UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549



FORM 20-F

(Mark One)



[  
]

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934



OR



[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended

December 31, 2008



OR



[  
]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from ___________________ to ____________________



OR



[  
]

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of the event requiring this shell company report________________________





Commission file number

0-13391



SAMEX MINING CORP.

(Exact name of Registrant as specified in its charter)



British Columbia, Canada

(Jurisdiction of incorporation or organization)



#301  32920 Ventura Avenue, Abbotsford, British Columbia, Canada V2S 6J3

(Address of principal executive offices)



Larry McLean, Vice President and CFO

Tel: (604) 870-9920  Facsimile: (604) 870-9930

SAMEX Mining Corp.  #301  32920 Ventura Avenue, Abbotsford, British Columbia, Canada V2S 6J3

(Name, telephone, e-mail and/or facsimile number and address of Company contact person)



Securities registered or to be registered pursuant to Section 12(b) of the Act: None



Securities registered or to be registered pursuant to Section 12(g) of the Act:



Common Shares, without par value

(Title of Class)



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:



Not Applicable

(Title of Class)



1





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Indicate the number of outstanding shares of each of the Registrants classes of capital of common stock as of December 31, 2008: 81,261,165 Common Shares





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

[  
] Yes      [X] No



If this report is an annual report or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

[  
] Yes      [X] No



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



[X]
Yes      [   ] No



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

[  
] Yes      [X] No



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act



Large accelerated filer
[   ]

Accelerated filer
[   ]

Non-accelerated filer
[X]





Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



|          |  |                                                                                                       |  |       |  
|--------- |  | ----------------------------------------------------------------------------------------------------- |  | ----- | -
|U.S. GAAP |  | International Financial Reporting Standards as issued by the International Accounting Standards Board |  | Other | X



|                                                                                                                                                              |  |         |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- | - | ------- | 
|If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. |  |        
|                                                                                                                                                              |  | Item 17 | X | Item 18 | 





If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

[  
] Yes      [X] No









2





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SAMEX MINING CORP.

FORM 20-F



TABLE OF CONTENTS





Page



Item 1. Identity of Directors, Senior Management and Advisers

3

Item 2. Offer Statistics and Expected Timetable

3

Item 3. Key Information

3

Item 4.  Information on the Company

16

Item 5. Operating and Financial Review and Prospects

41

Item 6. Directors, Senior Management and Employees

53

Item 7. Major Shareholders and Related Party Transactions

57

Item 8. Financial Information

60

Item 9. The Offer and Listing.

61

Item 10. Additional Information.

62

Item 11. Quantitative and Qualitative Disclosures About Market Risk.

76

Item 12. Description of Securities Other Than Equity Securities.

74

Item 13. Defaults, Dividend Arrearages and Delinquencies.

74

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.

75

Item 15. Controls And Procedures

75

Item 16A. Audit Committee Financial Expert

76

Item 16B. Code of Ethics

76

Item 16C. Principal Accountant Fees and Services

76

Item 16D. Exemptions From The Listing Standards For Audit Committees

79

Item 16E. Purchase Of Equity Securities By The Issuer And Affiliated Purchases

79

Item 17. Financial Statements.

79

Item 18. Financial Statements.

98

Item 19. Exhibits.

98





3





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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Annual Report on Form 20-F and the exhibits attached hereto contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern the Companys anticipated results and developments in the Companys operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future.  These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.  Statements concerning reserves and mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited.  Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects or does not expect, is expected, anticipates or does not anticipate, plans, estimates or intends, or stating that certain actions, events or results may, could, would, might or will (or the negative and grammatical variations of any of these terms and similar expressions) be taken, occur or be achieved,) are not statements of historical fact and may be forward-looking statements.  Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:



·

risks related to our status as a passive foreign investment company for U.S. tax purposes;

·

risks related to our history of operating losses;

·

risks related to our lack of production history;

·

risks related to our limited financial resources;

·

risks related to our need for additional financing;

·

risks related to competition in the mining industry;

·

risks related to increased costs;

·

risks related to possible shortages in equipment;

·

risks related to mineral exploration activities;

·

risks related to our lack of insurance for certain activities;

·

risks related to all our properties being in the exploration stage;

·

risks related to uncertainty that our properties will ultimately be developed;

·

risks related to fluctuations in precious and base metal prices;

·

risks related to the possible loss of key management personnel;

·

risks related to our mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title;

·

risks related to governmental and environmental regulations;

·

risks related to our ability to obtain necessary permits;

·

risks related our status as a foreign corporation;

·

risks related to current economic conditions; and

·

other risks related to our securities.



This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further in the sections entitled Risk Factors, Information on the Company and Operating and Financial Review and Prospects and in the exhibits attached to this Annual Report on Form 20-F.  Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements.  The Companys forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made and the Company does not assume any obligation to update forward-looking statements if circumstances or managements beliefs, expectations or opinions change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.



All references in this Report on Form 20-F to the terms we, our, us, the Company and SAMEX refer to SAMEX Mining Corp. and its subsidiaries.







4





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CONVERSION TABLE

In this Annual Report a combination of Imperial and metric measures are used.  Conversions from Imperial measure to metric and from metric to Imperial are provided below:



|                            |              |                        |                   
|--------------------------- | ------------ | ---------------------- | ------------------
|Imperial Measure          = | Metric Unit  | Metric Measure       = | Imperial Unit     
|2.47 acres                  | 1 hectare    | 0.4047 hectares        | 1 acre            
|3.28 feet                   | 1 meter      | 0.3048 meters          | 1 foot            
|0.62 miles                  | 1 kilometer  | 1.609 kilometers       | 1 mile            
|0.032 ounces (troy)         | 1 gram       | 31.1 grams             | 1 ounce (troy)    
|1.102 tons (short)          | 1 tonne      | 0.907 tonnes           | 1 ton             
|0.029 ounces (troy)/ton     | 1 gram/tonne | 34.28 grams/tonne      | 1 ounce (troy/ton)







1





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CURRENCY AND EXCHANGE RATES

Canadian Dollars Per U.S. Dollar



The following table sets out the exchange rates for one United States dollar (US$) expressed in terms of one Canadian dollar (Cdn$) in effect at the end of the following periods, and the average exchange rates (based on the average of the exchange rates on the last day of each month in such periods) and the range of high and low exchange rates for such periods.  Exchange rates are based upon the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.





|                       |        |                                  |                                   |        |        |        |        |  |  |  | 
|---------------------- | ------ | -------------------------------- | --------------------------------- | ------ | ------ | ------ | ------ |  |  |  | 
|                       |        | Canadian Dollar Per U.S. Dollars
|                       |        |                                  | 3-Month Period Ended
December 31,
|                       | 2008   | 2007                             | 2006                              | 2005   | 2004   | 2008   | 2007  
|End of period          | 1.224  | 0.9881                           | 1.1652                            | 1.1656 | 1.2034 | 1.224  | 0.9881
|Average for the period | 1.066  | 1.0742                           | 1.134                             | 1.2115 | 1.3016 | 1.2115 | 0.9809
|High for the period    | 1.2971 | 1.1852                           | 1.1726                            | 1.2703 | 1.3970 | 1.2971 | 1.0216
|Low for the period     | 0.9905 | 0.9168                           | 1.0989                            | 1.1507 | 1.1775 | 1.0607 | 0.9168





The following table sets out the high and low exchange rates for one United States dollar (US$) expressed in terms of one Canadian dollar (Cdn$) during the months from December 2008 to May 2009.  Exchange rates are based upon intra-day high/low rates between 08:00 (ET) and 16:00 (ET) (rather than noon or closing rates) reported by the Bank of Canada.







|                    |               |              |               |            |            |         
|------------------- | ------------- | ------------ | ------------- | ---------- | ---------- | --------
|For the month of:   | December
2008 | January
2009 | February
2009 | March
2009 | April
2009 | May
2009
|High for the period | 1.3008        | 1.2765       | 1.2731        | 1.3066     | 1.2707     | 1.1954  
|Low for the period  | 1.1872        | 1.1761       | 1.2160        | 1.2192     | 1.1875     | 1.0898  



The noon rate of exchange on June 12, 2009 as reported by the Bank of Canada for the conversion of United States dollars into Canadian dollars was US$1.00 = Cdn$1.1177.  Unless otherwise indicated, in this Annual Report on Form 20-F (the Annual Report or Form 20-F), all references herein are to Canadian Dollars.



Chilean Pesos Per US Dollar



The tables below set out the average of the Observed US Dollar Exchange Rate expressed in terms of the number of Chilean Pesos per US dollar for the following periods, reported by the Central Bank of Chile:



Yearly Average of Chilean Pesos Per U.S. Dollar



|              |                     
|------------- | --------------------
|Calendar Year | Average For Year    
|2003          | 1 US$ = 691.40 pesos
|2004          | 1 US$ = 609.53 pesos
|2005          | 1 US$ = 559.77 pesos
|2006          | 1 US$ = 530.28 pesos
|2007          | 1 US$ = 522.69 pesos
|2008          | 1 US$ = 521.79 pesos



Monthly Average of Chilean Pesos Per U.S. Dollar for Year 2008



|      |        |        |        |        |       |        |        |        |        |        |        |       
|----- | ------ | ------ | ------ | ------ | ----- | ------ | ------ | ------ | ------ | ------ | ------ | ------
|Month | Jan    | Feb    | Mar    | Apr    | May   | Jun    | Jul    | Aug    | Sep    | Oct    | Nov    | Dec   
|Pesos | 480.89 | 467.21 | 442.94 | 446.43 | 470.1 | 493.61 | 502.24 | 516.70 | 530.17 | 618.39 | 651.50 | 649.31



Monthly Average of Chilean Pesos Per U.S. Dollar for Year 2009



|      |        |        |        |        |       
|----- | ------ | ------ | ------ | ------ | ------
|Month | Jan    | Feb    | Mar    | Apr    | May   
|Pesos | 623.01 | 605.99 | 592.93 | 583.17 | 565.71





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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable

ITEM 3. KEY INFORMATION

We were incorporated as Silver Duke Mines Ltd. (N.P.L.) on December 15, 1967 under the Company Actof British Columbia (the Company Act).  We changed our name to Totem Resources Ltd. (N.P.L.) on February 3, 1976 and subsequently to Paragon Resources Ltd. (N.P.L.) on June 9, 1978.  On May 13, 1981, we became a limited company instead of a specially limited company and our name became Paragon Resources Ltd.  We changed our name to SAMEX Mining Corp. on September 11, 1995.  On March 29, 2004, the Company Act was repealed and was replaced by the Business Corporations Act (British Columbia) (the Business Corporations Act).  Because of this change, we replaced our former Memorandum of Incorporation with new Notice of Articles on February 11, 2005.  We also amended our Articles to conform to the new legislation and changed our authorized share capital by eliminating the maximum number of common shares and preferred shares that the Company is authorized to issue, effective June 13, 2005.  Also during 2005, the Company changed its fiscal year-end from November 30th to December 31st.  (see Item 4 Information on the Company - History and Development of the Company).



SAMEX Mining Corp. is a junior resource company engaged in the acquisition and exploration of mineral properties in South America, particularly in the countries of Chile and Bolivia.  The Company focuses its exploration on the search for deposits of precious metal and porphyry copper-gold.  SAMEX management is motivated by a strong conviction that gold and silver are precious, valuable hard assets.   We hold a strong belief that gold prices are significantly undervalued.  Our objective is to be well-positioned to benefit from increases in the value of gold, silver and other metals.



In Chile, the Company holds an interest in the following exploration prospects: Los Zorros - gold-copper-silver, Inca - copper-gold-silver-molybdenum, Espijismo - gold, Tres Puntas/Chimbero  silver-gold.  In Bolivia the Company holds an interest in the following exploration prospects; El Desierto - porphyry copper-gold, Eskapa - gold-silver-copper, Santa Isabel - zinc-silver-lead-indium-copper-gold (see Item 4 Description of Property for individual property details).  We are an exploration stage company and have no mineral producing properties at this time.  All of our properties are exploration projects, and we receive no revenues from production.  All work presently planned by us is directed at defining mineralization and increasing our understanding of the characteristics and economics of that mineralization.  There is no assurance that a commercially viable ore deposit exists in any of our properties until further exploration work and a comprehensive evaluation based upon unit cost, grade, recoveries and other factors conclude economic feasibility.  The information contained herein respecting our mineral properties is based upon information prepared by, or the preparation of which was supervised by Robert Kell, a Director and the Vice President-Exploration of SAMEX Mining Corp., and Company geologist, Philip Southam, P.Geo., who are qualified persons pursuant to Canadian Securities National Instrument 43-101 concerning Standards Of  Disclosure For Mineral Projects.  Both Mr. Kell and Mr. Southam have signed forms consenting to the use of their names as qualified persons and the filing of this Form 20F Annual Report.



SAMEX is a reporting issuer in British Columbia and Alberta and its common shares trade in Canada on the TSX Venture Exchange under the symbol SXG.   The Companys common shares are also quoted in the United States on the National Association of Securities Dealers OTC Bulletin Board under the symbol SMXMF.



Selected Financial Data.

This data is derived from our audited consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP) and reconciled to accounting principles generally accepted in the United States (U.S. GAAP).  The following selected financial data has been extracted from the more detailed consolidated financial statements included herein (stated in Canadian Dollars, being the foreign currency our financial statements are denominated in, see Currency and Exchange Rates) and is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto included elsewhere herein.  During 2005, the fiscal year-end was changed from November 30th to a new year-end of December 31st.   As a result, the financial statements for fiscal 2005 cover a period of thirteen months from December 1, 2004 to December 31, 2005 as compared to a period of twelve months for the



3





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other fiscal years.  The following information should be read in conjunction with Item 5.  Operating and Financial Review and Prospects.



|                                       |                                     |                                     |                                     |                                    |                                    
|-------------------------------------- | ----------------------------------- | ----------------------------------- | ----------------------------------- | ---------------------------------- | -----------------------------------
|All Dollar Amounts
In Canadian Dollars | Fiscal Year Ended
December
31, 2008 | Fiscal Year Ended
December
31, 2007 | Fiscal Year Ended
December
31, 2006 | 13 Months Ended  December 31, 2005 | Fiscal Year Ended
November
30, 2004
|Income Statement Data                  |                                     |                                     |                                     |                                    |                                    
|Net Loss From Operations               | $(1,154,945)                        | $(1,865,163)                        | $(1,961,999)                        | $(1,539,887)                       | $(1,803,635)                       
|Gain On Sale of Equipment              | -                                   | 7,909                               | -                                   | 11,172                             | 1,052                              
|Mineral Interests
Written Off          | (1,416,792)                         | (46,429)                            | (17,867)                            | (17,642)                           | (31,296)                           
|Net Loss for the year (1)              |                                     |                                     |                                     |                                    |                                    
|Canadian GAAP                          | (2,571,737)                         | (1,903,683)                         | (1,979,866)                         | (1,546,357)                        | (1,833,879)                        
|US GAAP                                | (2,731,764)                         | (5,207,580)                         | (3,930,720)                         | (2,884,084)                        | (3,899,243)                        
|Net Loss per share (1)                 |                                     |                                     |                                     |                                    |                                    
|Canadian GAAP                          | (0.03)                              | (0.02)                              | (0.03)                              | (0.02)                             | (0.03)                             
|US GAAP                                | (0.03)                              | (0.07)                              | (0.06)                              | (0.04)                             | (0.06)                             



|                        |            |            |            |            |           
|----------------------- | ---------- | ---------- | ---------- | ---------- | ----------
|Balance Sheet Data      |            |            |            |            |           
|Current Assets          | $311,614   | $1,429,923 | $1,406,058 | $ 489,815  | $2,264,303
|Current Liabilities     | 104,228    | 106,463    | 67,728     | 35,403     | 90,467    
|Working Capital         | 207,386    | 1,323,460  | 1,338,330  | 454,412    | 2,173,836 
|Total Assets            | 11,125,120 | 12,083,496 | 8,605,000  | 5,751,166  | 6,181,545 
|Long Term Obligations   | -          | -          | -          | -          | -         
|Shareholders Equity (1) |            |            |            |            |           
|Canadian GAAP           | 11,020,892 | 11,977,033 | 8,537,272  | 5,715,763  | 6,091,078 
|US GAAP                 | 318,889    | 1,479,199  | 1,451,032  | 539,862    | 2,286,427 
|Number of Shares        | 81,261,165 | 78,696,165 | 72,287,665 | 66,423,165 | 65,272,415



(1)

See Note 11 to attached Consolidated Financial Statements to December 31, 2008.



There are several material differences between Canadian GAAP and U.S. GAAP that are applicable to the financial information disclosed or summarized herein.  Reference is made to Note 11 in the attached financial statements for an explanation of material differences between Canadian GAAP and U.S. GAAP.  The comparative period data for the fiscal period ended December 31, 2005 is a 13 month period versus 12 month periods for the fiscal years ended December 31, 2008, 2007 and 2006 and November 30, 2004.  Consequently, comparisons of these periods may not be indicative of future results.



See Currency and Exchange Rates for disclosure of exchange rates between Canadian dollars and United States dollars.  Unless indicated otherwise, all references to dollars in this annual report are to Canadian dollars.



Capitalization and indebtedness.

Not Applicable



Reasons for the offer and use of proceeds.

Not Applicable



Risk Factors.

In addition to other information in this Report, the following risk factors should be carefully considered in evaluating our business because such factors currently may have a significant impact on our business, operating results and financial condition.  As a result of the risk factors set forth below and elsewhere in this Report, and the risks discussed in our other Securities and Exchange Commission filings, actual results could differ materially from those projected in any forward  looking statements.  See Special Note Regarding Forward Looking Statements.





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We have a history of losses.

We have historically incurred losses and have no revenue from operations.  We incurred losses from operations of $1,154,945 for the fiscal year ended December 31, 2008, $1,865,163 for the fiscal year ended December 31, 2007, and $1,961,999 for the fiscal year ended December 31, 2006.  As of December 31, 2008, we had a cumulative net loss from operations of $16,287,573 and a cumulative deficit of $25,148,899.  There can be no assurance that either the Company or any of our subsidiaries will achieve profitability in the future or at all.



We have not identified any commercially viable mineral deposits.  We have not commenced development or commercial production on any of our properties.  We have no history of earnings or cash flow from operations.  We do not have a line of credit and our only present source of funds available may be through the sale of our equity shares or assets.  Even if the results of exploration are encouraging, we may not have the ability to raise sufficient funds to conduct further explorations to determine whether a commercially mineable deposit exists on any of our properties.  While additional working capital may be generated through the issuance of equity or debt, the sale of our properties, the possible optioning or joint venturing of our properties, and/or the sale of  royalty interests or capital assets, we cannot assure you that any such funds will be available for operations on acceptable terms, if at all.



In addition, should we be unable to continue as a going concern, realization of assets and settlement of liabilities in other than the normal course of business may be at amounts significantly different from those contained in our financial statements.



We have no production history from our mineral properties.

We have no history of producing metals from any of our properties as each of our properties are in the exploration stage.  Advancing properties from exploration into the development stage requires significant capital and time, and successful commercial production from a property, if any, will be subject to completing positive feasibility studies, permitting and construction of the mine, processing plants and roads and other related works and infrastructure.  As a result, we are subject to all the risks associated with developing and establishing new mining operations and business enterprises including:



·

Completion of feasibility studies to define reserves and commercial viability, including the ability to find sufficient mineral reserves to support a commercial mining operation;

·

The timing and cost, which can be considerable, of further exploration, preparing feasibility studies, permitting and construction of infrastructure, mining and processing facilities;

·

The availability and costs of drill equipment, qualified exploration personnel, skilled and reliable labour and mining and processing equipment, if required;

·

The availability and cost of appropriate smelting and/or refining arrangements, if required;

·

Compliance with environmental and other governmental approval and permit requirements;

·

The availability of funds to finance exploration, development and construction activities, as warranted;

·

Potential opposition from non-governmental organizations, environmental groups, local groups or local inhabitants which may delay or prevent development activities; and

·

Potential increases in exploration, construction and operating costs due to changes in the cost of fuel, power, materials and supplies.



The costs, timing and complexities of exploration, development and construction activities may be increased by the location of our properties and demand by other mineral exploration and mining companies.  It is common in exploration programs to experience unexpected problems and delays during drill programs and, if warranted, development, construction and mine start-up.  Accordingly, our activities may not result in profitable mining operations and we may not succeed in establishing mining operations or profitability producing metals at any of our properties.



We generally have limited financial resources and no source of cash flow.

Although we believe we have sufficient funds to meet our current obligations, we currently have no external sources of liquidity, and all additional funding required for our activities for the foreseeable future will be obtained from the sale of our securities.  Should we elect to satisfy our cash commitments through the issuance of securities, by way of either private placement or public offering, there can be no assurance that our efforts to raise such funding will be successful, or achieved on terms favourable to us or our shareholders.  Such financings, to the extent they are available may result in substantial dilution to our existing shareholders.  Failure to obtain additional financing on a timely basis could cause us to forfeit all or a portion of our interests in the assets or rights now held by us

 and our ability to continue as a going concern

..   As described in Note 1 to our consolidated financial statements, our consolidated financial statements have been prepared on the assumption that we will continue as a going concern, meaning that we will continue in operation for the foreseeable future, and will be able to realize



5





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assets and discharge our liabilities in the ordinary course of operations.  There can be no assurance that we will be able to continue as a going concern.



Our success depends on our ability to raise additional capital.

As of December 31, 2008, we had working capital of $

207,386

 (December 31, 2007:

$

1,323,460

).

  In March 2009 we completed a private placement of 7,830,500 units at a price of $0.10 per unit, raising gross proceeds of $783,050.  Based on the funds on hand, it will be necessary to raise additional financing during 2009 in order to fund our ongoing general operations for the next year.  

In relation to our proposed exploration programs and option payments, management will work to secure additional equity financings and/or joint venture/investment funding to continue exploration on our Los Zorros property and our other gold-silver prospect in Chile.   Failure to obtain additional financing on a timely basis could cause us to forfeit all or a portion of our interests in the assets or rights now held by us

 and our ability to continue as a going concern

..   As described in Note 1 to our consolidated financial statements, our consolidated financial statements have been prepared on the assumption that we will continue as a going concern, meaning that we will continue in operation for the foreseeable future, and will be able to realize assets and discharge our liabilities in the ordinary course of operations.  There can be no assurance that we will be able to continue as a going concern.



We currently have no external sources of liquidity, and additional funding required for our activities for the foreseeable future may be obtained from the sale of our securities.  Should we elect to satisfy our cash commitments through the issuance of securities, by way of either private placement or public offering, there can be no assurance that our efforts to raise such funding will be successful, or achieved on terms favorable to us or our shareholders.  Such financings, to the extent they are available may result in substantial dilution to our existing shareholders.



The business of mineral exploration is highly competitive and there is no assurance we can compete with other competitors for financing, qualified personnel and other resources related to the operation of our business.

Significant competition exists for the limited number of property acquisition opportunities available.  As a result of this competition, some of which is with large established mining companies with substantial capabilities and greater financial and technical resources than our Company, we may be unable to acquire attractive mining properties on terms we consider acceptable.  Competition in the precious metals mining industry is primarily for mineral rich properties which can be developed and exploited economically; the technical expertise to find, develop, and produce such properties; the labor to operate the properties; and the capital for the purpose of funding such properties.  Many competitors not only explore for and mine precious metals and minerals but conduct refining and marketing operations on a worldwide basis.  Such competition may result in our being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund our operations and develop our properties.  Our inability to compete with other mining companies for these resources may have a material adverse effect on our results of operation and business.  There can be no assurance that our exploration and acquisition programs will yield any reserves or result in any commercial mining operation.



Our operations are subject to the inherent risk associated with mineral exploration activities.

Mineral exploration activities and, if warranted, development activities generally involve a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome.  Environmental hazards, industrial accidents, unusual or unexpected geological formations, fires, power outages, labor disruptions, flooding, explosions, cave-ins, land slides and the inability to obtain suitable or adequate machinery, equipment or labor are other risks involved in the operation of mines and the conduct of exploration programs.  Operations and activities in which we have a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, development and production of precious and base metals, any of which could result in work stoppages, damage to or destruction of mines, if any, and other producing facilities, damage to life and property, environmental damage and possible legal liability for any or all damage.  We plan to obtain insurance, in amounts that we consider to be adequate, to protect ourselves against certain of these mining risks once we commence mining operations.  However, we may become subject to liability for certain hazards which we cannot insure against or which we may elect not to insure against because of premium costs or other reasons.  The payment of such liabilities may have a material, adverse effect on our financial position.  At the present time, we do not conduct any mining operations and none of our properties are under development, and, therefore, we do not carry insurance to protect us against certain inherent risks associated with mining.  Reclamation requirements vary depending on the location and the managing regulatory agency, but they are similar in that they aim to minimize long-term effects of exploration and mining disturbance by requiring the operating company to control possible deleterious effluents and to re-establish to some degree pre-disturbance landforms and vegetation.





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Increased costs could affect our financial condition.

We anticipate that costs at our projects that we may explore or develop, will frequently be subject to variation from one year to the next due to a number of factors, many of which are outside of our control.  A material increase in costs at any significant location could have a effect on our operations.



A shortage of equipment and supplies could adversely affect our ability to operate our business.

We are dependent on various supplies and equipment to carry out our mining exploration and, if warranted, development operations. The shortage of such supplies, equipment and parts could have a material adverse effect on our ability to carry out our operations and therefore limit or increase the cost of production.



Mineral exploration involves a high degree of risk against which we are not currently insured.

The Companys exploration activities are subject to the hazards and risks normally incident to the exploration for and development and production of precious minerals, any of which could result in damage for which the Company may be held responsible. Hazards such as unusual or unexpected weather, rock formations, formation pressures, fires, power outages, landslides, flooding cave-ins or other adverse conditions such as the inability to obtain suitable or adequate machinery, equipment or labor may be encountered in the drilling and removal of material.  While SAMEX may obtain insurance against certain risks in such amounts as we consider adequate, the nature of these risks is such that liabilities could exceed policy limits or could be excluded from coverage.  There are also a number of risks against which SAMEX cannot insure or against which we have decided not to insure, due to high premiums or for other reasons.  Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common shares. We do not currently maintain insurance against risks relating to our mineral property interests.



All of our properties are in the exploration stage and are highly speculative in nature, which means there can be no assurance that our programs will result in the discovery of any economically feasible mineral deposit.

At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.  We will only develop our mineral properties if we obtain satisfactory results from our exploration programs.   The development of gold, silver, copper, zinc and other mineral properties is affected by many factors, including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.  We have relied and may continue to rely upon consultants and others for exploration expertise.  Substantial expenditures are required to establish reserves through drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining.  We cannot assure you that any mineral deposits will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.  Depending on the price of gold or other minerals produced, if any, we may determine that it is impractical to commence or, if commenced, continue commercial production.



The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the global marketing conditions for gold and other metals, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting minerals and environmental protection.  Our properties are located in Chile and Bolivia.  These jurisdictions impose certain requirements and obligations on the owners of exploratory properties and mineral exploration activities are subject to certain risks which are described elsewhere in this section.



Very few mineral properties are ultimately developed into producing mines.

The business of exploration for minerals and mining involves a high degree of risk such as unusual or unexpected geological formations and the inability to obtain suitable or adequate machinery, equipment or labour and is highly speculative in nature. Few properties that are explored are ultimately developed into commercially viable mining operations. At present, our existing properties have no known significant body of commercial ore. Most exploration projects do not result in the discovery of commercially mineable deposits of ore. The occurrence of unsuccessful exploration efforts may eventually lead to us needing to cease operations.



The success of commodity exploration is determined in part by the following factors:





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·

Identification of potential mineralization based on surficial analysis;

·

Exploration permits, as granted by the various government bodies;

·

Experience and quality of management and geological consultants;

·

Capital available for exploration activity.



Substantial expenditures are required for us to establish proven and probable ore reserves through drilling and analysis, to develop metallurgical processes, to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining.  In making the determination as to the commercial viability of a mineral deposit, a number of factors are considered, which include, without limitation, the particular attributes of the deposit, such as size, grade, and proximity to infrastructure; metal prices, which fluctuate widely; and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, and use importing and exporting or minerals and environmental protection.



Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis.



We may invest significant capital and resources in exploration activities and abandon such investments if we are unable to identify commercially exploitable mineral reserves.  The decision to abandon a project may have an adverse effect on the market value of our securities and the ability to raise future financing.



We have no producing mines at this time.



Calculations of mineral reserves and of mineralized material are estimates only, subject to uncertainty due to factors including metal prices, inherent variability of the ore, and recoverability of metal in the mining process.

There is a degree of uncertainty attributable to the calculation of reserves and corresponding grades dedicated to future production. Until mineral reserves are actually mined and processed, the quantity of ore and grades must be considered as an estimate only. In addition, the quantity of mineral reserves and ore may vary depending on metal prices. Estimates of mineral resources under Canadian guidelines are subject to uncertainty as well. The estimating of mineral reserves and mineral resources under Canadian guidelines is a subjective process and the accuracy of such estimates is a function of the quantity and quality of available data and the assumptions used and judgments made in interpreting engineering and geological information. There is significant uncertainty in any reserve or estimate of mineral resources under Canadian guidelines, and the actual deposits encountered and the economic viability of mining a deposit may differ materially from our estimates. Estimated mineral reserves or mineral resources under Canadian guidelines may have to be recalculated based on changes in metal prices, further exploration or development activity or actual production experience. This could materially and adversely affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence estimates of mineral reserves or mineral resources under Canadian guidelines. Any material change in the quantity of mineral reserves, mineralization, grade or stripping ratio may affect the economic viability of our properties. In addition, there can be no assurance that metal recoveries in small-scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production.



The prices of precious metal and base metal directly impact on our business activities.

Our business activities are significantly affected by the prices of precious metals and base metals on international markets.  The price of minerals affects our ability to raise financing, the commercial feasibility of our properties, the future profitability of our properties should they be developed and our future business prospects. The prices of precious metals and base metals fluctuate widely and are affected by numerous factors beyond our control, including expectations with respect to the rate of inflation, the strength of the U.S. dollar and of other currencies, interest rates, and global or regional political or economic crisis.  The demand for and supply of precious metals and base metals may affect precious metals and base metals prices but not necessarily in the same manner as supply and demand affect the prices of other commodities.



Our business is affected by market fluctuations in the prices of minerals sought (gold, silver, and copper), which are highly volatile.  Depending on the price of gold, silver, copper or other metals, we may determine that it is impractical to continue our exploration activities or, if warranted, to commence commercial development or production of our properties, if a mineral deposit is identified.



Gold, silver, and copper prices may fluctuate widely and are affected by numerous industry factors, such as demand for precious metals, forward selling by producers, central bank sales and purchases of gold and production and cost levels in major mineral-producing regions.  Moreover, mineral prices are also affected by macro-economic factors that are beyond our control,



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including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the Canadian dollar relative to other currencies), interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods.  We cannot assure you that the price of gold, silver, or copper will remain stable or that such prices will be at a level that will prove feasible to continue our exploration activities, or, if applicable, begin development of our properties.



The current demand for and supply of precious metals and base metals affects their prices, but not necessarily in the same manner as current demand and supply affect the prices of other commodities.  If metal prices should decline for a sustained period, we could determine that it is not economically feasible to continue our exploration activities and such decision will have a material adverse affect on our business and results of operations.



The prices of gold, silver, and copperand other metals have fluctuated in recent years.The volatility of the prices for precious metals and base metals is illustrated by the following charts from kitco.com which show the market prices (US$) of gold, silver, and copper over the last five years.













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The loss of key management personnel may adversely affect our business and results of operations.

The success of our operations and activities is dependent to a significant extent on the efforts and abilities of our management: Jeffrey Dahl, President & Chief Executive Officer, Robert Kell, Vice President  Exploration and Larry McLean, Vice President  Operations & Chief Financial Officer.  Investors must be willing to rely to a significant extent on their discretion and judgment.  We do not maintain key employee insurance on any of our employees.



There may be defects in the title to our properties.

In accordance with mining industry practice, we attempt to acquire satisfactory title to our properties but have not obtained title insurance with the attendant risk that some titles, particularly titles to undeveloped properties, may be defective.  In accordance with mining industry practice, we have not obtained title insurance on the Bolivian and Chilean concessions held by our partners or us.  The Company carries out all normal procedures to obtain title and make a conscientious search of mining records to confirm that the Company has satisfactory title to the properties it has acquired by staking, purchase or option, and/or that satisfactory title is held by the optionor/owner of properties the Company may acquire pursuant to an option agreement, and/or that satisfactory title is held by the owner of properties in which the Company has earned a percentage interest in the property pursuant to a joint venture or other type of agreement.  However, the possibility exists that title to one or more of the concessions held by the Company, or an optionor/owner, or the owner of properties in which the Company has earned a percentage interest, might be defective for various reasons.  The Company will take all reasonable steps to perfect title to any particular concession(s) found to be in question.



All of our properties are in the exploration stage and are highly speculative in nature, which means there can be no assurance that our programs will result in the discovery of any economically feasible mineral deposit.

At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.  We will only develop our mineral properties if we obtain satisfactory results from our exploration programs.

The development of gold, silver, copper and other mineral properties is affected by many factors, including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.  We have relied and may continue to rely upon consultants and others for exploration expertise.  Substantial expenditures are required to establish reserves through drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining.  We cannot assure you that any mineral deposits will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.  Depending on the price of gold, silver, copper or other minerals produced, if any, we may determine that it is impractical to commence or, if commenced, continue commercial production.

The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the global marketing conditions for gold, silver and copper, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting minerals and environmental protection.  Our properties are located in Chile and Bolivia.  These countries impose certain requirements and obligations on the owners of exploratory properties which includes, among other things, certain application and permit requirements, certain limitations on mining and exploration activities, periodic reporting requirements, limited terms and certain fees and royalty payments.



Bolivian Interests - There are certain specific risks associated with mineral exploration activities and property ownership in Bolivia.

The process for acquiring, holding and developing an interest in mineral properties in Bolivia is different from procedures for acquiring mining claims in Canada or the United States and involves a number of risks not applicable in those jurisdictions.  In addition, recent legislative, judicial and political changes have seriously added to the risk of conducting mineral operations in Bolivia.





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We acquired our property interests in Bolivia under the former Law No. 1777 enacted on March 17, 1997 (the Former Code), which governed the rights and obligations associated with mineral concessions in Bolivia.  Under the Former Code, individuals and corporations were allowed to apply for mining concessions on and subject to certain rules respecting application and filing for such concession, which granted the lawful holder the right to explore for minerals on such concession and, subject to further requirements and qualifications, the right to own and conduct mineral operations on such concession, as well as the right to transfer such concession in compliance with certain prescribed registration and transfer requirements.  The Former Code also restricted ownership of any properties within 50 km of any international border of Bolivia or the Frontier Zone to a Bolivian national or a corporation owned by a Bolivian national(s), provided that such nationals were permitted to enter into a joint venture agreement with a foreign party subject to certain rules as to the form of joint venture and its operation.  Our interests within the Frontier Zone (Santa Isabel Property, Eskapa Property, El Desierto Property) are held under joint venture agreements with a Bolivian national.  In particular, the Eskapa Property and El Desierto Property mineral concessions are owned by Empresa Minera El Roble S.A. (El Roble), a company controlled by a Bolivian national, Patricio Kyllmann, a former director of SAMEX.  Our Bolivian subsidiary, Empresa Minera Boliviana S.A. (Emibol S.A.), earned a 99% interest in any mining operations which may be established on the concessions pursuant to an agreement (originally with Multimin S.A., a company also formerly controlled by Patricio Kyllmann) dated April 16, 1996 and as amended November 23, 1998 with El Roble and our Santa Isabel Property is held under a joint venture agreement with the Bolivian state mining company, Corporacion Minera de Bolivia (COMIBOL) (see Item 4  Information on the Company).



The legal effect of the Former Code has been seriously affected by subsequent legislative and judicial action, resulting in serious concern as to the status of our Bolivian concessions and our rights and obligations with respect thereto.



On May 10th, 2006, the Bolivian Constitutional Tribunal determined, under Constitutional Verdict 0032/2006, that the Former Code was unconstitutional in that, under the constitution then in effect (the Old Constitution), all natural resources belonged to the State and therefore mining concessions could not be sold, mortgaged, transferred or inherited.  The tribunal ruled that the Bolivian Parliament would be required to make a number of specific changes to the Former Code in order to comply.  Parliament was given two years to make these changes, which did not occur.  As a result of this decision, the transfer, mortgage or testamentary disposition of mineral concessions may no longer be permitted in Bolivia. This decision has had a significant adverse effect on the ability of concession holders to dispose of their interest.  There does not yet appear to be any restriction on disposition of the shares of companies which own mineral concessions (which is the case for all of the Companys Bolivian properties).  However, this also is not entirely clear.



On May 1, 2007, the Bolivian government issued Supreme Decree N. 29117 which declared the whole country to be a mining fiscal reserve.  This decree granted the Bolivian state mining company, Corporacion Minera de Bolivia (COMIBOL) the right to administer this reserve, and further gave the right to explore the reserve to the government Geological and Technical Mining Service (SERGEOTECMIN).  This decree effectively eliminated the entire mining concession system in Bolivia, other than filings made before May 1, 2007.



On January 25th 2009 a new constitution was approved by referendum (the New Constitution) which, among other things, provides that all natural resources belong to the Bolivian people and will be administered by the State for their collective interest.  This altered the Former Constitution which provided that all natural resources belong to the State, which could grant concessions according to the law, (in this case the Former Mining Code).  This new provision has given rise to numerous land title claims, particular from aboriginals living near mining concessions.  It is unclear at this time how this provision will be interpreted.



The New Constitution also provides that any mining concessions granted to national and foreign companies before the enacting of the New Constitution must enter into mining agreements with COMIBOL on or before December 6, 2010.  This provision affects all of our mining concessions in Bolivia, other than possibly our Santa Isabel property, which is held under an existing joint venture agreement with COMIBOL.



The New Constitution also provides the State must ensure reinvestment of profits from mining operations in Bolivia.  The provision does not state what portion of profits will need to be re-invested, so the effect of this provision is not clear at this time.



Finally the New Constitution states that certain autonomous regions (for time being limited to Santa Cruz, Beni, Tarija and Pando) are entitled to create and administer their own taxes.  This provision may be extended to other regions of the country, depending on the outcome of a referendum.  Accordingly, the application and effect of this provision in relation to taxing mineral concessions is uncertain at this time.



A new mining code has been proposed to replace the Former Code, but such legislation has not yet been enacted.  While the new proposed code may resolve some of the uncertainty created by the above legislative and judicial actions, its final content



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and effect are uncertain.   As a result, we have concluded, the foregoing changes taken as a whole, appear to be highly prejudicial to our interests and seriously adversely affect the viability of prospective mineral projects in Bolivia.   We have also concluded that our rights and obligations with respect to our Bolivian mineral interests, are at best, uncertain.



In light of these and other factors we have decided that our mineral interests in Bolivia are now subject to a high degree of risk, including a risk of the loss of the entire economic benefit of our mineral interests.  Accordingly we have decided to suspend all exploration activities in Bolivia and put all of our Bolivian projects on care and maintenance status.  We also elected to write down the value of our Eskapa project by $1,395,993 at December 31, 2008, and in the first quarter of 2009, also decided to abandon three low-priority properties  the Walter, Wara Wara and Yaritani properties.  We also wrote down the carrying value of our three remaining Bolivian properties - Eskapa, El Desierto, and Santa Isabel - to a nominal value of $1,000 each.  While we hope we will be able to return to exploring our remaining Bolivian properties at some time in the future, we do not anticipate we will be able to do so as long as current political and legal conditions persist.  There can be no assurance that these conditions will improve or, if so, when such changes might take place.



There are certain specific risks associated with mineral exploration activities and property ownership in Chile.

The process for acquiring an interest in mineral concessions in Chile is different from procedures for acquiring mining claims in Canada or the United States and involves certain risks not applicable in those jurisdictions.



The rights and obligations associated with mining concession in Chile are governed by legislation and protected by the Chilean Political Constitution enacted in 1980 (the Constitution). Article 19, No 24 of the Constitution, which assures the right of property, in its different forms over corporal or intangible assets, includes mining concessions within this protection.



Law No 18.097 of January 21, 1982, which has constitutional rank, regulates the granting of mining concessions and defines the mining concessions as a real and immovable right, distinctive and independent from property rights over the surface tenements, although owned by the same individual.  Such rights may be claimed against the State and any other person, may be transferred or transmitted, and may be mortgaged or subject to other real rights and, in general, to all acts and contracts.



A mining concession may be granted for exploring or exploiting mineral substances, the latter also being known as a mining claim.  All metallic and non-metallic substances and, in general, all fossil substances, regardless of their natural state, may be subject to concessions or claimed, including those in the subsoil of maritime waters under national jurisdiction, to which access may be had, through tunnels, from land.  Liquid or gaseous hydrocarbons, lithium or deposits of any kind in maritime waters under national jurisdiction or deposits of any kind entirely or partly embraced by areas which, under law have been classified as important, for mining reasons, to national security, are generally excluded from mining concessions, without prejudice to mining concessions validly granted prior to their exclusion or a resolution that classifies them as of importance to national security.



Any person is entitled to dig test holes and to take samples in search for mineral substances, regardless of ownership or property rights over the tenements, except in lands included within the limits of a mining concession granted to a third party.



The object of a mining concession is all substances over which a concession may be granted lying within its limits.  The territorial area of a mining concession comprises a solid whose upper surface is, along a horizontal plane, a parallelogram with right angles and of an indefinite depth within the vertical planes that limit it.  The area of an exploitation concession may not cover more than 10 hectares and an exploration concession may not exceed 5,000 hectares.  The owner of the concession can hold any number of mining concessions that comply with the maximum surface indicated above.



Mining concessions are established by a judicial decree given following a non adversarial proceeding, without the decisory participation of any other authority or third party.



In order keep a mining concession valid and in effect, it is necessary to pay an annual license fee (patent).  The patent payments must be made in advance during the month of March of each year.  Patent fee are calculated based upon the value of the Chilean Monthly Tax Unit (M.T.U.) which varies from month to month.  In the case of an exploitation concession the annual patent fee is calculated as one-tenth (1/10th) of the Monthly Tax Unit per hectare (for example, in March 2008 the M.T.U. was 34,668 x 1/10th = 3,466.8 Chilean Pesos per hectare which, at the average exchange rate for March 2008, equated to approximately US$7.83 per hectare for exploitation concessions).  In the case of an exploration concession the annual patent fee is calculated as one-fiftieth (1/50th) of the Monthly Tax Unit per hectare (for example, in March 2008 the M.T.U. was 34,668 x 1/50th = 693.36 Chilean Pesos per hectare which, at the average exchange rate for March 2008, equated to approximately US$1.57 per hectare for exploration concessions).   Should the holder of the concession fail to pay the fee within the designated period, judicial procedures to publicly auction the concession may be instituted.





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A foreign corporation may hold mining rights over mining concessions in Chile without restrictions and without any discrimination regarding Chilean nationals.



Regulatory matters could impact our ability to conduct our business in Chile

As our operations are primarily related to the exploration of our properties, many governmental regulations relating to mining activities are not yet applicable to us.



Our potential mining processing operations and exploration activities in Chile are subject to various laws governing land use, the protection of the environment, prospecting, development, production, exports, taxes, labour standards, occupational health, mine safety and other matters.  Such operations and exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require that we obtain permits from various governmental agencies.  We believe we are in substantial compliance with all material laws and regulations which currently apply to our activities.  There can be no assurance, however, that all permits which we may require for future operations will be obtainable on reasonable terms or that such laws and regulations would not have an adverse effect on any mining project which we might undertake.



Failure to comply with laws and regulations may result in orders being issued thereunder which may cause operations to cease or be curtailed or may require installation of additional equipment.  Violators may be required to compensate those suffering loss or damage by reason of their mining activities and may be subject to fines or penal sanctions if convicted of an offense under such legislation.



Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a material adverse impact on us or prevent development of our mining properties.



Chilean environmental legislation requires that the mining concessionaire obtains the prior authorization from the applicable environmental authorities to initiate any exploration or exploitation activity and for this purpose the mining concessionaire shall need to present an environmental assessments or an environmental impact study. Chilean environmental legislation defines the requisites that these studies have to fulfill, and the general mechanisms for controlling and ensuring compliance with such legislation. These reports entail a detailed technical and scientific assessment of the site and surrounding environmental as well as a prediction of the impact of proposed development on the environment.  Such authorizations and reports can add to the cost and time frame associated with any potential project development.



Environmental legislation in Chile imposes potential liability on owners and/or operators of mining facilities which release hazardous substances into the environment and are required to carry out their operations using methods and techniques not liable to cause damage to the environment or the land-owner.



Foreign investments in Chile can be repatriated under the Foreign Investment Regulations contained in Decree Law 600, the Foreign Investment Statute, which is based on the principle of non discrimination between foreign and local investors.  Foreign investors may enter into a foreign investment contract with the Republic of Chile where the terms of the investments, access to foreign currency, tax matters and other importation and exportation terms can be agreed upon for a term of 10 years or 20 years, if the investment is of an amount that exceeds US$50,000,000.  Chile and Canada entered into a Free Trade Agreement (FTA), which has been in effect since July 5, 1997.  This FTA enables Canadian investors to export products of Canadian origin into Chile without paying any custom duties and obtain relief under the double taxation provision, pursuant to which taxes paid in Chile on income generated by operations in Chile, including mining, will be used as a tax credit for the taxes levied in Canada on such income.



At present, the income of corporations, limited liability companies and mining companies is taxed in two stages; first, when income is accrued and or perceived, in a yearly basis, the corporate income is taxed with an income tax at a rate of 17% in year 2007 and future years; and second, when profits are distributed and remitted abroad to shareholders or partners without domicile in Chile, these profits are subject to a 35% Additional Tax rate, with a credit for the income tax paid by the corporation in Chile equivalent to 17% as stated above.  The foregoing taxes may affect the future profitability of any potential mining operations on our properties.  Operations in the mining sector may also be subject to an additional taxation, the Mining Royalty.  Pursuant to Law 20.026  (published in the Official Gazette dated June 16, 2005), a Royalty Payment was incorporated into the Income Tax Law which established an specific taxation to mining exploitation, known as Mining Royalty.  This specific tax is to be paid by any individual or legal entity who exploits concessionable mineral substances and sells any mineral products.  This specific tax applies to any mining exploitation in which annual sales exceed 50,000 metric tons of fine copper, applying in this case a tax rate of 5%.  This rate decreases if the annual production of fine copper is less than 50,000 metric tons of fine copper and more than 12,000 metric tons of fine copper, in which case the amount that exceeds the 12,000 metric tons and is less than 15,000 metric tons will be taxed at a rate of 0.5%.  There is a scale in relation to production and sales up to the



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amount of 50,000 metric tons of fine copper per year.  In addition, to determine this Royalty, the mining concessionaire is entitled to deduct from the income generated in the sale of the mining products, all the costs necessary to produce the income, in accordance with the terms contemplated in the Income Tax Law.  If additional special taxes or royalties were to be imposed in the future upon operations in the mining sector, this may affect the future profitability of any potential mining operations on our properties.



Foreign currency exchange is regulated by the Central Bank of Chile under Chapter XIV of its Foreign Exchange Regulations.  Currently there is no restriction on bringing investments or credits into Chile, provided that such investments and credits are registered with the Central Bank of Chile in accordance with Chapter XIV of The Foreign Exchange Regulations.  Credits granted for periods of over 1 year are subject to a stamp tax of 1.2% of the amount of the loan and interest on loans granted by banks and financial institutions are subject to a 4% tax levied upon remittance of the interest payment to the lender.



Currency exchange rate fluctuations could adversely affect our operation.

