).

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Figure 8.2. SW-NE Section in the Plane of Apex Drill Holes SL-0-1 & 2. (Section Looking NW; Prepared by Prospero, 2008)

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Figure 8.3. NE-SW Section in the Plane of Apex Drill Holes SL-0-3. (Section Looking NW; Prepared by Prospero, 2008))

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Meters Width Ag Zn Cu ppm % % 24.10 24.90 0.80 68.90 1.15 0.54 24.90 25.15 0.25 850.00 1.84 2.46 25.15 25.45 0.30 38.50 2.02 0.08 25.45 25.65 0.20 741.00 3.00 6.18 25.65 25.80 0.15 19.30 3.92 0.14 25.80 26.00 0.20 19.50 1.63 0.11 26.00 26.45 0.45 30.80 1.17 0.18 26.45 27.55 1.10 3.60 1.37 0.02 27.55 28.80 1.25 22.50 2.22 0.26 28.80 28.95 0.15 101.00 10.45 2.25 4.85 102.00 2.00 0.64 28.95 29.50 0.55 35.30 2.00 0.52 29.50 30.55 1.05 3.70 0.36 0.06 30.55 31.00 0.45 326.00 1.78 1.90 31.00 31.40 0.40 4.40 0.26 0.03 31.40 31.80 0.40 51.30 0.35 1.14 7.70 89.29 1.61 0.62

Figure 8.4 N-Section in the in the Plane of HC Drill Hole HCSR-2 Testing Santa Rosa Structure (Prepared by Prospero, 2008).

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Ag Pb Cu Zn Meters Width ppm pct pct pct 83.65 84.75 1.10 356.40 1.62 0.09 2.44 84.75 85.70 0.95 181.40 3.50 0.10 2.58 85.70 86.40 0.70 23.00 0.30 0.01 0.20 86.40 87.50 1.10 13.80 0.14 0.00 0.06 87.50 88.20 0.70 49.40 0.34 0.04 0.80 88.20 89.10 0.90 6.30 0.20 0.00 0.21 89.10 89.40 0.30 44.40 0.90 0.04 2.15 89.40 89.80 0.40 300.90 3.18 0.14 6.06 89.80 90.60 0.80 144.20 2.84 0.07 4.75 90.60 91.05 0.45 152.00 0.87 0.11 1.50 91.05 92.10 1.05 89.60 0.79 0.03 2.06 8.45 123.95 1.29 0.05 1.87

Figure 8.5 N-S Section in Plane of HC Drill Holes HCIB-1 and HCIB-2 Testing India Bonita Vein System.

(note India Bonita veins generally dip southerly 70-80° but best intersection suggest shallower dip)

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LONGITUDINAL SECTION N60W LOOKING NE SANTA ROSA VEIN

Figure 8.6 NW-SE Section Showing Santa Rosa Workings and Altiplano Sampling Above Water Table. (Prepared by Prospero, 2008)

9.0 GEOLOGICAL SETTING

9.1 Regional Geological Setting The geology of Durango State, Mexico is dominated by extensive volcanic fields that form one of the world’s largest deposits of rhyolitic ignimbrite and tuff. The volcanic field has been divided into an early, Lower Volcanic Group (LVG) consisting mainly of intermediate composition volcanic and volcaniclastic rocks and a later (Oligocene), Upper Volcanic Group (UVG) consisting of acid volcanic rocks. Early Tertiary to Mesozoic age, sedimentary rocks occur in the eastern part of Durango State and as windows in the extensive Tertiary volcanic fields. Younger intrusive bodies cut the sedimentary rocks. Quartz feldspar porphyry and dioritic or granodioritic bodies intrude limy sedimentary rocks on the SLDC property and result in large area of skarn development.

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9.2 Property Geology (Figures 9.1 & 9.2) The SLDC property is located in the Sierras y Llanuras de Durango with the property geology described as part of a regional mapping project by the CRM. The local geology has been mapped by Apex, Altiplano and HC and field checked by Prospero and the writer. A plan of the SLDC geology compiled by Prospero is presented as Figure 9.1 with the stratigraphic section for the SLDC presented as Figure 9.2 and a geological plan showing the area of silicification and jasperoid alteration is presented as Figure 11.1. The SLDC is underlain by Mesozoic and Tertiary clastic sedimentary rocks and limestone covered by large areas of recent alluvium. The oldest sedimentary rocks consist of interbedded shale, sandstone and limestone of the Jurassic La Casita Formation. The Jurassic sedimentary rocks occupy the core of a recumbent anticline that passes through the central part of the SLCD and are the main country rocks for the India Bonita vein structure. The Jurassic sedimentary rocks are hornfelsed near intrusive contacts and vein structures. Massive limestone and thick bedded dolomite with minor interbedded shale of the Cretaceous Cuesta del Cura Formation overlie the Jurassic sedimentary rocks. The Questa del Cura Formation is estimated to be up to 200 meters thick and is converted to skarn near the Tertiary quartz feldspar porphyry and granodiorite contacts. Conglomerate, containing limestone fragments and boulders, is part of the Tertiary Ahuichila Formation which reaches thicknesses of 50 meters. A few small outcropping of this unit have been mapped. The Tertiary conglomerate is overlain by rhyolitic tuff of the Cerro Prieto Formation cover much of the SLDC near and west of the main road. Quaternary Basalt overlies rhyolites east of the main road about two kilometers west of San Luis del Cordero. Recent alluvial cover is the most extensive unit on the SLDC. Mineralization is believed to be related to quartz feldspar porphyry and diorite or granodiorite intrusive rocks of Tertiary age with intrusive bodies sub-parallel to the trends of the Santa Rosa and India Bonita vein structures. The geological picture is complicated by a recumbent fold with the northerly trending axis centered on the SLDC. Thrust fault, normal faults and fracture zones complicate the distribution of units and cause segmenting of the geophysical response.

