San Dimas Analyst Tour Presentation
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Transcript of San Dimas Analyst Tour Presentation
SAN DIMAS ANALYSTS TOUROctober 2010
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2
Cautionary Statement
This presentation may contain “forward-looking” statements within the meaning of Canadian securities legislation and the United States Private SecuritiesLitigation Reform Act of 1995. Forward-looking statements relate to future events or the anticipated performance of the Company and reflectmanagement’s expectations or beliefs regarding such future events and anticipated performance. In certain cases, forward-looking statements can beidentified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, ”estimates”, ”forecasts”, ”intends”, ”anticipates” or“believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, ”could”, “would”, ”might”, or “will betaken”, “occur” or “be achieved”, or the negative of these words or comparable terminology. By their very nature forward-looking statements involveknown and unknown risks, uncertainties and other factors which may cause the actual performance of the Company to be materially different from anyanticipated performance expressed or implied by the forward-looking statements. Such factors include various risks related to the Company’s operations,including, without limitation, fluctuations in spot and forward markets for gold, silver and other metals, fluctuations in currency markets, changes innational and local governments in Mexico and the speculative nature of mineral exploration and development, risks associated with obtaining necessaryexploitation and environmental licenses and permits, and the presence of laws that may impose restrictions on mining. A complete list of risk factors aredescribed in the Company’s preliminary prospectus and will be detailed from time to time in the Company’s interim and annual financial statements andmanagement’s discussion and analysis of those statements, all of which are, or will be available, for review on SEDAR at www.sedar.com.
This presentation uses the terms “measured resources”, “indicated resources” and “inferred resources”. The Company advises readers that although theseterms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI43-101”)),the United States Securities and Exchange Commission does not recognize them. Readers are cautioned not to assume that any part or all of the mineraldeposits in these categories will ever be converted in to reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence,and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies, except fora Preliminary Assessment as defined under NI43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economicallyor legally mineable.
Although the Company has attempted to identify important factors that could cause actual performance to differ materially from that described in forward-looking statements, there may be other factors that cause its performance not to be as anticipated. The Company neither intends nor assumes anyobligation to update these forward-looking statements or information to reflect changes in assumptions or circumstances other than required by applicablelaw. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially fromthose currently anticipated. Accordingly, readers should not place undue reliance on forward-looking statements.
Unless otherwise indicated, all dollar values herein are in US$.
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Agenda
TSX:PSafety Induction
Underground and Surface Operations.
Required PPE:
Hard Hat
Safety Vest.
Steel-toe boots/shoes
Gloves
Hearing protection
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Safety Induction
For some activities special equipment must be used
Be aware of signage in specific areas
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Safety Induction
Surface / Underground driving
Be an approved driver
Obey speed Limit
Buckle up your safety belt
Backward parking all times
Lights on all time
Emergency lights on while parked
Surface / Underground Driving
Be an approved driver
Obey speed Limit
Buckle up your safety belt
Backward parking all times
Lights always on
Emergency lights on while parked
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Safety Induction
Right of Way for vehicles:
1. Ambulances on duty
2. Trucks transporting hazardous materials
3. Haulage trucks (loaded)
4. Haulage trucks (empty)
5. Heavy Equipment
6. Utility vehicles
7
TSX:PSafety Induction
In Underground Operation:
1. Sign in with the Security Guard
2. Do not exit from vehicles in motion
3. Do not stay in atmospheres +50ppm CO
4. Indentify heavy equipment, make contactwith operator
5. Verify good tunnel back conditions (scaling)
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Agenda
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10
San Dimas Location
San DimasGold-Silver Mine
DURANGO, MEXICO
Mazatlán
Durango
VentanasExploration Property
DURANGO, MEXICO
Mexico City
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San Dimas History
1890 San Luis Mining Company began operations in México
1961 Minas de San Luis is formed with 51 % Mexican capital
1978 A group of Mexican investors acquires full ownership
1987 San Antonio mine started operating
1991 Exploitation began in Santa Rita Mine
2002 Wheaton River acquired Luismin, Central Block High Grade Discovery
2005 Wheaton merged with Goldcorp
2006 Goldcorp merged with Glamis
2008 Mala Noche Resources Formed
2009 Sinaloa Graben High Grade Discovery
2010 Primero (formerly Mala Noche) acquired San Dimas
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Introduction
More than 100 known veins in the district
Thickness of veins varies from 0.10m up to 15m, avg. 1.50m wide
Some veins can be followed for more than 1,500 m
Total underground development of more than 500 km
Historical Production (1978-2008)
Tonnes (millions) Gold (g/t ) Silver (g/t) Gold (moz) Silver (moz)
13.3 7.0 511 2.9 219
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Historical Production (1990-present)
New High Grade Impact?
