EXHIBIT 99.1







ANNUAL
INFORMATION FORM



For
the year ended December 31, 2011



Dated
as of March 30, 2012



P.O.
Box 41, Axa Place

Suite
1660, 999 West Hastings Street

Vancouver,
B. C. V6C 2W2 Canada

Phone:
(604) 681-9512

Fax:
(604) 688-9532











TABLE OF CONTENTS



|                                                           |                                                                                             |    | Page
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------- | -- | ----
|                                                           |                                                                                             |    |     
|PRELIMINARY NOTES                                          |                                                                                             | 1  |     
|                                                           | Date of Information                                                                         |    | 1   
|                                                           | Documents Incorporated by Reference                                                         |    | 1   
|                                                           | Currency                                                                                    |    | 1   
|                                                           | Conversion Table                                                                            |    | 2   
|                                                           | Cautionary Statements Regarding Forward Looking Statements                                  |    | 2   
|                                                           | Cautionary Note to United States Investors Regarding Mineral Reserve and Resource Estimates |    | 4   
|                                                           | Mineral Application Process in Argentina                                                    |    | 4   
|CORPORATE STRUCTURE                                        |                                                                                             | 7  |     
|                                                           | Name, Address and Incorporation                                                             |    | 7   
|                                                           | Intercorporate Relationships                                                                |    | 8   
|GENERAL DEVELOPMENT OF THE BUSINESS                        |                                                                                             | 8  |     
|                                                           | 2011                                                                                        |    | 8   
|                                                           | 2010                                                                                        |    | 9   
|                                                           | Subsequent Events                                                                           |    | 10  
|DESCRIPTION OF THE BUSINESS                                |                                                                                             | 10 |     
|                                                           | General                                                                                     |    | 10  
|                                                           | Specialized Skills                                                                          |    | 10  
|                                                           | Competitive Conditions                                                                      |    | 10  
|                                                           | Business Cycles                                                                             |    | 11  
|                                                           | Environmental Protection Requirements                                                       |    | 11  
|                                                           | Employees                                                                                   |    | 11  
|                                                           | Foreign Operations                                                                          |    | 11  
|                                                           | Social or Environmental Policies                                                            |    | 11  
|Risk Factors                                               |                                                                                             | 12 |     
|cerro moro - PRINCIPAL PROJECT                             |                                                                                             | 22 |     
|                                                           | Acquisition Terms                                                                           |    | 22  
|                                                           | Summary                                                                                     |    | 22  
|                                                           | Introduction                                                                                |    | 23  
|                                                           | Property Location                                                                           |    | 23  
|                                                           | Geology and Mineralization                                                                  |    | 24  
|                                                           | Exploration                                                                                 |    | 25  
|                                                           | Mineral Resource Estimation                                                                 |    | 26  
|                                                           | Preliminary Mining Studies                                                                  |    | 27  
|                                                           | Metallurgical Testwork Summary                                                              |    | 30  
|                                                           | Mineral Processing and Recovery Methods                                                     |    | 31  
|                                                           | Site Infrastructure                                                                         |    | 31  
|                                                           | Environmental                                                                               |    | 33  
|                                                           | Capital and Operating Cost Estimates                                                        |    | 34  
|                                                           | Economic Analysis                                                                           |    | 39  
|                                                           | Conclusions                                                                                 |    | 40  
|OTHER NON MATERIAL PROPERTIES                              |                                                                                             | 43 |     
|DIVIDENDS AND DISTRIBUTIONS                                |                                                                                             | 44 |     
|DESCRIPTION OF CAPITAL STRUCTURE                           |                                                                                             | 44 |     
|MARKET FOR SECURITIES                                      |                                                                                             | 44 |     
|DIRECTORS AND EXECUTIVE OFFICERS                           |                                                                                             | 46 |     
|Name, Address and Occupation                               |                                                                                             | 46 |     
|Conflicts of Interest                                      |                                                                                             | 48 |     
|LEGAL PROCEEDINGS                                          |                                                                                             | 48 |     
|INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS |                                                                                             | 48 |     
|TRANSFER AGENT                                             |                                                                                             | 49 |     
|MATERIAL CONTRACTS                                         |                                                                                             | 49 |     
|INTEREST OF EXPERTS                                        |                                                                                             | 49 |     
|AUDIT COMMITTEE                                            |                                                                                             | 50 |     
|                                                           | Audit Fees, Audit-Related Tax and All Other Fees                                            |    | 50  
|ADDITIONAL INFORMATION                                     |                                                                                             | 51 |     



- i -







EXTORRE GOLD MINES LIMITED



PRELIMINARY NOTES



Date of Information



In this Annual Information Form (the “AIF”),
unless the content otherwise requires, references to “our”, “us”, “it”, “its”,
“the Company” or “Extorre” mean Extorre Gold Mines Limited and its subsidiaries. All the information contained
in this AIF is as at December 31, 2011, the last day of the Company’s most recently completed financial year, unless otherwise
indicated.



Documents Incorporated by Reference



Certain
sections of the technical report entitled “Preliminary Economic Assessment For The Cerro Moro Gold-Silver Project, Santa
Cruz Province, Argentina” (the “PEA”) is incorporated by reference into this AIF, a copy of which can be obtained
online from SEDAR at www.sedar.com.  See “Cerro Moro – Principal Project”.  The PEA has an
effective date of March 30, 2012 and was co-authored by Carlos Guzmán, Mining Eng, Registered Member of the Chilean Mining
Commission, Bill Gosling, BSc Eng, MBA, FAusIMM, David (Ted) Coupland, BSc, DipGeoSc CFSG ASIA, MAusIMM (CP), Anthony Sanford,
BSc, MBA, SACNASP Pr.Sci.Nat., Krishna Sinha, P. Eng Utah and Michael Gabora, P. Geo Ontario.



Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this AIF to the
extent that a statement contained in this AIF or in any subsequently filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not constitute a part
of this AIF, except as so modified or superseded. The modifying or superseding statement need not state that it has modified or
superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making
of such a modifying or superseding statement shall not be deemed an admission for any purpose that the modified or superseded statement,
when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that
is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was
made.



Currency



All dollar amounts referenced in this AIF
are expressed in Canadian dollars, unless otherwise indicated.



The following table sets forth the rate
of exchange for the Canadian dollar expressed in United States dollars in effect at the end of the periods indicated, the average
of exchange rates in effect on the last day of each month during such periods, and the high and low exchange rates during such
periods based on the noon rate of exchange as reported by the Bank of Canada for conversion of Canadian dollars into United States
dollars.











|Canadian Dollars to     |  | Year Ended December 31 |       
|----------------------- |  | ---------------------- | ------
|U.S. Dollars            |  | 2011                   |       
|Rate at end of period   |  | $                      | 0.9833
|Average rate for period |  | $                      | 1.0151
|High for period         |  | $                      | 1.0583
|Low for period          |  | $                      | 0.9430



The noon rate of exchange on March 30,
2012 as reported by the Bank of Canada for the conversion of Canadian dollars into United States dollars was Canadian $1.00 equals
US$ 1.0009.



Conversion Table



For ease of reference in this AIF, the
following conversion factors from metric measurements into imperial equivalents are provided:



|To Convert from Metric |  | To Imperial           |  | Multiply by
|---------------------- |  | --------------------- |  | -----------
|                       |  |                       |  |            
|Hectares (ha)          |  | Acres                 |  | 2.471      
|Metres (m)             |  | Feet (ft)             |  | 3.281      
|Kilometres (km)        |  | Miles                 |  | 0.621      
|Tonnes                 |  | Tons (2000 pounds)    |  | 1.102      
|Grams/tonne (g/t)      |  | Ounces/ton (troy/ton) |  | 0.029      



Cautionary Statements Regarding Forward Looking Statements



This AIF contains “forward looking
information” and “forward-looking statements” (together, “forward-looking statements”) within the
meaning of securities legislation in Canada and the United States Private Securities Litigation Reform Act of 1995, as amended.
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 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. 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”
be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. While the Company
has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared,
the statements are not a guarantee of the Company’s future performance and are subject to risks, uncertainties, assumptions
and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking
statements. Such factors and assumptions include, amongst others, the effects of general economic conditions, changing foreign
exchange rates and actions by government authorities, uncertainties associated with negotiations and misjudgements in the course
of preparing forward-looking statements. In addition, there are also known and unknown risk factors which may cause actual events
or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:



- 2 -







| | · | risks related to the Company’s lack of operating history;
| | - | ---------------------------------------------------------

| | · | risks related to the Company’s lack of revenues from operations and its continued ability
to fund ongoing and planned exploration and possible future mining operations;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company’s history of losses, which may continue to occur in the future;
| | - | --------------------------------------------------------------------------------------------

| | · | risks related to the on-going credit crisis centered in the United States and Europe and the Company’s
ability to raise money in the future to fund its operations;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to its ability to successfully establish mining operations or profitably produce
precious or other metals;
| | - | ------------------------------------------------------------------------------------------------------------------------

| | · | risks related to differences between US and Canadian practices for reporting mineral resources
and reserves;
| | - | ------------------------------------------------------------------------------------------------------------

| | · | risks related to the speculative nature of resource exploitation;
| | - | -----------------------------------------------------------------

| | · | risks related to the effect of foreign exchange regulations on operations in Argentina;
| | - | ---------------------------------------------------------------------------------------

| | · | risks related to the absence of mineral reserves;
| | - | -------------------------------------------------

| | · | risks related to uninsured risks;
| | - | ---------------------------------

| | · | risks related to shortages of equipment and supplies;
| | - | -----------------------------------------------------

| | · | uncertainty as to actual capital costs, operating costs, production and economic returns, and uncertainty
that any possible future development activities will result in profitable mining operations;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to mineral resource figures being estimates based on interpretations
and assumptions which may result in less mineral production under actual conditions than is currently estimated;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | changes in the market price of gold and silver, and other minerals which in the past has fluctuated
widely and which could affect the profitability of possible future operations and financial condition;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to currency fluctuations;
| | - | ---------------------------------------

| | · | risks related to the inherently dangerous activity of mining, including conditions or events beyond
the Company’s control;
| | - | --------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company’s primary property being located in Argentina, including political,
economic, and regulatory instability;
| | - | --------------------------------------------------------------------------------------------------------------------------------------

| | · | uncertainty in the Company’s ability to obtain and maintain certain permits necessary for
current and anticipated operations;
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company being subject to environmental laws and regulations which may increase
the costs of doing business and/or restrict operations;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to land reclamation requirements which may be burdensome;
| | - | -----------------------------------------------------------------------

| | · | risks over the uncertainty in the Company’s ability to attract and maintain qualified management
to meet the needs of anticipated growth and risks relating to its ability to manage growth effectively;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to the Company’s held mineral properties being subject to prior unregistered
agreements, transfers, or claims and other defects in title;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to increased competition that could adversely affect the Company’s ability
to attract necessary capital funding or acquire suitable producing properties for mineral exploration in the future;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | risks related to officers and directors becoming associated with other natural resource companies
which may give rise to conflicts of interests;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the volatility of the Company’s common share price and volume;
| | - | --------------------------------------------------------------

| | · | tax consequences to United States shareholders; and
| | - | ---------------------------------------------------

| | · | risks relating to potential claims by indigenous people over the Company’s mineral properties.
| | - | ----------------------------------------------------------------------------------------------



- 3 -







The above 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 this AIF. 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. Forward-looking
statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and the Company
undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should
change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements.



Cautionary Note to United States Investors Regarding Mineral
Reserve and Resource Estimates



This AIF has been prepared in accordance
with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities
laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve”
are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for
Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”)
- CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (“CIM
Standards”). These definitions differ from the definitions in the United States Securities and Exchange Commission’s
(the “SEC”) Industry Guide 7 under the United States Securities Act of 1933, as amended (the “Securities Act”).
Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves,
the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and all necessary permits
and environmental authorizations must be filed with the appropriate governmental authority.



In addition, the terms “mineral resource”,
“measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are
defined in and required to be disclosed by NI 43-101 and the CIM Standards; however, these terms are not defined terms under SEC
Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors
are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.
“Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in limited cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists
or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under
Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves”
by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.



Accordingly, information contained in this
AIF and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable
to similar information made public by US companies subject to the reporting and disclosure requirements under the United States
federal securities laws and the rules and regulations thereunder.



Mineral Application Process in Argentina



The laws, procedures and terminology regarding
mineral title in Argentina differ considerably from those in Canada and the United States. According to Argentine Political State
Organisation, the minerals are owned by the provinces where they are located, which grant the exploration permits and mine concessions
to the applicants. However, the Argentinean Federal Government is entitled to enact the National Mining Code, which is applicable
to the whole country, while the provinces have the power to regulate the procedural aspects of the Mining Code through each Provincial
Mining Procedure Code and to organize the concession and enforcement authorities.



- 4 -







In general, a similar concept applies to
the environmental aspects related to mining activities. Although the Mining Code includes a chapter that regulates the main aspects
of environmental regulations, provinces are the enforcement authorities. Furthermore, in application of Section 121 and Section
41 of the Argentine Constitution, many provinces have also enacted additional environmental laws, which directly or indirectly
are applicable to mining activities.



The Mining Code



The rights, obligations, and procedures
for the acquisition, exploration, exploitation, and use of mineral substances in Argentina are regulated by the Mining Code. The
Mining Code establishes three classes of minerals, two of which are: (i) the main metalliferous substances such as gold, silver,
copper, and lead whose ownership is vested in the provincial government, which in turn grants exploitation concessions to private
companies; and (ii) the other metalliferous substances, which include earthy minerals and industrial minerals that belong to the
land owner. Except for minerals contained in this last category, mineral rights in Argentina are separate rights from surface ownership
rights. Creek bed and placer deposits, as well as abandoned tailings and mine waste rock deposits, are included in the latter mineral
class.



Description of “Exploration” and “Mining”
Permits



There is no actual ground staking of mineral
claims for securing mineral rights in Argentina. Mineral rights are acquired by application to the government for concessions to
seek, own and sell minerals located within a specified parcel of land. Generally, all persons or entities qualified to acquire
and possess real estate can obtain mineral rights. The levels of mineral rights and titles are described below:



Cateo



A cateo is an exploration concession which
does not permit mining but gives the owner a preferential right to a mining concession for exploitation of minerals discovered
in the same area. Cateos are measured in 500 hectare unit areas. A cateo cannot exceed 20 units (10,000 hectares). No person may
hold more than 20 permits or 400 units in a single province. The term of a cateo is based on its area: 150 days for the first unit
(500 hectares) and an additional 50 days for each unit thereafter. After a period of 300 days, 50% of the area over four units
(2,000 hectares) must be relinquished. At 700 days, 50% of the area remaining must be relinquished. Extensions may be granted to
allow for bad weather, difficult access, or similar issues. Cateos are identified by a file number or dossier number.



Cateos are awarded by the following process:



| | (i) | an application is made in respect of a designated area, describing a minimum work program and an
estimation of the investment to be made and a schedule for exploration;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | approval is granted by the province and a formal placement on the official map or graphic register
is made provided the requested area is not superseded by a previous mining right;
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | publication of the claim is made in the provincial official bulletin so as to notify third parties
of the claim; and
| | ----- | --------------------------------------------------------------------------------------------------------------------



- 5 -







| | (iv) | upon expiry of a period following publication in the official bulletin, the cateo is awarded.
| | ---- | ---------------------------------------------------------------------------------------------



The length of this process varies depending
on the province, and often takes up to two years. Applications are processed on a first-come, first-served, basis. During the application
period, the first applicant has rights to any mineral discoveries made by third parties in the area of the cateo without its prior
consent.



Until August 1995, a “canon fee”,
or tax, of AR$400 per unit was payable upon the awarding of a cateo. An amendment to this law requires that a canon fee be paid
upon application for the cateo. The canon fee for the cateo is paid once for the whole duration of the exploration permit.



Mina



Minas (Manifestos de Descubrimiento) are
mining concessions which permit mining on a commercial basis. Although the previous granting of a cateo is not a pre-condition
for the granting of a mina, the most common way to acquire a mina would be by discovering a mine as a consequence of an exploration
process under the awarding of a cateo. The area of a mina is measured in claims (“pertenencias”). Each mina may consist
of one or more claim (pertenencias). “Vein mineral claim (pertenencias)” are 6 hectares and “Disseminated mineral
claim (pertenencias)” are 100 hectares (relating to disseminated deposits of metals rather than discrete veins). The mining
law determines the number of claim (pertenencias) allowed to cover the geologic extent of the mineral deposit in question according
to the applicant category (company or person). Once granted, minas have an indefinite term assuming the requirements of law and
exploration development or mining is in progress.



To convert an exploration concession, or
cateo, to a mining concession, or mina, a declaration of manifestation of discovery must be made wherein a point within a cateo
must be nominated as a discovery point. The manifestation of discovery is used as a basis for location of the claims (pertenencias).
Manifestations of discovery do not have a definite area until pertenencias are measured. Within a period following designation
of a manifestation of discovery, the claimant may do further exploration, if necessary, to determine the size and shape of the
ore body.



Following a publication and opposition
period and approval by the province, a formal survey of the pertenencias, together forming the mina, is completed. A surveyed mina
provides the highest degree of mineral rights in Argentina.



The application to the mining authority
must include official cartographic coordinates of the mine location and of the reconnaissance area, and a sample of the mineral
discovered. The reconnaissance area, which may be as much as twice the surface area projection of the mine, is intended to allow
for the geological extent of the ore body and for site layout and development. Excess area is released once the survey plans are
approved by the mining authority.



Once the application for a mine has been
submitted, the holder of the mining concession may commence the mining operation. Any person opposed to the mine operation, whether
a holder of an overlapping cateo, a land owner disputing the existence of the ore deposit or the class of the economic mineral,
or a partner in the discovery who claims to have been neglected, must register his opposition to the operation with the mining
authority.



New mining concessions may also be awarded
for mines that were abandoned or for which their original mining concessions were declared to have expired. In such cases, the
first person claiming an interest in the property will have priority. A new mining concession will be awarded for the mine in the
condition left by the previous holder.



- 6 -







The titleholder of a mine must fulfill
three conditions as part of its mining concession in order to maintain its title to the mining concession in good standing: (i)
payment of mining canons; (ii) provision of minimum investment; and (iii) continuous mining activity (if the mine is shut down
for more than four years, the mining authority may demand the mine to be reactivated and a new investment plan be submitted).



Mining canons are paid to the state (national
or provincial) under which the mining concession is registered, and are paid in equal instalments twice yearly. The canon is set
by national law according to the category of the mine. In general, the canon due per year is AR$80 per 6 hectare pertenencia for
common ore bodies held by the mining concession, or AR$800 per 100 hectares pertenencia for disseminated ore bodies. Failure to
comply with this obligation for fourteen months results in the cancellation of the mining right. However, the titleholder can recover
the mining right during 45 days after being notified by the mining authority, by paying the due canon plus 20% charge as a fine.
The discoverer of the mine is exempt from paying canons for three years from the date on which formal title was awarded to the
mine.



