" In addition, the Company is extremely pleased to announce that initial trench sampling suggest potential for disseminated gold."

"Upon receipt of preliminary geophysical sections generated in the field, a small trench-sampling program was completed across a geophysical anomaly corresponding to the “structural corridor” in the vicinity of the A4 Vein in Zona Central. Twenty-two 3-m-long bulk samples weighing about 30 kg each were collected from 3 trenches testing a 100-m strike length of the lowresistivity geophysical response. The trenches were aligned perpendicular to the long axis of one distinct low-resistivity anomaly and returned 50 to 1130 ppb gold across an alteration zone up to 45 meters wide, including economically significant assays of 553 ppb gold across 9 meters (3 samples). The zone tested by trenching is 100 meters long, and further work is required to evaluate the much longer strike length indicated by geophysical responses."

"Geochemically anomalous gold (50 to 1130 ppb, average 249 ppb) was detected in all samples of the alteration zone corresponding to the geophysical anomaly. Assays of potential economic significance (> 200 ppb gold) were obtained from all three trenches, including 9 meters of 553 ppb gold and 6 meters of 360 ppb gold in the longest trench, which spans 45 meters of alteration. In addition, laboratory tests indicate that 78% of the gold can be extracted by cyanide leach."

"The grades and initial recovery results suggest that with further work to expand the Tesoro disseminated zone, it might be feasible to establish a heap-leach extraction operation to complement production from the high grade veins."

The northern part of the A7 swarm is within a zone of propylitic alteration in

brecciated and sheared diorite. Fourty-two trench samples of the altered diorite

with an average sample length of 3.0 meters returned an average grade of 250 ppb

gold within a north-northwesterly trending zone measuring 200 m by 50 m. The

highest-grade sample assayed 2.26 g/t gold across 3.0 m. Another chip sample

assayed 0.94 g/t gold across 7.5 m. This gold-anomalous alteration zone may be

of economic interest at a higher gold price.

For

example, at the northernmost end of the swarm, sample 253401 assayed 39.6 ppm

gold across 1.1 meters. Immediately east of this, sample 253402 gave 1.02 ppm

gold across 3.4 meters. Further to the south-southeast, trench sample 253403

assayed 2.26 ppm gold across 0.9 meters. About 150 meters to the southsoutheast

of this, sample 562669, taken of altered diorite between veins, assayed

7.48 ppm gold across 2.0 meters. In view of these results, additional sampling of

wallrocks immediately adjacent to and in between veins of the S2 swarm is

warranted.

The northernmost part of the S1 vein is exposed in a small window of diorite poking

through surrounding volcanics. Within this window, an unusual style of quartz

veining was observed in what was initially interpreted as subcrop. Veining occurs

as knotty “blowouts” and micro stockworks of milky quartz in muscovite-bearing

diorite. Grabs of this material across 27m assayed 1.75 ppm gold in sample

253259. This assay was confirmed by a check sample of the rejects. However, the

outcrop source of this material was not encountered in the three deep trenches that

were excavated at the site of sample 253259. It can only be concluded that the

interpreted “subcrop” is actually transported colluvium, and that the source outcrop

may be buried beneath the volcanics.

"

Companies such as

Buenaventura and the Hoschield Group made their initial fortunes mining narrow

auriferous quartz veins using the skills of this workforce. Lately these companies

have been focusing on disseminated deposits such as Yanacocha, but with

increasing gold prices they are beginning to return to their roots."

"

"It’s not possible to be anywhere in the Nazca-Ocoña Gold Belt without being within

±50 km of a gold mill (usually with capacity of 50-200 tpd). The author has seen

four of these (Laytaruma, Belen, Colibri, Dynacor), but there are a score of others

in the district. Most of these mills are not associated with a particular mine; rather

they grubstake groups of informales; providing dynamite, compressors, water,

transportation, etc. in exchange for the right to mill the gold-mineralized material.

Salient to this report is the fact that there is no dearth of gold mills in the Nazca-

Ocoña Gold Belt. And custom-milling prices are quite reasonable."

This next excerpt proclaims the rich C-2 vein, a vein that is very little mentioned, but has also been mined to an extent. Very important bulk grades returned from this vein .

"The bulk sample material was extracted from the C2 Vein. The bulk samples were processed at the milling facility of Dynacor Gold Mines Inc. located immediately north of the Property. To date, a total of 32.3 tons of bulk sample material averaging 3.14 oz/t gold has been extracted from ongoing underground exploration development at the C2 Vein at the Tesoro Property including 4.1 tons averaging 5.84 oz/t gold and 13 tons averaging 2.02 oz/t gold. The Company is pursuing a high grade shoot on the C2 Vein to investigate its size, continuity and geometry."