Document:

Unassociated Document

    
      EXHIBIT
        10.2

    

    

    

    NI
      43-101 TECHNICAL REPORT PERTAINING TO:

    

    The
      Vianey Mine - Guerrero State, Mexico

    

    

    

    Summary
      of Property Setting, Prior Exploration, and Mineral Potential, 

    With
      Recommendations for Exploration

    

    

    

    October
      18, 2004

     Revised
      March 10, 2005

    

    

    

    

    Prepared
      For: Minerale Jazz S.A. de C.V.

    5525
      West
      Boulevard, Suite 123

    Vancouver,
      B.C. Canada

    V6M
      3W6

    Tel.
      (604) 677-6830

    

    

    

    

    

    

    Prepared
      By: Rodney A. Blakestad, J.D., C.P.G.

    1602
      W.
      Placita Sin Nieve

    Sahuarita,
      Arizona 85629

    Tel./Fax:
      (520) 625-5046

    MasOro@dakotacom.net

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	Vianey
              Mine - Guerrero State, Mexico 	 	
              Page

            

    

    
      	1.  	
              Summary

            

    

    

    This
      report provides a summary of the physical setting, geology, recent exploration
      history and mineral exploration potential of the Vianey Mine concession and
      provides recommendations for exploration. The report was prepared in conformance
      with National Instrument 43-101 at the request of Minerale Jazz SA de CV.

    

    The
      Vianey Mine concession is a historically productive mining property with mineral
      values primarily in silver-zinc-lead, and local gold-copper credits. The subject
      property has been involved in prior underground exploitation by third parties
      and is said to have realized production intermittently since prior to the
      Spanish conquest. The concession consists of 44 hectares held under Exploitation
      concession (Number 164151, Exp. No. 5929, issued March 5, 1979) pursuant to
      the
      laws of Mexico. Minerale Jazz SA de CV exercised a lease with option to purchase
      the property held between Minera LMX SA de CV, and Minera Chilpancingo SA de
      CV,
      and the owner of the concession. The property is owned 100% by Minerale Jazz
      with no royalty, back-in rights, or other encumbrance.

    

    The
      Vianey Mine concession is located in south-central Mexico, within a belt of
      Mesozoic limestone-siltstone-volcanic rocks, intruded locally by Cenozoic
      igneous rocks. The belt is the southern part of the Sierra Madre province,
      which
      includes a string of gold-silver and base metal deposits that occur in a NW-
      to
      NNW-trending belt from the state of Oaxaca (to the ESE) northward to the Arizona
      border with Sonora. 

    

    Preliminary
      mineral resource calculations were compiled by Hawley (2000a and 2000b) for
      mineralization left in-place above the -75 meter level and in areas of recent
      drilling above and below that level. The resource estimates are not confirmed
      in
      this analysis; instead the property is viewed as an exploration target for
      silver-zinc-lead and local gold-copper mineralization. On-site examination
      and
      available exploration
      data
      (drill data and channel sample results) indicate a high probability for
      discovering extensions to known productive silver-bearing veins on Vianey Mine
      concession. Excellent exploration potential extends both laterally and
      vertically from the areas of historical production and recent drilling. An
      exploration plan and strategy for development are recommended.

    

    Initial
      exploration is recommended to comprise of lithological and structural mapping
      of
      the underground and surface exposures, and aerial photography or high-resolution
      satellite imagery interpretation of the area. The objective of recommended
      work
      is to locate and orient approximately 3,230 meters of angle-hole diamond core
      drilling to test the grade, thickness, and continuity of mineralization at
      depth
      and along strike of known mineralized structures. Particular emphasis should
      be
      placed on the down-dip projections of the productive mineral system, where
      success in further exploration will add substantial tonnage to the
      mineralization identified at- and above the -75 meter level. The estimated
      cost
      of the proposed exploration is $461,780 USD or $577,225 CAD. 

     

    If
      favorable results are obtained during the recommended work, subsequent work
      plans are deferred for future consideration and should be addressed by a
      Qualified Person as the results warrant. The medium-term strategy recommended
      for Vianey Mine is that a decline be considered for access to the underground
      workings below the -75 meter level so that underground drilling and potential
      future exploitation can be accomplished efficiently. 

    
       

      
        
          
          

        

        
          Page
            i

          
            

          

        

        
          
          

        

      

       
TABLE
      OF CONTENTS

    

      
        	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                1.

