the company now expects to produce only 1.0-1.5 million oz. of silver this year, down from prior guidance of 3 million, which was down from 6 million. but this is a start up issue related to the processing of jig tails. it is important to remember that tailings are waste. they were left there by the previous operator, and are in no way indicative of the engineering of the project. the company used the tailings first to test the operation so as not to destroy any valuable ore if there were problems.

they are done with the tailings, and are processing oxide ores, and are starting to see some sulfides from the pit, which is what the mill was designed for. the sulfide ores have been tested and results agree with the feasibility study. by the end of the 1st quarter 2010 they will be done with the oxides and transitional ore, and will be processing the sulfides.

they produced a small amount of tin, and will continue to ramp up production through the fist half of next year. they are stockpiling zinc, and will continue to do so throughout 2010, but the good news is that they are finding a lot more zinc than expected.

the san luis feasibility study is under review by management, but we probably wont see the results for 2-3 months, and the environmental impact study should be completed in the first half of next year.

at snowfield we can expect an updated resource estimate later this quarter or early next quarter. drilling at snowfield was infill to move inferred resources to measured and indicated, while bluejack was exploratory, and they want to explore the 6 kilometers between the two projects.

the construction work at pirquitas is complete, and the company does not expect to need to raise any capital to maintain the project or its current exploration activities.

Update on Pirquitas Mine

The company began open pit pre-stripping in July 2008 as well as developing mill and support teams in preparation for continuous operations. This mining activity exposed oxide and transitional ore during the first quarter of 2009 and the ore continued to be stockpiled while the historical jig tailings were fed through the silver circuit during the third quarter. A total of 13.6 million tonnes of waste and 499,600 tonnes of oxide and transitional ore have been mined as at September 30, 2009.

The silver circuit operated during the third quarter, and in September operating time averaged 93% over 22 consecutive days prior to a scheduled four-day shutdown as the plant proved its mechanical and electrical reliability. The plant feed to the end of the quarter was comprised of 139,000 tonnes of historical jig tailings ranging in grade from 90 grams/tonne to 465 grams/tonne for an average grade of 166 grams/tonne.

As envisioned in the feasibility study, the historical jig tailings were to provide material to prove the operation of the facility.The metallurgical performance from the jig tailings has been disappointing as a result of the variation in head grade and oxidation precipitates within the jig tailings. This has resulted in inconsistent silver recovery ranging from 30% to 60% and concentrate grades ranging from 900 grams of silver/tonne to in excess of 5 kilograms of silver/tonne. The company shipped 56,388 ounces of silver in concentrates during the third quarter.

Pirquitas is now feeding oxide ore from the open pit into the mill and expects to achieve silver recoveries of approximately 30% from this mill feed. The mill will continue to operate on oxide and transitional ore until the first quarter of 2010 when sulphide ore from the open pit will be introduced as mill feed.

As a consequence, Pirquitas is now expected to produce approximately 1 to 1.5 million ounces of silver in 2009 depending on the consistency of the oxide and transitional ore silver recoveries. Test work on the open pit sulphide ore has confirmed the feasibility study results, and the company plans to provide estimated silver production for 2010 later in the year as production schedules are finalized for the coming year.

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