NICOLE PROJECT

In Durango state, Chesapeake’s two regional projects are Nicole and San Javier. Nicole is located 45 kilometers northwest of the Metates deposit within a regional hydrothermal alteration zone spanning over 12 square kilometers. Over a vertical extent of one kilometer, quartz breccia veins transition to disseminated and stockwork mineralization at depth. Channel samples from the upper levels returned values of 7 meters of 3.1 g/t gold, 238 g/t silver and 0.3% zinc and 3 meters of 12 g/t gold and 450 g/t silver. Lower in the system, channel sampling of disseminated and stockwork mineralization returned 135 meters of 0.8 g/t gold, 16 g/t silver, and 0.7% zinc and 35 meters of 0.7 g/t gold, 20 g/t silver and 0.5% zinc. Limited historic core drilling targeting the disseminated and stockwork mineralization returned intercepts of 30 meters of 1.2 g/t gold, 29 g/t silver and 1.5% zinc and 30 meters grading 0.7 g/t gold, 19 g/t silver and 0.7% zinc. A 45 line-kilometer IP/Resistivity survey has defined a large 1.0 by 1.5 kilometer coincident low resistivity/ high chargeability anomaly which underlies the area of drilling.