              	
                Summary
                  

              	
                i

              
	
                2.

              	
                Introduction
                  and Terms of Reference 

              	
                1

              
	
                3.

              	
                Disclaimer
                  - Reliance on Other Experts

              	
                1

              
	
                4.

              	
                Property
                  Description and Location 

              	
                1

              
	
                5.

              	
                Accessibility,
                  Climate, Local Resources, Infrastructure and Physiography

              	
                5

              
	
                6.

              	
                History

              	
                6

              
	
                7.

              	
                Geological
                  Setting

              	
                12

              
	
                7.1

              	
                Stratigraphy
                  of Sedimentary Rocks

              	
                12

              
	
                7.2

              	
                Intrusive
                  Rocks

              	
                13

              
	
                7.3

              	
                Structural
                  Framework

              	
                13

              
	
                8.

              	
                Deposit
                  Types

              	
                13

              
	
                9.

              	
                Mineralization
                  at the Vianey Mine Concession

              	
                14

              
	
                10.

              	
                Exploration

              	
                15

              
	
                11.

              	
                Drilling

              	
                16

              
	
                12.

              	
                Sampling
                  Method and Approach

              	
                22

              
	
                13.

              	
                Sample
                  Preparation, Analyses and Security

              	
                22

              
	
                14.

              	
                Data
                  Verification

              	
                22

              
	
                15.

              	
                Interpretation
                  and Conclusion

              	
                23

              
	
                16.

              	
                Recommendations

              	
                23

              
	
                17.

              	
                Pertinent
                  References

              	
                26

              
	
                18.

              	
                Statements
                  of Qualification of Mr. Rodney Blakestad

              	
                27

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                ILLUSTRATIONS

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                Figure
                  1: 

              	
                Location
                  map of Mexico and the Vianey project area.

              	
                2

              
	
                Figure
                  2: 

              	
                Detail
                  map of the Vianey Mine area 

              	
                3

              
	
                Figure
                  3: 

              	
                Location
                  of Vianey Mine and nearby mineral deposits

              	
                5

              
	
                Figure
                  4: 

              	
                View
                  from Vianey Mine portal across valley

              	
                6

              
	
                Figure
                  5: 

              	
                Plan
                  map for the Vianey Mine concession

              	
                7

              
	
                Figure
                  6: 

              	
                Longitudinal
                  section of the Vianey Mine

              	
                10

              
	
                Figure
                  7: 

              	
                Regional
                  geology map of the Vianey Mine area

              	
                12

              
	
                Figure
                  8: 

              	
                Massive
                  sulfide on left portion of vein

              	
                14

              
	
                Figure
                  9: 

              	
                Lens
                  of massive sulfide in fault zone

              	
                14

              
	
                Figure
                  10: 

              	
                Example
                  of an un-named, near vertical hydrothermal vein

              	
                15

              
	
                Figure
                  11: 

              	
                Plan
                  map of the -75 Level showing 1996 drill stations

              	
                17

              
	
                Figure
                  12: 

              	
                Table
                  of mineralized intercepts and drill hole section - station
                  1

              	
                18

              
	
                Figure
                  13: 

              	
                Table
                  of mineralized intercepts and drill hole section - station
                  2

              	
                19

              
	
                Figure
                  14: 

              	
                Table
                  of mineralized intercepts and drill hole section - station
                  4

              	
                20

              
	
                Figure
                  15: 

              	
                Table
                  of mineralized intercepts and drill hole section - station
                  6

              	
                21

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              

      

       

    

    
      
        
        

      

      
        Page
          ii

        
          

        

      

      
        
        

      

    

    

    LIST
      OF TABLES

    
 

    
      	Table 1: 	 	List of holes drilled at the Vianey
              Mine
              concession1	
              16

            
	Table 2:	 	Proposed exploration budget for the
              Vianey
              Mine	
              24

            

    

     

    
      	 	 	 	 
	APPENDIX A -Vianey Mine
              Title
              Opinion	
              29

            

    

     

          

    
      
         

      

      
        Page
          ii

        
          

        

      

      
         

      

    

    
      	2.  	
              Introduction
                and Terms of Reference

            

    

    

    This
      report was prepared at the request of
      Minerale Jazz SA de CV as a National Instrument 43-101 (Standards of Disclosure
      for Mineral Projects) Technical Report. Following the guidelines of Companion
      Policy 43-101-CP and Form 43-101-F1 for Technical Reports, this document
      includes a description of the physical attributes of the property, its
      ownership, location and access, a brief description of its geological setting,
      a
      compilation of previous work on the property, a description of the exploration
      potential for the Vianey property, and contains recommendations for exploration.
      

