The Pachuca SE Project, Hidalgo State, Mexico A Pachuca-type high-level epithermal system? Overview Technical Presentation, February 2017 1 Cautionary Statement This presentation contains certain forward-looking statements concerning anticipated developments in Prospero’s operations in the future. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved. These forward-looking statements may include statements regarding exploration results and budgets, reserve estimates, mineral resource estimates, work programs, capital expenditures, timelines including timelines for third-party studies and issuance of permits to operate by various government agencies, strategic plans, the market price of metals, costs, or other statements that are not a statement of fact. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements due to a variety of risks, uncertainties and other factors. Prospero’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, and Prospero does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations and opinions should change. Cautionary note to U.S. investors: the terms “measured and indicated resource”, “mineral resource”, and “inferred mineral resource” used in this document are Canadian geological and mining terms as defined in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”) under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resources and Mineral Reserves. We advise U.S. investors that while such terms are recognized and required under Canadian regulations, the SEC does not recognize these terms. Mineral Resources do not have demonstrated economic viability. It cannot be assumed that all or any part of a Mineral Resource will ever be upgraded to Reserves. Under Canadian rules, estimates of inferred mineral resources may not form the basis of or be included in feasibility or other studies. U.S. investors are cautioned not to assume that any part of an inferred mineral resource exists, or is economically or legally mineable. 2 Introduction Prospero is seeking a JV partner for its Pachua SE project, Hidalgo, Mexico. Terms to be negotiated. • PSL’s Pachuca SE project covers a window through post-mineral cover volcanics which has exposed fault-controlled alteration & veining over a strike length of more than 2km in a series of clay pits. • The structural trend is similar to the historic Pachuca mining camp roughly 20-25km to the northwest • The alteration is similar to alteration seen 100-200m above hi-grade ore bodies on the Vizcaina vein in the Pachuca camp, with anomalous pathfinder elements and mildly anomalous Au & Ag locally. • PSL believes the 7,256ha concession has potential to host a system of Pachuca-type epithermal veins. • The area has no security or community issues and drill permitting is underway 3 Summary Target Type Pachuca-type low sulphidation epithermal Ag-rich vein system Location 2 hours drive from Mexico City, ±25km from the City of Pachuca Land Holdings 7,256 hectares Mining History Extensive local mining history with production of 1.2B oz Ag + 6 Moz Au from the Pachuca mining camp (Vizcaina, Real Del Monte etc) Security Good. No issues in the 3 years Prospero has worked in the area Community Mining friendly. Local mining from clay pits for ceramic-grade clays within the concession. Targets Structurally controlled hi-level alteration exposed in clay pits with highly anomalous pathfinder elements, and probable high elevation within the epithermal alteration system. Alteration Illite-smectite associated with structures, with silica-kaolin-alunite at higher elevations Work Done Mapping, sampling, clay mineralogy & fluid inclusion work Spend to Date $105k 4 Contents Page # • Introduction 3 • Summary Overview 4 • Mineral Deposits of Northern Mexico 6 • Location 7 • Local Mining History 8 • Community & Security 10 • Work Done by Prospero 11 • Regional Geology 12 • Google Earth Image 13 • The Vizcaina Fault Zone 15 • Geology of Pachuca 16 • Pachuca SE Alteration 18 • Local Geology 19 • Photos of Pachuca SE 20-23 • Geochemistry / Sampljng Results 24-29 • Interpreted cross sections 30-32 • Fluid Inclusion Analysis 34-35 • Summary Slide 36 • Contact Details 37 5 Mineral Deposits of Northern Mexico Recent or newer discoveries shown in bold. Mulatos ⚒ Dolores ⚒ Trias Sta. Eulalia Yepachic ⚒ Bermudez ⚒Pinos Altos USA ⚒Ocampo ⚒ Naica Magistral ⚒ Piedras Verdes ⚒ ⚒ Batopilas Los Gatos ⚒ Levon Mexico S. Fco. Del Oro ⚒ ⚒ Parral Sta. Barbara ⚒⚒ Gambusino Baborigame