Following is a summary of revenues and costs:

During 2009, the Company successfully completed the acquisition and re-commissioning of a 500 tonnesper-

day gold and silver recovery plant (the "Plant") located adjacent to its properties near the town of

Velardeña. The Company also owns a 320 tonnes-per-day flotation plant located near the town of

Velardeña. During the three month period ended September 30, 2010 the Company’s focus was primarily

on the operation of its plants and development of its mines in the oxide resource. During the period, the

Company incurred cash development costs on the Velardeña property totalling $3,886,955. It also

increased its related supplies and spare parts inventory by $107,103. These costs were offset by revenues

from the sale of doré bars and concentrates totalling $5,293,139 bringing the net positive cash flow to

$1,299,081. Non-cash development costs included depreciation of plant and equipment in the amount of

$570,469 and stock based compensation of $32,660. Mining and milling activities are presented later in

this report under the caption “Mining and Milling Results”. The Company plans to continue its focus on the

operation of its plants, and on the development of its mines.

During the third quarter, the Company signed a sales contract for a portion of its existing unprocessed gold

pyrite material-in-process inventory. Shipments under the contract began during the quarter. The

Company’s policy is to write off the value of such inventory to zero until such time as its salability is proven.

In relation to the pyrite concentrate which was shipped in the period under the sales contract, the Company

recorded a reversal of the costs previously written off under the policy amounting to $1,049,111. This

reversal has increased deferred mining costs.

Also, we are apparently exploring another property:

Nazas Property