The week was characterized by the completion of three (3) holes (S015, S016, S017) and a few drill moves. We managed to maintain over a kilometer of core production (1,111m). Drilling was campaigned at four locations, now all at South Zone - S015, S016, S017 and S018.

As the 2021-2022 drilling program moves into its final phase, we have mobilized a Major Drilling owned drill rig that is capable of drilling very shallow dipping to flat holes, to the south-west side of the Gradeshell where we do not have good access for angled holes.  We are targeting the expansion of the shallow seated mineralized zone on the hanging wall in this area. The rig has become established since December 4th at the first drill site, and has been anchored to the roadside highwall: the program has just collared hole N044.

Figure 1

Above: Collaring Diamond Drill Hole N044, to be drilled through a southern portion of the North Zone: the newly-mobilized drill is capable of drilling holes at flat or inclined angles, in contrast with the rest of the drill fleet which are capable of holes that are inclined to -45o to vertical.

The balance of the drill fleet is busy drilling the South Zone drill program, which will continue through to the Christmas break shutdown.

Some 531 samples (including duplicates and standards) were shipped from Ranchito to the assay lab during the week, including samples from drill holes S014, S015 and S016.

Geological modeling of the North Zone is now migrating to the ratification stage with the involvement and increasing oversight of external and independent consultants.  Some re-logging of historical and early drill holes is continuing so as to ensure a fit-for-purpose model of North Zone is prepared on schedule.

Figure 2

Above: Loading laboratory assay samples at Ranchito using our nimble Bobcat skid steer – the larger forklift was demobilized with the drill and truck/other equipment fleet provided previously by Minera Gavilan.

Metallurgical work continues and is building off initial comminution drop-weight tests and preliminary rougher kinetic tests to establish indicative flotation responses have been completed.



Figure 3

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These historical resource estimate models are based upon historical resource estimates prepared by John Thornton in 2011. While, in the opinion of Dane A. Bridge, author of the revised NI 43-101 standard technical report, Geology, Mineralization and Exploration of the Santo Tomas Cu-(Mo-Au-Ag) Porphyry Deposit, Sinaloa, Mexico dated April 21, 2020 (the “Report”), reliable estimation practices were used, in order to upgrade or verify the historical estimations, resampling and assay of historical drill samples, twinning of historical drill holes, and a new program of regularly spaced drilling is required. No qualified person has undertaken sufficient work to classify the current mineral resources or mineral reserves upon which these models are based and the Company is not treating the estimates as current estimates of the mineral resources. The Company gives no assurance that either these models or the historical resource estimates upon which they are based are accurate, and does not undertake any obligation to update the models or to release publicly any update or revisions of the resource estimates except as required by applicable securities law. The reader is cautioned not to rely upon these models or the historical resource estimates upon which they are based.

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