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Figure 9.1 Generalized Geology of SLDC, Durango State, Mexico. (Prepared by Prospero, 2008)

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Figure 9.2 Stratigraphic Section for the SLDC Project Area. (Prepared by Prospero, 2008)

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10.0 DEPOSIT TYPES (Figure 10.1)

10.1 Mineral Deposit Type/Model for the Property The SLDC property contains a number of workings in skarnified and hornfelsed areas of Mesozoic limy sediments along the contact of a dioritic or granodioritic intrusive bodies. The setting is favourable for skarn type and replacement deposits like Velardena and Victoria, replacement and skarn deposits held by others in Durango State. Previous exploration and exploitation was directed at mineralized and veined shear zones with the Santa Rosa and India Bonita the most developed and some exploration of the NE vein zone.

10.2 Geological Concepts Used For Exploration of the Property The concept for exploration of skarn and contact metamorphic deposits in the Sierra Madre is to locate geophysical anomalies associated with the conductivity of sulfide bodies or magnetism associated with bodies enriched in pyrite, magnetite or pyrrhotite. The inducted polarization method has been successfully used to identify sulfide concentration buried below post-mineral or recent alluvial or soil cover. The quality of the geophysical interpretation is enhanced by the availability of detailed geological and alteration mapping. The evaluation of vein type deposits can be enhanced if mineralization is associated with conductive sulfides and if resistivity signatures are characteristic of well mineralized lodes. 11.0 MINERALIZATION (Figures 11.1)

11.1 Mineralized Zones Encountered Three mineralized structural epithermal vein zones, the Santa Rosa, India Bonita and Veta NE have been explored with workings and drilling. Modest exploitation has occurred from the Santa Rosa Mine workings and minor exploitation is indicated by the smaller workings at the India Bonita Mine. Areas of skarn or replacement mineralization, occurring on the SLDC, have not been the main exploration targets in the past. In the Santa Rosa Mine area a zone of silicification or jasperoid occurs along a WNW trend that splays from the EW trending Santa Rosa structure. Previous drilling has shows that quartz and carbonate veins with galena, chalcopyrite, pyrite, sphalerite and tetrahedrite fill several sub-parallel structures in the Santa Rosa and India Bonita vein systems with mineralization occurring within a width of 50 to 100m (Figures 8.1 to 8.5) along east-west trending zones with 60-80°southerly dips. The Santa Rosa and India Bonita structures have been traced for over a kilometer in workings and drilling. The Santa Rosa structures has a possible WNW splay indicated by silicification and jasperoid formation and the India Bonita structure bends to the SSW along its westerly trend (Figures 8.1 & 11.1). The Veta NE structures has been followed for about 200m and tested by a single drill hole.

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Santa Rosa Veins under Mine India Bonita Limestones Mine HCSR-02

POSSIBLE LARGE TONNAGE TARGETS

EXPLORATION STRATEGY

• DRILL THE TETRAHEDRITE-BEARING VEINS FOR SHALLOW RESOURCE WITH POTENTIAL FOR SEVERAL MILLION TONS • FOLLOW THE VEINS DOWNWARDS INTO REPLACEMENT DEPOSITS, SKARNS AT THE INTRUSIVE CONTACT IN JURASSIC LIMESTONES OR BELOW THE THRUST FAULT

Figure 10.1 Section Showing Vein, Replacement and Skarn Type Targets for Ag-Cu-Zn-Pb Mineralization on the SLDC. (Prepared by Prospero, 2008)

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Figure 11.1 Figure Showing Silicification or Jasperoid Mineralization Trending WNW in Santa Rosa Mine Area. (Prepared by Prospero, 2008)

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12.0 EXPLORATION BY THE ISSUER

12.1 Geochemical Sampling Prospero’s and Altiplano’s geochemical sampling program consisted of 104 rock samples from surface outcrops, the India Bonita underground workings (Figure 12.1) and further sampling in historic drill hole (Table 12.1) with another 8 samples (blank, standard and duplicate) for QA/QC purposes. All samples were analyzed by ICP multi-element Au + 41 package at the ALS-Chemex laboratory in Vancouver, British Columbia. The elements Au, Ag, Cu, Pb, and Zn were considered of economic interest or as possible pathfinders for silver- base metal mineralization. Prospero found that molybdenum and to a lesser degree beryllium and tungsten were also anomalous in the India Bonita structure. Tin values were not obtained by some analyses might prove worthwhile. A tabulation of results from surface and underground channel samples are presented on Figure 12.1 and the results of further sampling of hole HCRS2 is presented in Table 12.1. The geochemical sampling verifies the presence of significant silver in the India Bonita structure and suggests that molybdenum and possibly the lithophile elements tungsten, beryllium and tin may be of interest in skarn and replacement type deposits or wider areas of vein or stockwork mineralization. The channel sampling did not test the full width of the vein structure because surface outcrops and underground working did not expose the full 8.4m vein width intersected in DDH HCIB-2. Core samples from HCRS2 were sawed to yield half of the material for analysis with the remainder retained in secured storage for reference. Sample sequence 70275 to 70330 were bagged, secured and shipped to ALS Chemex for preparation and prepared pulps shipped to North Vancouver for Au + ICP by ME-ICP41 and assay for over limit Ag, Cu, Pb and Zn. Sample 70306, 0.52m from 48.70 to 49.22m containing calcite veinlets with sulphides, returned >100ppm Ag and assayed 86ppm Ag and 1.38% Zn. A 2.5 meter interval from 18.5 50 21.0m contained an average of 37.7ppm Ag and an 0.52m interval from 48.70 to 49.22m contained 86ppm Ag and the 0.95m interval from 52.2 to 53.15m (#70309) contained 76.5ppm Ag. Further sampling by Prospero showed that core with modest sulphide-carbonate veinlets may contain significant silver values and requires analysis. Channel samples from surface and underground workings (Figure 12.1) showed that the India Bonita vein system contained some high grade silver values up to 1060ppm silver (#70231) with values associated with copper, zinc and lead mineralization and strongly anomalous molybdenum (to 6940ppm in #70245) and vanadium (to >10,000ppm in 70255 and 70258). The values obtained by Prospero suggest that the lithophile elements molybdenum and possibly tungsten, beryllium (values to 3100ppm in #70260) and tin should be considered when evaluating vein, replacement and skarn mineralization.

