Ann: Production Update Las Lagunas Gold/Silver Pr, page-28

re: Ann: Production Update Las Lagunas Gold/S... Ann Analysis

1. I put current production at approx 25% based roughly on 360kg of dore shipped out over say a 6 week period of feed {take off 3 weeks where little would have been produced due to problems now mentioned}

2. 2nd confirmation now of head grades which is excellent.

3. Still no clear sign of recovery rates. Until we get the amount of tonnage fed through and the resultant dore produced we have no clear idea as yet. This will be a big and significant boxed ticked for the Albion process and its ability to extract gold at economic rates from refractory ore.

4. "Operating Costs appear to be within budget". Until we get 3 above then we won't know.

Overall, an optimistic update underpinned with some promising raw data.

Locki, I still stick with a fair valued share price of 37-40c {if I recall from my previous posts} IF ACTUAL costs, recoveries and grades are consistent with expected results and hence expected production is met. This takes into account hedging in place and a budgeted gold price of $1400 oz for the remaining production with a 6 year mine life. This is fair value based on on a PE of 6. If these criteria are met say, in 6 months time, then 37-40c would be fair value IMO at a gold price of $1400. Under this price & the market has not kept pace, over it and its run away with it IMO.

Great to see the acceleration of the Azuay project in Ecuador. I calculated that if Azuay gets into production in 2015 and sometime thereafter meets its projections then fair value would be more in the vicinity of $1.00 per share based on a PE then of around 10 and a gold price of $1600 oz.

Nice results by Goldcrest in the DR lately in the search for gold. I think we have some nice tenements there for future exploration and growth also.

Dominoes are gradually starting to fall in place.

GLTAH