Villa Ocampo Platosa Santa Maria Del Oro/ Matorral ⚒ ⚒ ⚒ Pitarrilla Mapimi San Julian Guanacevi ⚒ ⚒ El Gallo ⚒⚒ San Luis Del Cordero Magistral Topia ⚒ Jimulco ⚒ La Cienega Campana ⚒ EW Fold Belt Velardena⚒ ECU Silver San Juan ⚒ Tayahua Bacis San Augustin ⚒⚒⚒ Nochebuena ⚒ Gonzolo Avino ⚒GPE. Victoria ⚒ ⚒ ⚒ ⚒⚒Aranzazu ⚒ Penasquito Tayoltita La Preciosa ⚒ ⚒ Camino Rojo Mala Noche ⚒ ⚒ La Parrila San Martin Panuco ⚒ Sombrerete⚒ ⚒ S.M. La Paz ⚒ ⚒ Catorce Copala ⚒ Colorada ⚒ ⚒ Del Toro⚒ Rosario La Rastra Charcas ⚒ ⚒ Juanicipio ⚒Fresnillo ⚒ Cucharas ⚒ ⚒ F. I. Madero ⚒⚒ ⚒ El Indio San Nicholas ⚒ Real De Angeles ⚒ Pinos San Pedro Orion ⚒ ⚒ ⚒ Coronel El Dorado ⚒ ⚒ Asientos⚒ ⚒ ⚒Xichu Guanajuato ⚒ La Negra Zimapan ⚒ El Petate 200km Pachuca ⚒ Pachuca SE Existing or past Prospero project ⚒ Historic or current producing mine 6 Location Hidalgo State, 2 hours on sealed road from Mexico City • Southern Hidalgo, a 2 hour drive on freeway from Mexico City • Close to the historic Pachuca mining camp, which produced >1B oz Ag + 6M oz Au from epithermal veins • Can drive to the property – no access issues • Alteration exposed in a series of small pits being actively mined for clay for ceramics and bricks • Accommodation and supplies available in Pachuca 7 Local Mining History • Pachuca was a major silver mining center until well into the 20th Century. Local culture has been influenced by the historic immigration of miners from Cornwall in England • Mining is reported to have started here in 1552 after a Spanish settler found silver on his ranch. • Mining began to decline by the second half of the 20th century as the mines fell under Mexican government control in the 1960s and the major veins were exhausted. • The Pachuca-Real Del Monte mines are conservatively estimated to have produced 1.2 billion Troy ounces of silver and 6.2 million ounces of gold and were an important contributor to the economy of the Spanish empire*. • Average mined grades are estimated to have been 500g/t Ag + 2.5g/t Au • Within PSL’s target area, a number of adits and tunnels have been found presumably developed by the Pachuca-Real del Monte operators suggesting that they recognised the similarity in the alteration at PSL’s concession to the main mining camp. They excavated several levels over a 100m in length and shafts over 30m deep. https://en.wikipedia.org/wiki/Mineral_del_Monte 8 Pachuca City with Loreto Mine Head Gear The City of Pachuca has an extensive silver-gold mining history stretching back to the 1550s 9 Community & Security • Prospero has encountered no security issues over the past 3 years whilst working at Pachuca SE • The property area is located 25 km SE of Pachuca City and hosts all basic infrastructure including power lines, highways and gravel roads. • The area consists both of privately-owned homes and ranches as well as surrounding ejido land. • The drill targets identified to date are located within private land where access has been granted, and it is anticipated that permission for drilling will not be an issue. 10 Work Done by Prospero • PSL’s targets –including the Petate project - were found during regional prospecting and mapping of the historic Pachuca mining district. • PSL's geologists investigated a number of small pits mined for industrial clay. Epithermal-style smectite-illite alteration is associated with major fault structures which parallel the main Vizcaina vein. • PSL has carried out regional and local scale mapping and prospecting. Small scale sampling of the mapped alteration. Alteration mineralogy and fluid inclusion geochemistry. • PSL has also carried out orientation geochemical sampling and clay alteration work on exposed high-level alteration 150-200m above some of the richest ore bodies of the historic Vizcaina vein to understand & characterize its surface expression 11 Regional Geology Area of next slide 12 Google Earth Image Trend of the Vizcaina vein Pachuca Cinder cones Area of next slide 13 Google Earth North Zone South Zone 14 The Vizcaina Fault Zone Pyrite-sericite alteration The Vizcaina fault above the historic Pachuca mine – seen from road cut. 15 Geology of Pachuca 16 Comparative Geochemistry: Hi-level Vizcaina vs. Pachuca SE PSL carried out orientation geochemical sampling and clay alteration work on exposed high-level alteration 200-250m above some of the richest parts of the Vizcaina vein to characterize its surface expression & allow comparison with the Pachuca SE geochemistry.