    

    The
      Vianey Mine concession (the subject property) is situated within the southern
      Sierra Madre Occidental province in the south-central region of Mexico (Reyes,
      et. al, 2000). The property contains a number of silver-base metal exploration
      targets based on an assessment of drilling and other exploration work carried
      out on the tenement by Hawley (2000a) and others. 

    

    Field
      examination by the author verified the presence of these mineralized structures.
      A
      near-term campaign of geological mapping, structural analysis, underground
      sampling, and surface drilling is recommended; a budget to conduct the same
      is
      set forth.
      

    

    All
      units
      used in this document are metric, unless otherwise indicated and all currency
      amounts are in US Dollars, unless otherwise indicated.

    

    
      	3.  	
              Disclaimer
                - Reliance on Other Experts

            

    

    

    In
      preparing this report the writer reviewed a number of internal reports, drill
      records, and resource compilation tables and maps pertaining to the geology
      and
      the existence of silver-zinc-lead resources defined at the Vianey property
      by
      previous workers, and from published maps and reports (see Pertinent
      References). The writer acknowledges the input of Mr. Peter Hawley, a Qualified
      Person, who has extensive knowledge and experience with the Vianey Mine and
      the
      underground exploration performed there. Ground-truth evaluation of the property
      took place by the writer between August 21 and August 23, 2004, which resulted
      in identification of several issues involving prior exploration and sample
      reports. Notwithstanding, the writer believes that the preexisting data are
      reasonably accurate and sufficient to form a sound basis to recommend aggressive
      exploration of the concession. 

    

    The
      writer did not have the means to investigate title of the property or the status
      of periodical tax payments required by the Mexican government to maintain the
      property in good standing. Thus, the writer relies entirely on the title opinion
      attached to this document as Appendix A.

    

    
      	4.  	
              Property
                Description and Location

            

    

    

    The
      Vianey Mine is located in the north-central part of the state of Guerrero,
      which
      lies in the southern part of Mexico (see Figure 1). The Vianey Mine concession
      is located about 250 km by road south of Mexico City and 160 km north of
      Acapulco. Road access is good via highway 95, then by 15 kilometers of gravel
      road.

    

    

    
      
        
           

        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

    
      

      The
        concession exists in the municipality of Cocula, 1.6 km southeast of the
        small
        town of Atzcala, where labor suitable for exploration and limited mining
        can be
        found. Supplies and equipment area available in the towns of Mezcala and
        Chilpancingo, the capital of Guerrero, located on the main highway approximately
        8 and 48 km south of the property respectively. A major power line passes
        near
        the property and electrical power is available at the mine.

       

    

    

     

    Figure
      1:
      Location map of Mexico and the Vianey project area showing major cities and
      roads (R. Blakestad, 2004). 

     

    The
      Vianey Mine is situated within the Morelos National Mining Reserve on the
      southwestern flank of the southern Sierra Madre Occidental province that extends
      north-northwest to the border between Sonora and Arizona, and east-southeast
      to
      Oaxaca State. The region is characterized by moderately steep rolling hills
      with
      alternating valleys of gentle gradient. Elevations in the area range from 450
      to
      850m above sea level. A major drainage system, the Balsas River, flows generally
      east to west through the region, about 2.5 km south of the site (see Figure
      2).

     

     

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

     

    The
      concession constitutes 44 contiguous hectares, centered on UTM coordinates
      431,330m E, 1,987,020m N (WGS 84, Zone 14), or -99.6485 degrees E, 17.9704
      degrees N. The property is held under Exploitation concession (Number 164151,
      Exp. No. 5929, issued March 5, 1979).

    

    Right
      of
      access over the surface is not an issue with the Vianey Mine claim, as it
      straddles the main road between Atzcala and Mezcala. The owner of the surface
      estate of the concession is not known; restrictions and rights of use to the
      surface were not determined. The property was formerly in production on a
      small-scale basis by Minera Chilpancingo, SA de CV. 

