From 1994 to 2005, we performed sporadic reconnaissance work on some of the Zacatecas concessions, including taking approximately 2,000 surface samples. In 2006, we began systematic reconnaissance work on all concessions that we controlled. On the basis of this and our previous work in the Zacatecas region, we identified Adriana, Los Clarines, El Cristo, Muleros, Pánuco, San Manuel-San Gil and San Pedro de Hercules as areas of interest. In these areas, we performed more detailed mapping work as well as trenching and detailed sampling, and in the Muleros area, we completed a two-stage diamond drilling program of 37 holes totaling
approximately 6,800 meters.
We have completed a first stage drilling program and are currently conducting a second stage drilling program at the Pánuco target, which is located in the northeastern part of the Zacatecas district about 10 kilometers east of the Muleros area, and at the San Pedro de Hercules and El Cristo targets, located in the southern and central part of the district. We believe that each of the target areas has potential for the discovery of silver with associated base metals and gold. We have spent approximately $11.1 million through December 31, 2010 on exploration and property acquisition in the Zacatecas district.