NI 43-101 Technical Report Puchuldiza Project I Region Chile

Prepared for Southern Legacy Minerals, Inc.

Prepared by: Antony J. Amberg CGeol Sociedad Cartografica Limitada

Effective Date: May 15, 2011 Report Date: November 7, 2011 Southern Legacy Minerals, Inc. Puchuldiza Gold Deposit, Chile 43-101 Technical Report

1Table of Contents

Table of Contents ...... 2 List of Figures ...... 4 List of Tables ...... 5 1 Summary...... 6 2 Introduction...... 8 3 Reliance on Other Experts...... 9 4 Description and Location...... 10 4.1 Location...... 10 4.2 Mineral Tenure and Agreements...... 13 4.3 Surface Rights...... 16 4.4 Puchuldiza Project Option to Purchase Agreement...... 17 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography...19 6 History...... 21 6.1 Historical Gold Exploration...... 22 6.2 Historical And Conceptual Resource Estimates...... 35 7 Geological Setting and Mineralization...... 36 7.1 Regional Geology...... 36 7.2 Property Geology...... 38 7.3 Mineralization...... 39 8 Deposit Types...... 40 9 Exploration...... 41 10 Drilling...... 41 11 Sample Preparation, Analyses and Security...... 41 11.1 Sampling Method...... 41 11.2 Sample Preparation and Analysis...... 43 12 Data Verification...... 44 12.1 Data Review...... 44 12.2 QA/QC...... 44 12.3 Site Visit...... 48 12.4 Check Sampling...... 50 13 Mineral Processing and Metallurgical Testing...... 54 13.1 Metallurgy...... 54 14 Mineral Resource Estimates...... 56 14.1 Geological Model, Domains and Coding...... 56 14.2 Compositing...... 57 14.3 Exploratory Data Analysis...... 58 14.4 Evaluation of High Grades...... 59 14.5 Density...... 59 14.6 Variography...... 59 14.7 Block Model Set-up...... 62

1 Cover photo – Puchuldiza Project

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14.8 Kriging Interpolation Parameters...... 63 14.9 Validation...... 63 14.10 Resource Classification...... 63 14.11 Mineral Resources...... 66 15 Mineral Reserve Estimates...... 67 16 Mining Methods...... 67 17 Recovery Methods...... 67 18 Project Infrastructure...... 67 19 Market Studies and Contracts...... 67 20 Environmental Studies, Permitting and Social or Community Impact...... 67 21 Capital and Operating Costs...... 68 22 Economic Analysis...... 68 23 Adjacent Properties...... 68 24 Other Relevant Data and Information...... 68 25 Interpretation and Conclusions...... 69 26 Recommendations...... 72 26.1 Work Program...... 72 26.2 Recommended Budget for the first 12 months...... 73 27 References...... 75 28 Date and Signature Page...... 78 29 Certificates...... 79 Appendix 1 – Drill hole coordinates ...... 80 Appendix 2 – Probability Plots ...... 81 Appendix 3 – Cartografica Check Sampling Assay Certificate...... 84 Appendix 4 – Vertical Sections...... 85

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List of Figures Figure 1: Location Map (Henricksen, 2011)...... 10 Figure 2: The Puchuldiza Project Claim Status...... 11 Figure 3: The Puchuldiza Project Claim Status with 3 New Exploration Claims to the west of the claim block...... 12 Figure 4: Puchuldiza Project, District of Tamarugal, Region I, Chile...... 19 Figure 5: Puchuldiza Project Geology (Barrick, 2007)...... 24 Figure 6: Geologic Cross Section L-5 (Barrick, 2007)...... 25 Figure 7: Historic Geologic Cross Section L-0 (Barrick, 2007)...... 25 Figure 8: Cross Section Legend (Barrick, 2007)...... 26 Figure 9: Hydrothermal Alteration and Mineralization (Barrick, 2007)...... 26 Figure 10: Historical Surface Rock Geochemistry Au and Ag (CDE, 2009)...... 28 Figure 11: Historical Surface Rock Geochemistry Hg and As (CDE, 2009)...... 29 Figure 12: Historical Gold, Antimony and Mercury distribution in the Drill Sections (Henricksen, 2011)...... 33 Figure 13: IP - Resistivity Anomalies (Coeur, 2009)...... 34 Figure 14: B-B’ cross section chargeability results (Coeur, 2009)...... 34 Figure 15: Regional Geology of Puchuldiza Area (Barrick, 2007)...... 37 Figure 16: Aster Image of Puchuldiza Area with Other Known Hot Spring Gold Areas (Barrick, 2007)...... 38 Figure 17: Geology of the Puchuldiza Project (CDE, 2009)...... 39 Figure 18: Gold Standard STD-G28...... 45 Figure 19: Gold Standard STD-G32...... 46 Figure 20: Gold Standard STD2-CH04...... 46 Figure 21: Blank Samples...... 47 Figure 22: Duplicate Samples...... 48 Figure 23: Drill hole PUDH-011...... 49 Figure 24: Puchuldiza Project core store...... 50 Figure 25: Validation sample vs. original sample...... 52 Figure 26: PUDH-008 26m - 34m...... 53 Figure 27: PUDH-008 29 m detail...... 53 Figure 28: Mineralization domain model looking north-west with Barrick Vertical Section L-0...... 56 Figure 29: Mineralization domain model looking north-west...... 57 Figure 30: Semi variograms for Sinter Domain - 202...... 61 Figure 31: Semi-Variograms for Breccia domain - 203...... 61 Figure 32: Semi-Variograms for Stockwork domain - 204...... 62 Figure 33: Vertical Section L-0 showing Barrick drilling, mineralization domain and block model...... 65 Figure 34: Grade Tonnage Curve...... 67 Figure 35: Proposed Barrick Drill hole program (Barrick 2007)...... 74 Figure 36: Probability Plot - Sinter Domain - 202 - Log Au g/t...... 81 Figure 37: Probability Plot - Breccia Domain - 203 - Log Au g/t...... 82 Figure 38: Probability Plot - Stockwork Domain - 204 - Log Au g/t...... 83

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List of Tables Table 1: PUCHUL claims coordinates...... 15 Table 2: PUCHUL Claims registration page and year...... 15 Table 3: Puchuldiza claims registration...... 16 Table 4: Historic Trench Geochemistry...... 30 Table 5: Historical CDE Chilean Drill hole Intercepts...... 31 Table 6: Historical Barrick Drill Hole Intercepts...... 32 Table 7: Historical Drill Hole Geochemistry Comparison...... 32 Table 8: Historical Conceptual Resource Estimates...... 35 Table 9: Barrick ALS Chemex Sample Preparation and Analysis...... 43 Table 10: QA/QC Samples...... 45 Table 11: Gold Standards...... 45 Table 12: Validation of collar coordinates...... 49 Table 13: Validation sample preparation...... 51 Table 14: Validation sample results...... 51 Table 15: Results of metallurgical test work...... 54 Table 16: Composite samples basic statistics...... 58 Table 17: Composite sample top-cut...... 59 Table 18: Block model set-up...... 62 Table 19: Kriging Interpolation Parameters...... 63 Table 20: Inferred Resource Estimate...... 66

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1 Summary

The Puchuldiza Project (“Puchuldiza Project”) is located in the Andes of northern Chile near the Bolivian boarder. The project is approximately 230 kilometres north-west from Iquique.

The Puchuldiza Project is a large epithermal gold deposit of geothermal/hot- springs origin, located in a geological setting similar to ore deposits and prospects in New Zealand, Papua New Guinea, Japan and the USA.

Minera Southern Legacy Chile Limitada (“MSL”), a wholly owned subsidiary of Southern Legacy Minerals, Inc. (“SLM”) signed an option to purchase contract (“The Option Agreement”) with the Chilean Agency of Coeur South America (“Coeur”), on May 14, 2010, whereby Coeur irrevocably offered to sell to MSL six exploitation concessions covering 1,049 hectares and all of the rights inherent to them, which contain the Puchuldiza sinter, one of the largest centres of the Puchuldiza active geothermal/hot spring field. The Option Agreement was accepted by MSL on June 14, 2011, granting sole ownership of the mining concessions of Puchuldiza Project. Furthermore, SLM filed for 20 additional exploration concessions in 2010 covering 5300 hectares. Of these concessions 17 are fully constituted and three are in the process of being constituted.

Mineralization is related to a low sulphidation epithermal system developed in acidic to intermediate volcanic and volcanoclastic rocks of Upper Tertiary to Quaternary age. Alteration is extensive in the area, consisting of a central silicified nucleus, represented by the sinter and underlying silica replacements, surrounded by an extensive halo of argillic alteration, characterized by a low temperature assemblage of illite and/or illite-smectite, and an external zone of chloritic alteration grading to fresh rocks. Solfataric alteration, related to a Quaternary volcanic centre, is extensive in the higher parts of the zone.

Gold mineralization coincides with a complex system of veins, veinlets, breccias, stockworks, and hydro-fractures that generate sub-horizontal bodies hosted in the sinter and in the underlying breccias and basement volcanic rocks, and also in restricted sub-vertical vents, both intimately related to the silicic alteration. These bodies consist of fine bands of opal and chalcedony, with disseminations, bands, and veinlets of pyrite, marcasite, arsenopyrite, occasional free gold, stibnite, native antimony, cinnabar, orpiment and realgar.

A total of 6,097 meters in 35 core holes have been drilled in the project by CDE Chilean Mining Corporation (“CDE”) in 1992, and in 2003-2004 by Compañia Minera Barrick Ltda (“Barrick”). Results showed large stretches with average

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gold grades close to 1.0 g/t Au (up to 136 m @ 0.91 g/t; 114 m @ 0.94 g/t; and 78 m @ 1.30 g/t Au). More restricted higher-grade zones (up to 36.0 m @ 2.16 g/t Au; 21 m @ 3.14 g/t; and 7.0 m @ 3.90 g/t Au) were identified, located mostly underneath the sinter but close to the surface. Hg, Sb and As contents are variable and not necessarily related to the gold grades.

The historical and preliminary metallurgical testing by CDE, although not compliant with the standards of NI 43-101, suggests recoveries of approximately 90% of the gold may be achieved by high pressure grinding and roasting.

Sociedad Cartografica Limitada (“Cartografica”) has estimated Inferred Mineral Resources for the Puchuldiza Project in accordance with the CIM guidelines (CIM 2010) which have been adopted as part of NI 43-101.

3D models for the mineralizing domains were created and have been used for the resource estimation. The drill hole data was composited to 2 metres. The basic statistics and variograms were created for each domain. Experimental variograms were calculated and the ordinary kriging search ellipsoid radii and orientations were defined from the variogram analysis. No Measured or Indicated Resources were delineated due to several factors that diminish the certainty of estimates. Among them is the lack of a detailed topographical survey of the prospect and the wide separation between drill holes.

The ordinary kriging estimation results are Inferred Resources of 30.07 million tonnes grading 0.71 g/t Au containing 686,000 ounces Au with 0.5 g/t Au cut-off or 40.72 million tonnes grading 0.63 g/t Au containing 827,000 ounces Au with a 0.3 g/t Au cut-off. The effective date of this mineral resource estimate is May 15, 2011, which represents the cut-off date for information used in the resource estimation and the date the check sampling results were received.

MSL plans to implement an aggressive exploration program at the Puchuldiza Project for the purpose of upgrading the NI 43-101 compliant resource and defining extensions to the known mineralization. This 12 – 18 month program, which will include infill drilling on 50-meter centres plus exploration drilling and extensive metallurgical testing, will cost in the range of five million US dollars.

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2 Introduction This technical report has been prepared by Sociedad Cartografica Limitada.

Southern Legacy Minerals, Inc. is an Idaho corporation, duly established on February 26, 2010. Its legal domicile is 6 1/2 N Second St. Suite 201, Walla Walla, WA 99362. The Company’s President is Howard M. Crosby, its Chairman and CEO is Cesar Lopez and its corporate secretary is John Ryan. Its Directors are: Howard M. Crosby, Cesar Lopez, John Ryan, Bruce Reid and John May.

Minera Southern Legacy Chile Limitada, a wholly owned subsidiary of Southern Legacy Minerals, Inc. RUT N° 76.093.266-3 (Chilean Tax ID), is a limited liability company constituted under Chilean law, by way of a public deed dated March 16, 2010, signed before the Notary Public, María Gloria Acharán Toledo, Repertory N° 7.198. An extract of said deed is registered on page 13491 N° 9098 in the Commercial Registry of the Santiago Real Estate Registrar for the year 2010 and published in the Official Gazette dated March 20, 2010. The company capital was established at CLP $1,000,000.

The partners of MSL are Southern Legacy Minerals Inc., with 99% interest and Cesar Andres Lopez Alarcon, with 1% interest, held in trust on behalf of Southern Legacy Minerals, Inc.

The administration and use of the company name belongs to Cesar Andres Lopez Alarcon, Stephanie Diane Ashton or Angelica Paz Catalan Appelgren, whom may act jointly or severally, with ample faculties.

The geological setting of the property, mineralization style and occurrences, and exploration history were described in reports prepared by CDE, Barrick, and in various government and other publications listed in Section 21, References. The relevant sections of those reports are reproduced herein.

A total of 6,097 meters in 35 core holes have been drilled in the project by CDE in 1992, and in 2003-2004 by Barrick. The exploration program and drilling are discussed in detail in Section 10 and Section 11 of this report.

Cartografica has not reviewed The Option Agreement or the underlying mining claims and is not qualified to comment on their validity. However Cartografica has no reason to doubt the validity of these contracts or agreements.