    

    Minera
      LMX SA de CV acquired a purchase option on the property in 1996 and conducted
      exploration summarized below. Minerale Jazz SA de CV acquired 100% interest
      in
      the property from Minera LMX, Minera Chilpancingo, SA de CV and the underlying
      owner, Mr. Jorge Briones de Garcia, in 2004. Accordingly, there is no royalty
      or
      ownership encumbrance regarding the property. An independent legal assessment
      of
      the title to the property is presented in Appendix A of this report.

    
       

      

       

      Figure
        2:
        Detail map of the Vianey Mine area showing the capital Chilpancinco, the
        Rio
        Balsas and the major electrical power line that passes just north of the
        property.

      Base
        map
        from Maps of Mexico (2004). 

      
 

    

    
      In
        Mexico, all minerals are held in trust for the people of Mexico by the national
        government. Surface rights can be held by the government, local communities
        (“ejidos”), or privately held by companies or individuals. Under the mining
        regulations, there are no provisions for patent to mineral lands in Mexico.
        The
        granting of permission for an individual, a cooperative, or a commercial
        company
        to acquire rights to explore for-, and ultimately for extracting minerals
        from
        the ground, is governed by legislation administrated by the government of
        Mexico. 

      

      The
        Mexico mining code of 1990 was revised in June 1992, and its current enabling
        Regulations were issued by the President of Mexico in 1999. The government,
        under the mining code, can grant to individuals and Mexican corporations
        mining
        concessions with the right to explore and extract mineral resources.

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

    
 

    “Concessions”
      refer to mining lots, the perimeter and name of which is determined by the
      applicant, and which are granted on “free” land (“tierra libre”). Exploration
      concessions are granted to whoever first requests them; if two or more persons
      request the same area at the same time, a lottery is held to award the
      concession. Concessions are initially granted for exploration purposes. An
      Exploration concession is valid for a period of six years; an Exploitation
      concession for fifty years. Exploitation concessions can be renewed once for
      an
      additional fifty years, if requested before the end of the expiration of the
      original concession. The Vianey Mine is under an Exploitation concession, which
      was granted in 1979 and will expire, unless renewed, in 2029. 

    

    The
      main
      obligations which arise from a mining concession, and which must be kept current
      to avoid its cancellation, are the performance of assessment work, the payment
      of mining taxes (technically called “duties”), and compliance with environmental
      laws. 

    

    The
      Mining Law establishes that minimum amounts of funds for assessment work be
      spent in performing exploration work (in the case of exploration concessions)
      or
      exploration and/or exploitation work (in the case of exploitation concessions);
      in the latter case the sales of minerals from the mine may be substituted in
      lieu of the equivalent amount of minimum expenditures. A report must be filed
      in
      May of each year regarding the work done during the previous calendar year.
      

    

    Mining
      duties must be paid in advance in January and July of each year, and they are
      based on the type of concession, on the surface area of the concession and
      the
      number of years that have elapsed since the date of issue. Environmental laws
      require the filing and approval of an environmental impact statement for all
      exploitation work, and for exploration work that does not fall within the
      threshold of a standard issued by the Federal Government for mining exploration.
      Environmental permitting for exploitation, absent any strong local opposition
      to
      the project, can be usually achieved in less than one year (Sanchez, 2001).
      

    

    Potential
      environmental impacts and social impacts to communities affected by future
      land
      disturbance and mining activities are reviewed by the environmental protection
      sector of the government. There are no known or observed environmental
      liabilities respecting the concession or the land adjacent to the Vianey Mine.
      The writer is not aware of any requirements to survey the property, other than
      those that would be conducted in the ordinary process of applying for an
      exploration concession, or those incident to developing a production plan (for
      environmental purposes). 

    

    Water
      is
      scarce in Mexico, and mining operations generally require a great deal of water.
      The system that has been in place since the mid-nineties is based on a market
      allocation of water. Since the use of most water requires a water concession,
      by
      making this concession transferable within its hydrological district a market
      was created for water rights in each such district. Typically, with prior
      approval of the National Water Commission, a miner will purchase water rights,
      cap the existing wells, and drill a new well near his mining project (Sanchez,
      2001). 

    At
      the
      Vianey Mine, no water occurs in the mine, even at the lowest -75 meter level.
      