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
Au
gra
de
(g/
t)
Pro
du
ctio
n (
oz)
Production (oz) Au grade (g/t)
Central Block DiscoveryAdditional high-grade discoveries
(Roberta, Robertita & Santa Lucía veins)
Acquisition of Luismin by Wheaton River
Sinaloa Graben Discovery
Subsequent Acquisition of San Dimas
by Primero
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San Dimas2010 Guidance
Goldcorp Inc. Primero
Reported Jun 30, 2010
Unaudited Jul 1, 2010 to
Aug 5, 2010
Estimated Aug 6, 2010 to Dec 31, 2010
Estimated Full Year 2010
Gold produced (ounces)
45,800 7,700 37,000-42,000 90,000-95,000
Silver produced(1)
(ounces)2,315,500 429,900 1,755,000-1,955,000 4,500,000-4,700,000
Total cash costs(2)
(per gold equivalent ounce)$529(3) $655 $450 - $480 $500 - $530
Total cash costs(2) - by-product(per gold ounce)
$411 $555 $330 - $360 $390 - $420
Capital expenditures (US$ millions)
10 4 12 26
1) Refer to slide 7 for silver purchase agreement details
2) Cash costs are a non-GAAP performance measure
3) Calculated from Goldcorp Inc.’s Second Quarter 2010 Report
Material assumptions used to forecast total cash costs(1) for 2010 include: $1,200 per ounce for gold; by-product silver price of $4.04 per ounce; an oil price of $95 per barrel and foreign exchange rates of 1.03
Canadian dollars and 12.63 Mexican pesos to the US dollar.
14
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Agenda
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People
San Dimas Headcount : 1,080
16
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People
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Human Resources
Selection
Recruitment
Training
Types of personnel handled:
Unionized Employees
Salaried Employees
Contractors’ workers
Main duties
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National Union Negotiation
Collective bargaining
Wages
Clauses review
Bonus review
Special bonus negotiation
Contractors’ personnel agreement rev.
Medical benefits agreement review
Collective bargaining
Human Resources
19
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2 Maintenance programmers
5 Process plant supervisors
2 Maintenance supervisors
2 Mine supervisors
3 Surveyors
2 Planning supervisors
1 Assayer
1 Mine assistant superintendent
Technical school graduates
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People
1 Mine superintendent assistant
1 Plant assistant superintendent
1 Chief Metallurgist
1 Geologist
1 School Principal
1 Math teacher
1 HR Superintendent
Currently, the company is sponsoring 15 scholarships for employees
Primero sponsored graduates
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Agenda
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World Class Safety Policies
23
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Central Committee
Chaired by the General Manager
Permanent members, all the
superintendents of operations and services
Objective: to have a governing body that ensures
the continuous improvement and feasibility of the
safety management system
Who else has a commitment in Safety?
24
TSX:PWho else has a commitment in Safety?
The procedures and work instructions for each
one of the operative areas of the district are
defined in this system.
The OP must detect unsafe acts and conditions
and work on them until correction.
Although it is a Subcommittee that only works when
an accident happens, this contributes to find out the
root causes and to avoid the repetition of these.
The supervisor has the responsibility to make Safety
25
Subcommittees
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Who else has a commitment in Safety?
2. DELTA
Development on the personal values; focus in safety values
Behavior training
1. Safety Leadership Training.
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Awards
•1st Place National Contest , First Aid ( Bleeding, Fractures)
•1st Place National Contest Biopack- Biomarin
2010, 2009
•2nd Place National Contest Biopack- Biomarin2008, 2007,2006
In 10 years the “Silver Hardhat”
of the Mexican Chamber of Mines
was won 6 times
Goldcorp Most Improved Safety Performance Award 2007
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0 200 400 600 800 1,000 1,200 1,400 1,600
Local 22
Local 21
Salaried
Contractors
La Roca
Local 8
DSD
Days
Days without LTI
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Lost Time Injuries13
6
9 9
32
0
5
10
15
2005 2006 2007 2008 2009 2010
All incidents
5965 61
53
31
18
0
20
40
60
80
2005 2006 2007 2008 2009 2010
8.5310.04
7.08
4.97
3.232.14 1.62
0
2
4
6
8
10
12
2004 2005 2006 2007 2008 2009 2010
All Frequency Index
LTI Index
0.68
0.87
0.39
0.53 0.55
0.21 0.18
0
0.2
0.4
0.6
0.8
1
2004 2005 2006 2007 2008 2009 2010
Safety Improvements
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Agenda
TSX:PCommunity Relations
1) Tayoltita 1) New Truchas
2) San Dimas 2) Huahuapan
3) Rincón de Calabazas 3) San Antonio de las Truchas
4) Guamúchil y Anexos 4) Co-ownersSan Antonio Forestry Assoc.