The holder of the mining concession must
also commit to investing in the fixed assets of the property to a minimum of at least 300 times the value of the annual mining
canon, over a period of five years. In the first two years, 20% of the total required investment must be made in each year. For
the final three years, the remaining 60% of the total required investment may be distributed in any other manner to the discretion
of the concessionaire. The mining concession expires if the minimum required investment schedule is not met. If the exploration
or exploitation works at the mine are suspended for more than four years in a row, the mining authority can require the holder
of the concession to prepare and undertake a plan to activate or reactivate work. Failure to file such reactivation plan within
six months results in the cancellation of the mining right. Such work must be completed on the property within a maximum period
of five years.



Environmental Regulation



Argentina’s Mining Code contains
environmental provisions which are administered by each Province. Operators are liable for environmental damage. Before initiating
operations, mining companies must prepare and submit an environmental impact report to the Provincial regulators. This report outlines
the proposed operations and methods and what measures will be taken to minimize the impact on the environment. Updates which detail
the status of operations and results are required. If the regulators determine the protection measures to be inadequate or insufficient,
additional environmental protection measures may be required, and violators may be forced to cease operations and rectify any damage.



CORPORATE STRUCTURE



Name, Address and Incorporation



The Company was incorporated on December
21, 2009 under the Canada Business Corporations Actas 7300492 Canada Inc. and changed its name to Extorre Gold Mines Limited
on February 5, 2010.



On March 24, 2010, pursuant to a
Plan of Arrangement (the “Arrangement”) conducted by Exeter Resource Corporation (“Exeter”) under the Business
Corporations Act (British Columbia), Exeter transferred its wholly owned subsidiaries, Estelar Resources
Limited (“Estelar”) and Cognito Limited (“Cognito”) together with cash and working capital balances
of approximately $25 million to Extorre. Estelar and Cognito hold the former Argentine assets of Exeter which included
interests in a number of precious and base metal projects, the Cerro Moro property (“Cerro Moro” or the
“Cerro Moro Project” or the “Project”), the Don Sixto property, the Estelar properties and the MRP
properties.



- 7 -







The head office of the Company is located
at Suite 1660-999 West Hastings Street, Vancouver, British Columbia, V6C 2W2. The address for service and the registered and records
office of the Company is located at Suite 2300, 550 Burrard Street, Vancouver, British Columbia V6C 2B5.



Intercorporate Relationships



As of the effective date of this AIF, the
Company has two wholly-owned subsidiaries: Estelar and Cognito. Estelar and Cognito are incorporated in the British Virgin Islands
and are registered to conduct the Company’s business in Argentina.



GENERAL DEVELOPMENT OF THE BUSINESS



The Company is engaged in the
business of acquisition, exploration and development of mineral properties located in Argentina; its business development
over the last two years is described in the following paragraphs. Unless otherwise noted in this AIF, Eric Roth, President
and Chief Exceutive Officer of the Company and a Fellow of the AusIMM, a qualified persion under NI 43-101, is responsible
for the preparation of scientific or technical information in this AIF.



2011



During the first quarter, the Company continued
to explore at the Cerro Moro Project with four drill rigs. The exploration drilling at Cerro Moro was focused on both the evaluation
of new exploration targets as well as infill drilling on the Escondida and Gabriela veins. Initial drill programs were also completed
on the Union Dome and Falcon targets, which lie within the Bahia Laura (Fomicruz Joint Venture) and Santa Cruz Regional tenements,
respectively. The Company also listed on the NYSE Amex stock exchange under the trading symbol “XG”.



During
the second quarter, Extorre announced the discovery of high grade gold-silver mineralization in the Zoe sector at Cerro Moro. Concurrent
with the discovery of Zoe, an accelerated drill program was initiated with the arrival of two additional drill rigs. An updated
mineral resource estimate for the Cerro Moro Project, which included the results of drilling completed up until February, 2011
(and therefore excluding Zoe), was prepared in April, 2011. The updated mineral resource statement included an indicated category
resource of 927,000 ounces gold equivalent* and inferred category resource of 396,000 gold ounces equivalent. In May 2011, Extorre
received approval from Santa Cruz Provincial authorities for the Environmental Impact Assessment (“EIA”) that had been
submitted in September, 2010, for the development of a 750 tonne per day mining operation at Cerro Moro. Discovery drilling on
the Santa Cruz Regional tenements led to the discovery of the Renaldo prospect on the Puntudo property, which is located 200 kilometres
west of Cerro Moro. In June 2011, mine development-related studies continued at Cerro Moro, including additional metallurgical
testwork,



On July 12, 2011, the
Company completed a bought deal equity financing in which it sold 2,400,000 common shares at a price of $10.50 per share to
raise gross proceeds of $25.2 million. The Company paid the underwriters a cash fee in an amount equal to six percent (6.0%)
of the gross proceeds received from the offering and also issued 120,000 broker warrants which are exercisable to acquire up
to 120,000 common shares of the Company at an exercise price of $11.15 per common share for a period of 12 months from
closing.



Extorre continued to release positive
drill results from Zoe that extended the zone of high-grade mineralization. Drilling and assaying continued to be undertaken
at an accelerated rate with six drill rigs operating at Cerro Moro. Mineral resource definition drilling was nearly completed
in preparation for an updated mineral resource estimate in the fourth quarter. The Company also released positive initial
drill results from the Puntudo property.





*The gold equivalent ounces are
calculated by dividing the total silver ounces by 50 and adding this value to the total gold ounces.



- 8 -









Early in the fourth quarter,
the Company received final assays from the Zoe discovery for incorporation in an updated mineral resource estimate. On
October 13, 2011, Extorre announced the appointment of key development personnel Trevor Mulroney (Chief Operating Officer)
and Alberto Carlocchia (Country Manager – Argentina). On October 26, 2011, the Argentine government announced new
foreign currency transfer regulations that created uncertainty in the market. Extorre responded publically to these new
regulations on October 26, 2011. On November 3, 2011 Extorre announced an updated mineral resource estimate for Cerro Moro
undertaken by Cube Consulting Pty. Ltd. (“Cube”) which incorporated maiden contributions from the Martina, Carla, Nini & Zoe
veins. The updated mineral resource statement included an indicated mineral resource category of 1.35 million ounces gold
equivalent*, and an inferred mineral resource  category of 1.05 million ounces gold equivalent*. Further positive assays were
released from the Zoe vein near year end. Concurrent with the release of the updated mineral resource statement, the number
of drill rigs at Cerro Moro was reduced from 6 to 4. By year-end, a total of 73,900 m of drilling in 389 drill holes had been
completed on the central portion of the Cerro Moro tenements.



2010



During the first quarter Exeter and Extorre
announced that they had completed the Arrangement.



During the second quarter, the Company
released an updated mineral resource estimate and technical report dated May 31, 2010 prepared by an independent
qualified person for the Cerro Moro Project.



Ongoing drilling and engineering studies
on the Cerro Moro Project continued through the second quarter.



Due to a significant assay backlog, with
some 4,000 sample results awaited, Extorre entered into a contract for the installation and management of a dedicated on-site sample
preparation facility at Cerro Moro, to be managed by an independent, accredited geochemical contractor.



During the third quarter the Company presented
its EIA for the proposed Cerro Moro mine development to the Santa Cruz Provincial authorities. Separately, an addendum to the existing
exploration permits requesting permission for the construction of a decline at Escondida Far West was prepared and submitted to
the Santa Cruz Minister of Mines.



On August 3, 2010 the Company reported
a new high grade gold zone on the Martina zone at the Cerro Moro Project and results from the Escondida Far West and Carla zones
where drilling defined high grade mineralization.



Drilling, assaying and engineering studies
continued on an accelerated basis including undertaking a preliminary economic assessment for Cerro Morro. Consequently, the Company’s
staff continued increasing.



On September 28, 2010, the
Company completed a bought deal equity financing in which it sold 9,100,000 common shares at a price of $4.45 per share to
raise gross proceeds of $40.5 million. The Company paid the underwriters a cash fee in an amount equal to six percent (6.0%)
of the gross proceeds received from the offering and also issued 455,000 broker warrants which are exercisable to acquire up
to 455,000 common shares of the Company at an exercise price of $5.00 per common share for a period of 12 months from
closing.





*The gold equivalent ounces are
calculated by dividing the total silver ounces by 50 and adding this value to the total gold ounces.



- 9 -







Exploration activities continued at Cerro
Moro with four drill rigs active on site. Drilling activities were primarily focused on i) the discovery of new mineral resources
and ii) infill drilling on the Loma Escondida and Gabriela veins.



On October 19, 2010, the Company
released the results of the preliminary economic assessment on the Cerro Moro Project. Drill activities were initiated on the
Verde and Falcon (Calandria) properties. These properties form part of the CVSA agreement that was originally signed in
December 2003 (see “Cerro Moro Principal Project”).



Subsequent Events



On March 30, 2012, the Company filed the
PEA on SEDAR at www.sedar.com.



On March 16, 2012, the Company closed
a bought deal private placement financing and sold 3,530,000 common shares of the Company at
a price of $7.10 per share for gross proceeds of $25.1 million. The underwriter received a cash commission of 5% of the
gross proceeds raised. The common shares issued with respect to the financing are subject to a four month hold period.



DESCRIPTION OF THE BUSINESS



General



The Company is a mineral resource exploration
company. The Company’s principal property is the Cerro Moro property in Southern Argentina.



The Company is in the exploration stage
of its corporate development; it owns no producing properties and, consequently has no current operating income or cash flow from
the properties it holds, nor has it had any income from operations in the past three financial years. As a consequence, operations
of the Company are primarily funded by equity subscriptions.



The progress on and results of work programs
on the Company’s principal property is set out in the Principal Project section of this AIF. At this time, based on the exploration
results to-date, the Company cannot project significant mineral production from any of its existing properties.



Specialized Skills



The Company’s business requires specialized
skills and knowledge in the areas of geology, drilling, planning, implementation of exploration programs, and compliance. To date,
the Company has been able to locate and retain such professionals in Canada and Argentina, and believes it will be able to continue
to do so.



Competitive Conditions



The Company operates in a very competitive
industry, and competes with other companies, many of which have greater technical and financial facilities for the acquisition
and development of mineral properties, as well as for the recruitment and retention of qualified employees and consultants.



- 10 -







Business Cycles



Late in 2008 the credit crisis in
the United States sent many economies, including the Canadian economy, into a recession. Since then, some markets have
recovered and others have worsened (most notably some member States of the European Economic Union) and the commodity markets
have remained volatile. The gold market, late in 2010, made significant gains in terms of US dollars but remained volatile
throughout 2011 and suffered declines throughout the latter part of the year.



In addition to commodity price cycles and
recessionary periods, exploration activity may also be affected by political developments and seasonal and irregular weather conditions
in Argentina.



Environmental Protection Requirements



The Company’s operations are subject
to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions
and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations,
such as seepage from tailings disposal areas, and the use of cyanide which would result in environmental pollution. A breach of
such legislation may result in imposition of fines and penalties. In addition, certain types of operations require the submission
and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards,
and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry
a heightened degree of responsibility for companies and their directors, officers, contractors and employees. The cost of compliance
with changes in governmental regulations has a potential to reduce the viability or profitability of operations.



Employees



As of December 31, 2011, and the date hereof,
the Company has two employees in Canada, and approximately 123 employees in Argentina. The Company relies on and engages consultants
on a contract basis to provide services, management and personnel who assist the Company to carry on its administrative or exploration
activities in Canada and Argentina.



Foreign Operations



Mineral exploration and mining activities
in Argentina may be affected in varying degrees by political instability and government regulations relating to the mining industry.
Any changes in regulations or shifts in political conditions may adversely affect the Company’s business. Operations may
be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls,
foreign exchange controls, income taxes, expropriation of property, environmental legislation and mine safety.



Social or Environmental Policies



In March 2010, the Company adopted its
“Environment and Corporate Social Responsibility Principles and Policies” which sets out the principles that all directors,
management and employees are required to adhere to while conducting Company business. The principles are (i) environmental stewardship,
which sets the objective of minimizing negative impacts on the environment; (ii) the commitment to conduct due diligence before
undertaking material activities on the ground to ensure proper management of issues surrounding these activities; (iii) a commitment
to engage host communities and other affected and interested parties by including all parties and providing clear and accurate
information; (iv) contribute to community development; (v) upholding Human Rights; (vi) safeguarding the health and safety of workers
and local populations by implementing sound health and safety policies; (vii) a commitment to accurate and transparent reporting;
and (viii) the commitment to ethical business practices.



- 11 -







Risk Factors



Properties in which the Company has or
is acquiring an interest, are all currently at the exploration stage. The activities of the Company are speculative due to the
high risk nature of its business which is the acquisition, financing, exploration and development of mining properties. The following
risk factors, which are not exhaustive, could materially affect the Company’s business, financial condition or results of
operations and could cause actual events to differ materially from those described in forward-looking statements relating to the
Company. These risks include but are not limited to the following:



Risks Associated with Our Operations
and Mineral Exploration



We operate in the resource industry, which is highly
speculative, and has certain inherent exploration risks which could have a negative effect on our operations.



Resource exploration is a speculative business,
characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the
failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and
quality to return a profit from production. The marketability of minerals acquired or discovered by us may be affected by numerous
factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity
of milling facilities, mineral markets and processing equipment, and such other factors such as government regulations, including
regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. Any
one or a combination of these factors may result in the Company not receiving an adequate return on our investment capital.



We have no declared mineral reserves and no economic
reserves may exist on our properties, which could have a negative effect on our operations and valuation.



Despite exploration work on our mineral
claims, no mineral reserves have been established on any of our mineral properties. We may expend substantial funds in exploring
some of our properties only to abandon them and lose our entire expenditure on the properties if no commercial or economic quantities
of minerals are found. Even if commercial quantities of minerals are discovered, the exploration properties might not be brought
into a state of commercial production. Finding mineral deposits is dependent on a number of factors, including the technical skill
of exploration personnel involved. The commercial viability of a mineral deposit once discovered is also dependent on a number
of factors, some of which are the particular attributes of the deposit, such as content of the deposit including harmful substances,
size, grade and proximity to infrastructure, as well as metal prices and the availability of power and water in sufficient supply
to permit development. Most of these factors are beyond the control of the entity conducting such mineral exploration. We are an
exploration and development stage company with no history of pre-tax profit and no income from our operations. There can be no
assurance that our operations will be profitable in the future. There is no certainty that the expenditures to be made by us in
the exploration and development of our properties will result in discoveries of mineralized material in commercial quantities.
Most exploration projects do not result in the discovery of commercially mineable deposits and no assurance can be given that any
particular level of recovery of mineral reserves will in fact be realized or that any identified mineral deposit will ever qualify
as a commercially mineable (or viable) mineral deposit which can be legally and economically exploited. There can be no assurance
that minerals recovered in small scale tests will be duplicated in large scale tests under on-site conditions or in production.
If we are unsuccessful in our exploration and development efforts, we may be forced to acquire additional projects or cease operations.





Preliminary economic assessment
results are based on many factors that are subject to uncertainty and risks.



Preliminary economic assessments are used
to estimate the economic viability of a deposit. The economic assessment results of the preliminary economic assessment are preliminary
and do not reflect the same level of certainty as a definitive feasibility study. Generally accepted levels of confidence are plus
or minus 35-40% for a preliminary economic assessment. The level reflects the level of confidence that exists at the time the study
is completed. While a preliminary economic assessment is based on the best information available to us, we cannot be certain that
actual costs will not significantly exceed the estimated cost. While we incorporate what we believe is an appropriate contingency
factor in cost estimates to account for this uncertainty, there can be no assurance that the contingency factor is adequate.
Many factors are involved in the determination of the economic viability of a mineral deposit, including the achievement of satisfactory
mineral reserve estimates, the level of estimated metallurgical recoveries, capital and operating cost estimates and estimates
of future metal prices. Resource estimates are based on the assay results of many intervals from many drill holes and the interpolation
of those results between holes. Mineral reserve estimates may be materially affected by metallurgical, environmental, permitting,
legal title, socio-economic factors, marketing, political and other factors. There is no certainty that metallurgical recoveries
obtained in bench scale or pilot plant scale tests will be achieved in commercial operations. Capital and operating cost estimates
are based upon many factors, including anticipated tonnage and grades of ore to be mined and processed, the configuration of the
orebody, ground and mining conditions, expected recovery rates of the metals from the ore and anticipated environmental and regulatory
compliance costs. Each of these factors involves uncertainties, and as a result, we cannot give any assurance that our preliminary
economic assessment results will not be subject to change and revisions. If a mine is developed, actual operating results may differ
from those anticipated in a feasibility study, pre-feasibility study or preliminary economic assessment.





- 12 -







We conduct mineral exploration in foreign countries
which have special risks which could have a negative effect on our operations and valuation.



Our exploration and development operations
are located in Argentina. Foreign countries can experience economic instability associated with unfavourable exchange rates, high
unemployment, inflation and foreign debt. These factors could pose serious potential problems associated with our ability to raise
additional capital which will be required to explore and/or develop any of our mineral properties. For example, official government
estimates of inflation in Argentina for 2011 are around 14%, however, unofficial estimates place this figure at closer to 25-30%.
Inflation of this magnitude would impact the cost of carrying out our business plans in Argentina. Developing economies have additional
risks, including: foreign exchange controls, changes to or invalidation of government mining laws and regulations; expropriation
or revocation of land or property rights; changes in foreign ownership rights; changes in foreign taxation rates; corruption; uncertain
political climate; terrorist actions or war; and lack of a stable economic climate. For example, on June 20, 2007, legislation
was passed by the Provincial government, in Mendoza, Argentina, prohibiting the use of chemicals typically used in the extraction
of gold and other metals in the province, affecting all mining companies that use such extraction techniques, and effectively putting
our Don Sixto project on hold. As a result of these regulations, the Company has written off its investment in Don Sixto. On February
28, 2011 the Argentine President enacted Decree 207/2011 which regulates Law 26,639 (the Law on Minimum Standards for the Protection
of Glaciers and the Peri-glacial Environment). Decree 207/2011 has only regulated 4 out of the 17 sections of Law 26,639. The general
outlines established by the Decree establish the specific objectives of the National Glacier Inventory, define the Strategic Environmental
Evaluation as the systematic process of study of the environmental impact of the policies, plans or programs and their alternatives,
including the preparation of a written report and the evaluation conclusions as well as their use in the public decision proceedings
and appoints the Environment and Sustainable Development Secretariat of Chief Ministry as the application authority of Law 26,639.
In addition, indigenous and community organizations can impact government mining regulations resulting in additional uncertainty.
The presence or persistence of any of these conditions could have a negative effect on our operations and could lead to us being
unable to exploit, or losing outright, our rights. This would have a negative impact on the Company and the value of our securities.



On October 26, 2011 the Federal Government
of Argentina announced that future export revenues derived from mining operations must be repatriated to Argentina and converted
to Argentine currency prior to being distributed either locally or back overseas. The distribution of earnings back overseas would
require the Argentine currency to be reconverted to foreign currency for repatriation. This overturns the benefits provided in
2002 and 2003-04 to all Argentine oil and mining companies, respectively, that exempted them from the currency repatriation laws
that apply to all other primary producers in the country. A preliminary analysis of the new decree by Extorre legal counsel in
Buenos Aires indicates that this does not change the current regulations that allow, subject to the Argentinean central bank rules,
the unlimited purchase and transfer of foreign currency to offshore destinations in consideration for debt repayment facilities
or approved and budgeted dividend payments.