    

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    There
      are
      no facilities at the mine. Situated approximately 40 meters in front of the
      main
      portal, there exists a 940 tonne stockpile of ore from recent underground
      development work. Other than a small shed and an electrical control box, there
      are no buildings, tailings piles or waste stockpiles on the property.

     

    There
      are
      no other constraints, obligations, or environmental liabilities known to the
      writer that constitute a concern for Minerale Jazz in regards to exploration
      on
      the property. The exploration recommended in this document will require permits
      for drilling, which are normally readily available. An underground development
      program would require an explosives permit, impact assessments and environmental
      planning permits from various Mexican government agencies, which entails several
      months of planning and governmental document review. 

    

    
      	5.  	
              Accessibility,
                Climate, Local Resources, Infrastructure and
                Physiography

            

    

    

    The
      Vianey Mine property is located in the Guerrero Gold Belt, in the central
      Guerrero State

    Morelos
      National Mineral Reserve, southwestern Mexico, 15 km northwest of Mezcala.
      The
      property can be reached using Highway 95, from Mexico City or Acapulco to
      Mezcala at the Balsas River and 15 km of gravel road to Atzcala (population
      ~
      2000), 1.6 km from the mine site. Access is somewhat restricted from June to
      October, due to rainy season. Electricity and water supplies are readily
      available near the site, and telephone, medical facilities and labor are
      available from the local towns. Land for mining, milling and waste disposal
      is
      available on- and immediately adjacent to the concession.

    

    The
      Vianey Mine is located in a region known to have many mines. It is situated
      near
      populated centers that can provide all the necessary services, labor and
      suppliers to sustain a mining operation. Most of these towns and villages can
      be
      accessed by paved roads or highways. A railroad and a local airport can be
      accessed in Iguala, 55 km north of Valerio on Highway 95 (see Figure 3).

     

    

    Figure
      3:
      Location of the Vianey Mine and nearby mineral deposits. Map after Hawley
      (2000a).

    

    One
      of
      the closest mills capable of processing ore extracted from the Vianey Mine
      is
      located in Taxco, 80 km to the north of Valerio, on Highway 95; it is operated
      by Industrial Minera Mexico S.A. The mill uses flotation and a cyanide leach
      process, with an operating capacity of 1500 tons per day (Ciesielski, 2001).
      Other mills are located in the vicinity of Vianey Mine, but their suitability
      for processing poly-metallic silver ores is not known. 

    

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

    The
      region around Vianey Mine consists of rolling hills, generally covered with
      lush
      vegetation (see Figure 4), and low-gradient valleys where extensive farming
      takes place. Valley elevations are on the order of 450 meters and local hills
      rise to elevations of 850 meters. The climate is semi-tropical with a rainy
      season from June to October and generally warm temperatures throughout the
      year
      (range 10 to 40° C). Work and mining operations can be accomplished on a
      12-month basis. 

    

    

    Figure
      4:
      View from Vianey Mine portal across valley to Atzcala, with power line in
      background. 

    

    
      	6.  	
              History

            

    

    

    According
      to Hawley (2000a), the Vianey Mine has been operated intermittently on a
      small-scale basis since the 1400s. More recently, the mine is said to have
      been
      in almost continuous production
      since about 1976 by Compania Minera de Chilpancingo S.A. and operated until
      1996
      on a small scale with short breaks, extracting 200 to 300 tonnes per month.
      

    
       

      Underground
        workings put in by Compania Minera de Chilpancingo, and its predecessors,
        amounts to seven levels, several winzes, two shafts and numerous stopes.
        The
        portal is at the “0” Level approximately 540 meters elevation (see Figures 5 and
        6), which penetrates into the mountain about 100 meters in an easterly
        direction. The various level numbers reflect distance in meters above and
        below
        the 0 Level. Two primary veins were developed by Chilpancingo: the Tepemesquite
        and the Vianey Veins. 

      

      
        
          
          

        

        
          Page
            6

          
            

          

        

        
          
          

        

      

      Stopes
        exist along the Tepemesquite vein between the +25 and 0 Levels on a N110°E vein
        system that dips 85°N. The Vianey Vein was developed on the 0, -25, -38, -50,
        -68 and -75 levels. The levels are connected by two internal shafts and are
        generally accessible, but with difficulty. Developments on the Vianey Vein
        extend in a southeast direction following veins and mineralized structures
        trending generally N145°
to
        155°E
        dipping
        80° to 85°SW. The lower levels extend from the area of the portal to the
        southeast about 200 meters. Numerous faults trend parallel to- and cross
        the
        trend of the tunnels. 