Our functional currency is the Canadian dollar, and we have obligations and commitments in other currencies including United States dollars, Chilean Pesos and Bolivian Bolivianos.  Fluctuations in foreign currency exchange rates may affect our results of operations and the value of our foreign assets, which in turn may adversely affect reported financial figures and the comparability of period-to-period results of operations.  (See Currency and Exchange Rates)



We are a foreign corporation and most of our directors and officers are outside of the United States, which may make enforcement of civil liabilities difficult.

We are incorporated under the laws of the Province of British Columbia, Canada.  All of our directors and officers are residents of Canada, with the exception of Robert Kell (who resides in the United States and Chile), and all of our assets are located outside of the United States.  Consequently, it may be difficult for United States investors to effect service of process within the United States upon those directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the United States Securities Exchange Act of 1934, as amended.  A judgment of a US court predicated solely upon such civil liabilities would probably be enforceable in Canada by a Canadian court if the US court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter.  There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or us predicated solely upon such civil liabilities.



We do not intend to pay cash dividends.

We have never, and we do not have any intention of paying cash dividends in the foreseeable future.  In particular, there can be no assurance that our Board of Directors will ever declare cash dividends, which action is completely within their discretion.



We have reserved 20,493,250common shares for future issuance, which if issued may cause dilution in the value of currently issued and outstanding shares.

As of May 31, 2009, we reserved 6,365,000 common shares for issuance on the exercise of incentive stock options (at a weighted average exercise price of $0.73).  In addition we reserved 14,128,250 common shares for issuance upon the exercise of outstanding warrants (at a weighted average exercise price of $0.32).  If such options and warrants are fully exercised, such common shares would constitute 18.7% of our share capital.  The exercise of such options and the subsequent resale of such common share in the public market could adversely affect the prevailing market price and our ability to raise equity capital in the future at a time and price which it deems appropriate.  We may also enter into commitments in the future which would require the issuance of additional common shares and we may grant additional share purchase warrants and stock options.  See Item 6.  Compensation  Incentive Stock Options



Likely Passive Foreign Investor Company (PFIC) Status Has Possible Adverse Tax Consequences for U.S. Investors



Current holders of and potential

 investors 

in our common shares 

who are U.S. taxpayers should be aware that SAMEX expects to be a passive foreign investment company (PFIC) for the current fiscal year, and may have been a PFIC in prior years and may also be a PFIC in subsequent years.

 

 If SAMEX is a PFIC for any year during a U.S. taxpayers holding period, then such U.S. taxpayers generally will be required to treat any so-called excess distribution received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distributions or gain, unless the taxpayer makes a qualified electing fund (QEF) election or a mark-to-market election with respect to the shares of SAMEX.  In certain circumstances, the sum of the tax and the interest charge may exceed the amount of



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the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer.  A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of SAMEXs net capital gain and ordinary earnings for any year in which SAMEX is a PFIC, whether or not SAMEX distributes any amounts to its shareholders.  A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayers basis therein.  U.S. taxpayers are advised to seek the counsel of their professional tax advisors.

  This paragraph is qualified in its entirety by the discussion below under the heading TaxationCertain U.S. Federal Income Tax Considerations.  Each U.S. taxpayer should consult his or her own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the PFIC rules and

 the acquisition, ownership, and disposition of

our common shares.  

See Item 10. Taxation  United States Federal Income Tax Consequences.



Economic conditions and fluctuation and volatility of stock price may negatively impact shareholder value



The market price of our common shares is highly volatile.  If investors interest in the sector in which we operate declines, the price for our common shares would likely also decline.  In addition, trading volumes in our common shares can be volatile and if the trading volume of our common shares experiences significant changes, the price of our common shares could be adversely affected.  The price of our common shares could also be significantly affected by other factors, many of which are beyond our control.



Fluctuations in economic conditions, such as the continuing downturn in the global economy, may also significantly affect our ability to meet our objectives which could adversely affect our share price.



Broker-dealers may be discouraged from effecting transactions in our shares because they are considered a penny stock and are subject to the penny stock rules.

Rules 15g-1 through 15g-9 promulgated under the Exchange Act impose sales practice and disclosure requirements on certain brokers-dealers who engage in certain transactions involving a penny stock. Subject to certain exceptions, a penny stock generally includes any non-NASDAQ equity security that has a market price of less than US$5.00 per share.  The market price of our shares over the fiscal year ended December 31, 2008 ranged between CDN$0.115 and CDN$0.78 and our shares are deemed penny stock for the purposes of the Exchange Act.  The additional sales practice and disclosure requirements imposed upon brokers-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.



Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or accredited investor, generally, an individual with net worth in excess of US$1,000,000 or an annual income exceeding US$200,000, or US$300,000 together with his or her spouse, must make a special suitability determination for the purchaser and must receive the purchasers written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.  In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the United States Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customers account and information with respect to the limited market in penny stocks.



As a foreign private issuer, our shareholders may have less complete and timely data.

The Company is a foreign private issuer as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the Exchange Act).  Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3 of the Exchange Act.  Therefore, the Company is not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders.  The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders activities in our securities.



Recent market events and conditions

In 2008 and into 2009, the U.S. credit markets began to experience serious disruption due to a deterioration in residential property values, defaults and delinquencies in the residential mortgage market (particularly, sub-prime and non-prime mortgages) and a decline in the credit quality of mortgage backed securities. These problems led to a slow-down in residential housing market transactions, declining housing prices, delinquencies in non-mortgage consumer credit and a general decline in



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consumer confidence. These conditions continued and worsened in 2009, causing a loss of confidence in the broader U.S. and global credit and financial markets and resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, less liquidity, widening of credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions. Notwithstanding various actions by the U.S. and foreign governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions caused the broader credit markets to further deteriorate and stock markets to decline substantially. In addition, general economic indicators have deteriorated, including declining consumer sentiment, increased unemployment and declining economic growth and uncertainty about corporate earnings.



These unprecedented disruptions in the current credit and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many companies. These disruptions could, among other things, make it more difficult for us to obtain, or increase our cost of obtaining, capital and financing for our operations.  Additional capital may not be available on terms acceptable to us or at all.



General economic conditions

The recent unprecedented events in global financial markets have had a profound impact on the global economy. Many industries, including the gold mining industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates, and tax rates may adversely affect our growth and profitability.  Specifically:

·

The global credit/liquidity crisis could impact the cost and availability of financing and our overall liquidity;

·

the volatility of gold prices may impact our revenues, profits and cash flow;

·

volatile energy prices, commodity and consumables prices and currency exchange rates impact potential production costs; and

·

the devaluation and volatility of global stock markets impacts the valuation of our equity securities



These factors could have a material adverse effect on our financial condition and results of operations.

ITEM 4.  INFORMATION ON THE COMPANY

History and Development of the Company.

We were originally incorporated as Silver Duke Mines Ltd. (N.P.L.) on December 15, 1967 under the Company Act of British Columbia, Canada.  We changed our name and consolidated our share capital as set forth below on the following dates:

|                   |                                 |                        
|------------------ | ------------------------------- | -----------------------
|Date               | Name                            | Consolidation (Old:New)
|December 15, 1967  | Silver Duke Mines Ltd. (N.P.L.) | Not applicable         
|February 3, 1976   | Totem Resources Ltd. (N.P.L.)   | 4:1                    
|June 9, 1978       | Paragon Resources Ltd. (N.P.L.) | Not applicable         
|May 13, 1981       | Paragon Resources Ltd.          | Not applicable         
|September 11, 1995 | SAMEX Mining Corp.              | 5:1                    





Effective May 28, 1999, we increased our authorized capital from 100,000,000 shares divided into 50,000,000 common shares without par value and 50,000,000 preferred shares without par value, none of which preferred shares are issued, to 150,000,000 shares divided into 100,000,000 common shares without par value and 50,000,000 preferred shares without par value, none of which preferred shares are issued.



Change in Articles



On March 29, 2004, the corporate legislation under which we were incorporated, the Company Act (British Columbia) (the Former Act), was repealed and was replaced with the new Business Corporations Act (British Columbia) (the Act).  Because of this change, we were required to undertake certain transitionary steps set out under the Business Corporations Act, including filing a Transition Application, which, among other things, replaced our former Memorandum of Incorporation with new Notice of Articles and which adopted certain provisions under the Business Corporations Act known as the Pre-existing



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Company Provisions.  This step was completed on February 11, 2005.  We were also required to amend our Articles to comply with the new legislation.  Coincidentally with these changes, we also altered our authorized share structure to eliminate the maximum number of common shares and preferred shares that the Company is authorized to issue, effective June 13, 2005.  See Item 10. Additional Information  Changes to Corporate Legislation.



Change In Year-End

During the fourth quarter of fiscal 2005,we changed the Companys fiscal year-end to synchronize it with the year-end of our Chilean subsidiary and with the quarter ends of our Bolivian subsidiaries.  The change helps make the Companys accounting and reporting process more streamlined and efficient.  The Companys old financial year-end of November 30th was extended one additional month and the Companys new financial year-end is now December 31st.

During 2005, the fiscal year-end was changed from November 30th to a new year-end of December 31st.   As a result, the Companys annual financial statements for fiscal 2005 covered a period of thirteen months from December 1, 2004 to December 31, 2005 as compared to a period of twelve months for the other fiscal years.



Our total mineral interests and exploration costs were $1,949,405 for the fiscal year ended December 31, 2008 as compared to  $3,797,308 for the fiscal year ended December 31, 2007, substantially all of which was spent on our mineral properties in Chile and Bolivia.  We have financed these expenditures primarily through private placement financing and the exercise of warrants and options raising gross proceeds of $3,806,800 during fiscal 2006, $4,765,480 during fiscal 2007 and $1,539,000 during fiscal 2008.  Further details applicable to anticipated capital expenditures and funding sources are detailed in Item 5. Liquidity and Capital Resources.



We have six subsidiaries, all of which are described below.  The present inter-corporate relationship between us and our subsidiaries is illustrated in the following chart:







South American Mining & Exploration Corp.

South American Mining & Exploration Corp. (S.A.M.E.X. Corp.) was incorporated in British Columbia on November 24, 1993.  Since its inception, S.A.M.E.X. Corp. has been involved principally in the acquisition and exploration of mineral properties in South America through its operating subsidiaries in Bolivia.  Its authorized share capital consists of 100,000,000 common shares with 7,925,001 shares outstanding, all of which are held by us.

SAMEX International Ltd.

SAMEX International Ltd. (SAMEX International) was incorporated as an international business company under the laws of the Commonwealth of the Bahamas on August 4, 1995.  The directors and officers of SAMEX International are Patricio Kyllmann (Director, President and Secretary) and Kenneth Taves (Director).  Its authorized share capital consists of 5,000 common shares of which 100 are issued and outstanding, all of which are held by S.A.M.E.X. Corp.  SAMEX International



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functions as an international holding and finance company and holds 98% of the shares of each of SAMEX S.A. and Emibol S.A.

SAMEX S.A.

SAMEX S.A. was incorporated under the laws of the Republic of Bolivia on May 10, 1994.  The directors and officers of SAMEX S. A. are: Jeffrey Dahl  President & Director, Lorena Fernandez  Vice President & Director, Franz Vega  Secretary & Director, Robert Kell - Director, Aida Martinez - Alternate Director, Albaro Gonzales Quint - Sindico, Felix Villegas Michel  Alternate Sindico.  SAMEX S.A. has authorized capital of 500,000 Bolivianos (Bs.) and paid up capital of 250,000 Bs. represented by 100 common shares issued with a nominal value of 2,500 Bs each.  Bolivian corporate law requires that the company have at least three shareholders and, accordingly, the shares of SAMEX S. A. as well as Bolivex S.A. and Emibol S.A. have been issued so that 2 shares are held by persons other than S.A.M.E.X. Corp. or SAMEX International.  Of the 100 issued and outstanding shares, 98 are held by SAMEX International and the remaining 2 shares are held by each of Jeffrey Dahl and Peter Dahl, directors of SAMEX. SAMEX S.A.s primary asset is its interest in a portion of the Goya I/El Bonete concession which form the Santa Isabel property referred to below.

Bolivex S.A.

Minas Bolivex S.A. (Bolivex S.A.) was incorporated under the laws of the Republic of Bolivia on September 23, 1994.  The directors and officers of Bolivex S. A. are: Jeffrey Dahl  President & Director, Edgar F. Zapata  Vice President & Director, Franz Vega  Secretary & Director, Robert Kell - Director, Aida Martinez - Alternate Director, Victor Flores  Sindico.   Bolivex S.A. has authorized capital of 500,000 Bolivianos (Bs). and paid up capital of 250,000 Bs. represented by 100 common shares issued with a nominal value of 2,500 Bs each.  Of the 100 issued and outstanding shares, 98 are held by S.A.M.E.X. Corp. and the remaining 2 shares are held by each of Jeffrey Dahl and Peter Dahl.  Bolivex S.A.s primary asset was the Walter property that was abandoned in the first quarter of 2009 (see Description of Properties referred to below).

Emibol S.A.

Empresa Minera Boliviana S. A. (Emibol S.A.) was incorporated under the laws of the Republic of Bolivia on August 22, 1995.  The directors and officers of Emibol S. A. are: Jeffrey Dahl  President & Director, Lorena Fernandez  Vice President & Director, Franz Vega  Secretary & Director, Robert Kell - Director, Aida Martinez - Alternate Director, Albaro Gonzales Quint - Sindico, Felix Villegas Michel  Alternate Sindico.  Emibol S.A. has authorized capital of 200,000 Bolivianos (Bs) and paid up capital of 100,000 Bs. represented by 100 common shares issued with a nominal value of 1,000 Bs each.  Of the 100 issued and outstanding shares, 98 are held by SAMEX International and the remaining 2 shares are held by each of Jeffrey Dahl and Peter Dahl.  Its principal assets are its interests in the El Desierto and Eskapa properties in Bolivia.



Minera Samex Chile S.A.



Minera Samex Chile S. A. (Samex Chile) was incorporated in Santiago, Chile on July 5, 2002.  The directors and officers of Samex Chile are Jeffrey P. Dahl, Robert E. Kell and Allen D. Leschert and the alternate directors are Francisco Vergara, Felipe Garcia and Pedro Lyon.  Of the 1,000 issued and outstanding common shares, 999 shares are held by SAMEX Mining Corp. and 1 share is held by Francisco Vergara, our Chilean legal counsel.   Samex Chiles principal assets are its interest in mineral concessions in the Los Zorros, Tres Puntas/Chimberos, and Inca properties in Chile.



Principal Expenditures And Divestitures



Since the beginning of the last three financial years, our principal capital expenditures and divestitures have been comprised of the following:



Unilateral Option Purchase Contract dated March 31, 2006 between Sociedad Contractual Minera Porvenir and our subsidiary Minera Samex Chile S. A. (the Minera Porvenir Option).   We signed an option contract to acquire mineral concessions covering a 2,138-hectare portion of the Inca project in Chile by making option payments totaling the Chilean Peso-equivalent of US$2,000,000 over thee years (US$961,500 has been paid).  Pursuant to payment terms revised March 31, 2008, payments are due: upon resolution of certain title issues on an 85-hectare portion of the optioned property, US$77,000 payable on behalf of the optionor to a third party (has not been paid); and March 31, 2009  US$961,500 (The Company has not made the option payment of US$961,500 due on March 31, 2009.  If an option payment is not made on the due date, the option agreement includes a provision whereby Minera Porvenir may advise SAMEX in writing of the non-payment of the option payment, and if the option payment is not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination, which would result in a complete loss of our interest in the optioned properties.  At the date of this report, the Company had not received written notice of default with respect to non-payment of the option payment due under the Minera



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Porvenir Option on March 31, 2009.)   (See Item 4 Information on the Company  Description of Property - Inca Project).



Unilateral Option Purchase Contract dated April 4, 2006 between Malvina del Carmen Araya Santander and our subsidiary Minera Samex Chile S. A. (the Araya Option).  We signed an option contract to acquire mineral concessions covering a 45-hectare portion of the Inca project in Chile by making option payments totaling the Chilean Peso-equivalent of US$300,000 over thee years (US$204,523 has been paid).  Effective March 31, 2009, the Optionor agreed to revise the payment terms with respect to the option payment balance of US$95,477 due March 31, 2009 as follows: US$30,000 on March 31, 2009 (which has been paid); US$30,000 on June 30, 2009; and US$35,477 on September 30, 2009).  (See Item 4 Information on the Company  Description of Property - Inca Project).



Unilateral Option Purchase Contract dated May 25, 2006 between Oscar David Rojas Garin and our subsidiary Minera Samex Chile S. A. (the Rojas Option).  We signed an option contract to acquire mineral concessions covering a 20-hectare portion of the Inca project in Chile by making option payments totaling the Chilean Peso-equivalent of US$300,000 over thee years (US$150,000 has been paid).  Option payment is due: April 30, 2009 - US$150,000 (The Company has not made the option payment of US$150,000 due on April 30, 2009.  If an option payment is not made on the due date, the option agreement includes a provision whereby Rojas may advise SAMEX in writing of the non-payment of the option payment, and if the option payment is not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination, which would result in a complete loss of our interest in the optioned properties.  At the date of this report, the Company had not received written notice of default with respect to non-payment of the option payment due under the Rojas Option on April 30, 2009.).  (See Item 4 Information on the Company  Description of Property - Inca Project).



Unilateral Option Purchase Contract dated April 9, 2007 between Jaime Ruben Parra Vasquez and our subsidiary Minera Samex Chile S. A. (the Parra Option).  We signed an option contract to acquire mineral concessions covering a 21-hectare portion of the Inca project by making option payments totaling the Chilean peso equivalent of US$180,000 over two years (US$100,000 has been paid).  Option payment is due: April 9, 2009 - US$80,000 (The Company has not made the option payment of US$80,000 due on April 9, 2009.  If an option payment is not made on the due date, the option agreement includes a provision whereby Parra may advise SAMEX in writing of the non-payment of the option payment, and if the option payment is not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination, which would result in a complete loss of our interest in the optioned properties. At the date of this report, the Company had not received written notice of default with respect to non-payment of the option payment due under the Parra Option on April 9, 2009.)  (See Item 4 Information on the Company  Description of Property - Inca Project).



Viscacha I Purchase  In September 2007, the Company purchased the Viscacha I mineral concession covering a 3-hectare-portion of the INCA project from Florentino Gomez for a total consideration of US$32,938 (17,000,000 Chilean Pesos). (See Item 4 Information on the Company  Description of Property - Inca Project).



We have not made any material divestitures since the beginning of the last three financial years.



We have not made any acquisitions of other companies and our shares are not subject to any public takeover offers.  Neither we nor any of our subsidiaries have been involved in any bankruptcy, receivership or similar proceedings.



Our head office is located at #301  32920 Ventura Avenue, Abbotsford, British Columbia, V2S 6J3.   The address for our registered and records office is #2760  200 Granville Street, Vancouver, British Columbia, V6C 1S4.  The phone number of our head office is (604) 870-9920.  In South America, we have a field office in Copiapo, Chile.



Business Overview.

For 2008

During 2008 we were principally involved in continued exploration on our INCA copper-gold-silver-moly prospect in Chile.  By  December 2007 we had completed the last of more than 10,300 meters of drilling as part of our Phase I exploration program on the Inca property.  Then, continuing through fiscal 2008, our work was mainly focused on logging drill core, assaying, correlating, analyzing and interpreting the results from more than 10,000 meters of drill core.   As a result of the activities on our mineral exploration properties during fiscal 2008, our expenditures on mineral interests and exploration costs for the year totaled $1,949,405 at December 31, 2008.



During the first quarter of 2008 our activities included processing drill core and compiling data from the INCA project, making option payments and an advance royalty payment related to our mineral properties in Chile, and arranging a private placement financing.





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During the second quarter our activities at the INCA project in Chile included continued processing of drill core and data compilation, as well as additional trenching, channel sampling, assaying and installation of safety ladders to provide exploration access to the historic underground workings at the Jardinera mine on the INCA property.  We also made option payments on certain mineral properties in Chile and completing a private placement financing that had been announced in the first quarter.  At the Eskapa project in Bolivia, work was conducted to complete construction of the new Eskapa exploration camp.



During the third quarter our activities at the INCA project in Chile included the installation of a system of safety ladders and platforms to facilitate exploration access into the underground workings of the Providencia mine and then we conducted rock-chip channel sampling and assaying of the underground workings.  We also continued with the process of compiling and interpreting the extensive amount of data from the Phase I exploration program at the INCA project.



During the fourth quarter, the Company conducted property visits on the INCA Project in Chile for larger companies who expressed interest in possible joint-ventures on the project.  The Company also continued compiling and interpreting the results from the Phase I exploration program at the INCA project.



For 2007

During the 2007 fiscal year we were principally involved in exploration and drilling on our INCA copper-gold-silver-moly prospect near Inca de Oro, Chile, and in constructing a new exploration camp and conducting bulldozer work building additional access roads and drill pads at the Eskapa copper-gold-silver prospect in Bolivia.  Expenditures on mineral interests and exploration costs for the 2007 fiscal year totaled $3,797,308.



During the first quarter of 2007 our activities included completing 30.6 line-kilometers of IP/Resistivity geophysical survey at the INCA project in Chile, financing activities, and making option payments on concessions comprising the INCA project.  During the quarter, annual patent payments were made on the Companys mineral properties in Chile.   During the first quarter, we raised $4,594,000 through a private placement of 5,742,500 units comprised of one common share and one-half of a share purchase warrant at a price of $0.80 per unit.  One full warrant entitles the holder to purchase an additional common share at a price of $1.00 per share if exercised at any time during the two year term of the warrant which expires March 16, 2009.  The units (5,742,500 shares and 2,871,250 warrants) were issued March 16, 2007 and are subject to a four-month hold period until July 17, 2007.  The proceeds of the private placement will be used for expenditures on the Companys mineral properties and for general working capital.  A director of the Company was a placee for 200,000 units.  A 7% finders fees ($253,400 in aggregate) was payable to four separate parties for their assistance in placing portions ($3,620,000 in aggregate) of the private placement.



During the second quarter of 2007, at the INCA project in Chile, we completed an additional 26.2 line-kilometers of IP/Resistivity geophysical surveys that included 10.4 line kilometers of 100-meter Dipole-dipole spacing and 15.8 line kilometers of 200-meter dipole-dipole spacing.  With the additional geophysical surveys completed, drill sites were selected and blasting and bulldozer work commenced to construct access roads and drill pads for the drilling program.  During the second quarter, the Company signed the Parra option agreement to acquire additional mineral concessions in the INCA project area. Under the Parra Option, SAMEX can purchase 100% interest in mineral concessions covering a 21-hectare portion of the INCA project by making option payments totaling the Chilean peso equivalent of US$180,000 over two years as follows: US$50,000 upon signing the Option Agreement (paid); US$50,000 by April 9, 2008 (paid); and US$80,000 by April 9, 2009.  At the Eskapa copper and precious metal prospect in Bolivia, the Company began constructing a new exploration camp, and commenced bulldozer work to repair and expand access roads, and build drill pads for the next phase of drill testing planned for the Eskapa property.



During the second quarter of 2007, we also appointed an investor relations representative.  We retained Brazen Financial Corp. of North Vancouver, British Columbia, as Consultant to provide investor relations services for the Company pursuant to a Consulting Agreement (the Agreement) dated for reference June 22, 2007 (see Item 19  Exhibits, Exhibit 4.10).  Mr. Jamie Punt is the key employee of Brazen Financial (the Consultant) and will provide the services to SAMEX on its behalf.  As a condition of the Agreement the Consultant is entitled to receive incentive stock options to purchase 200,000 common shares of SAMEX at a price of $0.85 per share.  The options are subject to quarterly vesting provisions in stages over 12 months from the date of issuance.  The Agreement will continue in effect for a period of 18 months commencing on June 22, 2007.  The Consultant is entitled to a fee of $7,500 per month (on a three-quarter time basis) increasing to $10,000 per month (full time), plus re-imbursement of approved expenses.  The Consultant will assist with general investor relations services for SAMEX, focusing on continued development of the Companys relationships with brokers, analysts and fund managers.



During the third quarter of 2007 the Company commenced a 10,000 meter Phase I drill program at the INCA project in Chile and blasting and bulldozer work continued to construct access roads and drill pads as the drilling program progressed.  Core logging, sampling and assaying was conducted on the drill core.  We also purchase an additional concession at INCA project during the third quarter.  The Company purchased the Viscacha I mineral concession covering a 3-hectare-portion of the INCA



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project by paying a total consideration of US$32,938 (17,000,000 Chilean Pesos).  In Bolivia, construction work continued on the new Eskapa exploration camp and bulldozer work completed the repair and expansion of access roads and the building of drill pads for the next phase of drill testing on the Eskapa property.



During the fourth quarter of 2007, the Phase I core-drilling program continued at the INCA Project, along with core logging, sampling and shipping of core samples to the assay lab.  By mid December the drilling portion of the program was finished with a total of 10,309 meters of drilling having been completed in 35 holes, with an average hole length of approximately 300 meters.  By that time, approximately 40% of the drill core from the program had been logged, sampled and ship to the lab for assaying.  The detailed process of core logging, sampling and assaying continued through the fourth quarter. During the fourth quarter, annual patent payments were made on the Companys mineral properties in Bolivia.



For 2006

During the 2006 fiscal year we were involved in exploration work on our Los Zorros gold-copper-silver prospect in Chile and in the evaluation, acquisition and exploration of our new INCA porphyry copper-gold-silver-moly prospect near Inca de Oro, Chile.  Our expenditures on mineral interests and exploration costs totaled $2,161,249 for 2006.



During the first quarter of 2006 we continued the detailed work of analyzing, compiling, evaluating and interpreting the data and assays from bulldozer trenching completed in the previous quarter on copper-gold-silver targets on the Los Zorros property.  These results will be used to select drill locations for a phase II drill program for Los Zorros (See Item 4 Information on the Company  Description of Property - Los Zorros Property).  We also began to seek financing in order to acquire rights to the Inca porphyry copper-gold prospects that had unexpectedly come to our attention.  We signed a Corporate Finance Consulting Agreement with European consultants, Spartacus Ltd. (the Consultant), to assist the Company with respect to its corporate financing efforts in Europe and other jurisdictions and as a result, during the first quarter, we raised gross proceeds of $2,604,000 through a private placement of 3,720,000 units at a price of $0.70 per unit.  This enabled us to secure rights to more than 5,000 hectares of mineral concessions at the INCA project in Chile by staking, by purchase of concessions at a government auction, and by option agreement to purchase mineral concessions.  Also during the first quarter, we prepared visual materials, maps, photos, cross-sections and drill sections for the Companys display booth at the Vancouver gold and resource conference and to be used in meetings held in Europe and Toronto.  Annual patent payments were made on our mineral properties during the first quarter.



During the second quarter, we constructed our new field camp and office facilities at the INCA project and we executed two additional option agreements for the acquisition of mineral concessions at the INCA project in Chile.



During the third quarter, we completed the construction and equipping of the camp and exploration office at the INCA project in Chile.  In addition, extensive maps were compiled from ground surveying of topographic, geologic and mining features.  We also had an airborne orthographic photo survey flown over the INCA project in order to produce orthographic air-photos and detailed topographic maps of the mineralized target areas.  The ortho-photos and topographic maps are being utilized in geologic mapping and planning of drill-hole locations for the upcoming exploration work.   We were also seeking and evaluating old reports and underground mining plans, etc. relative to the historic mining and exploration activities that have been conducted at INCA over the past 50+ years.  We were able to locate reports pertaining to geophysical IP surveys, geologic investigations, and much of the drilling including, fortuitously, some of the drill core from 1971 and 1990.  With this newly acquired information, first hand accounts from old miners, and current field studies, we were able to construct a geologic picture from the previous mining/exploration activities which is strongly supportive of the exploration targets at INCA.  Our objective is to explore beneath the oxide copper mines for substantial deposits of primary copper-sulfide ores with important gold, silver and molybdenum credits.  Detailed drill plans were being designed for each individual target area, focusing on expanding the known occurrences of primary and secondary enriched copper-sulfide mineralization which was encountered by previous mining/exploration activities.



During the fourth quarter of 2006, we completed the final option payments on two separate option agreements to acquire mineral concessions covering portions of the Los Zorros property in Chile.  We also commenced a large (30.6 line-kilometers) geophysical IP survey at the INCA Project in Chile.  The purpose of the IP survey was to aid in planning the exploration-drilling program by electrically mapping out the extent of primary copper-sulfide mineralization over the +12 square kilometer area encompassing the target zones which are mostly concealed beneath propylitic and clay-altered granodiorite cap rock.  Initial results from the first two lines were very encouraging and consequently the program was expanded to a total of six survey lines, which were finally completed in January 2007.



During the fourth quarter of 2006 we also paid the annual patent payments on our Bolivian mineral concessions.  The Companys focus over the past year has been on our mineral properties in Chile and as a result no exploration was conducted on our Bolivian properties.  Over the past several years, mineral interests and deferred exploration costs related to the Bolivian properties, with the exception of the Eskapa Property, have been written down annually to a nominal value of $1,000 each until



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exploration activity is resumed on the respective properties.



Plans and Projections For 2009 - The Company plans to focus its exploration activities during 2009 on its high quality gold and silver projects in Chile including Los Zorros which hosts high-grade gold, bulk-tonnage gold and gold-silver targets. We will also continuing our efforts to find suitable joint venture partners or outright purchasers for our INCA project and continue our efforts to negotiate revised option payment terms with various of the INCA property vendors (which have been only partially successful); if we are not able to do so and are not able to locate a suitable purchaser or joint venture partner for INCA, we may be required to relinquish a portion of the INCA property.  Although we raised $783,050 through a private placement of our securities during the first quarter of 2009, based on the funds currently on hand, it will be necessary to raise additional financing during 2009 in order to fund our ongoing general operations for the next year.  In relation to exploration programs and option payments, management will work to secure additional equity financings and/or joint venture/investment funding in order to fund our proposed exploration programs. Over the past year, due in large part to instability in the global financial situation, there has been a decline in the demand for, and in the prices of various metals and a corresponding decline in the market for shares of junior exploration companies which has made it more difficult to raise capital for mineral exploration. Although we anticipate we will be able to raise sufficient funds to carry out our proposed activities, there can be no assurance that we will be able to raise funds in sufficient quantities or at all. (See Item 4 Information on the Company  Description of Property - Los Zorros Property and Inca Project).  See Special Note Regarding Forward Looking Statements.



WE ARE AN EXPLORATION STAGE COMPANY AND HAVE NO MINERAL PRODUCING PROPERTIES AT THIS TIME.  ALL OF OUR PROPERTIES ARE EXPLORATION PROJECTS, AND WE RECEIVE NO REVENUES FROM PRODUCTION.  ALL WORK PRESENTLY PLANNED BY US IS DIRECTED AT DEFINING MINERALIZATION AND INCREASING UNDERSTANDING OF THE CHARACTERISTICS AND ECONOMICS OF THAT MINERALIZATION.  THERE IS NO ASSURANCE THAT A COMMERCIALLY VIABLE MINERAL DEPOSIT EXISTS IN ANY OF OUR PROPERTIES NOR DO WE ANTICIPATE SAME UNTIL AFTER COMPLETION OF FURTHER EXPLORATION WORK AND A COMPREHENSIVE EVALUATION BASED UPON UNIT COST, GRADE, RECOVERIES AND OTHER FACTORS CONCLUDE ECONOMIC FEASIBILITY.  THE INFORMATION CONTAINED HEREIN RESPECTING OUR MINERAL PROPERTIES IS BASED UPON INFORMATION PREPARED BY OR THE PREPARATION OF WHICH WAS SUPERVISED BY GEOLOGIST, ROBERT KELL, OUR VICE PRESIDENT EXPLORATION AND DIRECTOR OF THE COMPANY AND COMPANY GEOLOGIST, PHILIP SOUTHAM, P. Geo.   MR. KELL AND MR. SOUTHAM ARE QUALIFIED PERSONS PURSUANT TO CANADIAN SECURITIES NATIONAL INSTRUMENT 43-101 CONCERNING STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS.



Description of Property

CHILEAN PROPERTIES



LOS ZORROS PROPERTY, Chile

Location and means of access - The Los Zorros Property in the Atacama region of northern Chile is located approximately 60 kilometers south of the city of Copiapo, Chile.  The property is accessed by vehicle by driving approximately 60 kilometers south of the city of Copiapo on the paved, two-lane Pan American Highway (Highway 5) then traveling 5.5 kilometers east on a government maintained dirt road to the western boundary of the property and a further 4 kilometers to the Companys exploration camp.



The exploration objective at Los Zorros is discovery of high-grade gold deposits and bulk-tonnage gold, copper-gold, and/or gold-silver-copper deposits.  Geologic interpretation of the Los Zorros district suggests that multiple mineralizing events are possibly related to a porphyry intrusion underlying parts of the area.  The bulk tonnage-style targets are geologically diverse and include: porphyry-hosted copper-gold, gold-silver-copper mantos and altered sill-hosted vein/veinlet/disseminated mineralization, gold-silver-copper-mineralized breccia bodies, and epithermal mantos-hosted gold.



Target identification/delineation at Los Zorros has been facilitated by the completion of an airborne orthographic photo survey over the entire property, ground topographic surveys, continuing detailed geological mapping, rock chip sampling/assaying, surveying/mapping of old workings, mines and prospect pits, and reviews of limited previous drilling by earlier parties.  Whole-rock geochemical analyses and thin section examination of the various rock types was also undertaken to help interpret the mineralization.   During 2004, we completed 8,617 meters of diamond core drilling in 26 holes, 10,800 meters of bulldozer trenching in 65 trenches and more than 3,100 trench and surface samples/assays.  Norex Drilling Limitada, a Chilean subsidiary of a Canadian company, Norex Drilling International, conducted the drilling using two drill rigs. The exploration work during 2004 was focused in Exploration Areas I, II, and III which are only a portion of the seven target/project areas that we have identified to-date.





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Our exploration at Los Zorros has identified seven Exploration Areas to-date within the Companys land holdings which cover more than 80 square kilometers.  Exploration Areas II through VII encompass numerous old, small gold, silver, copper and barite mines and prospects in low hills (elevations ranging from 700-900 meters) situated along a six-kilometer trend adjacent to a central pampa (plain) where a quartz porphyry intrusion hosts copper-gold mineralization (Exploration Area I).  Due to the number of targets within the Los Zorros property, the extensive size, and character of the alteration and mineralization of each individual area, each Exploration Area is being explored as an individual project.  Below are summaries/histories of each of the Exploration Areas identified thus far:



EXPLORATION AREA I (Lora, Lora S.E.)  Exploration Area I is situated in an area of pampa and low-lying hills with numerous prospected showings of fault-hosted, fracture-controlled and veinleted, oxide-copper mineralization.  Bulldozer trenching has exposed a large copper-gold-molybdenum anomaly within variably leached rocks over an area measuring approximately 1,000-meters long and 800-meters wide (open-ended to the east) with anomalous copper (>250 ppm), gold (>100 ppb) and elevated molybdenum (>10 ppm) in trench (see table below) and outcrop samples.



|                                                  |                  |                  |                   |                       
|------------------------------------------------- | ---------------- | ---------------- | ----------------- | ----------------------
|Trench                                            | Length
In Meters | Average Copper
% | Average Gold
ppm* | Average Molybdenum
ppm
|P-1                                               | 106.0            | 0.105            | 0.039             | 20                    
|P-2                                               | 219.0            | 0.252            | 0.103             | 13                    
|P-3                                               | 213.4            | 0.186            | 0.212             | 33                    
|P-5                                               | 67.0             | 0.266            | 0.189             | 20                    
|P-6                                               | 110.8            | 0.145            | 0.256             | 12                    
|P-9b                                              | 104.3            | 0.066            | 0.069             | 18                    
|P-9c                                              | 89.0             | 0.077            | 0.018             | 51                    
|P-16                                              | 129.4            | 0.277            | 0.149             | 12                    
|P-18                                              | 207.3            | 0.102            | 0.081             | <2                    
|C-1                                               | 199.0            | 0.069            | 0.100             | <6                    
|LR1-17                                            | 51.0             | 0.051            | 0.580             | 17                    
|Weighted average of trench samples in target area | 0.151            | 0.143            | 17               

* Analytical results are reported in parts per million (ppm).  1 ppm = 1 gram/metric tonne (g/mt)



The geologic setting of this target has been disclosed by trenching to be porphyritic diorite and quartz diorite which has been strongly hypogene altered (clay-silica and sericite-pyrite) and cut by later igneous dikes.  Strong supergene effects have produced secondary clays plus iron-oxide and oxide-copper minerals.  The oxide-copper mineralization occurs in all rock types mostly as copper wad and chysocolla along abundant fractures, structurally controlled wide zones of multiple orientation, and as strong disseminations in altered diorite.  The original copper mineralization appears likely to have been comprised of gold-bearing, copper sulfide (chalcopyrite) associated with the hypogene alteration within the porphyritic dioritic rocks.



During our phase-one drilling program in 2004, six core drill holes tested only a portion of the porphyry intrusions, encountering long intervals of low-grade copper/gold mineralization (see table below) in each hole.  Drilling was principally along a 500-meter long fence of four inclined holes (P1, P2, P3, P4) which were spaced on an east-west line, systematically testing across the central part of the large copper/gold anomaly defined earlier by trenching.  Two additional inclined holes (P5 and P6) were drilled 200-meters southwest, and 400-meters south of the fence, respectively.





|          |       |       |              |       |       
|--------- | ----- | ----- | ------------ | ----- | ------
|Hole #    | From  | To    | Interval (m) | Cu %  | Au ppm
|P1        | 5.45  | 228   | 222.55       | 0.163 | 0.061 
|including | 16.7  | 37    | 20.3         | 0.499 | 0.051 
|          | 14    | 86    | 69.3         | 0.236 | 0.045 
|AND incl. | 206.5 | 227   | 20.5         | 0.404 | 0.276 
|P2        | 7.5   | 245.8 | 238.3        | 0.144 | 0.117 
|including | 178   | 204   | 26           | 0.31  | 0.216 
|P3        | 2.1   | 330   | 327.9        | 0.175 | 0.147 
|including | 2.1   | 72    | 69.9         | 0.29  | 0.243 
|P4        | 6.5   | 306   | 299.5        | 0.163 | 0.108 
|including | 9.5   | 86.75 | 77.25        | 0.249 | 0.145 
|OR incl.  | 9.5   | 132   | 122.5        | 0.237 | 0.152 
|P5        | 6.3   | 293.2 | 286.9        | 0.035 | 0.03  
|P6        | 7.5   | 221.5 | 214          | 0.083 | 0.057 



Evaluation of the drill data suggests that this mineralization may represent the low-grade, distal zone or outer halo to more



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intensely altered and better mineralized parts of the porphyry copper/gold system within Exploration Area I.  Conclusive interpretations of the geologic features and geochemical results of Exploration Area I are not yet complete.  Further work within Exploration Area I will focus on searching for other areas of higher grade oxide and secondary sulfide mineralization which are advantageously positioned at shallow depths and for protore zones of combined high copper/gold grade with significant width.



EXPLORATION AREA II (Milagro, Milagro Pampa, Florida, Florida West) Exploration Area II is comprised of an area where gold was previously mined on a small scale via open cut methods and which is marked by strong clay alteration and silicification with abundant iron-oxide minerals over an area about 500 meters long by 200 meters wide.  The gold mineralization occurs in mantos-like layers (intervals of altered tuff units) in a package of andesite flows and diorite sills which are gently dipping and positioned at shallow depths.  PIMA analyses of altered tuff samples from the mine area show mineral assemblages typical of high-level epithermal gold-mineralized systems (opaline, silica, silica-jarosite, alunite-halloysite-montmorillonite, smectite-kaolinite, serecite-pyrophyllite, illite-silica, gypsum-silica and jarosite silica).  The gold mineralization within the small local mine workings occurs with distinct clay alteration and silicification and may be much-more extensive beneath surrounding areas to the previous mining activity.



The phase-one reconnaissance drilling and trenching program during 2004 in Exploration Area II identified four important prospective targets (A through D) for gold (-silver) and copper-gold mineralization.  Information from that program about Targets A, B, C and D and tables of geochemical analytical results were reported in our form 6-K filed January 24, 2005.  Further work during 2005 provided a better understanding of these targets as reported in the following form 6-K filed December 19, 2005 - Update On Gold Targets - Exploration Area II: A gravity geophysical survey, detailed geologic mapping, and re-logging of certain Phase I drill core has helped to better understand and outline gold targets in Exploration Area II of the Los Zorros property.  The nature and geochemistry of these targets were previously reported in form 6-K filed January 24, 2005.  Three of these targets,  Target A (Milagro Mine), Target C (Milagro Pampa) and Target D (La Florida), will be included for drilling as part of the proposed Phase II exploration program to follow-up numerous gold, copper-gold and silver targets on the Los Zorros property.  Target B is not currently being considered for follow up, but may be pursued at a later date depending upon further results in the area.  The three targets are summarized as follows:



Target A (Milagro Mine)is an area where Phase I drilling intersected gold-mineralized mantos and underlying thick hydrothermal breccia that may be part of an important gold zone.  The mantos zone was intersected between drilling depths of 27.0 to 31.7 meters.  The gold content ranges from 1.240 grams/metric tonne to 4.140g/mt and averages 2.579 g/mt gold with a silver average credit of 15.9 g/mt over a true width of 4.4 meters (previously reported in News Release No. 1-05).  Of importance, the gold-mineralized mantos occurs within a very wide halo of strongly anomalous gold values.  The gold mineralization (mantos) of the Milagro Mine area is fortuitously located in an uplifted (horst) block and occurs just below the floor of a gabbro body.  The gravity expression of the dense gabbro body masks the presence of the low-gravity character of the underlying altered rocks which host the gold mineralization.  The surface extent and indications of gold mineralization in the horst block defines a target size of 300 to 400 meters across by 800 meters down dip (easterly).  The mantos interval and better mineralized upper part of the underlying breccia are together approximately 50-meters thick.  If better grade gold-mineralized intervals can be found by drilling, the target dimensions are permissive for 25 million to 35 million metric tons within the uplifted (horst) block.  The spatial extent of the gold-mantos and underlying breccia zone in down-dropped blocks to the north and south flanking the horst block of the target area are unknown at this stage, and may be the focus of later explorations efforts. Two or three core holes are planned to drill the projected down-dip continuation of the gold mineralized mantos interval and underlying breccia to the east.



Target C (Milagro Pampa)is a stockwork-veined, sericite-clay-quartz-altered/pyritized gabbro sill with strongly anomalous copper-gold-silver and mercury content which is concealed beneath pampa cover and was discovered during Phase I drilling in hole ML-04-03.  The strong alteration, anhydrite and quartz-pyrite stockwork veining, and highly anomalous copper content intersected suggests that Milagro Pampa is near the center of the intrusive porphyry source of the mineralizing system.  The typical gravity high expression of the gabbro over the region is considerabley diminished by the alteration/mineralization effects at Milagro Pampa.  The hole did not quite reach and penetrate through the floor of an altered and mineralized gabbro body, but garnet skarn xenolith blocks comprising the last twenty meters suggest that the hole was stopped near the floor contact with underlying rock.  The strong alteration, pyritization and variable anomalous copper over the entire length of the hole may comprise the outer halo to substantial gold-copper mineralization hosted in altered porphyry and layered skarnoid sedimentary and volcaniclastic rocks that likely underlie the gabbro body.



In light of the gold mineralization being concentrated just below the floor of the gabbro unit at the Milagro Mine (Target A), exploration results make a strong case to test for copper-gold mineralization underlying the gabbro in the Milagro Pampa area.  The fault-bounded prospective area of Milagro Pampa measures 1000 meters by 500 meters with the top of the target becoming progressively deeper in a down-dip direction to the east (ranging approximately 400 to 500 meters vertical depth).  One to two core drill holes are proposed to test this target during Phase II.





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Target D (La Florida)is an area where Phase I trenching and sampling exposed silicified and clay-altered quartz-eye porphyritic intrusion with significantly anomalous gold content including a 138-meter interval averaging 0.405 g/mt.   The gold mineralized/altered intrusion intrudes up through a little-altered, thick diorite sill and coincides with a well-defined gravity low.  The surface outcropping, oval-shaped area of gold mineralized quartz-eye porphyritic dacite intrusion encompasses approximately 200 meters wide by 400 meters long.   Similar altered/mineralized porphyritic intrusion outcrops/daylights elsewhere in the vicinity, indicating the target extends over a much greater distance beneath the surrounding area.  One to two core drill holes are proposed to test this target during Phase II.



EXPLORATION AREA III (Nora)- Exploration Area IIIis a large area hosting a complex swarm of numerous copper-gold-mineralized barite veins and a series of broad zones of anomalous gold we exposed by trenching. The upper oxide parts of some principal veins of the swarm have been mined historically on a small scale for gold, copper and barite.



Exploration work carried out during 2004 in Exploration Area III included: geologic mapping and surface outcrop rock-chip sampling mostly across principal vein structures (193 samples), approximately 2000 meters of trenching (14 trenches/520 channel samples), and 3,799.5 meters of core drilling in 10 holes.  The phase-one reconnaissance drilling and trenching program identified five targets (A through E) prospective for gold ore-bodies.  Information from that program about Targets A,B, C, D and E was reported in our form 6-K filed April 8, 2005.   Further work during 2005 provided a better understanding of the targets in Exploration Area III as reported in the following form 6-ks filed September 13 and 14, 2005 - Update On Exploration Area III (NORA High-Grade Gold Target) - A Phase II exploration drilling program is being planned for the Los Zorros property in Chile.  In preparation, SAMEX has re-logged so far, core from six Phase I drill holes, carried out further geologic mapping, and conducted a gravity geophysical survey over a large area encompassing the principal targets on the property.  The new information is being compiled, critically evaluated, and merged with the results from the Phase I exploration drilling program and as a result the geologic setting of several of the numerous targets on the property are now much better understood.  The first technical update, presented here, is focused on the high-grade goldmineralization encountered by drilling within Exploration Area III atwhat is now called the NORAtarget.  The NORA High-Grade Gold Target now encompasses Target zones A, B, C, D, & E.  Based on information gleaned from re-logging of Phase I drill core and further geologic mapping it was determined that these five target zones were inter-related and best explored and described as a single comprehensive target, namely, the NORA target which is described below:



NORA High-Grade Gold Target, Exploration Area III - During the Phase I drilling program, an impressive, mantos-style (layered), high-grade gold intersection (15.96 g/mt gold over 7.66 meters or 0.51 oz/mt over 25.12 ft.) was made in drill hole DDH-04-05.  If the gold-rich mantos layer should prove to be extensive beneath much of the NORA prospective area that measures 1,200 meters by 1,000 meters and maintains the average thickness intersected, a large target could be present.  The potential target is based on a model developed by the Company using available geological information which, although thought by the Company to be a reasonable explanation for the occurrence of identified mineralization in the NORA target area, has yet to be proven by drilling and other exploration activities.  Phase I drilling in Exploration Area III (DDH-N-04-01 to 06 and 08 to 10) indicated that grades of up to 16 g/t (grams/tonne) gold over significant thicknesses are present in the target area.  This target potential is conceptual in nature, there has been insufficient exploration to define a mineral resource within Exploration Area III and it is uncertain if further exploration will result in discovery of a mineral resource within the NORA target.



