La Sabila Precious & Base Metals Deposit Project...

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La Sabila Precious & Base Metals Deposit Project Report, Southern Michoacan, Mexico Prepared for US Precious Metals, Inc Page 1 La Sabila Precious & Base Metals Deposit Project Report Southern Michoacán, Mexico Prepared for US Precious Metals, Inc. 19 th November, 2015 Precious and Base Metals Deposit at La Sabila Ranch In Southern Michoacán, Mexico Technical Report on a Mineral Property Prepared for: U.S. Precious Metals, Inc. 242A West Valley Brook Road Califon, New Jersey 07830 Prepared by Michael J. Floersch Applied Minerals Thompson Falls, MT

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La Sabila Precious & Base Metals Deposit Project Report

Southern Michoacán, Mexico

Prepared for US Precious Metals, Inc.

19th

November, 2015

Precious and Base Metals Deposit at

La Sabila Ranch

In Southern Michoacán, Mexico Technical Report on a Mineral Property

Prepared for:

U.S. Precious Metals, Inc.

242A West Valley Brook Road

Califon, New Jersey 07830

Prepared by

Michael J. Floersch

Applied Minerals

Thompson Falls, MT

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Table of Contents

Introduction…………………………………………………………………………………………………………4

Source of Data………………………………………………………………………………………………………4

Disclaimer…………………………………………………………………………………………………………...4

Site Visits…………………………………………………………………………………………………………...4

Property Description and Location…………………………………………………………………………………4

Accessibility, Climate, Local Resources Infrastructure and Physiography………………………………………...6

History……………………………………………………………………………………………………………....6

Mount Isa Mines Exploration (MIM)…………………………………………………………………………….…6

Regional Geology…………………………………………………………………………………………………...8

Property Geology…………………………………………………………………………………………………....8

Mineralization…………………………………………………………………………………………………….…8

Deposit Type……………………………………………………………………………………………………….11

Exploration…………………………………………………………………………………………………………12

2015 Drilling Campaign……………………………………………………………………………………………12

Mineralized Zones………………………………………………………………………………………………….13

North Zone....………………………………………………………………………………………………………13

Main Zone………………………………………………………………………………………………………….14

Mojonera (Mina Vieja) Zone………………………………………………………………………………………16

Tunnels Zone………………………………………………………………………………………………………16

Mano de Chango Zone……………………………………………………………………………………………..17

Contact Zone……………………………………………………………………………………………………….18

Medio Cuendeo…………………………………………………………………………………………………….18

Arroyo Cuendeo……………………………………………………………………………………………………18

Cuendeo……………………………………………………………………………………………………………18

Cuendeo Sur………………………………………………………………………………………………………..18

Cross Sections………………………………………………………………………………………………………19

Drilling……………………………………………………………………………………………………………...20

Chain of Custody, Sample Preparation and assays…………………………………………………………………21

USPR Lab Facility, Morelia, Michoacán…………………………………………………………………………...21

Mineral Processing and Metallurgical Testing……………………………………………………………………..22

Project Infrastructure……………………………………………………………………………………………….22

Environmental Studies, Permitting and Social or Community Impact…………………………………………….22

Mineral Resource Estimates ……………………………………………………………………………………….22

Total Indicated Resource…………………………………………………………………………………………..23

Drill Hole Database………………………………………………………………………………………………...24

Risk Factor………………………………………………………………………………………………………….24

Interpretation and Conclusions……………………………………………………………………………………..24

Recommendations………………………………………………………………………………………………….24

References………………………………………………………………………………………………………….25

Signature Page……………………………………………………………………………………………………..26

Appendix A………………………………………………………………………………………………………...27

Appendix B……………………………………………………………………………………………………..….38

Appendix C………………………………………………………………………………………………………...40

Appendix D………………………………………………………………………………………………………...42

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Figures

Figure 1: Orientation map of Mexico………………………………………………………………………… 4

Figure 2: State map of Michoacán……………………………………………………………………………… 5

Figure 3: Topographic map with concession outlines……………………………………………………………5

Figure 4: MIM copy of original geologic map…………………………………………………………………...7

Figure 5: Digital map of Main and North Zones………………………………………………………………....7

Figure 6: Map of the Trans-Mexican Volcanic Belt……………………………………………………………..8

Figure 7: Chevron fold in Phyllites………………………………………………………………………………9

Figure 8: Mineralized host rock………………………………………………………………………………….9

Figure 9: Mineralized drill core from the 2015 drilling campaign………………………………………………9

Figure 10: Example of digital drill logs used by SPM Geologic Services………………………………………10

Figure 11: Silicified felsic intrusive……………………………………………………………………………..10

Figure 12: Geologic map of the 2200 meter trend………………………………………………………………11

Figure 13: Soil survey area map and mineralized trend………………………………………………………...12

Figure 14: Idealized geologic map………………………………………………………………………………13

Figure 15: Main Zone and a portion of the North Vein Zone map……………………………………………...18

Figure 16: Cross-Section………………………………………………………………………………………...19

Figure 17: Cross-Section………………………………………………………………………………………...19

Figure 18: Map of drill targets…………………………………………………………………………………..20

Figure 19: On site group photo………………………………………………………………………………….20

Figure 20: Ready to drill photo………………………………………………………………………………….21

Figure 21: Lab facility in Morelia……………………………………………………………………………….21

Figure 22: pilot plants, copper silver bar………………………………………………………………………..22

Tables

Table 1: Concessions table……………………………………………………………………………………..6

Table 2: North Vein Drill intercepts……………………………………………………………………………14

Table 3: Main Zone Drill Intercepts………………………………………………………………………….15/16

Table 4: Tunnel Zones Drill Intercepts………………………………………………………………………..17

Table 5: Mano De Chango Drill intercepts…………………………………………………………………..17/18

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Introduction

U.S. Precious Metals Inc. (OTC-QB: Symbol “USPR”) is a minerals exploration company incorporated in the state of Delaware on

January 21, 1998. U.S. Precious Metals of Mexico is a wholly owned subsidiary with an office and laboratory facility in Morelia,

Michoacán, Mexico. U.S. Precious Metals de Mexico, S.A. de C.V. conducts all exploration on 8 concessions totaling 37,000 acres.

The first known exploration of the property was completed in 1997-98 by Mount Isa Mines (MIM). Significant mineral occurrences

have been identified and partially explored with assay results from three drilling campaigns identifying ore grade copper, silver and

gold. USPR continues to explore the 37,000 acre concessions by drilling an area referred to as the Main Zone, and the surrounding

area which includes the North Zone, and Cuendeo, 2 kilometers south of the Main Zone. To date, USPR has completed 3 drilling

programs, 2008, 2010 and 2015. All three drilling campaigns have been successful with each substantially better in grade than the

previous.

Source of Data

Meetings were held with the following individuals:

David Burney: Chief Geologist, U.S. Precious Metals, Inc.

Mr Juan Cardenas: Project Manager, ACT.

Juan Contreras: Geologist, U.S. Precious Metals de Mexico de SA. de CV.

All references to measurements in this report conform to metric units commonly used in the United States and used in the exploration

industry. All currency is in U.S. Dollars (USD) unless otherwise stated. All grades, tonnage and resource numbers are compliant to NI

43-101 standards.

Disclaimer

All information in this report is from historical data collected and reported by persons and corporations performing mining and

exploration on the La Sabila Ranch Site.

Site Visits

Michael Floersch, geologist, metallurgist, Applied Minerals, has made numerous trips to both the lab facility in Morelia and the La

Sabila project site.

Property Description and Location

The property consists of 8 mining concessions (Table 1) totalling 37,316.76 acres and is located approximately 14 kilometers from

Paso de Nunez along a winding partially paved road in Southeastern Michoacán in an area referred to as Tierra Caliente and within the

mineral district called “Regiones de Mineras Huetamo”. The property consists of small mountains with steep and rugged terrain.

Small adits are located throughout the property. Past mining conducted was non-mechanized and most likely conducted by artisanal

miners high grading the small oxide and sulfide veins at or near the surface. Small but significant dumps totalling approximately 4000

to 5000 tons are located at the Cuendeo Site (approximately 2 kilometers south of the La Sabila Main Zone). Large cobbles and

boulders of near solid sulfides are easily located in the streambed cutting the Cuendeo workings. U.S. Precious Metals de Mexico is

the current owner of the eight mining concessions totalling 37,316.76 acres at the La Sabila Project. The mining concession title name,

number and hectares are shown in the Table 1, below. Note; 2.47 acres equal 1 Hectare.

Figure 1: Orientation map of Mexico. Yellow Star represents the property location.

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Figure 2: State map of Michoacán. Concessions indicated with blue star.

Figure 3: Topographic map with the concessions plotted. The mineralized area lies within Solidaridad.

North Zone

Main Zone

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Table 1: Concessions table

Accessibility, Climate, Local Resources Infrastructure and Physiography

The La Sabila Mine Project is accessible by a state maintained partially paved road from the nearest town, Paso de Nunez. On the La

Sabila ranch USPR maintains all roads. The climate of the region consists of two seasons, a dry desert like climate from November to

July and a rainy season from August to October. Rainfall during the rainy season varies from 18 to 22 inches with the temperature

ranging from 70 to 95 degree Fahrenheit. During the dry season temperatures during the day can easily reach 110 degrees Fahrenheit

with only slight cooling in the night hours.

The infrastructure is limited at this time and although somewhat isolated the main road into the concession is well maintained.

Electricity is provided by the State. One hospital is available between Caracquaro and Nocupetaro, however the hospital has limited

services. Food and supplies must be obtained from Morelia however limited supplies can be purchased from Paso de Nunez, Huetamo,

Caracuaro or Nocupetaro. Physiography consists of a rugged volcanic terrain dissected by valleys and streams. Elevations vary from

100 meters above sea level to 1000 meters above sea level.

History

The property was discovered and acquired by La Esperanza del Oro after a favorable report by their geologist Juan Contreras Vasquez

in 1995. Further property acquisitions around the original concessions were made in 1996 by La Esperanza del Oro. Exploration on

the property was conducted through the late 1990s by La Esperanza del Oro (1996) and Mount Isa Mines (M.I.M.) Exploration Pty.

LTD (1997- 1998). All work performed through 1997 was done by La Esperanza as manager of a joint venture between La Esperanza

and Mount Isa Mining. M.I.M. took over as manager of the project in 1998. USPR began exploration and drilling in 2008. A second

drilling campaign was completed in 2010 and the third, recently completed this year.

Mount Isa Mines Exploration (MIM)

MIM completed drilling of the property in December of 1997 after drilling 11 R.C. holes. Hot Springs Gold Corporation drilled an

additional 10 R.C. holes in 1998. Three mineralized zones were identified from this work; the North Zone, the Main Zone and

Cuendeo, (2 km south of the Main Zone). The Main Zone and North Zones are clustered near the ranch of La Sabila. Fourteen holes

had significant mineral intercepts. The Main Zone is 400 meters wide on the surface and approximately one km in length. Seven R.C.

drill holes were drilled in the Main Zone. The North Zone was tested with three drill holes. Drill hole 97-8 intercepted 6 meters of 8

gt/Au, and requires additional drilling. Cuendeo was tested with one drill hole with poor results. MIM was led to Cuendeo as a result

of an old adit discovered during recon mapping. From the drilling completed by MIM, a resource estimate of 3 million tons of 3 g/t

gold, 20 g/t silver and .5% copper was reported.

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Figure 4: Original map produced by MIM Exploration. The Main Zone is center.

Figure 5: Digital map of the Main and North Zones using current technology.

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Regional Geology

La Sabila lies within the geographic region of southern Michoacán referred to as Tierra Caliente and within the mineral district called

“Regiones de Mineras Huetamo.” The property also lies to the south of the Trans-Mexican Volcanic belt. This geographic region is

characterized by rugged volcanic mountain terrain. The surface volcanics consist of Tertiary rhyolites and andesites with granitic

intrusives. The regional geology consists of a north-northwest trending anticlinal sequence, believed to be the Tzitzio-Huetamo

Anticline, of upper Jurassic and lower Cretaceous sedimentary rocks and volcanic andesites. Ebert, S. (1997), Druecker M. (1997) and

Smith D., (1997) believed the Jurassic-Cretaceous units to be phyllites metamorphosed to a greenschist phase of metamorphism. Core

drilling by US Precious Metals suggests that little to no metamorphism of the black shales, and mudstones has taken place in the upper

sediments (above 900 feet). However, Hole #11 was drilled to a depth of 1200 feet at a -55 degree inclination. A black shale

encountered at the bottom of the hole may be demonstrating a very weak schistosity in the bedding planes of the shale. This

characteristic is suggestive of low grade metamorphism.