Cartografica has not reviewed the Puchuldiza Project environment permits but has no reason to doubt that the environmental permitting requirements have been met. MSL has a high level of environmental management.

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All currency amounts are stated in Canadian dollars, US dollars or Chilean pesos, as specified, with costs and commodity prices typically expressed in US dollars. Quantities are generally stated in metric Système International d’Unités (SI) units, the standard Canadian and international practice, including metric tonnes (tonnes) and kilograms (kg) for weight, kilometres (km) or meters (m) for distance, hectares (ha) for area, grams (g) and grams per metric ton (g/t) for gold and silver grades (g/t Au, g/t Ag). Wherever applicable, any Imperial units of measure encountered have been converted to SI units for reporting consistency. Precious metal grades may be expressed in parts per million (ppm) or parts per billion (ppb) and their quantities may also be reported in troy ounces (ounces, oz), a common practice in the mining industry. All coordinates are in the UTM Zone 19 Projection using the Provisional South American Datum. 3 Reliance on Other Experts

Unless otherwise stated, Cartografica has relied on MSL personnel for details of the exploration license tenure, legal, mining and environmental legislation in Chile. Cartografica has not attempted to verify the validity of The Option Agreement. Cartografica has not independently investigated the tenement status of the prospect or the requirements of Chilean mining law. Cartografica is not qualified to provide comment on the legal issues associated with the Puchuldiza Project, including any agreements, joint venture terms or the legal status of the Land Tenure.

The sections 4, 5, 6, 7, and 8 have in large part been taken from the January 2011 Technical Report prepared by Dr. T. Henricksen (Henricksen 2011). The original data sources used by Dr. Henricksen have been referenced allowing the author to cross-check the data.

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4 Description and Location A large part of this chapter has been taken from the January 2011 Technical Report prepared by Dr. T. Henricksen (Henricksen 2011).

4.1 Location The Puchuldiza Project is located in the high Andean Plateau (Puna) of northernmost Chile, close to the Bolivian border at an altitude 3,800 to 4,200 meters above sea level. Central UTM coordinates of the property are 7,854,000 North and 504,500 East. The project lies approximately 230 kilometres NW from the port city of Iquique, capital city of the region, 18 kilometres west of the small Chile border town of Colchane. Access to the area is good via paved roads that join Iquique through Huara with the village of Colchane (Figure 1). The claim status is shown on Figure 2.

Figure 1: Location Map (Henricksen, 2011)

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Figure 2: The Puchuldiza Project Claim Status

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Figure 3: The Puchuldiza Project Claim Status with 3 New Exploration Claims to the west of the claim block.

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4.2 Mineral Tenure and Agreements

4.2.1 Chilean Mining Regulations and Laws In Chile, the state controls mineral rights, and those mineral rights are acquired through concessions, according to stipulations in the Mining Law. There are two types of concessions: exploration concessions and exploitation concessions. Exploration concessions are valid for a limited period of time and give the concession holder the right to do exploration work and the exclusive right to apply for exploitation concessions within the exploration area. Exploitation concessions grant the right to mine, subject to such other laws as may apply, including, for example, environmental regulations. Those concessions that comprise the Puchuldiza Project property are both exploitation concessions and exploration concessions.

The process of acquiring concessions is a step-by-step procedure that begins with a petition before a judge, followed by publication of the petition, legal surveying, granting of the concession, and registering of the concession. The procedure may vary with respect to exploration or exploitation concessions. The detailed steps required to acquire a mineral concession can be found in Section 4.2.

The Mining Code provides a minimum size for an exploitation concession of 1 hectare and a maximum of 10 hectares. The side of an exploitation concession must be 100 meters or longer and always a multiple of 100 meters. If an apparent gap between existing concessions is smaller than the minimum size for a concession, it cannot be acquired as a new concession. Such gaps can be granted to the oldest of the bounding concessions.

In order to maintain concessions, an annual mining license (Patente Anual) is required. The annual mining license, denominated in Chilean pesos, is calculated as [Unidad Tributaria Mensual /10], multiplied by the number of hectares. The Unidad Tributaria Mensual (UTM), or Month Tax Unit, is a monetary unit indexed monthly to inflation by the Chilean government. For October 2011, 1 UTM is equivalent to CLP 38,634 (approximately US$80).

Corner posts for the mineral concessions comprising the Puchuldiza Project were not observed, but the new concessions were staked as per the new regulations, based on co-ordinates with north-south and east-west boundaries. Once an exploration concession has been granted it can be converted at any time within the period in which it is valid into an exploitation concession.

In April, 2005, an amendment to the Chilean Organic Constitutional Law on Mining Concessions (1982) introduced a new royalty tax of 5% on operational profits of mining companies with an annual output over 50,000 tonnes of mineral. However, this tax is considered a deductible expense against income tax.

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4.2.2 Puchuldiza Project Exploitation Concessions

- PUCHUL 1 to 20 - PUCHUL 31 to 50 - PUCHUL 61 to 80 - PUCHUL 91 to 120 - GINA 1 to GINA 23 - ROCA 1 to 12

The above, hereinafter the (“Claims”), are all still registered in the name of Coeur, but the registration of the transfer of property in the name of MSL is currently under procedure before the Registrar of Mines of Pozo Almonte.

The Claims are constituted in accordance with the law and are currently in good standing. PUCHUL 1 to 20 shows unpaid license fees for the period of 2002- 2003, however, the statute of limitations for inclusion in an auction has expired, therefore this does not affect the current good standing of the Claims.

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Table 1: PUCHUL claims coordinates NAME PUCHUL 1 TO 20 PUCHUL 31 TO 50 PUCHUL 61 TO 80 Hectares 200 200 188 Mining Roll 01210-0056-3 01210-0057-1 01210-0058-K UTM COORDINATES VERTICE North East North East North East Intermediate Point 7.854.500 502.500 7.854.500 503.500 7.854.500 504.500 V 7.855.500 502.000 7.855.000 503.000 7.856.000 504.000 V 7.855.500 503.000 7.855.000 504.000 7.856.000 504.300 V 7.853.500 503.000 7853.000 504.000 7.845.400 504.300 V 7.853.500 502.000 7.853.000 503.000 7.854.400 505.000 V 7.853.000 505.000 V 7.853.000 504.000 NAME PUCHUL 91 AL 120 GINA 1 AL 23 ROCA 1 AL 12 Hectares 300 137 24 Mining Roll 01210-0059-8 01210-0015-6 01210-0082-2 UTM COORDINATES VERTICE North East North East North East Intermediate Point 7.854.500 505.500 7.855.550 504.650 7.855.500 504.700 V 7.856.000 505.000 7.856.700 504.300 7.855.700 504.400 V 7.856.000 506.000 7.856.700 505.000 7.855.700 505.000 V 7.853.000 506.000 7.855.700 505.000 7.855.300 505.000 V 7.853.000 505.000 7.855.700 504.400 7.855.300 504.400 V 7.855.300 504.400 V 7.855.300 505.000 V 7.854.400 505.000 V 7.854.400 504.300 All coordinates are in UTM Zone 19, Provisional South American Datum.

Table 2: PUCHUL Claims registration page and year Name Registration page Year PUCHUL 1 al 20 Page 1, No. 1 1994 PUCHUL 31 al 50 Page 11, No. 2 1994 PUCHUL 61 al 80 Page 11, No. 3 1994 PUCHUL 91 al 120 Page 17, No. 4 1994 GINA 1 al 23 Page 197 (r.s.), No. 47 1989 Page 472, No. 123 1999 ROCA 1 al 12 Page 1, No. 1 1994

4.2.3 Puchuldiza Project Exploration Concessions There are 17 filings for exploration concessions (“Exploration Claims”) named: PUCHULDIZA 1 to PUCHULDIZA 17, all filed by Angelica Paz Catalán Appelgren, on behalf of MSL, on February 11, 2010 before the Court of Pozo

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Almonte which is currently at the Chilean Geological Mining Service (“Sernageomin”). These claims are fully constituted and their due date is October 19, 2012.

Table 3: Puchuldiza claims registration Name Registration Puchuldiza 1 Pages 597 N° 373 Puchuldiza 2 Pages 598 N° 374 Puchuldiza 3 Pages 599 N° 375 Puchuldiza 4 Pages 600 N° 376 Puchuldiza 5 Pages 601 N° 377 Puchuldiza 6 Pages 602 N° 378 Puchuldiza 7 Pages 603 N° 379 Puchuldiza 8 Pages 604 N° 380 Puchuldiza 9 Pages 605 N° 381 Puchuldiza 10 Pages 606 N° 382 Puchuldiza 11 Pages 607 N° 383 Puchuldiza 12 Pages 608 N° 384 Puchuldiza 13 Pages 609 N° 385 Puchuldiza 14 Pages 610 N° 386 Puchuldiza 15 Pages 611 N° 387 Puchuldiza 16 Pages 612 N° 388 Puchuldiza 17 Pages 613 N° 389

The exploration concessions described above are registered on the pages and numbers indicated, all in the Discovery Registry of the Registrar of Mines of Pozo Almonte, and all for the year 2010.

Subsequently, 3 additional exploration concessions were filed on October 28, 2010 with the Civil Court of Pozo Almonte. The application for judgment was made on January 26, 2011, the report from Sernageomin is still pending. - Puchuldiza 18 (200 hectares) - Puchuldiza 19 (200 hectares) - Puchuldiza 20 (300 hectares)

4.3 Surface Rights The surface rights in the area of the Puchuldiza Project, based on information gathered to date, belong to the Indigenous Community Mauque Puchuldiza (“ICMP”), which was established on February 25, 2003, according to resolution 077-2003 issued by the National Northern Sub-direction of the National Corporation for Indigenous Development.

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MSL successfully negotiated an agreement with ICMP for surface, water and exploration rights in exchange for SLM to make a one time contribution of $13 million pesos (approximately US$26,000) for the construction of their lodging and hosteria and a monthly payment of $2 million pesos (approx. US $4,000 based on a 500 exchange rate of pesos to the dollar). SLM can terminate the agreement at any time, paying two months of fees. The $13 million pesos is to be given on a draw down basis as the construction progresses.

The monthly payments began in December 2010, and in addition, SLM made a one time contribution of $800,000 pesos (approx. US$1600) to their soccer championship.

The geothermal company, GeoGlobal Energy LLC (“GGE”), has signed a similar deal with the ICMP, although in addition they offered a royalty on production. They also contributed to the soccer championship, and have formally filed an environmental impact study.

Note: In accordance with that set forth in articles 14 and following of the Chilean Mining Code, any property investigation in these areas must have the permission of the owners. In the absence of an agreement with the surface owners, a judge may grant permission to develop exploration and exploitation by granting a mining easement in accordance with articles 120 and following of the Mining Code. Any mining easement imposed via court proceeding implies paying the owners of the surface lands an indemnity set by the judge; the mining easement shall always be transitory and may not be used for purposes other than for which it was constituted.

4.4 Puchuldiza Project Option to Purchase Agreement In a public deed dated May 14, 2010, there was signed, before the Notary Public, María Acharán Toledo, repertoire N° 13.921, between Coeur South America, Chile Agency; and Minera Southern Legacy Chile Limitada and Southern Legacy Minerals Inc., an unilateral option to purchase agreement whereby Coeur irrevocably offered to sell to MSL the claims and all of the rights inherent to them.

To exercise the option to purchase, MSL must pay US$1,500,000 plus 500,000 shares of SLM common stock.

The purchase price of US$1,500,000 shall be paid according to the following schedule: a) US$300,000 on signing (fully and timely paid). b) US$300,000 on November 14, 2010 (fully and timely paid). c) US$900,000 on May 14, 2011 (fully and timely paid).

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If SLM does an Initial Public Offering, then SLM may modify the number of shares it issues to Coeur, as long as the number of shares is not less than US$125,000 in cash equivalent.

In addition to the purchase price, Coeur is entitled to a 1.5% NSR Royalty, which will last for all the mining period of the concessions, with an aggregated maximum ceiling of US$5,000,000.

The Option Agreement was accepted by MSL on June 14, 2011, granting MSL sole and full ownership of the mining concessions of the Puchuldiza Project.

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5 Accessibility, Climate, Local Resources, Infrastructure and Physiography A large part of this chapter has been taken from the January 2011 Technical Report prepared by Dr. T. Henricksen (Henricksen 2011).

The Puchuldiza Project is located within the Comuna de Colchane, Tamarugal Province, Region I Chile, near the border with Bolivia at an average elevation of approximately 4,200 meters. The central coordinates of the property are 7,854,000 North and 504,500 East. The project lies approximately 230 kilometres NW from Iquique, the capital city of the region and one of the main ports in northern Chile. Access to the area is good via paved roads that join Iquique through Huara with the village of Colchane.

Figure 4: Puchuldiza Project, District of Tamarugal, Region I, Chile

The weather is cold and dry from May to November and rainy from December to April, with occasional snow-storms and lightening, allowing exploration activities most of the year. No infrastructure is available in the area except for minor facilities existing in the villages nearby.

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Cellular telephone service is not available in the project area.

The wildlife is typical of the high altitude arid Puna area of northern Chile with vicunas, guanacos, and ñandus, all abundant in the area, as well as herds of domestic llamas.

The nearest mining prospect is the inactive high sulphidation Choquelimpie precious metal prospect, 140 kilometres to the north. Choquelimpie has an historic resource of approximately 3 million ounces of gold.

