The Don Pancho Project is in a prolific polymetallic mineral belt in central Peru with several operating mines in the area including the world class Iscaycruz and Yauliyacu polymetallic mines operated by Glencore Xstrata Plc located 50 kilometers to the north-northwest. Additionally, Travail Mining Corporation’s Santander silver-lead-zinc mine is located 9 kilometers to the east and Buenaventura’s silver-lead-zinc Uchucchacua mine is located 63 kilometers to the north, (10 million ounces of silver produced in 2011). The Infrastructure is considered excellent with ready access and a power line crosses the property enroute to the Santander mine.

Previous exploration on the property included an extensive surface mapping and sampling program, geophysics, and a 2,021-metre diamond drilling program of 6 holes conducted by a private Peruvian company. Mapping and sampling show an extensive NNW-SSE trending breccia zone called the Yanapallaca Zone measures over 800 metres in length and 150 to 200 metres in width. There are numerous old workings and underground drifts located within this zone. The 2014 diamond drilling program by the previous owner shows large intersections of polymetallic mineralization, including 40 metres of 0.88% Zn, 0.40% Pb and 7.7 g/t Ag, 22.65 metres of 1.00% Zn, 0.26% Pb and 6.85 g/t Ag and 1.15 metres of 4.38% Zn, 3.25% Pb and 61.1 g/t Ag. Surface sampling from the previous operator has revealed very interesting values, including 13.9 metres of 28.1g/t Ag, 2.43% Pb, and 2.42% Zn, 2.8 metres of 28.1g/t Ag, 1.06% Pb, and 9.07% Zn and 13 metres of 8.38g/t Ag, 0.39% Pb, and 2.22% Zn. Sampling of underground workings in Yanapallaca area before the previous operators returned 106 g/t Ag, 3.26% Pb and 17.56% Zn over 2.00 metres. The true width of the mineralization both on the surface and in the underground workings cannot yet be determined as the controls of the mineralization are yet to be fully understood.

There is a new worldwide interest in the exploration for battery metals for electric vehicles. Manganese is one of the metals needed for these batteries. Besides the extensive Pb-Zn-Ag mineralization at Don Pancho, the Yapallaca Zone contains a significant amount of manganese with surface samples exceeding 40% Mn. Previous channel sampling in an underground adit in the Yapallaca zone showed three intervals returning 31 metres of 9% Mn, 26 metres of 10.88% Mn and 17 metres 10% Mn. All three intervals have combined low grade Pb and Zn ranging from 0.60% and 1.32%.

During 2022 the Company negotiated access agreements with the local community to sample and collect enough material to conduct preliminary metallurgical work. The field work for this work was completed in October 2022. The fieldwork revealed that manganese at Don Pancho is associated with elevated lead- zinc-silver mineralization. Twenty-six surface samples were collected throughout the Yanapallaca zone. Twenty-four of these samples were further assayed because of Mn overlimits greater than 10 per cent and averaged 0.81 ounce Ag/MT, 0.66 per cent Pb,1.89 per cent Zn and 19.23 per cent Mn. The range of the Mn from these assays was from 10.70 per cent Mn to 31.17 per cent Mn. Preliminary metallurgical work showed that it is possible to produce enriched Mn concentrates. Bulk material has been collected being stored in Lima and will be able to be used for the detailed metallurgical work required regarding the extraction of the Manganese at commercial quantities.