Argentina’s economy has a history of instability
and future instability and uncertainty could negatively affect our ability to operate in the country.



Since 1995, Argentina’s economy has
suffered periods of instability, which include high inflation, capital flight, default on international debts and high government
budget deficits. Results of these problems included domestic disturbances and riots, government resignations and instability in
the currency and banking system. Official government estimates of inflation in Argentina in 2011 are 14%, however, unofficial estimates
place this figure at closer to 25-30%. Such disorder in the future, including significant increases in the rate of inflation, could
make it difficult or impossible for us to operate effectively in the country and require us to reduce or suspend our operations
in Argentina.



- 13 -







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 mineral exploration and, if warranted, development operations. The Argentine
Government has introduced measures requiring local sourcing of equipment and supplies wherever possible. The shortage of such
supplies, equipment and parts could have a material adverse effect on our ability to carry out its operations and therefore
limit or increase the cost of production.



Mining and resource exploration is inherently dangerous
and subject to conditions or events beyond our control, which could have a material adverse effect on its business and plans.



Mining and mineral exploration involves
various types of risks and hazards, including:



| | · | environmental hazards;
| | - | ----------------------

| | · | power outages;
| | - | --------------

| | · | metallurgical and other processing problems;
| | - | --------------------------------------------

| | · | unusual or unexpected geological formations;
| | - | --------------------------------------------

| | · | personal injury, flooding, fire, explosions, cave-ins, landslides and rock-bursts;
| | - | ----------------------------------------------------------------------------------

| | · | inability to obtain suitable or adequate machinery, equipment, or labour;
| | - | -------------------------------------------------------------------------

| | · | metals losses;
| | - | --------------

| | · | fluctuations in exploration, development and production costs;
| | - | --------------------------------------------------------------

| | · | labour disputes;
| | - | ----------------

| | · | unanticipated variations in grade;
| | - | ----------------------------------

| | · | mechanical equipment failure; and
| | - | ---------------------------------

| | · | periodic interruptions due to inclement or hazardous weather conditions.
| | - | ------------------------------------------------------------------------



These risks could result in damage to,
or destruction of, mineral properties, production facilities or other properties, personal injury, environmental damage, delays
in mining, increased production costs, monetary losses and possible legal liability. Insurance against certain environmental risks,
including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from production,
may be prohibitively expensive. We may suffer a material adverse effect on our business if we incur losses related to any significant
events that are not covered by our insurance policies.



The figures for our resources are estimates based
on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated.



Unless otherwise indicated, resource estimates
presented in this AIF and in our filings with securities regulatory authorities, press releases and other public statements that
may be made from time to time are based upon estimates made by independent geologists and our internal geologists. When making
determinations about whether to advance any of our projects to development, we must rely upon such estimated calculations as to
the mineral resources and grades of mineralization on our properties.



Estimates can be imprecise and depend upon
geological interpretation and statistical inferences drawn from drilling and sampling analysis, which may prove to be unreliable.
We cannot assure you that:



| | · | these estimates will be accurate;
| | - | ---------------------------------

| | · | resource or other mineralization estimates will be accurate; or
| | - | ---------------------------------------------------------------

| | · | this mineralization can be mined or processed profitably.
| | - | ---------------------------------------------------------



- 14 -







Any material changes in mineral resource estimates
and grades of mineralization will affect the economic viability of placing a property into production and a property’s return
on capital.



Because we have not completed feasibility
studies on our properties and have not commenced actual production, mineralization estimates, including resource estimates, for
our properties may require adjustments or downward revisions. In addition, the grade of ore ultimately mined, if any, may differ
from that indicated by our estimates and drill results. Minerals recovered in small scale tests may not be duplicated in large
scale tests under on-site conditions or in production scale.



The resource estimates contained in this
AIF have been determined and valued based on assumed future prices, cut-off grades and operating costs that may prove to be inaccurate.
Extended declines in market prices for gold, silver or other commodities may render portions of our mineralization and resource
estimates uneconomic and result in reduced reported mineralization or adversely affect the commercial viability determinations
we reach. Any material reductions in estimates of mineralization, or of our ability to extract this mineralization, could have
a material adverse effect on its share price and the value of our properties.



Land reclamation requirements for our properties
may be burdensome and expensive.



Although variable depending on location
and the governing authority, land reclamation requirements are generally imposed on mineral exploration companies (as well as companies
with mining operations) in order to minimize long term effects of land disturbance.



Reclamation may include requirements to:



| | · | control dispersion of potentially deleterious effluents;
| | - | --------------------------------------------------------

| | · | treat ground and surface water to drinking water standards; and
| | - | ---------------------------------------------------------------

| | · | reasonably re-establish pre-disturbance land forms and vegetation.
| | - | ------------------------------------------------------------------



In order to carry out reclamation obligations
imposed on us in connection with its potential development activities, we must allocate financial resources that might otherwise
be spent on further exploration and development programs. If we are required to carry out unanticipated reclamation work, our financial
position could be adversely affected.



Changes in the market price of gold, silver and
other metals, which in the past has fluctuated widely, will affect the profitability of our operations and financial condition.



Our long-term viability and future profitability
depend, in large part, upon the market price of gold, silver and other metals and minerals. The market price of gold, silver and
other metals is volatile and is impacted by numerous factors beyond our control, including:



| | · | expectations with respect to the rate of inflation;
| | - | ---------------------------------------------------

| | · | the relative strength of the US dollar and certain other currencies;
| | - | --------------------------------------------------------------------

| | · | interest rates;
| | - | ---------------

| | · | global or regional political or economic conditions;
| | - | ----------------------------------------------------

| | · | supply and demand for jewellery and industrial products containing metals;
| | - | --------------------------------------------------------------------------

| | · | sales by central banks and other holders, speculators and producers of gold, silver and other metals
in response to any of the above factors; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------

| | · | any executive order curtailing the production or sale of gold or silver.
| | - | ------------------------------------------------------------------------



- 15 -







We cannot predict the effect of these factors
on metal prices. A decrease in the market price of gold, silver, and other metals could affect the commercial viability of our
properties and our anticipated development of such properties in the future. Lower gold prices could also adversely affect our
ability to finance exploration and development of our properties.



Fluctuations in the availability and costs of labour
could negatively affect our operations and financial condition.



Employees at our various projects may be
a mix of union and non-union workers. At the present time a sufficient supply of qualified workers is available for our current
operations at our projects. The continuation of such supply depends upon a number of factors, including principally, the demand
occasioned by other competing companies. There can be no assurance that we will continue to be able to retain or attract qualified
employees. There is a risk that increased labour costs and labour litigation risks could have a material adverse effect on our
operating costs.



Our operations contain significant uninsured risks
which could negatively impact future profitability as we maintain no insurance against our operations.



Our exploration and development of our
mineral properties contains certain risks, including unexpected or unusual operating conditions including rock bursts, cave-ins,
flooding, fire and earthquakes. It is not always possible to insure against these risks. Should events such as these arise, they
could reduce or eliminate our assets and shareholder equity as well as result in increased costs and a decline in the value of
our securities. We expect to maintain only general liability and director and officer insurance but no insurance against our properties
or operations. We may decide to take out this insurance in the future if it is available at economically viable rates.



We have not surveyed any of our properties, have
no guarantee of clear title to our mineral properties and we could lose title and ownership of our properties which would have
a negative effect on our operations and valuation.



Only a preliminary legal survey of the
boundaries of some of our properties has been done and, therefore, in accordance with the laws of the jurisdictions in which these
properties are situated, their existence and area could be in doubt. If title is disputed, we will have to defend our ownership
through the courts. In the event of an adverse judgment, we would lose our property rights.



The natural resource industry is highly competitive,
which could restrict our growth.



We compete with other exploration resource
companies which have similar operations, and many competitors have operations, financial resources and industry experience greater
than ours. This may place us at a disadvantage in acquiring, exploring and developing properties. These other companies could outbid
us for potential projects or produce minerals at lower costs which would have a negative effect on our operations.



Mineral operations are subject to market forces
outside of our control which could negatively impact our operations.



The marketability of minerals is affected
by numerous factors beyond our control including market fluctuations, foreign exchange controls, government regulations relating
to prices, taxes, royalties, allowable production, imports, exports and supply and demand. One or more of these risk elements could
have an impact on the costs of our operations and if significant enough, reduce the profitability of our operations and threaten
our continuation.



- 16 -







We are subject to substantial environmental and
permitting requirements which could cause a restriction, suspension or abandonment of our operations.



Our current and anticipated future operations
require permits from various governmental authorities and such operations are and will be governed by laws and regulations governing
various elements of the mining industry. Our exploration activities in Argentina are subject to various Federal, Provincial
and local laws governing land use, the protection of the environment, prospecting, development, production, exports, taxes, labour
standards, occupational health, waste disposal and toxic substances. Such operations and exploration activities are also subject
to substantial regulation under these laws by governmental agencies and may require us to obtain permits from various governmental
agencies.



Exploration generally requires one form
of permit while development and production operations require additional permits. There can be no assurance that all permits which
we may require for future exploration or possible future development will be obtainable at all or on reasonable terms. In addition,
future changes in applicable laws or regulations could result in changes in legal requirements or in the terms of existing permits
applicable to us or our properties. This could have a negative effect on our exploration activities or our ability to develop our
properties.



We are also subject to environmental
regulations which require us to minimize impacts upon air, water, soils, vegetation and wildlife, as well as historical and
cultural resources, if present. In Argentina, prior to conducting operations, miners must submit an environmental impact
assessment to the provincial government, describing the proposed operation and the methods to be used to prevent
environmental damage. The Company submitted this report for the potential development of a 750 tonnes per day mine at Cerro
Moro to the provincial authorities in Argentina in September 2010 and received approval of  the report in May 2011.
Additional approvals for revisions or updates to the environmental impact assessment are still required for proposed
development at Cerro Moro. Approval must be received from the applicable bureau and/or department, which will also conduct
ongoing monitoring of operations before exploration can begin. In addition, landowners must consent to any access and work
within their property. While to date we have been able to secure necessary access agreements from landowners in areas where
our properties are located, if in the future a landowner believes that our activities are producing environmental damage, the
landowner could apply to the courts seeking damages or requesting an injunction or suspension of our activities.



On June 20, 2007, legislation was passed
by the Provincial government, in Mendoza Argentina, prohibiting the use of chemicals typically used in the extraction of gold and
other metals in the province. The legislation effectively puts our Don Sixto project on hold, unless the government amends the
law or our lawsuit to have the law declared unconstitutional is successful.



As we are presently at the exploration
and development stage, the disturbance of the environment is limited and the costs of complying with environmental regulations
are minimal. However, if operations result in negative effects upon the environment, government agencies will likely require us
to provide remedial actions to correct the negative effects.



Failure to comply with applicable laws,
regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities
causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of
additional equipment or other remedial actions.



- 17 -







Regulations and pending legislation governing issues
involving climate change could result in increased operating costs, which could have a material adverse effect on our business.



A number of governments or governmental
bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential
impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, and
our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting
and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our
ability to compete with companies situated in areas not subject to such limitations. Given the emotion, political significance
and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation
will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased
awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies
in our industry could harm our reputation. The potential physical impacts of climate change on our operations are highly uncertain,
and would be particular to the geographic circumstances in areas in which it operates. These may include changes in rainfall and
storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact
the cost, production and financial performance of our operations.



We depend upon key management employees, the absence
of which would have a negative effect on our operations.



We depend on the business and technical
expertise of our management and key personnel. It is unlikely that this dependence will decrease in the near term. As our operations
expand, additional general management resources will be required. We may not be able to attract and retain additional qualified
personnel and this would have a negative effect on our operations. We maintain no “key man” life insurance on any members
of our management or directors.



Certain of our officers and directors may have conflicts
of interest, which could have a negative effect on our operations.



Certain of our directors and officers are
also directors and/or officers and/or shareholders of other natural resource companies. While we are engaged in the business of
exploring for and exploiting mineral properties, such associations may give rise to conflicts of interest from time to time. Our
directors are required by law to act honestly and in good faith with a view to uphold the best interests of the Company and to
disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting
of our board of directors, any director in a conflict must disclose his interest and abstain from voting on the matter. In determining
whether or not we will participate in any project or opportunity, our directors will primarily consider the degree of risk to which
we may be exposed and our financial position at the time.



Financing Risks



We have a history of losses and a limited operating
history. We will require additional equity financings, which will cause dilution to existing shareholders.



We have limited operating history and have
limited financial resources and no operating cash flow. As of the end of December 31, 2011, our historical net loss under International
financial reporting standards totalled $163,362,000. Continued exploration efforts will require additional capital to maintain
and to expand exploration on our principal exploration properties. Additionally, if we decide to proceed with a feasibility study
on any of our primary properties, substantial additional funds will be required to complete the study as well as to complete the
acquisition of the projects held under option agreements. Late in fiscal year 2008, resulting from the on-going credit crisis centered
in the United States, many economies including that of Canada went into a recession. The US and Canadian economies have shown some
signs of recovery but in the meantime the economies and credit ratings of many member States in the European Economic Union have
worsened considerably. These developments impacted investor confidence and reduced the availability of risk capital and project
financing. If we are unable to obtain sufficient financing in the future, we might have to dramatically slow exploration and development
efforts and/or lose control of our projects. If equity financings are required, then such financings could result in significant
dilution to existing or prospective shareholders.



- 18 -







We have a lack of cash flow sufficient to sustain
operations and do not expect to begin receiving operating revenue in the foreseeable future.



None of our properties have advanced to
the commercial production stage and we have no history of earnings or cash flow from operations. Although all persons who will
be involved in the management of the Company have had long experience in their respective fields of specialization, we have no
operating history upon which prospective investors can evaluate our performance. We have paid no dividends on our common shares
since incorporation and do not anticipate doing so in the foreseeable future. Any future additional equity financing would cause
dilution to current shareholders. If we do not have sufficient capital for our operations, management would be forced to reduce
or discontinue our activities, which would have a negative effect on the value of our securities.



We operate in Argentina and are subject to currency
fluctuations which could have a negative effect on our operating results.



Our operations are located in Argentina
which makes us subject to foreign currency fluctuation as our accounts will be maintained in Canadian dollars while certain expenses
will be enumerated in US dollars, Australian dollars and the local currency. Such fluctuations may adversely affect our financial
position and results. Management may not take any steps to address foreign currency fluctuations that will eliminate all adverse
effects and, accordingly, we may suffer losses due to adverse foreign currency fluctuations.



Global financial conditions may adversely impact
operations and the value and price of our common shares.



Global financial conditions have been subject
to increased volatility and numerous financial institutions have either gone into bankruptcy or have had to be rescued by governmental
authorities. Access to public financing has been negatively impacted by both sub-prime mortgages and the liquidity crisis affecting
the asset-backed commercial paper market. These factors may impact our ability to obtain equity or debt financing in the future
and, if obtained, on terms favourable to us. If these increased levels of volatility and market turmoil continue, our operations
could be adversely impacted and the value and the price of our common shares could be adversely affected.



Risks Relating to our Common Shares



The market for our common shares is subject to volume
and price volatility which could negatively affect a shareholder’s ability to buy or sell our common shares.



The market for our common shares may be
highly volatile for reasons both related to our performance or events pertaining to the industry (i.e. mineral price fluctuation/high
production costs/accidents) as well as factors unrelated to us or our industry such as economic recessions and changes to legislation
in the countries in which we operate. In particular, market demand for products incorporating minerals in their manufacture fluctuates
from one business cycle to the next, resulting in changes in demand for the mineral and an attendant change in the price for the
mineral. Since our listing on the Toronto Stock Exchange, the price of our common shares has fluctuated between $2.04 and $14.57
on the TSX and $4.23 and $15.42 on the NYSE Amex. Our common shares can be expected to be subject to volatility in both price and
volume arising from market expectations, announcements and press releases regarding our business, and changes in estimates and
evaluations by securities analysts or other events or factors. In recent years, the securities markets in the US and Canada have
experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly small-capitalization
companies such as Extorre, have experienced wide fluctuations that have not necessarily been related to the operations, performances,
underlying asset values, or prospects of such companies. For these reasons, our common shares can also be subject to volatility
resulting from purely market forces over which we will have no control such as that experienced recently resulting from the on-going
credit crisis centered in the United States. Further, despite the existence of a market for trading our common shares in Canada
and the United States, our shareholders may be unable to sell significant quantities of our common shares in the public trading
markets without a significant reduction in the price of the stock.



- 19 -







The Company could be deemed a passive foreign investment
company which could have negative consequences for US investors.



The Company could be classified as a Passive
Foreign Investment Company (“PFIC”) under the US tax code. If the Company is declared a PFIC, then owners of the Company’s
common shares who are US 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 distribution or gain, unless the taxpayer makes a qualified electing fund (“QEF”) election or
a mark-to-market election with respect to the Company’s common shares. A US taxpayer who makes a QEF election generally must
report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the Company
is classified as a PFIC, whether or not the Company distributes any amounts to its shareholders.



Differences in United States and Canadian reporting
of reserves and resources.



The disclosure in this AIF, including the
documents incorporated herein by reference, uses terms that comply with reporting standards in Canada. The terms “mineral
resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral
resource” are defined in and required to be used by the Company pursuant to NI 43-101; however, these terms are not defined
terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the
SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted
into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their
economic and legal feasibility. It cannot be assumed that all or any part of the measured mineral resources, indicated mineral
resources, or inferred mineral resources will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility, pre-feasibility studies or other economic studies, except in rare cases.



Investors are cautioned not to assume that
all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces”
in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization
that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference
to unit measures.



Further, the terms “mineral reserve”,
“proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance
with NI 43-101 and the CIM Standards. These definitions differ from the definitions in SEC Industry Guide 7. Under SEC Industry
Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year
historical average price is used in any reserve or cash flow analysis to designate reserves and all necessary permits or governmental
authorizations must be filed with the appropriate governmental authority.



- 20 -







Accordingly, information contained in this
AIF and the documents incorporated by reference herein containing descriptions of the Company’s mineral deposits may not
be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements
under the United States federal securities laws and the rules and regulations thereunder.



US security holders may not be able to enforce their
civil liabilities against us or our directors, controlling persons and officers.



It may be difficult to bring and enforce
suits against the Company in the United States. The Company is a corporation incorporated in British Columbia under the Business
Corporations Act. A majority of the Company’s directors and officers are residents of Canada and all of the Company’s
assets and its subsidiaries are located outside of the US. Consequently, it may be difficult for US investors to effect service
of process in the US upon those directors or officers who are not residents of the US, or to realize in the US upon judgments of
US courts predicated upon civil liabilities under US securities laws. There is substantial doubt whether an original action could
be brought successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities under
the United States Securities Act of 1933, as amended.



Increased costs and compliance risks as a result
of being a public company.