5) Guarisamey 5) La Manga
6) Las Huertas 6) San Francisco de los Lobos
7) Palmarito 7) Carboneras
8) Yamoriba 8) Puentecillas
9) San Bartolo
10) San José de Causas
11) San Pedro Villa Corona
Temporary occupancy agreements
Right of way agreements
Surface occupied 3,306 ha
Average cost: US$ 79 / ha
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Strategic AreasH
EA
LT
H
ED
UC
AT
ION
DE
VE
LO
PM
EN
T
SO
CIA
L
CO
MM
UN
ITY
LINKING AND COMMITMENT WITH THE
COMMUNITY AND ITS DEVELOPMENT
AC
TIO
NS
INFRASTRUCTURE
HEALTH
EDUCATION
HEALTH AND TRAINING
HEALTH WEEK
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Strategic AreasH
EA
LT
H
ED
UC
AT
ION
DE
VE
LO
PM
EN
T
SO
CIA
L
CO
MM
UN
ITY
LINKING AND COMMITMENT WITH THE
COMMUNITY AND ITS DEVELOPMENT
EDUCATIONAL
INFRASTRUCTURE
EDUCATION AND CULTURE
COMMUNITY TRAINING
Community Company Total Company %
Active students 96 36 132 27%
Graduates 111 25 136 18%
IDEA STATS : Primary and Secondary School
Community Company Total Company %
Active students 84 38 122 31 %
Graduates 26 42 68 62%
CONALEP: Technical Professional
AC
TIO
NS
33
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HE
ALT
H
ED
UC
AT
ION
DE
VE
LO
PM
EN
T
SO
CIA
L
CO
MM
UN
ITY
LINKING AND COMMITMENT WITH THE
COMMUNITY AND ITS DEVELOPMENT
SOCIAL
INFRASTRUCTURE
PRODUCTION PROJECTS
SUSTAINABLE ALTERNATIVE
SPECIAL SUPPORT AND
DONATIONS TO THE COMMUNITY
AC
TIO
NS
:
Government agency Project
Secretaria de Desarrollo SocialGreenhouse, daycaresewing shop, bakery
Secretaria de Medio Amb. y Recursos Nat. Green stoves
Secretaria de Educación Pública Safe school
Fondo Nacional de Apoyo a Empresas Sociales Support to improve facilities
Centro de Integración Juvenil Drug use prevention
Strategic Partnerships
Communities Families benefiting Population
10 700 3,255
Electrical Power Supply
Strategic Areas
34
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PRODUCTION PROJECTS
SUSTAINABLE ALTERNATIVE
Community Development
35
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Recognition
b) Award granted by
Mexican Center for Philanthropy (CEMEFI)
third consecutive year.
a) Communities recognize San Dimas Team support.
36
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Agenda
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Mine
Service Ramp
38
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Mine
Drilling
Blasting
Bolting
Hauling Mucking
39
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Plant’s Flowsheet
40
“EL PERIHUETE” MILL
Flowsheet – 2100 TPD
PREGNANT SOLUTION
34
BALL MILL 12’x14’ NO. 2
Industrial Water
Pregnant Solution
Precipitate
Zinc
Pulp
Tailings
Barren Solution
Return Solution
Dore
Slag
TAILINGS IMPOUNDMENT
1
RETURN
SOLUTION
COARSE ORE BIN CAP. 780 TON
CONVEYOR BELT Nº 1 36’’ W, 49.1’ L
JAW CRUSHER PETTIBONE 20”x
36”
CONVEYOR BELT Nº 2 24” W, 160.6’ L
INTERMEDIATE ORE BIN CAP. 375 TON
VIBRATING SCREEN TRAYLOR 8’X16’
CONVEYOR BELT Nº 3 36” W, 18.5’ L
CONVEYOR BELT Nº 4 36” W, 77.5’ L
CONVEYOR BELT Nº 5 36 ” W, 86.1’ L
SECONDARY CRUSHER HP-300
TERTIARY CRUSHER SYMON´S 7 Ft
CONVEYOR BELT Nº 6 24’’ W, 750.7’ L
FINE ORE BINS Nº 1 & Nº 2 CAP. 1,000 TON
Ea.
