During 2007, the Company successfully negotiated three new surface access agreements, permitting exploration into three high-priority targets for the first time since 1997, including the La Yaqui area. Drilling at La Yaqui in the fourth quarter of 2007 produced immediate success outlining an oxide gold zone exposed at surface with numerous ore-grade intercepts including 44.2 metres of 2.73 g/t Au and 30.0 metres of 3.33 g/t Au. Definition drilling was completed in 2008 with an additional 7,200 metres in 50 holes drilled.

This newly discovered near-surface oxide gold zone is located approximately 9.5 kilometres southwest of the Mulatos Pit. The results of drilling at La Yaqui were incorporated into inferred resources in the Company’s measured and indicated resource statement at December 31, 2008, as released in March 2009.

The Company has commenced internal engineering studies on La Yaqui and expects to have them completed in 2010.