Legal, accounting and other expenses associated
with public company reporting requirements have increased significantly in the past few years. The Company anticipates that general
and administrative costs associated with regulatory compliance will continue to increase with ongoing compliance requirements under
the Sarbanes-Oxley Actof 2002, as amended (“Sarbanes-Oxley”), the Dodd-Frank Wall Street Reform and Consumer
Protection Act, as well as any new rules implemented by the SEC, Canadian Securities Administrators, the NYSE Amex Equities and
the TSX in the future. These rules and regulations have significantly increased the Company’s legal and financial compliance
costs and made some activities more time-consuming and costly. There can be no assurance that the Company will continue to effectively
meet all of the requirements of these regulations, including Sarbanes-Oxley Section 404andNational Instrument 52-109Certification of Disclosure in Issuers’ Annual and Interim Filings(“NI 52-109”). Any failure to effectively
implement internal controls, or to resolve difficulties encountered in their implementation, could harm the Company’s operating
results, cause the Company to fail to meet reporting obligations or result in management being required to give a qualified assessment
of the Company’s internal controls over financial reporting or the Company’s independent auditors providing an adverse
opinion regarding management’s assessment. Any such result could cause investors to lose confidence in the Company’s
reported financial information, which could have a material adverse effect on the trading price of the common shares. These rules
and regulations have made it more difficult and more expensive for it to obtain director and officer liability insurance, and the
Company may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or
similar coverage in the future. As a result, it may be more difficult for the Company to attract and retain qualified individuals
to serve on its board of directors or as executive officers. If the Company fails to maintain the adequacy of its internal control
over financial reporting, the Company’s ability to provide accurate financial statements and comply with the requirements
of Sarbanes-Oxley and/or NI 52-109 could be impaired, which could cause the Company’s stock price to decrease.



- 21 -







As a “foreign private issuer”, the Company
is exempt from Section 14 proxy rules and Section 16 of the Securities Exchange Act of 1934.



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 “US Exchange
Act”). Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the
US Exchange Act pursuant to Rule 3a12-3 of the US 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.



cerro moro - PRINCIPAL PROJECT



Acquisition Terms



Pursuant to an agreement dated December
30, 2003 Estelar, a wholly-owned subsidiary of Extorre, secured the right to acquire a 100% interest in the Cerro Moro Project
by paying US$ 100,000 to Cerro Vanguardia Sociedad Anonima (“CVSA”) and incurring US$ 3 million in expenditures, including
the completion of 8,000 metres of drilling. The interest is subject to a 2% net smelter royalty in favour of CVSA. Estelar exercised
its right to acquire the properties in 2007.



On March 3, 2009, Estelar announced that
it had entered into a definitive agreement (the “Fomicruz Agreement”) with Fomento Minera de Santa Cruz Sociedad del
Estado (“Fomicruz”), a company owned by the Government of Santa Cruz Province, Argentina, over ten Fomicruz concessions
located adjacent to the Cerro Moro Project. The Fomicruz Agreement sets out the key terms for Fomicruz’s participation in
the future development of the Cerro Moro Project, and provides access to Fomicruz’s significant landholding adjacent to the
Cerro Moro Project. By spending a total of US$ 10 million on exploration expenditures on the concessions the Company would acquire
an 80% interest in the Fomicruz properties. In addition, Fomicruz will acquire a 5% participating interest in the Cerro Moro Project
following the granting of all the required exploitation concessions and permits to commence mining. Estelar will finance and manage
all exploration and development costs of the Cerro Moro Project and on the Fomicruz properties, and Fomicruz will repay an agreed
amount of those costs from 50 percent of its share of net revenue from future operations. As of the effective date of this AIF,
neither Estelar nor Fomicruz had satisfied the requirements to earn an interest in the other’s property.



Summary



The following information on
the Cerro Moro Project is based on the Summary section of the PEA which is excerpted from Sections 4 to 25 of the
PEA which sections are specifically incorporated by reference into this AIF. A copy of the PEA may be reviewed under the
Company’s profile on the SEDAR website at www.sedar.com.



NCL Ingeniería y
Construcción Ltda. (“NCL”) was responsible for the compilation of information and preparation of the PEA.
Significant contributions were also received from Cube (Geology and Mineral Resource Estimates), GR Engineering Services Ltd.
(Metallurgy and Process Plant Design), and Ausenco Vector (“Ausenco”; Environmental, Hydrology, and Tailings
Storage Facility) all of whom  are qualified persons under NI 43-101. Mr. Eric Roth is the QP responsible for reviewing the
technical disclosure contained in this section.



- 22 -







Readers are directed to review the PEA
which qualifies the following disclosure. The following summary is not exhaustive. The PEA is intended to be read as a whole, and
sections should not be read or relied upon out of context. The PEA contains the expression of the professional opinions of a “qualified
person” as defined under NI 43-101 based upon information available at the time of preparation of the PEA. The following
disclosure, which is derived from the PEA, is subject to the assumptions and qualifications contained in the PEA.



Introduction



This PEA describes the Cerro Moro Project,
which is located in the Deseado Department, Santa Cruz Province, Argentina. The Project is held by Extorre through its local subsidiary
Estelar.



Cerro Moro consists of a series of low-
to immediate-sulfidation epithermal-style veins with locally high grade gold-silver mineralization, especially in the Escondida
zone. To date, NI 43-101 compliant mineral resources have been delineated in a total of 8 sectors (Escondida, Loma Escondida, Zoe,
Martina, Carla, Esperanza-Nini, Gabriela, and Deborah) all of which are located within the central portion of the Cerro Moro tenements.
This PEA considers the potential development options for the Project and is based upon the November, 2011, NI 43-101-compliant
mineral resource estimate as prepared by Cube.



The PEA indicates that Extraction
of the mineral inventory at Cerro Moro could potentially be achieved using a combination of open pit and
underground (bench-and-fill) mining techniques. Treatment of the mineral inventory is proposed through a processing plant
that includes a standard crushing / milling circuit, flotation and gravity recovery stages, and a Merrill Crowe (zinc
cementation) circuit for the recovery of precious metals from leach solutions. Throughput rates of 1,300 tonnes per day
(Option A) and 1,150 tonnes per day (Option B) are considered and compared. Metallurgical testwork completed to date has
indicated very high recoveries of both gold (95%) and silver (93%) from Cerro Moro mineralization. The projected precious
metal production over the life of the Project is 848,000 ounces of gold and 47.2 million ounces of silver, with economic
modelling (using the base case metal price assumptions of US$ 1,320 / ounce for gold and US$ 26 / ounce for silver)
indicating that gold is expected to contribute approximately 48% of the projected future revenue stream for Cerro Moro and
silver the remaining 52%.



Property Location



The Cerro Moro Project comprises eighteen
tenements covering an area of approximately 177 square kilometers. Sixteen of these tenements are mining claims (Manifestaciones
de Descubrimiento), with the remaining two being exploration claims (Cateos de Exploracion). The Cerro Moro concessions are currently
held 100% by Estelar, and are subject to a 2% NSR payable to CVSA on any future metal production. Provincial mining
entity Fomicruz also possesses the right to receive a 5% participating interest in the Project once all permits required to begin
production are received.



The Project is located 70 km (90 km by
road) southwest of the port city of Puerto Deseado, Santa Cruz Province, southern Argentina (Figure 1). The Project area is geographically
centred at approximately 48° 01’ 55” south latitude and 66° 33’ 45” west longitude. Access to the
Project is via 20 km of paved road (Provincial Highway 281) from Puerto Deseado to the locality of Tellier, followed by 70 km of
all-weather gravel road (Provincial Route 47) to the Project turnoff. The Project area is characterized by low altitudes (70 m
to 150 m above mean sea level), flat to undulating relief, and a cool, dry climate typical of the Patagonian pampa (plains).



- 23 -













Figure 1	Location and Access Map
(Source Extorre, 2011)



Geology and Mineralization



The polymetallic gold-silver mineralization
at Cerro Moro is of the low- to intermediate-sulphidation epithermal vein type. Individual prospects vary from simple, single veins
to complex vein systems with spur and cymoid loop structures. Limited quartz stockwork veinlets are also present peripheral to
the main veins.



The mineralization is hosted in sub-volcanic
and volcanic rocks, which are interpreted to belong to the Jurassic age Chon Aike and La Matilde Formations. In general, the Project
area is composed of many structural blocks produced by a conjugate set of north-west and north-east faults. Both fault directions
contain mineralized quartz veins. In the eastern and central part of the Project, north-easterly trending faults control the mineralization
at the Deborah, Belen, Maria, Michelle, Barbara and Ana prospects. In the central and western part of the Project, north-westerly
trending structures are the dominant control to the mineralization at the Escondida, Carla, Esperanza, Nini, Gabriela, Carolene,
Lucia, Dora, Moro, Florencia, Natalia, Tres Lomas and Lala prospects. The Escondida Structure has a much larger segment of east
west strike in the area of the recently discovered Zoe Shoot. Several secondary eastwest structures occur between the primary north-west
structures, and these control the mineralization at the Patricia, Loma Escondida and Carlita prospects. The width of the veins
varies generally from 1 to 5 m, but veins may locally attain widths of up to 10 m. The strike length of individual veins is variable,
generally between 200 m and 1 kilometre. The Escondida structure has been defined by drilling for more than 8 km, and remains open
along strike and also at depth.



- 24 -







Improved geological, structural and mineralization
models developed over the past two years have led to the discovery of numerous high-grade gold-silver polymetallic veins at Cerro
Moro. These base metal anomalous Au-Ag veins tend to be recessive and are represented on the surface by either very poorly outcropping
quartz vein material or none at all. Extensive cover of Tertiary marine sediments and Quaternary gravels also hinder the location
or extensions of some of the veins and targets.



Detailed ground magnetic survey data, coupled
with IP and resistivity data, has highlighted potential targets that are initially tested via trenching and/or scout drilling,
as in the case of the Escondida prospect.



Presently structures in northwest-southeast
and east-west orientation are the preferred exploration targets, the latter orientation being interpreted to be due to tensional,
pull apart structures resulting from minor strike-slip movement of the larger north-west structures.



The discontinuous mineralized shoots within
the larger structures appear to be locally controlled by changes in strike, which are thought to have produced dilational flexures
and jogs allowing for greater fluid flow. Changes in wall-rock lithology, along the structures, may be an important factor in controlling
the local strike direction of the structures. It has also been noted that the brittle, felsic units have a tendency to produce
stronger stockwork style development around the main structures than the intermediate units.



Exploration



Exploration activities at the Project typically
include a combination of geological mapping, geochemical sampling, geophysical surveys, and drilling. The exploration works completed
since December 2010 include infill drilling and exploration drilling, Table 1 chronologically summarises all exploration work undertaken
since 1st January 2011 up until 31st January 2012.



|Date                       |  | Extorre Exploration Works                                                                                                                                                                                                                                              
|-------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Jan 2011                   |  | Complete infill drilling Martina, Loma Escondida, Gabriela with the aim to convert Inferred resource category mineralization to higher confidence categories. Exploration drilling to extend Lucia, Gabriela Loma Escondida and Esperanza. Scout drilling at Carolene  
|Feb 2011 to end March 2011 |  | Exploration drilling to extend Gabriela, Esperanza- Nini, Escondida far west, Michelle, Loma Escondida. Scout drilling Agostina Gabriela NW, Belen and Zoe (discovery of Zoe) Regional drilling Union domes                                                            
|April 2011 to end May 2011 |  | Infill drilling at Carla and Gabriela SE. Exploration drilling at Zoe, Tres Lomas and Gabriela. Scout drilling Agostina, Deborah parallel, Loma Escondida and Zoe extensions                                                                                           
|June 2011 to Jan 2012      |  | Infill drilling at Zoe, Carla, and Gabriela. Exploration drilling at Zoe, Tres Lomas, Esperanza, Escondida, Loma Escondida and Gabriela. Scout drilling Carlita, Lala, Deborah parallel, Deborah Termination Structure, Mosquito, Alejandra, Romina, Lechuzo and Belen.



Table 1	Summary of Exploration
Work undertaken by Extorre -Jan 2011 to Jan 2012



- 25 -







Mineral Resource Estimation



The PEA includes mineral resources that
are not mineral reserves and therefore do not have demonstrated economic viability.



The November 2011 mineral resource
estimate for the Project is the third undertaken by Cube of Perth, and supersedes a previous estimate that was announced on
August 4, 2011. The mineral resource estimates were prepared by Mr. David (Ted) Coupland, MAusIMM(CP), Director and Principal
Geostatistician of Cube. Mineral resources have been classified and reported in accordance with the CIM guidelines (CIM 2011)
and NI 43-101. Mr. Ted Coupland is ‘independent’ and a ‘qualified person’ as defined by NI
43-101.



Updated mineral resource estimates were
compiled for the Gabriela and Esperanza prospects and maiden mineral resource estimates were compiled for the Zoe, Martina, Carla
and Nini prospects. No changes have been made to the existing Escondida, Loma Escondida and Deborah mineral resource estimates.



All drilling data available as of October
10, 2011 was used for the November 2011 mineral resource estimation. Additional drilling data received subsequent to this date
including geological logging and core photography was used to validate the geological interpretations where possible.



Cube has classified a substantial proportion
of the Cerro Moro mineral resources as “indicated” where drill spacing is sufficient to demonstrate acceptable confidence
in the geometry, continuity and grade of the mineralized zones. Surrounding areas have been classified as inferred where drill
spacing is wider or where unresolved geological complexity exists.



A summary of the Cerro Moro indicated and
inferred mineral resources above a cut-off of 1 ppm gold equivalent are shown in Table 2 and Table 3 respectively.



|Zone      |  | Tonnes |           |  | Gold (ppm) |  |      | Silver (ppm) |  |  | Gold Equivalent Grade* (ppm) |  |  | Gold (ounces) |      |  | Silver (ounces) |  |         | Gold Equivalent Ounces** | 
|--------- |  | ------ | --------- |  | ---------- |  | ---- | ------------ |  |  | ---------------------------- |  |  | ------------- | ---- |  | --------------- |  | ------- | ------------------------ | 
|Escondida |  |        | 620,000   |  |            |  | 18.8 |              |  |  | 829.2                        |  |  |               | 35.4 |  |                 |  | 374,000 |                          | 
|Loma Esc  |  |        | 44,000    |  |            |  | 18.4 |              |  |  | 919.5                        |  |  |               | 36.8 |  |                 |  | 26,000  |                          | 
|Gabriela  |  |        | 1,642,000 |  |            |  | 1.5  |              |  |  | 226.1                        |  |  |               | 6.0  |  |                 |  | 79,000  |                          | 
|Zoe       |  |        | 105,000   |  |            |  | 27.2 |              |  |  | 2,614.5                      |  |  |               | 79.5 |  |                 |  | 91,000  |                          | 
|Carla     |  |        | 15,000    |  |            |  | 16.0 |              |  |  | 701.2                        |  |  |               | 30.0 |  |                 |  | 7,000   |                          | 
|Total     |  |        | 2,425,000 |  |            |  | 7.4  |              |  |  | 498.8                        |  |  |               | 17.4 |  |                 |  | 578,000 |                          | 



Table 2	Cerro Moro Indicated Mineral
Resources above 1 ppm Gold Equivalent



|Zone           |  | Tonnes |           |  | Gold (ppm) |  |      | Silver (ppm) |  |  | Gold Equivalent Grade* (ppm) |  |  | Gold (ounces) |      |  | Silver (ounces) |  |         | Gold Equivalent Ounces** | 
|-------------- |  | ------ | --------- |  | ---------- |  | ---- | ------------ |  |  | ---------------------------- |  |  | ------------- | ---- |  | --------------- |  | ------- | ------------------------ | 
|Escondida      |  |        | 508,000   |  |            |  | 4.3  |              |  |  | 164.8                        |  |  |               | 7.6  |  |                 |  | 70,000  |                          | 
|Loma Esc       |  |        | 13,000    |  |            |  | 9.7  |              |  |  | 595.4                        |  |  |               | 21.6 |  |                 |  | 4,000   |                          | 
|Zoe            |  |        | 1,248,000 |  |            |  | 4.1  |              |  |  | 280.3                        |  |  |               | 9.8  |  |                 |  | 167,000 |                          | 
|Martina        |  |        | 293,000   |  |            |  | 13.0 |              |  |  | 60.3                         |  |  |               | 14.2 |  |                 |  | 123,000 |                          | 
|Carla          |  |        | 2,000     |  |            |  | 9.5  |              |  |  | 390.4                        |  |  |               | 17.3 |  |                 |  | 1,000   |                          | 
|Gabriela       |  |        | 331,000   |  |            |  | 1.3  |              |  |  | 219.7                        |  |  |               | 5.7  |  |                 |  | 14,000  |                          | 
|Esperanza-Nini |  |        | 1,773,000 |  |            |  | 1.8  |              |  |  | 144.3                        |  |  |               | 4.7  |  |                 |  | 105,000 |                          | 
|Deborah        |  |        | 578,000   |  |            |  | 2.4  |              |  |  | 48.1                         |  |  |               | 3.4  |  |                 |  | 45,000  |                          | 
|Total          |  |        | 4,747,000 |  |            |  | 3.5  |              |  |  | 172.0                        |  |  |               | 6.9  |  |                 |  | 528,000 |                          | 



Table 3	Cerro Moro Inferred Mineral
Resources above 1 ppm Gold Equivalent



- 26 -







*Gold equivalent values have been calculated
by Extorre on the basis of the following parameters:



| | · | Long term gold price US$ 1,320/Oz
| | - | ---------------------------------

| | · | Long term silver price US$ 26/Oz
| | - | --------------------------------

| | · | Metallurgical recovery gold 100%
| | - | --------------------------------

| | · | Metallurgical recovery silver 100%
| | - | ----------------------------------



The gold equivalent grade is calculated
by dividing the silver grade (ppm) by 50 (approximate ratio of gold/silver US$ value) and adding it to the gold grade (ppm).



**The gold equivalent ounces are calculated
by dividing the total silver ounces by 50 and adding this value to the total gold ounces.



Preliminary Mining Studies



This PEA is based on Cube’s November,
2011, mineral resource statement for Cerro Moro which includes both indicated and inferred category mineral resources.



The reader is cautioned that the PEA
is a preliminary economic assessment and it includes inferred mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty
that the preliminary assessment will be realized. No mineral reserves have been estimated.



The mining study in the PEA utilizes a
combination of open pit and underground mining methods. The pit underground interface is determined by optimising the net value
of the (mined) mineralization after mining costs have been considered. A number of different production scenarios were considered,
ranging from 1,000 tpd to 1,500 tpd. However, above 1,300 tpd it becomes progressively more difficult to sustain a consistent output
with the current resource. This is due to the low tonnes per metre and very high development rates associated with narrow vein
mining. Both 1,300 tpd (Option A) and 1,150 tpd (Option B) are considered sustainable with the current resource and mining methods.
However, the remote location of the mine and the limited mining facilities and infrastructure in country, make it worth considering
the lower production rate.



The open pits will be mined by a conventional
(owner-operated) method, using backhoe excavators, front end loaders and 50t mining trucks, together with the usual auxiliary support
fleet such as graders bulldozers etc to produce a total material flow of between 3.5 and 7.3 million tonnes per year for the 1,300
tpd option, and between 2.8 and 7.3 million tonnes per year for the 1,150 tpd option.



The average open pit operating cost is
estimated to be US$ 2.46 per tonne of mined material for the 1,300 tpd option and US$ 2.39 per tonne for the 1,150 tpd option.



In addition to the open pit study, a portion
of the underground mineral resources directly below the open pits were considered to be mined using a bench and fill system. The
mining analysis carried out indicate a total of 2.3 million tonnes at 7.55 g/t Au and 425.8 g/t Ag can be considered as underground
mine resources.