BALL MILLS (2) 12’ X 14’ MARCY
PRIMARY THICKENNER Nº 1 48’X12’ (d x h)
PRIMARY THICHENNER Nº 2 (HI-CAP) 55’X10’ (d x h)
AGITATORS (7) 30’X24’ (d x h)
AGITATORS (1) 30´X20’ (d x h)
SUPERAGITATORS (6) 50’X30’ (d x h)
THICKENNER - INTERMEDIATE (2) 30’X10’ (d x h)
THICKENNER - INTERMEDIATE(1) (HI-CAP) 48’X10’ (d x h)
SHEET FILTERS AUTOJET (2)
FILTERS PRESS (4) 60” SQUARE
INDUCTION FURNACE (2) CAP. 700kg
GEHO PUMPS TZPM-180 (4)
DELKOR THICKENNER (1) 50 FT HI-PAC
DELKOR THICKENNER (1) 80 FT HI-PAC
BUFFER TANK (1) 30 x 24 (dxh)
PUTZMEISTER SAND PUMP HSP-25100
EQUIPMENT CHARACTERISTICS
VIBRATING FEEDER
MINE CARS
COARSE ORE BIN
JAW CRUSHER
INTERMEDIATE
ORE BIN
VIBRATING SCREEN
BELT No. 1
SECONDARY FEEDER
DUMP TRUCKS
BELT Nº 7CONE CRUSHER
HP-300BELT Nº 8
BELT Nº 9
CONE CRUSHER
SYMONS 7 FT
GEHO PUMPS
+ + + + +
+ + + + +
+ + + + +
CLARIFIE
RS
+ + + + +
+ + + + +
+ + + + +
BALL MILL 12’x14’ NO1
LIME
FINE ORE BIN No. 2
FINE ORE BIN NO 1
INDUSTRIAL WATER
1 2
3 4 5 6 7 8 9
BARREN Nº 1
SEMIRICH SOLUTION
PRIMARY
THICKENNER 1
RETURN SOLUTION
INTERMEDIATE NO 1
14
INTERMEDIATE Nº3
13
JALES
BARREN Nº 2
SUPERAGITATORS1211
SUPERAGITATORS
10
RECIRCULATOR9
INTERMEDIATE NO 2
THICKENNER DELKOR 1SUPERAGITATOR
1SUPERAGITATOR
2
HOLOFLITE
DRYER
HELICOIDAL
CONVEYOR
JAW CRUSHER
BULLION
PACKING
FLUX MIX
VAULT
FILTERS PRESS
SHEET FILTERS
AUTOJET NºS1 & 2
VACUUM PUMP
PCP PUMPS
DE-OXYGENTION TOWER
INDUCTION
FURNACES
ZINC
POWDER
PRIMARY
THICKENNER 2
AGITATORS
THICKENNER DELKOR 2
1 2
BUFFER TANK
PUTZMEISTER
PUMP
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District Process
Crushing AreaUnderground Mine
Tailings
Impoundment
Grinding Section
Dore
BarsPrecipitation
& SmeltingChemical
Treatment
41
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42
Au production
9 8
11
9 8
10
9
8
11
9
11 11
9
6
9
7
8
7
-
2
4
6
8
10
12
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 1-5
Aug 6-31
Sep Oct Nov Dec
Au koz
2009 2010
Estimated
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43
Ag production
483
357
483
431
384
449 404
363
464
376
482
416 439
289
478
347
420
342
-
100
200
300
400
500
600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 1-5
Aug 6-31
Sep Oct Nov Dec
Au koz
2009 2010
Estimated
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Mine
Mine Cost breakdown (July 2010)
44
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45
60%
40%
Cost
Mexican Pesos
US Dollars
Cost in different currencies
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46
0%
20%
40%
60%
80%
100%
Cost
49%
51%
Variable
Fixed
Operating Cost
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47
Cost
Labor and related
Reactivos
Equipment Leasing
Mine Spare Parts
Explosives
Materials-General
Insurance
Diesel Fuel and gas
Steel Balls
Plant Spare parts
Freights
Drill Steel and bits
Electrical Material
Pumps and Compressor parts
Tires
Electrical Power
Other
49%
6%
5%
4%
4%
3%
3%
3%
2%
2%
2%
1%
1%
1%
1%
1%
10%
Operating Cost Detail
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48
CapEx Detail
1.3
13.57.3
3.9
2010 CapExmU$
Infrastructure
Exploration
Sustaining
Special Projects
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Agenda
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50
Main Projects
Project Total CostkU$
Completion date
Third tailings filter 2,300 Q1 2011
Mine Waste deposit 6,400 Q4 2012
Hydropower 2nd Stage 26,000 E Q4 2013
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Tailings filter no. 3
113 m2 Belt filter
Building for 3 tons conveyor crane
Conveyor belt no.2 re-location
New conveyor belt at 3rd filter discharge
New filtered solution pond
Aux. system to cover failure in belts
Filter 1 and 2 integrated in one building
Reagents area in upper level
Maintenance shop in lower level
Expansion area already considered
Project description
51
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Objective
To have a specific area to deposit the waste rock from themine that complies with international technical andenvironmental regulations and lasts for 20 years.