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Table 12.1 Further Analysis by Prospero of ½ Core from Historic Hole HCSR2. Number Interval (m.) Width Ag Comments and Observations (m.) ppm 70275 6.1-7.6 1.50 3.6 Sil-chl-hem hornfels 70276 7.6-8.55 0.95 6.1 Sil-chl-hem hornfels 70277 Duplicate 5.5 70278 8.55-10.1 1.55 12.4 Sil-chl-hem-cal hornfels, 70279 10.1-1.68 1.58 4.3 Qv-cal hornfels 70280 11.68-12.38 0.70 5.2 Hornfels minor Cal-hem-chl 70281 12.38-12.83 0.45 9.4 Qv-hem in hornfels 70282 12.83-13.70 0.87 5.0 Hornfels clast sil-hem 70283 13.70-14.60 0.90 15.3 Hornfels hem-Cal-veins 70284 14.60-15.38 0.78 2.2 Hornfels 70285 15.38-16.45 1.07 4.8 Hornfels veins cal 70286 16.45-17.05 0.60 1.7 Hornfels veinlets cal-chl 70287 18.20-18.50 0.30 9.8 >>hem, veinlets white cal 70288 Blank 70289 18.50-18.80 0.30 39.6 70290 18.80-19.50 0.70 40.7 As color Mnox-feox-Cuox 70291 19.50-20.20 0.70 53.9 Hornfels feox-cuox-veinlets cal 70292 20.20-21.00 0.80 14.1 Hornfels feox-cuox-veinlets cal 70293 21.00-21.50 0.50 5.6 As, gossen, Mnox-hem 70294 21.50-22.45 0.95 4.0 Hornfels, ep-chl-cal-py 70295 22.45-22.85 0.40 12.4 Gossen hem-chl-py 70296 22.85-24.10 1.25 42.9 As >>hem, Qv 70297 Std PR6 11 1.3 Std pr6 11 70298 32.70-34.00 1.30 1.3 Hornfels, >hem 70299 34.00-34.95 0.95 8.8 Hornfels chl-py in Qv 70300 34.95-35.30 0.35 2.8 Hornfels 2-3cm Qv, hem 70301 35.30-36.40 1.10 0.9 Hornfels, >hem,cal-Qv 70302 36.40-37.20 0.80 2.0 Hornfels, ep-chl, py 70303 37.20-38.35 1.15 8.1 Hornfels, >>chl, py 70304 38.35-39.50 1.15 1.6 Hornfels, >>chl, py 70305 39.50-41.15 1.65 1.1 Hornfels, chl, py,ep 70306 48.70-49.22 0.52 86 Hornfels, v cal, v sulp Zn 1.38% 70307 49.22-49.95 0.73 13.2 As wk hem & cal. 70308 49.95-50.25 0.30 0.8 Hornfels 70309 52.20-53.15 0.95 76.5 Hornfels 70310 53.15-53.95 0.80 1.6 Hornfels 70311 54.10-55.00 0.90 0.6 Hornfels 70312 55.00-56.00 1.00 1.0 Hornfels 70313 56.00-57.55 1.55 0.8 Hornfels 70314 57.55-58.60 1.05 15.2 Hornfels, chl, py, ep 70315 58.60-59.75 1.15 3.9 Hornfels chl, py, ep

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 31 SAN LUIS DEL CORDERO PROJECT cont. Table 12.1 Width Ag Comments and Observations # Interval (m) (m) ppm 70316 59.75-61.20 1.45 2.1 Banded sil, hem, >chl 70317 61.20-61.80 0.60 20.6 Sil hornfels chl, ep, hem, py 70318 Blank 0.2 70319 62.15-63.40 1.25 19.2 As?, >>chl, hem 70320 63.40-64.22 0.82 0.5 Hornfels, hem, chl, py layers 70321 64.22-65.05 0.83 0.3 As?, >>chl,hem 70322 65.45-66.15 0.70 0.7 Hornfels, chl, sil sed, ep & py 70323 NA 5.3 Below vein , ser & py 70324 122.30-122.55 0.25 1.7 Contact (CZ) Sil, v py 70325 174.70-175.75 1.05 Cz Cal v chl & py 70326 177.50-178.80 1.30 0.2 Cz v cal, chl, py 70327 178.80-180.15 1.35 Cz v cal, chl, py 70328 180.15-180.45 0.30 0.2 V white cal, py 70329 195.45-196.60 1.15 0.4 Cz v cal, chl, py 70330 196.60-197.80 1.20 0.3 Cz v cal, chl, py

12.2 Induced Polarization Geophysical Program (Figure 12.2, 12.3 & 21.1) A time domain 3D Induced Polarization (“IP”) survey was conducted from June 05, 2008 to June 25, 2008 on 17 north-south line spaced at 100m intervals (1W to 17W) by SJ Geophysics (“SJ”) of Canada (Dobrescu and Ko, 2008; Rastad and Dobrescu, 2008). A dipole array consisted of a modified pole-dipole configuration with a combination of 8 or 12 dipoles, for a total array length of 800m. For a majority of the lines the remote current was placed at station 1100N on line 7W or at 3125N and 2W for the southern part of lines 5W, 6W and 7W. The IP readings from each day’s surveying were downloaded to a computer and entered into a database archive every evening. The data base program allowed the operator to display the IP decay curves and a visual review of the data quality on site. The acquired data was inverted to provide a subsurface distribution of resistivity and chargeability. The 23 line-km IP survey was interpreted in a report by Rastad and Dobrescu (2008). SJ’s survey shows that chargeability anomalies appear to correlate with resistivity features and mapped geology (Figures 12.3 & 12.4). All receiver lines were approximately 800m in length and current lines were 1300m long. Stations were placed every 50m, and clinometer measurements were taken at all stations. DGPS waypoints, defined in the UTM NAD 27 (Mexico) Projection, Zone 13, were established by a Prospero crew of line cutters. SJ Geophysics provided geophysicist Jan Dobrescu and two trained geophysical assistants and Prospero provided a crew of eight local helpers and geological support.