- 27 -















Underground mining at Cerro Moro will be
a modified Bench and Fill method that utilizes a primary decline, spiral ramps and cross cuts to access the mineralized horizon.
Mining levels are spaced 12 m apart with 8 m high stope benches. The mineralized veins are drilled using hydraulic DTH equipment
and the blasted mineral is removed using remote-controlled LHD’s. The mined-out stopes are backfilled with waste from development
or the surface waste dumps.



The higher grade material at Cerro Moro
comprises most of the indicated resources while the material estimated to have lower grades is mostly in the inferred category.
The mining plan maximises the use of the higher grade material in the early years of the Project, leaving the lower grade (inferred
material) to make up the final years of production.





|                      |  |  |           |  |  |  |         | pp |  |  | Year 1 |  |  | Year 2 |         |  | Year 3 |  |         | Year 4 |  |  | Year 5  |  |  | Year 6 |         |  | Year 7 |  |         | Year 8 |  |  | Year 9  |  | Total
|--------------------- |  |  | --------- |  |  |  | ------- | -- |  |  | ------ |  |  | ------ | ------- |  | ------ |  | ------- | ------ |  |  | ------- |  |  | ------ | ------- |  | ------ |  | ------- | ------ |  |  | ------- |  | -----
|                      |  |  | Escondida |  |  |  | ktonnes |    |  |  | 27 100 |  |  |        | 232 340 |  |        |  | 252 881 |        |  |  | 177 348 |  |  |        | 143 688 |  |        |  | 76 804  |        |  |  | 17 362  |  |      
|                      |  |  |           |  |  |  | Au g/t  |    |  |  | 19.6   |  |  |        | 14.9    |  |        |  | 12.1    |        |  |  | 13.9    |  |  |        | 13.3    |  |        |  | 12.9    |        |  |  | 10.6    |  |      
|                      |  |  |           |  |  |  | Ag g/t  |    |  |  | 1202.4 |  |  |        | 613.4   |  |        |  | 453.9   |        |  |  | 719.6   |  |  |        | 588.5   |  |        |  | 430.8   |        |  |  | 342.5   |  |      
|                      |  |  | Zoe       |  |  |  | ktonnes |    |  |  |        |  |  |        | 29 800  |  |        |  | 120 200 |        |  |  | 142 800 |  |  |        | 132 075 |  |        |  | 204 525 |        |  |  | 96 602  |  |      
|                      |  |  |           |  |  |  | Au g/t  |    |  |  |        |  |  |        | 9.7     |  |        |  | 7.4     |        |  |  | 7.3     |  |  |        | 8.4     |  |        |  | 7.4     |        |  |  | 9.9     |  |      
|                      |  |  |           |  |  |  | Ag g/t  |    |  |  |        |  |  |        | 914.4   |  |        |  | 648.2   |        |  |  | 475.9   |  |  |        | 580.8   |  |        |  | 626.6   |        |  |  | 685.6   |  |      
|                      |  |  | Gabriela  |  |  |  | ktonnes |    |  |  |        |  |  |        |         |  |        |  | 79 796  |        |  |  | 200 271 |  |  |        | 135 200 |  |        |  | 144 144 |        |  |  | 141 144 |  |      
|                      |  |  |           |  |  |  | Au g/t  |    |  |  |        |  |  |        |         |  |        |  | 2.0     |        |  |  | 2.4     |  |  |        | 2.2     |  |        |  | 2.0     |        |  |  | 1.5     |  |      
|                      |  |  |           |  |  |  | Ag g/t  |    |  |  |        |  |  |        |         |  |        |  | 272.0   |        |  |  | 368.2   |  |  |        | 354.5   |  |        |  | 321.8   |        |  |  | 242.1   |  |      
|Combined              |  |  | Esperanza |  |  |  | ktonnes |    |  |  |        |  |  |        | 127 066 |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  | 70 717  |        |  |  | 136 867 |  |      
|Open Pit /            |  |  |           |  |  |  | Au g/t  |    |  |  |        |  |  |        | 1.5     |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  | 3.0     |        |  |  | 2.7     |  |      
|Underground Mine Plan |  |  |           |  |  |  | Ag g/t  |    |  |  |        |  |  |        | 132.7   |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  | 202.3   |        |  |  | 223.6   |  |      
|                      |  |  | Carla     |  |  |  | ktonnes |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |      
|                      |  |  |           |  |  |  | Au g/t  |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |      
|                      |  |  |           |  |  |  | Ag g/t  |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |      
|                      |  |  | Martina   |  |  |  | ktonnes |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  | 45 300  |  |  |        | 95 600  |  |        |  | 85 500  |        |  |  | 53 500  |  |      
|                      |  |  |           |  |  |  | Au g/t  |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  | 9.0     |  |  |        | 14.1    |  |        |  | 12.3    |        |  |  | 10.0    |  |      
|                      |  |  |           |  |  |  | Ag g/t  |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  | 52.6    |  |  |        | 61.5    |  |        |  | 48.7    |        |  |  | 41.3    |  |      
|                      |  |  | Deborah   |  |  |  | ktonnes |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |      
|                      |  |  |           |  |  |  | Au g/t  |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |      
|                      |  |  |           |  |  |  | Ag g/t  |    |  |  |        |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |      
|                      |  |  | TOTAL     |  |  |  | ktonnes |    |  |  | 27 100 |  |  |        | 389 206 |  |        |  | 452 877 |        |  |  | 565 719 |  |  |        | 506 564 |  |        |  | 581 689 |        |  |  | 445 476 |  |      
|                      |  |  |           |  |  |  | Au g/t  |    |  |  | 19.6   |  |  |        | 10.1    |  |        |  | 9.1     |        |  |  | 7.8     |  |  |        | 9.2     |  |        |  | 7.0     |        |  |  | 5.1     |  |      
|                      |  |  |           |  |  |  | Ag g/t  |    |  |  | 1202.4 |  |  |        | 479.5   |  |        |  | 473.4   |        |  |  | 480.3   |  |  |        | 424.6   |  |        |  | 388.7   |        |  |  | 312.4   |  |      





Table 4	Mine Schedule Summary for
1,300 tpd (Option A)



- 28 -













|                      |  |           |  |  |         |  | pp |  |        | Year 1 |  |  | Year 2  |  |  | Year 3 |         |  | Year 4 |  |         | Year 5 |  |  | Year 6  |  |  | Year 7 |         |  | Year 8 |  |         | Year 9 |  |  | Total   | 
|--------------------- |  | --------- |  |  | ------- |  | -- |  | ------ | ------ |  |  | ------- |  |  | ------ | ------- |  | ------ |  | ------- | ------ |  |  | ------- |  |  | ------ | ------- |  | ------ |  | ------- | ------ |  |  | ------- | 
|                      |  | Escondida |  |  | ktonnes |  |    |  | 27 264 |        |  |  | 212 452 |  |  |        | 296 289 |  |        |  | 229 674 |        |  |  | 118 574 |  |  |        | 33 500  |  |        |  | 9 770   |        |  |  |         | 
|                      |  |           |  |  | Au g/t  |  |    |  | 19.5   |        |  |  | 16.1    |  |  |        | 13.9    |  |        |  | 13.3    |        |  |  | 8.6     |  |  |        | 11.3    |  |        |  | 7.6     |        |  |  |         | 
|                      |  |           |  |  | Ag g/t  |  |    |  | 1196.2 |        |  |  | 915.9   |  |  |        | 528.9   |  |        |  | 426.0   |        |  |  | 338.6   |  |  |        | 454.8   |  |        |  | 406.8   |        |  |  |         | 
|                      |  | Esperanza |  |  | ktonnes |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  | 28 804  |  |  |        | 168 979 |  |        |  | 136 687 |        |  |  | 103 466 | 
|                      |  | Nini      |  |  | Au g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  | 1.6     |  |  |        | 2.1     |  |        |  | 2.7     |        |  |  | 3.4     | 
|                      |  |           |  |  | Ag g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  | 150.5   |  |  |        | 158.8   |  |        |  | 223.6   |        |  |  | 262.5   | 
|                      |  | Zoe       |  |  | ktonnes |  |    |  |        |        |  |  |         |  |  |        | 13 400  |  |        |  | 104 900 |        |  |  | 142 675 |  |  |        | 194 425 |  |        |  | 143 002 |        |  |  | 112 200 | 
|                      |  |           |  |  | Au g/t  |  |    |  |        |        |  |  |         |  |  |        | 9.6     |  |        |  | 8.5     |        |  |  | 6.3     |  |  |        | 8.3     |  |        |  | 7.5     |        |  |  | 9.6     | 
|                      |  |           |  |  | Ag g/t  |  |    |  |        |        |  |  |         |  |  |        | 991.5   |  |        |  | 725.8   |        |  |  | 462.0   |  |  |        | 687.2   |  |        |  | 539.9   |        |  |  | 533.6   | 
|Combined              |  | Martina   |  |  | ktonnes |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  | 45 300  |        |  |  | 95 600  |  |  |        | 85 500  |  |        |  | 53 500  |        |  |  | 8 300   | 
|Open Pit /            |  |           |  |  | Au g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  | 9.0     |        |  |  | 14.1    |  |  |        | 12.3    |  |        |  | 10.0    |        |  |  | 7.3     | 
|Underground Mine Plan |  |           |  |  | Ag g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  | 52.6    |        |  |  | 61.5    |  |  |        | 48.7    |  |        |  | 41.3    |        |  |  | 36.2    | 
|                      |  | Gabriela  |  |  | ktonnes |  |    |  |        |        |  |  |         |  |  |        | 15 800  |  |        |  | 129 596 |        |  |  | 218 171 |  |  |        | 195 844 |  |        |  | 141 144 |        |  |  | 185 475 | 
|                      |  |           |  |  | Au g/t  |  |    |  |        |        |  |  |         |  |  |        | 2.6     |  |        |  | 2.0     |        |  |  | 2.4     |  |  |        | 2.0     |  |        |  | 1.5     |        |  |  | 2.1     | 
|                      |  |           |  |  | Ag g/t  |  |    |  |        |        |  |  |         |  |  |        | 401.3   |  |        |  | 288.7   |        |  |  | 376.2   |  |  |        | 326.3   |  |        |  | 242.1   |        |  |  | 303.7   | 
|                      |  | Deborah   |  |  | ktonnes |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         | 
|                      |  |           |  |  | Au g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         | 
|                      |  |           |  |  | Ag g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         | 
|                      |  | Carla     |  |  | ktonnes |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         | 
|                      |  |           |  |  | Au g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         | 
|                      |  |           |  |  | Ag g/t  |  |    |  |        |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         |  |  |        |         |  |        |  |         |        |  |  |         | 
|                      |  | TOTAL     |  |  | ktonnes |  |    |  | 27 264 |        |  |  | 121 452 |  |  |        | 325 489 |  |        |  | 509 470 |        |  |  | 603 824 |  |  |        | 678 248 |  |        |  | 484 284 |        |  |  | 409 411 | 
|                      |  |           |  |  | Au g/t  |  |    |  | 19.5   |        |  |  | 16.1    |  |  |        | 13.2    |  |        |  | 9.0     |        |  |  | 6.4     |  |  |        | 5.6     |  |        |  | 4.7     |        |  |  | 4.6     | 
|                      |  |           |  |  | Ag g/t  |  |    |  | 1196.2 |        |  |  | 915.9   |  |  |        | 541.7   |  |        |  | 419.6   |        |  |  | 328.5   |  |  |        | 359.4   |  |        |  | 305.9   |        |  |  | 378.3   | 



Table 5	Mine Schedule Summary for
1,150 tpd (Option B)



- 29 -







A general layout for the Project is shown
in Figure 2







Figure 2	Conceptual Mine Development
for Cerro Moro(Source: NCL, 2011)



Metallurgical Testwork Summary



Metallurgical test work has demonstrated
that the various mineralized zones are readily amenable to cyanidation. Given the high silver to gold ratio (~60:1) a Merrill Crowe
circuit was selected for precious metal recovery from solution rather than a carbon adsorption and elution circuit.



- 30 -





Filtration of the leached residue resulted
in low filtration rates due to ultrafine clay particles in the mineralization. The mineral inventory is however amenable to thickening
and counter current decantation thickening has been selected to wash the leach residue.



The inco cyanide destruction process proved
successful in reducing the weak acid dissociable cyanide in the process tailings to below 8 ppm. The expected
metallurgical recoveries for the mineralization are 95% for gold and 93% for silver, further testwork has been recommended to confirm
recoveries for any new potential mineralized zones.



Mineral Processing and Recovery Methods



The process design targeted simplicity
consistent with maximising recovery of the precious metals and the utilization of well established and proven technologies.



The comminution circuit design involves
a three stage crushing circuit followed by a single stage closed circuit ball mill. Classifier overflow from the grinding circuit
reports to a conventional flotation circuit to enhance recovery of gold and silver minerals for the subsequent concentrate regrind
and leaching stages. The flotation tailings are to be thickened prior to being leached in a five stage leach circuit with a nominal
residence time of 48 hours.



The leach residue is to be washed in a
5 stage counter current decantation (“CCD”) thickening circuit with precious metals recovered from the pregnant solution
by a conventional Merrill Crowe circuit. The washed residue from the CCD thickening circuit is to undergo cyanide destruction prior
to thickening and tailings disposal.



Flash flotation, centrifugal gravity and
conventional flotation have been incorporated in the design to recover precious metals into a concentrate that is to be re-ground
prior to intensive cyanidation leaching on a continuous basis. The leached concentrate is to be filtered and washed and the resulting
pregnant solution fed to the Merrill Crowe circuit for precious metal recovery. The washed filter cake is to be repulped and returned
to main leaching circuit to maximise the extraction of precious metals.



The processing plant has been
designed to treat 1,300 tpd of feed with maximum head grades of 25 g/t of gold and 1000 g/t of silver. A design availability
of 92% (8059 operating hours per year) for the process plant has been selected with standby equipment in critical areas. The
process design criteria were developed from testwork and benchmarked data from similar projects.



Site Infrastructure



Power Supply



Electrical power is expected to be supplied
to the Project via a 132 kV line that will connect to the Argentine national grid (“Sistema Argentino de Interconexion”)
at a point located on National Highway 281 approximately 60 km to the north-west of Puerto Deseado and near the locality of Antonio
de Biedma. From Antonio de Biedma, where a new substation would need to be constructed, the Cerro Moro High Voltage Line (HVL)
would broadly follow Provincial Route 66 southwards, crossing the Deseado River in the area of Paso Gregores and then continuing
southwards along Provincial Route 87 to the Estancia El Mosquito before, finally, reaching the Project (Figure 3). The proposed
routing for the power line was selected on the basis of representing one of the shortest routes (72 km) between the national power
grid and the Project, and for crossing the least number of third-party surface rights owners.



- 31 -







At the Cerro Moro site, the process
plant electrical substation is expected to be equipped with a single 132/33/13.2 kV step-down transformer of 12 MW capacity
and associated switchgear. From this site, 13.2 kV overhead transmission lines are expected to be drawn to the various
portals.







Figure 3	Overhead Powerline Route
to Cerro Moro (Source: SIEyE, 2012)



Site Access Roads



Cerro Moro site is currently accessed using
existing upgraded farm tracks from provincial road 66. The alignment for a new access road from provincial road 66 direct to the
process plant site has been roughly cut and partially upgraded. This access road is approximately 13 km long and will be upgraded
using a mix of local gravels and road-base to provide suitable access for light vehicles and trucks for delivery of construction
equipment and operating requirements.



Water Supply



Water supply to the process plant and infrastructure
will be provided from water bores located to the north and east of the plant site and adjacent to the Zoe prospect. A water treatment
plant will be located at the at the plant site and will provide potable water for distribution to offices, amenities and the accommodation
camp.



The current water supply to Cerro Moro
is transported by truck to tanks on site, this system will be held in place until such time as the borefield and water treatment
plant are in operation.



- 32 -







Mine Infrastructure



The following buildings will be newly constructed
for the Project:



| | · | Mine workshops.
| | - | ---------------

| | · | Change house.
| | - | -------------

| | · | Training Centre.
| | - | ----------------

| | · | Mine Warehouse.
| | - | ---------------

| | · | Fuel storage and distribution facility
| | - | --------------------------------------



The workshop facilities will be divided
into heavy and light equipment and will provide for the servicing of all mobile equipment both surface and underground. They will
be supplemented with underground workshops when the mining operation is sufficiently advanced.



Magazines for open pit and underground
blasting operations will be located at safe and convenient locations.



Tailings Storage Facility



The process tailings from the first two
years of production will be stored in a cell to be built adjacent to the process plant. The cell will be equipped with a geosynthetic
liner and facilities to reclaim and recirculate tailings in the event that initial recoveries are erratic.



A larger tailings storage facility (“TSF”)
will be constructed after the mine commences production. In this case the process tailings will be stored in large shallow valley
area with earth fill embankments providing the necessary enclosure. This TSF will have a geosynthetic liner to prevent seepage
into the groundwater system. Surface water will be diverted around the TSF.



The tailings will be pumped from the process
plant to the Cell or TSF as slurry; water will be recovered and pumped back to the process plant to minimize water consumption.
The capacity of the cell will be approximately 630,000 m3 (0.9 Mt), whilst the total TSF facility will provide additional
storage capacity of 2,214,000 m3 (3.3 Mt). The capacity of the two facilities comfortably exceeds the life of mine considered in
the PEA.