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6 History A large part of this chapter has been taken from the January 2011 Technical Report prepared by Dr. T. Henricksen (Henricksen 2011).

Puchuldiza is one of the largest gold bearing active geothermal/hot-springs field known in the world. It is located in a geological setting similar to ore deposits and prospects in New Zealand (Waiotapu), Papua New Guinea (Lihir), Japan (Ishikari, Nansatsu) and USA (Mc Laughlin). Some features of the field, such as the magnitude of the sinter deposits, the complexity of the structural pattern, and the presence of gold on the surface and at depth, indicate that the Puchuldiza Project may be a large gold prospect.

Exploration started at Puchuldiza in 1968 when the Chilean Geothermal Committee, a government agency, with the assistance of the Japan International Cooperation Agency (“JICA”) initiated exploration activities aimed to the evaluation of the geothermal potential of the area. The exploration program was active until 1981 and included geology, geochemistry, geo-thermometry and drilling of 6 geothermal holes down to a maximum depth of 1,147 meters. Results were not conclusive and the project was abandoned.

Early in 1990, CDE acquired the mining rights from Freeport Chilean Exploration Company, who started the exploration for precious metals in the area, including surface mapping and a 25 x 30 meter rock geochemical grid over the sinter (samples assayed for Au, Ag, Cu, Mo, As, Sb, Hg, Tl, and Ba).

CDE continued the exploration activities with: a) Additional mapping and geochemical sampling; b) IP-Resistivity survey over the geochemical anomaly; c) 1,722 meters of diamond drilling in 18 RC holes sampled for Au, Ag, Cu, Mo, As, Sb, Hg, Tl, and Ba; d) Petrographic studies in transparent and polished sections of surface and core samples; e) Laboratory scale metallurgical tests, including conventional cyanide leaching, pressure oxidation, bioxidation, high-pressure grinding, and roasting and; f) Preliminary geological resources estimate.

In November 2001, an option for a joint venture was agreed with Barrick, under which Barrick committed to spend a minimum of US$2,250,000 in exploration activities within a period of five years in exchange for a 75% interest in the project.

Activities carried out by Barrick between January 2002 and December 2004 included: a) Geological mapping; b) Geochemistry, including PH soil analysis, talus fines, soil gas hydrocarbons and Terrasol analysis, and stream sediment analysis; c) PIMA surveys; d) selective chip sampling and channel sampling; e) Geophysics including ground magnetic, gravity, and IP surveys; f)

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Geochronology; g) 4,375 meters of diamond drilling in 17 holes sampled for Au, Ag and 35 additional elements; h) Geological modeling and; i) Potential resource estimates.

In May 2007, Coeur and Barrick agreed on an extension of the option until November 2008. The extension was granted in return for fulfillment by Barrick of US$250,000 in pending expenditures committed for the 2001 - 2006 period and for fulfillment of additional expenditures of US$200,000 in exploration in the property. By the end of the extension period Barrick had not met the committed expenditures and was thus officially notified by Coeur of the expiration of the option.

6.1 Historical Gold Exploration

6.1.1 Historical Geologic Mapping Good quality geologic mapping has been carried out at Puchuldiza at various scales between 1990 and 2004. CDE did the initial work up to 2001 when CDE signed a joint venture agreement with Barrick. The geologic data has been provided to MSL and is in the process of being completely digitized, providing excellent information for future interpretations and planning. Historically, each map is probably a refinement of previous maps, hence, only the most recent historical map is shown in this report (Figure 5).

6.1.2 Hydrothermal Alteration And Mineralization As mapped by CDE and Barrick, hydrothermal alteration is extensive in the area. Four phases are distinguished, including silicification, argillization, propylitization, and solfataric alteration. Alteration is clearly zoned with a central strongly silicified nucleus developed underneath the sinter as massive opaline- chalcedonic replacements, opaline silica in veinlets, silicified breccias, and stockwork zones. At greater depths silicification is more restricted and developed as halos of the sub-vertical phreatic breccias.

Silicification changes laterally and at depth to a broad halo of low temperature argillic alteration, assemblage characterized by the occurrence of illite and illite- smectite (mixed layers) association. Chloritic alteration grading to fresh rocks characterize the external zone of the hydrothermal alteration system. Steam heated alteration assemblages dominated by alunite/kaolinite occur along structures overprinting the illite/smectite alteration (Figure 9).

Gold mineralization at the Puchuldiza Project coincides with a complex system of veins, veinlets, breccias, stockworks, and hydro-fractures that generates sub- horizontal bodies hosted in the sinter and in the underlying breccias and

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basement volcanic rocks, and also in restricted sub-vertical vents, both intimately related to the silicic alteration (Figure 9). These bodies consist of fine bands of opal and chalcedony, with disseminations, bands, and veinlets of pyrite, marcasite, arsenopyrite, occasional free gold, stibnite, native antimony, orpiment, realgar, and cinnabar.

Veins vary in thickness from 1 to 8 meters. Their attitude varies from sub-vertical in the western zone of the sinter to sub-horizontal in the eastern zone of the sinter. They consist in quartz, opal, pyrite, arsenopyrite, and marcasite, grading at depth to calcite with subordinate quartz and pyrite.

Stockworks are developed in zones of intense silicification under the phreatic breccias preferentially in zones of intersection with veins. Stockworks are also developed in zones of hydro-fracturing around the breccias. They consist of veinlets and bands of black opal, chalcedony, and microcrystalline quartz, which at depth grade to calcite.

Gold mineralization occurs in association with opal, microcrystalline quartz, pyrite, arsenopyrite, and marcasite. Pyrite occurs as fine grained disseminations and veinlets and in coarse crystalline grains in open fractures. Marcasite and stibnite occur as disseminations, cavity filling and in quartz banded veins. Cinnabar, realgar, and orpiment occur as precipitates in bands within the opaline-chalcedonic sinter.

The geometry, type of gold mineralization, mineral suite, lithology, and hydrothermal alteration coincide with a typical hot springs mineralization environment formed at shallow depths, varying from 0 to 150 meters from the surface.

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Figure 5: Puchuldiza Project Geology (Barrick, 2007)

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Figure 6: Geologic Cross Section L-5 (Barrick, 2007)

Figure 7: Historic Geologic Cross Section L-0 (Barrick, 2007)

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Figure 8: Cross Section Legend (Barrick, 2007)

Figure 9: Hydrothermal Alteration and Mineralization (Barrick, 2007)

6.1.3 Surface Geochemistry Over 700 surface samples including 554 samples from trenches have been collected and assayed from the property. Compared to the published data from other projects the sinter of the Puchuldiza Project ranks among those with highest gold values in the world (Ward ,1978; Ward. and Wright, 1989; White, 1995). Geochemical sampling grids carried out by Coeur (30 x 25 m) and by Barrick (50 x 50 m) define a NNE to NS elongated gold anomaly (Figure 10) located in the eastern and southern zones of the sinter (values over 40 ppb), 650 meters long and 200 meters wide, including a stretch of 300 x 100 meters with values over 200 ppb of gold and several samples over 1 g/t Au (maximum of 4.1 g/t Au). Silver contents are low with a maximum value of 13 g/t. Gold shows a very good spatial correlation with Ag, Hg and Sb, and an inverse correlation with arsenic. Specific details of the surface samples and analytical parameters are not known, however because the work was carried out by two reputable companies,

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CDE and Barrick, cross-checking each other over a period of 14 years, it is assumed that the historical surface geochemistry is fairly reliable.

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Figure 10: Historical Surface Rock Geochemistry Au and Ag (CDE, 2009)

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Figure 11: Historical Surface Rock Geochemistry Hg and As (CDE, 2009)

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Table 4: Historic Trench Geochemistry Barrick N Mean Minimum Maximum Au (ppm) 554 0.08 0.005 0.50 Ag (ppm) 554 <0.2 <0.2 1.70 As (ppm) 554 338 <2 7,680.00 Sb (ppm) 554 33 <2 7,840.00 Hg (ppm) 554 67.34 <0.01 1,880.00 Cu (ppm) 554 5 <1 81.00 Mo (ppm) 554 1 <1 88.00 Tl (ppm) 554 0.3 <10 100.00 Ba (ppm) 554 362 <10 1,980.00

6.1.4 Historical Drilling Exploration started at Puchuldiza in 1968 when the Chilean Geothermal Committee, a government agency, with the assistance of the JICA initiated exploration activities to evaluate the geothermal potential of the area. The exploration program was active until 1981 and included geology, geochemistry, geo-thermometry and drilling of 6 geothermal holes down to a maximum depth of 1,147 meters. Detailed results of this geothermal exploration were not available to the author of this report.

A total of 6,097 meters in 35 core holes have been drilled for gold exploration on the project. The first 17 holes were drilled by CDE in 1992 (Figure 5 and Table 5). The drilling was carried out in an approximately regular grid of 200 per 200 meters covering the majority of the main area of the Puchuldiza sinter. The area was tested mostly with vertical holes down to 153 meters.

A second drilling campaign was performed by Barrick in 2003 and 2004 totalling 17 inclined holes located mainly in the centre of the sinter and in outer zones towards the north, northeast and southeast (Figure 5 and Table 6). These holes tested the area down to 300 meters below the surface.

A total of 1,704 samples from CDE drill holes were analyzed for Au, Ag, Sb, As and Hg. About 25% of these were also analyzed for Cu and Mo and 45 selected samples were analyzed for Tl and Ba. Barrick’s core samples (2,936) were assayed for Au and Ag and for 35 additional elements including As, Sb, Hg, Cu, Mo, Tl, and Ba. Summaries of the means and ranges for drill hole samples are shown on Table 7 and those for trench samples are shown on Table 4. Results showed large stretches with average gold grades close to 1.0 g/t Au, up to 136 m @ 0.91 g/t; 114 m @ 0.94 g/t and; 78 m @ 1.30 g/t Au, including more restricted higher grade zones up to 36.0 m @ 2.16 g/t Au; 21 m @ 3.14 g/t and; 7.0 m @ 3.90 g/t Au,

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located mostly underneath the sinter but close to the surface. Hg, Sb and, As contents are variable and not necessarily related to the gold grades.

Barrick results were comparable with those obtained by CDE in the first drilling campaign but generally grades are lower. Large stretches were intercepted with gold average grades slightly below 1.0 g/t Au, up to 204.0 m @ 0.80 g/t; 167 m @ 0.80 g/t and; 118 m @ 0.96 g/t Au, including restricted higher grade intervals up to 10.0 m @ 2.95; 7.0 m @ 4.25 g/t and; 6.0 m @ 5.13 g/t. Higher grade intercepts are mostly located close to the surface, again with variable contents of Hg, Sb and As. Twelve additional holes were intended to be drilled by Barrick in the central part of the sinter before the decision to abandon the area was made.

Table 5: Historical CDE Chilean Drill hole Intercepts CDE CHILEAN DRILLING PROGRAM Hole Id From To Interval Au ppm Ag ppm As ppm Ba ppm Cu ppm Hg ppm Mn ppm Mo ppm Pb ppm Sb ppm Tl ppm Zn ppm PDH001 0.00 78.00 78.00 1.30 6.0 457 12 29.36 9 419 Include 35.00 38.00 3.00 3.90 10.7 440 10 2.23 9 351 Include 45.00 48.00 3.00 4.82 24.7 176 8 1.84 11 219 PDH002 6.00 142.00 136.00 0.91 4.7 436 19 16.97 8 543 Include 6.00 34.00 28.00 0.95 2.3 141 28 81.45 11 2,335 Include 45.00 142.00 97.00 0.99 5.9 500 15 0.16 7 74 Include 48.00 55.00 7.00 3.90 14.9 678 16 0.32 11 210 PDH003 7.00 150.10 143.10 0.60 1.3 434 7 11.19 6 933 Include 39.00 49.00 1.00 9.65 14.0 667 5 5.00 9 495 PDH004 Barren PDH004A Barren PDH005 7.00 59.50 52.50 1.46 3.1 1,856 0 72.85 0 7,260 Include 7.00 28.00 21.00 3.14 1.9 142 0 69.24 0 6,830 Include 19.00 28.00 9.00 5.72 3.3 263 0 46.67 0 13,000 PDH006 48.00 62.00 14.00 0.27 3.1 256 0 0.53 0 51 87.00 103.00 16.00 0.22 2.2 340 0 0.27 0 38 PDH007 12.00 21.00 9.00 0.16 0.5 80 0 18.89 0 1,723 PDH007A Barren PDH008 18.00 31.00 13.00 0.28 0.5 484 0 3.55 0 706 Include 29.00 30.00 1.00 2.26 3.5 452 0 4.00 0 504 57.00 67.00 10.00 0.18 1.1 484 0 0.78 0 36 PDH009 Barren PDH010 0.00 48.00 48.00 0.21 0.9 208 0 8.55 0 492 Include 11.00 19.00 8.00 0.36 1.4 47 0 9.00 0 534 71.00 99.00 28.00 0.16 0.5 471 0 0.32 0 63 PDH011 8.00 49.00 41.00 0.25 0.4 1,068 0 16.89 0 1,415 Include 35.00 39.00 4.00 0.85 1.9 2,175 0 0.39 0 94 PDH012 Barren PDH013 1.00 14.00 13.00 0.19 0.1 159 0 16.15 0 1,293 PDH014 Barren PDH015 0.00 140.70 140.70 0.64 3.1 403 0 16.23 0 375 Include 0.00 97.00 97.00 0.81 3.3 463 0 23.51 0 518 Include 17.00 20.00 3.00 5.83 5.7 1,320 0 9.27 0 605 PDH016 0.00 113.70 113.70 0.94 3.3 406 0 22.58 0 410 Include 0.00 36.00 36.00 2.16 3.6 804 0 68.80 0 996 Include 25.00 28.00 3.00 4.33 8.0 625 0 4.30 0 553

