The Nieves project is a low sulfidation epithermal silver deposit hosted in three east-northeast trending, steeply south dipping vein systems with alteration and mineralization bearing strong similarities to the Fresnillo silver deposit.

The most economically significant mineralization occurs in anastomosing carbonate-quartzsulphide veins that have been defined over a total strike length of 3.8 kilometers by 54,814 meters of drilling in 187 holes. The system develops to a maximum true width of in excess of 200 meters and has a proven down dip extent of approximately 525 meters.

The carbonate-quartz-sulphide veins contain the best grades of silver, gold, lead and zinc. This vein type consists of calcite that is partially to totally replaced by grey to white, chalcedonic, fine-grained quartz veins and veinlets. Individual veins vary in size from a few centimetres in width with a few up to 1.5 m wide with up to 50% sulphide minerals. Sulphides include pyrite, stibnite, sphalerite, galena, chalcopyrite and the silver sulphosalts: proustite, pyrargyrite, jamesonite and scarce tetrahedrite.

The central and most important of the three vein systems is the Concordia-San Gregorio-Dolores system which includes both the La Quinta and Gregorio North zones. Mineralization along the Concordia-San Gregorio-Dolores vein has a known total strike length of 1,300 meters and a true width up to 100 meters. The mineralized zone in the Gregorio North area is approximately 1,200 meters long and up to 200 meters wide. The La Quinta and Gregorio North zones are the subject of the resource estimate in this report. Only the La Quinta zone has a designed open pit for the economic assessment.

The attitude and size of the mineralized zones along the Santa Rita zone to the south and California vein system to the north are not well understood at this stage of exploration. Drilling along the Santa Rita system suggests that the mineralized zone is at least 750 meters long and may be up to 340 meters wide. The mineralized zone along the California vein system is at least 550 meters long and may be up to 130 meters wide.

The Nieves silver deposit contains mineralization at or near the surface and is distributed in continuous veins that is ideal for open pit mining methods. The method of material transport evaluated for this study is open pit mining using two16.5-m3 front end shovels as the main loading units with a 12.2-m3 front end loader as a backup loading unit. The mineralized material will be loaded into 90-tonne haul trucks and transported to the primary jaw crusher, which will be set up at the toe of the waste dump. The plan assumes that the project operator owns, operates, and maintains all equipment.

Mineralized material production is planned at a nominal rate of 10,000 tonnes per day (tpd), equivalent to 3.65 million tonnes per annum with a 10 year mine life. Mining is planned on a 7 day per week schedule, with two 12 hour shifts per day. Other mining schedules may prove to be more effective, but are not expected to significantly change project economics. Peak mineralized material and waste production is estimated at 94,000 tpd during the first year and then slowing to an average rate of 62,000 tpd. The average life of mine stripping ratio is 5.36:1 waste-to-mineralized material, using a 21.3 g/t AgEq cutoff. Lower grade material is stockpiled using 30.5 g/t AgEq cutoff in order to improve project economics which results in a maximum low grade stockpile of 2.8 million tonnes. Other cutoff scenarios using 19.4, 21.3, 23.7, 26.7 and 30.5 g/t were evaluated during the study but the chosen scenario resulted in the best IRR and NPV.

The design basis for the processing facility is 10,000 dry metric tons per day (DTPD) or 3,650,000 dry metric tons per year (DTPY) on an operating basis of 91% availability.

Design mineralized material grade to the process plant is estimated to average 32.0 gpt of silver and 0.04 gpt gold. The process plant design allows for sustained metal recovery of silver and gold.

Run of Mine (ROM) mineralized material will be trucked from the mine to the primary crusher where it will be dumped directly into the crusher dump pocket that feeds a jaw crusher. If required, ROM mineralized material may be dumped in a stockpile ahead of the primary crusher. A front end loader will be used to feed the crusher if needed. The crusher feed pocket will be designed to contain two truckloads of material.

ROM mineralized material will discharge from the crusher dump hopper onto a vibrating grizzly feeder. The feeder will discharge oversize mineralized material directly into a ........