Property Geology

The geology of the 37,000 acre concession as established by past and current drilling consists of a stratigraphic sequence of

mudstones, black shales and interbedded andesites, to a depth of at least 1200 feet, which have been folded and faulted and are

believed to lie on the west edge of the Tzitzio-Huetamo anticline. The age of this sedimentary sequence was reported by Hot Springs

Gold Corporation as Jurassic to Upper Cretaceous in age. Many intervals appear to have undergone soft sediment deformation and

associated brecciation. Quartz dikes and potentially interbedded quartz layers are enriched in pyrite and chalcopyrite and can be

characterized as quartz sulfide veins typical of porphyry copper systems. Additionally preliminary microprobe work has identified

various tellurides suggesting the potential for rare PGM’s. In some of the interbedded andesites weakly disseminated pyrite has been

observed. U.S. Precious Metals drilling has identified a sedimentary sequence; believed to be Cretaceous, black shales and mudstones

with interbedded units of andesites. The stratigraphy is folded and includes the interbedded andesites. Andesite contact with the

mudstones and shales indicates that the magma flowed out onto the sea floor and was laid down uncomformably or disconformably on

top of the sea floor sediments in semiregular intervals. On the other hand, the sediments overlying the andesites are conformable. This

scenario is consistent with fluid inclusion studies completed by Jim Reynolds work as noted in the Shane Ebert report of 1997. It

should be noted that Druecker (1997) identified the andesites as fine grained quartzites. The stratigraphy thus far in this drilling

campaign, is dominated by steeply dipping black shales and mudstones with abundant interbedded andesite beds. The quartz and

dolomite veining appears to be steeply dipping also and possibly concentrated in the crest of the folds. Often well brecciated intervals

with both dolomite and quartz matrix have been observed in the core. Diorite dikes and small intrusive bodies of diorite were

identified and mapped by M.I.M. These diorites may not be the source of mineralization but may have played a role in mobilizing or

remobilizing the mineralization. No phaneritic intrusive igneous rocks have been identified or observed to date.

The property is heavily faulted. Shane Ebert (1997) reported the area as dominated by a north south striking east dipping thrust fault

placing Jurassic to Cretaceous phyllite and quartzite over non-metamorphosed Cretaceous sandstone conglomerate. U.S. Precious

Metals drilling have not identified the Cretaceous sandstone-conglomerates nor the green schist facies sequences reported by Ebert.

Figure 6: Trans-Mexican Volcanic Belt with property located by the red circle.

The property also lies near the Michoacán-Guerrero border and within a Metallogenic Province. About 30 kilometers to the southwest

is El Baztan, a deposit with the mineralization and occurrence the same as La Sabila. El Baztan has been an active mine for the past

100 years. Farallon Resources opened a zinc rich massive sulfide deposit several years ago and is currently in production. This mine

lies about 90 air miles to the east. Numerous other mines occur within Southern Michoacán.

Mineralization

The mineralization is hosted in an interbedded shale and siltstone unit of Cretaceous age. The sedimentary unit is metamorphosed on

the surface to phyllites and quartzites and non-metamorphosed to weakly metamorphosed at depth. The entire sedimentary package is

foliated, folded and faulted with beds dipping up to 70 degrees. A quartz sulfide stockwork is contained within the sedimentary

sequence with quartz sulfide veins exposed on the surface. A Tertiary intrusive, probably a diorite, has intruded the sedimentary

sequence and outcrops in several locations on the property.

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Figure 7: Chevron fold in phyllites

Figure 8: Mineralized host rock

Figure 9: Mineralized drill core from the 2015 drilling campaign

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Figure 10: Example of digital drill logs used by SPM Geologic Services, Contractor for the 2015 drilling campaign.

The mineralization consists of quartz dolomite veining with strong sulfide mineralization. The sulfides consist of chalcopyrite, pyrite,

pyrrhotite and small amounts of galena and sphalerite. Both silver and gold values are present in the sulfides. The sulfides discovered

thus far occur within the northeasterly trending vein network that has been traced and mapped for 2200 meters remaining open on both

ends.

A major northeasterly trending fault lies just west of the mineralized quartz stockwork and may be responsible for the northeasterly

trending valley as seen on the topographic map. This fault is interpreted to be a thrust fault that has been studied and a controlling

factor for the metamorphosed shales and siltstones on the surface. Additionally folding, to include chevron folding of the

metamorphosed section is suggestive of contact metamorphism caused by the regional thrust faulting.

The interbedded black shale and siltstone, the host unit for the quartz sulfide stockwork, also shows localized, sporadic and weak

schistosity. Sericitic alteration and advanced argillic alteration are common, however neither propylitic nor potassic alteration have

been observed although there are few Tertiary intrusives outcropping in the area. No petrographic analysis has been completed on the

intrusives. No chloritic zones have been observed, common in VMS deposits. The shallow marine sediments lie above a fine grained

arkosic sandstone with a hematite cement, referred to as the red beds and has been observed in core and outcrop near the La Sabila

ranch. Folded and faulted, the sedimentary package is steeply dipping giving the appearance of concordant quartz sulfide veining. At

the base of the sedimentary unit is an interpreted decollement zone about 3 meters in thickness indicating the sedimentary unit has

been thrust faulted easterly.

Northwest of the Main Zone is a felsic intrusion separated from the other zones by a fault with silicified hydrothermal veins. This

intrusive was drilled in 2010, however there was no economic mineralization observed. There have been ongoing discussions with

other exploration geologist regarding the intrusion. Some speculate the intrusion is a low sulfidation epithermal gold system.

Figure 11: Silicified felsic intrusive

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Figure 12: Geologic map of the 2200 meter trend.

Deposit Type

The style of mineralization in the La Sabila project area of Tierra Caliente is consistent with volcanogenic massive sulfide origin,

however, a high temperature, steeply dipping quartz sulfide vein network of mesothermal origin has not been ruled out. Ore

microscopy completed on a limited number of ore samples indicates textures consistent with VMS style mineralization The

mineralization consists primarily of hypogene sulfides, pyrite and chalcopyrite. Gold, silver and electrum are commonly associated

with the sulfides.

Excerpt from a study by Professor John Nold, University of Central Missouri, a professor of geology and an ore microscopist

and petrologist, now retired, regarding samples from La Sabila.

1. All the samples appear to be from a high-grade sulfide deposit (or deposits). They appear to be from samples of massive sulfide ore,

although a high-grade vein deposit cannot be ruled out.

2. All have undergone significant supergene alteration from weathering, and deposition of sulfide minerals within the zone of supergene

sulfide enrichment.

3. All samples show evidence of minor weathering and oxidation after exposure.

4. Perhaps the most surprising thing is the presence of sphalerite stars within chalcopyrite, accepted by ore microscopists as evidence of

high temperature formation of the chalcopyrite, allowing it to absorb the zinc that is later exsolved during cooling as the sphalerite

stars.

5. The high percent copper and the modest amounts of zinc are suggestive of a copper-zinc massive sulfide deposit, although other

deposit types cannot be ruled out.

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Exploration

A soil survey along the northeasterly trending mineralized trace is currently in the planning stages. The purpose is to better plan for

the upcoming drilling campaign by better targeting of drill holes.

Satellite imaging and ground geophysics has been completed on the property with good results. It is the intentions of the company to

continue satellite imaging and ground geophysics in the future.

Figure 13: The above map provides an overview of the property with soil survey area, areas designated for additional mapping and

sampling and the location of Cuendeo for reference.

2015 Drilling Campaign

The 2015 drilling campaign focused on the Main Zone and areas surrounding the Main Zone. The strategy was to obtain assay data

from the drilling to facilitate a feasibility study in preparation for an open cut mining operation. That strategy still remains a priority,

however with the encouraging field mapping; the company will continue exploration while beginning predevelopment studies.

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Figure 14: Idealized geologic map, a result of the field mapping in 2015. The mineralized zones are labeled.

Mineralized Zones

Ten discrete mineralized zones are currently recognized within the 2220 m strike length studied to date.

These are, from north to south: North Vein Zone, Main Zone, Mojonera Zone, Tunnels Zone, Mano de Chango Zone, Contact Zone,

Medio Cuendeo Zone, Arroyo Cuendeo Zone, Cuendeo and Cuendeo Sur.

1. North Veins

Five zones of NNE striking veins are recognized. These veins were sampled on surface by MIM and were tested by two RC holes.

One of the holes SD 97‐08 returned significant grades with 8.1 gpt Au and 0.09% Cu over 6.0 m while holes SD97‐09 and 10 cut 2 m

intervals ranging from 0.9 to 1.4 gpt Au. In general these veins are lower in copper than the other areas but strong copper is still

locally present. Drilling in 2015 tested the southwest extension of this target in seven holes LS 15‐01 through LS15‐07. These holes

cut narrow intervals of strong sulphide veining and associated gold but only holes 6 and 7 cut significant intercepts. LS15‐06 returned

North Veins Zone

Main Zone

Mojonera

Tunnels

Mano de Chango

Main Reverse Fault

Medio Cuendeo

Cuendeo North

Cuendeo South

Contact Zone

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8.6 gpt Au, 7 gpt Ag, 0.08% Cu over 1.55 m and LS15‐07 cut 2.1gpt Au, 16 gpt Ag and 0.16% Cu over 5.4 m including 6.1 gpt Au, 15

gpt Ag and 0.18% Cu over 1.2 m. Narrow high grade intervals occur in holes LS15‐03 and LS15‐05 but require additional sampling of

adjacent wall rock to provide assays over 1.5m. In general the north veins are lower grade and narrower targets than elsewhere drilled

to date and make a lower priority target at this time.

Table 2

North Vein Drill Intercepts DH_Hole DH_From DH_To Length Au_ppm Ag_ppm Cu_pct Intercept

SD97‐8 14 20 6 8.1 3.2 0.1 6.0m @ 8.1 gpt Au

SD97‐9 32 34 2 1.3 1.9 0 2.0m @ 1.3 gpt Au

SD97‐9 52 54 2 1.4 0.2 0 2.0m @ 1.4 gpt Au

SD97‐9 62 66 4 2 0.7 0 4.0m @ 2 gpt Au LS10‐011 7.5 16 8.5 2.3 13.7 1.1 8.5m @ 2.34 gpt Au

Includes 10 11 1 5.7 35 2.8 1.0m @ 5.71 gpt Au

and 15 16 1 6.2 14.9 1.4 1.0m @ 6.24 gpt Au LS15‐009 178.3 181 2.7 7.3 53.5 1.8 2.7m @ 7.29 gpt Au LS15‐001 5.6 8.5 3 1.4 12.7 0.8 3.0m @ 1.37 gpt Au LS15‐002 6 8 2 1.5 3 0.1 2.0m @ 1.47 gpt Au LS15‐003 25.5 27.5 2 1.5 6.8 0.1 2.0m @ 1.54 gpt Au LS15‐003 114.2 115.8 1.6 5.2 3.2 0 1.6m @ 5.22 gpt Au LS15‐004 98.9 99.5 0.5 6.9 7.7 0.3 0.5m @ 6.9 gpt Au LS15‐006 82 83.6 1.6 8.6 4.9 0.1 1.5m @ 8.57 gpt Au LS15‐007 10.7 14.2 3.6 1.4 21.5 0.4 3.5m @ 1.44 gpt Au LS15‐007 86.5 87 0.5 20 8.2 0.1 0.5m @ 19.98 gpt Au LS15‐007 145.8 151.2 5.4 2.1 15.8 0.2 5.4m @ 2.12 gpt Au

2. Main Zone

The Main Zone has the strongest concentration of mineralization observed to date. It is a prominent hill crisscrossed by drill roads and

has been well sampled by MIM in 1997 and has been the focus of most of the drilling. The zone consist of several north striking shear

veins with strongly developed 060 extension veining resulting in wide zones of mineralization. Due to the various orientations of

veining present on surface, drilling has been undertaken on a variety of orientations. Most of the drill holes are inclined to the west or

northwest and the 2015 drilling consists largely of inclined holes to 315. Surface mapping identified five well developed N‐S striking

mineralized zones across a width of 90 m. Extension veining is well developed throughout this zone providing a nearly continuous

zone of mineralization in the road cuts and numerous stacked intercepts in drilling. Drilling has indicated two well‐developed

mineralized zones that can be traced across several sections as well as numerous smaller mineralized intervals that may prove to be

continuous zones with further drilling. The two zones have been drilled along a strike of about 100 m with several strong intercepts

another 100 m to the south; suggesting a minimum of 200 m of strike. Most of the drilling is shallow but several holes drilled in 2015

have cut the principal mineralized zones at 140 m below surface. There are numerous strong mineralized intervals as tabulated below.

Some highlights include the following.

LS08‐05 5.2m @ 10.46 gpt Au 50 gpt Ag 0.8% Cu

LS08‐06 11.6m @ 5.88 gpt Au 20 gpt Ag, 0.5% Cu

LS15‐020 4.3m @ 7.67 gpt Au 33 gpt Ag, 1.4 % Cu

LS15‐020 2.3m @ 13.63 gpt Au, 56 gpt Au, 2.4% Cu

LS15‐022 9.6m @ 7.25 gpt Au 9 gpt Ag, 0.2% Cu

LS15‐023 4.0m @ 14.84 gpt Au, 31 gpt Ag, 1.4% Cu

LS15‐024 5.2m @ 8.6 gpt Au 17 gpt Ag, 0.7% Cu

SD97‐3 14.0m @ 7.60 gpt Au, 10 gpt Ag, 0.3% Cu

SD97‐4 6.0m @ 10.30 gpt Au, 70 gpt Ag, 1.7% Cu

SD98‐19 6.0m @ 6.39 gpt Au, 10 gpt Ag, 0.2% Cu

About 50 m west of Main zone a road cut intersects a well‐developed zone of shear veining with a well-developed halo of alteration

and extension veining. MIM obtained some good surface grades in this area. Several drill holes intersected mineralization. Grades are

weak but hole LS08‐09 did intercept 5.1 gpt Au, 1.3 gpt Ag and 0.7% Cu over 4.9 m and LS 15‐09 cut 7.3 gpt Au, 53 gpt Ag and

1.8% Cu over 2.7 m at greater depth. This may be the north continuation of the Tunnels zone.