Environmental



Table 6 shows the schedule of filing, approval,
and notification dates for the 5 exploration / advanced exploration permits (Environmental Impact Statements, or EIS’s) and
one development permit (Environmental Impact Assessment, or EIA) that have been approved to date by the Santa Cruz Provincial Authorities
for the Project. Under Santa Cruz Provincial legislation, all environmental permits have a validity of two years and, in order
to allow work to continue, must be renewed prior to their respective expiry dates. All valid environmental permits for Cerro Moro
are held in the name of Extorre’s subsidiary in Argentina, Estelar.



|Company                |  | Filing Date  |  | Grant Date |  | Notification Date |  | Expiry Date |  | Project Stage 
|---------------------- |  | ------------ |  | ---------- |  | ----------------- |  | ----------- |  | --------------
|MINCORP EXPL. SA       |  | 23/05/97     |  | 23/06/97   |  | 15/07/97          |  | 15/07/99    |  | Exploration   
|MINCORP EXPL. SA       |  | 29/06/99     |  | N/D        |  | N/D               |  | N/D         |  | Exploration   
|CERRO VANGUARDIA SA    |  | 08/04/05     |  | 20/02/06   |  | 24/02/06          |  | 24/02/08    |  | Exploration   
|ESTELAR RESOURCES LTD. |  | 09/10/08     |  | 30/03/09   |  | 28/05/09          |  | 28/05/11    |  | Exploration   
|ESTELAR RESOURCES LTD. |  | October 2010 |  | 13/12/10   |  | 15/12/10          |  | 15/12/12    |  | Advanced Expl.
|ESTELAR RESOURCES LTD. |  | 17/09/2010   |  | 16/05/11   |  | 16/05/11          |  | 16/05/13    |  | Development   



Table 6   Schedule
of the filing of the Environmental Impact Assessment (EIA)



- 33 -





Capital and Operating Cost Estimates



The total initial capital investment for
the mining, process plant and infrastructure for the 1,300 tpd (Option A) and 1,150 tpd (Option B), has been summarised in Table 7
and Table 8 respectively.



|Category (MUS$)                                                    |  | Initial Capital |       |  | Sustaining Capital |  |       | Total Capital | 
|------------------------------------------------------------------ |  | --------------- | ----- |  | ------------------ |  | ----- | ------------- | 
|Direct Costs                                                       |  |                 |       |  |                    |  |       |               | 
|Open pit mining Equipment                                          |  |                 | 29.7  |  |                    |  | 3.6   |               | 
|Underground mining equipment & Development & Infra/Services        |  |                 | 66.1  |  |                    |  | 109.4 |               | 
|Plant                                                              |  |                 | 82.1  |  |                    |  |       |               | 
|Tailings Storage Facility                                          |  |                 | 8.1   |  |                    |  | 22.3  |               | 
|Water Borefield                                                    |  |                 | 6.5   |  |                    |  |       |               | 
|Power Supply                                                       |  |                 | 26.6  |  |                    |  |       |               | 
|Camp facilities                                                    |  |                 | 14.5  |  |                    |  |       |               | 
|Access roads                                                       |  |                 | 3.8   |  |                    |  | 8.5   |               | 
|Mobile Equipment                                                   |  |                 | 3.1   |  |                    |  |       |               | 
|Fuel Storage                                                       |  |                 | 1.6   |  |                    |  |       |               | 
|Site Buildings                                                     |  |                 | 1.8   |  |                    |  |       |               | 
|Assay Laboratory                                                   |  |                 | 2.8   |  |                    |  |       |               | 
|Communications                                                     |  |                 | 0.3   |  |                    |  |       |               | 
|Closure                                                            |  |                 |       |  |                    |  | 5.0   |               | 
|Subtotal Direct Costs                                              |  |                 | 246.9 |  |                    |  | 148.7 |               | 
|Indirect Costs                                                     |  |                 |       |  |                    |  |       |               | 
|EPCM, Commissioning, Temporary facilities, Initial Fill and Spares |  |                 | 32.9  |  |                    |  |       |               | 
|Owners Costs                                                       |  |                 | 4.3   |  |                    |  |       |               | 
|Subtotal Indirect Costs                                            |  |                 | 37.2  |  |                    |  |       |               | 
|TOTAL                                                              |  |                 | 284.1 |  |                    |  | 148.7 |               | 



Table 7    Mine, Process
Plant and Infrastructure CAPEX Summary (1,300 tpd Option A)



|Category (MUS$)                                             |  | Initial Capital |      |  | Sustaining Capital |  |       | Total Capital | 
|----------------------------------------------------------- |  | --------------- | ---- |  | ------------------ |  | ----- | ------------- | 
|Direct Costs                                                |  |                 |      |  |                    |  |       |               | 
|Open pit mining Equipment                                   |  |                 | 19.9 |  |                    |  | 11.6  |               | 
|Open pit pre-stripping                                      |  |                 | 2.7  |  |                    |  |       |               | 
|Underground mining equipment & Development & Infra/Services |  |                 | 50.9 |  |                    |  | 119.5 |               | 
|Plant                                                       |  |                 | 77.4 |  |                    |  |       |               | 



- 34 -







|Category (MUS$)                                                    |  | Initial Capital |       |  | Sustaining Capital |  |       | Total Capital | 
|------------------------------------------------------------------ |  | --------------- | ----- |  | ------------------ |  | ----- | ------------- | 
|Tailings Storage Facility                                          |  |                 | 8.1   |  |                    |  | 22.3  |               | 
|Water Borefield                                                    |  |                 | 6.5   |  |                    |  |       |               | 
|Power Supply                                                       |  |                 | 26.6  |  |                    |  |       |               | 
|Camp facilities                                                    |  |                 | 14.5  |  |                    |  |       |               | 
|Access roads                                                       |  |                 | 3.8   |  |                    |  | 8.5   |               | 
|Mobile Equipment                                                   |  |                 | 3.1   |  |                    |  |       |               | 
|Fuel Storage                                                       |  |                 | 1.6   |  |                    |  |       |               | 
|Site Buildings                                                     |  |                 | 1.8   |  |                    |  |       |               | 
|Assay Laboratory                                                   |  |                 | 2.8   |  |                    |  |       |               | 
|Communications                                                     |  |                 | 0.3   |  |                    |  |       |               | 
|Closure                                                            |  |                 |       |  |                    |  | 5.0   |               | 
|Subtotal Direct Costs                                              |  |                 | 219.9 |  |                    |  | 166.8 |               | 
|Indirect Costs                                                     |  |                 |       |  |                    |  |       |               | 
|EPCM, Commissioning, Temporary facilities, Initial Fill and Spares |  |                 | 32.4  |  |                    |  |       |               | 
|Owners Costs                                                       |  |                 | 4.3   |  |                    |  |       |               | 
|Subtotal Indirect Costs                                            |  |                 | 36.7  |  |                    |  |       |               | 
|TOTAL                                                              |  |                 | 256.7 |  |                    |  | 166.8 |               | 



Table 8  Mine, Process Plant
and Infrastructure CAPEX Summary (1,150 tpd Option B)



The total process plant capital and operating
costs are summarised in Table 9 and Table 10, and are shown for each year of operation due to the high variability depending on
silver grades in the plant feed. The mining capital and operating costs are summarised in Table 11 and Table 12, showing sustaining
capital also.



- 35 -









|Production         |  | Y-02 |  |  | Y-01 |  |  | Y01 |  |  | Y02     |  |  | Y03 |         |  | Y04 |  |         | Y05 |  |  | Y06     |  |  | Y07 |         |  | Y08 |  |         | Y09 |  |  | Total   | 
|------------------ |  | ---- |  |  | ---- |  |  | --- |  |  | ------- |  |  | --- | ------- |  | --- |  | ------- | --- |  |  | ------- |  |  | --- | ------- |  | --- |  | ------- | --- |  |  | ------- | 
|Tonnes Treated (t) |  |      |  |  |      |  |  |     |  |  | 375,527 |  |  |     | 436,570 |  |     |  | 436,570 |     |  |  | 436,570 |  |  |     | 480,180 |  |     |  | 480,180 |     |  |  | 480,180 | 
|Gold (g/t)         |  |      |  |  |      |  |  |     |  |  | 11.2    |  |  |     | 9.6     |  |     |  | 8.7     |     |  |  | 10.3    |  |  |     | 7.3     |  |     |  | 5.2     |     |  |  | 4.1     | 
|Silver (g/t)       |  |      |  |  |      |  |  |     |  |  | 547.8   |  |  |     | 482.9   |  |     |  | 523.9   |     |  |  | 461.8   |  |  |     | 413.3   |  |     |  | 332.9   |     |  |  | 362.5   | 





|Cost Centre              |  | Unit Cost $/t |  |  | Unit Cost $/t |  |             | Unit Cost $/t |  |  | Unit Cost $/t |  |  | Unit Cost $/t |            |  | Unit Cost $/t |  |            | Unit Cost $/t |  |  | Unit Cost $/t |  |  | Unit Cost $/t |            |  | Unit Cost $/t |  |            | Unit Cost $/t |  |  | Unit Cost $/t | 
|------------------------ |  | ------------- |  |  | ------------- |  | ----------- | ------------- |  |  | ------------- |  |  | ------------- | ---------- |  | ------------- |  | ---------- | ------------- |  |  | ------------- |  |  | ------------- | ---------- |  | ------------- |  | ---------- | ------------- |  |  | ------------- | 
|Cost Centre Labour       |  |               |  |  |               |  |             |               |  |  | 15.93         |  |  |               | 13.7       |  |               |  | 13.7       |               |  |  | 13.7          |  |  |               | 12.45      |  |               |  | 12.45      |               |  |  | 12.45         | 
|Power                    |  |               |  |  |               |  |             |               |  |  | 6.06          |  |  |               | 5.78       |  |               |  | 5.78       |               |  |  | 5.78          |  |  |               | 5.26       |  |               |  | 5.26       |               |  |  | 5.26          | 
|Regents and Grinding     |  |               |  |  |               |  |             |               |  |  | 46.79         |  |  |               | 45.2       |  |               |  | 45.85      |               |  |  | 44.93         |  |  |               | 44.21      |  |               |  | 42.85      |               |  |  | 43.41         | 
|Media Maintenance        |  |               |  |  |               |  |             |               |  |  | 4.01          |  |  |               | 3.45       |  |               |  | 3.45       |               |  |  | 3.45          |  |  |               | 3.14       |  |               |  | 3.14       |               |  |  | 3.14          | 
|Linings                  |  |               |  |  |               |  |             |               |  |  | 1.51          |  |  |               | 1.3        |  |               |  | 1.3        |               |  |  | 1.3           |  |  |               | 1.18       |  |               |  | 1.18       |               |  |  | 1.18          | 
|Other                    |  |               |  |  |               |  |             |               |  |  | 6.96          |  |  |               | 6.07       |  |               |  | 6.07       |               |  |  | 6.07          |  |  |               | 5.57       |  |               |  | 5.49       |               |  |  | 5.49          | 
|Total                    |  |               |  |  |               |  |             |               |  |  | 81.26         |  |  |               | 75.49      |  |               |  | 76.15      |               |  |  | 75.23         |  |  |               | 71.81      |  |               |  | 70.36      |               |  |  | 70.92         | 
|Total Opex               |  |               |  |  |               |  |             |               |  |  | 30,515,324    |  |  |               | 32,956,669 |  |               |  | 33,244,806 |               |  |  | 32,843,161    |  |  |               | 34,481,726 |  |               |  | 33,785,465 |               |  |  | 34,054,366    | 
|Total Capex              |  |               |  |  |               |  | 188,390,000 |               |  |  | 1,000,000     |  |  |               | 11,160,000 |  |               |  | 1,000,000  |               |  |  | 6,800,000     |  |  |               | 1,000,000  |  |               |  | 1,000,000  |               |  |  | 7,290,000     | 
|Return of VAT            |  |               |  |  |               |  |             |               |  |  | -24,468,000   |  |  |               |            |  |               |  |            |               |  |  |               |  |  |               |            |  |               |  |            |               |  |  |               | 
|Overall Processing Costs |  |               |  |  |               |  | 188,390,000 |               |  |  | 31,515,324    |  |  |               | 44,116,669 |  |               |  | 34,244,806 |               |  |  | 39,643,161    |  |  |               | 35,481,726 |  |               |  | 34,785,465 |               |  |  | 41,344,366    | 



Table 9   Process Plant
Total Capex and Operating Cost Summary – 1,300 tpd Option A



- 36 -









|Production         |  | Y-02 |  |  | Y-01 |  |  | Y01 |  |  | Y02     |  |  | Y03 |         |  | Y04 |  |         | Y05 |  |  | Y06     |  |  | Y07 |         |  | Y08 |  |         | Y09 |  |  | Y10     |  |  | Y11 |         |  | Total | 
|------------------ |  | ---- |  |  | ---- |  |  | --- |  |  | ------- |  |  | --- | ------- |  | --- |  | ------- | --- |  |  | ------- |  |  | --- | ------- |  | --- |  | ------- | --- |  |  | ------- |  |  | --- | ------- |  | ----- | 
|Tonnes Treated (t) |  |      |  |  |      |  |  |     |  |  | 239,719 |  |  |     | 315,821 |  |     |  | 386,170 |     |  |  | 386,170 |  |  |     | 424,787 |  |     |  | 424,787 |     |  |  | 424,786 |  |  |     | 424,786 |  |       | 
|Gold (g/t)         |  |      |  |  |      |  |  |     |  |  | 16.5    |  |  |     | 13.2    |  |     |  | 10.4    |     |  |  | 8.0     |  |  |     | 6.5     |  |     |  | 5.2     |     |  |  | 4.6     |  |  |     | 4.3     |  |       | 
|Silver (g/t)       |  |      |  |  |      |  |  |     |  |  | 947.8   |  |  |     | 541.7   |  |     |  | 473.5   |     |  |  | 340.8   |  |  |     | 426.1   |  |     |  | 348.6   |     |  |  | 377.6   |  |  |     | 369.3   |  |       | 





|Cost Centre              |  | Unit Cost $/t |  |  | Unit Cost $/t |  |             | Unit Cost $/t |  |  | Unit Cost $/t |  |  | Unit Cost $/t |            |  | Unit Cost $/t |  |            | Unit Cost $/t |  |  | Unit Cost $/t |  |  | Unit Cost $/t |            |  | Unit Cost $/t |  |            | Unit Cost $/t |  |  | Unit Cost $/t |  |  | Unit Cost $/t |            |  | Unit Cost $/t | 
|------------------------ |  | ------------- |  |  | ------------- |  | ----------- | ------------- |  |  | ------------- |  |  | ------------- | ---------- |  | ------------- |  | ---------- | ------------- |  |  | ------------- |  |  | ------------- | ---------- |  | ------------- |  | ---------- | ------------- |  |  | ------------- |  |  | ------------- | ---------- |  | ------------- | 
|Cost Centre Labour       |  |               |  |  |               |  |             |               |  |  | 24.95         |  |  |               | 18.94      |  |               |  | 15.49      |               |  |  | 15.49         |  |  |               | 14.08      |  |               |  | 14.08      |               |  |  | 14.08         |  |  |               | 14.08      |  |               | 
|Power                    |  |               |  |  |               |  |             |               |  |  | 7.21          |  |  |               | 6.23       |  |               |  | 5.76       |               |  |  | 5.76          |  |  |               | 5.24       |  |               |  | 5.24       |               |  |  | 5.24          |  |  |               | 5.24       |  |               | 
|Regents and Grinding     |  |               |  |  |               |  |             |               |  |  | 52.79         |  |  |               | 46.77      |  |               |  | 45.81      |               |  |  | 43.77         |  |  |               | 44.99      |  |               |  | 43.85      |               |  |  | 44.29         |  |  |               | 44.18      |  |               | 
|Media Maintenance        |  |               |  |  |               |  |             |               |  |  | 5.72          |  |  |               | 4.34       |  |               |  | 3.55       |               |  |  | 3.55          |  |  |               | 3.23       |  |               |  | 3.23       |               |  |  | 3.23          |  |  |               | 3.23       |  |               | 
|Linings                  |  |               |  |  |               |  |             |               |  |  | 2.01          |  |  |               | 1.52       |  |               |  | 1.25       |               |  |  | 1.25          |  |  |               | 1.13       |  |               |  | 1.13       |               |  |  | 1.13          |  |  |               | 1.13       |  |               | 
|Other                    |  |               |  |  |               |  |             |               |  |  | 10.49         |  |  |               | 8.1        |  |               |  | 6.73       |               |  |  | 6.56          |  |  |               | 6.11       |  |               |  | 6.11       |               |  |  | 6.11          |  |  |               | 6.11       |  |               | 
|Total                    |  |               |  |  |               |  |             |               |  |  | 103.15        |  |  |               | 85.9       |  |               |  | 78.58      |               |  |  | 76.38         |  |  |               | 74.77      |  |               |  | 73.63      |               |  |  | 74.07         |  |  |               | 73.97      |  |               | 
|Total Opex               |  |               |  |  |               |  |             |               |  |  | 24,726,705    |  |  |               | 27,129,024 |  |               |  | 30,345,239 |               |  |  | 29,495,665    |  |  |               | 31,761,324 |  |               |  | 31,277,067 |               |  |  | 31,463,899    |  |  |               | 31,421,420 |  |               | 
|Total Capex              |  |               |  |  |               |  | 183,172,378 |               |  |  | 1,000,000     |  |  |               | 11,160,000 |  |               |  | 1,000,000  |               |  |  | 6,800,000     |  |  |               | 1,000,000  |  |               |  | 1,000,000  |               |  |  | 7,290,000     |  |  |               | 1,000,000  |  |               | 
|Return of VAT            |  |               |  |  |               |  |             |               |  |  | -23,964,849   |  |  |               |            |  |               |  |            |               |  |  |               |  |  |               |            |  |               |  |            |               |  |  |               |  |  |               |            |  |               | 
|Overall Processing Costs |  |               |  |  |               |  | 183,172,378 |               |  |  | 1,761,856     |  |  |               | 38,289,024 |  |               |  | 31,345,239 |               |  |  | 36,295,665    |  |  |               | 32,761,324 |  |               |  | 32,277,067 |               |  |  | 38,753,899    |  |  |               | 32,421,420 |  |               | 



Table 10 Process Plant Total
Capex and Operating Cost Summary – 1,150 tpd Option B



- 37 -







|Production                   |  | Y-02 |            |  | Y-01 |  |            | Y01 |  |  | Y02         |  |  | Y03 |            |  | Y04 |  |            | Y05 |  |  | Y06        |  |  | Y07 |            |  | Y08 |  |            | Y09 |  |  | Total      | 
|---------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | --- |  |  | ----------- |  |  | --- | ---------- |  | --- |  | ---------- | --- |  |  | ---------- |  |  | --- | ---------- |  | --- |  | ---------- | --- |  |  | ---------- | 
|Open Pit Operations          |  |      |            |  |      |  |            |     |  |  |             |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            | 
|Total CAPEX                  |  |      |            |  |      |  | 29,663,026 |     |  |  |             |  |  |     | 1,438,811  |  |     |  | 1,246,361  |     |  |  | 121,000    |  |  |     | 652,762    |  |     |  |            |     |  |  |            | 
|Total OPEX                   |  |      |            |  |      |  |            |     |  |  | 14,247,923  |  |  |     | 16,154,852 |  |     |  | 16,876,700 |     |  |  | 11,744,530 |  |  |     | 16,480,915 |  |     |  | 14,633,160 |     |  |  | 16,965,551 | 
|Total open pit expenses      |  |      |            |  |      |  | 29,663,026 |     |  |  | 14,247,923  |  |  |     | 17,593,662 |  |     |  | 18,123,060 |     |  |  | 11,865,530 |  |  |     | 17,133,678 |  |     |  | 14,633,160 |     |  |  | 16,965,551 | 
|Underground Operations       |  |      |            |  |      |  |            |     |  |  |             |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            | 
|Development                  |  |      | 6,389,230  |  |      |  | 24,499,544 |     |  |  | 29,432,926  |  |  |     | 21,584,795 |  |     |  | 15,291,701 |     |  |  | 13,745,518 |  |  |     | 3,956,171  |  |     |  |            |     |  |  |            | 
|Equipment                    |  |      | 8,917,298  |  |      |  | 13,445,590 |     |  |  | 10,761,024  |  |  |     | 9,535,523  |  |     |  | 2,260,959  |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            | 
|Infraestructure and Services |  |      | 2,217,525  |  |      |  | 1,033,776  |     |  |  | 495,625     |  |  |     | 186,849    |  |     |  | 71,276     |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            | 
|Others                       |  |      | 958,719    |  |      |  | 1,214,583  |     |  |  | 938,903     |  |  |     | 806,745    |  |     |  | 193,984    |     |  |  |            |  |  |     | 145,847    |  |     |  |            |     |  |  |            | 
|Pre-production Operation     |  |      | 730,304    |  |      |  | 6,678,108  |     |  |  |             |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            | 
|Total CAPEX                  |  |      | 19,213,076 |  |      |  | 46,871,601 |     |  |  | 41,628,479  |  |  |     | 32,113,912 |  |     |  | 17,817,920 |     |  |  | 13,745,518 |  |  |     | 4,102,019  |  |     |  |            |     |  |  |            | 
|Total OPEX                   |  |      |            |  |      |  |            |     |  |  | 13,974,375  |  |  |     | 21,802,485 |  |     |  | 24,590,489 |     |  |  | 20,572,985 |  |  |     | 12,525,382 |  |     |  | 9,440,918  |     |  |  | 5,641,259  | 
|Total underground expenses   |  |      | 19,213,076 |  |      |  | 46,871,601 |     |  |  | 55,602,854  |  |  |     | 53,916,397 |  |     |  | 42,408,409 |     |  |  | 34,318,503 |  |  |     | 16,627,401 |  |     |  | 9,440,918  |     |  |  | 5,641,259  | 
|Return of VAT                |  |      |            |  |      |  |            |     |  |  | -16,617,370 |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            | 
|Overall Mining Expenses      |  |      | 19,213,076 |  |      |  | 76,534,627 |     |  |  | 53,233,407  |  |  |     | 71,510,059 |  |     |  | 60,531,469 |     |  |  | 46,184,033 |  |  |     | 33,761,079 |  |     |  | 24,074,078 |     |  |  | 22,606,811 | 



