Reserves and Resources*

1 The mineral reserves and resources for the Las Cristinas Project are based on estimates prepared by MDA (Steve Ristorcelli, P. Geo. and Thomas Dyer, P. Eng. of MDA were the Qualified Persons) in the 2007 Technical Report Update. The mineral reserves estimated by MDA are based on a US$550 per ounce gold price and cut-off grades ranging from 0.33 grams of gold per tonne to 0.57grams of gold per tonne depending on the mineral type. The mineral resources estimated by MDA are based on a cut-off grade of 0.5 grams of gold per tonne.
2 The mineral resource with respect to the La Victoria operation was estimated by Dr. Richard Spencer, P. Geo, formerly VP
3 The inferred resources are based on a cut-off grade of 0.5 grams of gold per tonne.

The Company employs industry standards and methods for estimating mineral reserves and resources. However, reported mineral reserves and resources are only estimates and no assurance can be given that the indicated quantities of gold will be produced. Mineral reserve and resource estimates may require revision (either up or down) based upon actual production experience. Market fluctuations in the price of metals, as well as increased production costs or reduced recovery rates, may render certain mineral reserves and resources uneconomic and may ultimately result in a restatement of reserves and/or resources. Moreover, short-term operating factors relating to the mineral reserves and resources, such as the need for sequential development of ore bodies and the processing of new or different ore grades, may adversely affect the Company’s profitability in any particular accounting period.

• The Canadian Institute of Mining and Metallurgy defines three resource categories (Measured, Indicated and inferred) and two categories of reserve (Proven and Probable). Measured resources have the highest level of predictive confidence, and Inferred the lowest level of confidence. Unlink proven and probable reserves, resources, of all categories, do not have demonstrated economic viability. A reserve is that portion of a Measured or Indicated resource that has been demonstrated to be economically extractable.
• For the United States reporting purposes, under the Securities and Exchange Comission, (the "SEC") Industry Guide 7 applies different standards in order to classify mineralization as a reserve. The SEC permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and lgally extract or produce. A full feaslbility study is required in order to classify mineralization as a reserve. In addition, the primary environmental analysis document is required to be submitted to the government authorities for reserve classification. We use certain terms in this website, such as,"measured resources" and "indicated resources". We advise US investors that while those terms are recognized and required by Canadian regulations, the US SEC does not recognize them. US investors are cautioned not to assume that any part or all of mineral resources in these categories will ever be converted into reserves. US investors are urged to consider closely the disclosure in our Annual Report on form 40-F.

In calculating mineral reserves, cutoff grades are established using the Company’s long-term gold price, the average metallurgical recovery rates and estimated production costs over the life of the related operation.

A Qualified Person, as defined in National Instrument 43-101, is an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation, mineral project assessment, or any combination of these, has experience relevant to the subject matter of the mineral project and the technical report, and is a member in good standing of a professional association.