The intersected gold mineralization occurs in a complicated package of volcaniclastic detrital rocks, volcanic breccia, and minor siliclastic sedimentary rocks.  The highest grades of gold occur within a distinctly layered clastic sequence and specifically within two, closely spaced, unique black-matrix breccia sub-intervals which have been silicified and contain abundant disseminated pyrite and minor chalcopyrite.  Follow-up drilling (DDH-N-04-08, -09, and -10) though did not encounter this distinctly layered interval and gold-mineralized black breccia, and the reasons for this were evaluated via re-logging the core of all these holes.   The gold-mineralized mantos interval in DDH-N-04-05 was intersected intact and without fault complications.  The gold-mineralized interval has a moderate (+/-30o) eastward dip similar to the general dip of layering of the volcaniclastic section.  A 250-meter wide alteration halo surrounds the gold mineralized interval and consists of a narrow outer chloritic zone and thick interior zone of silica-clay-pyrite with scattered veinlets of quartz-pyrite+/-chalcopyrite.  Coincident with the alteration halo are numerous anomalous to highly anomalous values of copper, mercury, and silver and many elevated (>25 ppb to <100 ppb range) to anomalous (>100 ppb range) gold values.  This alteration and geochemical expression suggests strong and widespread mineralizing processes were associated with the deposition of the gold-rich interval.



In follow-up drill holes, parts of this alteration and geochemical expression were also intersected toward the bottom of DDH-N-04-08 and the top part of DDH-N-04-09, but neither of these holes encountered the distinct high-grade, gold-bearing interval.  Fault zones were also observed in the holes and, based on the difficulty of projecting thicker stratigraphic units between the drill holes, the faults bounding the intersected high-grade gold-mineralized mantos interval have minor to moderate amounts of dip-slip normal displacement.  A fault of significant dip-slip displacement must be present between DDH-N-04-5, -8, -9 (fanned from the same pad) and DDH-N-04-10 located 70 meters to the west.  From this review it appears that DDH-N-04-08 was not drilled deep enough to make an intersection and DDH-N-04-09 penetrated through a fault gap, which may explain why these



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holes missed the gold-mineralized zone.



The results of DDH-N-04-10 suggest that the gold-mineralized zone is significantly down-dropped by faulting to the west to greater depths beneath the NORA area.  Hence, DDH-N-04-05 made an intersection in the up-thrown block, east of the fault, and DDH-N-04-10 was positioned in the down-thrown block and was not drilled deep enough to encounter the alteration halo and enclosed gold-mineralized interval.  DDH-N-04-10 though, did encounter intervals of gold, silver, and copper in highly interesting anomalous values over the final 60 meters of the hole.  A north-south-trending, west-dipping fault of substantial normal displacement was found to the south and traced northward until its offset position was lost beneath covered pampa.  This fault is now believed to extend along the east side of the target area and is the fault positioned between DDH-N-04-10 and the fan set of holes DDH-N-04-05, -08, and -09.



Importantly, the high-grade, gold-mineralized interval is possibly widespread beneath the NORA target area.  The substantial width of the haloes of both the associated hydrothermal alteration and anomalous values of copper, mercury, and silver, plus elevated to anomalous gold surrounding the gold-mineralized interval in DDH-N-04-05, indicate a strong mineralizing system that could have produced an extensive gold ore body of moderate- to high-grade nature. This may be supported by the presence at the surface, of numerous copper-gold-mineralized barite veins and a series of north-trending broad zones of anomalous gold exposed by trenching, which could represent leakage up from the deeper seated, high-grade, gold-mineralized mantos.  The area of veins and anomalous gold zones measures 1,200 meters by 1,000 meters and if the gold-rich mantos layer extends beneath much of this prospective area, a large target could be present. This target potential is conceptual in nature, there has been insufficient exploration to define a mineral resource within Exploration Area III and it is uncertain if further exploration will result in discovery of a mineral resource within the NORA target.



To pursue this target, recommendations are that drilling first should be carried out north and south of DDH-N-04-05 in the up-thrown block where depths to reach the high-grade gold-mineralized zone should range between 200 to 250 meters.  Then, drilling would be moved westward to test for the high-grade, gold-mineralized zone at greater depths (300 to >600 meters) within the large area encompassing the barite veins and broad anomalous gold zones in the down-thrown block.  Within the large area of the down-dropped block, where a moderate (250 to 350) eastward dip of layered rocks prevails, the targeted gold-mineralized zone should come closer to the surface in a westward direction and much exploration drilling could be accomplished at depths of between 350 to 450 meters.



The high-grade gold mineralization atNORA represents a very exciting exploration target, with substantial upside potential, that was discovered through the patient and diligent efforts of the SAMEX team.  Should the geologic model hold together through Phase II drilling a major discovery could result and be a tremendous success for the Company.  This is only one of several quality targets that are coming together at Los Zorros and management is pleased with the progress and potential resulting from these efforts.  Further target information will be announced when all applicable data is complete.



SAMEX commenced trenching and sampling in early October 2005 within Exploration Area III at Los Zorros, focusing first on the area overlying the NORA high-grade gold target which was described in our form 6-Ks filed September 13 and 14, 2005.  The purpose of this exploration work was to expose and sample parts of zone A along the western side and zones C, D & E in the northeastern part of Exploration Area III.   These prospective zones have been historically prospected with numerous small mine workings and consist of multiple narrow veins and mantos intervals containing interesting gold and copper mineralization that may represent leakage up off a well-mineralized system at depth. The eastern-most anomalous gold zone, and the other zones, may prove to comprise an important guide to deeper seated high-grade gold mineralization.  Hence, the trench results will be important in planning Phase II exploration core drilling in the Nora target area.  (This trenching program in Exploration Area III (NORA) totaled 1,865 meters in 10 trenches with 559 samples taken.)



EXPLORATION AREAS IV, V, VI and VII - As indicated above, the drilling and trenching program from July to December 2004 was focused in Exploration Areas I, II and III, which are only a portion of the seven Exploration Areas that have been identified to-date on the Los Zorros property.  Following are brief summaries of Exploration Areas IV, V, VI and VII that have yet to be explored by drilling.



EXPLORATION AREA IV (Cinchado) - Exploration Area IV includes a gold-bearing, iron-oxide cemented breccia body cross-cutting the contact between limestone and underlying volcanic/volcaniclastic rocks with diorite sill.  A small open-pit gold mine within the breccia body (formerly identified as the San Pedro prospect) was worked in the early 1990s.  According to the operator, 150,000 metric tons was mined with an average grade of just over 3 g/mt gold.  The breccia is comprised of clasts that are up to several meters in diameter.  The controls of the breccia are in part structural and perhaps locally stratigraphic.  Breccia and related alteration features of silicification and barite deposition have been traced for 1,200 meters with thicknesses from several meters (distal) to over 40-meters at deepest depths observed.  Overlying alteration features, in places, are locally well-over 150 meters across.





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Gold mineralization in the open-pit occurs in breccia which has been strongly affected by supergene leaching.  SAMEX sampling of the breccia exposed in the open-pit, show gold values ranging from 0.05 to 9.5 grams per tonne in 151 rock-chip samples.  The geochemical character of the breccia suggests that primary mineralization (breccia intra-clast cement) may have been comprised of gold-bearing, iron-copper+/-zinc sulfides with an epithermal character (overprint) of additional gold with associated anomalous arsenic and antimony.  The common presence of elevated to anomalous molybdenum values (up to 180 ppm) suggests that the source of the breccia-hosted mineralization may be a porphyry-copper intrusion.  Our drilling will be designed to test for possible extensions of the mineralized breccia body where mining has been historically focused, and, to determine whether the exposed parts of the breccia are actually the margin of a concealed, large central breccia pipe that could comprise a sizeable ore-body.



Detailed geologic mapping was  conducted in Exploration Area IV including on the 95 hectares of additional concessions acquired under an option to purchase agreement signed in June 2005.  The mapping in Exploration Area IV was followed by bulldozer trenching totaling 3,009 meters in 14 trenches with 1,020 samples taken in the trenches for assaying and an additional 82 samples taken from old pits and vein workings.   Results have been incorporated into the existing project database and will assist in the selection of drill locations for Phase II drilling.



EXPLORATION AREA V (Salvadora) - Exploration Area V is a barite vein system hosted in andesite and volcaniclastic rocks.  The system is +700 meters long and nearly 300 meters wide.  Historic barite mining activity to shallow depths (+/- 15 meters) focused on steep-dipping veins that averaged a meter in width.  Barite is commonly associated with gold, silver and gold-silver deposits in epithermal environments.  SAMEX has mapped and sampled the vein sets and is planning drilling to test the down-dip character of the veins for possible gold, silver, and copper content.  The presence of complicated minor veining locally in outcrops suggests a bulk-tonnage target comprised of spaced major veins with intervening rocks containing abundant minor veins/veinlets.



EXPLORATION AREA VI (Colorina)  Initial geologic mapping defined an area of strong hydrothermal alteration with geochemical values of gold, silver and copper that are characteristic of the high-level part, or outer halo, of a possible deeper seated epithermal, precious metal system.  A unique feature of the alteration found in Target VI is its unusually high sodium enrichment which is similarly reported to occur associated with the large copper/gold deposits of the Candelaria and Punta del Cobre District situated 40 kilometers north of Los Zorros.  The area of alteration is hosted in a thick diorite sill and measures 1500-meters (north-south) by 400- to 800-meters across (east-west).  The center of the alteration is just outboard in low-lying pampa to the west of a higher, range-front mine where barite breccia and mantos-hosted oxide-copper-silver mineralization was exploited on a small scale.  The alteration is characterized by hematite-clay-silica with later fracture-controlled superimposed clay-silica.  This style of alteration and weakly anomalous gold, silver, copper suggests a position above perhaps deeper seated, gold-copper-silver (Candelaria-type), or gold-silver (Andacollo-type) mantos- and related vein zone-hosted mineralization similar to other ore bodies in this lower Cretaceous geologic belt.



Initial reconnaissance chip sampling (44 samples) of scattered outcrops of clay-red hematite altered and silicified porphyry and diorite in the area showed common elevated (0.022 to 0.082 ppm) levels of gold with anomalous silver (1 to 6.1 ppm).  Eight samples contained weakly to moderately anomalous gold values (0.173 to 1.22 ppm) with anomalous silver (1.9 to 8.4 ppm), and mercury (110 to 1180 ppb).  Higher gold values (two samples, 4.73 ppm and 5.19 ppm) are restricted to a meter-wide, oxide copper-mineralized (to 3.04% copper) northeast-trending structure.  High sodium values (most >3%) and strongly depleted calcium (most <0.5%) and magnesium (most <0.2%) in the samples suggest the colorful alteration includes a peculiar sodic metasomatism which is noted to importantly occur associated with the copper-gold deposits at Punta del Cobre and Candelaria located in this same geologic belt.   Also in this area, barite-bearing mantos-hosted and breccia-hosted silver and oxide-copper mineralization to several meters thick occurs, replacing a limestone unit just above the zone of altered porphyritic rock.  Samples across the mantos and breccia are polymetallic in character containing anomalous copper (0.32% to 1.06%), silver (11.1 to 49.3 ppm), and zinc (1365 ppm to 9230 ppm).  Detectible elevated gold values (0.011 to 0.055 ppm) are also present with markedly anomalous amounts of arsenic (2490 ppm to 2560 ppm), mercury (260 to 950 ppb), and antimony (112 to 304 ppm).



An intensive program of detailed sampling and trenching has not yet been started.  However, spot, outcrop chip sampling was extended northward, and a channel cut was taken along a 300-meter-long reconnaissance trench, located 400 meters north of the core area.  This east-west oriented bulldozer trench exposed numerous altered zones with widths from a meter to over 50 meters which are separated by intervals of weakly altered to unaltered diorite.  Continuous sampling along the trench wall was carried out at 5-meter-long intervals across all rock types.  The geochemical analytical results from this trench and other samples within the target area continue to show the common presence of elevated to anomalous gold and silver, high amounts of sodium, and many samples also contain low-level anomalous copper and mercury.



EXPLORATION AREA VII (Virgen del Carmen) An additional area of exploration interest on the Los Zorros property is located 2.0 kilometers further north of Exploration Area VIalong the same range front and includes an area of previous small



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mining of oxide-copper-silver-mineralized mantos and breccia which is similar to that exploited at the small mine in Exploration Area VI.  Future work will be focused on further evaluating the outlying pampa to the west of the mine for alteration/geochemical indications of a target of deeper seated, epithermal, gold-silver-copper mineralization similar in size and characteristics to Exploration Area VI.



In summary, the Los Zorros property contains numerous large-sized copper-gold and gold-silver-copper targets on a single property holding and thus represents a very important, strategic opportunity for SAMEX.  The prospect is geologically well-situated within the highly prospective mining belt that contains the copper-gold ore bodies of the Punta del Cobre District (150 million cumulative tonnes with an average grade of 1.5% copper, 0.2 to 0.6 g/mt gold, 2 - 8 g/t silver), the large Candelaria mine (460 million tonnes containing 0.82% copper, 0.22 g/mt gold, 3.1 g/mt silver), the large, mined-out Chanarcillo silver deposit (+100 million ounces of silver), plus many smaller copper-gold and gold ore bodies which still locally support mining operations.  Infrastructure for large mining activity is readily available in the area with power, transportation, water, communications and manpower all within advantageously close distances.  Because of the large size of the property, and the fact that our exploration is still in progress, the information and ideas behind the targets currently being developed must be considered as an evolving picture.  The possibility of defining further new target(s) on the property remains strong.



Sampling, analytical procedures, controls - Geochemical analyses on samples were performed by ALS Chemex, an independent, internationally recognized and ISO certified laboratory complying with the international standards ISO 9001:2000 and ISO 17025:1999.  In preparing drill core samples for analysis, the core is cut or split in half, with one half kept for reference and re-analysis if necessary, while the other half is bagged and sealed as a sample for analysis.  To provide quality control, pre-packaged, sealed, certified standard (include low and medium grade copper-gold pulps) and blank pulps are included for analysis by inserted them as samples in random order at approximately 1 per every 30 samples. To ensure chain of custody, the bagged samples for analysis are picked up by an agent of ALS Chemex and transported directly to the ALS Chemex laboratory at Antofagasta or at La Serena, Chile.



Except where otherwise noted, the analytical and test data underlying the information disclosed herein was verified by or under the supervision of Robert Kell, Vice-President Exploration for SAMEX MINING CORP. and Phil Southam, Geologist, who are qualified persons pursuant to Canadian Securities National Instrument 43-101 concerning Standards Of Disclosure For Mineral Projects.



In the first quarter of 2009, SAMEX resumed exploration work at the Los Zorros gold project in Chile.  The work will build upon and advance the numerous quality targets identified during the Phase I program, with particular focus on the Companys high-grade gold discovery within the Nora target area.  We plan to also advance the Cinchado target area that includes the old San Pedro gold mine.



The Los Zorros project encompasses a large (80 square kilometers), highly prospective district of historic gold workings/mines.  As previously reported, Phase I exploration yielded significant results including:



·

Nora -DDH-N-04-05, 15.96 g/mt gold over 7.66 meters (0.51 oz/mt gold over 25.12 ft.) - trenches TN-9 0.757 g/mt gold over 131 meters, TN-3 0.558 g/mt gold over 117 meters

·

Milagro - DDH-ML-04-01, 2.579 g/mt gold over 4.4 meters.

·

West Florida

- trench TMW-10, 0.405 g/mt gold over 138 meters.

·

Cinchado - values ranging from 0.05 to 9.5 g/mt gold in 151 rock-chip samples of breccia in the open-cut of the old San Pedro mine.



These encouraging results provide important guides for the current exploration that is focused on designing future exploration drilling programs.  Although gold is the primary focus of SAMEXs exploration at Los Zorros, important values of silver and copper are also present in certain target areas.



During Phase I exploration work, SAMEX utilized a numbering system (ie. Exploration Area I, II, III, IV, etc) to designate the numerous target areas, in part because broader strategic land acquisition activities were ongoing.  With the Companys land position now satisfactorily expanded, the Company will be using the historic names of the various mines and landmarks for reference in exploration updates as follows:



·

Exploration Area I

= Lora and Lora S.E.

·

Exploration Area II

= Milagro, Milagro Pampa, Florida and West Florida.

·

Exploration Area III

= Nora

·

Exploration Area IV

= Cinchado

·

Exploration Area V

= Salvadora



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·

Exploration Area VI

= Colorina

·

Exploration Area VII

= Virgen del Carmen



The Companys Chilean subsidiary, Minera Samex Chile, S.A, has mineral rights to 66 exploitation mining concessions that cover an area of approximately 8,156 hectares that comprise the Los Zorros property in Chile.  Following is a list of the concession names-rol #s: FOXES 1 AL 8 - #03201-8071-6; PLACER 20 1 AL 30 -  #03201-7005-2; PLACER 21 1 AL 30 - #03201-7006-0; EL ZORRO VI 1 AL 30 - #03201-7294-2; EL ZORRO VII 1 AL 30 - #03201-7292-6; EL ZORRO VIII 1 AL 10 - #03201-7295-0; EL ZORRO IX 1 AL 20 - #03201-7293-4; EL ZORRO X 1 AL 30 - #03201-7308-6; EL ZORRO XI 1 AL 30 - #03201-7309-4; EL ZORRO XII 1 AL 26 - #03201-7310-8; EL ZORRO XIII 1 AL 29 - #03201-7311-6; EL ZORRO XIV 1 AL 19 - #03201-7312-4; EL ZORRO XV 1 AL 15 - #03201-7313-2; THE FOXES ONE 1/3 - #03201-7185-7; THE FOXES TWO 1/3 - #03201-7186-5; THE FOXES THREE 1 AL 30 64 - #03201-7187-3; THE FOXES FOUR 1 AL 20 - #03201-7188-1; FOXES 1 - #03201-B059-3; EL ZORRO V 1 AL 9 - #03201- 7483-K; PIERNAS LARGAS 1 AL 16 - #03201- 7482-1; POLO 1 - #03201- 7484-8; POLO 2 - #03201- 7485-6; POLO 3 - #03201- 7486-4; POLO 4 - #03201- 7487-2; POLO 5 - #03201- 7488-0; EL ZORRO 22 1 AL 20 - #03201-7606-9; EL ZORRO 23 1 AL 20 - #03201- 7607-7; EL ZORRO 16 A 1 AL  4 - #03201- 7665-4; EL ZORRO 16 B 1 AL 20 - #03201- 7666-2; EL ZORRO 17  1 AL 30 - #03201-7667-0; EL ZORRO 18 1 AL 20 - #03201-7668-9; EL ZORRO 19 1 AL 30 - #03201- 7669-7; EL ZORRO 20 1 AL 30 - #03201- 7670-0; EL ZORRO 21 1 AL 20 - #03201- 7671-9; EL ZORRO 1 AL 2 - #03201- 7664-6; BARBAS 1-7 - #03201-3085-9; BARBAS 21-37 - #03201-3086-7; BARBAS 41-58 - #03201-3087-5; BARBAS 61-74 - #03201-3088-3; BARBAS 81-100 - #03201-3089-1; BARBAS 101-103 - #03201-3090-5; CANDY 1 1-14 - #03201-5547-9; COSTA PINTO(1/15) 1-4 & 6-12 - #03201-7094-K; ELISA 1 AL 4 - #03201-0183-2; FLOR MARIA 1-74 - #03201-2550-2; GOLD MINING I 1 - #03201-6533-4; GRINGO 1-29 - #03201-3941-4; GRINGO 31-60 - #03201-3942-2; KARINA LXVIII 3-11 - #03201-5553-3; LA COLORINA 1-15 - #03201-2233-3; LA SOCIALISTA 1-20 - #03201-3022-0; LA SOCIALISTA 11 - #03201-1012-2; LAS VIZCACHAS 1-9 - #03201-2483-2; LEONOR 1-3 - #3201-2489-1; MILAGRO 1-20 - #03201-2416-1; SANTA ROSA 1-20 - #03201-2490-5; NORA I - #03201-0527-7; NORA II - #03201-2166-3; NORA III - #03201-2643-6; POLO 1 - #03201-6687-K; POLO 2 - #03201-6688-8; PLACER 22 1-20 - #03201-6957-7; SAN PEDRO 1-5 - #03201-1246-K; SANTA ANA 1-6 - #03201-6595-4; LUCAS 18 1-30 - #03201-6487-7; LUCAS 19 1-30 - #03201-6488-5.



The Company acquired the concessions by a combination of staking and acquisition through government auctions, a purchase agreement (1,429 hectares), and by the exercise of two purchase option contracts (209 hectares and 95 hectares).  The Company holds 100% interest in the concessions subject to the terms described below in the Purchase and Sale Agreement with Compania Contractual Minera Ojos del Salado, the Purchase Option Contract with Comercial Sali Hochschild S.A., the Purchase Option Contract with Compania Minera San Estaban Primera S.A., and subject to the Finders Fee, Bonus and Royalty described below:



Purchase and Sale Agreement dated January 29, 2003 between our subsidiary, Minera Samex Chile S.A. and Compania Contractual Minera Ojos del Salado - We entered into a purchase agreement dated January 29, 2003, with the vendor, Compania Contractual Minera Ojos del Salado, to acquire approximately 1,429 hectares of mineral concessions covering old goldmines and gold showings in the Los Zorros district for US$50,000 cash (which has been paid).  Because of the vendors interest in copper, under the purchase agreement, the vendor retained a back-in right to earn an interest in the property in the event that we discover a copper deposit containing not less than two million tonnes of contained equivalent copper on or within a half kilometer of the property.  The vendor can elect to exercise the back-in right to earn a 30% interest by reimbursing us three times the expenditures incurred, and up to 51% interest by expending 100% of all further costs necessary to complete a bankable feasibility study on the property.  Thereafter, the parties would negotiate a joint venture to carry out development and mining of the property.



Puchase of Mineral Concessions Completed -  Re: Unilateral Purchase Option Contract dated November 6, 2003, between our subsidiary, Minera Samex Chile S.A. and Compañia Minera y Comercial Sali Hochschild S.A.  In October 2006 we completed  the acquisition of mineral concessions covering a 209-hectare-portion of the Los Zorros property (mainly covers the Exploration II Area of the Los Zorros property).  Under the Option, SAMEX acquired the concessions by making option payments totaling US$230,000 as follows: US$30,000 upon signing of the Option Agreement (paid); US$50,000 by October 31, 2004 (paid); US$50,000 by October 31, 2005; (paid); US$100,000 by October 31, 2006 (paid).



Pursuant to the exercise of the option and the related Purchase Contract dated October 27, 2006, SAMEX now holds 100% interest in the concessions subject to a Net Smelter Return Royalty of 2% on gold and silver, 1.5% on copper, and 1.5% on other payable minerals, if the US$ price per pound of the mineral is less than US$1 or 2% if the US$ price per pound of the mineral is US$1 or greater.  SAMEX has an option to buyout the Royalty at any time for US$1,800,000.  Pursuant to the option/purchase agreement, if the concessions are not in production by December 31, 2007, advance royalty payments of US$100,000 per year are required for five years (by February 29, 2008 (paid), by March 1, 2009 (which has been paid), and by March 1, 2010, 2011, and 2012) to a maximum of US$500,000, or until the commencement of commercial exploitation.   The advance royalty payments are recoverable from future royalty payments.  SAMEX is not obligated to make the advance royalty



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payments if it elects to return the concessions to the previous owner.



Puchase of Mineral Concessions Completed  Re; Unilateral Purchase Option Contract dated June 29, 2005 between our subsidiary, Minera Samex Chile S.A. and Compañia Minera San Estaban Primera S.A.   In December 2006 we completed the acquisition of mineral concessions covering a 95-hectare-portion of the Los Zorros property by making option payments totaling US$200,000 over 18 months as follows: US$75,000 upon signing the Option Agreement (paid); US$25,000 by December 20, 2005 (paid); US$50,000 by March 20, 2006 (paid); and US$50,000 by December 20, 2006 (paid).



SAMEX now holds 100% interest in the concessions subject to a Net Smelter Return Royalty of 1.5% on copper, gold, silver, and other payable minerals.  SAMEX has an option to buyout the Royalty at any time for US$1,000,000.



Finders Fee, Bonus and Royalty - Pursuant to a Consulting Agreement dated September 25, 2002 between SAMEX and Geosupply Servicios de Geologia & Mineria & Sondajes de Diamantina, the concessions in the Los Zorros district are subject to the following finders fee, bonus and royalty:



a)

A finders fee of US$10,000 payable within 90 days of commencement of a drilling program on the concessions (which has been paid);

b)

A bonus of US$150,000 payable within one year from the date of Commencement of Commercial Production on the concessions; and

c)

Net Smelter Return royalty equal to 0.25% of Net Smelter Returns.



Patent payments must be paid annually to the Chilean government during the month of March in order to maintain the mining concessions.  Patent fee are calculated based upon the value of the Chilean Monthly Tax Unit (M.T.U.) which varies from month to month.  In the case of an exploitation concession the annual patent fee is calculated as one-tenth (1/10th) of the Monthly Tax Unit per hectare (for example, in March 2008 the M.T.U. was 34,668 x 1/10th = 3,466.8 Chilean Pesos per hectare which, at the average exchange rate for March 2008, equated to approximately US$7.83 per hectare for exploitation concessions).  In the case of an exploration concession the annual patent fee is calculated as one-fiftieth (1/50th) of the Monthly Tax Unit per hectare (for example, in March 2008 the M.T.U. was 34,668 x 1/50th = 693.36 Chilean Pesos per hectare which, at the average exchange rate for March 2008, equated to approximately US$1.57 per hectare for exploration concessions).



The Los Zorros Property is without a known body of commercial ore and our activities to date have been exploratory in nature.







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INCA PROJECT, Chile

Location and means of access - The INCA property in the Atacama region of Chile is located approximately 90 kilometers north of the city of Copiapo, Chile and 6.0 kilometers east of the paved highway that connects Copiapo to Diego Del Amargo and the El Salvador Mine.  The property is accessed by vehicle by driving north from Copiapo on paved, two-lane highway (Highway C-17) to the village of Inca de Oro.  The INCA property western boundary is located 2.3 kilometers east of the village along a government maintained gravel road leading to the San Pedro de Cachiyuyo district and the Companys exploration camp is situated a further 4 kilometers along this road.



The INCA project is favorably situated from both a geological and a logistical perspective, being close to important transportation routes, power lines and general mining infrastructure.  Of interest, Chilean national mining company, CODELCO, the owner of concessions adjacent to SAMEXs western project boundary, commenced a bidding process in the latter part of 2008 to seek a joint-venture partner for development of their 345 million ton porphyry copper/gold/silver/moly deposit situated approximately 500 meters west of the INCA property boundary.  The INCA property is also situated eight kilometers northeast of Inca de Oro, historically the most prolific gold producing district in Chile and 62 kilometers southwest of CODELCOs El Salvador porphyry copper mine.



Historically, the INCA project area has been the center of small mining activity primarily for production of oxide-copper and some secondary enriched copper sulfide ores. The INCA property hosts approximately twelve currently known, variably sized breccia pipes with outcropping, or historically mined copper, molybdenum and gold mineralization.  The objective is to explore beneath and around this area for substantial deposits of copper with important gold, silver and molybdenum credits.



During 2006 we completed the construction and equipping of a camp and exploration office at the INCA project.  Extensive maps were compiled from ground surveying of topographic, geologic and mining features.  We also produced orthographic air-photos (covering approx. 45 sq. kms.) and detailed topographic maps over the mineralized target areas on the INCA property.  The ortho-photos and topographic maps are utilized in geologic mapping and planning of drill-hole locations.   We located and evaluated old reports and underground mining plans, etc. relative to the historic mining and exploration activities that have been conducted at INCA over the past 50+ years.  We were able to locate reports pertaining to geophysical IP surveys, geologic



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investigations, and much of the drilling including, fortuitously, some of the drill core from 1971 and 1990.  With this information, first hand accounts from old miners, and additional field studies, we were able to construct a geologic picture from the previous mining/exploration activities that strongly supported additional exploration of the targets at INCA.  During the fourth quarter of 2006, we commenced a large (30.6 line-kilometers) geophysical IP survey.  The purpose of the IP survey was to aid in planning exploration-drilling by electrically mapping out the extent of primary copper-sulfide mineralization over the +12 square kilometer area encompassing the target zones which are mostly concealed beneath propylitic and clay-altered granodiorite cap rock.   The IP geophysics program involved six survey lines that were finally completed in January 2007.



Additional IP geophysical surveys were conducted in 2007 and a program of bulldozer trenching, sampling and assaying was completed.  Blasting and bulldozer work then commenced to prepare access roads and drill pads for the Phase I core drilling program that began in July.  By December 2007 the first phase of drilling had been completed.  Following is a summary of information reported from the INCA project since that time.



Phase I Drilling Update - Inca Project, Chile -  December 2007 - The Phase I exploration core-drilling program at the INCA Project in northern Chile has now completed 10,309 meters over 35 holes, with an average hole length of approximately 300 meters (see map at www.samex.com).  Generally the program was designed to test shallow targets proximal to existing historic mine workings and coincident with IP geophysical anomalies, for areas of stock-work veining, breccia bodies, and disseminated and/or porphyry style copper-gold-molybdenum mineralization.  More specifically the program was set up to test, in systematic fashion, two principal target zones including: the Delirio-Tucumana breccia complex (14 holes) and the Puntilla-San Antonio vein system with a coincident strong IP expression (8 holes).   Other target areas received more cursory drilling attention and these include: San Antonio-Providencia (7 holes), Magallanes (2 holes), Manto Cuba-San Pedro (2 holes) and Jardinera (2 holes).  Lower priority target areas Barraza, Verde Nilo, Vizcacha and the A, B1, B2, C zones (east of Delirio-Tucumana) did not receive any drilling in Phase I and remain to be possibly tested in future exploration programs.



Strong Copper And Moly Intercepted At Magallanes, Inca Project Chile  February 2008 - SAMEX Phase I drilling encountered strong copper and molybdenum mineralization in the two holes drilled to test the Magallanes target located within the INCA project, Chile.  The surface expression of the Magallanes target is a nearly concealed, small breccia outcrop with minor copper-oxide mineralization surrounded by alluvial cover.   A moderate IP anomaly is also coincident over the target area.  Drill hole DDH-MG-01 intersected significant copper (chalcopyrite) over a drilled length of 121 meters, and drill hole DDH-MG-02 intersected significant molybdenite mineralization over a drilled length of 71 meters.



|       |               |            |                |                          |      |       |              |             
|------ | ------------- | ---------- | -------------- | ------------------------ | ---- | ----- | ------------ | ------------
|Hole # | From
(meters) | To
(meters | Width
(meters) | Est. True
Width (meters) | Cu
% | Mo
%  | Au
(g/tonne) | Ag
(g/tonne)
|MG-01  | 84.0          | 205.0      | 121.0          | 69.4                     | 0.38 | ---   | 0.183        | 2.97        
|Incl.  | 84.0          | 172.0      | 88.0           | 50.4                     | 0.48 | ---   | 0.237        | 3.67        
|Incl.  | 102.0         | 142.0      | 40.0           | 22.9                     | 0.70 | ---   | 0.309        | 5.47        
|       |               |            |                |                          |      |       |              |             
|MG-02  | 265.0         | 336.0      | 71.0           | 30.0                     | 0.08 | 0.080 | ---          | ---         
|Incl.  | 302.0         | 334.0      | 32.0           | 13.5                     | 0.12 | 0.147 | ---          | ---         
|Incl.  | 328.0         | 334.0      | 6.0            | 2.5                      | 0.33 | 0.329 | ---          | ---         



Tucumana Area: Copper, Moly & Gold Mineralization Intersected In Tucumana Breccia Pipe -In May 2008 we reported that Phase I drill holes TU-01, TU-02 and TU-03 had made important intercepts through oxide copper and sulfide copper, molybdenum and gold mineralization.   Drill hole D-L2-04 also intersected a zone of strong molybdenum mineralization that extends east from the Tucumana pipe.  This drilling was part of the Phase I exploration program at the INCA project which included testing of the Tucumana breccia pipe, situated 750 meters east of the previously reported Magallanes pipe.



Approximately 330 meters east of the Tucumana pipe, drill hole D-L3-01 encountered a large breccia pipe that had been highly altered and strongly leached.   Although this pipe was not highly copper mineralized where drilled, the residual abundant limonitic and minor oxide-copper minerals encountered indicate that parts may have originally been well mineralized.  This leaching process may have remobilized the copper mineralization and re-deposited a secondarily enriched zone nearby.  This is typical at the Manto Cuba, San Pedro and Providencia mines (1,000 to 1,400 meters away) where higher-grade copper-sulfide (chalcocite) and copper-iron-sulfide (chalcopyrite) ore was historically exploited from beneath leached breccia.  Follow-up drilling of the newly discovered "Tucumana 2" pipe is highly warranted to search for a similar secondary enriched zone of copper.





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From alteration and mineralization patterns observed in the Phase I drilling, and from careful study of the geophysical surveys in relation to these features, two very large deeper seated IP anomalies, located approximately 700 meters east of the Tucumana pipe, have now been identified as high-priority blind breccia targets for future drill testing.



Inca Project Update, Chile  Providencia Cluster Target Area  October 2008  Following is further results from our Phase I exploration program at the INCA Project in Chile.  Extensive geological work and drilling of 5 core drill holes in the Providencia area has resulted in;



·

Demonstrating that the Providencia mine breccia pipe not far beneath capping monzonite rock expands out to large size with strong copper-sulfide (chalcopyrite) content which sampling to-date shows averaging 2.16% copper; little of the pipe has been mined

·

Discovery of a concealed breccia pipe with significant copper/molybdenum mineralization including sections of 7.4 meters of 0.48% Copper, and 1.5 meters of 0.38% Molybdenum

·

Further confirmation of the two large IP anomalies, with newly identified surface geologic features, which suggest the possibility of significant copper-moly mineralized breccia bodies concealed at depth that strongly warrant follow up drilling.



The Phase I exploration work at the Providencia Mine and surrounding area included an IP geophysics survey of five lines spaced at 200 to 300 meters apart, detailed geologic mapping, drilling five exploration core holes, installing a ladder and platform system to access the Providencia underground mine workings, and rock-chip channel sampling of underground workings.  Since, the early 1920s, the Providencia mine has been sporadically operated on a small scale with inadequate capitalization and these operations have produced in total an estimated 200,000 metric tons of mostly oxide-Cu ore.  When SAMEX acquired the property, a small mining concern, which held a month-to-month lease on the mine, was sending approximately 500 metric tons/week of +2.5% copper direct shipping grade sulfide copper (chalcopyrite) ore to the ENAMI facility near Diego de Almagro for processing.  The part of the breccia ore body exploited in the past was determined to be a northeast-trending, floored branch, which proved to be an extension off a concealed, sizeable, steep breccia pipe.  So, by pursuing mining southwestward down along the direction of thickening of the branch, the miners inadvertently encountered the large, steeply plunging breccia pipe, which was concealed beneath a thick capping of monzonite rock.



The size and shape of the Providencia mine breccia pipe is not fully exposed by mining and could be over 80 meters across.  The pipe is well mineralized with chalcopyrite and abundant accessory pyrite; sampling of the mined areas indicates that the average grade is around 2.16% total copper.  The presence of strong sericite alteration, anomalous amounts of silver, lead, zinc, and antimony and position of the roof indicate that this level is at the top of the pipe and that very little of the pipe has actually been mined out.   In the district area, typically significant accessory amounts of gold and/or molybdenum may be additionally present with copper sulfide mineralization and potassic alteration at depth within the breccia pipes (ex. Magallanes, Tucumana).



The Providencia mine breccia pipe has a distinct IP signature and occurs within what appears to be a cluster of six additional concealed, possibly well-mineralized breccia pipes with similar or stronger IP responses, which were disclosed by our regional IP survey.  One set of our exploration core drill tests on one of the IP anomalies discovered a concealed, faulted part of a breccia pipe (Providencia West) with indications that it contains significant copper and molybdenum mineralization and anomalous silver, lead, and zinc content.  This breccia pipe is positioned 700 meters to the west of the Providencia mine where an outcropping sheeted vein swarm with oxide-copper mineralization and tourmalinized/silicified pods of breccia are present over a large area in the monzonite cap above the pipe.  A Phase II exploration program of concerted core drilling is highly warranted in the Providencia breccia cluster area to test for other concealed breccia pipes with the objective of discovering multiple ore bodies and the potential deeper source from which these pipes have emanated.



Inca Project Update, Chile  Jardinera Mines Target Area  October 2008  Following is further results from our Phase I exploration program at the INCA Project in Chile.  Extensive geological work and two drill holes in the Jardinera area has resulted in;



·

Defining well-mineralized aplite intrusional chimneys with strong values in copper, molybdenum and a gold credit.

·

Underground sampling of the Jardinera #1 mine hosting average grades of 1.87% total copper, 1297 ppm (0.13%) molybdenum, and 1.32 ppm (g/mt) gold.

·

Chip-channel sampling around the open cut of the Jardinera #2 mine chimney showing an average grade of 1.91% total copper and 1341 ppm (0.13%) molybdenum with a 0.701 ppm (g/mt) gold credit.

·

Outlining a sizeable, source porphyritic aplite intrusional target at depth based on the mineralization, alteration and fracture-veining features observed during exploration.



The Phase I exploration work at the Jardinera mines area of the Inca project included 2.2 line-kilometers of IP geophysics



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survey, geologic mapping, drilling two angle core holes totaling 363.70 meters, installing a ladder and platform system to access the Jardinera underground mine workings, and rock-chip sampling of surface outcrops and underground workings.



Inca Project Update, Chile  Delirio Breccia Target Area  December 2008 - SAMEX continued the compilation and interpretation of results from its Phase I exploration program at the INCA Project.  The following results are from the Deliro area where extensive geological work including geophysics surveys, trenching and ten core drill holes resulted in:



·

Defining two large, adjoining mineralized breccia bodies, Delirio West Lobe and Delirio East Lobe, with widths of 150- to nearly 200 meters and a combined length of more than 800 meters.

·

Observing visible coarse gold in several hand samples of oxide-copper mineralized breccia from the Delirio West Lobe (the likely source for the large placer-gold workings in the valley below the Delirio West Lobe).

·

Outlining an exploration target of near surface oxide-copper mineralization, situated in an ideal, easy strip-out mining location (low strip ratio).

·

Identifying significant geologic differences between the two lobes, which will help better define Phase II exploration work programs.

·

Continuous chip-channel samples along the new access road cut across the upper-western portion of the Delirio West Lobe returning an average grade of 0.40% total copper and 0.511g/mt gold over a 167-meter horizontal width.

·

Demonstrating that copper/moly mineralization and important alteration features persist to great drilling depths of over 400 meters.

·

Identifying a target for potential high-grade secondary enriched copper mineralization (covellite and chalcocite) and deeper seated, primary copper sulfide mineralization within the Delirio East Lobe breccia.



Manto Cuba-San Antonio Area & Puntilla-Concepcion Area - Inca Project, Chile

Compilation Of Inca Project Phase I Exploration Results Completed

March 2009  - SAMEX compiled Phase I exploration results for the Manto Cuba-San Antonio and Puntilla-Concepcion areas which adjoin each other and comprise a portion of the INCA Project.   A program of Phase domain IP surveys, detailed geologic mapping and twelve drill holes totaling 2,979 meters in the two areas provided the following results:



·

Defining two geophysical anomalies  the Manto Cuba-San Antonio anomaly, 600 meters long; and the Puntilla-Concepcion anomaly, 1,000 meters long by 300 meters wide.



·

Identifying at least four new untested breccia pipes which have little-to-no surface expression.



SAMEX has now completed the compilation and reporting of Phase I exploration results for the INCA Project.  Evaluation of all Phase I results is ongoing in order to quantify and prioritize the targets for future consideration.  The Company is also continuing in its efforts to joint-venture the project with other parties.



Sampling, analytical procedures, controls - Geochemical analyses on samples were performed by ALS Chemex, an independent, internationally recognized and ISO certified laboratory complying with the international standards ISO 9001:2000 and ISO 17025:1999.  In preparing drill core samples for analysis, the core is cut or split in half, with one half kept for reference and re-analysis if necessary, while the other half is bagged and sealed as a sample for analysis.  To provide quality control, pre-packaged, sealed, certified standard (include low and medium grade copper-gold pulps) and blank pulps are included for analysis by inserted them as samples in random order at approximately 1 per every 30 samples. To ensure chain of custody, the bagged samples for analysis are picked up by an agent of ALS Chemex and transported directly to the ALS Chemex laboratory at Antofagasta or at La Serena, Chile.



Except where otherwise noted, the analytical and test data underlying the information disclosed herein was verified by or under the supervision of Robert Kell, Vice-President Exploration for SAMEX MINING CORP. and Phil Southam, Geologist, who are qualified persons pursuant to Canadian Securities National Instrument 43-101 concerning Standards Of Disclosure For Mineral Projects.



The Companys Chilean subsidiary, Minera Samex Chile, S.A, has/or has option to purchase mineral rights to 91 mining concessions (78 exploitation concessions, 13 exploration concessions) that cover an area of more than 115 square kilometers at the INCA project in Chile (See Item 19 Exhibits, Exhibit 4.7 - INCA Project Concessions).  The Company has acquired a 100% interest in the concessions by staking, by purchase, by acquisition through government auctions, or has the right to acquire 100% interest in 17 of the concessions through four separate option purchase agreements subject to the terms described below in the Minera Porvenir Option, the Araya Option, the Rojas Option, and the Parra Option:



Minera Porvenir Option  Under the Unilateral Option Purchase Contract dated March 31, 2006 between Sociedad Contractual



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Minera Porvenir (Optionor) and our subsidiary Minera Samex Chile S. A., SAMEX can acquire 100% interest in concessions covering a 2,138-hectare portion of the INCA project by making option payments totaling the Chilean Peso-equivalent of US$2,000,000 over three years.  To facilitate the resolution of a title issue on an 85-hectare portion of the option, in March 2008 the Optionor agreed to revise the payment terms whereby a portion of the option payments are paid directly to third parties on behalf of the Optionor.  Effective March 31, 2008, the terms for the option payments for 2008 and 2009 were revised as follows:



i)

initial payment of US$608,677 (paid in 2006);

ii)

US$191,323 on March 31, 2007 (paid);

iii)

(Revised)Payment of US$200,000 due on March 31, 2008increased to US$238,500as follows:

a.

US$84,500 on March 31, 2008 (paid),

b.

US$77,000 (paid to a third party on behalf of the Optionor), and

c.

US$77,000 payable to a third party on behalf of the Optionor upon the Optionors resolution of the title issue on a 85-hectare portion of the option (has not been paid); and

iv)

(Revised) Payment of US$1,000,000 due March 31, 2009 decreased to US$961,500 (The Company has not made the option payment of US$961,500 due on March 31, 2009.  If an option payment is not made on the due date, the option agreement includes a provision whereby Minera Porvenir may advise SAMEX in writing of the non-payment of the option payment, and if the option payment is not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination, which would result in a complete loss of our interest in the optioned concessions.  At the date of this report, the Company had not received written notice of default with respect to non-payment of the option payment due under the Minera Porvenir Option on March 31, 2009.)



The concessions are subject to a 1% Net Smelter Return Royalty and the owner has the right to purchase up to 50% of any oxide-copper production at cost from SAMEX (to a limit of 10,000 tonnes per month) and subject to a cumulative maximum of 1.2 million tonnes or ten years, which ever is reached first.



Under the March 2008 revisions to the option payments, although a portion of the payments are directed to third parties on behalf of the Optionor, there is no change in the total option price of US$2,000,000 and as such we do not anticipate any net financial change for SAMEX.  The concessions that comprise the 85 hectares subject to the title issue are situated on the fringe of the target areas that are the focus of our exploration.  No substantial exploration, and no drilling, was done on these concessions as part of our Phase I drill program at INCA.  As such, the current title issue is not expected to materially affect the INCA project.



Araya Option - Under the Unilateral Option Purchase Contract dated April 4, 2006 between Malvina del Carmen Araya Santander and our subsidiary Minera Samex Chile S. A., SAMEX can acquire 100% interest in concessions covering a 45-hectare portion of the Inca project by making option payments totaling the Chilean Peso-equivalent of US$300,000 over three years as follows:



i)

US$50,000 initial payment (paid);

ii)

US$50,000 on March 31, 2007 (paid);

iii)

US$100,000 on March 31, 2008 (paid); and

iv)

US$100,000 on March 31, 2009 (US$4,523 was paid in advance during 2008, leaving a balance of US$95,477. Effective March 31, 2009, the Optionor agreed to revise the payment terms with respect to the option payment balance of US$95,477 due March 31, 2009 as follows: US$30,000 on March 31, 2009 (which has been paid); US$30,000 on June 30, 2009; and US$35,477 on September 30, 2009).



These concessions are subject to a 1% Net Smelter Return Royalty for a period of 20 years.  SAMEX has the option to buyout the Royalty at any time for US$500,000.



Rojas Option - Under the Unilateral Option Purchase Contract dated May 25, 2006 between Oscar David Rojas Garin and our subsidiary Minera Samex Chile S. A., SAMEX can acquire 100% interest in concessions covering a 20-hectare portion of the Inca project by making option payments totaling the Chilean Peso-equivalent of US$300,000 over three years as follows:



i)

US$25,000 initial payment (paid);

ii)

US$50,000 on April 30, 2007 (paid);

iii)

US$75,000 on April 30, 2008 (paid; and

iv)

US$150,000 on April 30, 2009 (The Company has not made the option payment of US$150,000 due on April 30, 2009.  If an option payment is not made on the due date, the option agreement includes a provision whereby Rojas may advise SAMEX in writing of the non-payment of the option payment, and if the option payment is



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not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination, which would result in a complete loss of our interest in the optioned concessions.  At the date of this report, the Company had not received written notice of default with respect to non-payment of the option payment due under the Rojas Option on April 30, 2009.)



There is no royalty payable on these concessions.



Parra Option - Under the Unilateral Option Purchase Contract dated April 9, 2007 between Jaime Ruben Parra Vasquez and our subsidiary Minera Samex Chile S. A.,  SAMEX can acquire 100% interest in mineral concessions covering a 21-hectare portion of the Inca project by making option payments totaling the Chilean peso equivalent of US$180,000 over two years as follows:



i)

US$50,000 upon signing the Option Agreement (paid);

ii)

US$50,000 by April 9, 2008 (paid); and

iii)

US$80,000 by April 9, 2009 (The Company has not made the option payment of US$80,000 due on April 9, 2009.  If an option payment is not made on the due date, the option agreement includes a provision whereby Parra may advise SAMEX in writing of the non-payment of the option payment, and if the option payment is not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination, which would result in a complete loss of our interest in the optioned concessions. At the date of this report, the Company had not received written notice of default with respect to non-payment of the option payment due under the Parra Option on April 9, 2009.)



There is no royalty payable on these concessions.



Viscacha I Purchase  In 2007, the Company purchased the Viscacha I mineral concession covering a 3-hectare-portion of the INCA project for a total consideration of US$32,938 (17,000,000 Chilean Pesos).  No royalty is payable on this concession.



Patent payments must be paid annually to the Chilean government during the month of March in order to maintain the mining concessions.  Patent fee are calculated based upon the value of the Chilean Monthly Tax Unit (M.T.U.) which varies from month to month.  In the case of an exploitation concession the annual patent fee is calculated as one-tenth (1/10th) of the Monthly Tax Unit per hectare (for example, in March 2008 the M.T.U. was 34,668 x 1/10th = 3,466.8 Chilean Pesos per hectare which, at the average exchange rate for March 2008, equated to approximately US$7.83 per hectare for exploitation concessions).  In the case of an exploration concession the annual patent fee is calculated as one-fiftieth (1/50th) of the Monthly Tax Unit per hectare (for example, in March 2008 the M.T.U. was 34,668 x 1/50th = 693.36 Chilean Pesos per hectare which, at the average exchange rate for March 2008, equated to approximately US$1.57 per hectare for exploration concessions).



