Dear shareholder,

Thank you for your inquiry. The majority of the mill is complete, but through test runs it was discovered that the ball mill in place was not providing the grind size required for adequate recovery of metal from the tailings. The grind size could not be predicted without live testing which was done as soon as possible.

A larger ball mill has been purchased and grind recovery tests are being re done at SGS laboratory in Durango with the specific grade and feed size actually encountered during test run, this ball mill is presently being shipped and reconstructed at the site.

The Bulldozer building the new tailings facility has had two mechanical breakdowns and Christmas break caused an anticipated delay.

The bulldozer has also been assisting in further sampling of the existing tailings pond and has not been 100% dedicated to construction of the new tailings pond although work on the new pond is well underway.

Regards,

AGORACOM Investor Relations