Mineralization in the vicinity of the Property occurs as LS epithermal quartz veins, breccias and stockwork systems accompanying normal-sinistral faults striking 330° to 340° and conjugate dextral faults. Most of the known mineralization at the Property is hosted by the Jurassic Bajo Pobre and Chon Aike Formations.

Regional exploration has identified numerous vein targets, of which five, Huevos Verdes, Frea, Kospi, Ayelén and Odin have been extensively explored by surface diamond drilling and subsequently developed by underground mining.

After reviewing the various drilling programs, Colquhoun et al. (2007) concluded the Frea and Kospi Veins were the most significant zones in terms of grade and tonnage. The mineralized Frea has been traced over a 1,200 m strike length and to depths of up to 250 m, with an average width of up to 2.5 m (Colquhoun et al. 2007, Minera Andes News Release, September 2, 2008). The Kospi Vein has been traced for over 1,300 m strike length (Mach and Elliott 2009) and to depths of up to 230 m, with an average width of around 3.0 m.

Huevos Verdes
The Huevos Verdes vein system is one of the most important targets on the Property consisting of three to four discontinuous zones: Huevos Verdes Norte (“HVN”), Huevos Verdes Sur (“HVS”), Huevos Verdes Centro (“HVC”) and Huevos Verdes Ramal (“HVR”). The system is comprised of an array of sub-parallel veins striking 325° with dips ranging between 45° and 75° to the northeast ........

San José is currently a ramp access underground mining operation. The San José veins are accessed from three main portals: The Tehuelche Portal, the Kospi Portal and the Güer Aike Portal. Initially two small inclined shafts were developed to provide access to the HVS and HVN veins. These shafts are now used to supplement the primary ventilation circuit. Main ramps are generally 4.0 m wide by 4.3 m high at a 12 % gradient on the straight sections and 10.5 % on the curves. A smaller profile is used in areas where truck access is not required. The main ramps are located about 50 m from the veins, depending on the dip of the ore. Cross-cuts to the ramp are centrally positioned on the vein and usually have an ore pass and a waste backfill pass.

The average mining width across all of the vein systems is approximately 2m. The dip of the veins varies from 55º to 70º. Mechanized Cut and Fill mining using scoop trams, and jacklegs (pneumatic rock drills) or single-boom jumbos, respectively, is utilized at San José. The majority of production ore is derived from the “uphole retreat” mining technique where a panel of approximately 50m in length is drilled with upholes and retreated along strike. Horizontal “breasting” is only used on the initial lift in each stope. A “resue” mining technique is employed in narrow high grade areas. Stoping areas are separated by 3 m high sill pillars. A timber floor mat, for narrow stopes, or cemented backfill, for wider stopes, is placed on th ........

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