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Table 3: Main Zone Drill Intercepts

Table 2:00 Main Zone Drill Intercepts DH_Hole DH_From DH_To Length Au_ppm Ag_ppm Cu_pct Intercept

LS08‐05 90.2 93.3 3 2.4 32 0.7 3.0m @ 2.4 gpt Au LS08‐05 92.7 93.3 0.6 7.5 112.6 2.7 0.6m @ 7.46 gpt Au LS08‐05 112.8 117.3 4.6 3.6 21.6 0.4 4.6m @ 3.59 gpt Au LS08‐05 112.8 115.8 3 5.2 23.3 0.4 3.0m @ 5.17 gpt Au LS08‐05 120.4 125.6 5.2 10.5 49.8 0.8 5.2m @ 10.46 gpt Au or 120.4 126.5 6.1 8.9 44.5 0.7 6.1m @ 8.94 gpt Au LS08‐05 157.9 162.8 4.9 2.9 17.2 0.2 4.9m @ 2.94 gpt Au Includes 160.9 162.8 1.8 6 21.5 0.3 1.8m @ 5.96 gpt Au LS08‐06 56.7 59.1 2.4 3.3 13.9 0.1 2.4m @ 3.3 gpt Au Includes 57.9 59.1 1.2 6.2 12.1 0.1 1.2m @ 6.19 gpt Au LS08‐06 72.5 84.1 11.6 5.9 19.3 0.5 11.6m @ 5.88 gpt Au Includes 73.2 76.8 3.7 5.5 40.8 1.5 3.7m @ 5.51 gpt Au and 79.9 84.1 4.3 11.1 14.4 0.1 4.3m @ 11.14 gpt Au LS08‐08 45.7 52.4 6.7 6.4 28.1 1 6.7m @ 6.44 gpt Au Includes 45.7 50 4.3 9 36.1 1.5 4.3m @ 9.03 gpt Au and 51.2 51.8 0.6 6 24 0.1 0.6m @ 6.03 gpt Au LS08‐09 63.4 72.5 9.1 2.8 30.3 0.7 9.1m @ 2.78 gpt Au Includes 65.2 72.5 7.3 3.4 33.6 0.9 7.3m @ 3.43 gpt Au Or 67.1 70.1 3 5.7 42.6 1.1 3.0m @ 5.73 gpt Au And 70.7 71.9 1.2 5.1 65.9 1.9 1.2m @ 5.13 gpt Au LS08‐10 51.2 54.3 3 6.2 53.1 1.6 3.0m @ 6.22 gpt Au LS08‐10 60.4 63.4 3 2 27 0.5 3.0m @ 2.03 gpt Au Includes 60.4 62.2 1.8 3.1 40.3 0.7 1.8m @ 3.12 gpt Au Or 61 61.6 0.6 5.4 57.5 1 0.6m @ 5.38 gpt Au LS08‐10 117 120.1 3 2.2 12.2 0.2 3.0m @ 2.21 gpt Au LS08‐11 36.6 39 2.4 1.5 70.6 1.3 2.4m @ 1.54 gpt Au LS08‐11 95.1 97.5 2.4 3.6 12.6 0.1 2.4m @ 3.62 gpt Au Includes 96.3 97.5 1.2 5.8 15.2 0.2 1.2m @ 5.8 gpt Au LS08‐11 109.1 109.7 0.6 5.4 48.8 0.9 0.6m @ 5.44 gpt Au LS08‐11 118.9 119.5 0.6 5.3 6.8 0.1 0.6m @ 5.29 gpt Au LS08‐11 146 147.5 1.5 6.2 13.3 0.3 1.5m @ 6.24 gpt Au LS08‐12 65.2 69.5 4.3 1.1 8.8 0.2 4.3m @ 1.11 gpt Au LS08‐14 42.7 43.9 1.2 6.2 128 2.8 1.2m @ 6.17 gpt Au LS15‐

009 178.3 181 2.7 7.3 53.5 1.8 2.7m @ 7.29 gpt Au LS15‐

013 55.3 59 3.8 3.5 47.1 0.7 3.8m @ 3.46 gpt Au Includes 56 56.5 0.5 7.8 41.8 0.2 0.5m @ 7.78 gpt Au and 57.7 59 1.4 5.2 74.5 1.6 1.4m @ 5.18 gpt Au LS15‐

014 69.1 70.4 1.4 9.7 35.1 1 1.4m @ 9.75 gpt Au LS15‐

015 29.3 31.7 2.4 9.1 95.4 2.6 2.3m @ 9.13 gpt Au LS15‐

015 45.6 47.2 1.6 20 156.1 5.3 1.5m @ 20.02 gpt Au LS15‐

015 138.7 140.7 2 4.5 17.6 0.3 2.0m @ 4.46 gpt Au LS15‐

015 145.5 150.4 4.9 6.4 34 1 4.9m @ 6.4 gpt Au DH_Hole DH_From DH_To Length Au_ppm Ag_ppm Cu_pct Intercept

Includes 145.5 146.9 1.4 7.8 26.8 0.9 1.4m @ 7.76 gpt Au and 148.9 150.4 1.5 13.6 84.8 2.4 1.5m @ 13.61 gpt Au LS15‐

017 113.1 115.7 2.6 2.4 26.2 0.9 2.6m @ 2.44 gpt Au Includes 114.4 115.3 0.9 5.1 23.1 0.8 0.9m @ 5.15 gpt Au LS15‐

018 79.9 81.9 2 1.1 33.7 0.8 2.0m @ 1.1 gpt Au LS15‐

018 84.2 89.7 5.5 1.4 46.3 1.4 5.5m @ 1.43 gpt Au LS15‐

019 29.5 31.1 1.6 14.1 66.8 1.6 1.6m @ 14.08 gpt Au LS15‐

019 71 73.3 2.3 1.9 11.1 0.3 2.3m @ 1.87 gpt Au LS15‐

019 117.9 118.5 0.6 24.1 119.8 3.6 0.6m @ 24.13 gpt Au LS15‐

020 65.7 71.3 5.6 1.3 6.6 0.3 5.6m @ 1.25 gpt Au LS15‐

020 79 83.4 4.3 7.7 32.6 1.4 4.3m @ 7.67 gpt Au LS15‐

020 81 83.4 2.3 13.6 56.4 2.4 2.3m @ 13.63 gpt Au

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LS15‐020 105.7 108.4 2.7 1.9 23.8 0.6 2.7m @ 1.87 gpt Au

Includes 106.9 108.4 1.5 3.1 39.7 1 1.5m @ 3.13 gpt Au LS15‐

021 57 59.8 2.8 3 11.1 0.2 2.8m @ 3.02 gpt Au Includes 58.6 59.3 0.7 6.9 27.1 0.6 0.7m @ 6.89 gpt Au LS15‐

022 31.8 41.4 9.6 7.3 9.7 0.2 9.6m @ 7.25 gpt Au LS15‐

022 138.8 143.4 4.6 2.3 12 0.3 4.6m @ 2.26 gpt Au Includes 139.4 140.2 0.8 6.7 20 0.7 0.8m @ 6.73 gpt Au LS15‐

022 141.2 141.7 0.5 6.5 52.5 1.3 0.5m @ 6.49 gpt Au LS15‐

023 33 37.1 4.1 14.8 30.8 1.3 4.0m @ 14.84 gpt Au LS15‐

023 109.4 112.7 3.4 2.1 10.2 0.2 3.4m @ 2.11 gpt Au Includes 110.6 111.6 1 5.1 23.1 0.3 1.0m @ 5.11 gpt Au LS15‐

023 174.6 176.7 2.1 3 38.9 0.7 2.1m @ 3.01 gpt Au Includes 175.7 176.7 1 6 76.3 1.4 1.0m @ 6.01 gpt Au LS15‐

023 183.7 194.6 10.9 2 6.8 0.2 10.9

@ 2 gpt Au

Includes 184.8 188 3.2 4.3 4.4 0.2 3.2m @ 4.35 gpt Au Or 186.3 188 1.7 6.2 4.5 0.2 1.7m @ 6.16 gpt Au LS15‐

024 144.9 147.4 2.5 1.4 19.7 0.8 2.5m @ 1.35 gpt Au LS15‐

024 149.8 150.3 0.5 6.1 9.3 0.1 0.5m @ 6.07 gpt Au LS15‐

024 182.2 187.8 5.2 8.6 17 0.7 5.2m @ 8.6 gpt Au Includes 182.2 182.8 0.6 9.3 12.9 0.1 0.6m @ 9.26 gpt Au and 184.1 187.8 3.8 8.3 18.1 0.9 3.8m @ 8.33 gpt Au LS15‐

026 142 145.1 3.1 1.3 15.3 0.1 3.1m @ 1.3 gpt Au LS15‐

026 143.4 143.9 0.5 5.8 9.6 0.1 0.5m @ 5.83 gpt Au SD97‐1 18 38 20 4.4 7.9 0.4 20.0m @ 4.4 gpt Au SD97‐1 58 60 2 4.7 30.2 0.9 2.0m @ 4.7 gpt Au SD97‐1 122 140 18 6 30.5 0.7 18.0m @ 6 gpt Au SD97‐1 122 140 18 6 30.5 0.7 18.0m @ 6 gpt Au SD97‐3 0 2 2 3.2 2.1 0.1 2.0m @ 3.2 gpt Au SD97‐3 22 36 14 7.6 9.8 0.3 14.0m @ 7.6 gpt Au SD97‐3 22 36 14 7.6 9.8 0.3 14.0m @ 7.6 gpt Au SD97‐3 64 68 4 4.6 16.9 0.6 4.0m @ 4.6 gpt Au SD97‐4 158 164 6 10.3 69.2 1.7 6.0m @ 10.3 gpt Au SD97‐5 98 100 2 4.1 21.2 0.5 2.0m @ 4.1 gpt Au SD98‐17 0 24 24 1.2 2.3 0.9 24.0m @ 1.18 gpt Au SD98‐18 56 68 12 1.7 3.4 0.5 12.0m @ 1.68 gpt Au SD98‐18 78 82 4 2 2.9 0.1 4.0m @ 1.97 gpt Au SD98‐18 136 138 2 2.6 1.4 0.3 2.0m @ 2.6 gpt Au SD98‐19 22 24 2 3.2 5.6 0.1 2.0m @ 3.22 gpt Au SD98‐19 52 58 6 6.4 10.3 0.2 6.0m @ 6.39 gpt Au SD98‐19 52 58 6 6.4 10.3 0.2 6.0m @ 6.39 gpt Au SD98‐19 136 138 2 2.6 1.4 0.3 2.0m @ 2.6 gpt Au SD98‐20 56 74 18 1.3 4.7 0.2 18.0m @ 1.29 gpt Au SD98‐20 88 98 10 1.6 31.8 0.8 10.0m @ 1.6 gpt Au SD98‐21 4 8 4 1.7 4 0.2 4.0m @ 1.65 gpt Au

3. Mojonera (Mina Vieja) Zone

About 90 m west of Main zone there are substantial collapsed old workings along a N‐S shear zone with mineralized veining. Two

drill holes have been drilled in this area but both (LS15‐17 and 18) are parallel to the strike of the zone. Both holes cut anomalous

values associated with strong sulphide mineralization.

4. Tunnels Zone

There are seven 2010 drill holes located here, all drilled in a fan pattern from 2 locations approximately 50 feet apart. There are

numerous good intercepts but most holes cut shallowly across the mineralized trend. Hole LS10‐06 and LS10‐07 and SD 97‐07 all cut

obliquely across the zone exposed on surface with a robust intercept of 13.2m @ 8.45 gpt Au in LS10‐07. Holes LS 10‐01 and 04 are

drilled west of the zone and along strike while holes 002 and 003 are drilled to the west across a zone that is poorly expressed on

surface. Some drilling highlights include the following.

