CANELO COPPER PROJECT

The Canelo project is an early-stage copper porphyry and skarn/CRD exploration project located within the Patagonia mining district, approximately 10 kilometers north-northeast of the Company’s Sunnyside project in Santa Cruz County, Arizona. The property consists of 433 federal mining claims that cover approximately 8,700 acres.

Geologic mapping and geophysical survey data suggests that the area is underlain by multi-phased intrusive event has altered the surrounding rocks from which surface mapping has identified several alteration patterns indicative of a hydrothermal system at depth. Historic surface sampling, including nearly 1,200 soil samples and approximately 50 rock chip samples, has identified a large 3 x 6 km soil anomaly that averages 200 ppm copper, 80 ppm lead and 185 ppm zinc.1 Sedimentary units that are suitable for the formation of adjacent high-grade skarn and outwardly zoned carbonate replacement deposits are thought to occur at depth and could be cut by Laramide intrusives. Deposits such as these are known to host very large resources in Arizona, such as those seen at the Sunnyside-Taylor complex, located 10 km to the east.