12.2 Discussion of Induced Polarization Results The modeled chargeability in milliseconds is shown in Figure 12.4 with anomalous features C1 through C5 with >22ms illustrated on Figure 12.4. The strongest chargeability response C1 has a >35ms core (~300 x 500m), shown in dark green on Figure 12.4, surround by anomalous chargeability >22ms in green. The C1 chargeability feature, in the northwest part of the grid is approximately 500m wide and over 800m long and open to the north and west. If

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Phase 1 drilling shows the anomaly to result form significant mineralization then further Phase 2 IP definition should be considered. Chargeability feature C2 in the northeast part of the IP grid is a >22ms feature open to the north and east but without the strong core found at C1. The large size of the anomalous feature justifies future evaluation. Smaller chargeability features C3, C4 and C5 are within the grid and have been delineated. The 100m diameter C5 feature is the main chargeability feature in the southern part of the grid which generally has low, <17ms chargeability response. Figure 12.4 shows the grid separated by an east-west trending line near 2800N which show a northern domain of higher chargeability. The resistivity shown on Figure 12.3 separate the grid into three contrasting resistivity zones with R1 to the southwest separated by a linear resistivity low L1 from resistivity low zone R2 in the southeast and a mixed resistivity zone R3 in the central and northwest area with resistivity contrasts separated by linear features possibly reflecting fault structures. The combined chargeability and resistivity was described in 4 geophysical zones designated G1 (northwest), G2 (southwest), G3 (northeast) and G4 (southeast). G1 contains chargeability feature C1 with the higher resistivity area R1 dipping northerly below the strong chargeability. The interpretation was possible mineralization near or above an intrusive contact. Chargeability anomaly C1 and geophysical zone G1 represent the main IP drill target.

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Figure 12.1 Sampling of India Bonita Mine by Prospero and Altiplano (Prospero, 2008).

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Figure 12.2 Location Plan for Surveyed IP Grid. (from Rastad and Dobrescu, 2008)

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Figure 12.3 3D Distribution of Resistivity (from Rastad & Dobrescu, 2008). (note MS=Ohm-meters)

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Figure 12.4 3D Distribution of Chargeability (from Rastad & Dobrescu, 2008).

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13.0 DRILLING Prospero has not conducted diamond drilling on the SLDC. Historic drilling, including 3 holes completed by Apex and 6 holes completed by HC, is summarized under history in section 8 of this report. 14.0 SAMPLING METHOD AND APPROACH

14.1 Sampling by Prospero A total of about 50 rock samples were collected by Prospero geologists from outcrops, workings and dumps to evaluate extensions of known mineralization and previous sampling. Chip samples were collected over a specific length or panel size at a sample grid location with a GPS NTS and elevation reading recorded for each sample center. Initial evaluation samples collected by Prospero that established the validity of the SLDC project are tabulated on Figure 12.1.

14.2 Prospero Rock Sampling Procedures

In order, Channel samples were obtained by Prospero to estimate grade of mineralization in mine workings. A vertically or horizontally oriented channel were spaced every 3 meters along the sides of the workings. The various steps of sample collection were undertaken under the supervision of Elisiel Moreno, Geological Engineer, with over 10 years experience as an exploration and mine geologist in México. A detailed description of the various sample collection and processing steps is described as follows: • Marking of sample lines. A 50 meter tape is extended along the wall of the working and a vertical or horizontal line is marked with a red spray can across the mineralized body where possible every 3 meters. Sample lines are vertical or horizontal depending on whether the mineralized body is a manto deposit in sub- horizontal position, or a sub-vertical vein. Individual samples along the vertical or horizontal line are separated by short red lines. The size/length of individual samples is selected according to natural geological boundaries of the sub-horizontal strata or vein. The number of individual samples generally varies from 2 to 3 per line. The maximum length of an individual sample is 1.5 meters. • Numbering sequence of the samples. The sequence initiates in each line in the lowermost part or the footwall side of the orebody which generally corresponds to the host rock contact. When the working allow, an additional sample is obtained in the hangingwall or footwall to evaluate metal values in the host rocks. The sample numbers are recorded in the walls of the workings with red spray paint. The numbering sequence is organized in a field notebook. • Numbering of samples. The numbering sequence used for sampling is continuous and ascending. Assay Quality Control requires systematic insertion of standards, blanks, and pulp duplicates (see following discussion).

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• Sample collection. The surface is first cleaned and evened out with a rock hammer and chisel, to create a clean and flat surface. A channel is excavated 10 centimeters wide and 3-6 centimeters deep with a hammer and chisel. The size of the channel varies with the hardness of the material. As the material is being cut it is collected with a 3/8” steel hoop with canvas in the middle. The material is then placed on the ground over a large piece of canvas and is fragmented down to fragments <1/2”, it is homogenized and quartered when the amount of material exceeds 6 kilograms. The sample (maximum of 6 kgs) is then placed inside a plastic bag. The samples are tagged by labeling a piece of flag tape with an indelible marker pen, and the tag is placed inside the sample bag. The sample bag is also labeled on the exterior surface with the indelible marker pen. Labeled sample bags are then placed inside 30 kilogram sacks. • Transport of the samples to the local warehouse. The sacks with samples are transported every day in a pickup to the local warehouse for temporary storage and are kept in a secured room. • Storage of the samples. The sacks are placed in numerical order and covered with black plastic to protect from dust contamination. Access is controlled by 2 company representatives. • Sample transport to the assay laboratory. At the end of each sampling campaign a vehicle is loaded with the sacks and driven to a courier for delivery to a Mexican ALS Chemex preparation center.