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LS10‐001 1.5m @ 14.49 gpt Au, 73 gpt Ag, 1.7% Cu

LS10‐002 1.5m @ 29.46 gpt Au, 43 gpt Ag, 0.5% Cu

LS10‐007 13.2m @ 8.45 gpt Au, 8 gpt Ag, 1.3% Cu

Table 4

Tunnels Zone Drill Intercepts DH_Hole DH_From DH_To Length Au_ppm Ag_ppm Cu_pct Intercept

LS10‐001 16.6 18.1 1.5 14.5 73 1.7 1.5m @ 14.49 gpt Au LS10‐002 2.1 3.7 1.5 29.5 42.6 0.5 1.5m @ 29.46 gpt Au LS10‐002 54.3 57.3 3 1.3 9.3 0.3 3.0m @ 1.3 gpt Au LS10‐002 69.2 70.7 1.5 10.8 46 1.2 1.5m @ 10.8 gpt Au LS10‐002 75 75.6 0.6 6.8 24.4 0.7 0.6m @ 6.8 gpt Au LS10‐002 76.8 80.5 3.7 1.9 12.7 0.4 3.7m @ 1.86 gpt Au

Includes 77.4 78.6 1.2 5.2 34 1 1.2m @ 5.24 gpt Au LS10‐003 43.3 51.3 8 1.4 44.4 0.8 8.0m @ 1.39 gpt Au LS10‐004 7.3 10.4 3 1.1 6.1 0.1 3.0m @ 1.1 gpt Au LS10‐004 15.8 20.1 4.3 9.5 59.4 1.9 4.3m @ 9.52 gpt Au

Includes 15.8 18.9 3 11.7 70.6 2.2 3.0m @ 11.68 gpt Au

and 19.5 20.1 0.6 5.8 28.6 1 0.6m @ 5.76 gpt Au LS10‐004 23.2 23.8 0.6 8.4 16.8 0.9 0.6m @ 8.41 gpt Au LS10‐005 64.3 65.2 1 20.2 70.9 1.6 1.0m @ 20.23 gpt Au LS10‐006 11 23 12 1.6 9.6 1.5 12.0m @ 1.61 gpt Au LS10‐006 24.5 26.5 2 1.2 1.3 0 2.0m @ 1.18 gpt Au LS10‐006 28.5 33.7 5.2 1.6 11.4 1 5.1m @ 1.64 gpt Au LS10‐006 41.5 44 2.5 1.9 10.8 0.9 2.5m @ 1.87 gpt Au LS10‐006 59.4 62 2.7 1.7 0.7 0 2.6m @ 1.7 gpt Au LS10‐007 15.5 28.7 13.2 8.4 52.9 1.3 13.2m @ 8.45 gpt Au

Includes 15.5 21.5 6 9.1 38.8 1.1 6.0m @ 9.06 gpt Au

and 22.5 28.7 6.2 9.2 66.5 1.6 6.2m @ 9.22 gpt Au LS10‐007 45.5 49 3.5 1.5 26.2 0.5 3.5m @ 1.45 gpt Au LS10‐007 71 72 1 5.1 13.4 0.4 1.0m @ 5.13 gpt Au

5. Mano de Chango Zone

A road cut cutting the main fault contact between the Balsas Conglomerate and the Cretaceous metasediments exposes a wide fault

zone with several mineralized structures striking N‐S, including a panel of altered conglomerate. Surface values are significant and

several generations of holes have been collared in the immediate vicinity of the outcrop. LS08‐02 and LS 15‐08 where drilled across

this zone and yield fairly weak intercepts. Hole LS15‐011 was collared very close to the vein and drilled at as shallow angle to one of

the veins. This yielded a strong Ag intercept with modest gold of 5.3 m (not true width) @ 2.64 gpt Au, 301 gpt Ag and 2.2% Cu as

well as significant Zn.

Table 4: Mano de Chango Drill Intercepts

DH_Hole DH_From DH_To Length Au_ppm Ag_ppm Cu_pct Intercept LS08‐01 47.5 56.7 9.1 1.9 11.1 0 9.1m @ 1.88 Au_ppm

Includes 51.2 54.3 3 3.2 11.7 0 3.0m @ 3.16 Au_ppm

Or 51.8 53 1.2 5.3 14.6 0.1 1.2m @ 5.32 Au_ppm

LS08‐03 34.7 37.8 3 1.1 24.3 0.2 3.0m @ 1.13 Au_ppm

LS08‐03 86 90.8 4.9 1.5 101.3 0.7 4.9m @ 1.46 Au_ppm

Includes 86.6 88.4 1.8 3.1 180.9 1.2 1.8m @ 3.09 Au_ppm

LS10‐ 8 61 68.6 7.6 1.7 5.9 0 7.6m @ 1.75 Au_ppm

Includes 65 68 3 3.4 10.5 0 3.0m @ 3.37 Au_ppm

Or 66 67 1 8.3 27.4 0.1 1.0m @ 8.27 Au_ppm

LS15‐

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11 32.9 39.6 6.8 1.9 238.9 1.7 6.8m @ 1.88 Au_ppm

Includes 33.5 37.4 3.9 3.1 377.2 2.9 3.9m @ 3.08 Au_ppm

Or 36.2 36.9 0.7 5.3 401.7 3.2 0.7m @ 5.28 Au_ppm

6. Contact Zone

Road cuts along the fault contact exposed alteration, veining and minor Cu mineralization. This zone and several adjacent veins to the

east did not yield strong gold values in surface sampling however systematic mapping and sampling is warranted.

7. Medio Cuendeo

A small hill and a south facing ridgeline, as well as road cuts, are underlain by altered and veined rocks with localized Cu

mineralization. MIM reported a single grab sample assaying 31 gpt Au in this area. Preliminary follow‐up work failed to duplicate the

assay result. However, the 2015 field sampling resulted in numerous samples with anomalous Au values. Also mineralized shear and

extension veining were discovered. This area has seen no drilling and warrants further mapping and sampling.

8. Arroyo Cuendeo

A single grab sample collected in 2015 of a hematite stained outcrop assayed 6.8 gpt Au and 0.9% Cu over 0.8 m. No drilling or other

work has been completed in this area.

9. Cuendeo

The Cuendeo area is one of the more significant areas of historical workings. The old workings are no longer accessible but road cuts

exposed a mineralized zone. Extension veins striking ENE dominate the exposed area and N‐S shear veins are locally present lower on

the slope. Chip samples collected in the area assayed up to 1.9 gpt Au and 0.22% Cu while a single grab sample of massive sulphide

mineralization assayed 8 gpt Au and 5.2% Cu. A single RC hole was drilled by MIM, SD97‐11, intersected 16m @ 0.6 gpt Au and

0.6% Cu. This area warrants follow up drilling.

10. Cuendeo Sur

Approximately 200 meters south of Cuendeo, MIM maps show several samples with values up to 4 gpt Au. This area has not been

mapped. However mapping and sampling is warranted.

Cross-Sections

Two cross-sections are shown on the following page. These section illustrations provide a digital image of the quartz sulfide

stockwork. The second cross section provides assay data information, based on drilling results and assay data.

Figure 15: The above map is of the Main Zone and a portion of the North Vein Zone. The diagonal lines indicate

cross section lines.

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Figure 16: Cross section through the Main Zone.

Figure 17: Cross section across the Main Zone

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Drilling

USPR has completed three drilling campaigns to date totaling approximately 11,300 meters of core. The company is currently

planning another 5000 meter drilling campaign scheduled to begin in early 2016. The purpose of the next drilling campaign is to

better define the Main Zone so that proven resources can be determined prior to a feasibility study. Additionally there are targets to

the south where copper oxides are exposed on the surface.

Figure 18: The above map illustrates drilling targets for the next 5000 meters of drilling.

Figure 19: Engineer, geologists, drillers, supervisors discussing roads, drill pads, etc.

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Figure 20: Road improvement, embankment scaled, water tank installed, ready to drill.

Chain of Custody, Sample Preparation and assays

All three drilling campaigns adhered to Chain of Custody procedures. Records are kept in the office in the Morelia Lab facility. All

cores has been logged in the lab, cut and sampled and shipped from the Lab to a certified assay lab for assaying.

The mineralized intervals from every hole were sawed longitudinally with half of the core sawed in half again. This procedure

provided a quarter section of core for assaying. This procedure was initiated in the event the core was lost in shipment, we would

have samples for assay without re-drilling a hole. All core is in storage in the lab and available for inspection.

Three different assay labs have been used; each drilling campaign utilized a different assay lab for accuracy and precision of the assay

results. In 2008, USPR used Chris Christopherson Lab of Kellogg, Idaho. In 2010, the company used ALS Chemex with sample prep

completed in Guadalajara, Jalisco, with pulps shipped to Vancouver, Canada for assay. In 2105 samples were sent to ACT Labs in

Zacatecas, Mexico.

USPR Lab Facility, Morelia, Michoacán

The lab facility is located about 20 minutes from Morelia International Airport and about 30 minutes from the Centro Historico or the

center of the capital city. The facility is a converted warehouse with about 10,000 square feet of floor space. In the rear of the facility

a 1000 square feet office and chemistry lab is located. USPR built the structure in 2008.

All core to date is stored in the lab and available for inspection. There is sufficient space to park the company vehicles, an F-150 Ford

pickup, a Chevrolet 4x4 pick-up and a minivan.

Additionally there are two core saws, a crusher and pulverizer and an assortment of necessary equipment and tools.

Figure 21: Photos of the Lab facility in Morelia

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Mineral Processing and Metallurgical Testing

There has been no metallurgical testing completed to date. However, in 2010, two acid leach pilot plants were built in the lab. The

first was a cyanide leach and the second a sulfuric acid leach.

The cyanide leach plant was to leach gold from hematitic gossan float collected from the dry washes. The samples were crushed and

leached and small amounts of gold were produced.

The sulfuric acid pilot plant was never tested. However leaching was completed using a 5 gallon bucket and iron bars. The copper

oxide was collected and reduced in the furnace.

Figure 22: Pilot plants for leaching Gold and Copper and a copper silver bar produced in the Lab

Project Infrastructure

To date all existing roads have been widened, repaired and graded. Some rain water drainage pipes have been installed, although

more are needed to prevent road damage during monsoons. All rock embankments have been scaled and stabilized to avoid loose

rocks and slabs from falling onto the road. A heliport was constructed northwest of the Main Zone and has been used at least 4 times.

Environmental Studies, Permitting and Social or Community Impact

Two permits are currently required for exploration and exploitation:

Environmental Impact Statement (MIA) per the abbreviation in Spanish, USPR has been approved for exploration and

exploitation and this permit was issued in 2008.

Land Use Change (ETJ) per the abbreviation in Spanish is a recent requirement. USPR has been working with the University

of Michoacán in preparing this study. This study has been submitted to SEMARNAT for approval. The company anticipates

receiving the permit in 30 work days.

A government fee must be paid to the Fondo Forestal Mexicano after the ETJ permit is approved.

As part of our community cooperation program, USPR has initiated relations with the University of Michoacán to facilitate field trips

and studies on the La Sabila property. USPR has established a professional relationship with the professors and students. A portion

of the Biology and Geology curriculum at UM now includes studies in Biology, Environmental and Metallurgy as related to the La

Sabila project.

U.S. Precious Metals Inc. has begun community assistance in “El Zapote” a pueblo 2 kilometers north of La Sabila. USPR will

continue the assistance during exploration. USPR has a commitment to maintain roads around the communities and provide a soccer

field for recreational use.

Mineral Resources & Reserve Estimates

A resource and reserve estimate has been calculated from the initial footages and assay findings from all available assay data

The latest down hole data now suggests that Vein systems are converging on each other from the southwest. The data, in general, also

suggests that the veins are narrowing as they approach the surface.

Based on this model a resource calculation is as follows:

Weighted averages were used to calculate indicated resource.

Main Zone

Area = 10,270 sq.Meter

Depth = 100 Meter avg.

Density = 3.0

Mineral Deposit = 10,270x 100 x 3 = 3,081,000 tonnes

Indicated resources Au

Grade: 4.85 grams per tonne

3,081,000 x 4.85 = 15,405,000g or 480,423.80 troy ounces

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Indicated resources Ag

Grade 24.7 gpt

3,081,000 x 24.7g = 76,100,700g or 2,378,146.88 Troy ounces

Indicated resource Cu

Grade 1.08%

3,081,000 x 1.08% = 33,274.80 Tonnes

NORTH OLD MINE AND BACK ZONE

Area = 2,962 sq.Meter

Depth = 100 Meter avg.

Density = 3.0

Mineral Deposit = 296,200x 100 x 3 = 888,600 tonnes

Indicated resources Au

Grade 4.63gpt

888,600 x 4.63 = 4,114,218g or 128,569.31 troy ounces

Indicated resources Ag

Grade 23gpt

888,600 x 23 = 20,437,800g or 638,681.25 troy ounces

Indicated resources Cu

Grade 1.12%

888,600 x 1.12% = 9,952.32 Tonnes

NORTHWEST ZONE to MANO DE CHANGO ZONE

Area = 3,317 sq.Meter

Depth = 100 Meter avg.

Density = 3.0

Mineral Deposit = 3,317x 100 x 3 = 995,100 tonnes

Indicated resources Au

Grade 4.87gmt

995,100 x 4.87 = 4,846,137g or 151,441.8 troy ounces

Indicated resources Ag

Grade 21.23gpt

995,100 x 21.23 = 21,125,973g or 660,186.65 troy ounces

Indicated resources Cu

Grade 1.1%

995,100 x 1.1% =10,946.1 tonnes

SOUTH OLD MINE ZONE

Area = 4,396 sq.Meter

Depth = 100 Meter avg.

Density = 3.0

Mineral Deposit = 4396x 100 x 3 = 1,318,800 tonnes

Grade 4.72gmt

1,318,800 x 4.72 = 6,224,736g or 194,523 troy ounces.

Indicated resource Ag

Grade 23.65gpt

1,318,800 x 23.65 = 31,189,620g or 974,675.6 troy ounces

Indicated resource Cu

Grade 1.1%

1,318,800 x 1.1% = 14,506.8 tonnes.

Total Indicated Resource

Indicated Mineralized Material: 6,283,500 tonnes

Au Indicated resource : 954,957.91 troy ounces

Ag Indicated resource : 4,651,690.38 troy ounces

Cu Indicated resource : 68,680 tonnes

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Drill hole Database

Drill hole information consists of geological logs for the 2008 drilling and laboratory assay results from the 2008, 2010 and 2015

drilling. Original certified assay documents are on file at the USPR office in Mexico.

