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Operations

Exploration

Mexico
In addition to exploratory drilling
programs at existing mines, we are
currently conducting exploration to locate
mineral reserves at 42 other sites in
Mexico.
In particular, we have identified significant
copper and gold deposits at El Arco site.

El Arco
The El Arco site is located in the state of
Baja California in Mexico. Preliminary
investigations of the El Arco site indicate
that the deposit contains approximately
846 million tons of sulfide ore with
average copper grades of 0.51% copper
and 0.14 grams of gold per ton, and 170
million tons of leaching ore with average
copper grades of 0.56%.

Angangueo
The Angangueo site is located in the state of
Michoacán in Mexico. A reserve of 13 million tons of
ore have been identified with diamond drilling. The
reserve contains 0.16 grams of gold and 262 grams
of silver per ton, and is comprised of 0.79% lead,
0.97% copper and 3.5% zinc. We expect the site
may be able to proceed to the pre-feasibility stage,
which would include additional metallurgical testing
and environmental permitting.

Buenavista
The Buenavista project site is located in the state of Sonora in Mexico, adjacent to
the Cananea ore body. Metallurgical studies have shown that the site has a reserve
of 36 million tons of ore containing 29 grams of silver, 0.69% of copper and 3.3%
of zinc per ton.

Peru

Los Chancas
The Los Chancas project, located in the department of Apurimac in southern Peru,
is a copper and molybdenum porphyry deposit. In 2004 we completed the final
phase of the diamond drilling program at Los Chancas with a total of 10,500 meters
drilled. We have completed the second and final phase of metallurgical testing and
have commenced pre-feasibility studies. Once completed, we will be able to make a
determination if more exploration is needed or if the project contains commercially
mineable reserves, which would warrant future development after comprehensive
economic, technical and legal feasibility studies are completed. Testing to date
indicates a mineral deposit of 200 million tons with a with copper grade of 1.0%,
0.07% molybdenum and 0.12 grams of gold per ton.

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Operations

Tantahuatay
The Tantahuatay project is located in the
department of Cajamarca in northern Peru. We have
performed exploration work in the upper part of the
deposit principally for gold recovery. Work to date
indicates mineralization of 27.1 million tons, with an
average gold content of 0.89 grams per ton and
13.0 grams of silver per ton. This project, in which
we have a 44.25% share, continues in the
exploratory stage. Although we performed
hydrological and evaluation studies during 2003 to prepare for the pre-feasibility
study, during 2004 we concentrated our efforts on dealing with social and
environmental concerns of communities near the project.

Tía María
The Tía María project, located in the department of
Arequipa in southern Peru, is a copper porphyritic
system. In 2004 a total of 12,165 meters of
diamond drilling was completed out of the 15,000
meters projected. The drilling is continuing into
2005 to complete the program. This project is in the
exploratory stage.

Other Peruvian Prospects


As part of our 2005 exploration and development program, drilling has been
scheduled at the Gloria Cristina prospect located in northern Peru, in the
department of La Libertad, and at the Millune prospect in southern Peru, in the
department of Tacna. Both prospects show evidence of copper-gold mineralization.

Chile
In 2003 we acquired several exploration properties in Chile with over 35,000
hectares of mining rights.

In 2004 we started exploration work on certain of these Chilean properties with


diamond drilling on the Sierra Aspera and El Salado prospects.

Sierra Aspera
The Sierra Aspera prospect, located in the Atacama
Region in northern Chile, stretches over 23,300
hectares and is being explored for copper-gold of
the porphyritic type. In 2004, 1,715 meters of
diamond drilling was completed. Drilling for this
prospect will continue in 2005.

El Salado
The El Salado prospect, also located in the Atacama
Region, stretches over 2,700 hectares and is also being explored for copper-gold.
In 2004, 945 meters of diamond drilling was completed.

Other Chilean Prospects


Other prospects like Catanave and Esperanza, located in the Tarapaca and Atacama
regions, respectively, in northern Chile, are scheduled for future exploration.