14.3 QA/QC Protocol for Proposed Drilling

After considering the success of the initial exploration, Prospero is planning on implementing a more comprehensive QA/QC program for drilling to include more standard, blank and check assays. During the proposed Phase 1 drill program the following QA/QC protocol has been established by Prospero (company memorandum dated July 2008) as follows: 1. Drilling Supervisión. Supervision of the drill program, sampling of the core, and collection of the metallurgical sample is under the supervision of the project geologist. During drilling round the clock supervision of 2 twelve hour shifts is required by the geologist and his assistants. At the time of target intersection it is important to take notes on core recovery and the conditions of the core. 2. Transport of the core to the core shack. Once the drill hole is completed the core boxes are loaded into a pick up and tied together with a rope to avoid any core falling out during transport. 3. Placing of the core for logging. In the secured core shack the core is placed in sequential order above benches specially conditioned to an adequate chest-height with lamps that provide proper ilumination. The secured core shack is a rented warehouse located in the town of San Luis del Cordero. 4. Calculation of core recovery and RQD (Rock Quality Data). With the core placed in decending order, the number of core pieces greater than 10 centimeters in length is determined in order to calculate the RQD. Measurement of the length of recovered core between each drilling interval is used to estimate the percent recovery of the core.

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5. Logging procedures and sample selection. The core is described according to intervals of equal lithology, according to formations and members, paying special attention to subdivisions in the mineralized zones. Sample selection is carried out in the mineralized intervals with a black marker pen indicating where each sample initiates and ends and showing arrows that indicate the interval to be sampled. The length of the samples varies depending on the type of material being sampled. The maximum length for individual samples does not exceed 1.5 meters. 6. Numbering of samples. Within the interval that is to be sampled a sample number is marked with a black marker pen that identifies the sample. The numbering sequence used for sampling is continuous and ascending with respect to depth in a specific diamond drill hole. Numbering control is carried out in a field notebook. 7. Assay Quality Control, during the period May 2008 to July 2008, required systematic insertion of standards, blanks, and pulp duplicates in the following manner: • Two standards with predetermined values (Standard PR611 and Standard M5374) are inserted successively 2 every 100 samples, each one between the ranges 50-55 and 95-100. • Two blanks are inserted every 100 samples, one blank after a visually high grade sample occurring within each 50 sample interval.. • Duplicate pulp samples are inserted in the sample sequences 35-40 and 75- 80. Thus, 2 duplicate samples exist for every 100 pulp samples that are sent for assaying. Placing of the duplicate pulps is done by the laboratory once all the pulps are produced.

For the period of time starting August 2008 and forward the systematic insertion of standards, blanks and pulp duplicates will be carried in the following manner: 1.At least three standards with predetermined values are inserted successively every 100 samples, each at predetermined sample numbers terminating in 3, 34, 67. Both gold standards (see Table 14.2) and silver and base metal standards (see Table 14.2) will be used depending on the type of deposit in order to develop statistical comparative data on all metals of economic significance in polymetallic mineralization. 2. Two blanks are inserted every 100 samples, one blank after a visually high grade sample occurring within each 50 sample interval. 3. Duplicate pulp samples are inserted in the sample sequence 35-40 and 75-80. Thus 2 duplicate samples exist for every 100 pulp samples that are sent to assaying. Placing of the duplicate pulps into the stream of samples is done by the laboratory once all the pulps are produced. 4. Check assays from a referee laboratory will be conducted on 4 of 100 duplicate pulp samples which are selected to represent a range of low to high grade assays.

8. Sampling of the Core. Splitting of the core carried out with a diamond saw that cuts the core in half. A half is placed in a plastic bag and is tagged by labeling a piece of flag tape with an indelible marker pen and inserting the numbered flag and/or an assay tag. The same number is also placed on the outside of the plastic

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 40 SAN LUIS DEL CORDERO PROJECT

bag. The remaining half core is ordered and returned the core box for reference and later use. Sample selection and splitting of the core is carried out by trained geological technicians with experience in core splitting and under the supervision of the geologist.

9. Storage of core boxes and transport of samples to the Assay Laboratory. The core boxes are placed inside secured rooms. The keys, permitting access, are controlled by two company representatives. The samples for assaying are placed into 30 kilogram sacks, loaded onto a company vehicle and driven by a company employee to a courier service for shipment to a sample preparation laboratory of ALS Chemex in Hermosillo, Sonora or in Guadalajara, Jalisco, México. 10. The pulps are sent from Hermosillo or Guadalajara to ALS Chemex in North Vancouver for assaying. 11. Assay Methods. The assay methods currently used by ALS Chemex are ME- ICP61m or ME-ICP41m for the metals and Au ICP21 for gold. The Code OG62 is for silver overruns of 100 ppm.

Table 14.2 Supplier for Analytical Standards. GOLD STANDARDS SUPPLIER CODE Au Ag Cu% Matrix ppm ppm Prepared by Newmont MS-374 1.007 0.6 82ppm Prepared by Newmont PR-611 0.428 1.2 192ppm Analytical Supply Solutions, OREAS .307 1.3 0.338 QMP Ltd. 52Pb www.explorationgeochem.com OREAS .841 2.5 0.744 QMP 50Pb OREAS 1.52 Greywacke 6Pc OREAS 4.76 9.27 61d

COPPER STANDARDS SUPPLIER CODE Au Ag Cu% Matrix ppm ppm Analytical Supply Solutions, Ltd. OREAS 94 1.15 Siltstone www.explorationgeochem.com OREAS 96 3.93 Siltstone COPPER-LEAD-ZINC-SILVER-GOLD STANDARDS SUPPLIER CODE Au Ag Cu Pb Zn Matrix ppm ppm % % % Minerals Exploration & MEG-AG- 1.13 248.3 0.24 6.26 10.46 Pb-Zn-Ag Environmental 1 skarn Nevada Geochemisty [email protected] MEG-CU- 25 0.48 .10192.5 Pb-Zn-Ag 1 skarn Nevada

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 41 SAN LUIS DEL CORDERO PROJECT

15.0 SAMPLE PREPARATION, ANALYSES AND SECURITY

15.1 Sampling Personnel and Security SLDC sampling data is from samples collected by trained geological personnel and consultants. The writer has no reason to doubt the sampling results. Reporting and description of sampling methods are conducted to standards recommended by the CIM and required by NI 43-101. Sampling and geological mapping, conducted by Altiplano, was undertaken by Martin Soto Moran, a geologist with extensive experience mapping and evaluating epithermal Au-Ag vein and skarn deposits in the Sierra Madre and Mesa Central of Mexico.