As disclosed above, the Company has not made an option payment of US$961,500 due March 31, 2009 pursuant to the Minera Porvenir Option by which the Company can acquire a 100% interest in a 2,138-hectare portion of the INCA project, therefore, the owner may terminate the option by giving 30 days written notice.  Also, the Company has not made an option payment of US$80,000 due April 9, 2009 pursuant to the Parra Option by which the Company can acquire a 100% interest in a 21-hectare portion of the INCA project, therefore, the owner may terminate the option by giving 30 days written notice.  Also, the Company has not made an option payment of US$150,000 due April 30, 2009 pursuant to the Rojas Option by which the Company can acquire a 100% interest in a 20-hectare portion of the INCA project, therefore, the owner may terminate the option by giving 30 days written notice.  The Company is continuing its efforts to negotiate revised option payment terms or arrange for additional financing to cover the option payments, and/or arrange a joint venture or sale of all, or a portion of the INCA property, but if we are not able to do so and are not able to locate a suitable purchaser or joint venture partner for INCA, we may be required to relinquish a portion of the INCA property.  Accordingly, the recoverability of the carrying value of the INCA project is dependent on the successful outcome of the above contingencies.



The INCA property is without a known body of commercial ore and our activities to date have been exploratory in nature.



ESPEJISMO PROSPECTS, Chile - Gold Prospects, Inca de Oro region, Chile.  SAMEX has acquired rights to approximately 463 hectares of mineral concessions covering gold prospects by purchasing concessions at a government auction and by staking.  No exploration is planned for these gold prospects until additional concessions are acquired.



TRES PUNTAS/CHIMBEROS PROSPECTS, Chile  Silver, Gold Prospects, Inca de Oro region, Chile.  SAMEX has acquired rights to approximately 2,440 hectares of mineral concessions covering silver, gold prospects by purchasing concessions at a government auction and by staking.  These silver, gold prospects are being held for future evaluation.



MISCELLANEOUS PROPERTIES, Chile - The Company staked mineral concessions (approximately 1,000 hectares in aggregate) over several separate areas in Chile for possible future evaluation. No exploration is currently planned.





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BOLIVIAN PROPERTIES



Cautionary Note:  Recent events in Bolivia have led to a number of special risks affecting mineral exploration and the holding of mineral concessions in Bolivia, the extent and affect of which have not been fully determined, but which may have serious adverse effects on the value of our Bolivian properties and the on the viability of our Bolivian mineral projects.  See Item 3 Key Information  Risk Factors  Bolivian Interests.



ESKAPA PROPERTY, Bolivia

The information herein respecting the Eskapa property is based on a technical report prepared by Robert E. Kell, Vice President Exploration and a Director of SAMEX Mining Corp., who is a certified professional geologist and a qualified person pursuant to the requirements of Canadian Securities Administrators National Instrument 43-101.  A copy of such report has been filed with the British Columbia Securities Commission and Alberta Securities Commission and is available for review by interested persons at SEDAR.com.  SAMEX, through its Bolivian subsidiary, EMIBOL S.A., holds a 99% interest in any mining operations which may be established on the 3,700 hectare Eskapa property located in the Enrique Baldevieso Province, Department of Potosi, Bolivia.  The Eskapa concession (elevation between 4200 to 4400 meters) is centered over the eroded-out core zone of the extinct Cerro Eskapa stratovolcano which is situated in the southwestern part of Bolivia, approximately 48 airline kilometers east of the frontier with Chile and 55-airline kilometers southeast of Ollague, Chile.







Location and means of access - The Eskapa Property is situated in the southwest part of Bolivia approximately 3 kilometers east of the village of Copacabana.  The Eskapa property is accessible from both Bolivia and Chile by four-wheel drive vehicle.  The Chile access route is somewhat easier due to the better condition of roads in that country.  Starting from the city of Calama, Chile, where air service is available from and to Santiago, Chile, travel is by Route 21 to the border town of Ollague, Chile.  The first 62 kilometers of Route 21 is paved highway and the remaining 123 kilometers to Ollague is gravel and/or dirt road..  After crossing the border into Bolivia, travel is approximately 35 kilometers along dirt road following the railway tracks to the village/military outpost/train station of Chiguana and then a further 35 kilometers on dirt road to the village of Copacabana .  The property is accessed from Copacabana by a 3 kilometer dirt road constructed and maintained by the Company.   Access within Bolivia  - From the town of Uyuni, Bolivia travel is by an improved gravel road for approximately 150 kilometers and by dirt roads for approximately 35 kilometers to the Eskapa Property.



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We explored the Eskapa property in sporadic fashion from 1995 to 1998 and carried out a ten-hole core drilling program in 1999. Additional exploration work was conducted during two time periods in 2001 and included drilling six core holes.   SAMEX has expended more than one million dollars exploring the Eskapa property since 1995.



The region, where the Cerro Eskapa prospect is situated, is part of the Cordillera Occidental which consists of numerous extinct or dormant late-Tertiary to early quaternary, andesite-dacite stratovolcanoes positioned on a high plateau (3500 meters mean elevation) of mid- to late-Tertiary volcanic and sedimentary rocks.  The Cerro Eskapa stratovolcano is uniquely considerably eroded such that strong alteration and silver-lead-antimony sulfosalt-mineralized zones are exposed over a large 2 km. by 3 km. area of the core zone.  The stratovolcano core zone had, up until 1995, surprisingly not been explored during modern times.  Colorful chrysocolla mineralization on the lower north flank of the stratovolcano was worked in pre-historic times by indigenous people.  In the stratovolcano core zone, Spanish Colonial-era prospectors explored silver-mineralized vuggy silica-barite outcrops with minor production from shallow irregular workings.  An unknown Chilean mining concern sank a 45 meter-deep shaft near one of the Spanish workings in the late-1870s just before the outbreak of the War of the Pacific There is no indication of any production from this shaft.  The geologic setting, extensive hydrothermal alteration, presence of silver-lead-antimony sulfosalt mineralization, accessible location, and lack of any previous exploration drilling made the area attractive to us for acquisition.



The strong argillic, advanced-argillic, and vuggy silica alteration are focused on porphyritic dacite and hydrothermal breccia which occupy the stratovolcano core zone.  The nature of the alteration and widespread abundant pyrite are characteristic of the high-sulfidation-type of precious-metal mineralizing system, which occur in the Cordillera Occidental of South America.  At Cerro Eskapa, silver-lead-antimony sulfosalt-mineralization occurs, at the surface of the eroded-out stratovolcano core zone, in linear/steeply dipping zones of vuggy silica-barite strongly controlled along west-northwest-trending faults.  The zones range from 1 to 3 meters in width and several can be traced for up to several thousands of meters.  Based on our sampling, grades of this mineralization in dump and rock-chip samples are variable, but typically contain high amounts of silver (>69.3 ppm to 2260 ppm (g/mt), lead (>144 ppm to 23100 ppm) and antimony (165 ppm to 25800 ppm) with anomalous mercury 1140 ppb (to 90000 ppb), but with very low gold values (<5 ppb).  Surrounding clay-pyrite-altered porphyritic dacite contains anomalous amounts of mercury, arsenic, and antimony, and low values in gold and silver.  The mineralized zones appear to represent the leakage up from more substantial mineralization at depth.



Our exploration of the stratovolcano core zone (1995-1999) included: considerable road building for access, geologic mapping, considerable rock-chip sampling and running IP surveys over long lines.  The data from these efforts showed that silver-lead-antimony sulfosalt/sulfide mineralization is tightly restricted to the zones of vuggy silica-barite and no indication could be found of a shallow bulk-tonnage type of deposit.  The IP surveys generally detected the high-resistivity expression of the zones and demonstrated a depth extent in excess of the 250-meter search depth limit.  The first attempt in 1999 to core drill the zones (March-June, 1999) produced mixed results.  Some holes were unfortunately not properly located and aimed, and missed making the intended down-dip intersection.  However, two drill holes (DDH-EK-99-02 and -04) did make interesting intersections confirming that the vuggy silica-barite rock does continue to depth, but silver grades were disappointing.  DDH-EK-99-02 intersected a thick vuggy silica-barite zone of 13.0 meters true width containing 41.8 ppm (g/mt) silver with low detectible gold (7 ppb) and anomalous copper, lead, antimony with anomalous mercury.  However, the intersection was considerably affected by a late oxidation alteration of sulfosalt/sulfide minerals producing abundant limonitic minerals.  This suggested that the metal values were much reduced in the intercept due to possible leaching of silver and base and pathfinder metals.  Hence, the intersection was not representative of mineralization elsewhere along strike or at depth along the zone.  The other intersection (DDH-EK-99-04) was located at high elevations at the east end of the same zone and was complicated by faulting.  The recovered fault-bounded sliver of the vuggy silica rock contained 109.2 ppm (g/mt) silver over a 0.30 meter true width.  No funding was available to pursue follow-up drilling and consequently, no exploration work was carried out from June, 1999 to December, 2000.



In November 2000, we granted International Chalice Resources (Chalice) an option to earn up to a 40% joint venture interest in mineral operations on the Eskapa property by making payments totaling US $500,000 by November 15, 2003.  Later, we agreed with Chalice to amend certain terms of the agreement by reducing total option payments required, to US $461,137.98, by an earlier date, February 28, 2002.  Chalice completed option payments totaling US $461,137.98 by February 28, 2002 and thereby earned the right to receive, upon formation of a joint venture, a 40% joint venture interest with respect to mineral operations on the property.  However, in October 2002, we negotiated an agreement to restore our original 99% interest in the Eskapa property by purchasing-back the rights earned by Chalice under the Eskapa Property Option/Joint Venture Agreement.   We arranged to purchase-back this right to a 40% interest from Chalice by:



a) paying Chalice $50,000 cash ($25,000 paid on signing and $25,000 by October 3, 2003 [paid]);

b) issuing 200,000 of our shares to Chalice (issued November 4, 2002);

c) granting Chalice a US$2,000,000 cash royalty, to be paid out of production on the property in eight equal quarterly



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payments of US$250,000 beginning after the ninth month of continuous commercial mining operations on the property.



Pursuant to the buy-back agreement, the Eskapa Property Option/Joint venture Agreement with Chalice terminated and we now hold a 99% interest in any mining operations which may be established on the property.



The option payments from Chalice provided us with the funding to resume exploration on the Eskapa property in 2001 to identify and drill new targets for precious-metal mineralization.  Compilation of our previous exploration data outlined ten (I-X) prospective mineralized zones within the stratovolcano core zone, but exploration attention was instead focused in the Breccia Area to the southwest where considerable breccia was found and then evaluated using geologic mapping, rock-chip sampling, and running IP surveys.   These zones could be interpreted as the fault-offset continuation of those found in the stratovolcano core zone.  However, although the breccia zones contain anomalous mercury and, locally, antimony, arsenic, and zinc, no values for gold or silver are present.  The only attempt at drilling in the Breccia Area encountered faulting and no indication of precious-metal mineralization was intersected.  Exploration for a concealed significant copper deposit related to the oxide-copper-mineralized pebble breccia bodies of the Copper Zone also did not yield positive results from drill testing one of the IP chargeability targets.  A cored intersection through one of the pebble breccia bodies (DDH-EK-01-1C) yielded a 1.0 meter true width of 5% copper and 10 ppm (g/mt) silver.  The decision was made to locate a deep drill test of one of the vuggy silica-barite zones (Zone III) in the stratovolcano core zone.  The test (DDH-EK-01-11) was sited toward the far southeast end of Zone III, using DDH-EK-99-02 as control, and made a complete drill intersection through the vuggy silica target at a depth between 392.70 to 457.10 meters depth.  The intersection revealed toward the footwall of the zone, the vuggy silica-barite rock is cut by massive veins/veinlets of gold-bearing, high-grade copper-silver-antimony-bismuth sulfosalt/sulfide mineralization.   The analytical results, solely on the recovered part of one of the veins (0.20 meters apparent width), give a glimpse of the tenor of the mineralization which might be more extensive elsewhere along this and similar mineralized zones.  This vein sample contains 1890 ppm (g/mt) silver, 6.1% copper, 4.18% antimony, and 2.93% bismuth with 1.180 ppm (g/mt) gold and occurs in an interval (0.75 meters true width) of vuggy silica-barite (445.45 to 446.95 meters) which contains 0.583 ppm (g/mt) gold, 331 ppm (g/mt) silver, 1.04% copper, 0.71% antimony, and 0.43% bismuth.  Toward the top of the interval is a silica-barite veinlet interval with 1.280 ppm (g/mt) gold and 89.0 ppm (g/mt) silver and low copper, antimony, and bismuth.  This veinlet is relatively gold-rich and is considered different perhaps reflecting late-stage, secondary gold veins or gold deposition.  Although the deep intersection revealed that the mineralizing system below the stratovolcano core zone becomes auriferous and could contain high-grade copper-silver-antimony-bismuth mineralization, no funding was available at that time to continue follow-up drilling elsewhere along the numerous prospective zones.



When the results of DDH-EK-01-11 are combined with those from DDH-EK-99-02, the cross section demonstrates that the vuggy silica rock and contained precious-metal mineralization of Zone III are surrounded by outlying coherent/well-developed haloes of argillic and advanced-alteration and anomalous base- and pathfinder-metal zoning.  The spatial relationship of the alteration and base and pathfinder metal zoning in cross section importantly provides a guide to the position of the centrally positioned vuggy silica rock and deeper seated gold-silver-copper-antimony-bismuth mineralization. From the cross section, the outlying haloes of pathfinder and base metals surround the target zone and show that, at high levels in the system, anomalous values in outcrop samples, especially for silver, base and pathfinder metals (i.e. mercury, antimony, and arsenic) are the shallow expression of deep-seated, gold-bearing, high-grade, copper-silver-antimony-bismuth sulfosalt-sulfide mineralization.   Extrapolated to the other nine mineralized zones in the stratovolcano core zone, whose surface expressions are also marked by anomalous pathfinder metals, suggests that the deep-seated, gold-bearing, high-grade, copper-silver-antimony-bismuth sulfosalt-sulfide mineralization may likely be widely distributed at depth within various zones.  The ten zones can be traced confidently across the floor of the eroded stratovolcano core zone for over 11 kilometers of cumulative strike-length distance. Another +3 kilometers of cumulative strike length can be inferred in areas of cover and where zones are open ended.  The remaining potential for discovery of substantial amounts of vein, veinleted, and breccia-hosted gold-bearing, high-grade, copper-silver-antimony-bismuth mineralization is considered very good and should be pursued in the future with a rigorous drill testing.  The exploration objective is to discover a cumulative resource containing +25M metric tons in the range of +2 to +8 g/mt gold, +1500 g/mt silver, 5% to 8% copper, 2% to +4%  antimony, and 2% to 4% bismuth.  This target is postulated to occur along parts of the mineralized zones and would be accessible for selective underground mining methods via level tunnels driven underneath the stratovolcano core zone.  A drill program involving 4,500 meters of core drilling in up to 12 holes is proposed to test at depths of up to 400 meters along Zones I-II, III, IV, V, IX, and X at a cost of approximately US $1,000,000. During fiscal 2007 we constructed a new exploration camp, and completed bulldozer work to repair and expand access roads, and build drill pads for the next phase of drill testing planned for the Eskapa property at a later date.



Sampling, analytical procedures, controls - Geochemical analysis for rock-chip and drill core samples from the Eskapa property were conducted by two major laboratories, Bondar-Clegg (from 1995-1999) and ALS Chemex in 2001.  These laboratories subsequently merged as ALS Chemex which is an independent, internationally recognized and ISO certified laboratory complying with the international standards ISO 9001:2000 and ISO 17025:1999.  In preparation for analysis, drill core was cut or split in half, with one half kept for reference and re-analysis if necessary, while the other half was bagged and sealed as a



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sample for analysis.  No standards or blanks were submitted with any of the samples for analysis by Bondar-Clegg, whereas the samples for analysis by ALS Chemex in 2001 included blanks and standards to provide quality control and check analysis were run on approximately 10% of the samples for any one submittal.



The Eskapa property covers approximately 3,700 hectares and consists of the Eskapa concession (concession #4717), a principal 2885-hectare exploitation concession which covers most of the west half of the Cerro Eskapa stratovolcano.  This large concession encompasses two smaller concessions, Estrella / Mi Morena (concession #4763) which together cover 115 hectares.  On the north side of the stratovolcano, the Eskapa II concession covers 700 hectares.



The concessions are owned by Empresa Minera El Roble S.A. (El Roble), a company controlled by a Bolivian national, Patricio Kyllmann, who is one of our Directors.  Our Bolivian subsidiary, Emibol S.A. (Empresa Minera Boliviana S.A.) earned a 99% interest in any mining operations which may be established on the concessions pursuant to an agreement dated April 16, 1996 and as amended November 23, 1998 with El Roble.   Under the agreement, Emibol S.A. is required to make all expenditures on the concessions in exchange for a 99% interest in any mining operations which may be established on the concessions while El Roble is required to continue to hold title to the concessions and is entitled to a 1% interest in such operations.



The property is subject to a net smelter royalty of an aggregate of 0.6 % payable to Robert Kell, Front Range Exploration Corp., and El Roble S.A., and to a US$2,000,000 cash royalty payable to International Chalice Resources Inc., to be paid out of production on the property in eight equal quarterly payments of US $250,000 beginning after the ninth month of continuous commercial mining operations on the property.



Patent fees ranging between approximately US$1.00 to $2.00 per hectare (depends upon US$/Boliviano exchange rate) must be paid annually to the Bolivian government in order to maintain the mining concessions.



The Eskapa Property is without a known body of commercial ore and our activities to date have been exploratory in nature. Our Bolivian properties are subject to a number of special risks.  See Item 3 Key Information  Risk Factors  Bolivian Interests.



EL DESIERTO PROPERTY, Bolivia

The El Desierto property is located in southwestern Bolivia at an elevation of about 3,800 meters, near the villages of El Desierto and Abra de Napa, processing centers for sulfur mines in the area. The property is located approximately 25 km north of the Quebrada Blanca and Collahuasi copper porphyry mines in Chile and is readily accessible by road from both Bolivia and Chile.  The property is situated along a trend of a geologic belt that is renowned for some of the worlds largest porphyry copper-gold mines.  The exploration objective at El Desierto is to delineating targets for porphyry copper-gold deposits.



The El Desierto mineral concessions are owned by Empresa Minera El Roble S.A. (El Roble), a company controlled by a Bolivian national, Patricio Kyllmann, who is one of our Directors.  Our Bolivian subsidiary, Emibol S.A. (Empresa Minera Boliviana S.A.) earned a 99% interest in any mining operations which may be established on the concessions pursuant to an agreement dated April 16, 1996 and as amended November 23, 1998 with El Roble.  Under the agreements, Emibol S.A. is required to make all expenditures on the concessions in exchange for a 99% interest in any mining operations which may be established on the concessions while El Roble is required to continue to hold the concessions and is entitled to a 1% interest in such operations. The property is also subject to a net smelter royalty of an aggregate of 0.6 % payable to Robert Kell, Front Range Exploration Corp., and El Roble S.A.



During 1997, we conducted reconnaissance IP surveys, sampling and mapping on the property.  No exploration was conducted during 1998, but additional mineral concessions were staked to expand the property.



In 1999, we granted International Chalice Resources Inc. (Chalice) an option to earn up to a 35% joint venture interest in the El Desierto property by expending a total of US $500,000 on the property (El Desierto Property Option Agreement dated September 30, 1999).  SAMEX/Chalice exploration during 2000 involved road construction, geologic mapping, trenching, sampling, geochemical analysis and geophysical surveys on a portion of the property.  After two phases of exploration, SAMEX/Chalice decided the results on this portion of the property were not sufficient to warrant drilling at the time.  Since no immediate exploration was planned, Chalice agreed to fund annual property holding costs and we granted Chalice a three year extension on their option.   Effective February 26, 2002, Chalice decided to drop their option, relinquishing all rights under the El Desierto Property Option Agreement.  SAMEX had received a total of US$216,147 in option payments from Chalice up until the time the option was dropped.



No exploration has been conducted on the El Desierto property since the SAMEX/Chalice program in 2000.  In 2007 we further reduced our landholdings in the area, but we continue to maintain concessions covering approximately 319 hectares for possible



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future evaluation.  Patent fees ranging between approximately US$1.00 to $2.00 per hectare must be paid annually to maintain the mining concessions.



The El Desierto Property is without a known body of commercial ore and our activities to date have been exploratory in nature. Our Bolivian properties are subject to a number of special risks.  See Item 3 Key Information  Risk Factors  Bolivian Interests.



SANTA ISABEL PROPERTY, Bolivia

The Santa Isabel property (1,803 hectares) is located in the Sud Lipez province in the south-central Altiplano of Bolivia.  The prospect is approximately 105 kilometers by road west from Tupiza and 150 kilometers east-southeast of the rail station of Chiguana.   Surface elevations of the prospect area range from 14,000 feet (4260 m.) to 17,000 feet (5180 m.).



The Santa Isabel property covers a well-mineralized dacitic porphyry intrusive complex with propylitic alteration and widely disseminated sulfide mineralization.  Minerals explored for on this property include zinc, silver, lead, indium, copper, gold, antimony and molybdenum.  During 1996 and 1997, we drilled 4,704 meters in 15 holes as part of reconnaissance exploration on the Santa Isabel porphyry system.  Drilling intersected vein swarms and disseminated sulfides hosting lead, zinc, silver, copper, gold, antimony and molybdenum.  The significant intervals of zinc-lead-silver mineralization in a number of the holes, suggested the potential for bulk tonnage zinc, silver, lead targets on the property.  During 1998, an additional 2,537 meters of core drilling was completed on the Vera Cruz West Zone situated within the Candelaria concession which at that time was part of the Santa Isabel property.  Results for zinc, silver, lead and indium were encouraging, but declining prices for zinc and other metals through the year forced us to re-evaluate the priority of exploration on the Santa Isabel properties.  As a result, effective September 7, 1998, we abandoned our option on the Candelaria concession which covered a 200 hectare portion of the Santa Isabel property.  The Candelaria option agreement required us to make substantial cash payments to the owner and, in addition, assume certain debts of the owner related to this concession.  Although a significant portion of the work on the Santa Isabel property had been conducted on the Candelaria concession, management concluded that continuing with the Candelaria option agreement on the existing terms could not be justified.  We wrote off $1,551,099 deferred exploration cost related to the Candelaria concession in 1998.  In relation to the remaining portion of the Santa Isabel property, a further $2,113,801 of costs were written off in fiscal 2000 due to inactivity on the property.



The remaining portion of the Santa Isabel property consists of our interest in 1,803 hectares covering a portion of the Goya I and El Bonete concessions which are held under an agreement dated March 24, 1995 between the owner of the concessions, Corporation Minera de Bolivia (Comibol) and our subsidiary, Samex S.A.  The agreement was subsequently amended by agreement registered under Transcript Number 408/97 dated November 12, 1997 (the Comibol Agreement).  Under the terms of the amended Comibol Agreement, Samex S.A. is entitled to explore all or part of the property for a period of 6 years divided into three phases after which it is required to decide whether to enter into commercial production from all or a portion of the property.  If a favourable production decision is reached, Samex S.A. will have 3 years to commence production from the property after which it will be entitled to manage the joint venture project and will be required to pay a royalty to Comibol equal to 5.5% of net positive cash flow until recovery of capital investment and thereafter 16% of net positive cash flow.  The Goya I/El Bonete concessions are also subject to a 1.2% Net Profits interest in favour of Robert Kell and Front Range Exploration Corp. based on Samex S.A.s net profits interest in the property.  Comibol is the owner of the Goya I and Bonete concessions and pays annual patent payments on theses concessions.



In order to earn its interest under the Comibol Agreement, Samex S.A. has completed:



a)

an initial payment of US$6.00 per hectare ($14,124.00), which has been paid;

b)

during the first year, a payment of US$3.00 per Hectare ($7,062.00), which has been paid;

c)

during the first year, an additional payment of US$1,000.00/ month to March 1996, which has been paid;

d)

during the second year, an additional payment of US$2,000.00/ month from April 1996 through March 1997 (which has been paid); and

e)

a payment due March 1997 of US$100.00 per hectare on property retained for further exploration (US$180,300 was paid to retain 1,803 hectares); in addition, Samex S.A. was required to fulfill work commitments totaling US$1,140,000.00 during the first two years of the agreement, which requirement was fulfilled by March, 1997.



In order to maintain its rights under the Comibol Agreement, Samex S.A. is required to make a payment by April 11, 2000 of US$500.00 per hectare on property which Samex S.A. should decide to exploit (up to US$901,500 if all 1,803 hectares are retained).  This payment, which was due April 11, 2000, has not been made, however, Comibol has not made any demand for payment or given Samex S.A. any notice of default under the Comibol agreement with respect to such non-payment.  Samex S.A. has suspended any decision with respect to retention of property or delivery of the corresponding payment pending resolution of certain ongoing legal proceedings between Comibol and a third party.  Comibol has confirmed to Samex S.A. that a portion of the Santa Isabel property is subject to a claim by a third party with respect to two areas covering approximately 10



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hectares and 24 hectares of the 1,803 hectares covered by the Goya1/El Bonete concessions.  Comibol formally advised Samex that it is taking legal proceedings to resolve the dispute and asked Samex S.A to wait for it to do so.  Comibol has advised that it is taking active steps to assert its legal rights to the disputed area and anticipates it will be successful in doing so.  Samex has in turn formally advised Comibol that it considers Comibol to be in default of its obligations under the Comibol Agreement because of the dispute, but that it is presently awaiting the results of the ongoing legal proceedings before taking further action.  Comibol has indicated that the legal proceedings were still before the courts.  While Samex anticipates Comibol will be successful in its efforts, the outcome of the legal proceeding is dependant on factors outside of Samexs control and therefore there can be no assurance as to the actual outcome of the proceedings.  Samex has not yet analyzed the effect that a loss of the disputed area (34 hectares), if Comibol is not successful, would have on it, nor has it yet considered the existence and type of remedies which might be available to it in such event.



An oxide target with enriched silver values is present on a portion of the Santa Isabel property.  Here, prominent sulfide veins, intervals of vein swarms and disseminated sulfide, have been oxidized to depths of 100 meters or more.  Geologic mapping and IP geophysical surveys have outlined a sulfide-mineralized body 1,000 meters long by 900 meters wide beneath the oxide zone. Dump material and surface rock-chip samples of oxide material positioned above the sulfide target contain 119.4 to 754.8 grams/metric ton silver with 1.82% to 8.0% lead, low zinc (0.12% to 27%), 0.054 to 1.233 grams/metric ton gold (most >0.200 grams/metric ton).  Some samples contain 0.23% to 0.50% antimony.  Further geologic mapping and rock-chip sampling are needed to advance this target to a drill-ready status.  We have not conducted any exploration at Santa Isabel since 1998.



Provided the issue with Comibol is resolved and we are able to re-negotiate our obligations under the Comibol Agreement on satisfactory terms, we intend to seek to enter a joint venture with a major company which is established in zinc, silver, indium and lead mining, refining and marketing in order to facilitate further exploration on the Santa Isabel Property.



The Santa Isabel Property is without a known body of commercial ore and activities to date have been exploratory in nature. Our Bolivian properties are subject to a number of special risks.  See Item 3 Key Information  Risk Factors  Bolivian Interests.



WALTER PROPERTY, WARA WARA PROPERTY, AND YARETANI PROPERTY ABANDONED, Bolivia  Subsequent to the 2008 fiscal year, in March 2009 the Company decided to reduce a portion of its property interests in Bolivia and consequently abandoned three low-priority properties, Walter, Wara Wara and Yaretani.  These properties had been inactive for a number of years and consequently had been written down in past years (including fiscal 2008) to a nominal carrying value of $1,000 each.  The $1,000 deferred expenditure carrying value for each of the Walter, Wara Wara and Yaretani properties was written off during the first quarter ended March 31, 2009





Organizational Structure

See History and Development of the Company for subsidiaries and organizational chart.



Property, Plants and Equipment.

We do not own any of our offices.  Our executive office is located at suite 301, 32920 Ventura Avenue, Abbotsford, British Columbia, Canada that we rent on a month-to-month basis at a monthly cost of $2,083 including rent/taxes/operating costs.  We have a field-office/residence in Copiapo, Chile that we rent on a month to month basis at a cost of approximately US$825 per month which also functions as a residence for our Chilean geologic and support staff.    See Business Overview for a description of our mineral exploration properties.



ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our operating results explains material changes in our consolidated results of operations for the fiscal year ended December 31, 2008, compared to the fiscal years ended December 31, 2007 and December 31, 2006.  The discussion should be read in conjunction with the consolidated financial statements to December 31, 2008 and the related notes included in Item 17 of this report.  In order to synchronize the different quarter ends, the consolidated financial statements for fiscal 2008 include the accounts of the Bolivian subsidiaries for a 12month period that includes the second, third and fourth quarters of their 2008 fiscal year from January 1, 2008 to September 30, 2008 and the first quarter of their 2009 fiscal year from October 1, 2008 to December 31, 2008.  Managements discussion and analysis of our operating results in this section is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto.  This discussion contains forward-looking statements, the accuracy of which involves risks and uncertainties and our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, those risk factors described elsewhere in this report.  See Special Note Regarding Forward Looking Statements and Risk



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Factors.  Our consolidated financial statements have been prepared in Canadian dollars and in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"), which differ in significant respects from accounting principles generally accepted in the United States ("U.S. GAAP").  As such, this discussion of our financial condition and results of operations is based on the results prepared in accordance with Canadian GAAP.  The significant differences between Canadian GAAP and U.S. GAAP as applicable to our financial statements are summarized in Note 11 to our consolidated financial statements for the fiscal year ended December 31, 2008.



Overview

Our business is exploration for minerals.  We do not have any properties that are in development or production. We have no earnings and, therefore, finance these exploration activities by the sale of our equity securities or through joint ventures with other mineral exploration companies.  The key determinants of our operating results include the following:

(a)

Our ability to identify and acquire quality mineral exploration properties on favorable terms;

(b)

The cost of our exploration activities;

(c)

our ability to finance our exploration activities and general operations;

(d)

our ability to identify and exploit commercial deposits of mineralization; and

(e)

the write-down and abandonment of mineral properties as exploration results provide further information relating to the underlying value of such properties.

These determinates are affected by a number of factors, most of which are largely out of our control, including the following:

(a)

The competitive demand for quality mineral exploration properties;

(b)

Political and regulatory climate in countries where properties of interest are located;

(c)

Regulatory and other costs associated with maintaining our operations as a public company;

(d)

the costs associated with exploration activities; and

(e)

the cost of acquiring and maintaining our mineral properties.

Our primary capital and liquidity requirements relate to our ability to secure funds, principally through the sale of our securities, to raise sufficient capital to maintain our operations and fund our efforts to acquire mineral properties with attractive exploration targets and conduct successful exploration programs on them.  We anticipate this requirement will continue until such time as we have either discovered sufficient mineralization on one or more properties with sufficient grade, tonnage and type of mineralization to support the commencement of sustained profitable mining operations and are thereafter able to place such property or properties into commercial production or until we have obtained sufficient positive exploration results on one or more of our properties to enable us to successfully negotiate a joint venture with a mining company with greater financial resources than us or some other suitable arrangement sufficient to fund our operations.

Our success in raising equity capital is dependant upon factors which are largely out of our control including:

a)

market prices for gold, silver, copper and other metals and minerals;

b)

the market for our securities; and

c)

the results from our exploration activities.

Significant factors affecting our operations over the past year were the instability in the global financial situation and the related decline in the demand for, and in the prices of precious and base metals and a corresponding declining market for shares of junior exploration companies. We anticipate that the price of gold, silver, copper will continue to be volatile, but will generally increase over the next year which should enable us to secure additional equity financing.  Metal prices cannot be predicted with accuracy and our plans will be largely dependant upon the timing and outcome of metal markets, particularly the price of gold, silver and copper which is entirely outside of our control.  We also anticipate that our operating results would be significantly



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affected by the results of our exploration activities on our existing properties. See note titled Forward Looking Statements at the end of this report.  See Special Note Regarding Forward Looking Statements and Risk Factors.

Currency Risk

Currency exchange rate fluctuations could adversely affect our operations.  Our functional currency is the Canadian dollar, and we have obligations and commitments in other currencies including United States dollars, Chilean Pesos and Bolivian Bolivianos.  Fluctuations in foreign currency exchange rates may affect our results of operations and the value of our foreign assets, which in turn may adversely affect reported financial figures and the comparability of period-to-period results of operations.

Accounting Policies



We have adopted a number of accounting policies and made a number of assumptions and estimates in preparing our financial reporting, which are described in Note 2 to the consolidated financial statements.  These policies, assumptions and estimates significantly affect how our historical financial performance is reported and also your ability to assess our future financial results.  In addition, there are a number of factors which may indicate our historical financial results, but will not be predictive of anticipated future results.  You should carefully review the following disclosure, together with the attached consolidated financial statements and the notes thereto, including, in particular, the statement of significant accounting policies set out in Note 2 to such statements.



Going Concern Assumptions



As described in Note 1 to our consolidated financial statements, our consolidated financial statements have been prepared on the assumption that we will continue as a going concern, meaning that we will continue in operation for the foreseeable future and will be able to realize assets and discharge our liabilities in the ordinary course of operations.  We do not have any mineral properties in production, and have not yet generated any revenues and have a history of losses.   Our continuation as a going concern is uncertain and dependent on our ability to discover commercial mineral deposits on our properties and place them into profitable commercial production and our ability to sustain our operations until such time.  This, in turn depends on our ability to continue to fund our operations by the sale of our securities and other factors which are largely out of our control.  Although we have been successful in the past in obtaining financing, it cannot be assured that adequate financing or financing on acceptable terms can be obtained in the future.  In the event we cannot obtain the necessary funds, it will be necessary to delay, curtail or cancel further exploration on our properties.  Our consolidated financial statements do not reflect adjustments to the carrying values and classifications of assets and liabilities that might be necessary should we not be able to continue in our operations, and the amounts recorded for such items may be at amounts significantly different from those contained in our consolidated financial statements.



Treatment of Mineral Property Costs



As we are at the exploration stage, we capitalize the acquisition and exploration costs of our mineral properties under Canadian GAAP.  Should any of these properties be placed into production, such costs would be amortized over the life of the properties on a unit-of-production basis.  Should exploration results of any of our properties prove unsatisfactory, we would then abandon such property or properties, and write off costs incurred up to that time.  The impact on our net loss for the fiscal period would be dependent upon the amount of costs deferred up to the time of the write-off.



Accounting Estimates and Assumptions



The preparation of consolidated financial statements in conformity with Canadian GAAP requires management to make a wide variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and (ii) the reported amounts of expenses during the reporting periods covered by the consolidated financial statements.  Our management routinely makes judgements and estimates about the effect of matters that are inherently uncertain.  As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgements become even more subjective and complex.  We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations.  Our significant accounting policies are disclosed in Note 2 of notes to our consolidated financial statements, which should be read in conjunction with this Report.



Among other things, we determine our stock-based compensation costs using an option pricing model which involves the selection of highly subjective assumptions, including an assumption as to price volatility.  Changes in these assumptions can materially affect the fair value estimate and therefore the current model does not provide a consistently reliable measure of the



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fair value cost of the Companys outstanding stock options.



Stock-Based Compensation



We have a stock option plan whereby we grant incentive stock options as partial compensation to our directors, officers, employees and consultants.  Based on recommendations of the CICA Handbook - Section 3870, effective December 1, 2002, we adopted a new method to account for stock-based compensation and other stock-based payments that is described in note 2.h to our consolidated financial statements.  Under the new standard, any stock-based payments to non-employees, and any employee awards involving direct awards of stock, call for settlement in cash or other assets, or stock appreciation rights that call for settlement by the issuance of equity instruments will be accounted for using the fair value based method.  The fair value of the options at the grant date is determined using the Black-Scholes option pricing model.



During fiscal 2008 we granted the following options: in the second quarter the Company granted stock options to a geologic consultant working on the INCA project, on 150,000 shares at a price of $0.65 per share with a fair value of $55,745 based on the Black-Scholes option-pricing model.  This stock-based compensation expense of $55,745 was capitalized to mineral expenses included in the category, Geology, Mapping and Surveys for the INCA project in the Statements of Mineral Interests.  During the third quarter the Company granted stock options to a consultant, on 60,000 shares at a price of $0.50 per share with a fair value of $5,873 based on the Black-Scholes option-pricing model.  This stock-based compensation expense of $5,873 was included in the category, Consulting in the Statements of Operations and Deficit.  This grant was to a Chilean consultant contracted to assist in brokering a potential joint venture/investment for the INCA project. No other stock options were granted during fiscal 2008.



During fiscal 2007 we granted the following options:  in the first quarter of 2007, the Company granted options to directors and officers of the Company on an aggregate of 1,295,000 shares at a price of $0.84 per share resulting in a stock-based compensation expense totaling $672,272.  Of that amount, $531,095 is included in the category Salaries, Benefits and Stock-based Compensation of the Statement of Operations, and $141,177 is capitalized as mineral expenses included in the category Geology, Mapping and Surveys for the INCA project in the Statements of Mineral Interests in relation to a portion of the stock options granted a geologist working on the INCA project.   During the second quarter the Company granted options on 200,000 shares at $0.85 per share resulting in a stock-based compensation expense of $90,390 which is included in the category Consulting of the Statement of Operations. This was in relation to a consulting agreement with Brazen Financial Corp. to provide investor relation services to the Company.  In the third quarter, the Company granted options on 50,000 shares at $0.80 per share to a geologic consultant resulting in a stock-based compensation expense of $28,075 which is capitalized as mineral expenses included in the category Geology, Mapping and Surveys for the INCA project in the Statements of Mineral Interests.  During the fourth quarter of 2007, the Company granted options on 60,000 shares at $0.70 per share to a consultant appointed to the Companys Advisory Board resulting in a stock-based compensation expense of $22,900 that is included in the category Consulting of the Statement of Operations.



During fiscal 2006, we granted options on 1,850,000 shares at $0.85 per share resulting in a stock-based compensation expense totaling $1,094,575. Of that amount, $886,014 was included in the category Salaries, Benefits and Stock-based Compensation of the Statement of Operations, and $208,561 was capitalized to mineral expenses included in the categories Geology, Mapping and Surveys in the Statements of Mineral Interests.





Operating Results

Overview Of Results For 2008 Fiscal Year Ended December 31, 2008 - The following section contains a summary of our operating results during the year ended in December 31, 2008, which is qualified by detailed descriptions that follow elsewhere in this document.  This section also contains a number of forward looking statements which, although intended to be accurate, may be affected by a number of risks and uncertainties which may cause them to be materially different from actual outcomes. See Special Note Regarding Forward Looking Statements and Risk Factors.



Several key events occurred in 2008 that affected our yearly performance as compared to the prior year, and which we expect will continue to effect our performance during the upcoming year and beyond.  In 2007 we completed more than 10,300 meters of drilling as part of our Phase I exploration on our INCA property in Chile.  During 2008 and continuing until around March 2009, we focused a considerable amount of our efforts on correlating, analyzing and interpreting the results from this extensive drill program and therefore did not engage in extensive direct exploration activities.  As a result, our expenditures on mineral interests/exploration were down considerably in 2008 ($1,949,405) from 2007 ($3,797,308).



We also experienced a number of important external changes in fiscal 2008 that affected our overall performance for the year and beyond.



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Our mineral properties are located in Bolivia and Chile.  During 2007 and 2008, we focused largely on our INCA property in Chile.  During that time, we monitored with concern a number of changes in the political climate in Bolivia, but continued our efforts in Chile with the intention of eventually returning to our Bolivian properties, including, in particular, our Eskapa property.  With that in mind, we completed construction of a new Eskapa camp early in 2008 in order to prepare for commencement of the next phase of exploration on the property.  In the mean time, the political climate in Bolivia for resource companies continued to deteriorate with events such as the nationalization of Bolivias natural gas resources, a moratorium on the grant of new mineral exploration licenses, a national referendum that may result in certain fundamental constitutional changes and a proposed requirement that all mining projects be conducted only in partnership with the state mining company  on economically unfavourable terms.  In light of these and other factors we decided that Bolivia carried a significant risk for development of future mineral projects.  Accordingly we decided to suspend exploration activities in Bolivia and put all of our Bolivian projects on care and maintenance status.  We elected to write down the value of our Eskapa project by $1,395,993 at December 31, 2008, and early in 2009, we also decided to abandon three properties we had held for a number of years  the Walter, Wara Wara and Yaritani properties.  While we hope we will be able to return to exploring our remaining Bolivian properties at some time in the future, we do not anticipate we will be able to do so as long as current political conditions persist. See Item 3 Key Information  Risk Factors  Bolivian Interests.



As results from Phase I drilling on INCA and the interpretation of that data became available, it became apparent that, although some of the results (particularly in the area around the Providencia mine) were very promising, the results as a whole did not the support the scale of potential copper deposit (+350 m tonnes) that we had hoped for.  We concluded that, although the possibility still existed to find a large scale copper deposit at INCA, considerable more exploration work and expenditures would be required to do so, which exceeded our available resources.  In light of this, we decided to pursue a possible joint venture partner to help develop the INCA project.  We engaged in discussions with several parties and commenced serious negotiations with one large prospective joint venture partner.  We hoped this would lead to completion of an agreement which would result in a significant source of new exploration funding for the INCA project, as well as some immediate cash payments we could apply to other exploration efforts.  However, commencing around September 2008, commodity prices, particularly the price of copper, began a serious decline, eventually falling to a five year low.  This adversely affected both the short term attractiveness of the INCA project and our ability to raise capital to fund it.  Shortly thereafter, we found ourselves in the middle of the current global economic crisis, with its actual or threatened bank failures, major international liquidity issues, and a general slowdown leading to the current global recession.  These events also fed into both the decline in commodity prices and a decline in the share prices of most public companies including in particular junior resource stocks such as ours.  These events likely also adversely affected our prospective joint venture partners or purchasers for INCA and in November, 2008 the party engaged with us in active negotiations on INCA advised they were pulling out of negotiations for strategic reasons.  These events continued to adversely affect us and, by the end of fiscal 2008, we were left with a serious depleted cash position ($207,192 at December 31, 2008 as compared to $1,325,170 at December 31, 2007), a much lower share price ($0.175 at December 31, 2008 as compared to $0.72 at December 31, 2007) and a greatly reduced ability to raise capital.  Since then we have been able to raise additional capital in a private placement completed in March 2009, but only at significantly lower prices than our last placement completed a year earlier in April 2008 ($0.10 per unit as compared to $0.60 per unit in April, 2008), with less favourable terms (each unit comprised of one share and one full warrant in 2009 as compared to one share and 1/2 warrant in 2008), a smaller amount of proceeds and significantly higher dilution (7,830,500 units for $738,050 in gross proceeds in 2009 compared to  2,565,000 units for $1,539,000 in gross proceeds in 2008).



At the same time, likely due to increased global economic uncertainty and fears over the continued health of the US and the possible collapse of the US dollar and other reserve currencies, gold prices have remained relatively stable and have in fact shown signs of increasing.  We believe these economic trends are likely to continue into 2009 and possibly beyond and may result in a significant increase in the demand for and the price of gold.  These and other factors led us to conclude we should we should shift our primary efforts from exploration for copper (the primary mineralization on our INCA project, and our primary focus during 2007 and much of 2008) and return to our earlier corporate focus on exploration for gold.  Further, we faced a number of option payments on the INCA project which came due in March and April of 2009.  Accordingly, we decided to shift our focus to exploration on our Los Zorros gold project, while continuing our efforts to find suitable joint venture partners or outright purchasers for our INCA project.  We have also commenced negotiations with various of the INCA property vendors to extend payment dates on INCA (which have been only partially successful), but if we are not able to do so and are not able to locate a suitable purchaser or joint venture partner for Inca, we may be required to relinquish a portion of the INCA property.  We anticipate our primary exploration focus in 2009 will continue to be exploration for gold at our Los Zorros and other gold and silver properties in Chile.

Fiscal Year Ended December 31, 2008 compared to the Fiscal Year Ended December 31, 2007

During the first quarter of 2008 our activities included processing drill core and compiling data from the INCA project, making option payments and an advance royalty payment related to our mineral properties in Chile, and arranging a private placement



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financing.  During the second quarter our activities at the INCA project in Chile included continued processing of drill core and data compilation, as well as additional trenching, channel sampling, assaying and installation of safety ladders to provide exploration access to historic underground workings at the INCA project.  We also made option payments on certain mineral properties in Chile and completing a private placement financing that had been announced in the first quarter.  At the Eskapa project in Bolivia, work was conducted to complete construction of the new Eskapa exploration camp.



During the third quarter of 2008 our activities at the INCA project in Chile included the installation of a system of safety ladders and platforms to facilitate exploration access into the underground workings of the Providencia mine and then we conducted rock-chip channel sampling and assaying of the underground workings.  We also continued with the process of compiling and interpreting the extensive amount of data from the Phase I exploration program at the INCA project.  During the fourth quarter, the Company conducted property visits on the INCA Project in Chile for larger companies who expressed interest in possible joint-ventures on the project.  The Company also continued compiling and interpreting the results from the Phase I exploration program at the INCA project.



Summary for fiscal 2008 - As a result of the activities on our mineral exploration properties during fiscal 2008, our expenditures on mineral interests and exploration costs for the year totaled $1,949,405 at December 31, 2008 as compared to $3,797,308 for fiscal 2007 when the Phase I drilling program on the INCA project was in progress.  These costs for 2008 include a Stock-Based Compensation expense of $55,745 that was capitalized in the Statement of Mineral Interests in relation to a stock option granted to a geologist working on our mineral properties.  An $328,444 portion of the mineral interests and exploration costs for 2008 was expensed in the Statement of Operations and Deficit as Mineral Interests Administration and Investigation Costs.  The remaining $1,620,961 is included in Deferred Expenditures in the Statements of Mineral Interests.



Our assets categorized in the consolidated financial statements as Mineral Interests decreased to $11,125,120 at December 31, 2008 as compared to $12,083,496 at December 31, 2007.  This decrease in Mineral Interests is due in part to $1,395,993 of deferred expenditures that were written off December 31, 2008 in relation to the Eskapa property which is currently inactive.  The Eskapa mineral interest was written down to a nominal value of $1,000 until exploration activity is resumed on the property.   Certain costs were also written off December 31, 2008 on the Espejismo Property ($5,611) and on the Miscellaneous Properties-Chile ($15,188) since no current exploration is being conducted on these properties. These mineral interests were written down to a nominal value of $1,000 each (see category Summary of Deferred Expenditures) until exploration activity is resumed on the respective properties.



The amount of cash on hand at December 31, 2008 was $207,192 compared to $1,325,170 at December 31, 2007.  At December 31, 2008, we were debt-free, apart from accounts payable and accrued liabilities of $104,228 as compared to $106,463 at December 31, 2007.



The following comments relate to certain categories in the consolidated financial statements at December 31, 2008:



Consolidated Balance Sheet

Other Current Assets - includes $68,853 which reflects the market value of 2,021.703 grams of gold the Company held at December 31, 2008 (the unrealized gain on the gold value for the year 2008 is $14,978  See  Unrealized  Gains Arising During the Year in Consolidated Statements of Comprehensive Loss and Accumulated Other Comprehensive Income and also see comment below concerning Accumulated Other Comprehensive Income).



Accumulated Other Comprehensive Income - $32,705  is the total unrealized gain on the value of 2,021.703grams of gold the Company held at December 31, 2008 (the unrealized gain on the gold value for the year 2008 is $14,978  - See  Unrealized  Gains Arising During the Year in Consolidated Statements of Comprehensive Loss and Accumulated Other Comprehensive Income and also see comment above concerning Other Current Assets).



Consolidated Statements of Operations and Deficit

Consulting  includes $40,000 paid to Brazen Financial Corp. to assist in providing investor relations services to the Company.  Also included are fees totaling $17,248 and a stock-based compensation expense of $5,873 in relation to a Chilean consultant contracted to assist in brokering a potential joint venture/investment in the INCA project.



Mineral Interests Administration and Investigation Costs - includes operating costs related to the Companys activities in Bolivia and Chile that are not allocated to one of the Companys specific mineral properties, and generative exploration or investigating and evaluating mineral properties not acquired by the Company.



Office, Supplies and Miscellaneous - includes rent and utilities for the Canadian corporate office, book-keeping/accounting, office supplies, telephone, postage, couriers, parking, mileage.