Risk Factors

As with all properties in Mexico, land access can be an issue, though USPR has a good relationship with all land holders and have the

mineral rights per Mexican law; it would be practical as the project moves forward to legally lock up the access rights.

Water is a key component of any operation, be it exploration or mining, USPR should identify multiple locations where they can

access water to further the project.

The area over the years has been prone to unrest mainly related to the cartels. Though USPR has not experienced any issues and the

area has been much less dangerous in recent years, as with all remote areas, proper protocol needs to be put in place to ensure

minimum disruption and staff safety

Interpretation and Conclusions

La Sabila deposit is a copper, silver, gold deposit within a dolomitic quartz sulfide stockwork and hosted in shallow marine black

shale siltstone sedimentary unit of Cretaceous age. A volcanogenic massive sulfide origin has been suggested by several geologists

although not confirmed at this time by academic studies. The system is a minimum of 2200 meters in length and lies adjacent a

reverse fault that creates a northeasterly trending valley. However, at this time in the exploration, the system is open to the north and

south. It is worth pointing out that USPR has explored less than 1% of the entire concession; further exploration in targeted areas will

lead to other strike zones and areas.

It is the opinion of the author the project merits continued exploration and drilling. Due to the success of the 2015 drilling campaign

the project is reclassified as a mid-level exploration project and pre-development planning should begin.

Recommendations

Complete reconnaissance exploration to the north and south to include soil survey and chip samples.

Further exploration of the 99.9% of the property that is unexplored

Potential sources of water should be located

At least one more geologist should be on staff to increase the throughput of core logging and conducting more field exploration on the

property.

Complete reconnaissance exploration to the east of the trend.

Mine 30 ton bulk samples from different locations for metallurgical testing.

In the Morelia lab; complete the assay lab, upgrade computers, software and upgrade trucks.

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References

1.“Consejo De Recursos Minerales, Geological Mining Monographs”, State of Michoacán

2. Albinson, F.T., Norman,D.I., Cole, D., and Chomiak, B., 2001, Controls on Formation of

Low Sulfidation Epithermal Deposits in Mexico: Constraints from Fluid Inclusions and

Stable IsotopeData. Society of Economic Geologists, Special Publication No. 8

3. Bissig, Thomas; Mortensen, James K., Tosdal, Richard M., 2008, The Rhyolite Hosted

Volcanogenic Massive Sulfide District of Cuale, Guerrero Terrane, West Central Mexico:

Silver Rich, Base Metal Mineralization Emplaced in a Shallow Marine Continental

Margin Setting; Economic Geology, January –February 2008; v.103; p. 141-159

4. Buchanan, L.J., 1981, Precious Metals Deposits Associated with Volcanic Environments

in the Southwest, Arizona Geological Society Digest, v. 14., p. 237-262

5. Corbett, G.J., 2002a, Epithermal Gold for Explorationists, Australian Institute of

Geoscientists Presidents lecture: AIG News No. 67, p. 8

6. Druecker, Michael D; “Report on the Drilling Results and Exploration Potential with

Recommendations” December 1997 (Prepared during Joint Venture between La

Esperanza del Oro and Mount Isa Mining (MIM).)

7. Ebert, Shane; “Mineralization and Regional Exploration Parameters at the Solidaridad

Project Michoacan State, Mexico” March 1997

8. Ferrari, Luca; “The Geochemical Puzzle of the Trans-Mexican Volcanic Belt: Mantle

Plume, Continental Rifting, or Mantle Perturbation Induced by Subduction?” Centro de

Geociencias, UNAM, Campus Juriquilla, Apdo. Postal 1-742, Centro Queretaro, Qro.

76001, Mexico

9. Floersch, Michael J. (2008). Unpublished report on 2008 drilling program

.

10. Harper, Gerald PhD; Appraisal of four prospects in Michoacan State, Mexico” April

2003

11. Jansma, Pamela E., Lang, Harold R., 1997, The Arcelia Graben: New Evidence for

Oligocene Basin and Range Extension in Southern Mexico; Geology: May 1997: v.25;

no. 5; p.455-458

12. Large, R., Blundell, D., 2000, Database on Global VMS Districts; Geode, European

Science Foundation

13. Miranda-Gasca, Miguel A., 2003, The Volcanogenic Massive Sulfide Deposits of

Mexico; GSA, abstract 52036

14. Mortensen, James K., Hall, B.V., Bissig T., 2008, Friedman, R.M., Danielson, T., Oliver,

J., Rhys, D.A., Ross, K.V., and Gabites, J.E.; Age and Paleotectonic Seting of

Volcanogenic Massive Sulfide Deposits in the Guerrero Terrane of Central Mexico:

Constraints from U-Pb Age and Pb Isotope Studies; Economic Geology, January-

February 2008; v.103, p. 117-140

15. Nold, John; (January 2010), Unpublished Petrology Report

16. Poliquin, Morgan, (no date provided) Low Sulphidation Epithermal Quartz-Adularia

Gold Silver Veins & The El Fuego Project, Mexico; Almaden Minerals Ltd.

17. Smith, David S.; “Comprehensive Report on the La Esperanza – MIM Joint Venture

Solidaridad Project” January 1998

18. US Precious Metals Form 10K report to the US Securities and Exchange Commmission

(SEC) dated May 31, 2010.

19. Author Unknown; “Status Report on the Solidaridad Project Michoacan, Mexico”

January 1999 (Maybe Esperanza)

20. US Precious Metals Internal Geological Report. (David Burney)

21. Wisser, E.D., 1966, The Epithermal Precious Metal Province of Northwest Mexico:

Nevada Bureau of Mines, Report 13, pt. C, p.63-92.

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Certificate of Qualifications

I, Michael J. Floersch, hereby do certify that:

1. I am a graduate of the University of Central Missouri with a BA in earth sciences in 1979.

2. I have practiced my professions continuously since 1979. I have twenty-eight years’ experience in mining, exploration, laboratory

and smelting experience.

3. I am a Qualified Professional Member in good standing with the Mining and Metallurgical Society of America with special

expertise in Geology and Metallurgy.

4. I am a “Qualified Person” for the purposes of National Instrument 43-101 of the Canadian Securities Administrators. My specific

relevant expertise for the purpose of this technical report includes:

a. Valuation of mineral properties

b. Metallurgical and Assay Testing

c. Exploration for mineral properties

d. Mining geology

5. I have read National Instrument 43-101 its Companion Policy and Form 43-101F1

6. I am independent of US Precious Metals, Inc. applying the tests set out in section 1.4 of the National Instrument 43-101.

7. I am familiar with the geology and operating conditions in Mexico having made multiple visits to Mexico over the last two years. I

have made several visits to the La Sabila project site several times this year to the property for which this report was made.

8. I am not aware of any material fact or material change with respect to the subject matter of the report, the omission to disclose

which, makes this report misleading.

9. I authorize US Precious Metals, Inc. to use this report in connection with submissions to regulatory authorities and shareholders,

provided it is use in its entirety and not taken out of context.

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Appendix A

Assay results for 2008 and 2010

Report date: March, 10, 2011, 12:08:35

User: TOSHIBA USER Project: La Sabila

Source File: E:\Consulting\LaSabila\Micromine\Assays.DAT

Edit Date: February, 25, 2011, 12:55:56

DHID SampleID From (ft) To (ft) From(m) To(m) Au_g/t Cu_% Ag_g/t

LS08-01 20 8.0000 10.00000 2.438400 3.048000 0.808690 0.009900 11.819322

LS08-01 21 10.0000 12.00000 3.048000 3.657600 0.497656 0.004700 13.063462

LS08-01 22 12.0000 14.00000 3.657600 4.267200 0.248828 0.005100 8.708974

LS08-01 23 14.0000 16.00000 4.267200 4.876800 0.373242 0.002600 9.953114

LS08-01 24 16.0000 18.00000 4.876800 5.486400 0.093310 0.003400 1.555174

LS08-01 25 18.0000 20.00000 5.486400 6.096000 0.062207 0.002000 0.622070

LS08-01 32 20.0000 22.00000 6.096000 6.705600 0.995311 0.007300 7.775870

LS08-01 33 22.0000 24.00000 6.705600 7.315200 0.124414 0.005200 18.662088

LS08-01 34 24.0000 26.00000 7.315200 7.924800 0.062207 0.002400 15.551740

LS08-01 35 26.0000 28.00000 7.924800 8.534400 0.031103 0.003300 6.220696

LS08-01 36 30.0000 32.00000 9.144000 9.753600 0.031103 0.002200 11.197253

LS08-01 37 32.0000 34.00000 9.753600 10.363200 0.217724 0.002800 22.394506

LS08-01 38 34.0000 36.00000 10.363200 10.972800 0.124414 0.009300 18.662088

LS08-01 39 42.0000 44.00000 12.801600 13.411200 0.031103 0.003300 6.220696

LS08-01 40 44.0000 46.00000 13.411200 14.020800 0.124414 0.004900 8.708974

LS08-01 41 50.0000 52.00000 15.240000 15.849600 0.062207 0.004000 6.842766

LS08-01 42 58.0000 60.00000 17.678400 18.288000 0.093310 0.003200 8.086905

LS08-01 43 62.0000 64.00000 18.897600 19.507200 0.031103 0.003000 6.220696

LS08-01 44 64.0000 66.00000 19.507200 20.116800 0.062207 0.004000 6.220696

LS08-01 45 142.0000 144.00000 43.281600 43.891200 1.617381 0.095200 13.063462

LS08-01 46 144.0000 145.00000 43.891200 44.196000 0.622070 0.015000 12.441392

LS08-01 18 145.0000 146.00000 44.196000 44.500800 0.870897 0.006100 6.842766

LS08-01 19 146.0000 148.00000 44.500800 45.110400 0.684277 0.004500 6.842766

LS08-01 1 148.0000 150.00000 45.110400 45.720000 0.248828 0.003300 3.110348

LS08-01 2 150.0000 152.00000 45.720000 46.329600 0.311035 0.002100 6.220696

LS08-01 3 152.0000 154.00000 46.329600 46.939200 0.311035 0.003200 6.220696

LS08-01 4 154.0000 156.00000 46.939200 47.548800 0.435449 0.002400 8.086905

LS08-01 5 156.0000 158.00000 47.548800 48.158400 0.933104 0.009200 9.953114

LS08-01 6 158.0000 160.00000 48.158400 48.768000 0.995311 0.003400 11.819322

LS08-01 7 160.0000 162.00000 48.768000 49.377600 1.181932 0.005900 6.220696

LS08-01 8 162.0000 164.00000 49.377600 49.987200 0.746484 0.005400 5.598626

LS08-01 9 164.0000 166.00000 49.987200 50.596800 3.296969 0.009600 9.331044

LS08-01 10 166.0000 168.00000 50.596800 51.206400 2.052830 0.006500 8.086905

LS08-01 11 168.0000 170.00000 51.206400 51.816000 1.679588 0.006500 8.086905

LS08-01 12 170.0000 172.00000 51.816000 52.425600 5.287592 0.042500 14.307601

LS08-01 13 172.0000 174.00000 52.425600 53.035200 5.349799 0.093300 14.929670

LS08-01 14 174.0000 176.00000 53.035200 53.644800 2.239451 0.033500 11.819322

LS08-01 15 176.0000 178.00000 53.644800 54.254400 1.244139 0.040000 9.331044

LS08-01 16 178.0000 180.00000 54.254400 54.864000 1.617381 0.005500 9.953114

LS08-01 17 180.0000 182.00000 54.864000 55.473600 0.373242 0.003900 6.220696

LS08-01 54 184.0000 186.00000 56.083200 56.692800 1.244139 0.045600 29.859341

LS08-01 55 186.0000 188.00000 56.692800 57.302400 0.466552 0.002000 9.331044

LS08-01 56 190.0000 192.00000 57.912000 58.521600 0.279931 0.001500 8.708974

LS08-01 26 206.0000 208.00000 62.788800 63.398400 0.373242 0.003700 11.819322

LS08-01 27 208.0000 210.00000 63.398400 64.008000 0.000000 0.000000 0.000000

LS08-01 28 210.0000 212.00000 64.008000 64.617600 0.497656 0.005800 16.173810

LS08-01 29 212.0000 214.00000 64.617600 65.227200 0.622070 0.003600 16.173810

LS08-01 30 214.0000 216.00000 65.227200 65.836800 0.248828 0.003400 9.331044

LS08-01 31 216.0000 217.70000 65.836800 66.354960 0.559863 0.004500 8.708974

LS08-01 47 232.0000 234.00000 70.713600 71.323200 0.031103 0.007600 1.555174

LS08-01 48 260.0000 262.00000 79.248000 79.857600 0.031103 0.031700 1.555174

LS08-01 49 264.0000 266.00000 80.467200 81.076800 0.062207 0.008700 2.488278

LS08-01 50 284.0000 286.00000 86.563200 87.172800 0.031103 0.002600 1.555174

LS08-01 51 294.0000 296.00000 89.611200 90.220800 0.031103 0.006600 1.555174

LS08-01 52 302.0000 304.00000 92.049600 92.659200 0.000000 0.006400 1.555174

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LS08-01 53 314.0000 316.00000 95.707200 96.316800 0.000000 0.002200 1.555174