      

      Underground
        workings include crosscuts, stopes and winzes that occur at irregular intervals
        along both lower levels. The amounts of ore and waste rocks extracted from
        the
        Vianey Mine are not documented, but extensive underground development is
        evident
        (see Figures 5 and 6). 

      

      

      Figure
        5:
        Plan map of Vianey Mine concession showing the location of the portal and
        projection of underground veins to the “0” level. Map by R. Blakestad,
        2004.

      
 

      Minera
        LMX SA de CV, a former subsidiary of LMX Resources Ltd., took over the Vianey
        operations in 1996 and started various exploration and development works.
        The
        first phase of exploration was conducted in the mine by P.H. Consultants
        Ltd of
        Val d’Or, Quebec, in order to determine what resources were still contained in
        the old workings. A total of 252 meters of vertical fan drilling was completed
        from drill station one, 276 channel samples were taken, and 433 additional
        samples were obtained. All samples were analyzed for 38 minerals by a
        combination of fire assay, ICP, and aqua regia-AA methods by Bondar Clegg
        Laboratories. 

      

      A
        second
        phase of exploration completed in November 1996 accomplished 2,173 meters
        of
        underground core drilling from drill stations one through six. The second
        phase
        drilling further delineated the mineralized zones identified by the first
        program and resulted in the partial definition of a new breccia chimney called
        the Twilight Zone. 

      The
        phase
        one and phase two exploration campaigns established the basis for a “geological”
resource estimate of mineralized blocks. The mineralized blocks defined by
        the
        underground drilling and channel sampling were viewed as a “geological” resource
        because a mining method had not been specified and no dilution factor was
        applied; additionally, the cost for mining and milling had not been determined
        to justify an appropriate cut-off grade. Notwithstanding, a resource of 440,601
        short tons (399,625 metric tonnes) representing an in-place value of $65/ton
        (Thorpe, 1998) was calculated based on an arbitrary cut-off value of $50/ton
        USD, using metal prices quoted by the Financial Post on February 18, 1997
        ($645/t for lead, $1195/t for zinc, and $5.21/oz for silver). Average metal
        grades were not reported for this initial resource calculation. 

      

      
        
          
          

        

        
          Page
            7

          
            

          

        

        
          
          

        

      

      Though
        the calculation of the resource is conceptual in nature and does not attain
        the
        level of diligence required for reporting under NI 43-101 section 1.3, these
        data are considered by the writer to be relevant as a preliminary estimate
        of
        the order of magnitude of mineralization defined by the first two phases
        of
        exploration, and it formed a basis for further exploration. 

      

      In
        May
        1997, Minera LMX started a third phase to verify and expand previous findings
        and to mine accessible reserves for direct shipping. After stockpiling about
        940
        tonnes of material from underground development work, the company abruptly
        closed the operation and the third drilling program was interrupted shortly
        after it was initiated. 

      

      The
        property was sold to the Chief Geologist of Minera LMX, who later defaulted
        on a
        property payment and a legal battle ensued. After several years of inactivity,
        the legal matters were settled and Minerale Jazz SA de CV acquired 100% interest
        in the property, free of royalties and encumbrances, with a cash payment
        in 2004
        (Vezina, prs. comm., 2004), but did not conduct any physical exploration
        of the
        property. 

      

      In
        the
        interim between cessation of operations in 1997 and acquisition by Minerale
        Jazz, several summaries of the exploration data and resource calculations
        were
        compiled by Hawley (2000a), Hawley (2000b), and Ciesielski (2001).

      

      Hawley
        (2000a) prepared a study of the drill intercepts and channel samples from
        the
        underground workings at Vianey Mine to establish a basis for resource and
        reserve calculations and to set the parameters for a cash flow analysis.
        A more
        detailed revised analysis, in line with the CIM Standards on Mineral Resources
        and Reserves prepared by the CIM Standing Committee on Reserve Definitions
        dated
        August 20, 2000, with supporting drill logs, assay sheets and underground
        development summaries was subsequently prepared (Hawley, 2000b). 