Herradura Waste Rock Impoundment
52
2010 2011 2012
Engineering
Construction
Construction
kU$ 700 kU$ 3,420 kU$ 2,280
Total Investment: U$ 6,400
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Herradura Waste Rock Deposit
HerraduraWaste Rock
Tayoltita town
Mill
Cupias Tailings Dam
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Las Truchas Hydropower Plant
54
• Capacity 7.3mW
• Provides 76% of San Dimas demand
• Saves kU$400 per month
• Savings of mU$10.8 in 27 months
• Saves 23,500 tonnes of CO2
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• Truchas avg cost :U$0.015/kWh
• Grid avg cost: U$0.11/kWh
• Stage 2
• Second Power house
• Additional 7mW
• In 2011
• Preliminary studies
• Engineering
Las Truchas Hydropower Plant
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Agenda
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Reserves and Resources (as of Dec. 2009)
0
1
2
3
4
Proven and Probable
Inferred Total
0.862
1.612
2.474
Million Gold Ounces
0
100
200
300
400
Proven and
Probable
Inferred Total
61
154215
Million Silver Ounces
Metric Tons mReserves Dec 2009
Au grade (g/t) Ag grade (g/t) Au moz Ag moz
5.54.80 339 0.86 60.9
57
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Reserve Growth (2005 to 2010E)Gold Ounces
Au koz
Reserves Estimated Reserves
+ 3 % + 5 %
58
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Ag koz
+ 3 % + 5 %
Reserve Growth (2005 to 2010E)Silver Ounces
Reserves Estimated Reserves
59
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Geology Setting
35°
Upper volcanic group
Piaxtla intrusive
Arana diorite and
intrusive andesite
Lower volcanic group
Fault
Geologic boundary
Vein
Strike and dip
Mill
Town site
0 1 2 3 4 5 Km
34°35°
10°105°
56’
TAYOLTITACONTRA
ESTACA
76°
33°
35°
35°
25°
CARBONERAS
NORTH
(After Henshaw, 1953; Randalll,1970; Smith and Hall, 1974; Nemeth,1976;
Clarke, 1982; Enriquez,1995).
A’
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San Dimas Geological Evolution
61
PRE-FAULT SHAPE OF
CONTRAESTACA ANTICLINE
0,00 m
-1,000 m
-2,000 m
0,00 m
-1,000 m
-2,000 m
SW NE
0,00 m
-1,000 m
-2,000 m
-3,000 m
0,00 m
-1,000 m
-2,000 m
-3,000 m
5,00 m5,00 m
MEXICAN PLATEAU STAGE
Source: P. C. Henshaw 1953.
2,000 m2,000 m
1,000 m
0,00 m
1,000 m
0,00 m
VERTCAL CROSS SECTION SHOWING
MAJOR STAGES IN THE DEVELOPMENT OF
GEOLOGICSTRUCTURE IN THE SAN DIMAS
MINING DISTRICT
1,000 m
0.00 m
-1,000 m
1,000 m
0.00 m
-1,000 m
ORE HORIZON
PRE-CLIFFS STAGE, AN APPROXIMATION
OF CONDITIONS AT THE TIME OF ORE
DEPOSITATION, THE ORE ZONE IS LIMITED
BETWEEN 0 AND 500 METERS OVER THE
SEA LEVEL
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Regional longitudinal section A – A´
Favorable Horizon
Mineralization – Ore Bodies
Extension of the Favorable Horizon
Potential
SW NE
0 1 2
K I L O M E T E R S
San Antonio
Area
West Block
Central BlockCastellana and
Robertas
Tayoltita Block Arana
Hanging Wall3,000 m.
2,000 m.
1,000 m.
3,000 m.
2,000 m.
1,000 m.
