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Florida Mine Adits

2005 Bulk Sample
4,400 tonnes mined with av. head grade per tonne of 8.3 grams of gold 165 grams of silver

Florida Quartz Vein

Key Infrastructure Available

Road Access with availability of water and electricity

Property Terrain - Mine Area

Mill Production Jan. 07

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Mine Development Program

By mid-2006 five different vein structures had been identified that outcrop for more than three kilometres within the Mina Real concessions. The mill is currently being fed from development mining on three parallel vein structures known as Florida 1, 2 and 3 which have over 2,500 metres of drift development work completed by the end of 2006. This development area comprises an estimated average of about 250 metres of vein structure laterally and an estimated depth of over 250 metres. As indicated in earlier reports this segment of the Florida vein system has been tested for continuity and grade at depth. In 2003, drill hole F2-03 intercepted the three Florida veins at about 50 metres below Level 1140. The average length of the drill intersections was 2 metres and the grades ranged from 0.52 - 12.73 grams/tonne of gold and 93.5 - 172 grams/tonne of silver. The host rock in this structure appears competent which should result in reasonable mine operating costs and efficient ore extraction.

An intrusion has been identified north-west of the current Florida mine development area followed by a continuous outcropping of the Florida vein system for over 1.1 kilometres to the north-west of the intrusion.

The 2006 Work Program continued the excavation in five levels of of Florida 3 until the underground drift reached the projected intrusion that intersects the ore horizon on the NW portion of the mineralized structure. To date, independent assays of channel samples taken every two metres on 775 metres of development mining produced an average grade of 12.1 grams/tonne of gold and about 209 grams/tonne of silver. The average vein width was about 1.1 metres. Management is pleased with the fact that these channel assay results were significantly higher than the grade of the previously announced 2005 bulk sample of 4,400 tonnes which produced an average mill head grade of 8.3 grams/tonne of gold and 165 grams/tonne of silver.

Of additional importance is the consistency of the grade up to the confirmed intrusive to the NW and the indication that the grade increases with depth. When combined with the results of surface sampling to the NW of the intrusion, these results support management's contention that this high-grade vein structure continues for a kilometer or more on the NW side of the intrusive.

Dr. Alfredo Parra, the President of Mina Real Mexico S.A de C.V., is the Company's in-house Qualified Person and QP Member of the Mining and Metallurgical Society of America with special expertise in Mining. Dr. Parra has reviewed the technical information contained herein. Channel samples reported were assayed by a combination of two certified and independent laboratories, ALS Chemex of North Vancouver, BC and SGS of Lakefield, Ontario. The Company has not conducted an independent feasibility study on the Mina Real Project, which may increase the risk that the planned operations are not economically viable. The board has relied on the work of management, an outside consultant and the project management in Mexico, who have extensive experience in similar size projects from the construction and operational perspective.

The Company's initial strategic objective was to bring the Mina Real Project to production status by the end of 2006. The Florida mine development plan is on target and the results to date, as indicated above, reinforces managements' view that sufficient mineralized feed is available to provide initial support for a 200 tonne/day mill.
The longer term objective is to become a major "niche market" gold/silver producer. Management believes that this key property, when combined with its experienced Mexican based management team, has the potential to produce a long-term revenue stream which should set the stage for the development of a series of similar size mining and milling operations in the region.

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