      

      The
        parameters used for the detailed resource study (Hawley, 2000b) are as
        follows:

       

      

      
        	
                Specific
                  Gravity

              	
                3.2
                  g/cc

              
	
                Mining
                  Rate 

              	
                100
                  T/day

              
	
                Mining
                  Days/Year

              	
                300
                  days

              
	
                Metal
                  Price (Northern Miner Sept 14, 2000)

              	 
	
                Silver

              	
                US$
                  4.88/oz

              
	
                Lead

              	
                US$
                  0.217/lb

              

      

    

    
       

      
        
          
          

        

        
          Page
            8

          
            

          

        

        
          
          

        

      

      
 

      
        	
                Zinc

              	
                US$
                  0.579/lb

              
	
                Dilution

              	
                10%

              
	
                Mining
                  Costs

              	
                US$
                  29.17/ton

              
	
                Trucking
                  Costs

              	
                US$
                  10.00/ton

              
	
                Custom
                  Milling Costs

              	
                US$
                  18.00/ton

              
	
                Mill
                  Recovery (based on Tasco Custom Mill)

              	 
	
                Silver

              	
                75.84%

              
	
                Lead

              	
                78.93%

              
	
                Zinc

              	
                75.31%
                  

              

      

      

      

      The
        revised resource estimate was based on a cut-off grade of 100 g/T silver,
        based
        on weighted average grade of drill intercepts and channel samples without
        consideration for accompanying lead, zinc, or other recoverable metals.
        Rectangular mining blocks were identified based on consideration of the previous
        mining history, distribution of drill intercepts and channel samples, and
        drifting in the mineralized zones extending 25 meters above or below the
        areas
        where samples were taken. Mining block values were calculated using mine
        channel
        samples extended 12.5 meters upward or downward and up to 12.5 meters left
        and
        right laterally and drill hole pierce points in the longitudinal section
        with a
        25-meter sphere of influence. In the case where channel samples or drill
        intercepts reported values less than the 100 g/T silver cut-off grade, the
        extrapolation distance was taken half way between the closest valid sample
        site
        and the invalid site. All drill intercepts were corrected for true with
        determinations by trigonometric calculation. A minimum 1.5 meter horizontal
        mining width was used and where the intercept or channel sample was less
        than
        1.5 meter, appropriate dilution at zero grade was factored in, then, subjected
        to a ten percent dilution factor, resulting in a 1.6 meter horizontal width.
        

      

      Based
        on
        his extensive experience with the property, its mining history and exploration,
        Hawley placed the majority of the reserves in the Proven mineral reserve
        category. Probable mineral reserves were calculated by extending the sphere
        of
        influence from a minimum of two Proven reserve blocks by a maximum of 12.5
        meters in a vertical or horizontal direction. 

      

      Using
        the
        above parameters, Hawley established the following reserve base:

      

      	·  	
              Proven
                mineral reserve: 61,814 tonnes grading 399.32 g/T Ag, 3.7% Pb, and
                2.63%
                Zn.

            

      

      	·  	
              Probable
                mineral reserve: 5,652 tonnes grading 406.65 g/T Ag, 4.27% Pb, and
                2.28%
                Zn. 

            

      

      A
        resource base was placed in a Measured or Indicated resources category according
        to drill hole continuity with mine workings above, or two or more drill hole
        intercepts showing continuity in grade and width, and the availability of
        detailed drill logs and assay reports. The resource base, fully diluted,
        was
        calculated to be:

      

      	·  	
              Measured
                mineral resource: 139,656 tonnes grading 338.61 g/T Ag, 2.04% Pb,
                and
                2.84% Zn.

            

       

      
        
          
          

        

        
          Page
            9

          
            

          

        

        
          
          

        

      

      
 

      	·  	
              Indicated
                mineral resource at Drill Station 2: 16,170 tonnes grading 132.0
                g/T Ag,
                1.14% Pb, and 1.71% Zn.

            

      

      	·  	
              Indicated
                mineral resource at Drill station 6: 121,728 tonnes grading 135.69
                g/T Ag,
                1.46% Pb, and 5.46% Zn.

            

      

      The
        total, fully diluted, proven and probable reserves plus measured and indicated
        mineral resources were calculated to be 345,020 metric tons 269 g/T Ag, 2.13
        %
        Pb, and 3.66 % Zn. The general distribution of reserve-resource blocks is
        shown
        in Figure 6. 