Sinaloa Graben
Block
Source: San Dimas Geology Office
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Exploration Success ThroughoutHigher Grade and New Reserves
Central Block
EL ABRA
VERDOSA
CORONADO
S. ANTONIO
CANDELARIA
CULEBRA
BLENDITA
PATRICIA
5 HERMANOS
EL SOL
TAYOLTITA
Piaxtla River
GUADALUPE
EL CRISTO TUNNEL
ROSARIO SINALOA GRABEN TUNNEL
Santa Ritamine
SAN FRANCISCO
TayoltitaBlock
LA VERDOSARAMP
N
Mill
Tayoltitamine
Central Block mine
San Antonio mine
(Source: San Dimas Geological Office)
San Vicente Area
West Block
Pilarmine
Vein
Fault
Town
Mill
Tunnel done
0 1 2 km
Tunnel Budget 2010
AranaHanging Wall
Ag-Au High Grade Trend
LEGEND
Proposed Tunnel
DDH Ag g/t Au g/t mRO-16-02 132 3.27 1.43RO-20-05 514 4.23 1.27
DDH Ag g/t Au g/t mMAR-9-17 514 8.86 2.45
DDH Ag g/t Au g/t mSOL-9-02 549 10.67 1.81
DDH Ag g/t Au g/t mA-25-217(1) 778 7.9 0.80HW-4G-01B 302 8.7 0.60
Dev Ag g/t Au g/t mRAMP7-129W 1,115 10.30 2.75
DDH Ag g/t Au g/t mTGS-S-22 958 6.81 8.56TGS-S-15 403 8.08 7.52
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2010 Exploration SuccessAlready Replaced 2010 Production
Estimated Proven and Probable Reserves
TonnesGrade (g/t)
Gold SilverGold
(ounces)Silver
(million ounces)
Exploration Drilling 219,302 5.1 348 36,000 2.5
Exploration Drifting 199,948 7.2 439 47,000 2.8
Total New Reserves 419,250 6.1 391 83,000 5.3
2010 exploration budget of $13.5 million
Total 2010 exploration drilling 38,000 metres
28,000 metres completed to date
Already nearly replaced estimated 2010 production:
additional 83,000 ounces of gold & 5.3 ounces of silver
Intercepts well above reserve grade
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65
Exploration
Diamond Drilling 38,000 m U$130/m kU$4,900
Drifting (X section 4x4 m) 2,200 m U$ 1,500/m kU$8,970
Cost per Equivalent Gold Ounce developed: U$ 47.00/oz
Equivalent Gold Ounces developed per meter drilled : 5 Ounces
Exploration
Program and Results 2010
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One Prolific VeinMany More to Explore
Robertita-Nancy Vein
Drilling
35,887m (as at Sep 2010)
Historic Production
k tons Au (koz) Ag (moz)
487 177 11.0
Resources
k tons Au (koz) Ag (moz)
364 114 6.0
Reserves
k tons Au (koz) Ag (moz)
868 243 12.5
Diamond
Drill Holes
Mined Ore
Robertita-Nancy Vein Exploration
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Sinaloa Graben Tunnel: Julieta - Sinaloa Norte vein (San Salvador system)
San Luis Tunnel
Drifting Plan
Drilling Plan 2010
Drifting Plan 2010
Drifting Done
Sinaloa GrabenHigher Grade and Wider Widths
SWNE
1,000 m
Sinaloa Mine (San Antonio Area)
Sinaloa Graben San Salvador ( Central Block )
San Luis Tunnel Elev
Santa Anita Tunnel
0 500 1000
M E T E R SProven Ore
Probable Ore
Probable Ore by Drilling
Explanation
0 m
500 m
0 m
500 m
1,000 m
DDH TGS-S-22Sinaloa Norte InterceptAg g/t Au g/t m958 6.81 8.56m
7-660 LAg g/t Au g/t m189 3.13 1.24
67
DDH TGS S-15Sinaloa Norte intercept
Ag g/t Au g/t m403 8.08 7.52
DDH TGS 7-17Julieta intercept
Ag g/t Au g/t m481 3.73 2.22
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TitleTSX:
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Central Block & Sinaloa Graben Potential
68
Area
Potential as ofDec 2009