15.2 Sample Preparation and Analytical Procedures The writer and Prospero follow recommended standards as outline by the CIM best practice guidelines. The writer’s samples were secured in plastic sacks and returned to Acme Laboratory in Vancouver for gold and silver assay and analyzed for copper, lead and zinc. Gold analyses are by fire assay start with an atomic absorption finish (“FA-AA”) on a 30 gram split. ICP-mass spectrometer methods were used for multiple elements. Prospero’s rock samples are delivered by Prospero personnel via courier to ALS Chemex Laboratories in Guadalajara or Hermosillo for processing and preparation, with sample pulps assayed by ALS-Chemex Laboratories in Vancouver, British Columbia. The assay methods currently used by ALS Chemex are ME-ICP61m or ME-ICP41m for the metals and Au ICP21 for gold. The Code OG62 is for silver overruns of 100 ppm. Typical interval standards and checks on the labs were completed by Acme and Chemex in Vancouver, B.C. A referee laboratory, possibly BS Inspectorate in Durango, will be used for checks of drill samples. The Altiplano (now Prospero) processing and storage facility in San Luis is clean and samples were well marked, secured and stored to industry standards.

16.0 DATA VERIFICATION

16.1 Quality Control and Data Verification The writer conducted a-field examination of the SLDC on May 2nd, 2008. The field examinations included examination of old workings, skarnified limy sedimentary rocks near the quartz feldspar porphyry or granodiorite contact and review of historic core securely stored in Altiplano’s core logging and storage building in San Luis del Cordero. After a review of the files on the property and a site examination of the geological setting, the writer was of the opinion that the intrusive contact zone and vein systems on the SLDC represent cost effective silver, copper and zinc exploration targets. The writer viewed and re-sampled Prospero sample locations in the field. Sample data is tabulated with samples described by number, UTM GPS location, type, width and geological notes (Table 16.1).

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 42 SAN LUIS DEL CORDERO PROJECT

16.2 Verification of Sampling and Analytical Data by Author (Table 15.1) The writer toured the SLDC property with Prospero’s exploration manager Martin Soto Moran on May 2nd, 2008 and collected 3 samples from an adit, a surface pits and a shallow trench. The writer’s samples support the presence of significant silver, zinc and copper grades obtained by Apex, HC, Altiplano and Prospero. The writer samples and locations are summarized in Table 16.1. The writer’s samples were submitted to Acme Laboratories in Vancouver for preparation and assay for gold and silver by fire assay start with an atomic absorption finish (“FA-AA”) on a 30 gram split from the prepared sample. Copper, lead and zinc were determined by digestion of a 1.0 gram split in aqua regia and analysis by AA.

Table 16.1 Writer’s Check Samples from the San Luis Property. Sample # Location Type/ Width Pb Cu % Ag COMMENTS UTM E/N KG % g/t (Elevation) IB080502-1 0572907E Chip/ 2.0m 1.06 0.214 104 ▲32 LIMY SED; CU 0.14% 2813832N 1.99 (1578m) SR080502-2 0571700E Chip/ 0.2m 0.04 1.183 251 @▲20388 50m into adit; 2812854N 0.85 checks 239 g/t Ag; 0.96% (1531m) Cu; 0.02% Pb & 0.19% Zn. SR080502-3 0572077E Grab/ na 0.03 1.436 990 Siliceous rocks; secondary 2812817N 0.71 copper stained; from dump (1519m) @ small shaft on Santa Rosa structure.

17.0 ADJACENT PROPERTIES`

17.1 Relevant Data on Adjacent & Nearby Properties The SLDC contains an intrusive contact type environment with potential for replacement or skarn type precious metal enhanced base metal deposits and structurally controlled vein mineralization. A number of other base metal skarn and replacement deposits occur in similar geological settings in eastern Durango State. The Velardena mining district, about 70km southeast of SLDC property, has been mining from skarn-replacement, limestone replacement and epithermal veins since Spanish times. Velardena is presently controlled by ECU Silver Mining Inc. (“EUC”). The Ojuela-Mapimi District, about 60km northeast of SLDC, was discovered by Spanish prospectors in 1598 and the district had strong production by Compania Minera Penoles, S.A. (“Penoles”) from 1894 till 1932 with production reported by Consejo de Recursos Minerales (“CRM”) of 3,732,589 tonnes yielding 470 g/t Ag, 3.73 g/t Au and 15.8% lead with total district production estimated at over 5,000,000 tonnes (Cardenas Vargas et al., 1993). The historic production is from Mexican government publications and has not been verified by either Prospero or the writer. The Ojela-Mapimi District is

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 43 SAN LUIS DEL CORDERO PROJECT about 60km from the SLDC and similar quantities of mineralization may not occur on the SLDC. 18.0 MINERAL PROCESSING AND METALLURGICAL TESTING

18.1 Mineral Processing and Metallurgical Testing A number of skarns in the area have been exploited for direct shipping mineralization containing silver, zinc, lead and copper which suggests that skarn mineralogy is compatible with mills that have operated in the area. There are currently no mill facilities on the SLDC property. There are ruins of a processing facility remaining from past production but information regarding their processing methods was not available to the writer. Technical evaluation of metallurgical processing options will be required as exploration progresses. EUC is presently milling silver and base metal bearing vein, replacement and skarn mineralization at Velardena about 70km southeast of the SLDC and their operation might provide for a custom milling option or at least provide metallurgical information on similar type mineralization.