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Salaries, Benefits and Stock-Based Compensation  the larger comparative amount of $904,313 for the fiscal year ended December 31, 2007 includes a stock-based compensation expense of $531,095 related to the grant of options during fiscal 2007.  These stock-based compensation expenses were determined using the Black-Scholes option-pricing model.  The existing models do not necessarily provide a reliable single measure of the fair value of the Companys stock options.



Consolidated Statements of Mineral Interests

Geology, Mapping and Surveys  includes salaries for geologists, support staff and geologic consultants doing work for the respective mineral properties.   This category for the INCA property includes a stock-based compensation expense of $55,745 that was capitalized to mineral expenses in relation to a stock option granted during 2008 on 150,000 shares at $0.65 to a geologic consultant working on the INCA project.



Liquidity and Capital Resources 2008 - We are an exploration company and do not have any mineral properties in production and, therefore, did not generate any revenue from operations during the fiscal year ended December 31, 2008.  We realized a net loss of $2,571,737 for the fiscal year ended December 31, 2008 or $0.03 per share compared to a net loss of $1,903,683 for the fiscal year ended December 31, 2007 or $0.02 per share.  Losses are a reflection of our ongoing expenditures on our mineral properties which are all currently in the exploration stage.  Since we have no source of operating revenues, no lines of credit and no current sources of external liquidity, our ability to continue as a going concern is dependent upon our ability to raise equity capital, enter into joint ventures or borrow to meet our working capital requirements.  Based on the funds on hand, we anticipate that it will be necessary to raise additional financing during 2009 in order to fund our ongoing general operations for the next year.  In relation to exploration programs and option payments, management will work to secure additional equity financings and/or joint venture/investment funding in order to fund our proposed exploration programs.  The Company plans to focus its exploration activities during 2009 on its high quality gold and silver projects in Chile including Los Zorros which hosts high-grade gold, bulk-tonnage gold and gold-silver targets. The Company will endeavor to secure the necessary financial resources to conduct these exploration activities. See Special Note Regarding Forward Looking Statements and Risk Factors.



In the coming years, we will require substantial additional capital to achieve our goal of discovering significant economic mineralization on one or more of our properties.  Until such time as we are able to make such a discovery and thereafter place one or more of our properties into commercial production or negotiate one or more joint venture agreements, we will be largely dependant upon our ability to raise capital from the sale of our securities to fund our operations.  We do not anticipate being able to obtain revenue from commercial operations in the short term and anticipate we will be required to raise additional financing in the future to meet our working capital and on-going cash requirements.  We intend to raise such financing through sales of our equity securities by way of private placements, and/or the exercise of warrants.  We may also secure additional exploration funding through option or joint venture agreements on our mineral properties; or through the sale of our mineral properties, royalty interests or capital assets, or borrow to meet our working capital requirements.  While we have in the past been able to raise sufficient funds to sustain our exploration programs, there is no assurance that we will continue to be able to do so.  If, for any reason, we are not able to access the capital market, our resources during this period will be limited to cash on hand and any revenues we are able to generate from joint venture or similar arrangements we may hereafter enter into. If we are unable to secure sufficient funds to pursue such proposed acquisitions and exploration to the level desired, we will adjust our proposed activities to reflect the amount of capital available to us after providing for sufficient working capital to maintain our existing operations.  At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.  See Special Note Regarding Forward Looking Statements and Risk Factors.



Fiscal Year Ended December 31, 2007 compared to the Fiscal Year Ended December 31, 2006



During the first quarter of 2007 our activities included completing 30.6 line-kilometers of IP/Resistivity geophysical survey at the INCA project in Chile, financing activities which raised more than $4,500,000 through a private placement of units, and making option payments on concessions comprising the INCA project.  During the quarter, annual patent payments were made on the Companys mineral properties in Chile.



During the second quarter, at the INCA project in Chile, we completed an additional 26.2 line-kilometers of IP/Resistivity geophysical surveys that included 10.4 line kilometers of 100-meter Dipole-dipole spacing and 15.8 line kilometers of 200-meter dipole-dipole spacing.  With the additional geophysical surveys completed, drill sites were selected and blasting and bulldozer work commenced to construct access roads and drill pads for the drilling program. During the second quarter, the Company signed the Parra option agreement and made the first option payment to acquire additional mineral concessions in the INCA project area.  At the Eskapa copper and precious metal prospect in Bolivia, the Company began constructing a new exploration camp, and commenced bulldozer work to repair and expand access roads, and build drill pads for the next phase of drill testing planned for the Eskapa property.



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During the third quarter the Company commenced a 10,000 meter Phase I drill program at the INCA project in Chile and blasting and bulldozer work continued to construct access roads and drill pads as the drilling program progressed.  Core logging, sampling and assaying was conducted on the drill core.  An additional three hectares of mineral concessions were purchased covering a small portion of the INCA project.  In Bolivia, construction work continued on the new Eskapa exploration camp and bulldozer work completed the repair and expansion of access roads and the building of drill pads for the next phase of drill testing on the Eskapa property.



During the fourth quarter, the Phase I core-drilling program continued at the INCA Project, along with core logging, sampling and shipping of core samples to the assay lab.  By mid December the drilling portion of the program was finished with a total of 10,309 meters of drilling having been completed in 35 holes, with an average hole length of approximately 300 meters.  By that time, approximately 40% of the drill core from the program had been logged, sampled and ship to the lab for assaying.  The detailed process of core logging, sampling and assaying continued through the fourth quarter. During the fourth quarter, annual patent payments were made on the Companys mineral properties in Bolivia.



Summary for fiscal 2007  - As a result of the activities on our mineral exploration properties during fiscal 2007, our expenditures on mineral interests and exploration costs for the year totaled $3,797,308 at December 31, 2007 as compared to $2,161,249 for fiscal 2006.  These costs for 2007 include $169,252 of Stock-Based Compensation expense capitalized in the Statement of Mineral Interests in relation to stock options granted during the fiscal year to geologists who work on our mineral properties.



A $339,285 portion of the mineral interests and exploration costs for 2007 was expensed in the Statement of Operations and Deficit as Mineral Interests Administration and Investigation Costs.  The remaining $3,458,023 is recorded as Expenditures in the Statement of Mineral Interests.  Our assets categorized in the consolidated financial statements as Mineral Interests increased to $10,497,834 at December 31, 2007 from $7,086,240 at December 31, 2006.



At the end of fiscal 2007, certain costs were written off on the Espejismo ($8,113), Miscellaneous Properties-Chile ($7,870), El Desierto ($3,633), Walter ($2,087), Wara Wara ($15,828) and Yaretani ($8,898) properties since no current exploration is being conducted on these properties.  These costs written off, relate mainly to property patent payments paid annually to maintain the mineral property concessions.  At the 2007 year-end, these properties were written down to a nominal value of $1,000 each (see category Summary of Deferred Expenditures) until exploration activity is resumed on the respective properties.



The amount of cash on hand at December 31, 2007 was $1,325,170 compared to $1,339,761 at December 31, 2006.  At December 31, 2007, we were debt-free, apart from accounts payable and accrued liabilities of $106,463 as compared to $67,728 at December 31, 2006.



The following comments are related to certain categories in the consolidated financial statements for the fiscal year ended December 31, 2007:



Consolidated Balance Sheet

Other Current Assets - includes $53,875 which reflects the market value of 2,024.427 grams of gold the Company held at December 31, 2007 (the book value of the gold is $36,148; the unrealized gain on the gold is $17,727  See  Unrealized Gain On Available-For-Sale Financial Instrument in Consolidated Statements of Comprehensive Loss).



Accounts Payable And Accrued Liabilities  consists of accounts payable and a $40,000 audit fee accrual.



Consolidated Statements of Operations and Deficit

Accounting and Audit  the higher amount recorded for fiscal 2006 is due in-part to a $10,000 prepayment in December 2006 for audit work that was completed in fiscal 2007 and, to costs during fiscal 2006 for the preparation/filing of controlled foreign affiliate tax information documents for multiple years.



Consulting  includes $48,053 paid to Brazen Financial Corp. to provide investor relation services to the Company and also includes a stock-based compensation expense of $90,390 in relation to the grant of options to Brazen Financial Corp. on 200,000 shares at a price of $0.85 per share.  Consulting also includes a stock-based compensation expense of $22,900 in relation to the grant of options on 60,000 shares at $0.70 per share to a consultant appointed during 2007 to the Companys Advisory Board.



Mineral Interests Administration and Investigation Costs - includes operating costs related to the Companys activities in Bolivia and Chile that are not allocated to one of the Companys specific mineral properties, and



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generative exploration or investigating and evaluating mineral properties not acquired by the Company.  Increases in this category over 2006, are due mainly to increased activity related to general and administrative functions at our Bolivian and Chilean operations.



Office, Supplies and Miscellaneous - includes rent and utilities for the Canadian corporate office, book-keeping/accounting, office supplies, telephone, postage, couriers, parking, mileage.



Salaries, Benefits and Stock-Based Compensation  includes a stock-based compensation expense of $531,095 related to the granted of options on shares at $0.85 per share.  These stock-based compensation expenses have been determined using the Black-Scholes option-pricing model.  The existing models do not necessarily provide a reliable single measure of the fair value of the Companys stock options



Travel and Promotion  The higher costs during fiscal 2006 as compared to 2007 is related to the Companys exhibiting in the Vancouver gold and resource conference during the first and second quarters of 2006.  Additional costs were also incurred during 2006 related to travel/introductions/meetings with shareholders, brokers and fund managers in London, Paris, Geneva, Zurich, Amsterdam, San Francisco, New York, Toronto and Vancouver.



Consolidated Statements of Mineral Interests

Geology, Mapping and Surveys  includes salaries for geologists, support staff and geologic consultants doing work for the respective mineral properties.  This category for the INCA Property in Chile also include $169,252 (in aggregate) of Stock-Based Compensation expense capitalized in the Statement of Mineral Interests in relation to stock options granted during the fiscal year to geologists working on our INCA mineral property.



Liquidity and Capital Resources 2007 - We are an exploration company and do not have any mineral properties in production and, therefore, did not generate any revenue from operations during the fiscal year ended December 31, 2007.  We realized a net loss of $1,903,683 for the fiscal year ended December 31, 2007 or $0.02 per share compared to a net loss of $1,979,866 for the fiscal year ended December 31, 2006 or $0.03 per share.   The size of the net losses for 2007 and 2006 are due in part to stock-based compensation expenses related to stock options granted during 2007 and 2006.  Losses are a reflection of our ongoing expenditures on our mineral properties which are all currently in the exploration stage.  Since we have no source of operating revenues, no lines of credit and no current sources of external liquidity, our ability to continue as a going concern is dependent upon our ability to raise equity capital, enter into joint ventures or borrow to meet our working capital requirements.



We intend to pursue both the acquisition of mineral properties that we consider to be highly prospective for gold, silver, copper and other metals and to conduct further exploration at the INCA project and the Los Zorros property in Chile.  In March 2008, the Company arranged a private placement of 2,565,000 units at $0.60 per unit raising gross proceeds of more than $1.5 million to help fund its activities.



In the coming years, we will require substantial additional capital to achieve our goal of discovering significant economic mineralization on one or more of our properties.  Until such time as we are able to make such a discovery and thereafter place one or more of our properties into commercial production or negotiate one or more joint venture agreements, we will be largely dependant upon our ability to raise capital from the sale of our securities to fund our operations.  We believe that our current capital resources are sufficient to fund our general operations as currently anticipated for the next year.  We do not anticipate being able to obtain revenue from commercial operations in the short term and anticipate we will be required to raise additional financing in the future to meet our working capital and on-going cash requirements.  We intend to raise such financing through sales of our equity securities by way of private placements, and/or the exercise of warrants.  We may also secure additional exploration funding through option or joint venture agreements on our mineral properties; or through the sale of our mineral properties, royalty interests or capital assets, or borrow to meet our working capital requirements.  While we have in the past been able to raise sufficient funds to sustain our exploration programs, there is no assurance that we will continue to be able to do so.  If, for any reason, we are not able to access the capital market, our resources during this period will be limited to cash on hand and any revenues we are able to generate from joint venture or similar arrangements we may hereafter enter into. If we are unable to secure sufficient funds to pursue such proposed acquisitions and exploration to the level desired, we will adjust our proposed activities to reflect the amount of capital available to us after providing for sufficient working capital to maintain our existing operations. At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.  See Special Note Regarding Forward Looking Statements and Risk Factors.



Financing - In the past, we have relied in large part on our ability to raise capital from the sale of our securities to fund the acquisition and exploration of our mineral properties.  During 2006 and 2007, increasing precious metal and base metal prices and revived market interest in mineral exploration companies enhanced our ability to raise funding for exploration.  For example, during the 2006 fiscal year we raised $2,604,000 from the sale of our securities through a private placement of



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3,720,000 units at $0.70 per unit and additional proceeds of $1,202,800 were raised from the exercise of warrants and options.  During fiscal 2007, we raised gross proceeds of $4,594,000 from the sale of our securities through a private placement of 5,742,500 units at a price of $0.80 per unit and additional proceeds of $171,480 were realized from the exercise of options and warrants.  During the second quarter of 2008 we raised proceeds of $1,539,000 from the sale of our securities through a private placement of 2,565,000 units at $0.60 per unit.  Over the past year, with the instability in the global financial situation, there has been a decline in the demand for, and in the prices of precious and base metals and a corresponding declining market for shares of junior exploration companies which makes it more difficult to raise capital for mineral exploration.  Subsequent to the 2008 fiscal year, we were able to raise additional capital in a private placement completed in March 2009, but only at significantly lower prices than our last placement completed a year earlier in April 2008 ($0.10 per unit as compared to $0.60 per unit in April, 2008), with less favourable terms (each unit comprised of one share and one full warrant in 2009 as compared to one share and 1/2 warrant in 2008), a smaller amount of proceeds and significantly higher dilution (7,830,500 units for $738,050 in gross proceeds in 2009 compared to  2,565,000 units for $1,539,000 in gross proceeds in 2008).



Use Of Proceeds For Fiscal 2006, 2007 and 2008 - During fiscal 2006 we completed a private placement and in regulatory filings disclosed that the intended use of the $2,604,000 proceeds would be $1,600,000 for expenditures/exploration on our mineral properties and $1,004,000 for general working capital.  The intended use of proceeds was more than fulfilled as expenditures/exploration on our mineral properties during fiscal 2006 totaled $2,161,249 at December 31, 2006.  During fiscal 2007 we completed a private placement and in regulatory filings disclosed that the intended use of the $4,594,000 proceeds would be $3,200,000 for expenditures/exploration on our mineral properties and $1,394,000 for general working capital.  The intended use of proceeds was more than fulfilled as expenditures/exploration on our mineral properties totaled $3,797,308 for the fiscal year ended December 31, 2007.  During the second quarter of 2008, we completed a private placement and in regulatory filings disclosed that the intended use of the $1,539,000 proceeds would be $800,000 for expenditures/exploration on our mineral properties and $739,000 for general working capital. This intended use of proceeds was more than fulfilled as expenditures/exploration on our mineral properties totaled $1,949,405 for the fiscal year ended December 31, 2008.



Anticipated Capital Requirements - Based on the funds on hand, we anticipate that it will be necessary to raise additional financing during 2009 in order to fund our ongoing general operations for the next year.  In relation to exploration programs and option payments, management will work to secure additional equity financings and/or joint venture/investment funding in order to fund our proposed exploration program at the Los Zorros property in Chile.



While we have in the past been able to raise sufficient funds to sustain our exploration programs, there is no assurance that we will continue to be able to do so.  If, for any reason, we are not able to secure equity financings, our resources during this period will be limited to cash on hand and any revenues we are able to generate from joint venture or similar arrangements we may hereafter enter into.  If we are unable to secure sufficient funds to pursue exploration to the level desired, we will adjust our proposed activities to reflect the amount of capital available to us after providing for sufficient working capital to maintain our existing operations.  Since we own our interests in the majority of our mineral properties, we do not have any significant capital obligations to third parties to maintain our property interests other than the payment of periodic patent and other government fees and the option payments listed under the Table of Contractual Obligations (see below).  Our anticipated cash requirements for the year are primarily comprised of the anticipated costs of conducting our exploration programs, our administrative overhead and the option obligations listed under the Table of Contractual Obligations (see below) and other operating expenses in the normal course of business. See Special Note Regarding Forward Looking Statements and Risk Factors.



Table of Contractual Obligations - The following table summarizes our contractual obligations at May 31, 2009 and the effect these obligations are expected to have on our liquidity and cash flows in future periods.



|                                        |                       |                  |            |           |              
|--------------------------------------- | --------------------- | ---------------- | ---------- | --------- | -------------
|Contractual Obligations                 | Payment Due By Period
|                                        | Total                 | Less than a year | 1-3 Years  | 4-5 Years | After 5 Years
|Porvenir Option (1)
Option Payments     | US$1,038,500          | US$1,038,500     |            |           |              
|Araya Option (2)
Option Payments        | US$65,477             | US$65,477        |            |           |              
|Rojas Option (3)
Option Payments        | US$150,000            | US$150,000       |            |           |              
|Parra Option (4)
Option Payments        | US$80,000             | US$80,000        |            |           |              
|Hochschild Purchase (5)
Advance Royalty | US$300,000            | US$100,000       | US$200,000 |           |              



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|                                              |                                                             |                                                             |                                |  | 
|--------------------------------------------- | ----------------------------------------------------------- | ----------------------------------------------------------- | ------------------------------ |  | 
|Capital  (Finances)
Lease Obligations         | NIL                                                         |                                                             |                                |  | 
|Operating Lease
Obligations                   | NIL                                                         |                                                             |                                |  | 
|Purchase Obligations
Equipment                | NIL                                                         |                                                             |                                |  | 
|Other Long-term
Liabilities                   | NIL                                                         |                                                             |                                |  | 
|Total Contractual
Obligations and
Commitments | Option Payments
US$1,333,977
Advance Royalty
US$300,000 (5) | Option Payments
US$1,333,977
Advance Royalty
US$100,000 (5) | Advance Royalty
US$200,000 (5) |  | 





(1) These are option payments (US$77,000 and US$961,500) pursuant to an option to purchase mineral property forming a 2,138-hectare portion of our INCA Property under the Unilateral Option Purchase Contract dated March 31, 2006 and as revised March 31, 2008 between Sociedad Contractual Minera Porvenir and our subsidiary Minera Samex Chile S. A.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (see Mineral Property Summaries  INCA Project)



(2) These are option payments pursuant to an option to purchase mineral property forming a 45-hectare portion of our INCA Property under the Unilateral Option Purchase Contract dated April 4, 2006 between Malvina del Carmen Araya Santander and our subsidiary Minera Samex Chile S. A.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (see Mineral Property Summaries  INCA Project for details)



(3) These are option payments pursuant to an option to purchase mineral property forming a 20-hectare portion of our INCA Property under the Unilateral Option Purchase Contract dated May 25 2006 between Oscar David Rojas Garin and our subsidiary, Minera Samex Chile S.A.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (see Mineral Property Summaries  INCA Project for details)



(4) These are option payments pursuant to an option to purchase mineral property forming a 21-hectare portion of our INCA property under the Unilateral Option Purchase Contract dated April 9, 2007 between Jaime Ruben Parra Vasquez and our subsidiary Minera Samex Chile S. A. While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (see Mineral Property Summaries  INCA Project for details)



(5) Pursuant to the exercise of an option and the related Purchase Contract dated October 27, 2006 between our subsidiary, Minera Samex Chile S.A. and Compañia Minera y Comercial Sali Hochschild S.A., SAMEX holds 100% interest (subject to an NSR royalty) in concessions covering a 209-hectare portion of our Los Zorros Property.  Pursuant to the option/purchase agreement, if the concessions are not in production by December 31, 2007, advance royalty payments of US$100,000 per year are required for five years (by February 29, 2008 (paid), by March 1, 2009 (which has been paid), and by March 1, 2010, 2011, and 2012) to a maximum of US$500,000, or until the commencement of commercial exploitation.  The advance royalty payments are recoverable from future royalty payments.  SAMEX is not obligated to pay the advance royalty if it elects to return the concessions to the previous owner (see Mineral Property Summaries  Los Zorros Property for details).





Research and Development, patents and licenses, etc. - We are a mineral exploration company and we do not carry on any research and development activities.



Trend Information - We anticipate that the price of gold, silver, copper will continue to be volatile, but will generally increase over the next year which should enable us to secure additional equity financing.  Metal prices cannot be predicted with accuracy and our plans will be largely dependant upon the timing and outcome of metal markets, particularly the price of gold, silver and copper which is entirely outside of our control.  See Special Note Regarding Forward Looking Statements and Risk Factors.



The prices of precious metals and base metals fluctuate widely and are affected by numerous factors beyond our control, including expectations with respect to the rate of inflation, relative strength of the U.S. dollar, Chilean Peso and of other currencies as against the Canadian Dollar, interest rates, and global or regional political or economic crisis.  The demand for and supply of precious metals and base metals may affect precious metals and base metals prices but not necessarily in the same manner as supply and demand affect the prices of other commodities.  If metal prices are weak, it is more difficult to raise financing for our exploration projects.  There is no assurance our attempts to attract capital will be successful.  Failure to attract sufficient capital may significantly affect our ability to conduct our planned exploration activities. Conversely, when metal



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prices are strong, competition for possible mineral properties increases as does the corresponding prices for such prospective acquisitions and the cost of drilling and other resources required to conduct exploration activities.



We have followed the policy of, at year end, writing down to nominal value any of our mineral properties on which we have not conducted any significant exploration activities during that fiscal year and do not plan to conduct exploration activities within the current year, regardless of our long term view of the prospects of the particular property.  Since our future exploration activities are dependent upon a number of uncertainties including our ability to raise the necessary capital (which is in turn affected by external factors such the prices of precious and base metals), we may be required, by application of this accounting policy, to write down other properties now shown as an asset in our consolidated financial statements to nominal value, even though we may intend to conduct future exploration activities on them after the current fiscal period.



In 2007 and into 2008, the U.S. credit markets began to experience serious disruption due to a deterioration in residential property values, defaults and delinquencies in the residential mortgage market (particularly, sub-prime and non-prime mortgages) and a decline in the credit quality of mortgage backed securities. These problems led to a slow-down in residential housing market transactions, declining housing prices, delinquencies in non-mortgage consumer credit and a general decline in consumer confidence. These conditions continued and worsened in 2008, causing a loss of confidence in the broader U.S. and global credit and financial markets and resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, less liquidity, widening of credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions. Notwithstanding various actions by the U.S. and foreign governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions caused the broader credit markets to further deteriorate and stock markets to decline substantially. In addition, general economic indicators have deteriorated, including declining consumer sentiment, increased unemployment and declining economic growth and uncertainty about corporate earnings.



These events in global financial markets have had a profound impact on the global economy. Many industries, including the gold mining and junior exploration industry, are impacted by these market conditions.   Among other things, there has been a decline in the demand for, and in the prices of various metals and a corresponding decline in the market for shares of junior exploration companies which has made it more difficult for us to raise capital for mineral exploration.



At the same time, likely due to increased global economic uncertainty and fears over the continued health of the US economy and the possible collapse of the US dollar and other reserve currencies, gold prices have remained relatively stable and have in fact shown signs of increasing.  We believe these economic trends are likely to continue into 2009 and possibly beyond and may result in a significant increase in the demand for and the price of gold.  We anticipate that these trends will in due course positively affect our ability to obtain suitable equity financing to fund our efforts to explore for gold at our Los Zorros and other gold and silver properties in Chile.  See Special Note Regarding Forward Looking Statements.



Off Balance Sheet Arrangements - We do not have any material off-balance sheet arrangements out of the ordinary course of business other than verbal employment or consulting agreements with our executives.



Employees, Salaries, Payments to Related Parties  During 2008 we had from 22 to 26 employees, the majority of which were involved in activity on our mineral properties in Chile and Bolivia.  By comparison, we had 23 employees during 2007.  Salaries, for employees who are also directors or officers of the Company, totaled $443,614 during the year ended December 31, 2008, a $140,014 portion of which was capitalized to mineral interests (compared to fiscal 2007 when their salaries totaled $424,513, a $120,913 portion of which was capitalized).   Allen D. Leschert, one of our directors, provides legal services to us through Leschert & Company Law Corporation.  Leschert & Company charged $17,230 for legal services during the fiscal year ended December 31, 2008.



Audit Committee & Compensation Committee - The Audit Committee is governed by the Companys Audit Committee Charter. The Audit Committee is composed of director, Larry McLean, Vice President, Operations and Chief Financial Officer of the Company who is not independent, and director, Peter Dahl and Allen Leschert (non-executive directors of the Company) who the Board of Directors have determined to be independent in accordance with the requirements of our Audit Committee Charter.  All three members have been directors of the Company since 1995 and have, in the course of their duties, engaged in the review and analysis of - and/or have actively supervised persons engaged in the preparation, auditing and analysis of - numerous interim and annual financial statements for the Company, as well as for other public companies for which they have served as directors or officers.  Allen Leschert, who serves as committee chairman, also has more than 20 years experience as a securities lawyer.  In addition to holding a law degree, he also holds a B. Comm. (with distinction), specializing in Corporate Finance and Accounting.  All three of the Audit Committee members are financially literate.  The Audit Committees primary function is to review the annual audited financial statements with the Companys auditor prior to presentation to the Board.  The audit committee also reviews the Companys interim un-audited quarterly financial statements prior to finalization and publication.



54





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Our Compensation Committee is composed of non-executive directors, Peter Dahl and Allen Leschert, and an executive director, Larry McLean.  The Compensation Committee was established to assist and advise the Board of Directors with respect to any and all matters relating to the compensation of the executive officers of the Company or other such persons as the Board may request from time to time.



Non-Recourse Loans, Derivatives, Liquidity of Working Capital  The Companys working capital and excess cash are immediately redeemable at any time and are not exposed to the liquidity problems associated with certain short-term investments such as asset-backed securities.  The Company does not have any joint venture agreements on any of its mineral properties whereby the Company is exposed to non-recourse loans.  SAMEX Mining Corp. is not a party to, nor bound by any agreement, document or instrument whereby the Companys interest in mineral properties may be reduced or diluted, or whereby the Company may incur any other liabilities or obligation as a direct or indirect result of any derivative embedded in any agreement, document or instrument.





ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management.

The following table sets out the names of our directors, management and employees we depend on, their positions and offices at May 31, 2009.  All our directors are residents of Canada, with the exception of Robert Kell, a resident of the United States and Chile.  None of our directors serve as directors for other public issuers.



|                                                                                                                     |                                                                                             |                                                |                                      
|-------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ---------------------------------------------- | -------------------------------------
|Name, Age, Municipality of Residence and Position                                                                    | Present and Principal Occupation During the Last Five Years                                 | Date of First Appointment as Executive Officer | Date of First Appointment as Director
|Jeffrey P. Dahl, 47
Abbotsford, British Columbia
President and Director
(son of Peter Dahl)                          | Our President, Chief Executive Officer, Investor Relations                                  | November 3, 1995                               | November 3, 1995                     
|Peter J. Dahl, 68
Abbotsford, British Columbia
Chairman and Director
(father of Jeffrey Dahl)                        | Consultant;
Counselor for Garden Ministries Society from 1997 to present                    | August 7, 2001                                 | November 3, 1995                     
|Robert Kell, 58
Missoula, MT & La Paz, Bolivia
Vice President - Exploration and Director                             | Geologist, our Exploration Manager from November 1995 to present;                           | November 3, 1995                               | June 11, 1996                        
|Allen D. Leschert, 52
West Vancouver, British Columbia
Director                                                      | Barrister and Solicitor with Leschert & Company Law Corporation                             | N/A                                            | November 3, 1995                     
|Larry D. McLean, 59
Abbotsford, British Columbia
Vice President - Operations and Director
(husband of Brenda McLean) | Our Operations/Administration Manager/Chief Financial Officer from November 1995 to present | November 3, 1995                               | November 3, 1995                     
|Brenda McLean, 57
Abbotsford, British Columbia
Corporate Secretary
(wife of Larry McLean)                            | Our Corporate Secretary from 1995 to present                                                | November 3, 1995                               | N/A                                  



Executive officers are appointed by the Board of Directors to serve until their successors are appointed.



Compensation.

Salaries, for employees who are also our directors or officers, totaled $443,614 for the 2008 fiscal year ended December 31, 2008 including $148,500 to Jeffrey Dahl, our President and Chief Executive Officer, US$130,200 to Robert Kell, our Vice President-Exploration, and $95,700 to Larry McLean our Vice PresidentOperations and Chief Financial Officer.



55





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Allen D. Leschert, one of our directors, provides legal services to us through Leschert & Company Law Corporation.  Leschert & Company charged $17,230 for legal services during the fiscal year ended December 31, 2008.



Except as otherwise disclosed herein, we have not entered into any employment or management agreements with any of our directors or executive officers.  In addition, we do not currently have any retirement, pension, bonus, profit-sharing or similar plans and none are proposed at this time.



Incentive Stock Options

In order to attract and retain highly qualified personnel, we provide incentives in the form of stock options to certain of our qualified employees, directors, officers and consultants on terms and conditions which are in accordance the Companys Stock Option Plan and the prevailing rules and policies of the TSX Venture Exchange, and our Board of Directors.



At our Annual General Meetings held on May 20, 2004, May 5, 2005, June 1, 2006, May 31, 2007, May 29, 2008, and May 26, 2009, the shareholders passed ordinary resolutions giving annual approval to the Companys rolling stock option plan.  Under the terms of the Companys Stock Option Plan (the Plan), our Board of Directors are authorized to grant options to any person who is an employee, director, officer, or consultant for us or one of our subsidiaries and who is not otherwise prevented from receiving the Option under the terms of applicable policy of the TSX-V or a company which is owned by one or more such individuals (an Eligible Person).  The maximum number of Common Shares which may be reserved for issuance under the Plan is 10% of the Common Shares outstanding at the time of the grant (on a non-diluted basis) less the aggregate number of Common Shares reserved for issuance under any other existing stock options or similar share compensation arrangement and the maximum number which may be reserved for issuance to any one person under the Plan is 5% (unless otherwise approved by a majority of disinterested shareholders, which approval has not been sought or granted).  Our Board of Directors is entitled, subject to the requirements of applicable TSX-V policy, to set the exercise price of each option (provided it is greater than the minimum prescribed under TSX-V Policy), the term during which it may be exercised (to a maximum of 10 years) and any vesting provisions as they may deem appropriate and as are in compliance with TSX-V policy.  Any options granted under the Plan are exercisable only while the holder remains an Eligible Person or the time period determined by the Board of Directors after ceasing to be an Eligible Person, and are not assignable or transferable other than by will or the laws of descent and distribution.



During the 2008 fiscal year ended December 31, 2008 and in the subsequent period to May 31, 2009, stock options were exercised or were granted under the Companys Stock Option Plan as follows: in the second quarter of 2008 the Company granted stock options to a geologic consultant working on the INCA project, on 150,000 shares at a price of $0.65 per share with a fair value of $55,745 based on the Black-Scholes option-pricing model.  This stock-based compensation expense of $55,745 was capitalized to mineral expenses included in the category, Geology, Mapping and Surveys for the INCA project in the Statements of Mineral Interests.  During the third quarter of 2008 the Company granted a consultant a stock option on 60,000 shares at a price of $0.50 per share with a fair value of $5,873 based on the Black-Scholes option-pricing model.  This stock-based compensation expense of $5,873 was included in the category, Consulting in the Statements of Operations and Deficit.  This grant was to a Chilean consultant contracted to assist in brokering a potential joint venture/investment for the INCA project.  No other stock options were granted or exercised during fiscal 2008 and the subsequent period to May 31, 2009.



During the 2007 fiscal year ended December 31, 2007, stock options were exercised or were granted under the Companys Stock Option Plan as follows:



Stock Options Exercised - On February 23, 2007 and March 12, 2007 directors/officers of the Company exercised stock options for the purchase of 400,000 shares at $0.20 per share that were due to expire on March 19, 2007.  On March 12, 2007 a consultant of the Company exercised stock options for the purchase of 100,000 shares at a price of $0.20 per share.  On April 17, 2007 a director/officer of the Company exercised stock options for the purchase of 50,000 shares at a price of $0.20 per share.  On November 8, 2007 a consultant exercised stock options for the purchase of 50,000 shares at a price of $0.20 per share.



Options Granted - On February 23, 2007 options were granted to directors/officers of the Company on an aggregate of 1,295,000 shares at a price of $0.84 per share.  During the second quarter the Company granted options on 200,000 shares at $0.85 per share in relation to a consulting agreement with Brazen Financial Corp. to provide investor relation services to the Company.  In the third quarter, the Company granted options on 50,000 shares at $0.80 per share to a geologic consultant working on the INCA project.  During the fourth quarter of 2007, the Company granted options on 60,000 shares at $0.70 per share to a consultant appointed to the Companys Advisory Board.



As a result of the stock options exercised or granted, at May 31, 2009 options were outstanding to acquire 6,365,000 shares  as



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shown in the table below.  They consist of options to purchase an aggregate of 5,435,000 common shares granted to our directors and/or officers and options to purchase an aggregate of 930,000 common shares granted to our employees or consultants as follows:



|                                    |                                                     |                                 |                         |                                                     
|----------------------------------- | --------------------------------------------------- | ------------------------------- | ----------------------- | ----------------------------------------------------
|Optionee                            | Date of Option                                      | # of Shares                     | Price                   | Expiry Date                                         
|Jeffrey Dahl                        | Aug 6, 2004
April 20, 2005
May 2, 2006
Feb 23, 2007 | 125,000
350,000
300,000
270,000 | $1.10
$0.40
$0.85
$0.84 | Aug. 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Peter Dahl                          | Aug 6, 2004
April 20, 2005
May 2, 2006
Feb 23, 2007 | 100,000
350,000
150,000
150,000 | $1.10
$0.40
$0.85
$0.84 | Aug. 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Robert Kell                         | Aug 6, 2004
April 20, 2005
May 2, 2006
Feb 23, 2007 | 125,000
350,000
300,000
275,000 | $1.10
$0.40
$0.85
$0.84 | Aug. 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Larry McLean                        | Aug 6, 2004
April 20, 2005
May 2, 2006
Feb 23, 2007 | 125,000
350,000
300,000
250,000 | $1.10
$0.40
$0.85
$0.84 | Aug. 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Allen Leschert                      | Aug 6, 2004
April 20, 2005
May 2, 2006
Feb 23, 2007 | 100,000
350,000
150,000
150,000 | $1.10
$0.40
$0.85
$0.84 | Aug. 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Patricio Kyllmann
(former director) | Aug 6, 2004
May 2, 2006
Feb 23, 2007                | 100,000
150,000
125,000         | $1.10
$0.85
$0.84       | Aug. 6, 2009
May 2, 2016
Feb 23, 2017               
|Brenda McLean                       | Aug 6, 2004
April 20, 2005
May 2, 2006
Feb 23, 2007 | 40,000
175,000
150,000
75,000   | $1.10
$0.40
$0.85
$0.84 | Aug. 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Philip Southam                      | Aug 6, 2004
April 20, 2005
May 2, 2006              | 50,000
30,000
70,000            | $1.10
$0.40
$0.85       | Aug. 6, 2009
April 20, 2015
May 2, 2016             
|Stephen Scammell                    | Aug 6, 2004                                         | 25,000                          | $1.10                   | Aug. 6, 2009                                        
|Francisco Vergara                   | Aug 6, 2004
May 2, 2006                             | 50,000
50,000                   | $1.10
$0.85             | Aug. 6, 2009
May 2, 2016                            
|Dale Dobson                         | Aug 6, 2004                                         | 25,000                          | $1.10                   | Aug 6, 2009                                         
|Manuel Avalos                       | Aug 6, 2004
May 2, 2006                             | 50,000
100,000                  | $1.10
$0.85             | Aug. 6, 2009
May 2, 2016                            
|Jorge Humphreys                     | Aug 6, 2004
May 2, 2006                             | 15,000
20,000                   | $1.10
$0.85             | Aug. 6, 2009
May 2, 2016                            
|Jean Nicholl                        | Aug 6, 2004
May 2, 2006                             | 15,000
20,000                   | $1.10
$0.85             | Aug. 6, 2009
May 2, 2016                            
|Jorge Espinoza                      | May 2, 2006                                         | 30,000                          | $0.85                   | May 2, 2016                                         
|Gerald Rayner                       | Sep 24, 2007                                        | 50,000                          | $0.80                   | Sep 24, 2012                                        
|Adrian Douglas                      | Dec 20, 2007
Jan 15, 2009                           | 60,000
60,000                   | $0.70
$0.20             | Dec 20, 2012
Jan 15, 2014                           
|Steve Buckley                       | May 1, 2008                                         | 150,000                         | $0.65                   | May 1, 2013                                         
|Carlos Saxton                       | August 5, 2008                                      | 60,000                          | $0.50                   | August 5, 2009                                      



Board practices.

Our board of directors consists of five members, the terms of which expire at the general meeting of shareholders to be held each year.  Directors are elected by a majority of the votes of our common shares present in person or represented by proxy at our annual meeting of shareholders and entitled to vote at such election.  Each director will hold office until his or her term expires and his or her successor has been elected and qualified.  Executive officers serve at the discretion of the board of



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directors.  Officers are elected at the annual meeting of the directors held immediately after the annual general meeting of shareholders.



We have granted and intend to continue to grant incentive stock options to employees, directors, officers and consultants on terms and conditions established by the Companys Stock Option Plan and in accordance with prevailing policy of the TSX Venture Exchange, as summarized in Item 6. Directors, Senior Management and Employees; Compensation  Incentive Stock Options.



Our directors do not receive any monies for serving in their capacity as directors and there is currently no arrangement for the payment of any compensation in the future.



Except as disclosed herein, we have not entered into any service or employment agreements with any of our directors or officers.  We do not have any retirement, pension, profit-sharing or such similar plans and none are proposed at the present time.



Our Audit Committee is composed of directors Larry McLean (the Vice-President, Operations and Chief Financial Officer of the Company) and Peter Dahl and Allen Leschert (non-executive directors of the Company).  The Audit Committee functions under a Charter adopted by the Board of Directors.  The Audit Committees primary function is to review the annual audited financial statements with the Companys external auditor (the Auditor) prior to presentation to the Board and to make recommendations thereon, together with recommendations to the Board with respect to such financial statements and compensation payable to the Auditor.  The audit committee also reviews the Companys interim un-audited quarterly financial statements prior to finalization and publication.  The Audit Committee also provides review oversight with respect to pre-approval of all non-audit services to be provided by the Auditor to the Company and a number of other related matters including issues related to a change of auditors and establishing procedures for treatment of complaints regarding accounting, internal accounting controls or auditing matters.  The Audit Committee meets as a separate committee of the board as and when needed to carry out its functions and keeps formal minutes of its proceedings.



Our Compensation Committee is composed of non-executive directors, Peter Dahl and Allen Leschert, and an executive director, Larry McLean.  The Compensation Committee was established during fiscal 2003 to assist and advise the Board of Directors with respect to any and all matters relating to the compensation of the executive officers of the Company or other such persons as the Board may from time to time request.  The Compensation Committee meets as a separate committee of the board as and when needed to carry out its functions and keeps formal minutes of its proceedings.



Employees.

At December 31, 2008 we had 22 employees.  At May 31, 2009, that number decreased to 21 employees, four of which are also our directors or officers.  A summary of employees over the last three fiscal years is set out below.  The majority of our employees during 2008 were involved in activities related to our mineral exploration properties in Chile.  None of our employees are represented by unions or covered by collective bargaining agreements.





|                  |                       |          |                                                               |   |   
|----------------- | --------------------- | -------- | ------------------------------------------------------------- | - | --
|Year ending       | Category of Activity  | Location | Total Number of  Employees per Category and Total at Year End
|Canada            | Chile                 | Bolivia 
|December 31, 2008 | Exploration           | 1        | 16                                                            | - | 17
|                  | Administrative/Office | 4        | 1                                                             | - | 5 
|                  | Total:                | 5        | 17                                                            | - | 22
|December 31, 2007 | Exploration           | 1        | 15                                                            | 2 | 18
|                  | Administrative/Office | 4        |                                                               | 1 | 5 
|                  | Total:                |          |                                                               |   | 23
|December 31, 2006 | Exploration           | 1        | 14                                                            | 1 | 16
|                  | Administrative/Office | 4        |                                                               | 1 | 5 
|                  | Total:                |          |                                                               |   | 21



Share ownership.

The following table sets forth the shareholdings, to our knowledge, owned beneficially, directly or indirectly, by our directors and members of our administrative, supervisory or management bodies as of May 31, 2009.  There were 89,091,665 common shares issued and outstanding as of May 31, 2009.



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|                                                                                   |                                 |                                         |                                 |                         |                                                       
|---------------------------------------------------------------------------------- | ------------------------------- | --------------------------------------- | ------------------------------- | ----------------------- | ------------------------------------------------------
|Name and Position                                                                  | Number of Shares of SAMEX Owned | Percentage of Shares Owned at
May 31/09 | Incentive Stock Options Owned  
|                                                                                   |                                 |                                         | Number of Shares under Option   | Exercise Price          | Expiry Date                                           
|Jeffrey P. Dahl
President and Chief Executive Officer/Director                     | 1,210,000                       | 1.36%                                   | 125,000
350,000
300,000
270,000 | $1.10
$0.40
$0.85
$0.84 | August 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Peter J. Dahl
Chairman/Director                                                    | 828,100                         | 0.93%                                   | 100,000
350,000
150,000
150,000 | $1.10
$0.40
$0.85
$0.84 | August 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Robert E. Kell
Vice President Exploration /
Director                               | 545,000                         | 0.61%                                   | 125,000
350,000
300,000
275,000 | $1.10
$0.40
$0.85
$0.84 | August 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Larry D. McLean
Vice President  Operations and Chief Financial Officer /
Director | 531,525                         | 0.60%                                   | 125,000
350,000
300,000
250,000 | $1.10
$0.40
$0.85
$0.84 | August 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Allen D. Leschert
Director                                                         | 367,012                         | 0.41%                                   | 100,000
350,000
150,000
150,000 | $1.10
$0.40
$0.85
$0.84 | August 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017
|Brenda McLean
Corporate Secretary                                                  | 318,975                         | 0.36%                                   | 40,000
175,000
150,000
75,000   | $1.10
$0.40
$0.85
$0.84 | August 6, 2009
April 20, 2015
May 2, 2016
Feb 23, 2017



Statements as to securities beneficially owned by directors, or as to securities over which they exercise control or direction, are based upon information obtained from such directors and from records available to the Company.  For particulars on outstanding stock options, see Item 6. Directors, Senior Management and Employees  Compensation  Incentive Stock Options.



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders.

As at May 31, 2009, 89,091,665 common shares of the Company were issued and outstanding.  At that date, we had 177 shareholders of record with addresses in the United States holding an aggregate of 41,610,013 common shares representing 46.7% of our common shares.  To our knowledge, no person beneficially owns, directly or indirectly or exercises control or direction over, or has a combination of direct or indirect beneficial ownership of and control or direction over, shares carrying more than 5% of the voting rights attached to our issued and outstanding common shares except for an investment fund, Top-Gold AG MVK, which to the best of our knowledge, holds 7,800,000 common shares which represents 8.75% of our issued and outstanding common shares at May 31, 2009.  All of our common shares have identical voting rights.



Related Party Transactions.

Except where described elsewhere in this Annual Report, we have not, during the three fiscal years ended December 31, 2008 and the subsequent period to May 31, 2009, entered into transactions or loans with any (a) enterprises that are directly or indirectly controlled by or under common control with us; (b) our associates; (c) individuals directly or indirectly owning voting right which give them significant influence over us or close members of their respective families, (d) our directors, senior management or close members of their respective families or (e) enterprises in which a significant voting is held or significantly influenced by any of the foregoing individuals (a Related Party), except as follows:



59





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Stock Options Granted to Related Parties:



|                                                        |                          |                     |                      |                         
|------------------------------------------------------- | ------------------------ | ------------------- | -------------------- | ------------------------
|Related Party Name/Position                             | Date Option Granted      | # of Shares Granted | Exercise
Price/Share | Expiry Date             
|Jeffrey Dahl
Director, President, CEO                   | May 2, 2006
Feb 23, 2007 | 300,000
270,000     | $0.85
$0.84          | May 2, 2016
Feb 23, 2017
|Peter Dahl
Director and Chairman                        | May 2, 2006
Feb 23, 2007 | 150,000
150,000     | $0.85
$0.84          | May 2, 2016
Feb 23, 2017
|Robert Kell
Director, Vice President - Exploration      | May 2, 2006
Feb 23, 2007 | 300,000
275,000     | $0.85
$0.84          | May 2, 2016
Feb 23, 2017
|Larry McLean
Director, Vice President  Operations, CFO | May 2, 2006
Feb 23, 2007 | 300,000
250,000     | $0.85
$0.84          | May 2, 2016
Feb 23, 2017
|Allen Leschert
Director                                 | May 2, 2006
Feb 23, 2007 | 150,000
150,000     | $0.85
$0.84          | May 2, 2016
Feb 23, 2017
|Patricio Kyllmann
Former Director                       | May 2, 2006
Feb 23, 2007 | 150,000
125,000     | $0.85
$0.84          | May 2, 2016
Feb 23, 2017
|Brenda McLean
Corporate Secretary                       | May 2, 2006
Feb 23, 2007 | 150,000
75,000      | $0.85
$0.84          | May 2, 2016
Feb 23, 2017





Stock Options Exercised by Related Parties:



|                                                        |                                                   |                             |                         |                                
|------------------------------------------------------- | ------------------------------------------------- | --------------------------- | ----------------------- | -------------------------------
|Related Party Name/Position                             | Date Option Exercised                             | # of Shares
Exercised       | Exercise
Price/Share    | Proceeds                       
|Jeffrey Dahl
Director, President, CEO                   | Jan 3, 2006
May 4, 2006
Dec 21, 2006
Apr 17, 2007 | 50,000
50,000
50,000
50,000 | $0.20
$0.20
$0.20
$0.20 | $10,000
$10,000
$10,000
$10,000
|Peter Dahl
Director and Chairman                        | May 16, 2006                                      | 100,000                     | $0.20                   | $20,000                        
|Robert Kell
Director, Vice President - Exploration      | Feb 23, 2007
Mar 15, 2007                         | 75,000
125,000              | $0.20
$0.20             | $15,000
$25,000                
|Larry McLean
Director, Vice President  Operations, CFO | Oct 30, 2006
Nov 9, 2006
Feb 23, 2007             | 50,000
100,000
50,000       | $0.20
$0.20
$0.20       | $10,000
$20,000
$10,000        
|Patricio Kyllmann
Former Director                       | Mar 2, 2006
Jun 5, 2006
Oct 10, 2006              | 100,000
100,000
100,000     | $0.40
$0.40
$0.40       | $40,000
$40,000
$40,000        
|Allen Leschert - Director                               | Feb 23, 2007                                      | 100,000                     | $0.20                   | $20,000                        
|Brenda McLean
Corporate Secretary                       | Nov 9, 2006
Feb 23, 2007                          | 50,000
50,000               | $0.20
$0.20             | $10,000
$10,000                







Warrants Exercised by Related Parties:



|                                                   |                           |                       |                      |                
|-------------------------------------------------- | ------------------------- | --------------------- | -------------------- | ---------------
|Related Party Name/Position                        | Date Warrant
Exercised    | # of Shares
Exercised | Exercise Price/Share | Proceeds       
|Peter Dahl
Chairman & Director                     | Aug 1, 2006               | 92,500                | $0.40                | $37,000        
|Robert Kell
Director, Vice President  Exploration | Jan 19, 2006
May 18, 2006 | 50,000
50,000         | $0.40
$0.40          | $20,000
$20,000
|Allen Leschert - Director                          | Sep 8, 2006               | 55,000                | $0.40                | $22,000        



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|                                                                  |                           |               |             |              
|----------------------------------------------------------------- | ------------------------- | ------------- | ----------- | -------------
|Heidi Dahl   wife of Peter Dahl, Chairman & Director             | Nov 27, 2006              | 10,000        | $0.80       | $8,000       
|John Michael Dahl  son of Peter Dahl, Chairman & Director        | Nov 6, 2006               | 10,000        | $0.80       | $8,000       
|Melanie Dahl  - daughter-in-law of Peter Dahl, Chairman, Director | Jul 12, 2006
Nov 7, 2006  | 22,500
10,000 | $0.40
$0.80 | $9,000
$8,000
|Cindy Dahl  - daughter-in-law of Peter Dahl, Chairman & Director  | Jul 12, 2006              | 22,500        | $0.40       | $9,000       
|Lisa Dahl  - daughter-in-law of Peter Dahl, Chairman, Director    | Aug 21, 2006
Nov 27, 2006 | 12,000
5,000  | $0.40
$0.80 | $4,800
$4,000
|Linda Dahl, - wife of Jeffrey Dahl, Director, President, CEO      | Nov 27, 2006              | 25,000        | $0.80       | $20,000      
|Walter & Alida Dahl  brother of Peter Dahl, Chairman & Director  | Nov 2, 2006               | 10,000        | $0.40       | $8,000       



Extension Of Warrant Terms  In January 2009, the Company extended the term of warrants exercisable for the purchase of 1,744,000 shares at a price of $0.78 per share.  The warrants were originally issued with a three year term expiring February 13, 2009, but the term of the warrant was extended for a period of two years until expiry on February 13, 2011.  Warrants for the purchase of 190,000 of the shares were held by related parties.  In January 2009, the Company also extended the term of warrants exercisable for the purchase of 2,871,250 shares at a price of $1.00 per share.  The warrants were originally issued with a two year term expiring March 16, 2009, but the term of the warrant was extended for a period of two years until expiry on March 16, 2011.  Warrants for the purchase of 100,000 of the shares were held by related parties.



