Name: Ollachea mine.

Location: The Ollachea mine project is located in southern Peru, about 250 km north of Lake Titicaca, on the eastern escarpment of the Andes Mountains.

Controlling Company: Minera IRL.

Brief History: Ollachea is a historical mining district, with evidence of small-scale mining dating back to the colonial period. Minera IRL, through its 100% owned subsidiary, Minera Kuri Kullu, acquired the property from Rio Tinto through a competitive tender in 2006. A comprehensive surface rights agreement was signed with the local community in late 2007 and exploration started in early 2008.

A significant gold discovery was announced in early 2009 and a scoping study was completed on the project later that same year. The study indicated the potential for a viable underground mine, with an average production rate of 117 000 oz/y at a cash operating cost of less than $400/oz. The project progressed to prefeasibility study (PFS) stage in early 2010.

The PFS concluded that a fully integrated underground mine and conventional treatment plant, with a capacity of 1.1-million tonnes a year, would produce a gold output of 117 000 oz/y for a total gold output of more than one-million ounces during a nine-year mine life. This conclusion came on the back of an upgraded Minapampa resource that increased the gold inventory in the indicated category to 1.4-million ounces with an additional 300 000 oz remaining in the inferred category.

A feasibility study (FS) was completed and announced to the market by the end of 2012. The FS provides a more detailed confirmation of an economically robust project with production of more than 920 000 oz. Capital costs have been estimated at $177.5-million and an average cash operating cost of $499/oz.

Brief Description: Ollachea consists of 12 concessions, covering 8 698.98 ha.

Mining Method: Long hole open stoping with paste fill.

Products: Gold.

Major Infrastructure and Equipment: The tailings storage facility has been designed for a capacity of 5.85-million tonnes.

The mine will require a standard, medium-scale, underground mobile production fleet of jumbos, load haul dumpers, trucks and drills.

Underground infrastructure will include underground power, a compressor, potable and service water, a gravity-fed dewatering system, an underground lunch room, a refuelling and service bay, as well as an explosives magazine.

Geology/Mineralisation: The Ollachea gold deposit is an orogenic or mesothermal-style gold deposit, hosted in Devonian-aged carbonaceous metasediments on the eastern flank of the Cordillera Oriental of the Peruvian Andes. Gold mineralisation is contained in seven discrete west-striking, north-dipping structures below the Minapampa zone on the north side of the Oscco Cachi river, a narrow creek, and about 1 000 m west of the town of Ollachea.

Gold mineralisation occurs within a shear zone in carbonaceous sediments cut by seven discrete, continuous packages of quartz-carbonate sulphide veins and veinlets. Metasediments in the shear zone are characterised by well-developed slatey cleavage. Mineralised quartz and quartz carbonate veins and veinlets occur within the slate in the shear zone and are broadly concordant with the slatey cleavage.

Alteration of the metasediments, slates and phyllites is weak. Mild sericitisation is observed in the area, but has no correlation with gold mineralisation.

Gold mineralisation is associated with a sulphide assemblage that comprises pyrrhotite with minor pyrite, arsenopyrite, and chalcopyrite. Coarse crystalline arsenopyrite and free gold are frequently observed in close association to one another within the central Minapampa zone.

Reserves: Total probable mineral reserves as at November 29, 2012, were estimated at 9.3-million tonnes, with a grade of 3.4 g/t of gold.

Resources: Total indicated mineral resources for the Ollachea property (Minapampa) as at November 29, 2012, higher than a 2.0 g/t of gold cutoff, were 10.8-million tonnes, with an average grade of 4.0 g/t gold. Inferred mineral resources were 3.3-million tonnes, with an average grade of 3.3 g/t gold.

Prospects: Permitting is in progress. Good progress was made during the first quarter and the environmental-impact approval is on track for receipt in the second half of 2013.

Further, there is high potential for a significant addition to the initial nine-year mine life through the upgrading and conversion of the resource at the Concurayoc Zone and extensions to the open-ended mineralised horizons along strike and down dip.

Contact Person: VP: corporate relations, Trish Kent.

Contact Details:
Minera IRL, tel +511 418 1230, fax + 511 4181270, email minera@irl.com.pe, and
website http://www.minera-irl.com.