Metric Tons Au grade (g/t)
Ag grade (g/t)
Auoz Agoz
Central Block 6,641,899 3.66 362 781,701 77,351,969
Sinaloa Graben 6,772,831 4.89 377 1,065,408 82,103,822
Total 13,414,730 4.28 370 1,847,109 159,455,791
San Dimas District
Potential as ofDec 2009
Metric Tons Au grade (g/t)
Ag grade (g/t)
Auoz Agoz
Total 27,176,630 3.79 357 3,310,548 311,778,657
TSX:P
Sinaloa GrabenGeological Potential as of Dec. 2009With probability of 30%
Metric Ag Au Ounces
Vein Tonnes (g/t) (g/t) oz Ag oz Au
San Isidro 425,250 350 3.50 4,785,310 47,853
San Daniel 567,000 350 3.50 6,380,413 63,804
Rosario-Sta. Lucía 850,500 362 2.91 9,898,756 79,573
Rosario-Sta. Lucía (Randall) 567,000 362 2.91 6,599,170 53,049
Rosario-San Ramón (Randall) 453,600 362 2.91 5,279,336 42,439
Franklin-Calzada 340,200 342 4.39 3,740,745 48,017
Franklin-Calzada (Randall) 340,200 342 4.39 3,740,745 48,017
Marshall-Sta. Gertrudis 340,200 300 3.50 3,281,355 38,282
Gpe-Sinaloa-Zacatera 340,200 342 4.39 3,740,745 48,017
Guadalupe Castellana 340,200 340 3.95 3,718,870 43,205
Guadalupe-Sinaloa-Celia 340,200 321 3.82 3,511,050 41,783
Gpe.-Santa Eulalia-Soledad 340,200 260 3.80 2,843,841 41,564
Santa Marcia-Pilar-Marinas 394,081 395 7.57 5,004,729 95,913
S.Ant.-SNiño-Roberta 567,000 513 10.22 9,351,863 186,308
S.Ant.-SNiño-Robertita 567,000 561 10.29 10,226,891 187,584
TOTAL 6,772,831 377 4.89 82,103,822 1,065,408
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San Dimas District map
70
West Block
EL ABRA
VERDOSA
CORONADO
S. ANTONIO
CANDELARIA
CULEBRA
BLENDITA
PATRICIA
5 HERMANOS
EL SOL
TAYOLTITA
Piaxtla River
EL CRISTO TUNNEL
ROSARIO SINALOA GRABEN TUNNEL
Santa Ritamine
SAN FRANCISCO
TayoltitaBlock
LA VERDOSARAMP
N
Mill
San Antonio mine
(Source: San Dimas Geological Office
Vein
Fault
Town
Mill
Tunnel done
Explanation
0 1 2 km
Arana H Wall Project
D. Drilling ProcessSan Vicente
Area
GUADALUPE
Pilarmine
TSX:P
Sinaloa Graben Block Reserves & Potential
Category
Reserves as Aug 2010
Metric Tons Au grade (g/t)
Ag grade (g/t)
True Width (m)
Au oz Ag oz
DDH TGS S-22 57,777 6.81 958 8.56 9,840 1,034,319
DDH TGS S-15 50,768 8.08 403 7.52 13,192 657,201
DDH TGS S-07 15,087 4.17 191 2.24 2,022 92,661
DDH TGS 7-17 14,992 3.73 481 2.22 1,797 231,663
7-660 Level (2P) 4,714 3.13 189 1.24 474 28,596
Total 143,338 5.93 444 27,325 2,044,440
Category
Potential as of Dec 2009
Metric Tons Au grade (g/t)
Ag grade (g/t)
True Width (m)
Au oz Ag oz
Total 6,772,831 4.89 377 1,065,408 82,103,822
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TitleTSX:
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Sinaloa Graben projectDDH TGS S-22
72
DDH TGS S-22Sinaloa Norte Intercept
Ag g/t Au g/t m958 6.81 8.56
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TitleTSX:
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Arana Hanging Wall Project
Systematic Diamond Drilling lines
73
DDH HW-4G-01-B
Done 697m
DDH HW-2B-01
Done 710m
DDH HW-2B-02
Done 646m
DDH Ag g/t Au g/t m
GUS S-10 780 14.9 0.50
GUS S-06 438 4.2 0.95
SRC-02 401 11.3 0.43
DDH Ag g/t Au g/t m
SRC-02 401 11.3 0.43
DDH Ag g/t Au g/t m
A-22-108 380 3.5 1.10
A-22-109 202 2.5 1.10
A-25-201 130 1.9 2.00
A-25-206 402 3.5 0.35
A-22-212 117 1.5 1.00
A-25-196 107 1.4 2.00