LS08-01 57 328.0000 330.00000 99.974400 100.584000 0.217724 0.002600 10.575183

LS08-01 58 348.0000 350.00000 106.070400 106.680000 0.248828 0.005000 5.598626

LS08-01 59 390.0000 392.00000 118.872000 119.481600 0.311035 0.080200 6.220696

LS08-01 60 426.0000 428.00000 129.844800 130.454400 0.062207 0.015800 7.464835

LS08-01 61 484.0000 486.00000 147.523200 148.132800 0.031103 0.014700 4.976557

LS08-02 1 8.0000 10.00000 2.438400 3.048000 0.124414 0.005000 4.354487

LS08-02 2 10.0000 12.00000 3.048000 3.657600 0.155517 0.006600 3.110348

LS08-02 3 12.0000 13.80000 3.657600 4.206240 1.181932 0.084000 6.842766

LS08-02 4 16.0000 18.00000 4.876800 5.486400 0.311035 0.010900 6.220696

LS08-02 5 28.0000 30.00000 8.534400 9.144000 0.435449 0.002000 6.220696

LS08-02 6 30.0000 32.00000 9.144000 9.753600 0.248828 0.002600 5.598626

LS08-02 7 38.0000 40.00000 11.582400 12.192000 0.124414 0.004200 4.976557

LS08-02 8 40.0000 42.00000 12.192000 12.801600 0.124414 0.003400 7.464835

LS08-02 9 62.0000 64.00000 18.897600 19.507200 0.062207 0.002700 6.220696

LS08-02 10 94.0000 96.00000 28.651200 29.260800 0.062207 0.022600 6.220696

LS08-02 11 98.0000 100.00000 29.870400 30.480000 0.062207 0.098500 8.708974

LS08-02 12 100.0000 102.00000 30.480000 31.089600 0.093310 0.435900 22.394506

LS08-02 13 102.0000 104.00000 31.089600 31.699200 0.124414 0.708000 29.237271

LS08-02 14 104.0000 106.00000 31.699200 32.308800 0.062207 0.815000 24.882784

LS08-02 15 114.0000 116.00000 34.747200 35.356800 0.031103 0.006100 10.575183

LS08-02 16 126.0000 128.00000 38.404800 39.014400 0.031103 0.028300 11.819322

LS08-02 17 130.0000 132.00000 39.624000 40.233600 0.062207 0.097200 9.331044

LS08-02 18 136.0000 138.00000 41.452800 42.062400 1.555174 0.101100 34.213828

LS08-02 19 138.0000 140.00000 42.062400 42.672000 0.933104 0.067500 22.394506

LS08-02 20 148.0000 150.00000 45.110400 45.720000 0.933104 0.009100 12.441392

LS08-02 21 182.0000 184.00000 55.473600 56.083200 1.990623 0.005100 11.819322

LS08-02 22 192.0000 194.00000 58.521600 59.131200 1.866209 0.002800 11.197253

LS08-02 23 202.0000 204.00000 61.569600 62.179200 1.866209 0.002300 11.197253

LS08-02 24 222.0000 224.00000 67.665600 68.275200 0.248828 0.008000 9.331044

LS08-02 25 224.0000 226.00000 68.275200 68.884800 0.248828 0.002600 9.953114

LS08-02 26 232.0000 234.00000 70.713600 71.323200 0.373242 0.002700 10.575183

LS08-02 27 234.0000 236.00000 71.323200 71.932800 0.248828 0.002900 13.063462

LS08-02 28 236.0000 238.00000 71.932800 72.542400 0.186621 0.002600 10.575183

LS08-02 29 238.0000 240.00000 72.542400 73.152000 0.435449 0.005600 9.953114

LS08-02 30 240.0000 242.00000 73.152000 73.761600 0.248828 0.001800 6.220696

LS08-02 31 242.0000 244.00000 73.761600 74.371200 0.124414 0.002600 4.976557

LS08-02 32 250.0000 252.00000 76.200000 76.809600 0.186621 0.002700 3.732418

LS08-02 33 254.0000 256.00000 77.419200 78.028800 0.155517 0.016400 4.354487

LS08-02 34 262.0000 264.00000 79.857600 80.467200 0.124414 0.002200 12.441392

LS08-02 35 270.0000 272.00000 82.296000 82.905600 0.124414 0.001800 9.331044

LS08-02 36 278.0000 280.00000 84.734400 85.344000 0.186621 0.004300 11.197253

LS08-02 37 300.0000 302.00000 91.440000 92.049600 0.186621 0.001400 9.953114

LS08-02 38 302.0000 304.00000 92.049600 92.659200 0.186621 0.001800 9.331044

LS08-02 39 304.0000 305.00000 92.659200 92.964000 0.062207 0.003500 3.732418

LS08-02 40 306.0000 308.00000 93.268800 93.878400 0.155517 0.001500 11.197253

LS08-02 41 314.0000 316.00000 95.707200 96.316800 0.124414 0.003800 9.331044

LS08-02 42 316.0000 318.00000 96.316800 96.926400 0.093310 0.003800 9.331044

LS08-02 43 322.0000 324.00000 98.145600 98.755200 0.093310 0.006800 9.331044

LS08-02 44 324.0000 326.00000 98.755200 99.364800 0.155517 0.015300 12.441392

LS08-02 45 326.0000 328.00000 99.364800 99.974400 0.062207 0.004400 10.575183

LS08-02 46 328.0000 330.00000 99.974400 100.584000 0.062207 0.003400 9.331044

LS08-02 47 331.0000 332.00000 100.888800 101.193600 0.124414 0.003000 14.307601

LS08-02 48 332.0000 333.70000 101.193600 101.711760 0.062207 0.002900 9.331044

LS08-02 49 338.0000 340.00000 103.022400 103.632000 0.124414 0.002200 8.708974

LS08-02 50 362.0000 364.00000 110.337600 110.947200 0.124414 0.001600 8.708974

LS08-02 51 364.0000 366.00000 110.947200 111.556800 0.062207 0.004200 6.842766

LS08-02 52 366.0000 368.00000 111.556800 112.166400 0.062207 0.006300 6.842766

LS08-02 53 368.0000 370.00000 112.166400 112.776000 0.093310 0.002900 9.331044

LS08-02 54 370.0000 372.00000 112.776000 113.385600 0.093310 0.003000 9.331044

LS08-02 55 372.0000 374.00000 113.385600 113.995200 0.124414 0.002800 9.953114

LS08-02 56 374.0000 376.00000 113.995200 114.604800 0.124414 0.001900 9.953114

LS08-02 57 376.0000 378.00000 114.604800 115.214400 0.062207 0.001400 9.331044

LS08-02 58 378.0000 380.00000 115.214400 115.824000 0.093310 0.002800 12.441392

LS08-02 59 380.0000 382.00000 115.824000 116.433600 0.062207 0.002400 11.197253

LS08-02 60 382.0000 384.00000 116.433600 117.043200 0.124414 0.002400 11.819322

LS08-02 61 388.0000 390.00000 118.262400 118.872000 0.062207 0.001600 9.331044

LS08-02 62 394.0000 396.00000 120.091200 120.700800 0.062207 0.003300 6.220696

LS08-02 63 396.0000 398.00000 120.700800 121.310400 0.031103 0.003800 3.732418

LS08-02 64 442.0000 444.00000 134.721600 135.331200 0.062207 0.004900 4.976557

LS08-02 65 444.0000 446.00000 135.331200 135.940800 0.124414 0.007300 8.708974

LS08-02 66 460.0000 462.00000 140.208000 140.817600 0.031103 0.004100 3.110348

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LS08-02 67 462.0000 464.00000 140.817600 141.427200 0.031103 0.003400 2.488278

LS08-02 68 478.0000 480.00000 145.694400 146.304000 0.093310 0.004000 9.331044

LS08-02 69 506.0000 508.00000 154.228800 154.838400 0.124414 0.015300 9.953114

LS08-02 70 548.0000 550.00000 167.030400 167.640000 0.124414 0.012700 9.331044

LS08-02 71 568.0000 570.00000 173.126400 173.736000 0.062207 0.019800 6.842766

LS08-02 72 570.0000 572.00000 173.736000 174.345600 0.155517 0.022200 10.575183

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La Sabila Precious & Base Metals Deposit Project Report, Southern Michoacan, Mexico Prepared for US Precious Metals, Inc Page 33

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LS10-003 17 152.0000 154.00000 46.329600 46.939200 0.390000 0.165000 6.700000

LS10-003 18 154.0000 156.00000 46.939200 47.548800 3.890000 1.400000 82.900000

LS10-003 19 156.0000 158.00000 47.548800 48.158400 2.140000 1.465000 70.100000

LS10-003 20 158.0000 160.00000 48.158400 48.768000 0.110000 0.060000 2.000000

LS10-003 21 160.0000 162.00000 48.768000 49.377600 2.090000 1.300000 44.100000

LS10-003 22 162.0000 164.00000 49.377600 49.987200 0.140000 0.772000 25.200000

LS10-003 23 164.0000 166.00000 49.987200 50.596800 2.590000 1.120000 112.000000

LS10-003 24 166.0000 168.30000 50.596800 51.297840 0.100000 0.188000 9.800000

LS10-003 25 174.0000 176.00000 53.035200 53.644800 1.320000 2.730000 108.000000

LS10-003 26 176.0000 178.00000 53.644800 54.254400 0.220000 0.089000 6.700000

LS10-003 27 209.0000 211.00000 63.703200 64.312800 0.050000 0.049000 3.600000

LS10-003 28 211.0000 213.00000 64.312800 64.922400 0.110000 0.091000 11.500000

LS10-003 29 213.0000 215.00000 64.922400 65.532000 0.080000 0.136000 2.600000

LS10-003 30 215.0000 217.00000 65.532000 66.141600 0.030000 0.009000 0.600000

LS10-003 31 217.0000 219.00000 66.141600 66.751200 0.140000 0.278000 5.500000

LS10-003 32 219.0000 220.00000 66.751200 67.056000 0.060000 0.049000 1.900000

LS10-003 33 238.0000 240.00000 72.542400 73.152000

0.005000 0.200000

LS10-003 34 240.0000 242.00000 73.152000 73.761600 0.040000 0.001000 18.000000

LS10-003 35 248.6000 250.00000 75.773280 76.200000 0.380000 2.580000 126.000000

LS10-003 36 250.0000 252.00000 76.200000 76.809600 0.100000 0.355000 26.800000

LS10-003 37 252.0000 254.00000 76.809600 77.419200 0.010000 0.006000 0.300000

LS10-003 38 254.0000 256.00000 77.419200 78.028800 0.010000 0.005000 0.500000

LS10-003 39 256.0000 258.00000 78.028800 78.638400 0.040000 0.401000 24.400000

LS10-003 40 258.0000 260.00000 78.638400 79.248000 0.630000 1.285000 35.800000

LS10-003 41 260.0000 261.80000 79.248000 79.796640 0.010000 0.052000 5.200000

LS10-003 42 282.0000 284.00000 85.953600 86.563200 0.400000 0.456000 19.400000

LS10-003 43 284.0000 286.00000 86.563200 87.172800 0.010000 0.008000 0.600000

LS10-003 44 286.0000 288.00000 87.172800 87.782400 LS10-003 45 288.0000 289.00000 87.782400 88.087200 0.030000 0.013000 0.500000

LS10-003 46 297.0000 299.00000 90.525600 91.135200 0.180000 0.145000 7.700000

LS10-003 47 299.0000 301.00000 91.135200 91.744800 0.130000 2.050000 214.000000

LS10-003 48 301.0000 303.00000 91.744800 92.354400 0.020000 0.094000 4.700000

LS10-003 49 303.0000 305.00000 92.354400 92.964000 0.010000 0.004000 1.500000

LS10-003 50 305.0000 307.00000 92.964000 93.573600 0.030000 0.012000 0.600000

LS10-003 51 370.0000 372.00000 112.776000 113.385600 0.020000 0.022000 2.800000

LS10-003 52 372.0000 374.00000 113.385600 113.995200 0.070000 0.762000 58.000000

LS10-003 53 374.0000 376.00000 113.995200 114.604800 0.060000 0.737000 63.900000

LS10-004 1 22.0000 24.00000 6.705600 7.315200 0.230000 0.173000 3.900000

LS10-004 2 24.0000 26.00000 7.315200 7.924800 0.550000 0.263000 7.300000

LS10-004 3 26.0000 28.00000 7.924800 8.534400 0.920000 0.145000 9.100000

LS10-004 4 28.0000 30.00000 8.534400 9.144000 0.510000 0.028000 2.100000

LS10-004 5 30.0000 32.00000 9.144000 9.753600 1.930000 0.072000 3.600000

LS10-004 6 32.0000 34.00000 9.753600 10.363200 1.590000 0.217000 8.400000

LS10-004 7 34.0000 36.00000 10.363200 10.972800 0.010000 0.003000 0.400000

LS10-004 8 38.0000 40.00000 11.582400 12.192000 0.030000 0.049000 1.100000

LS10-004 9 46.0000 48.00000 14.020800 14.630400 0.070000 0.015000 0.600000

LS10-004 10 52.0000 54.00000 15.849600 16.459200 3.990000 0.784000 27.500000

LS10-004 11 54.0000 56.00000 16.459200 17.068800 36.400000 6.730000 208.000000

LS10-004 12 56.0000 58.00000 17.068800 17.678400 10.450000 2.210000 83.800000

LS10-004 13 58.0000 60.00000 17.678400 18.288000 0.580000 0.146000 5.700000

LS10-004 14 60.0000 62.00000 18.288000 18.897600 6.980000 1.245000 27.900000

LS10-004 15 62.0000 64.00000 18.897600 19.507200 2.510000 1.215000 34.500000

LS10-004 16 64.0000 66.00000 19.507200 20.116800 5.760000 1.020000 28.600000

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LS10-004 17 68.0000 70.00000 20.726400 21.336000 0.110000 0.030000 1.400000