Table 11 Mining CAPEX and OPEX
Summary – 1,300 tpd Option A



|Production                   |  | Y-02 |            |  | Y-01 |  |            | Y01 |  |  | Y02         |  |  | Y03 |            |  | Y04 |  |            | Y05 |  |  | Y06        |  |  | Y07 |            |  | Y08 |  |            | Y09 |  |  | Y10        |  |  | Y11 |            |  | Total | 
|---------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | --- |  |  | ----------- |  |  | --- | ---------- |  | --- |  | ---------- | --- |  |  | ---------- |  |  | --- | ---------- |  | --- |  | ---------- | --- |  |  | ---------- |  |  | --- | ---------- |  | ----- | 
|Open Pit Operations          |  |      |            |  |      |  |            |     |  |  |             |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Total CAPEX                  |  |      |            |  |      |  | 19,914,849 |     |  |  | 1,438,811   |  |  |     | 7,109,082  |  |     |  | 966,677    |     |  |  | 1,899,123  |  |  |     |            |  |     |  |            |     |  |  | 144,672    |  |  |     |            |  |       | 
|Total OPEX                   |  |      |            |  |      |  |            |     |  |  | 8,592,987   |  |  |     | 14,849,107 |  |     |  | 15,228,268 |     |  |  | 15,332,889 |  |  |     | 14,881,004 |  |     |  | 14,670,063 |     |  |  | 16,615,959 |  |  |     | 15,898,466 |  |       | 
|Total open pit expenses      |  |      |            |  |      |  | 19,914,849 |     |  |  | 10,031,798  |  |  |     | 21,958,188 |  |     |  | 16,224,945 |     |  |  | 17,232,012 |  |  |     | 14,881,004 |  |     |  | 14,670,063 |     |  |  | 16,760,631 |  |  |     | 15,898,466 |  |       | 
|Underground Operations       |  |      |            |  |      |  |            |     |  |  |             |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Development                  |  |      | 6,388,412  |  |      |  | 14,029,043 |     |  |  | 28,590,497  |  |  |     | 26,642,115 |  |     |  | 16,049,003 |     |  |  | 17,360,640 |  |  |     | 5,841,683  |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Equipment                    |  |      | 8,917,298  |  |      |  | 10,388,886 |     |  |  | 10,900,068  |  |  |     | 10,055,823 |  |     |  | 1,213,519  |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Infraestructure and Services |  |      | 2,215,671  |  |      |  | 1,033,405  |     |  |  | 494,883     |  |  |     | 186,478    |  |     |  | 70,905     |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Others                       |  |      | 958,534    |  |      |  | 961,924    |     |  |  | 950,320     |  |  |     | 849,708    |  |     |  | 107,381    |     |  |  | 25,000     |  |  |     | 145,847    |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Pre-production Operation     |  |      | 729,846    |  |      |  | 5,292,719  |     |  |  |             |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Total CAPEX                  |  |      | 19,209,760 |  |      |  | 31,705,958 |     |  |  | 40,935,768  |  |  |     | 37,734,124 |  |     |  | 17,440,808 |     |  |  | 17,385,640 |  |  |     | 5,987,530  |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Total OPEX                   |  |      |            |  |      |  |            |     |  |  | 11,412,791  |  |  |     | 19,122,611 |  |     |  | 20,203,059 |     |  |  | 18,760,322 |  |  |     | 12,828,793 |  |     |  | 9,288,799  |     |  |  | 5,654,859  |  |  |     | 3,619,875  |  |       | 
|Total underground expenses   |  |      | 19,209,760 |  |      |  | 31,705,958 |     |  |  | 52,348,559  |  |  |     | 56,856,735 |  |     |  | 37,643,867 |     |  |  | 36,055,962 |  |  |     | 18,816,324 |  |     |  | 9,288,799  |     |  |  | 5,654,859  |  |  |     | 3,319,875  |  |       | 
|Return of VAT                |  |      |            |  |      |  |            |     |  |  | -12,292,908 |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |     |  |            |     |  |  |            |  |  |     |            |  |       | 
|Overall Mining Expenses      |  |      | 19,209,760 |  |      |  | 51,620,807 |     |  |  | 50,087,448  |  |  |     | 78,814,923 |  |     |  | 53,868,812 |     |  |  | 53,287,974 |  |  |     | 33,697,327 |  |     |  | 23,958,861 |     |  |  | 22,415,490 |  |  |     | 19,518,341 |  |       | 



Table 12 Mining CAPEX and OPEX
Summary – 1,150 tpd Option B



- 38 -







Economic Analysis



The PEA includes mineral resources that
are not mineral reserves and therefore do not have demonstrated economic viability.



The reader is cautioned that the preliminary
economic assessment is preliminary in nature and includes Inferred mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty
that the preliminary economic assessment will be realized. No mineral reserves have been estimated.



NCL notes it is not a financial adviser,
and that the models restated in the PEA are indicative only, based on NCL’s experiences. NCL has recommended that Extorre
seeks its own financial and tax advice.



Economic Analysis – 1,300 tpd (Option
A)



The total estimated initial
capital cost of the Project is US$ 284 million (VAT included), which comprises i) US$ 247 million for all plant,
infrastructure, energy, tailings dam, and open pit and underground development and mining equipment; ii) an additional US$
37.2M for engineering, procurement, construction and management (“EPCM”) costs and owners costs. Adding
sustaining capital and closure, the total capital cost for the life of the Project is estimated to be US$ 433 million.



The base case financial model assumes gold
and silver prices of US$ 1,320 per ounce and US$ 26 per ounce, respectively. Results of the discounted cash flow modelling (NPV5
and NPV10) for the 1,300 tpd throughput scenario at Cerro Moro, together with the projected internal rate of return (IRR) and payback
period, are presented in Table 13.



|Financial Model                                             |  | 1,300 tpd |              
|----------------------------------------------------------- |  | --------- | -------------
|NPV5pre-tax                                                 |  | US$       | 737.4 million
|NPV5Free cash flow (after tax)                              |  | US$       | 463.2 million
|NPV10pre-tax                                                |  | US$       | 524.7 million
|NPV10Free cash flow (after tax)                             |  | US$       | 320.1 million
|IRR pre-tax                                                 |  |           | 63.1         
|IRR Free cash flow (after tax)                              |  |           | 46.8         
|Years to payback from start of production (at 5% discount)  |  |           | 1.98         
|Years to payback from start of production (at 10% discount) |  |           | 2.16         



Table 13 Economical Evaluation Results
Summary (1,300 tpd)



Economic Analysis – 1,150 tpd (Option
B)



- 39 -









The total estimated initial capital cost
of the Project is US$ 257 million (VAT included), which comprises i) US$ 220 million for all plant, infrastructure, energy, tailings
dam, and open pit and underground development and mining equipment; ii) an additional US$ 36.7M for EPCM costs and owners costs.
Adding sustaining capital and closure, the total capital cost for the life of the Project is estimated to be US$ 424 million.



The base case financial model assumes gold
and silver prices of US$ 1,320 per ounce and US$ 26 per ounce, respectively. Results of the discounted cash flow modelling (NPV5
and NPV10) for the 1,150 tpd throughput scenario at Cerro Moro, together with the projected IRR and payback
period, are presented in Table 14.



|Financial Model                                             |  | 1,150 tpd |              
|----------------------------------------------------------- |  | --------- | -------------
|NPV5pre-tax                                                 |  | US$       | 723.0 million
|NPV5Free cash flow (after tax)                              |  | US$       | 453.8 million
|NPV10pre-tax                                                |  | US$       | 503.8 million
|NPV10Free cash flow (after tax)                             |  | US$       | 306.8 million
|IRR pre-tax                                                 |  |           | 65.7         
|IRR Free cash flow (after tax)                              |  |           | 47.4         
|Years to payback from start of production (at 5% discount)  |  |           | 1.84         
|Years to payback from start of production (at 10% discount) |  |           | 2.03         



Table 14 Economical Evaluation Results
Summary (1,150 tpd)



Sensitivity analysis was
undertaken for both the 1,300 tpd and 1,150 tpd scenarios to measure the effect of variations in gold price, discount rate,
total operating cost and average tax rate, for after-tax and before-tax cases. The obtained results are very solid, with
positive NPVs and attractive IRR for almost all the combinations.



In these financial models contained in
the PEA Extorre has assumed an accelerated depreciation schedule for the initial CAPEX of 60-20-20 (Years 1-2-3) together with
recovery of the initial capital expenditure (“CAPEX”) related VAT during the first year of commercial production, both
of which are allowed under Argentine legislation for mining projects. Extorre will also seek to apply for tax credits of at least
US$ 50 million that relate to pre-mining exploration expenditures (but have not been included in this financial analysis).



Conclusions



Mineral Resource



The November, 2011 mineral resource estimate
for Cerro Moro resulted in a significant increase to the Project mineral resource base. Of particular importance to the November,
2011 mineral resource statement was the inclusion of the high grade Zoe prospect. Updated mineral resource estimates were also
compiled for the Gabriela and Esperanza prospects and maiden mineral resource estimates were compiled for the Zoe, Martina, Carla
and Nini prospects. There have been no changes to the existing Escondida, Loma Escondida and Deborah mineral resource estimates.



- 40 -









Ted Coupland of Cube has classified a substantial
proportion of the Cerro Moro mineral resources as “indicated” where drill spacing is sufficient to demonstrate acceptable
confidence in the geometry, continuity and grade of the mineralized zones. Surrounding areas have been classified as Inferred where
drill spacing is wider or where unresolved geological complexity exists.



Extorre’s ongoing resource definition
strategy is aimed at:



| | · | further infill and extensional drilling at recently discovered prospects such as Zoe, Carla, Martina, and Nini-Esperanza;
| | - | -------------------------------------------------------------------------------------------------------------------------

| | · | the conversion of existing inferred category mineral resources to indicated category; and
| | - | -----------------------------------------------------------------------------------------

| | · | the identification of potential new mineral resources on other new and existing prospects.
| | - | ------------------------------------------------------------------------------------------



Ted Coupland believes that Extorre’s
ongoing resource definition and exploration strategy is well considered, appropriately funded and has a high chance of successfully
fulfilling its stated aims.



Risks and Uncertainties



As with all mineral resource projects there
are risks and uncertainties associated with all aspects of exploration, sampling, data collection, analytical analysis, mineral
resource estimation and economic evaluation. There is a high degree of geological and resource risk associated with inferred mineral
resources to the extent that there could be a significant material departure between the mineral resource estimates and reality.
Reliance on inferred mineral resources when undertaking preliminary economic evaluations is risky as there is no certainty of economic
viability and mineral reserves cannot be formulated. Indicated mineral resources provide more certainty as to the geological and
grade continuity of the mineralized system than inferred mineral resources. Whilst indicated resources may be converted to mineral
reserves by applying appropriate modifying factors, there still exists a significant degree of geological and resource complexity
that may affect the economic viability of the project.



Mining Studies



The PEA is based on Cube’s November,
2011 mineral resource estimate which includes both indicated and inferred category mineral resources.



The reader is cautioned that the mining
study is a preliminary assessment and it includes inferred mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty
that the preliminary assessment will be realized. No mineral reserves have been estimated.



The PEA study utilizes a combination of
open pit and underground mining methods. The open pit underground interface was determined by optimizing the net value of the mineralization
after projected mining costs have been considered. The open pit contained mineral inventory is estimated at 1.7 million tonnes
at an average grade of 6.01 g Au/t and 347.6 g Ag/t, with open pit operating costs estimated to be US$ 2.46 per tonne for the 1,300
tpd option and US$ 2.39 for the 1,150 tpd option. In addition to the open pit study, a portion of the mineral inventory lying below
the open pits was considered to be mined using an underground “bench and fill”-type system. Approximately 2.3 million
tonnes at 7.55 g/t Au and 425.8 g/t Ag are estimated to be exploitable using underground mining techniques.



A number of different production scenarios
were considered for Cerro Moro, ranging from 1,000 tpd to 1,500 tpd. However, above 1,300 tpd it becomes progressively more difficult
to sustain a consistent output with the current resource. This is due to the low tonnes per metre and very high development rates
associated with narrow vein mining. Either 1,300 tpd or 1,150 tpd are considered sustainable with the current resource and mining
methods.



- 41 -









Metallurgical Processing



A treatment plant capable of processing
either 1,300 tpd or 1,150 tpd has been proposed in the PEA. The plant design incorporates both flotation and gravity recovery stages
to maximise recovery from the variable mineralogy particularly of the silver minerals. Due to the high silver to gold ratios for
the deposits – overall average ratio of 60:1 silver:gold – the Merrill Crowe (zinc cementation) process has been included
instead of adsorption onto carbon for the recovery of precious metals from the leach solution. The plant design is intended to
comply with the requirements of the International Cyanide Management Code. The processing plant has been designed to accommodate
maximum head grades of 25 g/t of gold and 1000 g/t of silver. A design availability of 92% (8059 operating hours per year) for
the process plant has been selected with standby equipment in critical areas. The process design criteria were developed from testwork
and benchmarked data from similar projects.



The metallurgical recoveries selected for
financial evaluation of the Escondida mineralized zone are 95% for gold and 93% for silver. This has been calculated from the leach
extraction data for individual zones and proposed mining schedule on a weighted average basis. Where individual zones have not
been subjected to metallurgical test work the leach extraction rates from a similar source were used as nominated by the client.
It assumes a CCD wash efficiency of 99% and Merrill Crowe precipitation efficiency of 99%.



Preliminary Economic Assessment Results



Simple cash flow financial models
were created by NCL, based on its experience, utilizing the mine production schedule, associated gold/silver grades,
gold/silver recoveries estimated from the preliminary metallurgical test program, and capital and operating costs as outlined
in this technical study. Base case metal prices assumed in the financial modelling were US$ 1,320/oz for gold and US$ 26/oz
for silver. Total metals recovered during the life of the Project are estimated to be 848 koz Au and 47Moz Ag. A summary of
the discounted cash flow modelling (NPV5 and NPV10) for both the 1,300 tpd and the 1,150 tpd throughput scenario at Cerro
Moro, together with the projected IRR and payback period, are presented in Table 15.



|Financial Model                                             |  | 1,300 tpd |               |   | 1,150 tpd |    
|----------------------------------------------------------- |  | --------- | ------------- | - | --------- | ---
|NPV5pre-tax                                                 |  | US$       | 737.4 million |   |           | US$
|NPV5Free cash flow (after tax)                              |  | US$       | 463.2 million |   |           | US$
|NPV10pre-tax                                                |  | US$       | 524.7 million |   |           | US$
|NPV10Free cash flow (after tax)                             |  | US$       | 320.1 million |   |           | US$
|IRR pre-tax                                                 |  |           | 63.1          | % |           |    
|IRR Free cash flow (after tax)                              |  |           | 46.8          | % |           |    
|Years to payback from start of production (at 5% discount)  |  |           | 1.98          |   |           |    
|Years to payback from start of production (at 10% discount) |  |           | 2.16          |   |           |    



Table 15 Economical Evaluation Results
Summary (1,300 tpd &1,150 tpd)



- 42 -









Recommendations



Recommendations for Cerro Moro are discussed
in detailed in Section 26 of the PEA, however, the key recommendations for both exploration activities and development-related
studies going forward include the following:



| | · | Continue the current well balanced drilling strategy of targeted infill drilling to increase resource confidence and extensional
resource definition drilling at known prospects to add additional mineral resources;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Continue with exploration drilling at other encouraging known prospects;
| | - | ------------------------------------------------------------------------

| | · | Continue to update relevant mineral resource estimates for all significant mineralized zones to reflect ongoing changes to
mineral resource confidence and the overall Cerro Moro mineral resource base;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Continue mine engineering and planning studies to define and confirm the economic viability of the Project, and move towards
development stage;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------

| | · | Continue mining studies to refine the current mining model, optimize open pit and underground interface, and identify the optimum
tonnage throughput that yields the best compromise between profitability and practicality;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Continue geotechnical test work and studies including drilling geotechnical holes parallel to the vein-strike in order to identify
structures that may be parallel to exploration drilling. Continue drilling of additional geotechnical holes for open pits;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Carry out extended pumping tests at current bore-sites to determine sustainably flow rates, in addition to continuing prospecting
for water and testing of exploration bores intersect substantive flows;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Refine maximum demand studies for power and progress engineering designs for construction of powerline;
| | - | -------------------------------------------------------------------------------------------------------

| | · | Continue to refine designs for the Tailings Storage Facility;
| | - | -------------------------------------------------------------

| | · | Additional metallurgical test work, including i) test work to confirm concentrate leach extraction rates at the slurry density
nominated for the design of the concentrate leaching circuit, ii) test work to optimize the consumption of the cyanide and zinc
because of the significant impact these reagents have on operating cost, and iii) test work to establish the impact of thiocyanate
on flotation performance because of the impact this has on the selection of the cyanide destruction process and potential to significantly
increase the operating cost.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



OTHER NON MATERIAL PROPERTIES



Don Sixto



The Don Sixto Project is located in the
southern part of the Mendoza Province, central-western Argentina. The property lies at an altitude of 1200 meters, and the arid
character of the area allows good year-round access. The property is also located close to infrastructure and basic goods and services.
The property is controlled through an option agreement between an Argentinean vendor and Cognito Limited, a wholly owned subsidiary
of Extorre, in which Cognito has the right to acquire the Don Sixto Project.



On June 20, 2007, legislation was
passed by the Provincial government, in Mendoza Argentina, prohibiting the use of chemicals typically used in the extraction of
gold and other metals in the province. The legislation effectively puts the Company’s Don Sixto project on hold, unless and
until the government amends the law to allow the Company to resume exploration in the ordinary course. As a result of this legislation
the Company wrote off its investment in the Don Sixto Project during the year.



- 43 -









Santa Cruz Regional



The Santa Cruz regional projects include
Falcon, Verde, Azul, and Puntudo properties and are located in the Santa Cruz province, Argentina. Many of the properties within
the regional exploration package were strategically in Patagonia, suggesting large alteration systems. The amount of subsequent
exploration on these has varied, but in many cases anomalous gold mineralization has been identified. Extorre is re-examining all
of these systems with a view of identifying gold and/or silver targets.The Company owns 100% of the projects and CVSA retains only
a 2% net smelter return.



