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Location:

The property of three claims totalling 24,841 hectares is located in the Sierra Madre Gold Belt in the eastern portion of Sonora State, some 180 km North East of Hermosillo. The property is located in a highly prospective area for gold deposits hosting the Dolores Mine located 15 km to the east, the Alamos’s Mulatos deposit 36 km to the south and the Gammon Lake’s Ocampo deposit 93 km to the south-southeast.

Geology:

The property is underlain by a Tertiary andesitic to rhyodacitic volcanic sequence consisting of gently tilted felsic to mafic flows and tuffs with thicknesses up to 200 m. The volcanics rest unconformably on a Mesozoic sedimentary package composed of light grey and black shales inter-fingered by siltstone and fine-grain sandstones intruded by mafic to intermediate dykes contemporaneous to the volcanics. The known gold mineralisation reported in historical drill holes and observed on surface is associated with highly silicified epithermal breccias and stringers of quartz veinlets in their footwall.

Historical work:

In 1996-1998 Cambior did extensive mapping and surface sampling identifying high Au/Ag values in the Cusalito area in the southern portion of the Chivas property. Other anomalous rock & soil gold values over the actual property were found but not investigated.

From 2004 to 2008, X-Ore Minerales conducted an intensive exploration program leading to the discovery of the Piedra Rodante mineralized area. Zones of higher anomalous gold values were found within an intensely silicified interval of the volcano felsic sequence. In 2007, an IP and magnetic survey was performed over the Piedra Rodante zone. X-Ore completed a drill campaign of 3,101 meters over 22 holes to test their geophysical targets. The best results are illustrated below:

Best drill results 2007

* True width estimated at 80% of mineralized intersections

Work in progress:

A recently completed magnetic and radiometric heliborne survey covering an area of 7400 hectares has identified 14 new targets. The field evaluation of these targets is in progress, and until now 3 new silicified, locally brecciated zones, of several hundred meters in dimensions have been recently defined. The Company is evaluating these zones by soils, rock and heavy minerals sampling and structural mapping, the mineralization being controlled by NNW structures similar to the control described at the Dolores Mine.

The magnetic and radiometric airborne survey led to the identification of 14 targets of which 3 correspond to anomalous zones of intense wide silicification (lithocap) or argillization.

These areas of strong to intense epithermal alteration are typical of some of the largest Au-Ag deposits of Mexico such as El Sauzal and Mulatos. The alteration by micro-crystalline silica and the hydrothermal breccia and open-space textures (see photos gallery) observed in these zones are consistent with sinter zones found above high grade Bonanza-type low sulphidation epithermal systems. So far the character of the zones, as well as their remarkable size, mapped for over a strike length of 2,5 km and remains open to the SSE and NNW, is very encouraging and more field work will concentrate over these areas to establish priority drilling. The identification and mapping of the structures will allow us to elaborate drill targets for the upcoming drill programs on the property. The magnetic and radiometric survey performed in early June also identified an additional 3 zones that have not been investigated due to limited access during this past rain season. A follow up program is planned for January 2011.