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Table 6: Historical Barrick Drill Hole Intercepts COMPAÑÍA MINERA BARRICK DRILLING PROGRAM Hole Id From To Interval Au ppm Ag ppm As ppm Ba ppm Cu ppm Hg ppm Mn ppm Mo ppm Pb ppm Sb ppm Tl ppm Zn ppm PUDH-001 214.00 287.00 73.00 0.26 0.9 550 52 6 0.07 451 1 13 5 0.0 38 Include 264.50 270.75 6.25 1.15 3.6 618 11 10 0.00 78 10 13 16 0.0 30 313.00 423.50 110.50 0.23 0.6 361 30 8 0.32 267 2 17 7 0.0 48 Include 409.00 417.00 8.00 0.44 1.4 309 19 7 0.25 127 6 17 3 0.0 44 PUDH-002 9.00 93.80 84.80 0.40 0.3 765 35 30 6.40 1,209 1 4 609 12.6 59 Include 9.00 27.00 18.00 0.64 0.3 50 34 12 28.61 50 2 1 2,522 30.6 2 Include 72.00 87.00 15.00 1.04 1.1 1,296 33 41 0.27 3,296 0 6 33 7.3 121 Include 74.00 77.00 3.00 2.59 4.7 1,460 27 21 1.33 981 0 4 80 30.0 80 PUDH-003 170.00 200.00 30.00 0.26 0.5 312 48 8 0.00 383 0 10 3 0.0 32 Include 197.30 200.00 2.70 1.32 2.2 962 27 20 0.00 1,638 0 9 4 0.0 41 PUDH-004 Barren PUDH-005 67.00 85.00 18.00 0.23 0.8 559 19 31 0.67 1,015 1 4 16 1.1 59 233.00 302.50 69.50 0.62 2.0 460 21 29 0.57 848 3 14 6 0.0 51 Include 266.00 267.40 1.40 4.00 2.9 724 20 32 0 496 1 12 6 0 59 PUDH-006 0.00 265.00 265.00 0.53 1.9 308 48 13 59.15 646 2 12 205 14.2 36 Include 0.00 118.00 118.00 0.96 2.8 691 107 29 132.83 1,451 4 27 460 31.9 81 Include 13.00 17.00 4.00 3.36 2.3 5 10 18 253.75 70 1 1 343 2.5 1 Include 32.00 36.00 4.00 5.04 9.0 587 45 21 15.50 73 1 5 334 135.0 47 PUDH-007 11.00 173.65 162.65 0.64 1.3 400 57 9 24.25 744 2 11 954 19.8 32 Include 17.00 25.00 8.00 2.40 1.0 36 21 13 284.00 71 2 1 4,751 25.0 5 Include 40.00 42.00 2.00 3.20 3.7 309 10 19 26.00 69 2 3 784 235.0 17 PUDH-008 0.00 204.00 204.00 0.80 2.4 512 64 9 9.37 543 6 15 65 12.9 45 Include 0.00 10.00 10.00 2.95 3.4 10 47 9 150.10 71 0 1 142 5.0 5 Include 27.00 34.00 7.00 4.25 6.6 635 99 10 6.00 61 1 3 194 71.4 28 Include 38.35 47.00 8.65 1.81 4.4 487 42 12 3.04 216 1 3 76 30.4 37 PUDH-009 3.00 170.00 167.00 0.80 2.8 488 21 20 21.40 1,759 1 5 419 6.4 39 Include 90.00 136.00 46.00 1.67 6.1 586 11 11 0.49 3,536 2 4 13 0.4 36 Include 90.00 96.00 6.00 5.13 2.7 886 23 16 0.33 1,382 1 3 6 0.0 46 PUDH-010 10.00 43.95 33.95 0.34 0.4 684 32 32 16.66 224 2 1 953 32.6 36 Include 13.00 25.00 12.00 0.65 0.4 76 31 26 19.83 57 3 0 1,611 39.3 9 Include 23.00 25.00 2.00 1.42 0.8 250 75 78 11.50 31 3 0 3,770 60.0 6 PUDH-011 6.00 128.00 122.00 0.36 1.7 490 47 13 4.77 749 1 8 189 16.7 47 Include 6.00 26.00 20.00 0.62 1.1 277 48 11 22.37 74 1 2 1,060 68.0 24 Include 12.70 15.00 2.30 1.62 2.5 22 16 6 28.96 62 1 0 596 21.3 10 PUDH-012 126.00 186.80 60.80 0.31 2.7 509 87 15 0.25 365 1 12 7 6.1 34 Include 150.00 152.20 2.20 2.16 18.2 780 43 10 2.82 167 1 12 40 16.4 24 PUDH-013 Barren PUDH-014 23.00 30.00 7.00 0.15 0.1 240 14 9 15.72 62 2 4 2,274 79.0 11 PUDH-015 Barren PUDH-016 Barren PUDH-017 Barren

Table 7: Historical Drill Hole Geochemistry Comparison Coeur Barrick All Mea Mea N n Min Max N n Min Max N Mean Mini Max Au (ppm) 1,702 0.39 0.01 10.80 2,938 0.24 0.005 1.09 4,640 0.29 0.005 10.8 Ag (ppm) 1,702 1.6 0.1 41 2,938 0.9 0.2 100 4,640 1.2 0.1 100 As (ppm) 1,702 383 6 4,300 2,938 299 2 5,540 4,640 330 2 5,540 Sb (ppm) 1,702 612 2 45,900 2,938 195 2 10,000 4,640 348 2 45,900 14.0 Hg (ppm) 1,702 13.6 0.02 865 2,938 7 0.01 4,740 4,640 13.90 0.01 4,740 Cu (ppm) 444 12 2 287 2,938 14 1 972 3,382 13 1 972 Mo (ppm) 444 7 1 20 2,938 2 1 290 3,382 3 1 290 Tl (ppm) 45 9.3 1.1 39 2,938 6.7 10.0 440 2,983 6.7 1.1 440 Ba (ppm) 45 464 25 1,700 2,938 75 10 4,780 2,983 81 10 4,780

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Figure 12: Historical Gold, Antimony and Mercury distribution in the Drill Sections (Henricksen, 2011)

Comparing the geochemical data analysis in drill sections and plan views indicates that gold mineralization is preferentially associated with the hydrothermal breccias underneath the sinter together with antimony. Mercury on the other hand shows high concentrations starting from the surface (Figure 12). From a geochemical perspective, the best correlation of the Puchuldiza Project with other deposits appears to be with McLaughlin, CA, USA, in spite of the fact that the gold values are lower at the Puchuldiza Project.

6.1.5 Geophysics The first geophysical survey consisting of IP-resistivity was carried out in 1996 by Geodatos over an area of 5.5 sq km. that covers the sinter of Puchuldiza and the Churicollo fault. The survey consisted of 21 NW-trending profiles, spaced every 250 meters, totalling 27.3 line kilometres on a dipole spacing of 100 meters. In

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2002, Barrick did 4.1 line kilometres in three lines, two of which repeated CDE previous line surveys and a third done perpendicular to the orientation of the previous survey across the A - A’ section.

Resistivity defined a highly resistive body, 1,500 x 900 meters, elongated in a NE direction, which coincides with the sinter area (Figure 13). The IP survey defined a moderate anomaly extending for 900 x 300 meters elongated in a NE direction. The strongest portion of the anomaly coincides with the Churicollo fault along the NW side on the sinter, extending with decreasing intensity to the SE underneath the sinter area (Figure 14).

Figure 13: IP - Resistivity Anomalies (Coeur, 2009)

Figure 14: B-B’ cross section chargeability results (Coeur, 2009)

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The IP anomaly remains largely untested, except for few holes which intercepted 136 meters of 0.91 g/t Au (PUDH 2), 167 meters of 0.80 g/t Au (PUDH 9), and a deep seated mineralized zone of 69 meters of 0.62 g/t gold, located 180 meters below the surface, close to the trace of the Churicollo fault (PUDH5) (Figure 14).

6.2 Historical And Conceptual Resource Estimates

Several estimates of geological resources were produced for the drilled area by CDE and Barrick. These results are not compliant with the standards of NI 43- 101, but nonetheless should be mentioned because of the reputable companies that did the calculations of these “conceptual resources”. Using different methodologies and software, and similar cut-off grades and densities the results are summarized as follows:

Table 8: Historical Conceptual Resource Estimates Cut-Off: 0.5 g/t Au Au Company Method/Software Density Tonnes /t Oz Au CDE Polygonal 2.7 30,600,000 1.00 984,000 CDE PCX-Plor 2.7 27,450,000 1.00 883,000 Barrick Vulcan 2.6 17,000,000 1.04 568,000

Cut-Off: 1.0 g/t Au Densit Tonnes Au Company Method/Software y (MM) /t Oz Au CDE Polygonal 2.7 6,100,000 2.61 512,000 CDE PCX-Plor 2.7 9,200,000 2.07 612,000 Barrick Vulcan 2.6 5,300,000 1.78 303,000

The author has not reviewed any of the data used to calculate these in-house historical and conceptual resources, thus the resource information should not be considered as reliable.

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7 Geological Setting and Mineralization A large part of this chapter has been taken from the January 2011 Technical Report prepared by Dr. T. Henricksen (Henricksen 2011).

Because MSL has not carried out geologic studies on the property, most of the geologic information described in this report is from previous work by CDE and Barrick and is described in Section 6, History.

7.1 Regional Geology The Puchuldiza Project is located in the High Andean Plateau of northern Chile, morfo-structural elevated block that extends into eastern Bolivia and southern Peru. The block is characterized by a Palaeozoic basement, which underlies a thick pile of Mesozoic-Tertiary volcanic rocks. The district geology is characterized by the predominance of continental volcanic and sedimentary rocks ranging in age from Cretaceous to Pleistocene. The oldest rocks are folded clastic and volcanoclastic sedimentary rocks from the Cerro Empexa Formation of Cretaceous age, unconformable covered by a sequence of acidic tuffs and andesitic lavas with interbedded clastic sedimentary rocks of Lower Tertiary age (Oligocene) grouped under the Puchuldiza Formation (24.1 +- 0.26 Ma Ar/Ar) and the Estratos de Quitariri. Younger rocks ranging from Lower Miocene to Pleistocene are mostly sequences of volcanic events marked by large volumes of ignimbrites and volcanoclastic rocks, lava flows and sub-volcanic intrusions.

Volcanic activities continued until recent times and Quaternary volcanoes overlie from the flat surface, forming an irregular chain with centres spread every 2.5 kilometres on average. This volcanic activity is the responsible for the formation of the Puchuldiza sinter and the existing geothermal activity.

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Figure 15: Regional Geology of Puchuldiza Area (Barrick, 2007)

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Figure 16: Aster Image of Puchuldiza Area with Other Known Hot Spring Gold Areas (Barrick, 2007)

7.2 Property Geology The Puchuldiza geothermal/hot springs field spreads over an area of 14 by 12 kilometres. It includes at least eight main centres (Puchuldiza, Tuja, Lupe, Quitariri, Velullo, Lapihuella, Tatsujane, and Charullo), aligned along a regional NW fault (Puchuldiza fault) interpreted to host a large source of heat at depth. Puchuldiza is the largest of these centres.

The most conspicuous geological feature in the project area is the presence of an extensive sinter deposit, possibly the largest known in the world. The sinter covers an area 1 kilometre long and 500 meters wide, which resulted from continuous precipitation of solids from hot brines, generating masses of chalcedonic and opaline silica, with varying amounts of other components, such as sulphates and sulphides. The sinter is hosted in a SE dipping sequence of dacitic and rhyolitic lapilli and crystal tuffs and subordinate andesitic flows of the Puchuldiza Formation. It displays a sub-horizontal attitude, varying in thickness from 0.5 to 26 meters with an average of 18 meters in the central part (Figure 17). This map created by CDE differs slightly from the map shown in Figure 5:

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Puchuldiza Project Geology (Barrick, 2007). The Churicollo Fault is more prominent on the CDE map displayed here.

Figure 17: Geology of the Puchuldiza Project (CDE, 2009)

Hydrothermal breccias were identified in the drill holes. Matrix supported polymictic breccias interpreted as phreatic in origin form a sub-horizontal continuous lens-shaped body below the sinter, 3 to 6 meters thick in their extremes and up to 38 meters thick in their central part. These bodies are genetically related to sub-vertical breccia bodies of the same origin, interpreted as the feeders of the system.

The structure in the area is dominated by vertical to very steep faults trending NE (Churicollo system), NW (Puchuldiza system), and subsidiary NS.

7.3 Mineralization As MSL has not conducted its own study of alteration and mineralization, please refer to Section 6, History, for the discussions of previous work that has been conducted by CDE and Barrick.

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8 Deposit Types A large part of this chapter has been taken from the January 2011 Technical Report prepared by Dr. T. Henricksen (Henricksen 2011).

The Puchuldiza Project belongs to a class of gold deposits called “hot spring gold deposits” as defined by Robert and others (1997). The most famous deposit of this type is at McLaughlin, CA, USA, where approximately 27 million tonnes of 4.49 g/t gold (3.5 million troy ounces) were mined and recovered through 1997- 98. Other examples are Hasbrouk Mountain and Buckskin Mountain (Nevada), Cherry Hill and Champagne Pool (New Zealand) and Cinola (BC, Canada). Additional hot spring gold deposits that still have active geothermal systems are the Ladolam gold deposit (Papua New Guinea), the Benget deposit (Philippines), and the Hishikari deposit (Japan).