Private Placement Participation by Related Parties:



Private Placement  On February 13, 2006 we issued an aggregate of 330,000 units, comprised of one common share and one-half of a warrant to purchase an additional common share, to directors/officers and to close family members of directors/officers at a price of $0.70 per unit under a private placement of 3,720,000 units sold.  The Related Party subscribers were as follows:



|                                                                  |                           |         
|----------------------------------------------------------------- | ------------------------- | --------
|Related Party Name/Position                                       | Number of Units Purchased | Proceeds
|Cindy Dahl  daughter-in-law of Peter Dahl, Chairman & Director   | 50,000                    | $35,000 
|Melanie Dahl - daughter-in-law of Peter Dahl, Chairman & Director | 50,000                    | $35,000 
|Graham Dahl  son of Peter Dahl - Chairman & Director             | 20,000                    | $14,000 
|Jeffrey Dahl - President & Director                               | 50,000                    | $35,000 
|Peter Dahl - Chairman & Director                                  | 100,000                   | $70,000 
|Linda Dahl - wife of Jeffrey Dahl, President & Director           | 30,000                    | $21,000 
|Robert Kell  Vice President  Exploration & Director             | 30,000                    | $21,000 
|Allen Leschert  Director                                         | 50,000                    | $35,000 



Private Placement  On March 16, 2007 we issued 200,000 units, comprised of one common share and one-half of a warrant to purchase an additional common share, to a director/officer at a price of $0.80 per unit under a private placement of 5,742,500 units sold.  The Related Party subscriber was:



|                                 |                           |         
|-------------------------------- | ------------------------- | --------
|Related Party Name/Position      | Number of Units Purchased | Proceeds
|Peter Dahl - Chairman & Director | 200,000                   | $160,000



Private Placement  On March 24, 2009 we issued an aggregate of 2,051,000 units, comprised of one common share and one warrant to purchase an additional common share, to directors/officers and to close family members of directors/officers at a price of $0.10 per unit under a private placement of 7,830,500 units sold.  The Related Party subscribers were as follows:





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|                                                                                                |                           |         
|----------------------------------------------------------------------------------------------- | ------------------------- | --------
|Related Party Name/Position                                                                     | Number of Units Purchased | Proceeds
|Jody Carson  daughter of Larry McLean, Vice President-Operations & Director                    | 50,000                    | $5,000  
|Rick Carson  son-in-law of Larry McLean, Vice President -Operations & Director                 | 50,000                    | $5,000  
|Aaron Dahl  son of Jeffrey Dahl, President & Director                                          | 5,000                     | $500    
|Cindy Dahl  daughter-in-law of Peter Dahl, Chairman & Director                                 | 100,000                   | $10,000 
|Heidi Dahl   wife of Peter Dahl, Chairman & Director                                           | 100,000                   | $10,000 
|Jeffrey Dahl - President & Director                                                             | 700,000                   | $70,000 
|John M. Dahl  son of Peter Dahl, Chairman & Director                                           | 100,000                   | $10,000 
|Joshua Dahl  son of Peter Dahl, Chairman & Director                                            | 50,000                    | $5,000  
|Kenneth & Janice Dahl  brother of Peter Dahl, Chairman & Director                              | 165,000                   | $16,500 
|Linda Dahl - wife of Jeffrey Dahl, President & Director                                         | 55,000                    | $5,500  
|Lisa Dahl - daughter-in-law of Peter Dahl, Chairman & Director                                  | 50,000                    | $5,000  
|Melanie Dahl - daughter-in-law of Peter Dahl, Chairman & Director                               | 150,000                   | $15,000 
|Peter Dahl - Chairman & Director                                                                | 176,000                   | $17,600 
|Walter & Alida Dahl  brother of Peter Dahl, Chairman & Director                                | 100,000                   | 10,000  
|Brenda McLean  Corporate Secretary, wife of Larry McLean, Vice President-Operations & Director | 50,000                    | $5,000  
|Jeff McLean - son of Larry McLean, Vice President-Operations & Director                         | 50,000                    | $5,000  
|Kristi McLean  daughter-in-law of Larry McLean, Vice President-Operations & Director           | 50,000                    | $5,000  
|Larry McLean - Vice President-Operations & Director                                             | 50,000                    | $5,000  





Other Related Party Transactions



Allen D. Leschert, one of our directors, provides legal services to us through Leschert & Company Law Corporation.  Leschert & Company charged us $17,230 for legal services during the 2008 fiscal year ended December 31, 2008, $58,217 for legal services during the 2007 fiscal year ended December 31, 2007, and $25,965 for legal services during the 2006 fiscal year ended December, 31, 2006.



In May 2006, the Compensation Committee recommended 10% salary increases for employees who are senior executive officers of the Company: Jeffrey Dahl, President & CEO; Robert Kell, Vice President, Exploration; Larry McLean, Vice President, Operations & CFO; and Brenda McLean, Corporate Secretary.  The Compensation Committee recommended these salary increases to the Board of Directors to bring salaries up to current competitive levels of those in the exploration/mining industry.



Other than disclosed above, no Related Party is or has been indebted to us or our subsidiaries since December 31, 2008.  There are no management, consulting, lease or other agreements in which our management, directors or subsidiaries are parties.



Interests of Experts and Counsel.

Not Applicable.



ITEM 8. FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information.

Attached hereto, in Item 17 Financial Statements, are our audited consolidated financial statements, consisting of balance sheets as at December 31, 2008 and December 31, 2007, and the consolidated statements of operations and deficit and cash flows for each of the fiscal years in the three-year period ended December 31, 2008 together with related notes and schedules and the report of our Auditor.  See Item 17 Financial Statements.



Legal Proceedings

To our knowledge, there are no currently pending or threatened legal proceedings that could have a material effect on our



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business, results of operations or financial condition.



Dividend Policy

We have never declared or paid any cash dividends on our common shares.  As we do not have any earnings, we do not anticipate paying cash dividends on the common shares for the foreseeable future.  Future dividends on the commons shares will be determined by the Board of Directors in light of circumstances existing at the time, including our earnings and financial condition.  There is no assurance that dividends will ever be paid.  See Special Note Regarding Forward Looking Statements.



Significant Changes.

No significant changes have occurred since the date of the annual financial statements.



ITEM 9. THE OFFER AND LISTING.

Offer and Listing Details.

The following sets forth the price history of our common shares for the period indicated, as reported by the TSX Venture Exchange (formerly Canadian Venture Exchange Inc.).  They reflect inter-dealer prices, without retail markup, markdown or commissions, and may not represent actual transactions.



|                       |              |            
|---------------------- | ------------ | -----------
|Period                 | High (CDN $) | Low (CDN $)
|Most Recent Six Months |              |            
|May 2009               | 0.195        | 0.12       
|April, 2009            | 0.145        | 0.115      
|March, 2009            | 0.14         | 0.11       
|February, 2009         | 0.15         | 0.12       
|January, 2009          | 0.21         | 0.15       
|December 2008          | 0.195        | 0.13       
|Financial Year 2008    | 0.78         | 0.115      
|Fourth Quarter         | 0.24         | 0.115      
|Third Quarter          | 0.43         | 0.165      
|Second Quarter         | 0.66         | 0.37       
|First Quarter          | 0.78         | 0.50       
|Financial Year 2007    | 1.45         | 0.51       
|Fourth Quarter         | 1.45         | 0.51       
|Third Quarter          | 0.90         | 0.60       
|Second Quarter         | 1.05         | 0.70       
|First Quarter          | 0.86         | 0.63       
|Financial Year 2006    | 1.30         | 0.58       
|Fourth Quarter         | 1.02         | 0.65       
|Third Quarter          | 1.22         | 0.84       
|Second Quarter         | 1.30         | 0.65       
|First Quarter          | 0.98         | 0.58       
|Financial Year 2005    | 0.89         | 0.34       
|Financial Year 2004    | 1.65         | 0.65       



The closing price of our common shares on the TSX Venture Exchange on June 1, 2009 was $0.20.



Plan of distribution.

Not Applicable.



Markets.

Our Common Shares are quoted in Canada on the TSX Venture Exchange under the trading symbol SXG and in the United States on the OTC Bulletin Board under the trading symbol SMXMF.





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Selling shareholders.

Not Applicable.



Dilution.

Not Applicable.



Expenses of the issue.

Not Applicable.



ITEM 10. ADDITIONAL INFORMATION.

Share capital.

Not Applicable.



Corporate Legislation.

We are organized as a corporation under, and operate subject to the Business Corporations Act (British Columbia) (the Act).   See Item 4 Information On the Company.



Notice of Articles and Articles of association.

Our Articles and Notice of Articles (our Constating Documents) are attached as exhibits hereto as noted in Item 19.  Our Articles and Notice of Articles do not contain any limitations on our objects or purposes.



The following is a summary of certain provisions of our Constating Documents:



Director's Power To Vote On Matters In Which The Director Is Materially Interested

Our Articles provide that it is the duty of any of our directors who are directly or indirectly interested in an existing or proposed contract or transaction with us to declare the nature of their interest at a meeting of our Board of Directors.  In the case of a proposed contract or transaction, the declaration must be made at the meeting of our Board of Directors at which the question of entering into the contract or transaction is first taken into consideration, or if the interested directors are not present at that meeting, our directors are required to declare their interest at the next meeting.  If an interested Director votes in favour of such contract or transaction, he or she may be liable to account for any profit obtained therefrom.



Director's Power To Vote On Compensation To Themselves



Subject to the Act, our Articles provide that the directors may determine the amount to be paid out of our funds or capital as remuneration for their service.  The directors may also determine the proportions and manner that the remuneration will be divided among them.  The Directors have, by resolution, formed a Compensation Committee (composed of non-executive directors) to assist and advise the Board of Directors with respect to any and all matters relating to the compensation of the executive officers of the Company or other such persons as the Board may from time to time request.



Director's Borrowing Powers

Our Articles provide that the directors, on our behalf, may:



(a) raise or borrow money for our purposes upon such terms and conditions as they think fit;



(b) guarantee obligations of any other person;



(c) issue debt obligations as security for loans; and



(d) mortgage or charge any part of our property and assets.





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Retirement Of Directors Under An Age Limit Requirement



Our Articles do not require directors to retire prior to a specified age.



Number Of Shares Required For A Director's Qualification

Our Articles do not provide for a requirement of share ownership for a director's qualification.



Changes In Our Capital

Our Articles provide that we may, subject to the Act and, by special resolution, increase our authorized capital by:



(a) creating shares with par value or shares without par value, or both;



(b) increasing the number of shares with par value or shares without par value, or both; or



(c) increasing the par value of a class of shares with par value, if no shares of that class are issued.



Subject to the Act, the new shares may be issued upon such terms and conditions and with such rights, privileges, limitations, restrictions and conditions attached to them as the special resolution of our shareholders determines.



In addition, subject to the Act, we may also by special resolution subdivide or consolidate our shares;



At the meeting, at least two persons holding at least five percent (5%) of the outstanding shares must be present in person or represented by proxy in accordance with our Articles.



Our Articles require similar approval of the holders of Preferred Shares in the event of changes analogous to the ones described above to the Preferred Shares.  In addition, if the deletion, variation, modification, amendment or amplification of the provisions contained especially affects the rights of the holders of our Preferred Shares of any series, in a manner different from which the rights of the holders of our Preferred Shares of any other series are affected, then amendments must, in addition to being approved by the holders of our Preferred Shares, be approved by the holders of our Preferred Shares of the series especially affected.  This approval may be given in writing by the holders of 3/4 of our Preferred Shares of the series or by resolution passed by 3/4 of the votes cast on a poll at the meeting of the holders of our Preferred Shares of the series. At a meeting of the holders of our Preferred Shares as a class or as a series, each holder of our Preferred Shares is entitled to one vote in respect of each Preferred Share held by the holder.



Furthermore, the Act provides a holder of shares of any class or series of shares, the right to vote separately as a class or series upon amendments to our Constating Documents, which amendments may affect voting rights.



General Meeting

We must hold an ordinary general meeting of our shareholders at least once every calendar year at a time and place determined by our directors and not later than 15 months after the preceding ordinary general meeting, unless extended by the Registrar of Companies upon application made under the Act.  Our Chair, President and Chief Executive Officer, Chief Financial Officer or directors may at any time convene a special general meeting, and our directors, upon the requisition of shareholders in accordance with the Act, shall proceed to convene the meeting or meetings to be held at such time and place as the directors determine. The requisition shall state the objects of the meeting requested, be signed by the requisitionists and deposited at our registered office.



At least twenty one days' notice, or any longer period of notice as may be required by the Act, of every general meeting, specifying the place, day and hour of the meeting and, when special business is to be considered, the general nature of such business, must be given to our shareholders entitled to be present at our meeting by notice given as permitted by our Articles. With the consent in writing of all our shareholders entitled to vote at the meeting, a meeting may be convened by a shorter notice and in any manner they think fit, or notice of the time, place and purpose of the meeting may be waived by all of our shareholders. The accidental omission to give notice to a shareholder, or non-receipt of notice by a shareholder, will not invalidate any resolution passed at any general meeting.



No business will be transacted at any general meeting unless the requisite quorum is present at the commencement of the business. Subject to the Act, if we have two or more shareholders, a quorum for the transaction of business at a general meeting



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shall be two persons present in person, or by proxy and holding or representing by proxy, not less than five percent (5%) of the shares entitled to vote at the general meeting.



Holders of our Common Shares are entitled to attend meetings. However, holders of our Preferred Shares as a class will not be entitled to attend meetings, unless the rights of a particular class provide otherwise. Any of our corporate shareholders that have an authorized agent or representative present at any of the meeting will be deemed to be personally present at the meeting.



Limitations On The Rights To Own Securities

Our Articles do not provide for any limitations on the rights to own our securities. See also Item 10.  Exchange Controls.



Change In Control Provisions

Our Articles do not contain any change in control limitations with respect to a merger, acquisition or corporate restructuring involving us.



Shareholder Ownership Disclosure

Our Articles do not contain any provision governing the ownership threshold above which shareholder ownership must be disclosed.



Share Rights, Preferences and Restrictions

The following is a summary of the rights and restrictions pertaining to our two classes of shares:



Common Shares

All Common Shares are of the same class and have the same rights, preferences and limitations.

Holders of Common Shares are entitled to one vote per share at any meeting of our shareholders except meetings at which only shareholders of a specified class of shares (other than the Common Shares) are entitled to vote.  Subject to the preference of any outstanding Preferred Shares (described below), the holders of Common Shares are entitled to participate equally in any dividends our Board of Directors declares out of funds legally available for the payment of dividends. There are no limitations on the payment of dividends if we are liquidated, dissolved or wound up, holders of Common Shares are entitled to share ratably in all assets remaining after payment of our liabilities and any liquidation preferences of any outstanding Preferred Shares. There are no pre-emptive rights, subscription rights, conversion rights and redemption provisions relating to our Common Shares and none of our Common Shares carry any liability for further calls.



The rights of holders of Common Shares may not be modified other than in accordance with our Articles and the Act which generally requires the favorable votes of 3⁄4 of the Common Shares voting on such modification.  Because a quorum for a general meeting of shareholders can exist with only two shareholders (proxy-holders) personally present, the rights of holders of Common Shares may be modified by less than a majority of the issued Common Shares.

Shareholders may apply to the Supreme Court of British Columbia for various remedies on the ground that our affairs are being conducted in a manner oppressive to one or more of the shareholders or that some resolution of shareholders has been passed or is proposed that is unfairly prejudicial to one or more of the shareholders.  That Court may, with a view to bringing it to an end or to remedying the matters complained of, make an interim or final order if it considers appropriate, including the following:

a)

direct or prohibit any act or cancel or vary any transaction or resolution;

b)

regulate the conduct of our affairs in the future;

c)

provide for the purchase of the Common Shares of any shareholder of the company by another shareholder of the company, or by us;

d)

in the case of a purchase by us, reduce our capital or otherwise;

e)

appoint a receiver or receiver manager;

f)

order that we be wound up;



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g)

authorize or direct that proceedings be commenced in our name against any party on the terms the Court directs;

h)

require us to produce financial statements;

i)

order us to compensate an aggrieved person; and

j)

direct rectification of any of our records.

There are no restrictions on the purchase or redemption of Common Shares by us while there is any arrearage in the payment of dividends or sinking fund installments.

Preferred Shares

Our Board of Directors is authorized, without further action by the shareholders, to issue Preferred Shares in one or more series and to set the number of shares constituting any such series and the designation, rights, privileges, restrictions and conditions attaching to the shares of such series including dividend rights and rates, redemption provisions (including sinking fund provisions), rights of conversion or exchange, liquidation preferences and voting rights, if any.  The Preferred Shares as a class are entitled to priority over the Common Shares if our Board of Directors decides to pay any dividends, and, if we are dissolved, liquidated or wound up, the Preferred Shares are entitled as a class to priority in respect of return of capital. Except as required by law or the provisions of any designated series of Preferred Shares, the holders of Preferred Shares as a class is not entitled to receive notice of, attend or vote at any meeting of our shareholders.



There were no Preferred Shares allotted or issued as at the date of this Annual Report.



Material contracts.

The following are the material contracts which we, or any of our subsidiaries, have entered into in the last two years immediately prior to the date of this report:



1.

Our Company Stock Option Plan which received annual approval by our shareholders at our Annual General Meetings on May 31, 2007, May 29, 2008, and May 26, 2009.

2.

Consulting Agreement dated June 22, 2007 between Brazen Financial Corp. (the Consultant) and SAMEX Mining Corp. concerning the Consultant providing investor relations services to the Company.  This consulting agreement was concluded at the end of September 2008.

Exchange controls.

There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital (including, without limitation, foreign exchange controls), or that affect the remittance of dividends, interest or other payments to non-resident holders of our Common Shares. However, any such remittance to a resident of the United States may be subject to a withholding tax pursuant to the reciprocal tax treaty between Canada and the United States.  For further information concerning such withholding tax, see Item 10.E.  Taxation.



There are no limitations under the laws of Canada, the Province of British Columbia, or in our charter or other constituent documents with respect to the right of non-resident or foreign owners to hold and/or vote our common shares.  However, the Investment Canada Act (the Act), enacted on June 20, 1985, as amended, requires the prior notification and, in certain cases, advance review and approval by the Government of Canada of the acquisition by a non-Canadian of control of a Canadian business, all as defined in the Act.  For the purposes of the Act, control can be acquired through the acquisition of all or substantially all of the assets used in the Canadian business, or the direct or indirect acquisition of interests in an entity that carries on a Canadian business or which controls the entity which carries on the Canadian business.  Under the Act, control of a corporation is deemed to be acquired through the acquisition of a majority of the voting shares of a corporation, and is presumed to be acquired where more than one-third, but less than a majority, of the voting shares of a corporation are acquired, unless it can be established that the corporation is not controlled in fact through the ownership of voting shares.  Other rules apply with respect to the acquisition of non-corporate entities.

Investments requiring review and approval include direct acquisition of Canadian businesses with assets with a gross book value of $5,000,000 or more; indirect acquisitions of Canadian businesses with assets of $50,000,000 or more; and indirect acquisitions of Canadian businesses where the value of assets of the entity or entities carrying on business in Canada, control of



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which is indirectly being acquired, is greater than $5,000,000 and represents greater than 50% of the total value of the assets of all of the entities, control of which is being acquired.

Pursuant to the World Trade Organization Agreement Implementation Act, the Act was amended to provide that the value of the business acquisition threshold (the Threshold) above described is increased from those levels outlined where the acquisition is by a World Trade Organization Investor or by a non-Canadian other than a World Trade Organization Investor where the Canadian business that is the subject of the investment is immediately before the investment controlled by a World Trade Organization Investor.  The Threshold is to be determined yearly in accordance with a formula set forth in the Act.  For 2008, the Threshold was determined to be CDN$312,000,000.

A World Trade Organization Investor includes an individual, other than a Canadian, who is a national of a World Trade Organization Member, or who has the right of permanent residence in relation to that World Trade Organization Member.

Different provisions and considerations apply with respect to investment to acquire control of a Canadian business that, as defined in the Act or regulations:

a)

engages in production of uranium and owns an interest in a producing uranium property in Canada;

b)

provides financial services;

c)

provides transportation services;

d)

is a cultural business.

If an investment is reviewable, an application for review in the form prescribed by regulation is normally required to be filed with the Ministry of Industry, Director of Investment prior to the investment taking place and the investment may not be consummated until the review has been completed and ministerial approval obtained.  Applications for review concerning indirect acquisitions may be filed up to 30 days after the investment is consummated.  Applications concerning reviewable investments in culturally sensitive and other specified activities referred to in the preceding paragraph are required upon receipt of a notice for review.  There is, moreover, provision for the Minister (a person designated as such under the Act) to permit an investment to be consummated prior to completion of review if he is satisfied that delay would cause undue hardship to the acquirer or jeopardize the operation of the Canadian business that is being acquired.

Taxation.

Certain U.S. Federal Income Tax Considerations

The following is a summary of certain material U.S. federal income tax consequences relevant to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of our common shares.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax consequences that may apply to a U.S. Holder as a result of the acquisition, ownership, and disposition of our common shares.  In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of our common shares.  Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder.  Each U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the acquisition, ownership, and disposition of our common shares.

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the IRS) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of our common shares.  This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary.

Notice Pursuant To IRS Circular 230:  Anything contained in this summary concerning any U.S. federal tax issue is not intended or written to be used, and it cannot be used by a U.S. Holder, for the purpose of avoiding federal tax penalties under the Internal Revenue Code.  This summary was written to support the promotion or marketing of the transactions or matters addressed by this Form 20-F.  Each U.S. Holder should seek U.S. federal tax advice, based on such U.S. Holders particular circumstances, from an independent tax advisor.



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Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations (whether final, temporary, or proposed), published rulings of the Internal Revenue Service (IRS), published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the Canada-U.S. Tax Convention), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this Form 20-F.  Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive basis.  This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive basis.

U.S. Holders

For purposes of this summary, a U.S. Holder is a beneficial owner of our common shares that, for U.S. federal income tax purposes, is (a) an individual who is a citizen or resident of the U.S., (b) a corporation, or any other entity classified as a corporation for U.S. federal income tax purposes, that is created or organized in or under the laws of the U.S. or any state in the U.S., including the District of Columbia, (c) an estate if the income of such estate is subject to U.S. federal income tax regardless of the source of such income, or (d) a trust if (i) such trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes or (ii) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of such trust.

Non-U.S. Holders

For purposes of this summary, a non-U.S. Holder is a beneficial owner of our common shares other than a U.S. Holder.  This summary does not address the U.S. federal income tax consequences of the acquisition, ownership, and disposition of our common shares to non-U.S. Holders.  Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences (including the potential application of and operation of any tax treaties) of the acquisition, ownership, and disposition of our common shares.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax consequences of the acquisition, ownership, and disposition of our common shares to U.S. Holders that are subject to special provisions under the Code, including the following U.S. Holders:  (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, insurance companies, real estate investment trusts, or regulated investment companies; (c) U.S. Holders that are dealers in securities or currencies or U.S. Holders that are traders in securities that elect to apply a mark-to-market accounting method; (d) U.S. Holders that have a functional currency other than the U.S. dollar; (e) U.S. Holders that own our common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquired our common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold our common shares other than as a capital asset within the meaning of Section 1221 of the Code; (h) U.S. expatriates or former long-term residents of the U.S.; or (i) U.S. Holders that own, directly, indirectly, or by attribution, 10% or more, by voting power or value, of the outstanding shares of the Company.  U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the acquisition, ownership, and disposition of our common shares.

If an entity that is classified as a partnership (or pass-through entity) for U.S. federal income tax purposes holds our common shares, the U.S. federal income tax consequences to such partnership (or pass-through entity) and the partners of such partnership (or owners of such pass-through entity) generally will depend on the activities of the partnership (or pass-through entity) and the status of such partners (or owners).  Partners of entities that are classified as partnerships (or owners of pass-through entities) for U.S. federal income tax purposes should consult their own tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of our common shares.

Other Tax Consequences Not Addressed

This summary does not address the U.S. state and local, U.S. federal alternative minimum tax, U.S. federal estate and gift, or foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of our common shares.  Each U.S. Holder should consult its own tax advisor regarding the U.S. state and local, U.S. federal alternative minimum tax, U.S. federal



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estate and gift, and foreign tax consequences of the acquisition, ownership, and disposition of our common shares.

Passive Foreign Investment Company Rules

If the Company is considered a passive foreign investment company under the meaning of Section 1297 of the Code (a PFIC) at any time during a U.S. Holders holding period, the following sections will generally describe the U.S. federal income tax consequences to U.S. Holders of the acquisition, ownership, and disposition of our common shares.

PFIC Status of the Company

The Company generally will be considered a PFIC under Section 1297 of the Code if, for a taxable year, (a) 75% or more of the gross income of the Company for such taxable year is passive income or (b) 50% or more of the assets held by the Company either produce passive income or are held for the production of passive income, based on the fair market value of such assets.  Gross income generally means all revenues less cost of goods sold.  Passive income includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.  However, for transactions entered into after December 31, 2004, gains arising from the sale of commodities generally are excluded from passive income if substantially all of a foreign corporations commodities are (a) stock in trade of such foreign corporation or other property of a kind which would properly be included in inventory of such foreign corporation, or property held by such foreign corporation primarily for sale to customers in the ordinary course of business, (b) property used in the trade or business of such foreign corporation that would be subject to the allowance for depreciation under Section 167 of the Code, or (c) supplies of a type regularly used or consumed by such foreign corporation in the ordinary course of its trade or business.

For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation.  In addition, for purposes of the PFIC income test and asset test described above, passive income does not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a related person (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income.

In addition, if the Company is a PFIC and owns shares of another foreign corporation that also is a PFIC (a Subsidiary PFIC), under certain indirect ownership rules, a disposition of the shares of such other foreign corporation or a distribution received from such other foreign corporation generally will be treated as an indirect disposition by a U.S. Holder or an indirect distribution received by a U.S. Holder, subject to the rules of Section 1291 of the Code discussed below.  To the extent that gain recognized on the actual disposition by a U.S. Holder of our common shares or income recognized by a U.S. Holder on an actual distribution received on our common shares was previously subject to U.S. federal income tax under these indirect ownership rules, such amount generally should not be subject to U.S. federal income tax.

The Company believes that it was a PFIC for the taxable year ended December 31, 2008, and based on current business plans and financial projections, the Company expects that it will be a PFIC for the taxable year ending December 31, 2009.  The determination of whether the Company will be a PFIC for any taxable year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations.  In addition, whether the Company will be a PFIC for its current taxable year depends on the assets and income of the Company over the course of each such taxable year and, as a result, cannot be predicted with certainty as of the date of this Form 20-F.  Consequently, there can be no assurance regarding the Companys PFIC status for any taxable year during which U.S. Holders hold our common shares, and there can be no assurance that the IRS will not challenge the determination made by the Company concerning its PFIC status.

Default PFIC Rules Under Section 1291 of the Code

If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership, and disposition of our common shares will depend on whether such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if  any, as a qualified electing fund or QEF under Section 1295 of the Code (a QEF Election) or a mark-to-market election under Section 1296 of the Code (a Mark-to-Market Election).  A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a Non-Electing U.S. Holder.

A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale or other taxable disposition of our common shares and (b) any excess distribution paid on the common shares.  A distribution generally will be an excess distribution to the extent that such distribution (together with all other distributions received in the current taxable year) exceeds 125% of the average distributions received during the three preceding taxable



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years (or during a U.S. Holders holding period for the common shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of our common shares, and any excess distribution paid on the common shares, must be ratably allocated to each day in a Non-Electing U.S. Holders holding period for the common shares.  The amount of any such gain or excess distribution allocated to prior years of such Non-Electing U.S. Holders holding period for the common shares (other than years prior to the first taxable year of the Company beginning after December 31, 1986 for which the Company was not a PFIC) will be subject to U.S. federal income tax at the highest tax applicable to ordinary income in each such prior year.  A Non-Electing U.S. Holder will be required to pay interest on the resulting tax liability for each such prior year, calculated as if such tax liability had been due in each such prior year.  Such a Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as personal interest, which is not deductible.  The amount of any such gain or excess distribution allocated to the current year of such Non-Electing U.S. Holders holding period for the common shares will be treated as ordinary income in the current year, and no interest charge will be incurred with respect to the resulting tax liability for the current year.

If the Company is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds our common shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent years.  A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares were sold on the last day of the last taxable year for which the Company was a PFIC.

QEF Election

A U.S. Holder that makes a QEF Election generally will not be subject to the rules of Section 1291 of the Code discussed above.  However, a U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such U.S. Holders pro rata share of (a) the net capital gain of the Company and each Subsidiary PFIC, which will be taxed as long-term capital gain to such U.S. Holder, and (b) and the ordinary earnings of the Company and each Subsidiary PFIC, which will be taxed as ordinary income to such U.S. Holder.  Generally, net capital gain is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and ordinary earnings are the excess of (a) earnings and profits over (b) net capital gain.  A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each taxable year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company.  However, a U.S. Holder that makes a QEF Election may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge.  If such U.S. Holder is not a corporation, any such interest paid will be treated as personal interest, which is not deductible.

A U.S. Holder that makes a QEF Election generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents earnings and profits of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holders tax basis in the common shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election.  In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of our common shares.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely.  A QEF Election will be treated as timely if such QEF Election is made for the first year in the U.S. Holders holding period for the common shares in which the Company was a PFIC.  A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such first year in respect of the Company and each Subsidiary PFIC, if any.  However, if the Company was a PFIC in a prior year, then in addition to filing the QEF Election documents, a U.S. Holder must elect to recognize (a) gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if the common shares were sold on the qualification date or (b) if the Company were also a controlled foreign corporation under the meaning of Section 957 of the Code, such U.S. Holders pro rata share of the post-1986 earnings and profits of the Company as of the qualification date.  The qualification date is the first day of the first taxable year in which the Company was a QEF with respect to such U.S. Holder.  The election to recognize such gain or earnings and profits can only be made if such U.S. Holders holding period for the common shares includes the qualification date.  By electing to recognize such gain or earnings and profits, such U.S. Holder will be deemed to have made a timely QEF Election.  In addition, under very limited circumstances, a U.S. Holder may make a retroactive QEF Election if such U.S. Holder failed to file the QEF Election documents in a timely manner.

A QEF Election will apply to the taxable year for which such QEF Election is made and to all subsequent taxable years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election.  If a U.S. Holder makes a QEF Election and, in a subsequent taxable year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those taxable years in which the Company is not a PFIC.  Accordingly, if the



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Company becomes a PFIC in another subsequent taxable year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any such subsequent taxable year in which the Company qualifies as a PFIC.  In addition, the QEF Election will remain in effect (although it will not be applicable) with respect to a U.S. Holder even after such U.S. Holder disposes of all of such U.S. Holders direct and indirect interest in the common shares.  Accordingly, if such U.S. Holder reacquires an interest in the Company, such U.S. Holder will be subject to the QEF rules described above for each taxable year in which the Company is a PFIC.

U.S. Holders should be aware that there can be no assurances that the Company will satisfy the record keeping requirements that apply to a QEF, or that the Company will supply U.S. Holders with information that such U.S. Holders require to report under the QEF rules, in the event that the Company is a PFIC and a U.S. Holder wishes to make a QEF Election.  Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a QEF Election.

Mark-to-Market Election

A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock.  The common shares generally will be marketable stock if the common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange ensure active trading of listed stocks.

A U.S. Holder that makes a Mark-to-Market Election generally will not be subject to the rules of Section 1291 of the Code discussed above.  However, if a U.S. Holder makes a Mark-to-Market Election after the beginning of such U.S. Holders holding period for the common shares and such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the common shares.

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each taxable year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares as of the close of such taxable year over (b) such U.S. Holders tax basis in such common shares.  A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the lesser of (a) the excess, if any, of (i) such U.S. Holders adjusted tax basis in the common shares over (ii) the fair market value of such common shares as of the close of such taxable year or (b) the excess, if any, of (i) the amount included in ordinary income because of such Mark-to-Market Election for prior taxable years over (ii) the amount allowed as a deduction because of such Mark-to-Market Election for prior taxable years.

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holders tax basis in the common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election.  In addition, upon a sale or other taxable disposition of our common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior taxable years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior taxable years).

A Mark-to-Market Election applies to the taxable year in which such Mark-to-Market Election is made and to each subsequent taxable year, unless the common shares cease to be marketable stock or the IRS consents to revocation of such election.  Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that such U.S. Holder is treated as owning because such stock is not marketable.  Hence, the Mark-to-Market Election will not be effective to eliminate the interest charge described above.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of our common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations).  However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which our common shares are transferred.



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Certain additional adverse rules will apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election.  For example under Section 1298(b)(6) of the Code, a U.S. Holder that uses our common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of our common shares.

U.S. Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition of Our Common Shares

If our Company is not considered a PFIC at any time during a U.S. Holders holding period, the following sections will generally describe the U.S. federal income tax consequences to U.S. Holders of the acquisition, ownership, and disposition of our common shares.

Distributions on Our Common Shares

A U.S. Holder that receives a distribution, including a constructive distribution, with respect to our common shares will be required to include the amount of such distribution in gross income as a dividend (without reduction for any foreign income tax withheld from such distribution) to the extent of the current or accumulated earnings and profits of the Company.  To the extent that a distribution exceeds the current and accumulated earnings and profits of the Company, such distribution will be treated (a) first, as a tax-free return of capital to the extent of a U.S. Holders tax basis in our common shares and, (b) thereafter, as gain from the sale or exchange of such common shares.  However, the Company does not intend to maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to our common shares will constitute ordinary dividend income.  (See more detailed discussion at Disposition of Our Common Shares below).  Dividends paid on our common shares generally will not be eligible for the dividends received deduction.

For taxable years beginning before January 1, 2011, a dividend paid by the Company generally will be taxed at the preferential tax rates applicable to long-term capital gains if (a) the Company is a qualified foreign corporation (as defined below), (b) the U.S. Holder receiving such dividend is an individual, estate, or trust, and (c) certain holding period requirements are met.

The Company generally will be a qualified foreign corporation under Section 1(h)(11) of the Code (a QFC) if (a) the Company is incorporated in a possession of the U.S., (b) the Company is eligible for the benefits of the Canada-U.S. Tax Convention, or (c) our common shares are readily tradable on an established securities market in the U.S.  However, even if the Company satisfies one or more of such requirements, the Company will not be treated as a QFC if the Company is a PFIC for the taxable year during which the Company pays a dividend or for the preceding taxable year.

As discussed above, the Company believes that it was a PFIC for the taxable year ended December 31, 2008, and based on current business plans and financial projections, the Company expects that it will be a PFIC for the taxable year ending December 31, 2009.  (see more detailed discussion at Passive Foreign Investment Company Rules above).  The determination of whether the Company will be a PFIC for any taxable year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations.  In addition, whether the Company will be a PFIC for its current taxable year depends on the assets and income of the Company over the course of each such taxable year and, as a result, cannot be predicted with certainty as of the date of this Form 20-F.  Consequently, there can be no assurance regarding the Companys PFIC status for any taxable year during which U.S. Holders hold our common shares, and there can be no assurance that the IRS will not challenge the determination made by the Company concerning its PFIC status.

If the Company is not a PFIC, but a U.S. Holder otherwise fails to qualify for the preferential tax rate applicable to dividends discussed above, a dividend paid by the Company to a U.S. Holder, including a U.S. Holder that is an individual, estate, or trust, generally will be taxed at ordinary income tax rates (and not at the preferential tax rates applicable to long-term capital gains).  The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the dividend rules.

Disposition of Our Common Shares

A U.S. Holder will recognize gain or loss on the sale or other taxable disposition of our common shares in an amount equal to the difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) such U.S.



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Holders tax basis in our common shares sold or otherwise disposed of.  Subject to the PFIC rules discussed above, any such gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss if our common shares are held for more than one year.  Gain or loss recognized by a U.S. Holder on the sale or other taxable disposition of our common shares generally will be treated as U.S. source for purposes of applying the U.S. foreign tax credit rules, unless such gains are resourced as foreign source under an applicable income tax treaty, and an election is filed under the Code.  (See more detailed discussion at Foreign Tax Credit below).

Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust.  There are currently no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation.  Deductions for capital losses are subject to significant limitations under the Code.

Receipt of Foreign Currency

The amount of any distribution paid in foreign currency to a U.S. Holder in connection with the ownership of our common shares, or on the sale, exchange or other taxable disposition of our common shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time).  A U.S. Holder that receives foreign currency and converts such foreign currency into U.S. dollars at a conversion rate other than the rate in effect on the date of receipt may have a foreign currency exchange gain or loss, which generally would be treated as U.S. source ordinary income or loss.

Taxable dividends with respect to common shares that are paid in foreign currency will be included in the gross income of a U.S. Holder as translated into U.S. dollars calculated by reference to the exchange rate prevailing on the date of actual or constructive receipt of the dividend, regardless of whether the foreign currency is converted into U.S. dollars at that time.  If the foreign currency received is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt.  Any U.S. Holder who receives payment in foreign currency and engages in a subsequent conversion or other disposition of the foreign currency may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes.  Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

Foreign Tax Credit

A U.S. Holder who pays (whether directly or through withholding) foreign income tax with respect to dividends paid on our common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such foreign income tax paid.  Generally, a credit will reduce a U.S. Holders U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holders income subject to U.S. federal income tax.  This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holders U.S. federal income tax liability that such U.S. Holders foreign source taxable income bears to such U.S. Holders worldwide taxable income.  In applying this limitation, a U.S. Holders various items of income and deduction must be classified, under complex rules, as either foreign source or U.S. source.  In addition, this limitation is calculated separately with respect to specific categories of income.  Dividends paid by the Company generally will constitute foreign source income and generally will be categorized as passive income.  The foreign tax credit rules are complex, and each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.

Information Reporting; Backup Withholding Tax For Certain Payments

Under U.S. federal income tax law and regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation.  Penalties for failure to file certain of these information returns are substantial.  U.S. Holders of our common shares should consult with their own tax advisors regarding the requirements of filing information returns, and if applicable, any mark-to-market election or QEF election (each as defined above).

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from certain sales or other taxable dispositions of, our common shares generally will be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S. Holders correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not



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notified such U.S. Holder that it is subject to backup withholding tax.  However, U.S. Holders that are corporations generally are excluded from these information reporting and backup withholding tax rules.  Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holders U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS on a timely basis.  Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding tax rules.





Canadian Federal Income Tax Consequences

The following is a general discussion of all material Canadian federal income tax consequences, under current law, generally applicable to (a Holder) of one or more common shares of the Company who for the purposes of the Income Tax Act (Canada) (the Act) is a non-resident of Canada, does not hold his shares in the course of carrying on a business in Canada, holds his common shares as capital property and deals at arms length with the Company and is restricted to such circumstances.

Dividends

A Holder will be subject to Canadian withholding tax (Part XIII Tax) equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on the common shares.  Under the Canada-U.S. Income Tax Convention (1980) (the Treaty) the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States is reduced from the 25% rate.  Under the Treaty, the Company will be required to withhold Part XIII Tax at a rate of 15% from each dividend so paid and will be required to remit the amount withheld directly to the Receiver General of Canada on behalf of the Holder. The 15% rate is further reduced to 5% if the Holder is a company owning at least 10% of the outstanding common shares of the Company.

Disposition Of Common Shares

A Holder who disposes of a common share, including a deemed disposition on death, will not be subject to Canadian tax on any capital gain (or capital loss) thereby realized unless the common share constituted taxable Canadian property as defined by the Act. Generally, a common share will not constitute taxable Canadian property of a Holder unless the Holder held the common shares as property used by the Holder in carrying on a business (other than an insurance business) in Canada, or the Holder or persons with whom the Holder did not deal at arms length alone or together held, at any time within the five years preceding the disposition, 25% or more of the shares of any class of the capital stock of the Company.  The disposition of a common share that constitutes taxable Canadian property (other than treaty protected property) of a Holder could also result in a capital loss, which cannot be used to reduce all taxable income (only that portion of taxable income derived from a capital gain on the disposition of other taxable Canadian property, which is not treaty protected property.   Treaty protected property is defined to mean property any income or gain from the disposition of which would, because of a tax treaty with another country, be exempt from Canadian tax.

A capital gain occurs when proceeds from the disposition of a share or other capital property exceeds the adjusted cost base of the property and the reasonable costs of disposition.  A capital loss occurs when the proceeds from the disposition of a share or other capital property are less than the adjusted cost base of the property and the reasonable costs of disposition.  Under the Act, a capital gain is effectively taxed at a lower rate as only 50% of the capital gain is effectively included in the Holders taxable income (the taxable capital gain).

A Holder who is a resident of the United States and realizes a capital gain on the disposition of a common share that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the common share is derived from real property situated in Canada (including any option or similar right in respect thereof), rights to explore for or exploit Canadian mineral deposits, sources and other natural resources and rights to amounts computed by reference to the amount or value of production from such resources, (b) the common share formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 months preceding  the  disposition, or (c) the Holder (i) is an individual who was a resident of Canada at any time within the ten years immediately preceding, and for a total of 120 months during the 20 years, preceding the disposition, and (ii) owned the common share when the individual  ceased to be resident in Canada and (iii) was not a property that the individual was deemed to have disposed of when the individual ceased to be a resident of Canada and became a resident of the United States..

A Holder who is subject to Canadian tax in respect of a capital gain realized on disposition of a common share must include one half of the capital gain (taxable capital gain) in computing the Holders taxable income earned in Canada.  This Holder may, subject to certain limitations, deduct one half of any capital loss (allowable capital loss) arising on the disposition



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of other taxable Canadian property (other than treaty protected property) realized in the year of disposition and may deduct the capital loss (after taking into account any difference in inclusion rates between the particular year and year of disposition) realized in any preceding year or any of the three subsequent years from dispositions of other taxable Canadian property (other than treaty protected property) to the extent the capital loss was not deducted in any other year.

Dividends and paying agents.

Not Applicable.



Statement by experts.

Not Applicable.



Documents on display.

We have filed with the Securities and Exchange Commission this annual report on Form 20-F, including exhibits, under the Securities and Exchange Act of 1934.



We are subject to the informational requirements of the Securities Exchange Act of 1934 and file reports and other information with the Securities and Exchange Commission.  Reports and other information which we file with the Securities and Exchange Commission, including this Annual Report on Form 20-F, may be inspected and copied at the public reference facilities of the Securities and Exchange Commission at:



100 F Street, NE

Washington D.C.  20549



You can also obtain copies of this material by mail from the Public Reference Section of the Securities and Exchange Commission, 100 F Street, NE, Washington, D.C. 20549, at prescribed rates.  Additionally, copies of this material may also be obtained from the Securities and Exchange Commission's internet site at http://www.sec.gov.  The Commission's telephone number is 1-800-SEC-0330.



Copies of the above material contracts may be inspected at the offices of Leschert & Company Law Corporation, #2760  200 Granville Street, Vancouver, British Columbia, Canada, during normal business hours.



Subsidiary Information.

As of May 31, 2009 we have the following subsidiaries:

a)

South American Mining & Exploration Corp. (British Columbia, Canada)

b)

SAMEX International Ltd. (Bahamas)

c)

Minas Bolivex S.A. (Bolivex S.A.) (Bolivia)

d)

SAMEX S.A. (Bolivia)

e)

Empresa Minera Boliviana S. A. (Emibol S.A.) (Bolivia)

f)

Minera Samex Chile S. A. (Chile)



ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We were incorporated under the laws of British Columbia, Canada and our financial results are quantified in Canadian dollars.  We raise equity funding through the sale of securities denominated in Canadian dollars, whereas the majority of our obligations and expenditures with respect to our properties will be incurred in US Dollars, Chilean Pesos, and Bolivian Bolivianos.  Variations in the exchange rate may give rise to foreign exchange gains or losses that may be significant.  Market risks relating to our operations, if we begin production, are anticipated to result primarily from changes in interest rates, foreign exchange rates and commodity prices, as well as credit risk concentrations.  We do not use financial instruments for trading purposes and are not parties to any leverage derivatives.  We do not currently engage in hedging transactions.  See Currency and Exchange Rates and Item 4  Information on the Company.



76





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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.

Not Applicable.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

Not Applicable.



ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.

Modification of Instruments Defining Rights of Security Holders.Not Applicable.

Modification or Issuance of Other Class of Securities.Not Applicable

Withdrawal or Substitution of Security. Not Applicable.

Change of Trustee or Paying Agent.   Not Applicable

Use of Proceeds.Not Applicable



ITEM 15. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that the information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to management, including the Companys Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  After evaluating the effectiveness of the Companys disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d  14(c)) as of the end of the period covered by this report, the Chief Executive Officer and Chief Financial Officer have concluded that as of such date, the Companys disclosure controls and procedure were adequate and effective to ensure that material information relating to the Company and its consolidated subsidiaries would be made known to them by others within those entities.



Managements annual report on internal control over financial reporting:



Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act of 1934, as amended. The Companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that:



·

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;

·

provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles;

·

provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of our management and board of directors (as appropriate); and

·

provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.



Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



Management conducted an assessment of the effectiveness of our internal control over financial reporting as of the fiscal year



77





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ended December 31, 2008 based on the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework.   Based on this evaluation, management concluded that, as of the fiscal year ended December 31, 2008, the Companys internal controls over our financial reporting were adequate.   Management will continue to monitor and evaluate the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to implementing additional improvements as necessary.



Auditor Attestation



This annual report does not include an attestation report of the companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the companys registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only managements report in this annual report.



Changes In Internal Control Over Financial Reporting



There were no significant changes during the period covered by this Annual Report in the Companys internal controls or in other factors that have materially adversely affected, or are reasonably likely to materially adversely affect, the Companys internal control over financial reporting.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Larry McLean, our Chief Financial Officer, satisfies the requirements of an audit committee financial expert serving on our audit committee as defined in the instructions to Item 16A of Form 20-F.  Mr. McLean is not an independent director, as defined under the audit committee independent director requirements of the American Stock Exchange.