Fomicruz JV



In March, 2008, Estelar signed a Letter
of Intent for a strategic alliance with Fomicruz, the Santa Cruz Provincial Mining Company, whereby Fomicruz will acquire a 5%
equity interest in Cerro Moro upon the receipt of all permits and authorisations required for production. In parallel, Estelar
may earn-in to an 80% interest (resulting in a joint venture Fomicruz 20% and Estelar 80%) in a large block surrounding Cerro Moro
by spending US$ 10 million. The Fomicruz JV Block covers a total area of 63,000 Ha (630 square kilometers), and includes a possible
northwestern extension of the Escondida vein.



DIVIDENDS AND DISTRIBUTIONS



The Company has not paid any dividends
since incorporation and it has no plans to pay dividends for the foreseeable future, although there are no restrictions that could
prevent the Company from paying dividends.



DESCRIPTION OF CAPITAL STRUCTURE



The Company is authorized to issue an
unlimited number of Common Shares and an unlimited number of Preferred Shares without par value of which as of December
31, 2011, 92,499,439 common shares were issued and outstanding, and no preferred shares were issued and outstanding.
Shareholders are entitled to receive notice of and attend all meetings of shareholders with each common share held entitling
the holder to one vote on any resolution to be passed at such shareholder meetings. Shareholders are entitled to dividends
if, as and when declared by the board of directors of the Company. Shareholders are entitled upon liquidation, dissolution or
winding up of the Company to receive the remaining assets of the Company available for distribution to shareholders after
such assets have been distributed to the holders of the Company’s series 1 preferred shares, if any are then
outstanding, in accordance with the Company’s by-laws. There is no set dividend rate or dividend schedule for the
common shares. The board of directors of the Company will decide if and when dividends should be declared and paid. The
Company's common shares are not subject to any future call or assessment and there are no provisions for exchange,
conversion, exercise, redemption or retraction.



As of the date hereof the Company has 96,919,339
common shares issued and outstanding.



As of December 31, 2011, the Company also
had outstanding stock options to purchase 10,345,213 common shares with a weighted average exercise price of $3.13 per share. As
of the date hereof the Company has outstanding stock options to purchase 9,520,813 common shares with a weighted average exercise
price of $3.35.



MARKET FOR SECURITIES



The Company was incorporated on December
21, 2009 and its common shares began trading on the TSX on March 24, 2010 under the symbol “XG”.



- 44 -









On March 14, 2011, the Company began trading
its common stock on the NYSE Amex Equities under the symbol “XG”.



The following table shows the price ranges
and volume traded of the Company’s common shares on the TSX on a monthly basis for the most recently completed financial
year ended December 31, 2011:



|Year |  | Month     |  | Open |        |  | High |  |        | Low |  |  | Close  |  |  | Volume |       
|---- |  | --------- |  | ---- | ------ |  | ---- |  | ------ | --- |  |  | ------ |  |  | ------ | ------
|2011 |  | January   |  |      | 6.290  |  |      |  | 6.650  |     |  |  | 4.230  |  |  |        | 5.050 
|     |  | February  |  |      | 5.100  |  |      |  | 5.700  |     |  |  | 4.880  |  |  |        | 5.090 
|     |  | March     |  |      | 5.070  |  |      |  | 6.280  |     |  |  | 5.070  |  |  |        | 5.750 
|     |  | April     |  |      | 5.690  |  |      |  | 9.580  |     |  |  | 5.510  |  |  |        | 9.240 
|     |  | May       |  |      | 9.180  |  |      |  | 11.060 |     |  |  | 8.450  |  |  |        | 11.110
|     |  | June      |  |      | 11.010 |  |      |  | 12.520 |     |  |  | 10.110 |  |  |        | 12.410
|     |  | July      |  |      | 12.430 |  |      |  | 14.840 |     |  |  | 11.450 |  |  |        | 12.250
|     |  | August    |  |      | 12.720 |  |      |  | 12.890 |     |  |  | 8.640  |  |  |        | 9.590 
|     |  | September |  |      | 9.590  |  |      |  | 11.270 |     |  |  | 5.960  |  |  |        | 6.130 
|     |  | October   |  |      | 6.290  |  |      |  | 9.380  |     |  |  | 5.560  |  |  |        | 7.420 
|     |  | November  |  |      | 7.100  |  |      |  | 9.500  |     |  |  | 7.040  |  |  |        | 9.300 
|     |  | December  |  |      | 9.300  |  |      |  | 9.900  |     |  |  | 6.680  |  |  |        | 7.530 



During the year ended December 31, 2011,
the Company issued 400,000 stock options with a strike price of $8.89 per share.



- 45 -







DIRECTORS AND EXECUTIVE OFFICERS



Name, Address and Occupation



The names and municipalities of residence,
present positions with the Company and principal occupations during the past five years of the directors and executive officers
of the Company as at December 31, 2010 are as follows:



|Name, Position(s) with
the Company (3) and
Province / State or
Country of Residence                           |  | Principal Occupation 
During the Last Five Years (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Period (s) Served
as a Director(5)
|------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------
|Bryce RoxburghCo-Chairman of the Company and Director
        Philippines                                     |  | Co-Chairman of the Company since March 2010; President and Chief Executive Officer of Exeter Resource Corporation; Chairman of Rugby Mining Limited since January 2007 and Geological consultant from 2000-2003.                                                                                                                                                                                                                                                                                                     |  | March 11, 2010 to date            
|                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|Yale SimpsonCo-Chairman of the Company and Director
        
        West Vancouver, British Columbia, Canada |  | Co-Chairman of the Company since March 2010; Chairman of Exeter Resource Corporation since September 2003; President of Canaust Resource Consultants Ltd. since 1992; Director of Diamonds North Resources Ltd. since March 2002; Dynasty Metals & Mining Inc. from September 2003 to October 2011; Maudore Minerals Ltd. since November 2010; Silver Quest Resources Ltd. from December 2009 to December 2011; Director of Independence Gold Corp. since December 2011 and Rugby Mining Limited since January 2007. |  | March 11, 2010 to date            
|                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|Robert Reynolds(1)(2)Director
        Sydney, Australia                                                       |  | Chartered Accountant; Director of Exeter Resource Corporation since June 2007; Director of Rugby Mining Limited since January 24, 2007; Alacer Gold Corp. from March 2002 to August 2011 and Global Geoscience Limited since December 2007.                                                                                                                                                                                                                                                                          |  | March 11, 2010 to date            
|                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|Ignacio Celorrio
        DirectorBuenos Aires, Argentina                                                      |  | Lawyer with Quevedo Abogados, President of Malbex San Juan S.A., President of Minera Cielo Azul S.A., and President of Inversiones Mineras Australes S.A.                                                                                                                                                                                                                                                                                                                                                            |  | March 11, 2010 to date            
|                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|James Strauss(1)(2)Director
        London, UK                                                                |  | Partner of Strauss Partners LLP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | September 9, 2010 to date         
|                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|George Lawton(1)(2)Director
        North Vancouver, British Columbia, Canada                                 |  | Chartered Accountant and Consulting Business Advisor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | September 9, 2010 to date         

- 46 -







|Name, Position(s) with
the Company (3) and
Province / State or
Country of Residence              |  | Principal Occupation 
During the Last Five Years (4)                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Period (s) Served
as a Director(5)
|------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------
|Eric Roth
        President, CEO and Director of the CompanySantiago, Chile                      |  | President, Chief Executive Officer and Director of the Company since March 2010.                                                                                                                                                                                                                                                                                                                                                                                                                     |  | March 11, 2010 to date            
|                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|Darcy DaubarasChief Financial Officer
        
        North Vancouver, British Columbia, Canada |  | Chief Financial Officer of Rugby Mining Limited and Financial Manager of Exeter Resource Corporation.                                                                                                                                                                                                                                                                                                                                                                                                |  | N/A                               
|                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|Cecil BondVice President of Finance
        Langley, British Columbia,
Canada                    |  | VP of Finance since March 2010; Director of the Company from December 2009 to September 2010; Chief Financial Officer of Exeter Resource Corporation since April 2005; Chartered Accountant. Since 1996 to present Director, and at various times President, CEO and CFO of Argosy Minerals Inc.; CFO of Rugby Mining Limited (formerly Carlyle Mining Corp.) from February 2007 to March 2009; Director of Rugby Mining Limited since March 2009; Director and officer of various private companies |  | N/A                               
|                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                   
|Louis Montpellier
        Senior Vice PresidentVancouver, British Columbia, Canada               |  | Senior Vice President of the Company since March 2010; Director of the Company from March 2010 to September 2010; Vice President Corporate Development of Exeter Resource Corporation since February 2010; Mining lawyer; Partner Gowling Lafleur Henderson LLP from April 2001 to February 2011.                                                                                                                                                                                                    |  | N/A                               



| | (1) | Denotes member of the Audit Committee.
| | --- | --------------------------------------

| | (2) | Denotes member of the Compensation Committee.
| | --- | ---------------------------------------------

| | (3) | For the purposes of disclosing positions held in the Company, "Company" includes the
Company and any parent or subsidiary thereof.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------

| | (4) | The information as to province or state and country of residence, principal occupation and number
of shares beneficially owned by (directly or indirectly or over which control or direction is exercised) has been furnished by
the respective individuals.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Each director ceases to hold office at the close of the next annual meeting of shareholders.
| | --- | --------------------------------------------------------------------------------------------



At December 31, 2011, the Company's directors
and executive officers, as a group, beneficially own, control or direct, directly or indirectly, a total of 6,467,200 shares, representing
7.0% of the Company’s common shares. As at the date of this AIF, the Company’s directors and executive officers, as
a group, beneficially owned, controlled or directed, directly or indirectly, a total of 7,166,900 shares, representing 7.39% of
the Company’s common shares.



- 47 -







Conflicts of Interest



Certain of the directors and officers of
the Company are also directors and/or officers and/or shareholders of other natural resource companies. While the Company is engaged
in the business of exploiting mineral properties, such associations may give rise to conflicts of interest from time to time. The
directors of the Company are required by law to act honestly and in good faith with a view to uphold the best interests of the
Company and to disclose any interest that they may have in any project or opportunity of the Company. If a conflict of interest
arises at a meeting of the board of directors, any director in a conflict must disclose his interest and abstain from voting on
such matter. In determining whether or not the Company will participate in any project or opportunity, the directors will primarily
consider the degree of risk to which the Company may be exposed and its financial position at the time.



LEGAL PROCEEDINGS



Except for the following two actions, the
Company is not a party to any legal proceedings, nor to the knowledge of management, are there any legal proceedings which may
materially affect the business and affairs of the Company.



The Company is engaged in a constitutional
challenge of the anti-mining legislation in Mendoza Province, Argentina. On July 20th, 2007, Cognito filed a lawsuit at
the Supreme Court of Mendoza, against the Government of the Province of Mendoza. The named parties in the lawsuit are Cognito Limited
and Martin Carotti vs. Mendoza Government. The claim requests a constitutional challenge of the anti-mining legislation put forth
by the Mendoza government. Currently the lawsuit is in the stage of production of evidence.



Under Argentine foreign exchange control
regulations 30% of any funds brought into the country by way of loans are required to be placed on deposit with the Argentine Central
Bank (the “Central Bank”) for one year after they are brought into the country except under certain exemptions one
of which is where funds are brought into the country for exploration purposes. The Company’s Argentinean Branch, Cognito
utilized that exemption in bringing funds into Argentina.  Cognito understands that the Central Bank’s interpretation
of the regulations is that value added taxes and other taxes paid on exploration expenditures does not qualify for the exemption
and has consequently charged  it, together with certain of its representatives with a breach of the foreign exchange laws
relating to funds brought into the country in 2006. The charge is that an amount of US$ 7,300 should have been deposited with the
Central Bank to comply with the regulations. Under the penalty provisions a fine of up to US$ 73,000 and the suspension for up
to 10 years from operating in the currency exchange may be imposed if found guilty.  At this time Cognito and its representatives
are defending against the charge.  The charge against Cognito does not affect the activities of Estelar which owns and operates
the Cerro Moro Project.



INTEREST OF MANAGEMENT AND OTHERS
IN MATERIAL TRANSACTIONS



The directors and officers of the Company
are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interests
which they may have in any project or opportunity of the Company. The directors and officers of the Company are aware of the existence
of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors and
officers of conflicts of interest and the Company will rely upon such laws in respect of any directors' and officers' conflicts
of interest or in respect of any breaches of duty by any of its directors and officers. Such directors or officers in accordance
with applicable laws will disclose all such conflicts and they will govern themselves in respect thereof to the best of their ability
in accordance with the obligations imposed upon them by law.



- 48 -









During the current financial year and since
incorporation no director, executive officer or person or company that beneficially owns, controls or directs, directly or indirectly
more than 10% of the shares of the Company or any associate or affiliate of such persons or companies had any material interest,
direct or indirect, in any transaction which has materially affected or is reasonably expected to materially affect the Company
or its subsidiaries.



TRANSFER AGENT



The Company’s transfer agent for
its common shares is Computershare Investor Services Inc., at its Vancouver, B.C. office. Computershare Investor Services United
States acts as the co-transfer agent for US purposes.



MATERIAL CONTRACTS



The list below are contracts which management
currently considers to be material to the Company and its assets and operations:



| | · | Exploration and Option Agreement among
Cerro Vanguardia Sociedad Anonima, Estelar and Extorre dated December 30, 2003; and
| | - | --------------------------------------------------------------------------------------------------------------------------

| | · | Fomicruz Agreement between Estelar and Fomento Minera de Santa Cruz Sociedad del Estado dated March 3, 2009, see
                                                                                                               “Cerro Moro Project - Principal Project - Acquisition Terms”.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



INTEREST OF EXPERTS



The following persons, firms and companies
are named as having prepared or certified a report, valuation, statement or opinion described or included in a filing, or referred
to in a filing, made under National Instrument 51-102 – Continuous Disclosure Obligations by the Company during, or
relating to, the Company’s most recently completed financial year and whose profession or business gives authority to the
report, valuation, statement or opinion made by the person, firm or company.



|Name(1)                                                                        |  | Description         |  | Interest in
the
Company(2)
|------------------------------------------------------------------------------ |  | ------------------- |  | --------------------------
|Carlos Guzmán  Mining Eng, Registered Member 
of the Chilean Mining Commission |  | Co-authored the PEA |  | None                      
|David (Ted) Coupland(3)MAusIMM(CP)
Cube Consulting Pty Ltd.                    |  | Co-authored the PEA |  | None                      
|Bill Gosling(3)BSc Eng, MBA, FAUSIMM                                           |  | Co-authored the PEA |  | None                      
|Anthony Sanford BSc, MBA, SACNASP Pr.SciNat.                                   |  | Co-authored the PEA |  | None                      
|Krishna Sinha P. Eng Utah                                                      |  | Co-authored the PEA |  | None                      
|Michael Gabora P. Geo Ontario                                                  |  | Co-authored the PEA |  | None                      



- 49 -





Notes:

| | (1) | None of the experts identified above is or is expected to be elected or appointed or employed as
a director, officer or employee of the Company.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Refers to all registered and beneficial interests, direct or indirect, in any securities or other
property of the Company or its associates or affiliates (a) held by the expert while preparing the report, (b) received by
the expert after preparing the report or (c) to be received by the expert.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | In addition, each of the authors has prepared or certified additional reports during the Company’s
most recently completed financial year end.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



PricewaterhouseCoopers
LLP are the auditors who issued the auditor’s report for the Company’s annual financial statements for the financial
years ended December 31, 2011 and 2010. PricewaterhouseCoopers
LLP is independent with respect to the Company within the meaning of the Rules of Professional Conduct of the Institute
of Chartered Accountants of British Columbia. PricewaterhouseCoopers LLP is registered with
the Public Company Accounting Oversight Board.



AUDIT COMMITTEE



The Audit Committee is appointed by the
board of directors of the Company to oversee the accounting and financial reporting process of the Company, the system of internal
accounting and financial controls and procedures and the audit procedures and audit plans. The Audit Committee also reviews and
recommends to the Board for approval the annual financial statements, the annual report and certain other documents required by
regulatory authorities.



The Company’s Audit Committee Charter
is attached as Appendix 1 hereto.



As at the date hereof, the Audit Committee
is composed of: George Lawton, Robert Reynolds and James Strauss, all of whom are “financially literate” and “independent”
within the meaning of National Instrument 52-110 – Audit Committees.



Mr. Lawton, Chairman of the Audit Committee
is a Chartered Accountant with more than 20 years of financial experience in companies in diverse industries. His experience includes
all aspects of financial reporting and accounting (external and internal), M&A integration, balance sheet restructuring, financial
planning, and debt financing. Most recently he was the Senior VP of Operational Finance for Uranium One Inc. where he was responsible
for management reporting, financial planning, internal audit, enterprise risk management, and information technology.



Mr. Reynolds is a Chartered Accountant
with over 35 years’ experience in commerce and practice, and with over 25 years in the mining industry, which provides him
with an understanding of the accounting principles used by the Company to prepare its financial statements, the ability to assess
the general application of such accounting principles and analyze or evaluate financial statements, and an understanding of internal
controls and procedures for financial reporting.



Mr. James Strauss has worked for 25 years
as a stockbroker in the city of London, specializing in the corporate resource arena. Having left BMO Capital Markets as Managing
Director of the UK branch in 2009, Mr. Strauss is currently a Director of Strauss Partners. Mr. Strauss has raised in excess of
$1 billion in recent years for projects spanning the globe in both the energy and mineral sectors from institutions in North America,
Australia and Europe. Mr. Strauss is also a committee member of the Association of Mining Analysts.



Audit Fees, Audit-Related Tax and All Other Fees



The following table sets out the aggregate
fees billed by the Company’s external auditor for the two most recently completed financial years.



- 50 -









|PricewaterhouseCoopers LLP |     
|-------------------------- | ----
|Financial Year   Ending    |     
|                           | 2011
|                           | 2010



| | (1) | The aggregate fees billed by the Company’s external auditor for audit services.
| | --- | -------------------------------------------------------------------------------

| | (2) | The aggregate fees billed by the Company’s external auditor for assurance and services relating
to the 20F registration.
| | --- | ------------------------------------------------------------------------------------------------------------------------

| | (3) | The aggregate fees billed for tax compliance, tax advice and tax planning services.
| | --- | -----------------------------------------------------------------------------------

| | (4) | Other than as disclosed above, the Company’s external auditor has not billed the Company
for any products or services during the last two financial years.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



ADDITIONAL INFORMATION



Additional financial and other information
is provided in the Company’s audited consolidated financial statements and management’s discussion and analysis for
the financial year ended December 31, 2011 which can be found on SEDAR at www.sedar.com
and on EDGAR website at www.sec.gov.



Additional information, including directors’
and officers’ remuneration and indebtedness, principal holders of the Company’s securities and securities authorized
for issuance under equity compensation plans, is contained in the Company’s information circular dated May 2, 2011 for its
2011 annual meeting of shareholders held on June 9, 2011.



Copies of the above document and this AIF
are also available upon request to the Chief Financial Officer of the Company at its corporate head office.



- 51 -