Hot spring deposits like McLaughlin contain siliceous sinter and geyserite formed at the paleosurface but also include funnel-shaped hydrothermal and tectonic breccias and quartz stockworks narrowing at depth into structurally controlled feeder zones. These deposits occur in belts of sub aerial mafic and felsic volcanic centres and intervening clastic sedimentary rocks in subduction-related arc settings. They are mainly recognized in young volcanic belts but, perhaps due to their poor degree of preservation, are not known to exist widely in older, deformed terranes. Nonetheless, some Palaeozoic examples have been reported (Cuneen and Sillitoe, 1989).

Mineralization is generally hosted by vent and hydrothermal breccias in volcanic, volcanoclastic or sedimentary rocks, as well as by subvolcanic porphyritic intrusions. It consists of micron-scale gold and electrum in zones of massive silicification, less commonly in sinters which are nonetheless defining features, and in crustiform banded quartz, chalcedony ± adularia and barite + carbonate veins and stockwork zones. Mineralization typically contains up to 5% pyrite ± marcasite, pyrrhotite, cinnabar, stibnite, realgar or arsenopyrite and tellurides, with elevated concentrations of Hg, As, Sb, Tl, Ba and locally of Mo and W. It displays a characteristic steep vertical metal zoning with near-surface enrichments in Au, Hg, Sb, Tl, and As and with increasing Ag and Ba content with depth (Au:Ag from 1:1 near surface to 1:30 at depth). Associated alteration consists of massive silicification and adularization of breccia zones, grading outward into advanced argillic and argillic alteration zones, and downward into narrower zones of adularia along vein margins and as replacements along hydrothermal conduits. These deposits are thought to represent the paleosurface expressions of deeper adularia-sericite deposits (Robert, F., et al. 1997).

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9 Exploration A description of the historical exploration work conducted on the Puchuldiza Project is provided in Section 6.

MSL has recently started to conduct district scale exploration on their claims. The district geology is being mapped at a scale of 1:10,000 in conjunction with geochemical sampling. Mobile Metal Ion (MMI™) geochemistry is being carried out on a 200m by 200m grid over the property and analysed for: Au, Ag, Cu, Mo, As, Ba, S and Fe. The results of this survey are still pending. 10 Drilling MSL has not conducted any drilling at this point. There results of the historical drilling are described in Section 6.

11 Sample Preparation, Analyses and Security

11.1 Sampling Method The sample results, both surface and drill core, used in constructing this report and described in Section 6, were collected between the years 1990 and 2004 by CDE and Barrick. The author of this report has not verified how either the surface samples or the core samples were collected. However, CDE provided a protocol for collecting core samples that has been in place since Puchuldiza was optioned from Freeport in the early 1990s. Barrick has not provided their protocol for sampling. The following is a generalized description of the protocol by CDE:

Core Sampling

All core will be placed in a core box and clearly labelled with hole number, box number and starting meter and ending meter.

Drillers will insert “blocks” at the end of each core retrieval run that list the ending depth in meters.

All core will be washed and digitally photographed prior to sampling. Each photo will show the core in the box with a legible label indicating hole number, starting meter and ending meter and the sample interval. Sample breaks should also be clearly marked.

Photos will be saved as jpeg images and labelled with hole number, approximate start meter and approximate end meter. For example, the image

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for core hole 3, 153.5 meters to 165.2 meters would be named C003_153.5_165.2.jpg .

All core samples will be logged by a geologist for geology and recovery information.

The minimum geodic information to be collected is recovery and RQD:

Recovery = Sum of lengths of core sticks x 100 Total length of core run RQD = Sum of lengths of core sticks > 10 cm long x 100 Total length of core run Lithology with From-To measurements Primary and secondary alteration and intensity with From-To measurements Primary and secondary mineralization and estimated percentage with From-To interval Description of vein material and mineralization Logs will also include notes on depth to water table, base of table if encountered, and flow volume.

Core to be sampled will be split utilizing either a manual core splitter or diamond saw as deemed appropriate for the rock type. Before sawing the core the geologist will try to piece the core back together to form a continuous length of core through the proposed sample interval. The geologist will then scribe or mark with permanent marker a line, called the cut line, parallel to the core axis along the entire length of the proposed sample interval. This will help ensure that the core is cut consistently into a true half sample. One half will be placed in numbered bags for assays along with the sample tag and the other half placed back in the box for future reference.

Core will be sampled based on mineralization controls, mainly lithology, structure such as Shear zones or veins and alteration

Samples will have a minimum width 0.5m and maximum width 2m.

A duplicate drill sample will be taken as the project QA/QC protocols dictate. The duplicate sample needs to be collected from half core samples, ideally one half the core is sampled and then the remaining half core is sampled as the sample duplicate. If a portion of the sample interval is desired to be saved for later inspection the core should first be skeletonized before sampling. To properly skeletonize the core the geologist collect and preserve representative (representative of geology, alteration and mineralization) pieces of core that are about 10% of the total length to be sampled. For example if a 1.5 meter interval is to be skeletonized representative pieces of whole core that total about 0.15 meters will be kept in the box. The two half sample will be placed in

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separate bags numbered in consecutive sequence. In the sample ticket book one sample will be noted as the duplicate.

Assay standards (QA/QC samples) will be inserted into the assay stream as dictated by the project QA/QC protocol followed by a blank sample. The standard and blank samples are numbered sequentially with the drill samples.

Down hole surveys must be completed on all core holes at least every 15 meters down the hole and a final survey at the bottom of the hole. Surveys must included footage, azimuth and dip.

Abandon the hole by backfilling and cementing the collar. Mark the collar with the hole ID.

Cap top 2-3 meters with cement plug.

For wet seal, grout seal (example, bentonite clay) from bottom of hole to at least 10 meters above the water level. Cap at surface with a cement plug.

Daily drill report data, drill logs and sampling information will be recorded into an acQuire database.

11.2 Sample Preparation and Analysis The assay certificates from ALS Chemex indicate that the Barrick samples were prepared using the methodology outlined in Table 9.

Table 9: Barrick ALS Chemex Sample Preparation and Analysis ALS Code Description Instrument WEI-21 Received Sample Weight LOG-22 Sample Login – Rcd w/o BarCode CRU-31 Fine crushing – 70% <2mm SPL-21 Split sample – riffle splitter PUL-31 Pulverize split to 85% <75 µm Hg-CV41 Trace HG – cold vapour /AAS FIMS Au-AA24 Au 50g FA AA finish AAS ME-ICE41 35 Element Aqua Regia ICP-AES ICP-AES

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12 Data Verification Coeur and Barrick generated a great deal of data with their generative exploration in the area of the Puchuldiza project. This information is available as written reports, Geographical Information System, assay database and as a Vulcan mine modelling software data files. The data is stored as digital files in a well sorted and documented system. The data was reviewed and checked against the various reports.

12.1 Data Review The original handwritten logging data and the sample sheets are not available for review. The drilling and trench logging and assay data are stored in Microsoft Access database files and in Excel spreadsheets. The logging data is clean and relatively error free. Some of the logged lengths slightly exceed the total depth of the drill holes and there are some minor interval errors within the database that do not effect the overall resource estimate. It is recommended that these differences should be validated against the core in the future.

The assay batch results are stored in 67 ALS Chemex Excel files. This data was compiled by Barrick into the Access database. Only eight of these analysis batches have secure pdf certificates. ALS Chemex or Barrick should be approached to provide the certificates for the remaining batches.

All drilling samples with a grade of greater that 3 Au g/t in the drilling database were checked against the original Excel assay data. No errors were encountered.

Five batches of assay results were imported into the data database and the gold values checked against the database values. No errors were identified.

The data was imported into Micromine and Leapfrog mine modelling software. Validation routines were run on the collar, survey, lithology and assay data. This identified some minor interval errors. These were corrected where possible so that the data could be used create the domain model and for the compositing of the assay data. These minor errors in the database should be checked against the original records These changes did not materially alter the results of the resource estimate.

12.2 QA/QC Barrick analysed a total of 4,011 samples at the Puchuldiza Project, of which 4.5% were QA/QC samples (Table 10). This as a percentage of the total samples is low compared to today’s norms but these QA/QC samples indicate that the preparation and analysis of the samples was correctly carried out.

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Table 10: QA/QC Samples No. % of Total Sample Type Samples Samples Standards 54 1.3% Duplicates 50 1.2% Blanks 77 1.9% Normal Samples 3,830 95.5% Total 4,011 100.0%

Three different gold standards were used by Barrick in their sample batches analysed by ALS Chemex. The source of these gold standards is not documented, see Table 11.

Table 11: Gold Standards Lower Upper Gold Limit 2SD Limit 2SD Standards Au g/t Au g/t STD-G28 0.656 0.914 STD-G32 2.180 3.150 STD2-CH04 0.761 0.911

The results for these standards are shown in Figure 18, Figure 19 and Figure 20. None of the assay results exceeded the two standard deviation limit indicating that the ALS Chemex assay accuracy to be acceptable.

Gold Standard STD-G28

1 0.9 0.8 0.7 0.6 Au g/t 0.5 2sd Min

A u g /t 0.4 2sd Max 0.3 0.2 0.1 0

707721 707863 708017 708137 708283 708438 708543 708716 708860 709043 709165 709294 709471 709644 709815 Sample Number

Figure 18: Gold Standard STD-G28

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Gold Standard STD-G32

3.5

3

2.5

2 Au g/t 2sd Min

A u g /t 1.5 2sd Max

1

0.5

0 709900 710012 710069 710136 710169 707593 Sample No.

Figure 19: Gold Standard STD-G32

Gold Standard STD2-CH04

1 0.9 0.8 0.7 0.6 Au g/t 0.5 2sd Min

A u g /t 0.4 2sd Max 0.3 0.2 0.1 0

710284 710328 710396 710481 710597 710647 710745 710684 710832 710958 710984 711080 711192 711218 711282 711422 711463 711520 Sample Number

Figure 20: Gold Standard STD2-CH04

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12.2.1 Blanks A total of 77 blank samples were sent by Barrick for analysis with ALS Chemex. One sample had anomalous values and the remainder were below detection limit or just above the detection limit of 0.01 g/t Au (Figure 21). The blank sample results are acceptable.

Blank Samples

0.1

0.08

0.06

0.04 A u g /t 0.02

0

-0.02

707572707893708174708466708775709069709395709620709921710081710224710352710500710660710717710973711110711260711411711542 Sample Number

Figure 21: Blank Samples

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12.2.2 Duplicate Samples A total of 50 duplicate samples were sent by Barrick for analysis with ALS Chemex. It is not documented if these were pulp, coarse or quarter core duplicates. The correlation between the original and duplicate sample is adequate although there are few samples with grades above 0.3 g/t (Figure 22). Out of 50 sampled only 6 of the original assay samples had values greater than 0.3 g/t Au. It is recommended that in the future the mineralized zones should preferentially be selected for duplicate analysis.

Duplicate Sample

1.6

1.4

1.2

1

0.8

0.6 D up l i c a t e S m p A u g /t

0.4

0.2

0 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 Original Sample Au g/t

Figure 22: Duplicate Samples

12.3 Site Visit On April 27, 2011, Antony Amberg visited the Puchuldiza Project accompanied by Roman Flores, Exploration Manager for SLM.

During the visit, the location of nine drill holes was confirmed with a Garmin hand held GPS. The data is captured in the projection UTM WGS84 and

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converted with the Gamin software to UTM Provisional South American Datum using the default Garmin conversion factor Chile.

Figure 23: Drill hole PUDH-011

The converted coordinates for the Barrick drill holes show a difference of between 19 and 21 meters in the easting and 12 to 14 meters in the northing. The Coeur drill holes show a difference of between 16 and 2o meters in the easting and 54 to 58 meters in the northing. The difference in elevation is between 3 and 8 meters for all of the drill holes. See Table 12: Validation of collar coordinates.

Table 12: Validation of collar coordinates Compa HOLEID GPS Database East GPS Database North GPS Database Elev ny East East Diff. North North Diff. Elev Elev Diff. PSAD56 PSAD56

Barrick PUDH-002 504,501 504,482 -19 7,854,079 7,854,093 14 4,202 4,208 -3 Barrick PUDH-006 504,588 504,567 -21 7,853,972 7,853,983 11 4,216 4,200 -5 Barrick PUDH-007 504,493 504,473 -20 7,853,891 7,853,903 12 4,213 4,208 -4 Barrick PUDH-009 504,546 504,526 -20 7,854,130 7,854,142 12 4,211 4,209 -6 Barrick PUDH-011 504,645 504,626 -19 7,854,218 7,854,230 12 4,215 4,199 -5 Coeur PDH002 504,584 504,567 -17 7,854,166 7,854,224 58 4,216 4,211 -8 Coeur PDH005 504,463 504,443 -20 7,853,992 7,854,048 56 4,207 4,209 -7 Coeur PDH007 504,770 504,754 -16 7,854,027 7,854,081 54 4,216 4,205 -8 Coeur PDH015 504,678 504,662 -16 7,854,097 7,854,151 54 4,215 4,210 -6

This would indicate there is a difference between the coordinates used for the location of the Coeur drilling with that of the Barrick drilling. For both the Coeur

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and Barrick drilling the difference is consistent between the database coordinates and the GPS indicating that the database is precise but either the original data or the hand held GPS is not accurate.