19.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

19.1 Mineral Resource Estimates At the present time the SLDC property is at the drilling stage and does not contain demonstrated mineral reserves or resources. 20.0 OTHER RELEVANT DATA AND INFORMATION The writer is not aware of any data not included in this report that would make the report misleading or would influence the writer’s opinion that the property warrants further exploration and evaluation by Prospero. 21.0 INTERPRETATION AND CONCLUSIONS

21.1 Conclusions and Recommendations (Table 21.1) The SLDC is situated in a geological and tectonic environment the host numerous precious and base metal bearing skarn, replacement and base metal vein deposits. Previous exploration included a shaft and several levels on the Santa Rosa vein indicated the presence of significant silver, zinc, lead and copper mineralization. The SLDC property covers prospective contacts between quartz feldspar porphyry and granodioritic bodies with limy Mesozoic sedimentary rocks. The favourable contact zone is mainly covered by soil and alluvial deposits that require indirect geophysical and geochemical methods to guide drilling and detect covered or buried mineralized bodies. A qualifying exploration program of induced polarization was conducted by Prospero to identify prospective areas for

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 44 SAN LUIS DEL CORDERO PROJECT replacement or skarn deposits and mineralized extensions of the Santa Rosa and India Bonita vein systems. The India Bonita and Santa Rosa vein system have exploration potential along strike and dip extensions away from historic mine workings. Holes PSLC 1 to 7 have been selected to test for extensions. The contact areas between intrusive rocks and limy sedimentary rocks provide targets for skarn and replacement typed mineral deposits. A Contact or skarn mineralization may be the cause of the strong chargeability anomaly C1 in the NW part of the IP grid. The success of the initial exploration provides justification for further drilling of the SLDC with a recommended Phase 1 drill program of 1,500 meters. Seven holes (PSLC-1 to 7) are proposed to test extensions of the Santa Rosa and India Bonita vein structures and hole (PSLC-8) is proposed to test the strong chargeability anomaly in the northwest part of the IP grid (Table 21.1). The IP anomaly could represent: 1. a patch of pyrite-bearing jasperoid which outcrops about 350m north of the IP anomaly. The jasperoid outcrop does not explain the anomaly depth which extends below the project base of the limestone, 2. Santa Rosa type pyrite and tetrahedrite mineralization which is known from workings and historic drilling to extend below the limestone contact, 3. represent intrusive with dissemiated sulphides since a pyritic dyke outcropping near the jasperoid about 350m north of the IP anomaly, or 4. Some combination of pyritic jasperoid, tetahedrite bearing pyritic veins and/or sulphide bearing intrusive rocks with adjacent mineralized skarn.

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 45 SAN LUIS DEL CORDERO PROJECT

Table 21.1 Proposed Phase 1 Drill Holes. PROSPERO SILVER DIAMOND DRILL HOLE PROGRAM SAN LUIS DEL CORDERO, DGO LOCATION EAST ELEVATION LONG TARGET DDH Id (m) NORTH (m) (m) AZIMUT (°) DIP (°) (m) INDIA BONITA PSLC-1 573025 2813690 1559 0 -60 105 INDIA BONITA PSLC-2 572875 2813673 1600 0 -60 105 INDIA BONITA PSLC-3 572953 2813586 1556 0 -60 210 SANTA ROSA E PSLC-4 572060 2812665 1509 0 -60 130 SANTA ROSA E PSLC-5 572135 2812666 1510 0 -55 120 SANTA ROSA E PSLC-6 571985 2812666 1510 0 -55 120 SANTA ROSA PSLC-7 571401 2812817 1525 30 -55 260

IP ANOMALY PSLC-8 570800 2813430 1619 0 -70 450 TOTAL METERS 1500

22.0 WORK RECOMMENDATIONS

22.1 Summary Recommendation Phase One Work Program A recommended Phase 1 program of 1,500 meters of HQ diamond drilling is estimated to cost US$ 300,000 (Table 22.1).

22.2 Recommendation of Phase Two Work Program A success contingent US$600,000 Phase 2 3,000-meter drilling program is recommended for definition of significant mineralization found during the Phase 1 program (Table 22.2).

22.3 Opinion that Property is of Sufficient Merit to Justify Work Recommended In the writer’s opinion, the character of the SLDC property is of sufficient merit to justify the recommended Phase 1 program, and the program represents a worthwhile investment by Prospero.

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 46 SAN LUIS DEL CORDERO PROJECT

TABLE 22.1 RECOMMENDED WORK PROGRAM AND BUDGET FOR PHASE 1 ON SAN LUIS PROPERTY, DURANGO STATE, MEXICO. Type Description Cost/unit Estimated Cost Project Preparation US $5,000 Personnel 30,000 Vehicles 5,000 Diamond Drilling 1,500 meters $120/m 180,000 Surface Sampling 5,000 Geochemical Costs 20,000 Reporting 10,000 Management 10,000 Office Charges 5,000 Permitting, Claim 10,000 Fees, Legal Contingency ~10% 20,000 Phase 1 Total in US Dollars US $300,000

TABLE 22.2. WORK PROGRAM AND BUDGET FOR PHASE 2 ON SAN LUIS PROPERTY, DURANGO STATE, MEXICO (Success Contingent). .Type Description Total Length Estimated Cost Diamond Drilling 3,000 meters All in $200/m US $600,000 Phase 2 Total in US Dollars US $600,000

PAC GEOLOGICAL CONSULTING INC AUGUST 2008 47 SAN LUIS DEL CORDERO PROJECT

23.0 REFERENCES AND SOURCES OF INFORMATION Camprubi, A., Ferrari, L., Cosca, M.A., Cardellachi, E., and Canals, A., 2003. Age of Epithermal Deposits in Mexico: Regional Significance and Links with the Evolution of Tertiary Volcanism. Econ. Geol., Vol. 98, pp. 1029-1037.