ITEM 16B. CODE OF ETHICS

We have not adopted a formal code of ethics.  We have concluded that a written code of ethics would serve little practical purpose for us in deterring wrongdoing and promoting ethical conduct an full, fair and accurate public disclosure and compliance with applicable laws and regulatory requirements.  Since our operations are currently relatively small, most of our important activities are conducted directly by or under the direct supervision of our directors and senior officers.  All of our current directors and officers have held their positions for a number of years and are familiar with our operations and our informal requirements for conduct.  In light of the lack of perceived benefit from adopting a formal code considered against the time and cost for management to consider and implement a code, we have decided not to do so at the present time.  We will continue to monitor the possible benefits of adopting a formal code of ethics, particularly as our operations and the number of our employees expand and will consider whether we should adopt a formal code of ethics at a future date



ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees



The aggregated audit fees billed for each of the past two fiscal year by our auditor, Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, for professional services rendered for the audit of our annual financial statements or services that are normally provide in connection with statutory and regulatory filings were: $41,500 during the fiscal year ended December 31, 2007; and $42,672 during the fiscal year ended December 31, 2008.



Audit-Related Fees



The aggregated audit related fees billed by our auditor, Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, for professional services rendered were: $624 during the fiscal year ended December 31, 2007; and $2,750 during the fiscal year ended December 31, 2008.



Tax Fees



The aggregate of tax fees billed by our auditor, Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, for the preparation of all necessary Canadian tax returns for the Company and its subsidiaries was: $7,000 during the fiscal year ended December 31, 2007; and $4,000 during the fiscal year ended December 31, 2008.



All Other Fees



78





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Our auditor, Dale Matheson Carr-Hilton LaBonte, Chartered Accountants has not billed us for any other services during the past two fiscal years, than the audit fees, audit-related fees and tax fees noted above.



Audit Committees Pre-approval Policies and Procedures



The Audit Committee nominates and engages the independent auditors to audit the financial statements, and approves all audits, audit-related services, tax services and other services provided by the auditor.  Any services provided by our independent auditor that are not specifically included within the scope of the audit must be pre-approved by the audit committee prior to any engagement.  The audit committee is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimusexception before the completion of the engagement.



ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable



ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

There were no known purchases of the Companys securities by or on behalf of the Company or any affiliated purchaser during the period covered by this Annual Report.



ITEM 17. FINANCIAL STATEMENTS.

We are furnishing the following financial statements and reports:



·

Auditors Report dated April 7, 2009 except for Note 12 that is of April 15, 2009

·

Consolidated Balance Sheets at December 31, 2008 and December 31, 2007

·

Consolidated Statements of Operations and Deficit for the year ended December 31, 2008, the year ended December 31, 2007 and the year ended December 31, 2006

·

Consolidated Statements of Comprehensive Loss and Accumulated Other Comprehensive Income for the year ended December 31, 2008, the year ended December 31, 2007 and the year ended December 31, 2006

·

Consolidated Statements of Mineral Interests for the year ended December 31, 2008, the year ended December 31, 2007 and the year ended December 31, 2006

·

Consolidated Statements of Cash Flow for the year ended December 31, 2008, the year ended December 31, 2007 and the year ended December 31, 2006

·

Notes to the Consolidated Financial Statements



All financial statements herein, unless otherwise stated, have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP).  These principles, as they pertain to our consolidated financial statements, differ from United States generally accepted accounting principles (U.S. GAAP) in a number of material respects, which are set out elsewhere herein.  See Note 11 to the attached consolidated financial statements.



79





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[samex20f062209011.jpg]







AUDITORS REPORT



To the Shareholders of Samex Mining Corp.



We have audited the consolidated balance sheets of Samex Mining Corp. (an exploration stage company) as at December 31, 2008 and 2007 and the consolidated statements of operations and deficit, consolidated statements of comprehensive loss and accumulated other comprehensive income and cash flows for the years ended December 31, 2008, 2007 and 2006. These financial statements are the responsibility of the company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.



In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Samex Mining Corp. as at December 31, 2008 and 2007 and the results of its operations and its cash flows for the years ended December 31, 2008, 2007 and 2006 in accordance with Canadian generally accepted accounting principles.



DMCL



DALE MATHESON CARR-HILTON LABONTE LLP

DMCL CHARTERED ACCOUNTANTS





Vancouver, Canada

April 7, 2009 except for Note 12 that is of April 15, 2009







COMMENTS BY AUDITORS FOR UNITED STATES READERS ON CANADA-UNITED STATES REPORTING DIFFERENCES



In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Companys ability to continue as a going concern, such as those described in Note 1 to the financial statements.  Our report to the shareholders dated April 7, 2009 except for Note 12 that is of April 15, 2009, is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the auditors report when these are adequately disclosed in the financial statements.



DMCL



DALE MATHESON CARR-HILTON LABONTE LLP

DMCL CHARTERED ACCOUNTANTS



Vancouver, Canada

April 7, 2009 except for Note 12 that is of April 15, 2009











[samex20f062209012.jpg]





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CONSOLIDATED FINANCIAL STATEMENTS





SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



CONSOLIDATED BALANCE SHEETS



|                                         |  |   |                   |  |   |                  
|---------------------------------------- |  | - | ----------------- |  | - | -----------------
|                                         |  |   | DECEMBER 31,
2008 |  |   | DECEMBER 31,
2007
|ASSETS                                   |  |   |                   |  |   |                  
|                                         |  |   |                   |  |   |                  
|CURRENT                                  |  |   |                   |  |   |                  
|CASH                                     |  | $ | 207,192           |  | $ | 1,325,170        
|OTHER CURRENT ASSETS                     |  |   | 104,422           |  |   | 104,753          
|                                         |  |   |                   |  |   |                  
|                                         |  |   | 311,614           |  |   | 1,429,923        
|                                         |  |   |                   |  |   |                  
|MINERAL INTERESTS (NOTE 3)               |  |   | 10,702,003        |  |   | 10,497,834       
|EQUIPMENT (NOTE 4)                       |  |   | 111,503           |  |   | 155,739          
|                                         |  |   |                   |  |   |                  
|                                         |  | $ | 11,125,120        |  | $ | 12,083,496       
|                                         |  |   |                   |  |   |                  
|LIABILITIES AND SHAREHOLDERS EQUITY     |  |   |                   |  |   |                  
|                                         |  |   |                   |  |   |                  
|LIABILITIES                              |  |   |                   |  |   |                  
|                                         |  |   |                   |  |   |                  
|CURRENT                                  |  |   |                   |  |   |                  
|ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |  | $ | 104,228           |  | $ | 106,463          
|                                         |  |   |                   |  |   |                  
|                                         |  |   |                   |  |   |                  
|SHAREHOLDERS' EQUITY                     |  |   |                   |  |   |                  
|                                         |  |   |                   |  |   |                  
|SHARE CAPITAL (NOTE 6)                   |  |   | 31,960,718        |  |   | 30,421,718       
|                                         |  |   |                   |  |   |                  
|CONTRIBUTED SURPLUS (NOTE 6)             |  |   | 4,176,368         |  |   | 4,114,750        
|                                         |  |   |                   |  |   |                  
|ACCUMULATED OTHER COMPREHENSIVE INCOME   |  |   | 32,705            |  |   | 17,727           
|                                         |  |   |                   |  |   |                  
|DEFICIT                                  |  |   | (25,148,899)      |  |   | (22,577,162)     
|                                         |  |   |                   |  |   |                  
|                                         |  |   | 11,020,892        |  |   | 11,977,033       
|                                         |  |   |                   |  |   |                  
|                                         |  | $ | 11,125,120        |  | $ | 12,083,496       



CONTINGENCIES (NOTES 1 AND 3)



COMMITMENTS (NOTE 3)





SUBSEQUENT EVENTS (NOTE 12)





APPROVED BY THE DIRECTORS



Jeffrey P. Dahl



Jeffrey P. Dahl



Larry D. McLean



Larry D. McLean







THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS



81





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SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT

FOR THE YEARS ENDED





|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|---------------------------------------------------------------- |  |  |  | ------------ | ------------ | ------------ | - | ---------- |  | - | ----------
|                                                                 |  |  |  | DECEMBER 31, | DECEMBER 31, | DECEMBER 31,
|                                                                 |  |  |  |              | 2008         |              |   | 2007       |  |   | 2006      
|GENERAL AND ADMINISTRATIVE
EXPENSES                              |  |  |  |              |              |              |   |            |  |   |           
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|ACCOUNTING AND AUDIT                                             |  |  |  | $            | 59,422       |              | $ | 46,334     |  | $ | 80,356    
|AMORTIZATION                                                     |  |  |  |              | 44,902       |              |   | 51,604     |  |   | 36,301    
|BANK CHARGES AND INTEREST INCOME                                 |  |  |  |              | (38,535)     |              |   | (62,686)   |  |   | (20,925)  
|CONSULTING                                                       |  |  |  |              | 105,764      |              |   | 208,936    |  |   | 15,480    
|FOREIGN EXCHANGE LOSS                                            |  |  |  |              | 44,211       |              |   | 90,980     |  |   | 31,846    
|LEGAL (NOTE 5)                                                   |  |  |  |              | 46,644       |              |   | 73,053     |  |   | 59,978    
|MINERAL INTERESTS ADMINISTRATION
AND INVESTIGATION COSTS         |  |  |  |              | 328,444      |              |   | 339,285    |  |   | 233,043   
|OFFICE, SUPPLIES, AND MISCELLANEOUS                              |  |  |  |              | 84,478       |              |   | 96,251     |  |   | 84,499    
|PRINTING                                                         |  |  |  |              | 1,330        |              |   | 1,675      |  |   | 3,380     
|REGULATORY FEES                                                  |  |  |  |              | 24,975       |              |   | 40,322     |  |   | 25,976    
|SALARIES, BENEFITS AND STOCK-
BASED COMPENSATION (NOTE 5 AND 6c) |  |  |  |              | 375,853      |              |   | 904,313    |  |   | 1,248,679 
|TRANSFER AGENT                                                   |  |  |  |              | 13,234       |              |   | 13,199     |  |   | 15,040    
|TRAVEL AND PROMOTION                                             |  |  |  |              | 64,223       |              |   | 61,897     |  |   | 148,346   
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|NET LOSS FROM OPERATIONS                                         |  |  |  |              | 1,154,945    |              |   | 1,865,163  |  |   | 1,961,999 
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|GAIN ON SALE OF EQUIPMENT                                        |  |  |  |              | -            |              |   | (7,909)    |  |   | -         
|MINERAL INTERESTS WRITTEN OFF (NOTE 3)                           |  |  |  |              | 1,416,792    |              |   | 46,429     |  |   | 17,867    
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|NET LOSS                                                         |  |  |  |              | 2,571,737    |              |   | 1,903,683  |  |   | 1,979,866 
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|DEFICIT, BEGINNING                                               |  |  |  |              | 22,577,162   |              |   | 20,673,479 |  |   | 18,693,613
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|DEFICIT, ENDING                                                  |  |  |  | $            | 25,148,899   |              | $ | 22,577,162 |  | $ | 20,673,479
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|                                                                 |  |  |  |              |              |              |   |            |  |   |           
|BASIC AND DILUTED NET LOSS PER SHARE                             |  |  |  | $            | 0.03         |              | $ | 0.02       |  | $ | 0.03      





|                                              |  |  |  |  |            |  |  |            |  |  |           
|--------------------------------------------- |  |  |  |  | ---------- |  |  | ---------- |  |  | ----------
|WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING |  |  |  |  | 80,612,960 |  |  | 77,569,498 |  |  | 70,264,207















THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS





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SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS AND

ACCUMULATED OTHER COMPREHENSIVE INCOME

FOR THE YEARS ENDED



|                                     |  |  |  |                   |                   |                   |   |             |  |   |            
|------------------------------------ |  |  |  | ----------------- | ----------------- | ----------------- | - | ----------- |  | - | -----------
|                                     |  |  |  | DECEMBER 31,
2008 | DECEMBER 31,
2007 | DECEMBER 31,
2006
|                                     |  |  |  |                   |                   |                   |   |             |  |   |            
|NET LOSS FOR THE YEAR                |  |  |  | $                 | (2,571,737)       |                   | $ | (1,903,683) |  | $ | (1,979,866)
|                                     |  |  |  |                   |                   |                   |   |             |  |   |            
|UNREALIZED FINANCIAL INSTRUMENT GAIN |  |  |  |                   | 14,978            |                   |   | 17,727      |  |   | -          
|                                     |  |  |  |                   |                   |                   |   |             |  |   |            
|COMPREHENSIVE LOSS FOR THE YEAR      |  |  |  | $                 | (2,556,759)       |                   | $ | (1,885,956) |  | $ | (1,979,866)







|                                                              |   |        |        |   |        |        |   |   |   |  | 
|------------------------------------------------------------- | - | ------ | ------ | - | ------ | ------ | - | - | - |  | 
|                                                              |   |        |        |   |        |        |   |   |   |  | 
|ACCUMULATED OTHER COMPREHENSIVE INCOME,
BEGINNING OF THE YEAR |   | $      | 17,727 |   | $      | -      |   | $ | -
|                                                              |   |        |        |   |        |        |   |   |   |  | 
|UNREALIZED FINANCIAL INSTRUMENT GAIN                          |   |        | 14,978 |   |        | 17,727 |   |   | -
|                                                              |   |        |        |   |        |        |   |   |   |  | 
|ACCUMULATED OTHER COMPREHENSIVE INCOME                        | $ | 32,705 |        | $ | 17,727 |        | $ | -









THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS











83





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SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



CONSOLIDATED STATEMENTS OF MINERAL INTERESTS

FOR THE YEARS ENDED





|                                 |                   |                   |                   |   |            |  |   |          
|-------------------------------- | ----------------- | ----------------- | ----------------- | - | ---------- |  | - | ---------
|                                 | DECEMBER 31,
2008 | DECEMBER 31,
2007 | DECEMBER 31,
2006
|DEFERRED EXPENDITURES            |                   |                   |                   |   |            |  |   |          
|                                 |                   |                   |                   |   |            |  |   |          
|ESPEJISMO - CHILE                | $                 | 5,611             |                   | $ | 5,584      |  | $ | 3,529    
|INCA - CHILE                     |                   | 1,283,770         |                   |   | 3,183,704  |  |   | 1,379,900
|LOS ZORROS - CHILE               |                   | 266,122           |                   |   | 151,769    |  |   | 456,748  
|MISCELLANEOUS PROPERTIES - CHILE |                   | 15,188            |                   |   | 8,870      |  |   | -        
|TRES PUNTAS/CHIMBERO - CHILE     |                   | 31,516            |                   |   | 55,283     |  |   | 14,306   
|EL DESIERTO - BOLIVIA            |                   | -                 |                   |   | 3,633      |  |   | 5,879    
|ESKAPA - BOLIVIA                 |                   | 18,754            |                   |   | 72,819     |  |   | 46,223   
|WALTER - BOLIVIA                 |                   | -                 |                   |   | 2,087      |  |   | 1,045    
|WARA WARA - BOLIVIA              |                   | -                 |                   |   | 15,828     |  |   | 6,488    
|YARETANI - BOLIVIA               |                   | -                 |                   |   | 8,898      |  |   | 4,455    
|ALLOCATION OF ADVANCES           |                   | -                 |                   |   | (50,452)   |  |   | 9,633    
|                                 |                   |                   |                   |   |            |  |   |          
|EXPENDITURES                     |                   | 1,620,961         |                   |   | 3,458,023  |  |   | 1,928,206
|                                 |                   |                   |                   |   |            |  |   |          
|WRITTEN OFF                      |                   |                   |                   |   |            |  |   |          
|                                 |                   |                   |                   |   |            |  |   |          
|ESPEJISMO  CHILE                |                   | (5,611)           |                   |   | (8,113)    |  |   | -        
|MISCELLANEOUS PROPERTIES  CHILE |                   | (15,188)          |                   |   | (7,870)    |  |   | -        
|EL DESIERTO - BOLIVIA            |                   | -                 |                   |   | (3,633)    |  |   | (5,879)  
|ESKAPA - BOLIVIA                 |                   | (1,395,993)       |                   |   | -          |  |   | -        
|WALTER - BOLIVIA                 |                   | -                 |                   |   | (2,087)    |  |   | (1,045)  
|WARA WARA - BOLIVIA              |                   | -                 |                   |   | (15,828)   |  |   | (6,488)  
|YARETANI - BOLIVIA               |                   | -                 |                   |   | (8,898)    |  |   | (4,455)  
|                                 |                   |                   |                   |   |            |  |   |          
|BALANCE, BEGINNING               |                   | 10,497,834        |                   |   | 7,086,240  |  |   | 5,175,901
|                                 |                   |                   |                   |   |            |  |   |          
|BALANCE, ENDING                  | $                 | 10,702,003        |                   | $ | 10,497,834 |  | $ | 7,086,240
|                                 |                   |                   |                   |   |            |  |   |          
|SUMMARY OF DEFERRED EXPENDITURES |                   |                   |                   |   |            |  |   |          
|                                 |                   |                   |                   |   |            |  |   |          
|CHILE                            |                   |                   |                   |   |            |  |   |          
|ESPEJISMO                        | $                 | 1,000             |                   | $ | 1,000      |  | $ | 3,529    
|INCA                             |                   | 5,847,374         |                   |   | 4,563,604  |  |   | 1,379,900
|LOS ZORROS                       |                   | 4,745,524         |                   |   | 4,479,402  |  |   | 4,327,633
|MISCELLANEOUS PROPERTIES         |                   | 1,000             |                   |   | 1,000      |  |   | -        
|TRES PUNTAS/CHIMBERO             |                   | 101,105           |                   |   | 69,589     |  |   | 14,306   
|BOLIVIA                          |                   |                   |                   |   |            |  |   |          
|EL DESIERTO                      |                   | 1,000             |                   |   | 1,000      |  |   | 1,000    
|ESKAPA                           |                   | 1,000             |                   |   | 1,378,239  |  |   | 1,305,420
|SANTA ISABEL                     |                   | 1,000             |                   |   | 1,000      |  |   | 1,000    
|WALTER                           |                   | 1,000             |                   |   | 1,000      |  |   | 1,000    
|WARA WARA                        |                   | 1,000             |                   |   | 1,000      |  |   | 1,000    
|YARETANI                         |                   | 1,000             |                   |   | 1,000      |  |   | 1,000    
|                                 |                   |                   |                   |   |            |  |   |          
|UNALLOCATED ADVANCES             |                   | -                 |                   |   | -          |  |   | 50,452   
|                                 |                   |                   |                   |   |            |  |   |          
|                                 | $                 | 10,702,003        |                   | $ | 10,497,834 |  | $ | 7,086,240











THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS



84





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SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



CONSOLIDATED STATEMENTS OF MINERAL INTERESTS (CONTINUED)

FOR THE YEARS ENDED



|                                     |                   |                   |                   |   |           |  |   |          
|------------------------------------ | ----------------- | ----------------- | ----------------- | - | --------- |  | - | ---------
|                                     | DECEMBER 31,
2008 | DECEMBER 31,
2007 | DECEMBER 31,
2006
|DETAILS OF EXPENDITURES - CHILE      |                   |                   |                   |   |           |  |   |          
|                                     |                   |                   |                   |   |           |  |   |          
|ESPEJISMO - CHILE                    |                   |                   |                   |   |           |  |   |          
|MINERAL INTEREST ACQUISITION COSTS   | $                 | 66                |                   | $ | 1,430     |  | $ | -        
|PROPERTY PATENT PAYMENTS             |                   | 3,829             |                   |   | 3,552     |  |   | 3,529    
|SITE ADMINISTRATION                  |                   | 1,716             |                   |   | 602       |  |   | -        
|                                     | $                 | 5,611             |                   | $ | 5,584     |  | $ | 3,529    
|                                     |                   |                   |                   |   |           |  |   |          
|INCA - CHILE                         |                   |                   |                   |   |           |  |   |          
|DRILLING AND SUB-CONTRACTS           | $                 | 318,576           |                   | $ | 1,730,895 |  | $ | 188,373  
|FIELD SUPPLIES                       |                   | 42,434            |                   |   | 259,797   |  |   | 29,501   
|FOOD AND LODGING                     |                   | 254               |                   |   | 177       |  |   | 5,545    
|GEOLOGY, MAPPING, AND SURVEYS        |                   | 353,984           |                   |   | 296,354   |  |   | 281,812  
|LEGAL                                |                   | 24,000            |                   |   | 38,629    |  |   | 32,837   
|MINERAL INTERESTS ACQUISITION COSTS  |                   | 392,653           |                   |   | 443,206   |  |   | 818,417  
|PROPERTY PATENT PAYMENTS             |                   | 70,314            |                   |   | 33,304    |  |   | -        
|SITE ADMINISTRATION                  |                   | 64,728            |                   |   | 48,519    |  |   | 11,491   
|TRAVEL                               |                   | 5,263             |                   |   | 6,662     |  |   | 11,924   
|VALUE ADDED TAXES                    |                   | 11,564            |                   |   | 326,161   |  |   | -        
|                                     | $                 | 1,283,770         |                   | $ | 3,183,704 |  | $ | 1,379,900
|                                     |                   |                   |                   |   |           |  |   |          
|LOS ZORROS - CHILE                   |                   |                   |                   |   |           |  |   |          
|ADVANCE NET SMELTER ROYALTY PAYMENTS | $                 | 99,574            |                   | $ | -         |  | $ | -        
|DRILLING AND SUB-CONTRACTS           |                   | 62,995            |                   |   | 64,733    |  |   | 62,276   
|FIELD SUPPLIES                       |                   | 16,717            |                   |   | 12,803    |  |   | 11,525   
|FOOD AND LODGING                     |                   | -                 |                   |   | 33        |  |   | 13       
|GEOLOGY, MAPPING, AND SURVEYS        |                   | -                 |                   |   | -         |  |   | 38,165   
|MINERAL INTERESTS ACQUISITION COSTS  |                   | 11,812            |                   |   | 12,522    |  |   | 236,215  
|PROPERTY PATENT PAYMENTS             |                   | 55,491            |                   |   | 43,774    |  |   | 46,978   
|SITE ADMINISTRATION                  |                   | 19,533            |                   |   | 17,904    |  |   | 29,066   
|TRAVEL                               |                   | -                 |                   |   | -         |  |   | 8,477    
|VALUE ADDED TAXES                    |                   | -                 |                   |   | -         |  |   | 24,033   
|                                     | $                 | 266,122           |                   | $ | 151,769   |  | $ | 456,748  
|                                     |                   |                   |                   |   |           |  |   |          
|MISCELLANEOUS PROPERTIES  CHILE     |                   |                   |                   |   |           |  |   |          
|DRILLING AND SUB-CONTRACTS           | $                 | 3,795             |                   | $ | 1,315     |  | $ | -        
|FIELD SUPPLIES                       |                   | 121               |                   |   |           |  |   | -        
|MINERAL INTERESTS ACQUISITION COSTS  |                   | 1,151             |                   |   | 396       |  |   | -        
|PROPERTY PATENT PAYMENTS             |                   | 9,759             |                   |   | 6,858     |  |   | -        
|SITE ADMINISTRATION                  |                   | 362               |                   |   | 301       |  |   | -        
|                                     | $                 | 15,188            |                   | $ | 8,870     |  | $ | -        
|                                     |                   |                   |                   |   |           |  |   |          
|TRES PUNTAS/CHIMBERO - CHILE         |                   |                   |                   |   |           |  |   |          
|DRILLING AND SUB-CONTRACTS           | $                 | 4,160             |                   | $ | 12,401    |  | $ | 509      
|LEGAL                                |                   | -                 |                   |   | 186       |  |   | -        
|MINERAL INTERESTS ACQUISITION COSTS  |                   | 1,442             |                   |   | 7,380     |  |   | -        
|PROPERTY PATENT PAYMENTS             |                   | 17,835            |                   |   | 27,147    |  |   | 13,797   
|SITE ADMINISTRATION                  |                   | 8,079             |                   |   | 8,169     |  |   | -        
|                                     | $                 | 31,516            |                   | $ | 55,283    |  | $ | 14,306   



|                     |   |           |  |   |           |  |   |          
|-------------------- | - | --------- |  | - | --------- |  | - | ---------
|EXPENDITURES - CHILE | $ | 1,602,207 |  | $ | 3,405,210 |  | $ | 1,854,483







THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS



85





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SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



CONSOLIDATED STATEMENTS OF MINERAL INTERESTS (CONTINUED)

FOR THE YEARS ENDED



|                                  |                   |                   |                   |   |        |  |   |       
|--------------------------------- | ----------------- | ----------------- | ----------------- | - | ------ |  | - | ------
|                                  | DECEMBER 31,
2008 | DECEMBER 31,
2007 | DECEMBER 31,
2006
|DETAILS OF EXPENDITURES - BOLIVIA |                   |                   |                   |   |        |  |   |       
|                                  |                   |                   |                   |   |        |  |   |       
|EL DESIERTO - BOLIVIA             |                   |                   |                   |   |        |  |   |       
|PROPERTY PATENT PAYMENTS          | $                 | -                 |                   | $ | 3,633  |  | $ | 5,879 
|                                  |                   |                   |                   |   |        |  |   |       
|ESKAPA  BOLIVIA                  |                   |                   |                   |   |        |  |   |       
|AMORTIZATION                      | $                 | 5,287             |                   | $ | 5,007  |  | $ | 12,420
|DRILLING AND SUB-CONTRACTS        |                   | -                 |                   |   | 21,973 |  |   | 139   
|FOOD AND LODGING                  |                   | -                 |                   |   | -      |  |   | 1,651 
|FUEL                              |                   | 1,893             |                   |   | 5,999  |  |   | 161   
|GEOLOGY, MAPPING, AND SURVEYS     |                   | -                 |                   |   | -      |  |   | 23,143
|LEGAL                             |                   | 2,373             |                   |   | 2,830  |  |   | 391   
|PROPERTY PATENT PAYMENTS          |                   | -                 |                   |   | 15,068 |  |   | 7,922 
|REPAIRS AND MAINTENANCE           |                   | 887               |                   |   | 3,755  |  |   | -     
|TRAVEL                            |                   | 8,314             |                   |   | 18,187 |  |   | 396   
|                                  |                   |                   |                   |   |        |  |   |       
|                                  | $                 | 18,754            |                   | $ | 72,819 |  | $ | 46,223
|                                  |                   |                   |                   |   |        |  |   |       
|WALTER - BOLIVIA                  |                   |                   |                   |   |        |  |   |       
|PROPERTY PATENT PAYMENTS          | $                 | -                 |                   | $ | 2,087  |  | $ | 1,045 
|                                  |                   |                   |                   |   |        |  |   |       
|WARA WARA - BOLIVIA               |                   |                   |                   |   |        |  |   |       
|PROPERTY PATENT PAYMENTS          | $                 | -                 |                   | $ | 15,828 |  | $ | 6,488 
|                                  |                   |                   |                   |   |        |  |   |       
|YARETANI - BOLIVIA                |                   |                   |                   |   |        |  |   |       
|PROPERTY PATENT PAYMENTS          | $                 | -                 |                   | $ | 8,898  |  | $ | 4,455 



|                       |   |        |  |   |         |  |   |       
|---------------------- | - | ------ |  | - | ------- |  | - | ------
|EXPENDITURES - BOLIVIA | $ | 18,754 |  | $ | 103,265 |  | $ | 64,090





|                       |   |           |  |   |           |  |   |          
|---------------------- | - | --------- |  | - | --------- |  | - | ---------
|EXPENDITURES - CHILE   | $ | 1,602,207 |  | $ | 3,405,210 |  | $ | 1,854,483
|                       |   |           |  |   |           |  |   |          
|EXPENDITURES - BOLIVIA |   | 18,754    |  |   | 103,265   |  |   | 64,090   
|                       |   |           |  |   |           |  |   |          
|ALLOCATION OF ADVANCES |   | -         |  |   | (50,452)  |  |   | 9,633    
|                       |   |           |  |   |           |  |   |          
|TOTAL EXPENDITURES     | $ | 1,620,961 |  | $ | 3,458,023 |  | $ | 1,928,206

















THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS





86





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SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE YEARS ENDED



|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|------------------------------------------------------------ |  |  |  | ----------------- | ----------------- | ----------------- | - | ----------- |  | - | -----------
|                                                             |  |  |  | DECEMBER 31,
2008 | DECEMBER 31,
2007 | DECEMBER 31,
2006
|CASH FLOWS FROM OPERATING ACTIVITIES                         |  |  |  |                   |                   |                   |   |             | 
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|NET LOSS                                                     |  |  |  | $                 | (2,571,737)       |                   | $ | (1,903,683) |  | $ | (1,979,866)
|ADD NON-CASH ITEMS                                           |  |  |  |                   |                   |                   |   |             |  |   |            
|AMORTIZATION                                                 |  |  |  |                   | 44,902            |                   |   | 51,604      |  |   | 36,301     
|MINERAL INTERESTS AND
DEFERRED EXPLORATION
COSTS WRITTEN OFF |  |  |  |                   | 1,416,792         |                   |   | 46,429      |  |   | 17,867     
|STOCK-BASED COMPENSATION                                     |  |  |  |                   | 5,873             |                   |   | 644,385     |  |   | 886,014    
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|CHANGES IN NON-CASH WORKING
CAPITAL ITEMS                    |  |  |  |                   |                   |                   |   |             |  |   |            
|OTHER CURRENT ASSETS                                         |  |  |  |                   | 15,309            |                   |   | (20,729)    |  |   | (769)      
|ACCOUNTS PAYABLE AND
ACCRUED LIABILITIES                     |  |  |  |                   | (2,235)           |                   |   | 38,735      |  |   | 32,325     
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|NET CASH USED IN OPERATIONS                                  |  |  |  |                   | (1,091,096)       |                   |   | (1,143,259) |  |   | (1,008,128)
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|CASH FLOWS FROM FINANCING ACTIVITIES                         |  |  |  |                   |                   |                   |   |             | 
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|COMMON SHARES  FOR CASH                                     |  |  |  |                   | 1,539,000         |                   |   | 4,512,080   |  |   | 3,706,800  
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|NET CASH PROVIDED

BY FINANCING ACTIVITIES                   |  |  |  |                   | 1,539,000         |                   |   | 4,512,080   |  |   | 3,706,800  
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|CASH FLOWS FROM INVESTING ACTIVITIES                         |  |  |  |                   |                   |                   |   |             | 
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|MINERAL INTERESTS                                            |  |  |  |                   | (1,565,216)       |                   |   | (3,288,771) |  |   | (1,719,645)
|EQUIPMENT                                                    |  |  |  |                   | (666)             |                   |   | (94,641)    |  |   | (63,553)   
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|NET CASH USED IN

INVESTING ACTIVITIES                       |  |  |  |                   | (1,565,882)       |                   |   | (3,383,412) |  |   | (1,783,198)
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|NET CHANGE IN CASH                                           |  |  |  |                   | (1,117,978)       |                   |   | (14,591)    |  |   | 915,474    
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|CASH, BEGINNING                                              |  |  |  |                   | 1,325,170         |                   |   | 1,339,761   |  |   | 424,287    
|                                                             |  |  |  |                   |                   |                   |   |             |  |   |            
|CASH, ENDING                                                 |  |  |  | $                 | 207,192           |                   | $ | 1,325,170   |  | $ | 1,339,761  





|                                    | 
|----------------------------------- | 
|SUPPLEMENTARY CASH FLOW
INFORMATION | 



|                       |  |  |  |   |   |  |   |   |  |   |  
|---------------------- |  |  |  | - | - |  | - | - |  | - | -
|CASH PAID FOR INTEREST |  |  |  | $ | - |  | $ | - |  | $ | -



|                           |  |  |  |   |   |  |   |   |  |   |  
|-------------------------- |  |  |  | - | - |  | - | - |  | - | -
|CASH PAID FOR INCOME TAXES |  |  |  | $ | - |  | $ | - |  | $ | -











THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.







87





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SAMEX MINING CORP.

(AN EXPLORATION STAGE COMPANY)



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008



1.

BASIS OF PRESENTATION



These consolidated financial statements include the accounts of SAMEX Mining Corp. (the Company) and its subsidiaries.  The Company is incorporated in British Columbia and trades on the TSX Venture Exchange (the Exchange).  The fiscal year end of the Company and its Chilean subsidiary is December 31st, whereas the year end of the inactive subsidiary, South American Mining & Exploration Corp. and of the Bolivian subsidiaries is September 30th.  In order to synchronize the difference in quarter ends, these consolidated financial statements include the accounts of S.A.M.E.X. and the Bolivian subsidiaries for a 12 month period that includes their second, third and fourth quarters from January 1, 2008 to September 2008 and the first quarter of their 2009 fiscal year from October 1, 2008 to December 31, 2008.  The Companys subsidiaries are:



NAME

LOCATION

OWNERSHIP

South American Mining & Exploration Corp. (S.A.M.E.X.)

Canada

100%

Samex International Ltd.

Bahamas

100%

Samex S.A.

Bolivia

98%

Minas Bolivex S.A. (Bolivex)

Bolivia

98%

Empresa Minera Boliviana S.A. (Emibol)

Bolivia

98%

Minera Samex Chile S.A.

Chile

99.9%



These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) and are presented in Canadian dollars.



Going Concern - These financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.  As at December 31, 2008, the Company had incurred losses since inception totalling $25,148,899.  Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future.  As at December 31, 2008, the Company had not advanced its projects to commercial production and is not able to finance day-to-day activities through operations.



The Companys continued existence as well as the recovery of amounts capitalized as mineral property interests, is dependent upon the Company raising additional funds through issuance of its common stock, obtaining debt financing, selling a portion of its mineral property interests, or entering into joint venture agreements with other parties.  Management is currently evaluating other sources of financing, but there is no assurance that additional financing will be available, if needed, on terms acceptable to the Company. Management is also aware that significant uncertainties exist, related to current economic conditions that could impact the Companys ability to continue to finance the exploration and evaluation of its mineral property interests.  As a result, management plans on reducing spending in order to preserve cash and maintain liquidity until overall market conditions improve.  Management is not able to assess the likelihood or timing of improvements in the equity markets for raising capital for future acquisitions or expenditures. This uncertainty represents a liquidity risk and may impact the Companys ability to continue as a going concern in the future.



As disclosed in Note 3, the Company has not made an option payment of US$961,500 due March 31, 2009 pursuant to the Minera Porvenir Option by which the Company can acquire 100% interest in a 2,138-hectare portion of the INCA project, therefore, the owner may terminate the option by giving 30 days written notice.  Also, the Company has not made an option payment of US$80,000 due April 9, 2009 pursuant to the Parra Option by which the Company can acquire 100% interest in  a 21-hectare portion of the INCA project, therefore, the owner may terminate the option by giving 30 days written notice.  The Company is currently negotiating in an effort to revise the option payment terms, or arrange for additional financing to cover the option payments, and/or arrange a joint venture or sale of all, or a portion of the INCA property.  Accordingly, the recoverability of the carrying value of the INCA project is dependent on the successful outcome of the above contingencies.



2.

SIGNIFICANT ACCOUNTING POLICIES



a.

Principles of Consolidation  These consolidated financial statements include the accounts of the Company and its subsidiaries.  All inter-company transactions and balances have been eliminated upon consolidation.



b.

Use of Estimates - The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions, including fair value of financial instruments, stock-based compensation, determination of impairment of assets, carrying value of mineral interests and estimating future income tax rates, that affect the amounts reported in the financial statements and accompanying disclosures.  Although these estimates are based on management's best knowledge of current events and actions the Company may undertake in the future, actual results ultimately may differ from the estimates.



c.

Financial Instruments  The Company follows Canadian Institute of Chartered Accountants (CICA) Handbook Sections 3855, Financial Instruments - Recognition and Measurement.  Under Section 3855, financial instruments must be classified into one of five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets, or other financial



88





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liabilities.  All financial instruments, including derivatives, are measured at the balance sheet date at fair value except for loans and receivables, held-to-maturity investments, and otherfinancial liabilities which are measured at amortized cost.  The Companys financial instruments consist of cash, gold bullion and accounts payable.  Cash, which is measured at its face value, representing fair value, is classified as held for trading.  Gold bullion, which is measured at fair value, is classified as available-for-sale financial assets.  Accounts payable, which are measured at amortized cost, are classified as other financial liabilities.  For the years ended December 31, 2008 and 2007, management has determined that the Company has no derivatives or embedded derivatives.



d.

Mineral Interests - The Company is engaged in the exploration of mineral interests and records its investment in mineral interests at the lower of acquisition and capitalized mineral exploration expenditures or estimated recoverable value.  Where specific exploration programs are planned and budgeted by management, mineral exploration costs are capitalized until the properties are placed into commercial production, sold, abandoned or determined by management to be impaired in value.  Costs incurred for acquisition, including where applicable, lease and option payments made on properties that are held under lease and option agreements, are capitalized until such time as the related interest is placed into production, sold, abandoned, or management has determined that impairment in value has occurred.  Mineral Property Acquisition Costs include the following: third party acquisition costs, property option payments and third party staking costs.



In addition, the Company incurs certain value added taxes in connection with its Chilean exploration activities.  These costs are initially capitalized.  When the recoverability of these amounts has been established, the amount determined to be recoverable is recorded as a reduction of the carrying value of the related property.



Management evaluates each mineral interest on a reporting period basis or as events and circumstances warrant; and makes a determination based on exploration activity and results, estimated future cash flows and availability of funding as to whether costs are capitalized or impaired.  Mineral interests, where future cash flows are not reasonably determinable, are evaluated for impairment based on managements intentions and determination of the extent to which future exploration programs are warranted and likely to be funded.



Capitalized expenditures as reported on the balance sheet represent acquisition and capitalized mineral exploration expenditures incurred to date or estimated recoverable value if lower than cost.  The carrying values of Mineral Interests are not reflective of current or future values of the interests.  Recovery of carrying value is dependent upon future commercial success or proceeds from disposition of the mineral interests.



Upon the establishment of commercial production, carrying values of deferred acquisition and exploration expenditures will be amortized over the estimated life of the mine on the units of production method.



Mineral Interest Investigation Costs are expensed as incurred and are not capitalized to mineral interests, and include operating costs related to the Companys exploration activities that do not specifically relate to one of the Companys mineral interests and include generative exploration or investigating and evaluating mineral interests not acquired by the Company.



e.

Translation of Foreign Currency  The Company uses the temporal method of foreign currency translation to account for its integrated subsidiaries.  Balances denominated in foreign currencies are translated into Canadian dollar equivalents as follows:



i.

Monetary assets and liabilities at year end rates;

ii.

All other assets and liabilities at historical rates;

iii.

Revenue and expense transactions at the average rate of exchange prevailing during the year, except for amortization which is translated at historical rates.



Exchange gains or losses arising on these translations are charged to operations as incurred.



f.

Loss Per Share  The Company uses the treasury stock method to determine the dilutive effect of stock options and other dilutive instruments.  The treasury stock method assumes that proceeds received from in-the-money stock options and other dilutive instruments are used to repurchase common shares at the prevailing market rate.



Basic loss per share figures have been calculated using the weighted average number of shares outstanding during the respective periods.  Diluted loss per share figures are equal to those of basic loss per share for each year since the effects of the stock options and share purchase warrants have been excluded as they are anti-dilutive.



g.

Equipment and Amortization - Equipment is recorded at cost.  The cost, less the salvage or residual value, is charged to operations or exploration activities over the useful life of the asset on a straight line basis: Office equipment - 4 to 10 years; Exploration equipment - 4 to 8 years; Vehicles - 5 years.



h.

Stock-Based Compensation  The fair value of stock options granted is determined using the Black-Scholes option pricing model and recorded as stock-based compensation expenses over the vesting period of the stock options.



i.

Future Income Taxes  The Company follows CICA Section 3465 Income Taxes in accounting for income taxes.  The Company accounts for income taxes whereby the cost (benefit) of current and future income taxes is recognized as income tax expense in the determination of results of operations for the period.  Future income tax liabilities (assets) are the amount of income taxes arising from taxable temporary differences between the tax bases of an asset or liability and its carrying amount in the balance sheet.  Income tax liabilities and assets are recognized when they are more likely than not to be realized and are measured using the



89





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income tax rates and laws that are expected to apply at the time of settlement or realization.



j.

Asset Retirement Obligations - The Company follows the accounting guidelines of the CICA Handbook Section 3110, relating to the recognition and disclosure of liabilities for long lived asset retirement obligations and associated asset retirement costs. A liability for future site reclamation costs, or other obligation, would be recorded at its fair value when determinable and a corresponding increase to the asset carrying value would be amortized over the useful life of the asset. Management has reviewed the anticipated obligations and retirement costs of long lived assets for known obligations under contract, common practice, or laws and regulations in effect or anticipated and has concluded that the Company has no material obligations relating to asset retirement obligations.



k.

Impairment of Long-Lived Assets - The carrying value of long-lived assets with fixed or determinable lives are reviewed for impairment whenever events or changes in circumstances indicate the recoverable value may be less than the carrying amount. Recoverable value determinations are based on managements estimates of undiscounted future net cash flows expected to be recovered from specific assets or groups of assets through use or future disposition. Impairment charges are recorded in the period in which determination of impairment is made by management.



Assets with indefinite or indeterminable lives are not amortized and are reviewed for impairment on a reporting basis using fair value determinations through managements estimate or recoverable value.



l.

Comprehensive Income  The Company adopted CICA Handbook Section 1530, Comprehensive Income.  Section 1530 establishes standards for the reporting and presenting of comprehensive income which is defined as the change in equity from transaction and other events from non-owner sources.  Other comprehensive income refers to items recognized in comprehensive income that are excluded from net loss.



m.

Comparative Figures  Certain accounts in the prior years financial statements have been re-classified for comparative purposes to conform with the presentation in the current financial statements.



n.

Recent Accounting Pronouncements, Adopted  On January 1, 2008, the Company adopted the following new accounting standards related to financial statement presentation, capital disclosures, and financial instrument disclosures and presentation that were issued by the CICA. These changes in accounting policies have been adopted on a prospective basis. At January 1, 2008, management determined there were no adjustments required to the Companys financial instruments as a result of adopting these policies.



Accounting Changes  CICA Handbook Section 1506 - This standard establishes criteria for changes in accounting policies, accounting treatment and disclosure regarding changes in accounting policies, estimates and corrections of errors.  In particular, this section allows for voluntary changes in accounting policies only when they result in the financial statements providing reliable and more relevant information.  This section requires changes in accounting policies to be applied retrospectively unless doing so is impracticable.



Capital Disclosures  CICA Handbook Section 1535 -This section specifies the disclosure of (i) an entitys objectives, policies and processes for managing capital; (ii) quantitative data about what the entity regards as capital; (iii) whether the entity has not complied with any capital requirements; and (iv) if it has not complied, the consequences of such noncompliance.  The Company has included disclosures recommended by this new section in Note 10 to these financial statements.



Financial Instruments  Disclosures, CICA Handbook Section 3862, and Financial Instruments  Presentation, CICA Handbook Section 3863 - These new standards, which replaced Section 3861  Disclosure and Presentation, revise and enhance disclosure requirements while carrying forward presentation requirements.  These new sections will place increased emphasis on disclosure about the nature and extent of risks arising from financial instruments and how the entity manages those risks.  The Company has included disclosure recommended by these new sections in Note 9.



Going Concern  CICA Handbook Section 1400 - In June 2007, the CICA modified section 1400 General Standards of Financial Statement Presentation in order to require that management make an assessment of the Companys ability to continue as a going concern over a period which is at least, but not limited to, twelve months from the balance sheet date.  These new requirements were adopted by the Company on January 1, 2008.



Recent Accounting Pronouncements, Not Yet Adopted



Goodwill and Intangible Assets - As of January 1, 2009, the Company will be required to adopt the CICA Handbook Section 3064 Goodwill and Intangible Assets, which will replace the existing Goodwill and Intangible Assets standard.  The new standard revises the requirement for recognition, measurement, presentation and disclosure of intangible assets.  The adoption of this standard is not expected to have a material impact on the Companys financial statements.



International Financial Reporting Standards (IFRS) - In 2006, the Accounting Standards Board of Canada (ACSB) ratified a strategic plan that will result in the convergence of Canadian GAAP, as used by publicly accountable entities, with IFRS over a transitional period.  The ACSB has developed and published a detailed implementation plan, with changeover required for fiscal years beginning on or after January 1, 2011.  The Company is in the process of reviewing the impact of this initiative on its financial statements.





90





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3.

MINERAL INTERESTS



The Company has invested in various mineral interests located in Chile and Bolivia. The mineral interests have been acquired by purchase agreements, staking, option agreements, purchase at government auctions, or by earning a percentage interest in certain properties pursuant to a joint venture or other type of agreement.  Government patent fees must be paid each year in order to keep the mineral concessions valid and in effect.



CHILE



i.INCA Property  The Company has a 100% interest in approximately 11,500 hectares of mineral concessions acquired by purchase, staking, purchase at government auction, and by four separate agreements for options to purchase 100% interest   in mineral concessions as follows:



Minera Porvenir Option - Option to acquire 2,138 hectares of mineral interests for consideration of US$2,000,000 (US$961,500 paid).  Pursuant to payment terms revised March 31, 2008, payments are due: upon resolution of certain title issues on an 85-hectare portion of the optioned property, US$77,000 payable on behalf of the optionor to a third party; and March 31, 2009  US$961,500 (see Note 12).  A 1% net smelter royalty (NSR) has been retained by the vendor and the vendor has the right to purchase up to 50% of any oxide-copper production at cost from the Company (to a limit of 10,000 tonnes per month) and subject to a cumulative maximum of 1,200,000 tonnes or ten years, which ever is reached first.



Araya Option - Option to acquire 45 hectares of mineral interests for consideration of US$300,000 (US$200,000 paid).  Option payment is due: March 31, 2009  US$100,000 (an advance payment of US$4,523 was made during 2008) (see Note 12).  A 1% NSR retained by the vendor for a period of 20 years.  The Company has the option to buyout the NSR at any time for US$500,000.



Rojas Option - Option to acquire 20 hectares of mineral interests for consideration of US$300,000 (US$150,000 paid).  Option payment is due: April 30, 2009 - US$150,000.  No NSR is payable on these concessions.



Parra Option - Option to acquire 21 hectares of mineral interests for consideration of US$180,000 (US$100,000 paid).  Option payment is due: April 9, 2009 - US$80,000 (see Note 12). No NSR is payable on these concessions.



Viscacha 1 Purchase  The Company purchased 3 hectares of mineral interests.  No NSR is payable on this concession.



ii.

Los Zorros Property  The Company acquired 100% interest in approximately 8,230 hectares of mineral concessions acquired by staking, purchase at government auction, purchase agreement, and by two purchase option contracts:



Minera Ojos del Salado Purchase  The Company acquired 100% interest in 1,429 hectares of mineral interests for US$50,000 (paid).  The vendor retained a back-in option to earn a 30% to 51% interest in the event that the Company discovers a deposit containing not less than 2,000,000 tonnes of contained equivalent copper on the property.



Hochschild Option  The Company acquired 100% interest in 209 hectares of mineral interests for consideration of option payments totaling US$230,000 (paid). The concessions are subject to an NSR of up to 2%.  The Company has the option to buyout the NSR at any time for US$1,800,000.  If the concessions are not in production by December 31, 2007, advance NSR payments of US$100,000 per year are required for five years (by February 29 of 2008 (paid) and March 1st of 2009, 2010, 2011, and 2012) to a maximum of US$500,000 (US$100,000 paid).  The advance NSR payments are recoverable from future NSR payments.  The Company is not obligated to make the advance NSR payments if it elects to return the concessions to the previous owner.