The database drill hole coordinates for calculation of the Inferred Resource are acceptable. The location of the each drill hole should be clearly identified at the project site and the area resurveyed tying the coordinates back to an Instituto Geográfica Militar triangulation point.

12.4 Check Sampling The Barrick drill core is stored at the SLM field office in the town of Cariquima, a distance of 45 km by maintained dirt road from the Puchuldiza Project.

The core boxes have been carefully reviewed documenting the drill hole number, initial and final core depth, length of core present and any comments on the state of the core. This work has shown that out of a total of the 4,375 meters drilled by Barrick, 3,750 meters or 85% of core is present and in good condition. The core is stored to the rear of the field office within a locked walled compound in metal core trays stacked in metal shelving.

Figure 24: Puchuldiza Project core store

A total of nine drill holes intervals were identified in the database for check sampling. The core store staff were able to locate the correct core boxes and the original sample was identified. The remaining half core was sampled and placed in sample bags, tagged and sealed. The samples then accompanied the author on his return to Santiago where they were picked up from the consultants office by staff of Acme Analytical Laboratories (“Acme”).

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The samples were prepared and analyzed at the Acme laboratory in Santiago, Chile.

The samples were prepared using the standard Acme procedure. See Table 13.

Table 13: Validation sample preparation Method No. Code Description Test Weight Code Samples (g) R200-1000 9 Crush split and pulverize 1kg drill core to 200 mesh G6 11 Lead Collection Fire - Assay Fusion - AAS Finish 50 G6Gr-50 1 Lead collection fire assay 50G fusion - Grav finish 50 1D01 11 1:1:1 Aqua Regia digestion ICP-ES analysis 0.5

The check samples confirm the gold grades obtained by Barrick and correlation is adequate for the resembling of half core. The sample from drill hole PUDH-009 from 94m assayed with 11.5 g/t Au while the original Barrick sample was 5.7 g/t. This variability is expected due to difficulty of sampling high grade veins in the cut the drill core. The correlation is best for the samples below 1 Au g/t. The check sample results are shown in Table 14 and in Figure 25. The ACME assay certificate is shown in Appendix 3.

Table 14: Validation sample results Barrick Check Sample Barrick Check Barrick Check Sample Hole ID From To Interval No. Au g/t Au g/t Ag g/t Ag g/t No. PUDH-002 73.00 74.00 1.00 708037 0.582 0.459 0.1 <0.3 205440 PUDH-002 76.00 77.00 1.00 708040 1.645 1.376 0.4 0.6 205441 PUDH-007 24.00 25.00 1.00 709717 3.370 2.012 1.1 0.7 205442 PUDH-008 27.00 28.00 1.00 709998 3.080 3.462 3.0 5.0 205443 PUDH-008 29.00 30.00 1.00 710000 4.600 5.879 5.9 8.7 205444 PUDH-008 33.00 34.00 1.00 710004 3.380 2.565 7.5 5.8 205445 PUDH-009 90.00 92.00 2.00 710248 8.790 5.923 4.0 3.0 205447 PUDH-009 94.00 96.00 2.00 710250 5.710 11.500 3.2 7.4 205448 PUDH-009 97.15 98.00 0.85 710252 1.265 1.481 3.8 4.3 205449

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Half Core Check Samles Au g/t

12

10

8

6

4 C he ck S a m p l e s A u g /t

2

0 0 2 4 6 8 10 12 Barrick Samples g/t

Figure 25: Validation sample vs. original sample

Two Rock Labs OXH55 Certified Reference Material samples were added to the batch of check samples. The recommended gold concentration for the OxH55 reference material is 1.282 Au g/t and the round robin standard deviation was 0.038 g/t. The samples assayed with values of 1.37 and 1.38 g/t Au which is the equivalent of recommended value plus two standard deviations and as such is just acceptable.

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Figure 26: PUDH-008 26m - 34m

Figure 27: PUDH-008 29 m detail

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13 Mineral Processing and Metallurgical Testing A large part of this chapter has been taken from the January 2011 Technical Report prepared by Dr. T. Henricksen (Henricksen 2011).

13.1 Metallurgy

The following discussion was modified from the “Puchuldiza Project Summary Report, June, 1998” by CDE. No significant metallurgical studies have taken place since that time because the deposit was not deemed large enough by owners and lessors to justify a roasting plant for a major mining company. The data presented here must be considered “historical”. The author of this report has not reviewed the methods used by CDE in order to check if they comply with NI 43-101. Thus the conclusions cannot be relied upon.

The metallurgical samples were highly siliceous host rocks containing minor amounts of K-feldspar, calcite, iron oxides, ultra fine iron sulphides, and traces of chalcopyrite and stibnite. The iron sulphides consist of pyrite and marcasite, the latter being about 40-50% of the iron sulphides. These sulphides are ultra fine (< 1 to 10 microns). About 70-75% of the Au is associated with the iron sulphides, with the balance occluded in the gangue.

All of the samples submitted showed the following assay ranges: Au: 0.81-3.02 g/t Au; Ag: <0.3 – 9.3 g/t Ag; Sb: 0.004 – 0.85% ; C (org): 0.02-0.04%; S: 0.5- 0.6%; ; As: 0.043%; Fe 1.0-1.2%. Not all these assays correspond to the same samples, but are considered typical for this ore as sampled to date.

Metallurgical test work began in 1994 with a single hot cyanide leach of a sample of Puchuldiza Project ore at Geolab in Santiago, Chile. The result of the test was only about 10% extraction of the contained Au, indicating the mode of the occurrence is highly refractory. The bulk of the follow up work was performed in 1994-96 and the following table summarizes the series of laboratory tests performed at that time:

Table 15: Results of metallurgical test work Process Laboratory Au Recovery (%) High Pressure Grinding Roll (HPGR) PMET 84.3 Roast/NaCN leach USA High Pressure Grinding Roll(HPGR) PMET 51.7 Aeration/H2O2, NaCN leach USA Conventional Pressure Oxidation/ LC 76.5 NaCN leach Lakefield Can Conventional Bioxidation/ LC 59

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Process Laboratory Au Recovery (%) NaCN leach Lakefield Can Conventional NaCN leach LCH 21 Lakefield Chile Conventional Flotation LCH 25.1 - 56.5 Lakefield Chile

The test work suggests that a larger gold extraction (84% vs. 77%) by standard NaCN leaching could be achieved by dry high pressure roll grinding followed by whole ore roasting, rather than by wet comminution and high pressure oxidation.

Other metallurgical processes tested involving weaker forms of oxidation did not liberate the gold sufficiently to permit a satisfactory NaCN leach extraction. Metallurgical process implications have been made on the basis of the above mineralogy and metallurgy. Two different options have been reported, as follows:

1. Conventional crushing, wet grinding, acidic pressure oxidation, and standard NaCN agitated leaching/CIL 2. Conventional crushing, dry high pressure roll grinding, fluid bed roasting, and standard NaCN agitated leaching/CIL

The first alternative was investigated and economically examined initially and it was concluded that recovery could be expected to attain about 80% Au, but the 1999 economics (average gold price in 1999 was US$278.98/oz, Source: kitco.com) prohibited such an option at the grade of Puchuldiza, according to CDE.

The second alternative represented an economic advance upon the previous one, in that the recovery could be expected to attain about 90% Au, and that for a similar large scale plant the comparative capital cost would be reduced. CDE estimated $217 million dollars in 1999, with operating costs estimated at $15/tonne, and operating cost cut-off grade of 1.4 g/t, all historical numbers which should not be relied on for purposes of NI 43-101.

The average gold price for 2009 was US$972.39/oz and for the first semester of 2010 the average price was US$1152.22/oz (Source: www.kitco.com), which would indicate that a re-evaluation of the potential project economics is reasonable and recommended.

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14 Mineral Resource Estimates

14.1 Geological Model, Domains and Coding Puchuldiza Project is a large epithermal gold deposit of geothermal/hot-springs origin.

Barrick prepared 6 vertical sections and one plan showing: lithology, alteration and mineralization. The sections demonstrate the three dominate mineralizing features: sinter, breccia and the stockwork. The sinter is a flat-lying body at the current topographic surface 800 by 500 meters trending north-west and between 10 and 30 meters thick. The Barrick sections show the breccias as sub vertical structures swelling out as they approach the sinter creating a horizontal breccia body that is immediately below the sinter 650 by 350 meters wide and is up to 50 metes thick. Due to the drill hole spacing the breccias are interruptive and based on the logging of un-orientated drill holes.

The geological logging data for the Coeur and the Barrick drilling has not been normalized. Different codes are used for the same type of rock and the same geological units are not identified in both sets of logs. It was not possible to prepare lithological sections with the data provided. Reviewing the data and comparing to the cross sections, it was possible to identify four different units related to the mineralization: 1. Alluvial; 2. Sinter; 3. Breccia; and 4. Stock Work Zones base on fracture frequency and the gold grade.

Figure 28: Mineralization domain model looking north-west with Barrick Vertical Section L-0

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Figure 29: Mineralization domain model looking north-west

Using the Barrick sections, lithological logging, alteration logging and assay data of the four geological units were prepared as domains. The Sinter was clearly logged and could be easily modelled. The lithological logging indicates there are various types of breccia from matrix supported to clast supported and monmictic and polymictic breccias. The various types of breccias identified in the Barrick and Coeur logging were modelled as one unit. The breccia domain was modelled as a horizontal lying body 50 meters thick below the sinter. The Barrick interpretation shows sub vertical breccias and vents extending down from the horizontal main breccia body. Due to drill hole spacing it was not possible to model these structure in 3D. The stockwork was modelled using the lithological and alteration logging in conjunction with the assay grades. The modelled body is 400 by 250 meters tending north-east and is up to 110 meters thick. Within the stock there are breccias bodies, sub vertical vents and veins with high grade intersections but it was not possible to model these bodies.

The topographic surface included in the Barrick Vulcan model is 15 meters above the drill hole collars. The topographic surface used in the domain model was prepared using the collars coordinates to generate the topographic surface in the area of the drill holes and using the Vulcan model for the areas away from the drill holes. This ensures that there is no overestimation of the tonnage. The project area should be resurveyed in the future to ensure that the collar, infrastructure and elevation coordinates are accurate.

14.2 Compositing Compositing is carried out to ensure equal weight to all sample points for the statistical analysis. The composite length should retain the original characteristics of the original data and not overly smooth the data.

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An interval file was prepared for each drill hole identifying the modelled domain. The Coeur and Barrick sampling was mainly 1 or 2 meters long with some intermediate length samples and some up to 3 meters long. Therefore it was decided the data should be composited to 2 meter down hole lengths with length weighed averages. A 2 meter composite file was prepared with the domain, logged lithology and the length weighted average grade for Au, Ag, As and Hg.

14.3 Exploratory Data Analysis Exploratory data analysis is the statistical analysis of the composited data to evaluate the difference in grade and distribution between the different geological units. If the mineralization is different in the different geological units it must be modelled separately. The contact between these units was evaluated to see if there is a sharp contact between the different domains. The results of this study show that the sinter and breccia domains had hard boundaries. The stockwork breccia has a soft boundary with samples that are outside the mineral zone domains.

Table 16: Composite samples basic statistics Domain Number All 202 203 204 205 Domain Description All Sinter Breccia Stockwork Rock Au ppb Minimum 2 2 2 20 2 Maximum 8790 3945 7160 8790 2906 No of points 2148 102 136 260 1650 Sum 417084 58891 95400 149461 113332 Mean 194 577 701 575 69 Variance 259106 771,633 1,328,599 538,729 27,796 Std dev 509.02 878.43 1152.65 733.98 166.72 Coeff. of variation 2.621 1.521 1.643 1.277 2.427 Median 33 189 309 424 13 Mean 194 577 701 575 69 Mode 7 25 25 251 5 Bin Size 10 50 50 20 5 1st Standard Deviation 16 percentile 2 18 40 161 2 84 percentile 329 1122 1198 842 114 2nd Standard Deviation 2.3 percentile 2 5 15 54 2 97.7 percentile 1350 3735 4180 1805 480 3rd Standard Deviation 0.14 percentile 2 2 2 20 2 99.86 percentile 6095 3945 7160 8790 1718

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The statistical analysis indicates that the sinter has a slightly lower than average grade and has fewer outlying higher grades. The breccia domain has a higher average grade and variance. The stock work has a low average grade with some high grade outliers that are probably within breccia bodies or veins.

14.4 Evaluation of High Grades Histograms and probability plots were evaluated to identify the existence of anomalous high grades, (Appendix 2 – Probability Plots). The results for the gold show that there are relatively few anomalous samples and these samples are associated with veins. The top cuts as shown in Table 17 were applied to the composited drilling data.

Table 17: Composite sample top-cut Domain Au g/t top-cut No Samples 202 3.00 4 203 4.00 6 204 3.00 3

14.5 Density No density data measurements were available. A value of 2.6 tonnes per meter3 was applied to all domains.

14.6 Variography The variability of the grade within a mineral deposit depends on the distance and direction between the assay points. Normally the variability increases with distance. A semi-variogram is used to define the spatial variability within a deposit.

Out of a total of 17 Barrick drill holes, nine drill holes intersect the modelled domains and of these seven are drilled parallel to the north-east sections with an azimuth of 50 degrees and an inclination of -60 degrees. This means that we have closely spaced data down the drill holes, a distance of approximately 120 meters horizontally between the parallel drill holes and 150 meters between sections. The orientation of the data makes it difficult to evaluate the variography between the drill holes and between the sections.

