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Technical Report 43-101
IMC 11/05 (2Mb)

Terrazas Zinc-Copper Project: Chihuahua, Mexico –

The Terrazas project is located in north-central Chihuahua state, Mexico, about 45 km north of the capital city of Chihuahua. Within 4 km of the deposit, there is a major highway, a railway, and a 220 kilovolt power line, as well as abundant water. The deposit was originally mined from underground by artisanal miners in the early 20th century, but there has been no large-scale modern mining activity. Previous exploration of the property was done by Asarco, Frisco, Northcoast Silver, Swannel Minerals and, since 2000, by Constellation.

The mineral deposit at Terrazas is hosted in an oxidized skarn and is divided into a copper-dominant western zone (Main Zone) and zinc-dominant eastern zone (Cerro Verde). Oxidation is very deep and metal extractions for both copper and zinc via heap leaching or agitation leaching is very high. Metal recovery will likely be via solvent extraction and electrowinning.

The project has a total open pit mineable resource of 90 million metric tonnes grading 1.37% zinc and 0.32% copper, with the Cerro Verde zone having a resource of 28 million tonnes grading 3.22% zinc and 0.29% copper. A prefeasibility study was completed in 2002.

During 2007 the Company continued engineering studies and estimating capital requirements and operating costs for the agitation leach processing alternative at the Terrazas property in Chihuahua, Mexico. The focus remains on a fully integrated plant capable of producing all of the sulfuric acid required and generating a substantial part of the power required to produce nominally 19.8 million pounds per annum of cathode copper and 154.3 million pounds per annum of zinc metal. The Company is also evaluating other available zinc oxide resources that would be amenable to agitation leaching to enhance the economics of the project. As the capital costs of the fully integrated plant are estimated to be over $400 million, the Company is considering partnerships with other companies with zinc oxide resources, as well as other financing alternatives.

- Simplified Flow Diagram