LS10-004 18 76.0000 78.00000 23.164800 23.774400 8.410000 0.909000 16.800000

LS10-004 19 118.0000 120.00000 35.966400 36.576000 0.010000 0.005000 LS10-004 20 136.0000 138.00000 41.452800 42.062400 0.010000 0.035000 0.800000

LS10-004 21 156.0000 158.00000 47.548800 48.158400 0.010000 0.018000 0.400000

LS10-004 22 158.0000 160.00000 48.158400 48.768000 0.090000 0.223000 8.700000

LS10-004 23 160.0000 162.00000 48.768000 49.377600 0.020000 0.115000 3.000000

LS10-004 24 174.0000 176.00000 53.035200 53.644800 0.010000 0.020000 0.800000

LS10-004 25 176.0000 178.00000 53.644800 54.254400 0.350000 0.095000 5.200000

LS10-004 26 182.0000 184.00000 55.473600 56.083200 0.220000 0.182000 12.800000

LS10-004 27 184.0000 186.00000 56.083200 56.692800 1.220000 0.525000 21.300000

LS10-004 28 186.0000 188.00000 56.692800 57.302400 1.320000 1.360000 35.100000

LS10-004 29 188.0000 190.00000 57.302400 57.912000 0.030000 0.040000 5.100000

LS10-004 30 190.0000 192.00000 57.912000 58.521600 0.820000 0.294000 10.100000

LS10-004 31 192.0000 194.00000 58.521600 59.131200 0.050000 0.046000 1.600000

LS10-004 32 198.0000 200.00000 60.350400 60.960000 0.010000 0.006000 0.800000

LS10-004 33 200.0000 202.00000 60.960000 61.569600 0.070000 0.001000 0.400000

LS10-004 34 204.0000 206.00000 62.179200 62.788800 0.010000 0.002000 0.300000

LS10-004 35 206.0000 208.00000 62.788800 63.398400 0.050000 0.017000 0.900000

LS10-004 36 208.0000 210.00000 63.398400 64.008000 0.030000 0.025000 1.700000

LS10-004 37 210.0000 212.00000 64.008000 64.617600 0.040000 0.023000 2.600000

LS10-004 38 212.0000 214.00000 64.617600 65.227200 0.010000 0.004000 0.300000

LS10-004 39 216.0000 218.00000 65.836800 66.446400 0.010000

0.200000

LS10-004 40 218.0000 220.00000 66.446400 67.056000 0.070000 0.011000 0.200000

LS10-004 41 220.0000 222.00000 67.056000 67.665600 0.020000 0.031000 0.900000

LS10-004 42 222.0000 224.00000 67.665600 68.275200 0.010000 0.003000 0.400000

LS10-004 43 224.0000 226.00000 68.275200 68.884800

0.017000 0.600000

LS10-004 44 230.0000 232.00000 70.104000 70.713600 0.090000 0.237000 7.100000

LS10-004 45 232.0000 234.00000 70.713600 71.323200 0.070000 0.006000 1.800000

LS10-004 46 234.0000 236.00000 71.323200 71.932800 0.090000 0.023000 5.000000

LS10-004 47 236.0000 238.00000 71.932800 72.542400

0.022000 2.800000

LS10-004 48 242.0000 244.00000 73.761600 74.371200

0.013000 0.300000

LS10-004 49 244.0000 246.00000 74.371200 74.980800 0.010000 0.009000 1.100000

LS10-004 50 248.0000 250.00000 75.590400 76.200000 0.110000 0.023000 0.800000

LS10-005 1 34.3000 35.00000 10.454640 10.668000 0.030000 0.003000 LS10-005 2 35.0000 36.00000 10.668000 10.972800

0.002000

LS10-005 3 36.0000 37.00000 10.972800 11.277600

0.003000 LS10-005 4 37.0000 38.00000 11.277600 11.582400 0.010000 0.004000 LS10-005 5 38.0000 39.00000 11.582400 11.887200

0.004000

LS10-005 6 39.0000 40.00000 11.887200 12.192000

0.002000 LS10-005 7 40.0000 40.80000 12.192000 12.435840 0.010000 0.002000 LS10-005 8 82.0000 83.00000 24.993600 25.298400 1.080000 0.008000 3.400000

LS10-005 9 83.0000 84.00000 25.298400 25.603200 0.030000 0.002000 0.500000

LS10-005 10 132.5000 133.50000 40.386000 40.690800 0.010000 0.005000 LS10-005 11 133.5000 134.50000 40.690800 40.995600 0.030000 0.003000 LS10-005 12 134.5000 135.00000 40.995600 41.148000 0.010000 0.004000 LS10-005 13 187.0000 188.00000 56.997600 57.302400 0.010000 0.003000 0.300000

LS10-005 14 190.0000 191.00000 57.912000 58.216800 0.410000 0.145000 5.500000

LS10-005 15 191.0000 192.00000 58.216800 58.521600 0.220000 0.056000 2.500000

LS10-005 16 192.0000 192.50000 58.521600 58.674000

0.003000 0.300000

LS10-005 17 195.0000 196.00000 59.436000 59.740800 1.870000 0.220000 9.500000

LS10-005 18 196.0000 197.00000 59.740800 60.045600 0.150000 0.015000 0.700000

LS10-005 19 199.5000 201.00000 60.807600 61.264800 4.010000 0.257000 9.800000

LS10-005 20 207.6000 209.00000 63.276480 63.703200 0.070000 0.008000 0.300000

LS10-005 21 210.8000 212.00000 64.251840 64.617600 9.350000 0.685000 30.900000

LS10-005 22 212.0000 213.00000 64.617600 64.922400 51.300000 3.820000 183.000000

LS10-005 23 213.0000 214.00000 64.922400 65.227200 2.220000 0.330000 6.900000

LS10-005 24 215.0000 216.00000 65.532000 65.836800 0.120000 0.030000 1.300000

LS10-005 25 216.0000 217.00000 65.836800 66.141600 1.420000 0.110000 4.700000

LS10-005 26 218.0000 219.00000 66.446400 66.751200 0.130000 0.023000 0.600000

LS10-005 27 219.0000 220.00000 66.751200 67.056000 0.030000 0.002000 LS10-005 28 220.0000 221.00000 67.056000 67.360800 0.030000 0.008000 0.300000

LS10-005 29 221.0000 222.00000 67.360800 67.665600 6.240000 0.001000 0.200000

LS10-005 30 222.0000 223.00000 67.665600 67.970400 LS10-005 31 223.4000 224.00000 68.092320 68.275200 0.020000 0.001000

LS10-005 32 224.8000 226.00000 68.519040 68.884800 0.100000 0.001000 0.300000

LS10-005 33 230.0000 231.00000 70.104000 70.408800 18.050000 1.420000 39.500000

LS10-005 34 236.0000 237.00000 71.932800 72.237600 3.230000 0.155000 10.100000

LS10-005 35 237.0000 238.00000 72.237600 72.542400 0.250000 0.083000 2.000000

LS10-005 36 245.0000 246.00000 74.676000 74.980800 1.100000 0.133000 3.400000

LS10-005 37 250.0000 251.00000 76.200000 76.504800 0.120000 0.011000 0.500000

LS10-005 38 251.0000 252.00000 76.504800 76.809600 0.250000 0.007000 0.400000

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LS10-005 39 254.0000 255.00000 77.419200 77.724000 0.090000 0.030000 0.800000

LS10-005 40 264.0000 265.00000 80.467200 80.772000 0.380000 0.042000 1.300000

LS10-005 41 271.0000 272.00000 82.600800 82.905600 0.020000 0.003000 LS10-005 42 275.0000 276.00000 83.820000 84.124800 3.580000 0.244000 22.800000

LS10-005 43 277.0000 277.50000 84.429600 84.582000 0.080000 0.004000 0.200000

LS10-005 44 283.0000 284.00000 86.258400 86.563200 0.170000 0.002000 LS10-007 1 50.8524 52.49280 15.499812 15.999805 0.180000 0.314000 6.000000

LS10-007 2 52.4928 55.77360 15.999805 16.999793 15.650000 1.350000 64.100000

LS10-007 3 55.7736 59.05440 16.999793 17.999781 28.800000 3.660000 116.000000

LS10-007 4 59.0544 62.33520 17.999781 18.999769 5.030000 0.914000 31.300000

LS10-007 5 62.3352 65.61600 18.999769 19.999757 4.630000 0.217000 17.200000

LS10-007 6 65.6160 68.89680 19.999757 20.999745 0.110000 0.011000 0.800000

LS10-007 7 68.8968 70.53720 20.999745 21.499739 0.050000 0.029000 0.900000

LS10-007 8 73.8180 75.45840 22.499726 22.999720 7.450000 1.170000 56.300000

LS10-007 9 75.4584 78.73920 22.999720 23.999708 27.300000 4.380000 197.000000

LS10-007 10 78.7392 82.02000 23.999708 24.999696 1.850000 0.056000 3.000000

LS10-007 11 82.0200 85.30080 24.999696 25.999684 3.590000 1.685000 68.300000

LS10-007 12 85.3008 88.58160 25.999684 26.999672 12.900000 2.420000 71.500000

LS10-007 13 88.5816 91.86240 26.999672 27.999660 6.970000 0.461000 40.200000

LS10-007 14 91.8624 94.15896 27.999660 28.699651 1.200000 0.190000 5.500000

LS10-007 15 116.4684 118.10880 35.499568 35.999562 0.930000 0.068000 2.900000

LS10-007 16 118.1088 121.38960 35.999562 36.999550 0.020000 0.006000 0.800000

LS10-007 17 121.3896 124.67040 36.999550 37.999538 0.030000 0.032000 1.400000

LS10-007 18 124.6704 126.31080 37.999538 38.499532 0.120000 0.097000 2.900000

LS10-007 19 129.5916 131.23200 39.499520 39.999514 0.050000 0.013000 0.800000

LS10-007 20 131.2320 134.51280 39.999514 40.999501 0.160000 0.053000 2.200000

LS10-007 21 137.7936 141.07440 41.999489 42.999477 0.010000 0.004000 0.300000

LS10-007 22 141.0744 144.35520 42.999477 43.999465 0.020000 0.097000 1.300000

LS10-007 23 149.2764 150.91680 45.499447 45.999441 2.820000 0.626000 17.400000

LS10-007 24 150.9168 154.19760 45.999441 46.999428 3.440000 1.170000 62.000000

LS10-007 25 154.1976 157.47840 46.999428 47.999416 0.180000 0.185000 17.300000

LS10-007 26 157.4784 160.75920 47.999416 48.999404 0.050000 0.054000 3.700000

LS10-007 27 165.6804 167.32080 50.499386 50.999380 0.010000 0.003000 0.300000

LS10-007 28 167.3208 170.60160 50.999380 51.999368 0.030000 0.051000 2.100000

LS10-007 29 170.6016 173.88240 51.999368 52.999356 0.010000 0.051000 1.800000

LS10-007 30 173.8824 177.16320 52.999356 53.999343 0.020000 0.010000 2.800000

LS10-007 31 231.2964 232.93680 70.499143 70.999137 2.960000 1.240000 26.000000

LS10-007 32 232.9368 236.21760 70.999137 71.999124 5.130000 0.398000 13.400000

LS10-007 33 367.4496 370.73040 111.998638 112.998626 0.010000 0.004000 0.300000

LS10-007 34 370.7304 373.68312 112.998626 113.898615 0.600000 0.121000 2.500000

LS10-007 35 452.7504 456.03120 137.998322 138.998310 0.010000 0.002000 0.200000

LS10-007 36 456.0312 459.31200 138.998310 139.998298 0.010000 0.109000 5.500000

LS10-007 37 459.3120 462.59280 139.998298 140.998285

0.001000 0.300000

LS10-007 38 462.5928 465.87360 140.998285 141.998273

0.001000 0.200000

LS10-007 39 465.8736 467.84208 141.998273 142.598266

0.012000 0.600000

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Appendix B.

Professor John Nold, Unversity of Central Missouri Petrographic and ore Microscopy Report

Report

To: David Burney, President, U. S. Precious Metals, Inc.