San Estaban Option - The Company acquired 100% interest in 95 hectares of mineral interests for consideration of option payments totaling US$200,000 (paid).  A 1.5% NSR retained by the vendor.



Geosupply Servicios Bonus and Royalty - Pursuant to a consulting agreement dated September 25, 2002 the concessions comprising the Los Zorros property are subject to a bonus of US$150,000 payable within one year from the date of commencement of commercial production on the concessions; and to a 0.25% NSR.



iii.

Espejismo Prospects The Company acquired 100% interest in 463 hectares of mineral concessions by staking and purchasing concessions at government auction.  Since the property is currently inactive, the interest was written down at December 31, 2008 to a nominal value of $1,000.



iv.

Tres Puntas/Chimbero Prospects The Company acquired 100% interest in 2,440 hectares of mineral concessions by staking and purchasing concessions at government auction.



v.

Miscellaneous Property Interests- The Company staked mineral concessions (approximately 1,000 hectares in aggregate) over several separate areas for possible future evaluation.  Since the property interests are currently inactive, the interests were written down at December 31, 2008 to a nominal value of $1,000.







91





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BOLIVIA



i.

Eskapa Property  The Company has a 99% interest in 3,700 hectares of mineral concessions.  The concessions are owned by Empresa Minera El Roble S.A. (El Roble S.A.), a company controlled by a Bolivian national, Patricio Kyllmann, who is a director of the Company.  Emibol S.A. earned a 99% interest in any mining operations that may be established on the concessions pursuant to an agreement dated April 16, 1996, and as amended November 23, 1998 with El Roble S.A.   The property is subject to a 0.06% NSR and to a US$2,000,000 cash royalty, to be paid out of production on the property in eight equal quarterly payments of US$250,000 beginning after the ninth month of continuous commercial mining operations on the property.  The property is currently inactive and consequently $1,395,993 of deferred expenditures were written off December 31, 2008 and the interest written down to a nominal value of $1,000.



ii.

El Desierto Property - The Company has a 99% interest in 319 hectares of mineral concessions.  The concessions are owned by El Roble S.A.  Emibol earned a 99% interest in any mining operations which may be established on the concessions pursuant to an agreement dated April 16, 1996 and as amended November 23, 1998 with El Roble S.A.  The property is subject to an NSR of 0.6%.  The property is currently inactive and consequently the interest has been written down to a nominal value of $1,000 in 2006.



iii.   Santa Isabel Property  The Company has an interest in 1,803 hectares of mineral concessions covering a portion of the Goya I and El Bonete concessions pursuant to an agreement between Corporation Minera de Bolivia (Comibol) and the Companys Bolivian subsidiary, Samex S.A.  Comibol owns the Goya I and Bonete concessions and pays the annual patents on theses concessions.  The concessions are subject to a royalty payable to Comibol, equal to 5.5% of net positive cash flow until recovery of capital investment and thereafter 16% of net positive cash flow.  The concessions are also subject to a 1.2% Net Profits interest based on Samex S.A.s net profits interest in the property.  Subsequent to 1998, the Company suspended its activities on the property pending resolution of certain ongoing legal proceedings between Comibol and a third party.  Comibol confirmed that a portion of the property is subject to a claim by a third party with respect to two areas covering approximately 10 hectares and 24 hectares of the 1,803 hectares covered by the Goya1/El Bonete concessions.  Comibol formally advised Samex S.A. that it is taking legal proceedings to resolve the dispute and asked Samex S.A to wait for it to do so.  Due to the inactivity on the property, the interest has been written down to a nominal value of $1,000 until the issue with Comibol is resolved and exploration activity is resumed.



iv.

Walter Property - The Companys subsidiary, Bolivex S.A. acquired 100% interest in 910 hectares of mineral interests for a purchase price of US$500,000.  The property is subject to a net sales royalty of up to 3% (gross sales less the cost of smelting and sale). The property is currently inactive and consequently the interest has been written down to a nominal value of $1,000 in 2006.



v.

Wara Wara Property - The Companys subsidiary, Emibol S.A. acquired 100% interest in 3,875 hectares of mineral concessions acquired by staking and by two purchase/sale agreements for an aggregate purchase price of US$9,500.  The property is subject to an NSR of 0.6 %.  The property is currently inactive and consequently the interest has been written down to a nominal value of $1,000 in 2006.



vi.

Yaretani Property  The Companys subsidiary Emibol S.A. acquired 100% interest in 2,280 hectares of mineral interests pursuant to an option agreement and two purchase agreements for an aggregate purchase price of US$131,200.  The property is subject to an NSR of 0.6%. The property is currently inactive and consequently the interest has been written down to a nominal value of $1,000 in 2006.





4.

EQUIPMENT



|                      |                      |                          |                |           |                          |               
|--------------------- | -------------------- | ------------------------ | -------------- | --------- | ------------------------ | --------------
|                      | AT DECEMBER 31, 2008 | AT DECEMBER 31, 2007    
|                      |                      |                         
|                      | COST                 | ACCUMULATED
AMORTIZATION | NET BOOK
VALUE | COST      | ACCUMULATED
AMORTIZATION | NET BOOK
VALUE
|                      |                      |                          |                |           |                          |               
|Office equipment      | $
128,170            | $
96,449                 | $
31,721       | $
122,686 | $
82,407                 | $
40,279      
|Exploration equipment | 61,169               | 35,440                   | 25,729         | 61,169    | 23,404                   | 37,765        
|Vehicles              | 124,308              | 70,255                   | 54,053         | 123,839   | 46,144                   | 77,695        
|                      |                      |                          |                |           |                          |               
|                      | $
313,647            | $
202,144                | $
111,503      | $
307,694 | $
151,955                | $
155,739     











92





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5.

RELATED PARTY TRANSACTIONS



During the year ended December 31, 2008, a director charged the Company $17,230 for legal services (2007 - $58,217).  Employees who are also directors or officers of the Company were paid salaries totaling $443,614 during the year ended December 31, 2008, a $140,014 portion of which was capitalized to mineral interests (2007 - $424,513 of which $120,913 was capitalized).





6.

SHARE CAPITAL



a.

Authorized



Unlimited Common Shares without par value.

Unlimited Preferred Shares



b.

Issued



Common shares



|                                  |  |                  |            |  |       |           
|--------------------------------- |  | ---------------- | ---------- |  | ----- | ----------
|                                  |  | NUMBER OF SHARES |            |  | VALUE
|                                  |  |                  |            |  |       |           
|Balance at December 31, 2006      |  |                  | 72,287,665 |  |       | 25,909,638
|                                  |  |                  |            |  |       |           
|Incentive stock options exercised |  |                  |            |  |       |           
|At $0.20 per share                |  |                  | 600,000    |  |       | 120,000   
|Warrants exercised                |  |                  |            |  |       |           
|At $0.78 per share                |  |                  | 66,000     |  |       | 51,480    
|Private Placement                 |  |                  |            |  |       |           
|At $0.80 per share                |  |                  | 5,742,500  |  |       | 4,594,000 
|Financing Costs                   |  |                  |            |  |       |           
|Cash                              |  |                  | -          |  |       | (253,400) 
|                                  |  |                  |            |  |       |           
|Balance at December 31, 2007      |  |                  | 78,696,165 |  |       | 30,421,718
|                                  |  |                  |            |  |       |           
|Private Placement                 |  |                  |            |  |       |           
|At $0.60 per share                |  |                  | 2,565,000  |  |       | 1,539,000 
|                                  |  |                  |            |  |       |           
|Balance at December 31, 2008      |  |                  | 81,261,165 |  | $     | 31,960,718





Preferred Shares



In addition to common shares, the Companys authorized share capital includes preferred shares without par value, none of which are issued.  The board of directors is authorized, without further action by the shareholders, to issue preferred shares in one or more series and to set the number of shares constituting any such series and the designation, rights, privileges, restrictions and conditions attaching to the shares of such series including dividend rights and rates, redemption provisions (including sinking fund provisions), rights of conversion or exchange, liquidation preferences and voting rights, if any.  The preferred shares as a class are entitled to priority over the common shares if the board of directors decides to pay any dividends, and, if the Company is dissolved, liquidated or wound up, the preferred shares are entitled as a class to priority in respect of return of capital. Except as required by law or the provisions of any designated series of preferred shares, the holders of preferred shares as a class is not entitled to receive notice of, attend or vote at any meeting of the Companys shareholders.







93





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c.

Stock Options and Warrants



(i)

Stock Options





The Company has adopted a stock option plan for which options to acquire up to 10% of the common shares outstanding at the time of the grant may be granted to eligible optionees.  The exercise price may not be less than the discounted market price, as prescribed by the policies of the Exchange.





|                     |  |                     |  |                      |  |                               |  |                      |  |   |                |  |             
|-------------------- |  | ------------------- |  | -------------------- |  | ----------------------------- |  | -------------------- |  | - | -------------- |  | ------------
|BALANCE
DEC 31, 2006 |  | GRANTED
(EXERCISED) |  | BALANCE
DEC 31, 2007 |  | GRANTED
(EXPIRED)
(CANCELLED) |  | BALANCE
DEC 31, 2008 |  |   | EXERCISE PRICE |  | TERM TO     
|                     |  |                     |  |                      |  |                               |  |                      |  |   |                |  |             
|500,000              |  | (500,000)           |  | -                    |  | -                             |  | -                    |  | $ | 0.20           |  | Mar 19, 2007
|50,000               |  | (50,000)            |  | -                    |  | -                             |  | -                    |  | $ | 0.20           |  | Sep 12, 2007
|50,000               |  | (50,000)            |  | -                    |  | -                             |  | -                    |  | $ | 0.20           |  | Nov 12, 2007
|50,000               |  | -                   |  | 50,000               |  | (50,000)                      |  | -                    |  | $ | 0.40           |  | Aug 13, 2008
|30,000               |  | -                   |  | 30,000               |  | (30,000)                      |  | -                    |  | $ | 0.63           |  | Oct 15, 2008
|590,000              |  | -                   |  | 590,000              |  | (590,000)                     |  | -                    |  | $ | 1.00           |  | Nov 17, 2008
|205,000              |  | -                   |  | 205,000              |  | -                             |  | 205,000              |  | $ | 1.00           |  | Feb 3, 2009 
|-                    |  | -                   |  | -                    |  | 60,000                        |  | 60,000               |  | $ | 0.50           |  | Aug 5, 2009 
|945,000              |  | -                   |  | 945,000              |  | -                             |  | 945,000              |  | $ | 1.10           |  | Aug 6, 2009 
|1,955,000            |  | -                   |  | 1,955,000            |  | -                             |  | 1,955,000            |  | $ | 0.40           |  | Apr 20, 2015
|1,850,000            |  | -                   |  | 1,850,000            |  | (30,000)                      |  | 1,820,000            |  | $ | 0.85           |  | May 2, 2016 
|-                    |  | 1,295,000           |  | 1,295,000            |  | -                             |  | 1,295,000            |  | $ | 0.84           |  | Feb 23, 2017
|-                    |  | 200,000             |  | 200,000              |  | (200,000)                     |  | -                    |  | $ | 0.85           |  | Jun 22, 2012
|-                    |  | 50,000              |  | 50,000               |  | -                             |  | 50,000               |  | $ | 0.80           |  | Sep 24, 2012
|                     |  | 60,000              |  | 60,000               |  | -                             |  | 60,000               |  | $ | 0.70           |  | Dec 20, 2012
|-                    |  | -                   |  | -                    |  | *150,000                      |  | 150,000              |  | $ | 0.65           |  | May 1, 2013 
|                     |  |                     |  |                      |  |                               |  |                      |  |   |                |  |             
|6,225,000            |  | 1,005,000           |  | 7,230,000            |  | (690,000)                     |  | 6,540,000            |  |   |                |  |             





As at December 31, 2008, the weighted average remaining contractual life of the options is 5.80 years and the weighted average exercise price is $0.74.  All options have fully vested as at December 31, 2008 except for the grant of *150,000 shares at $0.65 per share, of which only 50,000 shares vested during fiscal 2008.



Stock-Based Compensation  During the year ended December 31, 2008 the Company granted 210,000 stock options with a fair value on the grant date of $61,618.  The weighted average fair value of each option on the grant date is $0.29 per share.  Of this amount, $5,873 was expensed in the consolidated statement of operations and deficit and $55,745 was capitalized to mineral interests.  The following assumptions were used for the Black-Scholes valuation of the stock options granted during 2008:  Expected dividend yield  0%; Expected stock price volatility  89%; Risk-free interest rate  4.75%; Expected life of options  varying from 1 to 5 years.



(ii)

Share Purchase Warrants





|                     |  |                               |  |                      |  |                               |  |                      |  |   |                |  |             
|-------------------- |  | ----------------------------- |  | -------------------- |  | ----------------------------- |  | -------------------- |  | - | -------------- |  | ------------
|BALANCE
DEC 31, 2006 |  | ISSUED
(EXERCISED
OR EXPIRED) |  | BALANCE
DEC 31, 2007 |  | ISSUED
(EXERCISED
OR EXPIRED) |  | BALANCE
DEC 31, 2008 |  |   | EXERCISE PRICE |  | TERM TO     
|                     |  |                               |  |                      |  |                               |  |                      |  |   |                |  |             
|400,000              |  | -                             |  | 400,000              |  | -                             |  | 400,000              |  | $ | 1.10           |  | Aug 25, 2009
|1,810,000            |  | (66,000)                      |  | 1,744,000            |  | -                             |  | 1,744,000            |  | $ | 0.78           |  | Feb 13, 2009
|-                    |  | 2,871,250                     |  | 2,871,250            |  | -                             |  | 2,871,250            |  | $ | 1.00           |  | Mar 16, 2009
|-                    |  | -                             |  | -                    |  | 1,282,500                     |  | 1,282,500            |  | $ | 0.70           |  | Apr 15, 2011
|                     |  |                               |  |                      |  |                               |  |                      |  |   |                |  |             
|2,210,000            |  | 2,805,250                     |  | 5,015,250            |  | 1,282,500                     |  | 6,297,750            |  |   |                |  |             





As at December 31, 2008, the weighted average remaining contractual life of the share purchase warrants is 0.64 years and the weighted average exercise price is $0.88.



d.

Contributed Surplus



The contributed surplus arises solely from stock based compensation.



|                                                              |   |           |  |   |           | 
|------------------------------------------------------------- | - | --------- |  | - | --------- | 
|                                                              |   | 2008      |  |   | 2007      | 
|                                                              |   |           |  |   |           | 
|Contributed surplus balance, beginning                        | $ | 4,114,750 |  | $ | 3,301,113 | 
|Stock based compensation                                      |   | 61,618    |  |   | 813,637   | 
|Fair value of options exercised
re-allocated to share capital |   | -         |  |   | -         | 
|                                                              |   |           |  |   |           | 
|Contributed surplus balance, ending                           | $ | 4,176,368 |  | $ | 4,114,750 | 





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7.

SEGMENTED INFORMATION



The Company is in the business of exploring and developing mineral resource properties located in South America. The Company derives income and incurs costs associated with assets in different geographic locations.  Segmented information on the Company's sole industry segment reported by geographic area is as follows:





|                                                             |   |         |  |   |               |  |   |           
|------------------------------------------------------------ | - | ------- |  | - | ------------- |  | - | ----------
|For the year ended December 31, 2008                         |   | CANADA  |  |   | SOUTH AMERICA |  |   | TOTAL     
|                                                             |   |         |  |   |               |  |   |           
|Operating expenses                                           |   |         |  |   |               |  |   |           
|Amortization                                                 | $ | 9,578   |  | $ | 35,324        |  | $ | 44,902    
|Foreign exchange loss                                        |   | -       |  |   | 44,211        |  |   | 44,211    
|Mineral interests administration
and investigation costs     |   | -       |  |   | 328,444       |  |   | 328,444   
|Salaries, benefits and stock-based compensation              |   | 375,853 |  |   | -             |  |   | 375,853   
|Administration and general                                   |   | 271,991 |  |   | 89,544        |  |   | 361,535   
|                                                             |   |         |  |   |               |  |   |           
|Net loss from operations                                     |   | 657,422 |  |   | 497,523       |  |   | 1,154,945 
|                                                             |   |         |  |   |               |  |   |           
|Mineral interests and deferred exploration costs
written off |   | -       |  |   | 1,416,792     |  |   | 1,416,792 
|                                                             |   |         |  |   |               |  |   |           
|Net loss                                                     | $ | 657,422 |  | $ | 1,914,315     |  | $ | 2,571,737 
|                                                             |   |         |  |   |               |  |   |           
|Expenditure for equipment and mineral interests              | $ | 2,166   |  | $ | 1,624,748     |  | $ | 1,626,914 
|                                                             |   |         |  |   |               |  |   |           
|Equipment and mineral interests                              | $ | 23,515  |  | $ | 10,789,991    |  | $ | 10,813,506
|                                                             |   |         |  |   |               |  |   |           
|Total assets                                                 | $ | 298,073 |  | $ | 10,827,047    |  | $ | 11,125,120





|                                                             |   |           |  |   |               |  |   |           
|------------------------------------------------------------ | - | --------- |  | - | ------------- |  | - | ----------
|For the year ended December 31, 2007                         |   | CANADA    |  |   | SOUTH AMERICA |  |   | TOTAL     
|                                                             |   |           |  |   |               |  |   |           
|Operating expenses                                           |   |           |  |   |               |  |   |           
|Amortization                                                 | $ | 12,877    |  | $ | 38,727        |  | $ | 51,604    
|Foreign exchange loss                                        |   | -         |  |   | 90,980        |  |   | 90,980    
|Mineral interests administration
and investigation costs     |   | -         |  |   | 339,285       |  |   | 339,285   
|Salaries, benefits and stock-based compensation              |   | 904,028   |  |   | -             |  |   | 904,028   
|Administration and general                                   |   | 429,376   |  |   | 49,890        |  |   | 479,266   
|                                                             |   |           |  |   |               |  |   |           
|Net loss from operations                                     |   | 1,346,281 |  |   | 518,882       |  |   | 1,865,163 
|                                                             |   |           |  |   |               |  |   |           
|(Gain) loss on sale of equipment                             |   | 2,289     |  |   | (10,198)      |  |   | (7,909)   
|Mineral interests and deferred exploration costs
written off |   | -         |  |   | 46,429        |  |   | 46,429    
|                                                             |   |           |  |   |               |  |   |           
|Net loss                                                     | $ | 1,348,570 |  | $ | 555,113       |  | $ | 1,903,683 
|                                                             |   |           |  |   |               |  |   |           
|Expenditure for equipment and mineral interests              | $ | 29,529    |  | $ | 3,526,673     |  | $ | 3,556,202 
|                                                             |   |           |  |   |               |  |   |           
|Equipment and mineral interests                              | $ | 30,927    |  | $ | 10,622,646    |  | $ | 10,653,573
|                                                             |   |           |  |   |               |  |   |           
|Total assets                                                 | $ | 1,408,307 |  | $ | 10,675,189    |  | $ | 12,083,496











8.

INCOME TAXES



The Company has incurred resource-related expenditures and operating losses which are available to reduce future years taxable income in Canada.  For the year ended December 31, 2008, the Company had Canadian operating losses of approximately $1,050,000. These operating losses expire as follows: 2009 - $483,000; 2010 - $880,000; 2014 - $560,000; 2015 - $566,000; 2026 - $720,000; 2027 - $720,000; 2028 - $1,050,000.  Resource-related expenditures available for carry-forward in Canada amount to approximately $5,719,372.  No future tax benefits have been recognized in the accounts for these Canadian losses and resource related expenditures and they are not transferable to the Companys corporate entities in foreign tax jurisdictions.  The Company also has resource-related expenditures and operating losses which are available to reduce future years taxable income in Chile and Bolivia.  No future tax assets have been recognized due to the Company taking full valuation allowances in the accounts for these operating and foreign losses and resource-related expenditures.







95





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9.

FINANCIAL INSTRUMENTS



Financial Risk Management

The Company is exposed in varying degrees to a variety of financial instrument related risks.



Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Companys primary exposure to credit risk is on its bank accounts. The Companys bank accounts are held with a major bank in Canada, a major bank in Chile which is a subsidiary of a major Canadian bank, and with a bank in Bolivia.  The Companys cash is held by the major bank in Canada, and specific amounts are transferred to the banks in Chile or Bolivia as and when required to fund the Companys budgeted exploration activities in these countries.  As the majority of the Companys cash is held by one bank in Canada, there is a concentration of credit risk.  This risk is managed by using a major bank that is a high credit quality financial institution as determined by rating agencies.



Currency Risk

The Company operates in Canada, Chile and Bolivia and is consequently exposed to foreign exchange risk arising from transactions denominated in foreign currency.  Our functional currency is the Canadian dollar, and we have obligations and commitments in other currencies including United States dollars, Chilean Pesos and Bolivian Bolivianos.  Fluctuations in foreign currency exchange rates may affect our results of operations and the value of our foreign assets.  The Company manages currency risk by closely monitoring relevant exchange rates and when possible, executes currency exchange transactions at times when exchange rates are most advantageous for the Company.  The Company does not use hedging to manage its currency risk.



Liquidity Risk

Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. The Companys objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time. The Company achieves this by maintaining sufficient cash.  Management is also aware that significant material uncertainties exist, related to current economic conditions that could cast significant doubt upon the Companys ability to continue to finance its exploration activities.  Management is not able to assess the likelihood or timing of improvements in the equity markets for raising capital for future acquisitions or expenditures.  This uncertainty represents a liquidity risk and may impact the Companys ability to continue as a going concern in the future.



10.

CAPITAL MANAGEMENT



The Company identifies capital as cash and share capital.  The Company raises capital through private placement and public share offerings.  Capital is managed in a manner consistent with the risk criteria and policies provided by the board of directors and followed by management.  All sources of financing are analyzed by management and approved by the board of directors. To maintain or adjust its capital structure, the Company may issue new shares, acquire or dispose of assets or adjust the amount of cash and cash equivalents.



The Companys primary objectives when managing capital is to safeguard and maintain the Companys financial resources for continued operations and to fund expenditure programs to further advance mineral interests.



The Company is able to scale its expenditure programs and the use of capital to address market conditions by reducing expenditures and the scope of operations during periods of commodity pricing decline and economic downturn.



There are no externally imposed capital restrictions.



11.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING

PRINCIPLES AND PRACTICES



The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada (CDN GAAP) which differ in certain material respects from those principles and practices that the Company would have followed had its consolidated financial statements been prepared in accordance with United States generally accepted accounting principles (US GAAP).  Had the Company followed US GAAP, certain items on the consolidated statements of operations and cash flow and consolidated balance sheets would have been reported as follows:



Gains and losses on inter-company foreign currency transactions are excluded from net income and deferred as Other Comprehensive Income.



Mineral interests acquisition costs are accounted for in accordance with CDN GAAP as disclosed in Note 2.f.  For US GAAP, mineral interest acquisition costs are capitalized in accordance with EITF 04-2 when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures.  Mineral property acquisition costs are impaired if the criteria for capitalization are not met.  For US GAAP, mineral property exploration costs are expensed as incurred.  When mineral properties are acquired under option agreements with future acquisition payments to be made at the sole discretion of the Company, those future payments are recorded only when the Company has made or is obliged to make the payment or issue the shares.  Because the Company has not yet earned the legal rights to its mineral interests under option agreements, all option payments have been expensed to date for US GAAP purposes. When it has been determined that a mineral interest can be



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economically developed as a result of establishing proven and probable reserves and pre feasibility, the costs incurred to develop such property are capitalized.  As of the date of these financial statements, the Company has incurred only acquisition and exploration costs.  For US GAAP, these acquisition and exploration costs have been impaired and  expensed.   To date the Company has not established any proven or probable reserves on its mineral interests.



Under US GAAP the Company needs to complete an analysis which involves determining whether it is more likely than not that a tax position would be sustained on audit based solely on its technical merits.  The amount of benefit recognized in the financial statements is the maximum amount which is more likely than not to be realized based on a cumulative probability approach.  FIN 48 became effective for the Company on January 1, 2007.  The Companys Bolivian and Chilean subsidiaries have not filed income tax returns for several years. Upon filing there could be penalties and interest assessed. Such penalties vary by jurisdiction and by assessing practices and authorities. As the Companys Bolivian and Chilean subsidiaries have incurred losses since inception there are no known or anticipated exposure to corporate income taxes. However, certain jurisdictions may assess penalties for failing to file returns and other disclosures and for failing to file other supplementary information associated with foreign ownership, debt and equity positions.  Inherent uncertainties arise over tax positions taken with respect to intercompany charges and allocations, fees, related party transactions, and stock based transactions.  Management has considered the likelihood and significance of possible penalties, based on their assessment, any such penalties, if any, would not be expected to be material.





|                            |   |            |  |   |         |  |   |            |  |   |          
|--------------------------- | - | ---------- |  | - | ------- |  | - | ---------- |  | - | ---------
|CONSOLIDATED BALANCE SHEETS |   | 2008       |  |   | 2007   
|                            |   |            |  |   |         |  |   |            |  |   |          
|Assets                      |   | CDN GAAP   |  |   | US GAAP |  |   | CDN GAAP   |  |   | US GAAP  
|                            |   |            |  |   |         |  |   |            |  |   |          
|Current                     | $ | 311,614    |  | $ | 311,614 |  | $ | 1,429,923  |  | $ | 1,429,923
|Mineral interests           |   | 10,702,003 |  |   | -       |  |   | 10,497,834 |  |   | -        
|Equipment                   |   | 111,503    |  |   | 111,503 |  |   | 155,739    |  |   | 155,739  
|                            |   |            |  |   |         |  |   |            |  |   |          
|                            | $ | 11,125,120 |  | $ | 423,117 |  | $ | 12,083,496 |  | $ | 1,585,662
|Liabilities                 |   |            |  |   |         |  |   |            |  |   |          
|Current                     | $ | 104,228    |  | $ | 104,228 |  | $ | 106,463    |  | $ | 106,463  
|Shareholders equity        |   | 11,020,892 |  |   | 318,889 |  |   | 11,977,033 |  |   | 1,479,199
|                            |   |            |  |   |         |  |   |            |  |   |          
|                            | $ | 11,125,120 |  | $ | 423,117 |  | $ | 12,083,496 |  | $ | 1,585,662





|                                                                                                   |      |             |      |   |             |  |   |            
|-------------------------------------------------------------------------------------------------- | ---- | ----------- | ---- | - | ----------- |  | - | -----------
|CONSOLIDATED STATEMENTS OF OPERATIONS                                                              | 2008 |             | 2007 |   | 2006       
|                                                                                                   |      |             |      |   |             |  |   |            
|Net loss as shown on the financial
statements  CDN GAAP                                           | $    | (2,571,737) |      | $ | (1,903,683) |  | $ | (1,979,866)
|Deferral of translation (gain) loss on inter-company
transactions of a long-term investment nature |      | 44,142      |      |   | 107,697     |  |   | (40,515)   
|Mineral interests costs expensed                                                                   |      | (204,169)   |      |   | (3,411,594) |  |   | (1,910,339)
|                                                                                                   |      |             |      |   |             |  |   |            
|Net loss  US GAAP                                                                                 |      | (2,731,764) |      |   | (5,207,580) |  |   | (3,930,720)
|                                                                                                   |      |             |      |   |             |  |   |            
|Other Comprehensive income (loss)                                                                  |      | (44,142)    |      |   | (107,697)   |  |   | 40,515     
|                                                                                                   |      |             |      |   |             |  |   |            
|Comprehensive loss                                                                                 | $    | (2,775,906) |      | $ | (5,315,277) |  | $ | (3,890,205)
|                                                                                                   |      |             |      |   |             |  |   |            
|Basic and diluted loss per share  US GAAP                                                         | $    | (0.03)      |      | $ | (0.07)      |  | $ | (0.06)     
|Weighted average number of
common shares outstanding                                               |      | 80,619,915  |      |   | 77,569,498  |  |   | 70,264,207 









|                                                                    |   |             |  |   |             |  |   |            
|------------------------------------------------------------------- | - | ----------- |  | - | ----------- |  | - | -----------
|CONSOLIDATED STATEMENTS OF CASH FLOW                                |   | 2008        |  |   | 2007        |  |   | 2006       
|                                                                    |   |             |  |   |             |  |   |            
|Net cash flows from operating activities under
Canadian GAAP        | $ | (1,091,096) |  | $ | (1,143,259) |  | $ | (1,008,128)
|Mineral Interest Expenditures                                       |   | (1,565,216) |  |   | (3,288,771) |  |   | (1,719,645)
|                                                                    |   |             |  |   |             |  |   |            
|Net cash used in operating activities under US GAAP                 |   | (2,656,312) |  |   | (4,432,030) |  |   | (2,727,773)
|                                                                    |   |             |  |   |             |  |   |            
|Net cash flows from financing activities under
CDN GAAP and US GAAP |   | 1,539,000   |  |   | 4,512,080   |  |   | 3,706,800  
|                                                                    |   |             |  |   |             |  |   |            
|Net cash flows used in investing activities under
CDN GAAP          |   | (1,565,882) |  |   | (3,383,412) |  |   | (1,783,198)
|Mineral Interest Expenditures                                       |   | 1,565,216   |  |   | 3,288,771   |  |   | 1,719,645  
|                                                                    |   |             |  |   |             |  |   |            
|Net cash used in investing activities under US GAAP                 |   | (666)       |  |   | (94,641)    |  |   | (63,553)   
|                                                                    |   |             |  |   |             |  |   |            
|Net change in cash                                                  |   | (1,117,978) |  |   | (14,591)    |  |   | 915,474    
|Cash, beginning                                                     |   | 1,325,170   |  |   | 1,339,761   |  |   | 424,287    
|                                                                    |   |             |  |   |             |  |   |            
|Cash, ending                                                        | $ | 207,192     |  | $ | 1,325,170   |  | $ | 1,339,761  





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US Recent Accounting Pronouncements



In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts  An interpretation of FASB Statement No. 60.  SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how SFAS 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprises risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted.  The adoption of this statement will have no effect on the Companys financial statements.



In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of non-governmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective sixty days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The adoption of this statement is not expected to have a material effect on the Companys financial statements.



In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment to FASB Statement No. 133. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows.  It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged.  The adoption of this statement is not expected to have a material effect on the Companys financial statements.



In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements Liabilities  an Amendment of ARB No. 51.  This statement amends ARB 51 to establish accounting and reporting standards for the Non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.



In December 2007, the EITF reached a consensus on Issue No. 07-1, Accounting for Collaborative Arrangements (EITF No. 07-1).  The EITF concluded on the definition of a collaborative arrangement, and that revenues and costs incurred with third parties in connection with collaborative arrangements would be presented gross or net based on the criteria in EITF No. 99-19 and other accounting literature.  Based on the nature of the arrangement, payments to or from collaborators would be evaluated, and its terms, the nature of the entitys business, and whether those payments are within the scope of other accounting literature would be presented.  Companies are also required to disclose the nature and purpose of collaborative arrangements, along with the accounting policies, and the classification and amounts of significant financial statement amounts related to the arrangements.  Activities in the arrangement conducted in a separate legal entity should be accounted for under other accounting literature; however, required disclosure under EITF No. 07-1 applies to the entire collaborative agreement.  EITF No. 07-1 is effective for fiscal years beginning after December 15, 2008 and is to be applied retrospectively to all periods presented for all collaborative arrangements existing as of the effective date.  The Company plans to adopt the provisions of EITF No. 07-1 as of January 1, 2009 and does not expect the adoption to have a material effect on its results of operations, financial position, or cash flows.



In April 2008, the FASB issued FSP No. SFAS 142-3, Determination of the Useful Life of Intangible Assets (SFAS 142-3). In determining the useful life of intangible assets, SFAS 142-3 removes the requirement to consider whether an intangible asset can be renewed without substantial cost or material modifications to the existing terms and conditions and, instead, requires an entity to consider its own historical experience in renewing similar arrangements.  SFAS 142-3 also requires expanded disclosure related to the determination of intangible asset useful lives SFAS 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008.  The Company is currently evaluating the effect, if any, the adoption of SFAS 142-3 will have on its results of operations, financial position, or cash flows.



In June 2008, the EITF reached a consensus Issue No. 07-5, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entitys Own Stock (EITF No. 07-5). EITF No. 07-5 was issued to clarify how to determine whether certain instruments or features are indexed to an entitys own stock under EITF Issue No. 01-6, The Meaning of Indexed to a Companys Own Stock (EITF No. 01-6). The consensus in EITF No. 07-5 applies to any freestanding financial instrument or embedded feature that has the characteristics of a derivative as defined in FSP No. SFAS 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133). The consensus in EITF No. 07-5 supersedes EITF No. 01-6 and is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company is currently evaluating the effect, if any, the adoption of EITF No. 07-5 will have on its results of operations, financial position or cash flows.



Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company.





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12.  SUBSEQUENT EVENTS



Extension Of Warrant Expiry Dates  In January 2009, the expiry date of warrants for the purchase of 1,744,000 shares at $0.78 per share, that were originally issued with a three year term expiring February 13, 2009, was extended for an additional two years until expiry on February 13, 2011. The exercise price of the warrants remains at $0.78 per share.  The expiry date of Warrants for the purchase of 2,871,250 shares at $1.00 per share, that were originally issued with a two year term expiring March 16, 2009, was extended for an additional two years until expiry on March 16, 2011. The exercise price of the warrants remains at $0.78 per share.



Private Placement  In March 2009, the Company completed a private placement of 7,830,500 units comprised of one common share and one share purchase warrant at a price of $0.10 per unit for gross proceeds of $783,050.  The warrant entitles the holder to purchase an additional common share at a price of $0.20 per share if exercised at any time during the five-year term of the warrant.  The units are subject to a four-month hold period until July 25, 2009.  Cash finders fees of $3,500 in aggregate were paid in relation to the placement of 700,000 of the units.  Director/Officers of the Company purchased an aggregate of 976,000 units of the private placement.  The proceeds of the private placement are for expenditures on the Companys mineral properties and for general working capital.



Three Properties Abandoned in Bolivia  March 2009 - In light of continuing political uncertainties in Bolivia, the Company decided to reduce a portion of its interests in the country and consequently abandoned three low-priority properties, Walter, Wara Wara and Yaretani.  These properties had been inactive for a number of years and consequently had been written down to a nominal value of $1,000 each.



Option Payments, INCA Project  Araya Option - Under the Araya Option (see Note 3. Mineral Interests) the Company can acquire 100% interest in concessions covering a 45-hectare portion of the Inca project.  Effective March 31, 2009, the Optionor agreed to revise the payment terms with respect to the option payment of US$95,477 due March 31, 2009 as follows:



1) US$30,000 on March 31, 2009 (which was paid);

2) US$30,000 on June 30, 2009; and

3) US$35,477 on September 30, 2009.



Minera Porvenir Option - The Company has not made an option payment of US$961,500 due on March 31, 2009 pursuant to the Minera Porvenir Option (see Note 3), under which the Company can acquire 100% interest in concessions covering a 2,138-hectare portion of the INCA project.  If an option payment is not made on the due date, the option agreement includes a provision whereby Porvenir may advise the Company in writing of the non-payment of the option payment, and if the option payment is not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination.  At the date of this report, Porvenir had not given written notice of default to the Company with respect to non-payment of the option payment that was due March 31, 2009.



Parra Option - The Company has not made an option payment of US$80,000 due on April 9, 2009 pursuant to the Parra Option (see Note 3), under which the Company can acquire 100% interest in concessions covering a 21-hectare portion of the INCA project.  If an option payment is not made on the due date, the option agreement includes a provision whereby Parra may advise the Company in writing of the non-payment of the option payment, and if the option payment is not paid within a term of 30 days counted from the date of the written notice, the option is subject to termination.  At the date of this report, Parra had not given written notice of default to the Company with respect to non-payment of the option payment that was due April 9, 2009.



At the date of this report, the Company is continuing in its efforts to negotiate revised option payment terms, or arrange for additional financing to cover the option payments on the Minera Porvenir Option and the Parra Option in order to maintain these portions of the INCA property, and/or arrange a joint venture or sale of all, or a portion of the INCA property with other interested mining companies.















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ITEM 18. FINANCIAL STATEMENTS.

Not applicable as our consolidated financial statements have been prepared in accordance with Item 17.



ITEM 19. EXHIBITS.

The following exhibits are filed as part of this Annual Report:

1.1.

*Altered Memorandum of SAMEX (*previously filed as exhibit to Form 20F Annual Report for the period ended November 30, 1995 (our 1995 Annual Report);

1.2.

*Change of Name Certificate for SAMEX (*previously filed with the 1995 Annual Report);

1.3.

*Altered Articles of SAMEX (*previously filed as exhibit to Form 20F Annual Report for the period ended November 30, 1998 (our 1998 Annual Report);

1.4.

*Altered Memorandum of SAMEX respecting the increase of authorized share capital (*previously filed with our 1998 Annual Report);

1.5.

*Form of Notice of Articles of SAMEX issued by the Registrar of Companies for British Columbia on February 11, 2005 (*previously filed with our 2004 Annual Report);

1.6.

*New Articles of SAMEX effective June 13, 2005 (*previously filed with our 2005 Annual Report);

1.7.

*Form of Notice of Articles of SAMEX issued by the Registrar of Companies for British Columbia on June 13, 2005 (*previously filed with our 2005 Annual Report);

4.1

*Corporate Finance Consulting Agreement dated January 12, 2006 between SAMEX Mining Corp. and Spartacus Ltd. concerning assistance with respect to our corporate financing efforts in Europe and other jurisdictions (*previously filed with our 2005 Annual Report);

4.2

*Unilateral Option Purchase Contract dated March 31, 2006 between Sociedad Contractual Minera Porvenir and our subsidiary Minera Samex Chile S. A. concerning option to purchase concessions covering a 2,138-hectare-portion of the Inca project (English translation of the Spanish contract) (*previously filed with our 2005 Annual Report);

4.3

*Unilateral Option Purchase Contract dated April 4, 2006 between Malvina del Carmen Araya Santander and our subsidiary Minera Samex Chile S.A. concerning option to purchase concessions covering a 45-hectare-portion of the Inca project (English translation of the Spanish contract) (*previously filed with our 2005 Annual Report);

4.4

*Unilateral Option Purchase Contract dated May 25, 2006 between Oscar David Rojas Garin and our subsidiary Minera Samex Chile S. A. concerning option to purchase concessions covering a 20-hectare-portion of the Inca project (English translation of the Spanish contract) (*previously filed with our 2005 Annual Report);

4.5

*Unilateral Option Purchase Contract dated April 9, 2007 between Jaime Ruben Parra Vasquez and our subsidiary Minera Samex Chile S. A. concerning option to purchase concessions covering a 21-hectare-portion of the Inca project (English translation of the Spanish contract) (*previously filed with our 2006 Annual Report);



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4.6

*Consulting Agreement dated June 22, 2007 between Brazen Financial Corp. (the Consultant) and SAMEX Mining Corp. concerning the provision of investor relations services to the Company (*previously filed with our 2007 Annual Report).

4.7

INCA Project Concessions;

8.1

Our subsidiaries.  See also Item 4. A.  History and Development Of The Company;

12.1

Certification of Chief Executive Officer under Rule 13a-4(a);

12.2

Certification of Chief Financial Officer under Rule 13a-4(a);

13.1

Sarbanes Oxley 906 Certification of Chief Executive Officer;

13.2

Sarbanes Oxley 906 Certification of Chief Financial Officer

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Date: June 18, 2009



SAMEX Mining Corp.



Jeffrey P. Dahl

Larry D. McLean

Jeffrey P. Dahl, Chief Executive Officer

Larry D. McLean, Chief Financial Officer







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Exhibit 4.7



INCA PROJECT CONCESSIONS



CONCESSION NAMEROL NACIONAL #HECTARESTYPEPURCHASE OPTIONAURORA 1-503102-0692-K5ExploitationRojas OptionBLANCA O CONSUELO03102-0525-31ExploitationCALAVERITA 81-20003102-0488-9600ExploitationMinera Porvenir OptionCALIFORNIA 26-27-36-3703102-1309-821ExploitationParra OptionCENTINELA03102-0476-55ExploitationMinera Porvenir OptionCERUSITA 1-20003102-0487-01000ExploitationMinera Porvenir OptionCONCEPCION 1-603102-0897-330ExploitationDELIRIO 2-403102-0484-615ExploitationMinera Porvenir OptionDOS AMIGOS 1-1703102-0625-385ExploitationMinera Porvenir OptionHUERFANITA03102-0482-K5ExploitationMinera Porvenir OptionJARDINERA DE CUBA 1-203102-0493-510ExploitationMinera Porvenir OptionJUSTA 103102-0581-85ExploitationMAGALLANES03102-0468-41ExploitationMinera Porvenir OptionMANTO DELIRIO03102-0494-35ExploitationMinera Porvenir OptionMATILDE 3  403102-0674-110ExploitationRojas OptionPLANTA INCA DE ORO 1-8003102-0492-7400ExploitationMinera Porvenir OptionPORTEZUELO03102-0465-K5ExploitationMinera Porvenir OptionPUNTILLA03102-0675-K5ExploitationRojas OptionPROVIDENCIA 1-903102-1054-445ExploitationAraya OptionSAN ANTONIO03102-0463-32ExploitationMinera Porvenir OptionSAN PEDRO 49-7003102-1377-244ExploitationTUCUMATA03102-0762-45ExploitationMinera Porvenir OptionVIZCACHA 1-203102-2609-24ExploitationVIZCACHA 103102-2300-K3ExploitationIRLANDA I 1/ 303102-3047-23ExploitationIRLANDA II 1/ 203102-3048-02ExploitationIRLANDA IX 1-303102-3112-63ExploitationIRLANDA IV 1/403102-3050-24ExploitationIRLANDA V 103102-3051-01ExploitationIRLANDA VI 103102-3052-91ExploitationIRLANDA VII 103102-3053-71ExploitationIRLANDA VIII 103102-3054-51ExploitationIRLANDA XI 1 AL 903102-3056-19ExploitationIRLANDA XII 1 AL 2003102-3057-K15ExploitationLINDA I 1 AL 5003102-3044-8100ExploitationLINDA II 103102-3045-61ExploitationLINDA III 1 AL 303102-3046-43ExploitationIRLANDA X 1 AL 403102-3055-34ExploitationMONTANA UNO 1 AL 3003102-3417-150ExploitationMONTANA DOS 1 AL 3003102-3418-4241ExploitationMONTANA TRES 1 AL 3003102-3419-2249ExploitationMONTANA CUATRO 1 AL 3003102-3420-653ExploitationMONTANA CINCO 1 AL 3003102-3392-7102ExploitationMONTANA 15 1 AL 1003102-3439-7100ExploitationMONTANA 16 1 AL 1003102-3440-0100ExploitationMONTANA 17 1 AL 1003102-3441-9100ExploitationMONTANA 18 1 AL 3003102-3442-7300ExploitationMONTANA 19 1 AL 3003102-300ExploitationMONTANA 20 1 AL 3003102-3443-5300ExploitationMONTANA 21 1 AL 3003102-3444-3300ExploitationMONTANA 22 1 AL 3003102-3445-1300ExploitationCOLUMBIA 1 1 AL 2003102-3456-7100ExploitationCOLUMBIA 2 1 AL 3003102-3457-5300ExploitationCOLUMBIA 3 1 AL 3003102-3458-3300ExploitationCOLUMBIA 4 1 AL 1503102-3459-1150Exploitation




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COLUMBIA 5 1 AL 1003102-3446-K100ExploitationCOLUMBIA 6 1 AL 3003102-3447-8300ExploitationCOLUMBIA 7 1 AL 3003102-3448-8300ExploitationCOLUMBIA 8 1 AL 1003102-3449-4100ExploitationCOLUMBIA 9 1 AL 3003102-3450-8300ExploitationCOLUMBIA 10 1 AL 3003102-3451-6300ExploitationCOLUMBIA 11 1 AL 2003102-3452-4200ExploitationCOLUMBIA 12 1 AL 2003102-3453-2200ExploitationCOLUMBIA VIII 1 AL 2003102-3456-7200ExploitationPATY 1 AL 4003102-160ExploitationCOLUMBIA 6, 1 AL 6003102-300ExploitationMONTANA I 1 AL 3003102-7796-7300ExploitationMONTANA II 1 AL 3003102-7797-5300ExploitationMONTANA III 1 AL 3003102-7798-3300ExploitationMONTANA IV 1 AL 3003102-7799-1300ExploitationMONTANA V 1 AL 3003102-7800-9300ExploitationMONTANA VI 1 AL 3003102-7801-7300ExploitationMONTANA VII 1 AL 3003102-7802-5300ExploitationMONTANA VIII 1 AL 3003102-7803-3300ExploitationMONTANA IX 1 AL 3003102-7804-1200ExploitationMONTANA X 1 AL 3003102-7805-K200ExploitationMONTANA XI 1 AL 3003102-7806-8200ExploitationCOLUMBIA VIII 1 AL 2003102-7795-9200ExploitationTORONTO I 1 AL 4003102-7846-7200ExplorationTORONTO II 1 AL 4003102-7847-5200ExplorationTORONTO III 1 AL 6003102-7848-3300ExplorationTORONTO IV 1 AL 6003102-7849-1300ExplorationTORONTO V 1 AL 6003102-7850-5300ExplorationMONTANA 2303102-8053-4200ExplorationMONTANA 2403102-8054-2300ExplorationMONTANA 2503102-8882-9300ExplorationMONTANA 2603102-8883-7300ExplorationROBERT 103102-300ExplorationROBERT 203102-300ExplorationROBERT 303102-300ExplorationROBERT 403102-300Exploration








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Exhibit 8.1





LIST OF SUBSIDIARIES





The following companies are subsidiaries of SAMEX Mining Corp. as of May 31, 2009:





|                                          |                               |          
|----------------------------------------- | ----------------------------- | ---------
|NAME OF SUBSIDIARY                        | JURISDICTION OF INCORPORATION | OWNERSHIP
|                                          |                               |          
|South American Mining & Exploration Corp. | British Columbia, Canada      | 100%     
|SAMEX International Ltd.                  | Bahamas                       | 100%     
|SAMEX S.A.                                | Bolivia                       | 98%      
|Minas Bolivex S.A. (BOLIVEX )           | Bolivia                       | 98%      
|Empresa Minera Boliviana S.A. (EMIBOL)  | Bolivia                       | 98%      
|Minera Samex Chile S.A  (Samex Chile)   | Chile                         | 99.9%    





For details see Item 4 - Information On The Company





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Exhibit 12.1

CERTIFICATION



I, Jeffrey Peter Dahl, certify that:



1.

I have reviewed this annual report on Form 20-F of Samex Mining Corp.;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;



4.

The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and



5.

The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.





|                    |  |                                                       
|------------------- |  | ------------------------------------------------------
|Date: June 18, 2009 |  | Jeffrey P. Dahl                                     
|                    |  | Jeffrey P. Dahl, President and Chief Executive Officer







105





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Exhibit 12.2

CERTIFICATION



I, Larry Dennis McLean, certify that:



1.

I have reviewed this annual report on Form 20-F of Samex Mining Corp.;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;



4.

The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and



5.

The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.





|                    |  |                                         
|------------------- |  | ----------------------------------------
|Date: June 18, 2009 |  | Larry D. McLean                       
|                    |  | Larry D. McLean, Chief Financial Officer





106





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107





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Exhibit 13.1







CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002







In connection with the Annual Report of Samex Mining Corp. (the Company) on Form 20-F for the fiscal year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date here of (the Report), I, Jeffrey P. Dahl, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.









Jeffrey P. Dahl

Jeffrey P. Dahl

President and Chief Executive Officer

June 18, 2009











108





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Exhibit 13.2











CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002







In connection with the Annual Report of Samex Mining Corp. (the Company) on Form 20-F for the fiscal year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date here of (the Report), I, Larry D. McLean, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.









Larry D. McLean

Larry D. McLean

Chief Financial Officer

June 18, 2009









109