EL SAUZAL (LA BRIGIDA-BATOPILAS)

El Sauzal is approaching the latter years of its mine life and the planned decline in production is occurring. Gold production for the second quarter of 2009 was 22%, or 14,600 ounces, less than in the second quarter of 2008. This reduced gold production was expected and was due to 25% lower grades, offset by 5% higher mill throughput. In comparison to the first quarter of 2009, gold production was 25%, or 17,800 ounces, less due to 28% lower grades, offset by 4% higher mill throughput. The stripping in phase three is being increased in order to maintain an appropriate mining sequence and ensure sufficient mining widths as the current pit operation deepens. Improvements to the haulage capacity are currently being reviewed in order to meet increased future stripping.

El Sauzal mine operations completed the third quarter of 2008 with 2% fewer ounces produced than in the same period last year, but 13% higher gold production compared to the second quarter of 2008. The ore grade was 4.75 grams per tonne, which was 7% higher than in the same period last year and 10% higher than in the second quarter. Gold production was 76,200 ounces, at a total cash cost of $147 per ounce, compared to production of 77,600 ounces, at a cash cost of $117 per ounce, in the same period last year. The 26% increase in cash costs was due to lower gold sales and increased cost of power and consumables during the third quarter of 2008. The increase in production compared to the second quarter was due to higher ore grade from the pit.

Gold production in the second quarter was 15% lower than the corresponding quarter of 2007, primarily as a result of lower ore grades and a decrease in tonnes mined as the mine nears the later stages of its life. Tonnes of ore mined in the current quarter decreased by 21% compared to the same period in 2007, primarily because of lower equipment availability due to an aging fleet and longer hauling distances. The average grade in the current quarter also decreased by 8% when compared with 2007. Total cash costs per ounce were correspondingly 17% higher than in the same period of 2007 due to the lower production. Comparing the current quarter to the previous quarter, gold production was 20% higher due to the higher grade of ore mined and processed. Cash costs of $149 per ounce were 6% lower compared to the first quarter, primarily as a result of the increased production. Extension of the mine life at El Sauzal remains a priority of the exploration program and exploration continues in the Trini area.