Recent Developments

The mining mandate issued by the National Constituent Assembly, effective April 18, 2008, ordered a halt to mining activities on all concessions country-wide. This includes all drilling, exploration and development work. We have scaled back our operations and work force on all our properties in Ecuador. We will carry out maintenance activities and control of our properties until the status of concessions is clarified and the new proposed mining law is enacted and put into effect.

As a result of this obligatory reduction of activities, we have now terminated 90 per cent of our work force in Ecuador. According to the mining mandate, mining will remain on hold for 180 days from the effective date of the mandate, when the government proposes to issue a new mining law.

We look forward to collaborating with the government in helping formulate the new law with the objective of creating a law allowing for the development of mining in Ecuador with favourable terms for mining companies, communities, and the country as a whole.

Additionally, we anticipate meeting with the authorities of Ecuador on a continuing basis so to have more information and influence on how the mandate will affect our mining operations and ultimately you, our shareholders. We will vigorously participate in the development of the new mining law.

Our exploration programs at Curipamba were beginning to show positive results and we were eagerly looking forward to continued developments with positive news. The recent VMS discovery at El Domo at Las Naves Central is a high-priority follow-up for the company. Four drill holes have been reported to date from this new discovery all intersecting massive sulphides with the body being expanded to over 300 metres and remaining open in all directions. The potential is significant as well as the grades reported to date. The project is not in an area affected by 'protected area status,' nor does this target exemplify an open-pit mining scenario, all considerations of the mining mandate. The project's concessions are in good standing and all environmental permits were accepted by the current government. When clarification about the mining mandate is received, we will focus all our efforts back to this area with the goal of delineating this new discovery.

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