To help evaluate the spatial variography, the composite assay data from the Coeur drilling was combined with the Barrick data. There are 13 Coeur drill holes within the mineralized domains and all but two were drilled vertically. Including

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the Coeur drill holes in the variography increases the number of sample pairs at different distances.

Due to the fact that the drill holes are orientated in the same direction and because the geology does not indicate any one preferential direction the semivariograms for each domain were orientated in same direction as the Barrick drilling. The Z axis demonstrates the data between the drill holes, the X axis the data down the drill hole and Y axis between the two sections.

The nugget is a measure of the variability of the data over very short distances. The sill is where the degree of variability reaches a maximum value. The distance between samples where the variability reaches a maximum value is called the range.

The results of the data analysis shows that the range down the drill hole axis is between 10 and 15 meters while the ranges between the sections can extend out to 40 meters. The nugget effect is relatively low being between 0.1 and 0.2. These results are as expected for epithermal gold deposits. The following parameters were derived from the semivariograms for the three mineral zone domains:

Using the Rotation Convention of ZXY and the direction is given by the left hand rule. Domain Sinter 202 Nugget ==> 0.100 C1 ==> 0.900 First Structure -- Exponential with Practical Range 1st rotation about the Z axis ==> -45 2nd rotation about the X' axis ==> 0 3rd rotation about the Y' axis ==> -60 Range along the Z' axis 30.0 Azimuth 45 Dip 30 Range along the X' axis 15.0 Azimuth 45 Dip -60 Range along the Y' axis 25.0 Azimuth 315 Dip 0

Domain Breccia 203 Nugget ==> 0.150 C1 ==> 0.850 First Structure -- Exponential with Practical Range 1st rotation about the Z axis ==> -45 2nd rotation about the X' axis ==> 0 3rd rotation about the Y' axis ==> -60 Range along the Z' axis 15.0 Azimuth 45 Dip 30 Range along the X' axis 10.0 Azimuth 45 Dip -60 Range along the Y' axis 40.0 Azimuth 315 Dip 0

Domain Stockwork 204 Nugget ==> 0.200 C1 ==> 0.800 First Structure -- Exponential with Practical Range 1st rotation about the Z axis ==> -45 2nd rotation about the X' axis ==> 0 3rd rotation about the Y' axis ==> -60 Range along the Z' axis 30.0 Azimuth 45 Dip 30 Range along the X' axis 15.0 Azimuth 45 Dip -60 Range along the Y' axis 40.0 Azimuth 315 Dip 0

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Figure 30: Semi variograms for Sinter Domain - 202

Figure 31: Semi-Variograms for Breccia domain - 203

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Figure 32: Semi-Variograms for Stockwork domain - 204 14.7 Block Model Set-up

The block model was prepared in Micromine mine modelling software using the parameters in Table 18. The blocks within the mineral zone wireframes were given the appropriate MinZone code.

Table 18: Block model set-up Origin Block Block No. of End Block Direction Centre Size Blocks Centre Size m East 504,200 10 75 504,940 740 North 7,853,670 10 77 7,854,430 760 Elev 3,900 10 35 4,240 340

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14.8 Kriging Interpolation Parameters The block model grades were estimated using Ordinary Kriging using the variography parameters and the following search parameters:

Table 19: Kriging Interpolation Parameters Search Type: Ellipsoidal Search Radius: 400m Sectors: 4 Max points per sector: 20 Min points (total): 8 Min count per DH: 2 Max count per DH: 10

The sinter and breccia domains had hard boundaries. The stockwork breccia has a soft boundary with samples that are outside the mineral zone domains.

14.9 Validation The results of the model were validated using several methods.

A detailed visual review of the blocks both in horizontal sections and vertical sections ensured that the interpolated grades correspond to the composited data and that they make geological sense.

An inverse distance squared model was run using a spherical search. This identified a similar tonnage with a slightly higher grade, particularly in the sinter and stockwork domains. These higher grade areas are probably associated with veins but the inverse distance squared interpretation can exaggerate the tonnage associated with these structures.

14.10 Resource Classification No resources were classified as Measured or Indicated Resources. The resources are classified as Inferred Resources.

Although the Barrick drill holes were drilled in 2003 and 2004, the assay results can be used in an Inferred Resource estimate because: • The drill hole collars can be located in the field; • The half core is available and stored in a secure manner; • Barrick implemented a QA/QC for the drill program and results indicate the sample preparation and analysis meets international standards; • The original assay batch files are available and match the Barrick database;

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• Validations sampling of the half core confirms the grades reported by Barrick; and • There are a total of nine Barrick drill holes within the mineral zone domain and they all demonstrate the continuity of the mineralization within the sinter, breccia and stockwork.

The Inferred Resources were constrained by limits of the modelled domains and 100 meter buffer that was created around the Barrick composite samples. This ensured that no blocks were classified outside of this 100 meter limit and so limited the sinter and stockwork domain blocks extending out too far horizontally.

The definition of an Inferred Mineral Resource is: “A ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies.” (CIM 2010).

Using the data that is available the semivariograms indicate that the Indicated Resource would need a drill hole spacing of between 20 and 50 meters but further drilling is need to demonstrate the grade variography over these distances. The Barrick drill holes spacing is approximately 12o meters along sections and 150 meters between sections.

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Figure 33: Vertical Section L-0 showing Barrick drilling, mineralization domain and block model

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14.11 Mineral Resources

The Inferred Mineral Resources for the Puchuldiza Project are summarised in Table 20 and the grade tonnage curve in Figure 34. These are Inferred Mineral Resources and are not Mineral Reserves as the economic viability of the project has not been demonstrated.

Table 20: Inferred Resource Estimate Cut-off Au Domain g/t Tonnes Au g/t Au Oz Sinter Domain 0.90 1,578,000 0.96 49,000 0.70 4,267,000 0.87 119,000 0.50 8,531,000 0.74 203,000 0.30 11,513,000 0.65 240,000 0.10 12,048,000 0.63 243,000

Breccia Domain 0.90 1,643,000 1.07 56,000 0.70 4,274,000 0.89 122,000 0.50 7,231,000 0.78 180,000 0.30 10,668,000 0.66 226,000 0.10 11,760,000 0.62 234,000

Stockwork 0.90 411,000 0.97 13,000 0.70 4,488,000 0.80 115,000 0.50 14,310,000 0.66 303,000 0.30 18,535,000 0.61 362,000 0.10 18,538,000 0.61 362,000

Puchuldiza 0.90 3,632,000 1.01 118,000 Project 0.70 13,029,000 0.85 356,000 0.50 30,072,000 0.71 686,000 0.30 40,716,000 0.63 827,000 0.10 42,346,000 0.62 840,000

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Grade Tonnage Graph 45 1.20 40 1.00 35 30 0.80 25 0.60

20 A u g /t 15 0.40 Tonn e s ( m il l ion s) 10 0.20 5 - 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 1.10 Cut-off grade (Au g/t)

Inferred Resource Average grade above cut-off

Figure 34: Grade Tonnage Curve

15 Mineral Reserve Estimates No Reserve Estimate has be calculated. 16 Mining Methods No mining study has been carried out on the project. 17 Recovery Methods No mining study has been carried out on the project. 18 Project Infrastructure No mining or infrastructure study has been carried out on the project. 19 Market Studies and Contracts No market studies have been carried out nor are there contracts in place. 20 Environmental Studies, Permitting and Social or Community Impact

Recently, changes to the legal framework in Chile have occurred in response to changing global sensitivities to the mining industry. A Framework Environmental Law was introduced in 1994 (Law 19.300), which created a system for environmental assessment of mining projects, which includes community involvement. Law N° 20.417 of January 12, 2010 created the Environmental Ministry, the Environmental Evaluation Service and the Environmental Super-

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Intendancy, which will be responsible for the environmental impact system going forward in Chile. A reorganization of the Corporacion Nacional de Medio Ambiente (“CONAMA”) under this new governmental structure is currently underway, however, no change has been implemented to the current process, which sets forth that certain exploration activities require an environmental permit.

The current course of action regarding work permits and environmental issues is for MSL to advise CONAMA, the environmental agency of the government, of its activities and provide updates. CONAMA conducts inspections from time to time to ensure compliance with the governmental regulations. MSL advises that it has had no problems meeting the governmental regulations. The Volcan Isluga National Park is immediately adjacent to the Puchuldiza Project claims to the northwest; however, all claims held by MSL are outside the park boundary.

An Environmental Impact Study is being prepared by Sustentable S.A for MSL. The study will be presented to CONAMA in the next couple of months for approval. The report defines the environmental impact of future exploration on the area. The exploration work proposed would include 20,000 meters of drilling with the drill holes to a depth of 400 meters over a five year period. The report defines the precautions that MSL would implement to minimise the environmental impact.

The author is unaware of any outstanding environmental liabilities, other than those normally associated with owning an exploration property in Chile and is unable to comment on any remediation, which may have been undertaken by previous companies.

21 Capital and Operating Costs No mining study has been carried out on the project. 22 Economic Analysis No economic analysis has been carried out on the project. 23 Adjacent Properties The author does not have any information on adjacent properties. 24 Other Relevant Data and Information There is no other relevant data and information.

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25 Interpretation and Conclusions

Puchuldiza is one of the largest active hot springs gold deposits known in the world. It is hosted in a sequence of pyroclastic felsic rocks, volcanic-derived sedimentary rocks, and subordinate andesitic flows of Upper Tertiary-Quaternary age.

The Puchuldiza Project is a low sulphidation hydrothermal system with an extensive and zoned alteration pattern, consisting of a central intensively silicified nucleus, represented by a sinter and underlying silica replacements, surrounded by an extensive halo of argillic alteration characterized by a low temperature assemblage of illite and/or illite-smectite. Chloritic alteration grading to fresh rocks characterize the external zone of the alteration. Solfataric alteration, related to a Quaternary volcanic centre, is extensive in the higher parts of the zone.

Gold mineralization is hosted in stockworks, hydrothermal breccias, and in well banded opaline to chalcedonic veins, within the large sinter deposit. The mineral association consists of free gold, pyrite, marcasite, arsenopyrite, quartz, and opal; stibnite, native antimony, realgar, and orpiment are local components of the mineral suite.

Geophysical resistivity and IP anomalies coincide with the silicified sinter areas and with sulphide rich mineralized zones respectively. Strong IP anomalies were identified associated to the NE-trending Churicollo fault and to the NW-trending fault system (Puchuldiza system). Both structural systems are considered as possible feeders of the geothermal field.

A total of 6,097 meters in 35 core holes have been drilled for gold exploration on the project. The first 17 holes were drilled by CDE in 1992. The drilling was carried out in an approximately regular grid of 200 per 200 meters covering the majority of the main area of the Puchuldiza sinter. The area was tested mostly with vertical holes down to 153 meters. A second drilling campaign was performed by Barrick in 2003 and 2004 totalling 17 inclined holes located mainly in the centre of the sinter and in outer zones towards the north, northeast and southeast. These holes tested the area down to 300 meters below the surface.

The core from the Coeur drilling is no longer available and so the grades reported cannot be verified. The assay results from the Coeur drilling have not been used in the resource estimation.

The drill core from the Barrick drill holes is stored in good condition and validation sampling has confirmed the reported grades. Barrick implemented a

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QA/QC for the drilling and surface sampling programs. The results of the QA/QC indicate that the sample preparation and assaying has been carried out to internationally accepted standards. The original assay batch files are available and have been imported into the drilling database. The database has some minor errors but these have no material affect on the resource estimate. There are a total of nine Barrick drill holes within the mineral zone domains and they all demonstrate the continuity of the mineralization within the sinter, breccia and stock work.

3D models for the mineralizing domains were created that have been used for the resource estimation. The drill hole data was composited to 2 metres. The basic statistics and variograms were created for each domain. Experimental variograms were calculated and the ordinary kriging search ellipsoid radii and orientations were defined from the variogram analysis. No Measured or Indicated Resources were delineated due to several factors that diminish the certainty of estimates. Among them is the lack of a detailed topographical survey of the prospect and the wide separation between drill holes.

Sociedad Cartografica Limitada have estimated Inferred Mineral Resources for the Puchuldiza Project in accordance with the CIM guidelines (CIM 2010) which have been adopted as part of NI 43-101.

The ordinary kriging estimation results are Inferred Resources of 30.07 million of tonnes grading 0.71 g/t Au containing 686,000 ounces Au with 0.5 g/t Au cut-off or 40.72 million tonnes grading 0.63 g/t Au containing 827,000 ounces Au with 0.3 g/t Au cut-off. The effective date of this mineral resource estimate is May 15, 2011, which represents the cut-off date for information used in the resource estimation and the date the check sampling results were received.

These Inferred Resources have more contained gold ounces compared to Barrick historical conceptual resource but the average grade is less (Table 8). This is probably due the to the way the project was modelled by Barrick. The Barrick model has the breccia extending to depth surrounded by stockwork. This effectively reduces the overall tonnage but will increase gold grade. With the current drill hole spacing the author was unable to model the project in a similar way. Infill drilling is needed to define breccia bodies and sub vertical vents at depth.

The historical and preliminary metallurgical testing by CDE, although not compliant with the standards of NI 43-101, suggest recoveries of approximately 90% of the gold may be achieved by high pressure grinding and roasting.

MSL plans to implement an aggressive exploration program at the Puchuldiza Project for the purpose of upgrading the NI 43-101 compliant resource and defining extensions to the known mineralization. This 12-18 months program,

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which will include infill drilling on 50-meter centres plus exploration drilling and extensive metallurgical testing, will cost in the range of five million dollars.

