Tahuehueto Project Preliminary Economic Assessment Durango State, Mexico Technical Report October 29, 2010 Prepared by Anthony Finch BEng, BEcon, MAusIMM Divisional Manager, Mining Engineering – Snowden Mining Industry Consultants Inc. Robert Gill B.A.Sci, P. Eng. Divisional Manager, Geotechnical Engineering – Snowden Mining Industry Consultants Inc. Gary Hawthorn B.Sc., P Eng. Westcoast Mineral Testing. Scott E. Wilson C.P.G President, Scott E. Wilson Consulting, Inc. Office Locations Perth 87 Colin Street IMPORTANT NOTICE West Perth WA 6005 This report was prepared as a National Instrument 43-101 Technical PO Box 77 West Perth WA 6872 Report, in accordance with Form 43-101F1, for Soho Resources AUSTRALIA Corporation by Snowden. The quality of information, conclusions, and estimates contained herein is consistent with the level of effort involved Tel: +61 8 9213 9213 Fax: +61 8 9322 2576 in Snowden’s services, based on: i) information available at the time of ABN 99 085 319 562 preparation, ii) data supplied by outside sources, and iii) the [email protected] assumptions, conditions, and qualifications set forth in this report. This report is intended to be used by Soho Resources Corporation, subject Brisbane to the terms and conditions of its contract with Snowden. That contract Level 15, 300 Adelaide Street permits Soho Resources Corporation to file this report as a Technical Brisbane QLD 4000 Report with Canadian Securities Regulatory Authorities pursuant to PO Box 2207 provincial securities legislation. Except for the purposes legislated Brisbane QLD 4001 under provincial securities law, any other use of this report by any third AUSTRALIA party is at that party’s sole risk. Tel: +61 7 3231 3800 Fax: +61 7 3211 9815 ABN 99 085 319 562 [email protected] Vancouver Suite 600 1090 West Pender Street Vancouver BC V6E 2N7 CANADA Tel: +1 604 683 7645 Fax: +1 604 683 7929 Reg No. 557150 [email protected] Johannesburg Technology House Greenacres Office Park Cnr. Victory and Rustenburg Roads Victory Park Johannesburg 2195 SOUTH AFRICA PO Box 2613 Parklands 2121 SOUTH AFRICA Tel: + 27 11 782 2379 Fax: + 27 11 782 2396 Reg No. 1998/023556/07 [email protected] London Abbey House Issued by: Vancouver Office Wellington Way Doc Ref: 101026_FINAL_V706_Soho_Tahuehueto_PEA_M_Poly Weybridge Surrey KT13 0TT, UK © 2010 Tel: + 44 (0) 1932 268 701 Fax: + 44 (0) 1932 268 702 [email protected] Website www.snowdengroup.com Subsidiary of Downer EDI Ltd Soho Resources Corp: Tahuehueto Project Preliminary Economic Assessment 1 Summary ...................................................................................................................... 9 1.1 Location ........................................................................................................ 9 1.2 Geology and mineralisation........................................................................... 9 1.3 Exploration and mining history ...................................................................... 9 1.4 Drilling and sampling................................................................................... 10 1.5 Metallurgical testing .................................................................................... 10 1.6 Mineral Resources ...................................................................................... 11 1.7 Preliminary Economic Assessment ............................................................. 11 1.8 Conclusions and recommendations ............................................................ 12 2 Introduction ................................................................................................................ 14 3 Reliance on other experts........................................................................................... 15 4 Property description and location ............................................................................... 16 4.1 Location ...................................................................................................... 16 4.2 Type of mineral tenure ................................................................................ 17 4.3 Royalties and agreements .......................................................................... 20 4.4 Environmental liabilities .............................................................................. 20 4.4.1 Previous mining activities .............................................................. 21 4.4.2 Environmental monitoring .............................................................. 21 4.5 Permits ....................................................................................................... 22 5 Accessibility, climate, local resources, infrastructure and physiography ..................... 24 5.1 Topography, elevation and vegetation ........................................................ 24 5.2 Access ........................................................................................................ 25 5.3 Climate ....................................................................................................... 26 5.4 Local population centres and infrastructure ................................................. 26 6 History ........................................................................................................................ 27 6.1 Prior ownership, exploration and development............................................ 27 6.2 Historical mineral resource estimates ......................................................... 29 7 Geological setting ....................................................................................................... 31 7.1 Regional geology ........................................................................................ 31 7.2 Local geology ............................................................................................. 33 7.3 Property geology ......................................................................................... 33 8 Deposit types ............................................................................................................. 37 8.1 Geological model ........................................................................................ 37 8.2 Tahuehueto geological model ..................................................................... 37 9 Mineralisation ............................................................................................................. 39 Final October 29, 2010 3 of 129 Soho Resources Corp: Tahuehueto Project Preliminary Economic Assessment 9.1 El Creston ................................................................................................... 39 9.2 Cinco de Mayo ............................................................................................ 40 9.3 El Rey ......................................................................................................... 41 10 Exploration ................................................................................................................. 43 11 Drilling ........................................................................................................................ 47 11.1 Historic drilling ............................................................................................ 47 11.2 Soho drilling ................................................................................................ 47 11.2.1 Drill collar surveying ...................................................................... 48 11.2.2 Down-hole surveying ..................................................................... 48 11.2.3 Core handling procedures ............................................................. 48 11.2.4 Drillhole database ......................................................................... 49 12 Sampling method and approach ................................................................................. 51 12.1 Historic sampling ........................................................................................ 51 12.2 Soho channel sampling ............................................................................... 51 12.3 Soho reverse -circulation sampling ............................................................. 53 12.3.1 Reverse-circulation sample contamination .................................... 53 12.4 Soho core sampling .................................................................................... 54 13 Sample preparation, analyses, and security ............................................................... 55 13.1 Reverse-circulation samples ....................................................................... 55 13.2 Core samples ............................................................................................. 55 13.3 Underground samples ................................................................................. 56 14 Data verification ......................................................................................................... 58 14.1 Integrity of database ................................................................................... 58 14.2 Quality assurance/quality control ................................................................ 58 14.2.1 Blanks ........................................................................................... 58 14.2.2 Reference standards ..................................................................... 58 14.2.3 Surface and underground channel