From: John L. Nold, Fellow in the Society of Economic Geologists

Mark A. Dudley

Re: Report on ore microscopy of polished sections from Michoacan, Mexico

Date: January 2, 2010

Sample C2a hypogene massive sulfide py-qtz-cp rock cut by supergene vein of porous iron oxides

Description:

pyrite - hypogene, clean, large crystals ~ 30 %

chalcopyrite - yellow-green, almost isotropic ~ 2-3 %

pyrrhotite - large bleb in chalcopyrite, strong anisotropism, light-brown color Trace

quartz - ~ same polishing hardness as py, somewhat brown from iron oxides ~ 15 %

supergene pyrite - in vein with marcasite, porous, low polishing hardness & negative relief compared to hypogene pyrite, light brownish green tint

compared to hypogene pyrite ~ 25 %

supergene marcasite - more white than pyrite, anisotropic, mostly as lath-shaped crystals ~ 25 %

sphalerite ? - small blebs in pyrite Trace

Sample C2b hypogene massive sulfide, mostly pyrite and chalcopyrite cut by supergene marcasite and quartz

Description:

pyrite - large euhedral to subhedral crystals up to 5 mm, hypogene, containing blebs of chalcopyrite, with gray gangue (mostly quartz) between py

crystals ~ 50 %

chalcopyrite - present as separate large blebs and as small blebs in pyrite, hypogene, negative relief compared to pyrite ~ 7-10 %

supergene marcasite - porous, in bands, about same reflectance as py but distinctly whiter, anisotropic, supposed green tint not very apparent under

scope but can easily see under hand lens, cutting py and cp ~ 30 %

gangue - probably mostly quartz, has about same polishing hardness as py ~ 10 %

sphalerite ? - gray, low reflectance, small blebs in gangue Trace

Sample CO6-25 O84a hypogene massive sulfide composed of massive chalcopyrite with minor pyrrhotite, fractured and veined with supergene py-qtz-

cc

Description:

chalcopyrite - the dominant mineral, massive, contains sphalerite exsolution stars ~ 40 %

pyrite - hypogene, clean crystals, euhedral ~~ 5 %

supergene pyrite - porous, deposited in bands, very small crystals compared to hypogene pyrite, in cross-cutting vein ~ 15 %

pyrrhotite - brownish, anisotropic, small equidimensional crystals within chalcopyrite, contains thin lamellae and irregular veinlets of chalcocite ?

replacing part of the pyrr, pyrr is also associated with the hypogene pyrite -- the pyrrhotite is apparently a hypogene mineral ~ 2 %

chalcocite ? - gray veinlets with bluish ? tint cutting pyrr and py Trace

gangue - probably mostly quartz ~ 20 %

hematite - red crystals in cavities on polished surface, from weathering few %

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Sample CO6-25 O84b hypogene massive chalcopyrite with sphalerite stars, cut by supergene py-mar

Description:

chalcopyrite - coarse grained, has small exsolution sphalerite stars, stars indicate high-temperature, hypogene formation, at least for this mineral ~ 40

%

pyrite - large, clean, euhedral crystals, hypogene, creamy yellow, isotropic ~ 10 %

supergene pyrite - porous, creamy but slight anisotropism

supergene marcasite - whiter than py, anisotropic, mostly as elongate laths and plates, together the supergene pyrite and the supergene marcasite

constitute about 25 % of the sample

sphalerite - as exsolution stars in chalcopyrite, four-pointed stars are aligned crystallographically along lattice directions in the cp with legs parallel,

largest stars are about 20 microns in length, some sph also within quartz as small blebs up to 0.22 mm in length

gangue - probably mostly quartz, stained brownish-red from iron oxides from weathering

Comments on the polished sections:

1. Samples were submitted by D. Burney and not collected by J. Nold, so my comments will be somewhat limited.

2. All the samples appear to be from a high-grade sulfide deposit (or deposits). They appear to be from samples of massive sulfide ore, although a high-grade vein deposit cannot be ruled out.

3. All have undergone significant supergene alteration from weathering, and deposition of sulfide minerals within the zone of supergene sulfide enrichment.

4. All samples show evidence of minor weathering and oxidation after exposure.

5. Perhaps the most surprising thing is the presence of sphalerite stars within chalcopyrite, accepted by ore microscopists as evidence of high temperature formation of the chalcopyrite, allowing it to absorb the zinc that is later exsolved during cooling as the sphalerite stars.

6. The high percent copper and the modest amounts of zinc are suggestive of a copper-zinc massive sulfide deposit, although other deposit types cannot be ruled out.

Comments on thin section analyses of Michoacan ore sent previously on October 18, 2009, and included here so that the Polished Section info

and the Thin Section info are included within the same final report.

The Michoacan thin sections have been finished and described. The polished sections have been mounted and still need to be polished which

may take a few weeks. This is a preliminary report on the thin section samples. All the samples were leached in hydrofluoric acid and

stained in sodium cobaltinitrite for K‑feldspar, and none contained even a trace, which I found a bit surprising.

I will write a more formal report later when the polished sections are finished.

LS08‑1 209 feet

pyritic sericitic quartz sandstone.

pyrite 5 %, euhedral to subhedral and a late hydrothermal addition, not pyrite sand grains. quartz ~ 55 %, very angular, undulose extinction,

source area is a plutonic terrane, not volcanic quartz, larger crystals up to 1.5 mm.

sericite 30‑35 %, perhaps from clay matrix in original sandstone and changed by thermal event.

carbonate, ~ 1‑2 %, probably dolomite, as small veinlets.

LS08‑2 101 feet

dolomitic sericitized porphyritic andesite

plagioclase ~ 60 %, as phenocrysts and as aphanitic matrix. Phenocrysts highly sericitized.

sericite ~ 20 %, high percent as alteration of plagioclase phenocrysts, some in matrix. Completely replaces some plagioclase phenocrysts.

carbonate, probably dolomite, ~ 10 %, scattered through the rock.

apatite, ~ 1 %, small hexagonal crystals in the matrix.

opaques, ~ 1 %.

titanite ?, ~ 1 %, disseminated through the rock.

LS08‑2 695 feet

dolomitic arkosic sandstone, very fine grained with red hematite coloring

plagioclase, ~ 60 percent, the main component in the rock.

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quartz, ~ 2‑3 %, very angular, one large grain up to 0.5 mm.

hematite, trace, translucent red, the red coloring in the rock.

dolomite, ~ 15‑20 %. scattered through the rock.

opaques, ~ 10 %, probably mostly hematite.

Only 19 feet above LS08‑2, 714 feet, and considerably finer grained, so could represent grading; need to see the core to tell.

Appendix C

ELECTRON MICROPROBE and

SCANNING ELECTRON MICROSCOPE ANALYSIS of

DRILL CORE SEGMENTS From LA SABILA PROJECT

Hole # 5 @ 399.5’ and Hole # 6 @ 157’

Description of Samples

2 small wedges of diamond drill core.

Purpose of Analysis

Characterize precious and base metal mineralogy with emphasis upon platinum group element minerals.

Sample Preparation

Prepare polished thick sections from core wedges. Grind and polish to show the mineral phases in cross section. Coat each polished thick

section with 40 angstroms of evaporated carbon to create an electrically conductive surface.

Electron Microprobe Instrumentation and Operating Conditions.

Analyze in an ARL SEMQ electron microprobe equipped with 6 wavelength dispersive x-ray spectrometers, a Robinson full television rate back

scattered electron detector, DigiSem digital image acquisition, KEVEX / PGT MCA 4000 EDS detector system.

Analysis Method

Survey the sample at 300 X using back scattered electron imaging which shows compositional variation using atomic number as the video

contrast basis.

Obtain scanning electron microscope back-scattered electron (SEM BSE) images using DigiSem digital acquisition hardware and software.

Atomic number is the contrast source in the images.

Use energy dispersive x-ray spectrometer (EDS) for basic mineral identification and wavelength dispersive x-ray spectrometer (WDS) for trace

analysis.

Analyst

The analyst on all instruments and the author of the report was Bart Cannon

Hole # 5 @ 399.5’ (La Sabila)

Pyrite showing networks of crosscutting voids. The voids show white, end member siderite and euhedral crystals of pyrite. Rare

chalcopyrite can be seen intergrown with the pyrite when the stereomicroscope is used to examine the sample.

No discrete platinum group element bearing phases were encountered.

Pentlandite, a nickel iron sulfide is the most likely phase which might host palladium in solid solution, but no nickel bearing minerals

were encountered. It is conceivable that PGE could occur in solid solution in the gold and silver bearing phases.

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Wavelength dispersive x-ray micro-analysis was conducted on the pyrite and chalcopyrite in the sample. No palladium or platinum in

concentrations greater than 100 ppm could be detected. Platinum normally occurs in discrete platinum group minerals rather than in

solid solution in base metal sulfides.

The silver bearing minerals hessite, and a lillianite homologue which may be either gustavite or eskimoite were encountered

frequently, but no gold bearing phases were located.

The hessite and gustavite were most commonly included in siderite rather than in the pyrite or chalcopyrite. When precious metal

bearing phases occur in pyrite, those occurrences are always very close to areas of siderite.

Arsenic bearing pyrite is a known solid solution or submicron gold host in Carlin and other types of deposits. The pyrite in this

sample is arsenic free.

SEM BSE Photos

01 Hessite (xrs 03) showing gustavite (xrs 02) rim in siderite.

02 Mag view of SEM photo 01.

04 Hessite (xrs 03), pyrite in siderite, magnesian siderite and quartz.

05 Gustavite in pyrite, siderite, magnesian siderite and chalcopyrite.

06 Gustavite in siderite and pyrite.

07 Gustavite in pyrite and siderite.

X-Ray Spectra

01 Siderite in all photos

02 Gustavite / eskimoite rim in SEM photos 01 and 02.

03 Hessite core in SEM photo 02 and 04.

04 End member siderite in all photos.

05 Magnesian siderite in SEM photo 03.

06 Typical pyrite spectrum. Note absence of arsenic.

Hole # 6 @ 157’ (La Sabila)

Pyrite is the predominant phase with abundant cross cutting veinlets of chalcopyrite siderite and magnesian siderite. This core

segment shows very few voids in contrast to the core segment from Hole # 5 which is described above.

No discrete platinum group element bearing phases were encountered

Pentlandite a nickel iron sulfide is the most likely phase which might host palladium in solid solution, but no nickel bearing minerals

were encountered.

Wavelength dispersive x-ray micro-analysis was conducted on the pyrite and chalcopyrite in the sample. No palladium or platinum in

concentrations greater than 100 ppm could be detected. It is conceivable that PGE could occur in solid solution in the gold and silver

bearing phases. Platinum almost always occurs in ore systems as discrete mineral grains containing essential platinum rather than

it does in solid solution in base metal sulfides.

Numerous small inclusions of silver bearing phases were encountered. Hessite is the most common phase, but preliminarily

identified rare silver bismuth selenide, bohdanowiczite is almost as common. Acanthite occurs as well, and it is the most frequent

precious metal bearing phase included in pyrite.

The most common gold bearing phase is electrum. It has a fineness of 620. Gold bearing phases are much less common than silver

bearing phases.

The great majority of precious metal bearing phases occur in siderite and magnesian siderite rather than as inclusions in sulfides.

Several grains of acanthite included in chalcopyrite, and one grain of electrum included in pyrite were observed, however.

Arsenic bearing pyrite is a known solid solution or submicron gold hosts in Carlin and other types of deposits. The pyrite in this

sample is arsenic free.

SEM BSE Photos

01 Acanthite in chalcopyrite and zoned iron carbonates (xrs 01,02).

02 Electrum (Au 620)(xrs 03) in siderite (xrs 01) and chalcopyrite.

03 Possible bohdanowiczite (xrs 05) intergrown with hessite in siderite.

04 Possible bohdanowiczite and hessite in siderite with chalcopyrite.

06 Electrum in pyrite swarm enclosed in siderite and magnesian siderite

(xrs 04).

X-Ray Spectra

01 End member siderite in all SEM photos.

02 Magnesian siderite in SEM photo 03.

03 Electrum in SEM photo 02.

04 Magnesian siderite with pyrite and electrum in SEM photo 06.

05 Possible bohdanowiczite in SEM photo 03 and 04.

Appendix D

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APPENDIX D

MINERAL RESOURCE ESTIMATES

Canadian NI 43-101 definitions of mineral resource and mineral reserve refer to the terms as

defined by the Canadian Institute of Mining, Metallurgy, and Petroleum (CIM). The CIM

definition standards on mineral resources and mineral reserves are as follows:

“A Mineral Resource is a concentration or occurrence of diamonds, natural solid

inorganic material, or natural solid fossilized organic material including base and

precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and

quantity and of such a grade or quality that it has reasonable prospects for economic

extraction. The location, quantity, grade, geological characteristics and continuity of a

Mineral Resource are known, estimated or interpreted from specific geological evidence

and knowledge.”

Measured Mineral Resource

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity,

grade or quality, densities, shape, and physical characteristics are so well established that

they can be estimated with confidence sufficient to allow the appropriate application of

technical and economic parameters, to support production planning and evaluation of the

economic viability of the deposit. The estimate is based on detailed and reliable

exploration, sampling and testing information gathered through appropriate techniques

from locations such as outcrops, trenches, pits, workings and drill holes that are spaced

closely enough to confirm both geological and grade continuity.

Indicated Mineral Resource

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity,

grade or quality, densities, shape and physical characteristics, can be estimated with a

level of confidence sufficient to allow the appropriate application of technical and

economic parameters, to support mine planning and evaluation of the economic viability

of the deposit. The estimate is based on detailed and reliable exploration and testing

information gathered through appropriate techniques from locations such as outcrops,

trenches, pits, workings and drill holes that are spaced closely enough for geological and

grade continuity to be reasonably assumed.

Inferred Mineral Resource

An ‘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.