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26 Recommendations

26.1 Work Program The proposed work program is to carry out district exploration to identify new target areas and to upgrade the Inferred Resources to Indicated Resources.

District and project scale exploration will be carried out on the SLM concession area to identify new drill targets. A 5,000 meter drill hole program is proposed once the environmental permitting is obtained and the district and project geology target definitions is completed.

The infill drilling at the Puchuldiza Project will be carried out over an area of approximately one kilometre by five hundred meters and a drilled grid with a hole spacing of approximately 50 meters x 50 meters. This would represent approximately 200 holes, drilled to a depth of at least 200 meters, or 40,000 meters of drilling. The cost of this will be approximately five million dollars, including a detailed metallurgical study.

The initial program planned by Barrick in 2007 was to drill the holes seen on the accompanying Figure 35, which will be taken into consideration as SLM prepares its drill program.

This initial proposal is oriented to serve as a first step in the confirmation of the Inferred Resources, exploration to expand the known mineralization and the initiation of metallurgical work. The cost is in the range of $2.5-$4 million US dollars and would include the following activities:

1. Metallurgical testing of 6 different types of gold mineralization: do detailed metallurgical investigation for this special ore type deposit and prepare an adequate early test program, considering at least 2 breccia gold samples, 2 sinter gold samples, and 2 stockwork gold samples; the purpose of this metallurgical work is to confirm the recovery of gold. The very preliminary work by CDE in 1996 indicates a recovery of approximately 85%; 2. Drilling program to confirm the continuity of gold mineralization between historic holes and also into several new areas’ 3. Drill approximately 12 holes to depths of 250 meters to better understand and model the mineralized veins and sub-vertical vents below the flat lying breccias body’ 4. Study the effects of the geothermal waters on mining gold in the deposit area; and 5. Update the Inferred Resource to Indicated Resources classification.

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26.2 Recommended Budget for the first 12 months Activity Detail/Description Cost (inc. VAT)

District Geology Mapping & Sampling, Exploration Program and 200,000 Target Definition

Project Geology Roads, Trenching, Mapping, Geochem and 800,000 geophysics, Prospect Definition

Permits/Licenses DIA, Easements, Annual Property Fees 100,000

Phase I Drilling Exploration Diamond Drilling (all-in): 5,000m 1,000,000

Metallurgy Phase I Metallurgical Testing 200,000

Report NI 43-101 First Compliance Resource Report 100,000

Supervision and Consultants and Travel 250,000 Support

TOTAL US$2,650,000

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Figure 35: Proposed Barrick Drill hole program (Barrick 2007)

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27 References Casaceli, R. et al., 1986, Geology and mineralization of the McGinness Hills, Lander County, Nevada: Nevada Bur. Mines Geology Rept. 41, p. 93-102.

CIM, 2010, CIM DEFINITION STANDARDS - For Mineral Resources and Mineral Reserves, Prepared by the CIM Standing Committee on Reserve Definitions. Adopted by CIM Council on November 27, 2010 http://www.cim.org/UserFiles/File/CIM_DEFINITON_STANDARDS_Nov_201 0.pdf

Corporación de Fomento de la Producción, Comité Geotérmico. Informes Inéditos 1974-1978.

Cunneen R. and Sillitoe R., 1989, Palaeozoic Hot Spring Sinter in the Drummond Basin, Queensland, Australia: Economic Geology, v. 84, No. 1, p.135-142.

Delfin, Jr, F., et al., 1992, Hazard assessment of the Pinatubo volcanic- geothermal system: Clues prior to the June 15, 1991 eruption: Geothermal Resources Council Meeting San Diego.

Giggenbach W. and Glasby G., 1977, the influence of thermal activity on the trace metal distribution in marine sediments around White Island: New Zealand DSIR Bull., v. 218:121-126.

Heald, P et al., 1987, Comparative anatomy of volcanic hosted epithermal deposits: acid sulfate and adularia-sericite types: Econ. Geol., v.82: 1-26.

Hedenquist J., 1990, the thermal and geochemical structure of the Broadlands- Ohaki geothermal system: Geothermics, v. 19: 151-185.

Hedenquist J. and Henley R., 1985: Hydrothermal Eruptions in the Waiotapu Geothermal System, New Zealand: Their Origin, Associated Breccias and Relation to Precious Metal Mineralization: Economic Geology, v. 80, No. 6, p.1640-1668.

Henley, R., 1985, the geothermal framework for epithermal deposits: Geology and Geochemistry of Epithermal Systems (eds. B.Berger and P. Bethke), Reviews in Econ. Geol., v. 2: 1-24.

Henley R. and Ellis, A., 1983.Geothermal systems, ancient and modern. Earth Science Reviews, Vol. 19, p. 1-50.

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Henley R. and Hedenquist J., 1986: Introduction to the geochemistry of active and fossil geothermal systems: In Guide to the active Epithermal Systems and Precious Metal Deposits of New Zealand (eds R. Henley, J. Hedenquist, P. Roberts) Monograph Series Mineral Deposits, Gebruder Borntraeger, Berlin, n. 26:211 pp.

Henricksen T., 2011. Technical Report, Puchuldiza Gold Deposit. Unpublished Report.

JICA, 1979. Report on Geothermal Power Development Project in Puchuldiza Area. Phase I. Comité Geotérmico, Corporación de Fomento de la Producción.

JICA, 1981. Report on Geothermal Power Development Project in Puchuldiza Area. Phase II Comité Geotérmico, Corporación de Fomento de la Producción.

Lahsen A., 1973. Geología de Puchuldiza. Informe Inédito. CORFO. Nelson C. and Giles D., 1985, Hydrothermal Eruption Mechanisms and Hot Springs Gold Deposits: Economic Geology, v.80, No. 6, p.1633-1639.

Paz, Angelica Catalan Appelgren, 2010, Puchuldiza Legal Matters, private internal report to Southern Legacy Minerals: 9 pp.

Robert, F , Poulsen, K.H., and Dubé, B., 1997, Gold Deposits and their Classification, in “Proceedings of Exploration 97: Fourth Decennial International Conference on Mineral Exploration” edited by A.G. Gubins , p. 209–220

Simmons S., 1994. Notes of Lectures on Epithermal Mineralization. UNAM, Mexico City.

Simmons S. and Browne P., 1999, Hydrothermal Minerals and Precious Metals in the Broadlands-Ohaki Geothermal System: Implications for Understanding Low- Sulphidation Epithermal Environments: Submitted To Economic Geology, June 1999.

United Nations, UNDP. Unpublished Reports on Hot Springs localities in Tarapacá and Antofagasta Provinces. 1968-1972.

Unknown, Puchuldiza Project Summary Report, 2009 Private CDE report, 16 pp. including figs.

Unknown, Informe Proyecto Puchuldiza, Compania Minera Barrick Chile, Ltda, 2007: 32 pp. including figs.

Unknown, Estudio Petrographico, Puchuldiza, solicitado for Compania Minera Barrick Chile, 2004: Universitad Nacional San Juan, Argentina, 41 pp.

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Unknown, An appraisal of the Puchuldiza Hydrothermal System, Implication for the Exploration of Precious Metal Deposits, 1996, Private report to CDE Chile, 10 pp.

Unknown, Puchuldiza Project Summary Report, June, 1998, private CDE Chilean Mining Corporation Report: 10 p. plus figs. (metallurgy)

Unknown, Coeur Exploration, Geologic Procedures and Protocols, 2008, private CDE internal report, 41 pp.

Ward S. et al., 1978. A summary of the geology, geochemistry, and geophysics of the Roosevelt Hot Springs thermal area, Utah. Geophysics, Vol 43, No.7, p.1515- 1542.

Ward S. and Wright P., 1989: State-of-the-Art Geophysical Exploration for Geothermal Resources; p.629-644 in Proceedings of Exploration '87: Third Decennial International Conference on Geophysical and Geochemical Exploration for Minerals and Groundwater, edited by G.D. Garland, Ontario Geological Survey, Special Volume 3, 960p.

Weissberg, B.G., 1969, Gold-silver ore-grade precipitates from New Zealand thermal waters: Economic Geology, v. 64, p. 95-108.

White, D.E., 1955, Thermal springs and epithermal ore deposits: Economic Geology 50th Anniversary Volume, p. 99-154.

White D. and Heropoulos P., 1983: Active and fossil hydrothermal-convection systems of the Great Basin: Geothermal Resources Council Spec. Rept.13, p. 41- 53.

White N. et al., 1995, Epithermal deposits of the southwest Pacific: Journal of Geochemical Exploration, v. 54, p.87-136.

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28 Date and Signature Page

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29 Certificates CERTIFICATE OF QUALIFIED PERSON

I, Antony John Amberg FGS (CGeol), am employed as a Principal Consultant with Sociedad Cartografica Limitada of Santiago, Chile. This certificate applies to the Technical Report entitled “NI 43-101 Technical Report, Puchuldiza Project, I Region, Chile.” (“The Technical Report”) effective date May 15, 2011. I graduated with a degree in Bachelor of Science (BSc Honours) in Geology from Royal School of Mines, Imperial College, London, United Kingdom in 1985. In addition, I have obtained a Master of Science (MSc) degree in Geographical and Geodetic Information Systems, University College, London, United Kingdom in 1995 I am a Chartered Geologist and Fellow of the Geological Society of London and also a “Persona Competente en Recursos y Reservas Mineras” with La Comisión Calificadora de Competencias en Recursos y Reservas Mineras, Republica de Chile. Registration Number 0025. I have practiced my profession continuously since 1986. Since then I have been involved in various mineral exploration projects for precious and base metals and industrial minerals in South Africa, Chile, Brazil, Peru, Argentina, Bulgaria and Kazakhstan. As a result of my experience and qualifications, I am a “Qualified Person” as that term is defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects. I have made a current visit to the Puchuldiza Project on 27th April 2011. I am responsible for sections 1 through to section 29 of the technical report. I am independent of Southern Legacy Minerals Inc. as independence is described by Section 1.4 of NI 43-101. I have been involved with the Puchuldiza Project during the period April to November 2011. I have read NI 43–101 and this report has been prepared in compliance with that Instrument. As of the date of this certificate, to the best of my knowledge, information and belief, the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

Dated at Santiago, Chile this 7th day of November 2011 Signed

Antony J. Amberg, FGS (CGeol)

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Appendix 1 – Drill hole coordinates

East North Total HOLE-ID Psad56 Psad56 Elev Depth Azimuth Dip Comapany PUDH-001 504,809 7,853,715 4,222 424 319 -44 CMB PUDH-002 504,482 7,854,093 4,199 157 317 -60 CMB PUDH-003 504,502 7,853,676 4,208 401 315 -45 CMB PUDH-004 504,979 7,853,478 4,230 351 318 -59 CMB PUDH-005 504,606 7,854,335 4,209 421 316 -51 CMB PUDH-006 504,567 7,853,983 4,211 325 49 -55 CMB PUDH-007 504,473 7,853,903 4,209 174 50 -60 CMB PUDH-008 504,675 7,854,070 4,212 205 48 -59 CMB PUDH-009 504,526 7,854,142 4,205 194 50 -59 CMB PUDH-010 504,427 7,854,060 4,193 44 50 -60 CMB PUDH-011 504,626 7,854,230 4,210 206 51 -57 CMB PUDH-012 504,624 7,853,824 4,210 255 48 -57 CMB PUDH-013 504,730 7,853,889 4,209 280 53 -61 CMB PUDH-014 504,766 7,854,145 4,208 198 50 -60 CMB PUDH-015 504,485 7,854,671 4,232 355 137 -48 CMB PUDH-016 504,481 7,854,493 4,225 268 51 -48 CMB PUDH-017 504,956 7,854,301 4,210 118 50 -58 CMB PDH001 504,678 7,854,139 4,211 150 0 -90 CDE PDH002 504,567 7,854,224 4,208 153 0 -90 CDE PDH003 504,545 7,853,980 4,209 150 0 -90 CDE PDH004 504,316 7,854,154 4,176 15 0 -90 CDE PDH005 504,443 7,854,048 4,200 60 0 -90 CDE PDH006 504,798 7,854,311 4,206 145 0 -90 CDE PDH007 504,754 7,854,081 4,208 26 0 -90 CDE PDH-08 504,424 7,853,819 4,201 76 0 -90 CDE PDH009 504,648 7,853,913 4,209 121 0 -90 CDE PDH010 504,691 7,854,388 4,208 100 0 -90 CDE PDH011 504,287 7,853,899 4,183 51 0 -90 CDE PDH012 504,100 7,853,888 4,164 91 0 -90 CDE PDH013 504,215 7,853,794 4,175 100 0 -90 CDE PDH014 504,334 7,853,699 4,184 100 0 -90 CDE PDH015 504,662 7,854,151 4,209 141 308 -65 CDE PDH016 504,659 7,854,131 4,209 114 254 -60 CDE PDH04A 504,329 7,854,177 4,178 22 0 -90 CDE PDH07A 504,776 7,854,064 4,207 101 0 -90 CDE

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Appendix 2 – Probability Plots

Figure 36: Probability Plot - Sinter Domain - 202 - Log Au g/t

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Figure 37: Probability Plot - Breccia Domain - 203 - Log Au g/t

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Figure 38: Probability Plot - Stockwork Domain - 204 - Log Au g/t

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Appendix 3 – Cartografica Check Sampling Assay Certificate

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Appendix 4 – Vertical Sections

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