Cardenas Vargas, J., Carrasco Centeno, M., Sanenz Reyes, R., and Macedo Palencia, R., 1993. Monografia Geologico-Minero del Estado de Durango. For Consejo de Recursos Minerales, Publication M-10e.

Cardenas Vargas, J., Paraga Perez, J. de J., Merida Montiel, R., Macedo Palencia, R., and Rodriguez Salinas, J. de J., 1992. Geological-Mining Monograph of the State of Zacatecas for Consejo de Recursos Minerales, Publication M-2e.

Christopher, P.A., 2005. Technical Report on Proposed Exploration, Claudia Project, Durango State, Mexico. For Capstone Gold Corp. and Silverstone Resources Corp. dated December 31, 2005.

Christopher, P.A., 2004a. Technical Report on the Inde Gold Property, Durango State, Mexico. For Sydney Resource Corporation. dated March 18, 2004.

Christopher, P.A., 2004(b). Progress Report on Drilling of the Cerro Prieto and El Manto Zones, Tejamen Silver Property, Durango State, Mexico. For Oremex Resources Inc. dated August 6, 2004.

Christopher, P.A., 2004(c). Progress Report on Drilling of the Tejamen Silver Property, Durango State, Mexico. For Oremex Resources Inc. dated May 10, 2004.

Christopher, P.A., 2003(a). Technical Report on Proposed Exploration Ventanas Gold-Silver Property, Durango State, Mexico. For Capstone Gold Corp. dated May 9, 2003.

Christopher, P.A., 2003(b). Technical Report on Proposed Exploration Claudia Project, Durango State, Mexico. For Capstone Gold Corp. dated December 1, 2003.

Christopher, P.A., 2003(c). Technical Report on Proposed Exploration Promontorio Gold-Silver Property, Durango State, Mexico. For Capstone Gold Corp. dated November 28, 2003.

Christopher, P.A., 2003(d). Technical Report on Proposed Exploration Montoros Project, Durango State, Mexico. For Capstone Gold Corp. dated December 4, 2003.

Christopher, P.A., 2003(e). Technical Report on Proposed Exploration Cozamin Project, Zacatecas State, Mexico. For Capstone Gold Corp. dated November 25, 2003.

48 SAN LUIS DEL CORDERO PROJECT

Christopher, P.A., 2003(f). Technical Report on Proposed Exploration Copala Project, Sinaloa State, Mexico. For Capstone Gold Corp. dated December 10, 2003.

Christopher, P.A., 2003(g). Technical Report on the Tejamen Silver Property, Durango State, Mexico. For Blackhorn Gold Mines Ltd. dated April 30, 2003, revised September 2003 and October 1, 2003.

Christopher, P.A., 2003(h). Technical Report on the San Lucas Silver Property, Durango State, Mexico. For Blackhorn Gold Mines Ltd. dated April 30, 2003, revised September 22, 2003 and October 1, 2003.

Christopher, P.A., 2003(i). Summary Report on the Parrilla Silver Property, Durango State, Mexico. For Blackhorn Gold Mines Ltd. dated April 30, 2003.

Christopher, P.A., 2003(j). Summary Report on the Mezquital Silver Property, Durango State, Mexico. For Blackhorn Gold Mines Ltd. dated April 30, 2003.

Christopher, P.A., 2003(k). Summary Report on the El Sol Silver Property, Durango State, Mexico. For Blackhorn Gold Mines Ltd. dated April 30, 2003.

Christopher, P.A., 2003(l). Summary Report on the Chalchiuites Silver Property, Zacatecas State, Mexico. For Blackhorn Gold Mines Ltd. dated April 30, 200.

Christopher, P.A., 2001. Geology and Mineralization of the Inde Gold Property, Durango State, Mexico. For Hunter Dickinson Group Inc. dated October 26, 2001.

Dobrescu, J. and Ko, K., 2008. Logistical Report for Prosper Silver Corp. Induced Polarization Survey on the San Luis Del Cordero Project. Survey conducted by SJ Geophysics Ltd., dated July 2008.

Gilmer, A.L., Clark, K.F., Conde C., J., Hernabdez C., I., Figueroa S., J., and Porter, E.W., 1988. Sierra de Santa Maria, Velardena Mining District, Durango, Mexico. Econ. Geol., Vol. 83, pp. 1082- 1829. Perez Corona, J.L., 2007. Reporte de barrenacion con diamate primera etapa-Projecto San Luis del Cordero, Durango: Internal Report Minera Hochschild Mexico, SA de CV, Julio 2007.

Ponce S., B.F., and Clark, K.F., 1988. The Zacatecas Mining District: A Tertiary Caldera Complex, Associated with Precious and Base Metal Mineralization. Econ. Geol. V. 83, No. 8, pp. 1668-1682.

49 SAN LUtS DEL CORDERO PROJECT

Prospero Silver Corp., 2008a. Procedure for sample collection, security, and data verification of Mine Assay Samples. Memorandum Dated July 2008.

Prospero Silver Corp., 2008b. Procedure for sample collection and security of diamond drill hole core samples for assaying. Memorandum Dated July 2008.

Rastad, S. and Dobrescu, J., 2008. Geophysical Report for Prospero Silver Corporation, 3D Induced Polarization on the San Luis del Cordero Project. Draft report prepared by S.J.V. Consultants Ltd., dated July 2008.

Smaliwood, R., and Enriquez, F., 2003. San Dimas District, Durango, Mexico. Abstract for presentation at Cordilleran Roundup, pp.17-19.

Smee, B.W., 2004. Results of an Audit of Reno and Elko Laboratories Nevada, USA. Prepared by Smee and Associates Consulting Ltd., Audit jointly funded by Capstone and other Canadian listed companies, dated September 2004.

Wallis, S., Pearson, J.L., and Hayden, A.S., 2005. Technical Report on the Velardena Project, Durango Mexico. For ECU Silver Mining Inc. dated July 10, 2005.

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