DDH Intercepts
Drilling process
Drilling proposed
E x p l a n a t i o n
DDH Ag g/t Au g/t m
HW-4G-01A 302 8.7 0.6
HW-4G-01A 81 1.5 1.0
N
TR
EV
IÑO
TU
NN
EL
CANDELARIA
CULEBRA
BLENDITA
5 HERMANOS
EL SOL
SAN FRANCISCO
0 1 2 km
Tayoltitamine
Mill
Santa Ritamine
DDH HW-3C-01
Process 366m
DDH HW-6F-01
Process 183m
CEDRAL
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Arana Hanging Wall ProjectSystematic D. Drilling line 2-2´
DDH HW-2B-02
Process 643m
Drilling plan
DDH HW-2B-01
Done 710m
DDH HW-2B-02
Process 643m
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M E T E R S
0 250 500 Source: San Dimas Geology Office
Andesite
24 L
17
L
12 Level
16 Level
18 Level
20 Level
NWSE
1500 m
1000 m
L R
500 m
13,0
00
E
TREVIÑO TUNNEL
Socavon
Rhyolite
Buelna
Andesite
Portal
Rhyolite
Productive
AndesiteCamichi
n
Rhyolite
Las Palmas
Formation
Intrusive
Andesite
Arana
Diorite
SAN EDUARDO TUNNEL25 LEVEL
Piaxtla
Intrusive
Arana Hanging Wall ProjectRegional cross section
Sta. Rita
Mine
Arana Hanging Wall
Project
Tayoltita Mine
Resources
380 koz Au 38 moz Ag
Historic Production 7.9 mt
2.0 moz Au & 136 moz Ag
1500 m
1000 m
Historic Production 1.2 mt
119 koz Au & 17 moz Ag
ARANA
DIORITE
ARANA
DIORITE
ARANA
DIORITE
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Tayoltita Mine Candelaria Vein & NE vein system
WE
Historic Production 1.5 mt0.25 moz Au & 28.0 moz Ag
500 m
1000 m
LEVEL 4
LEVEL 6
LEVEL 10LEVEL 12
LEVEL 17
Aurora Area
(Low Angle Vns)
Favourable
horizon
San Luis Tunnel Elev
0 500
M E T E R S
Level 28
Piaxtla Intrusive
Socavon
Rhyolite
Productive
Andesite Camichin
Formation
(Source: San Dimas Geological Office)
Level 25
A-22-108
A-25-201
DDH Ag g/t Au g/t mA-22-108 380 3.5 1.10A-22-109 202 2.5 1.10A-25-201 130 1.9 2.00A-25-206 402 3.5 0.35
A-22-212 117 1.5 1.00
A-25-196 107 1.4 2.00
ARANA
DIORITE
Surface Drilling
650-750m
A-22-109
Arana Hanging Wall
320 g/t Ag_2.5 g/t Au @1.00m(18m Length)
A-22-212A-25-196
A-25-206
DDH A-25-217(1)Arana Hanging WallAg (g/t) Au (g/t) m778 7.9 0.8
DDH HW-4G-01BArana Hanging WallAg (g/t) Au (g/t) m302 8.7 0.6
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San Dimas District potential areas
Central Block
EL ABRA
VERDOSA
CORONADO
S. ANTONIO
CANDELARIA
CULEBRA
BLENDITA
PATRICIA
5 HERMANOS
EL SOL
TAYOLTITA
Piaxtla River
GUADALUPE
EL CRISTO TUNNEL
ROSARIO SINALOA GRABEN TUNNEL
Santa Ritamine
SAN FRANCISCO
N
Mill
TayoltitamineCentral
Block mine
San Antonio mine
(Source: San Dimas Geological Office
Vein
Fault
Town
Mill
Tunnel done
Explanation
0 1 2 km
Arana H Wall Project D. Drilling Process
Roberta & Robertita– Nancy Vein System
Tunnel Budget 2010
Pilarmine
DDH TGS S-15Sinaloa Norte vn
Ag Au m403 8.08 7.52
DDH TGS-S-07Robertita Vn
Ag Au m191 4.17 2.24
DDH TGS-7-17Julieta Vein
Ag Au m481 3.73 2.22
A’
DDH TGS-S-22Sinaloa Norte vn
Ag Au m958 6.81 8.56m
Tinajas Area Resource
43 koz Au
6.6 moz Ag
Tahonitas Area Resource
43 koz Au
5.3 moz Ag
Sn Vicente Area
Res+Pot
360 koz Au
27 moz Ag
West Block Area
Res+Pot
0.7moz Au
67 moz Ag
Cristo AreaRec+Pot
400 koz Au
42 moz Ag
Arana HW Resource
380 koz Au
38 moz Ag
Sta RitaPotential
400 koz Au
46 moz Ag
Proposed Tunnel
77
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San Dimas Mine