       

      

      Figure
        6:
        Longitudinal section of the Vianey Mine showing stopped areas, resource blocks,
        and underground sample sites. View looking northeast, map from Hawley
        (2000b).

      

      In
        addition, a surface stockpile at the portal of the mine consisting of 940
        tonnes
        grading 212 g/T Ag, 2.7% Pb, and 5.6% Zn was placed in the Proven reserve
        category (Hawley, 2000b). Supporting assays and work sheets for this
        determination were not available to the writer.

      

      A
        review
        of the mineral resource and reserve calculation data, coupled with inspection
        of
        the underground workings, indicate that the resource summaries may not be
        consistent with the requirements of Section 1 of NI 43-101. Though the resource
        calculations were properly calculated and the summaries of exploration results
        are indicative of substantial mineralization at the Vianey Mine, the writer
        identified significant issues relating to: 1) the underground “channel samples”,
        which were attributed considerable weight in the resource study, were observed
        to be chip samples or chip-channel samples rather than true channel samples,
        2)
        extrapolation of drill intercepts to support “proven reserves” were, in the
        writer’s opinion, too far apart to correlate as “proven reserves”, 3) missing
        drill logs and assay reports for phase two drilling activities and underground
        sampling, and 4) inconsistencies in the use of terms [tons/tonnes, g/t vs.
        g/T,
“reserves” vs. “resources”, etc.], causes some concern in the resource
        designation. The writer rejects the resource estimates for purposes of this
        Qualifying Report, but suggests they be used in consideration of the mineral
        potential of the Vianey Mine property for purposes of further exploration
        and
        future resource determinations.

      

      
        
          
          

        

        
          Page
            10

          
            

          

        

        
          
          

        

      

      Ciesielski
        (2001) conducted an independent review and analysis of the Vianey Mine data.
        A
        mineral reserve estimate was established using a standard rectangular method
        based on the distribution of 134 channel samples on the different mine levels
        and the LMX drill hole pierce points on the mine longitudinal section. Sample
        locations and drill hole pierce points were digitized and plotted. Channel
        sample grades for Ag, Pb, and Zn were indexed according to gross in situ
        value
        using $4.60/oz Ag, $0.24/lb Pb and $0.53/lb Zn. Following Hawley (2000b)
        a
        horizontal with of 1.5 meters was used and diluted by 10% where necessary
        to
        maintain a 1.6 meter effective mining width and a 12.5 meter search radius
        was
        applied. The resulting data were statistically processed using statistical
        nearest neighbor and triangulation method, then, replotted in longitudinal
        sections.

      

      The
        resulting plots of metal grade in longitudinal sections showed a good
        correlation with Hawley’s 2000b resource-reserve block calculation (Figure 6),
        with the advantage of displaying gradational changes in grade for silver,
        zinc,
        and gross value distribution. Grade distribution panels for silver using
        100 g/T
        cut-off and for zinc at an equivalent 1.35% cut-off were prepared. These
        data
        indicate that Ag and Zn concentrations increase with depth and to the southeast
        of the longitudinal sections. A similar distribution was demonstrated with
        the
        gross value index using a $90/ton (sic) cut-off. 

      

      The
        Ciesielski (2001) analysis states that their results support the reserves
        calculated by Hawley (2000b) and that the grades comport with the averages
        from
        Minera de Chilpancingo metal sales reports for the years 1990 to 1992 (this
        later data is not in the materials reviewed by this writer). Ciesielski did
        not
        produce an independent tabulation of resource-reserves, but stated that there
        is
        more than sufficient information to demonstrate the presence of measured
        and
        probable reserves and indicated resources to warrant further exploration.
        

      

      The
        mineral resource-reserve
        quantities and grades are reported here for the sole purpose of establishing
        an
        order of magnitude for the tonnage and grade of mineralization defined by
        exploration at the Vianey Mine as of the end of 1997. As stated above, there
        are
        issues related to sample distribution and adequacy of channel samples used
        in
        the calculation, that suggest the resource calculation may not meet the
        requirements of Section 1 of NI 43-101. The calculation, however, was performed
        by a Qualified Person (P. Hawley) with intimate experience with the property
        and
        its mineralization. At an absolute minimum, the results of exploration to
        date
        and the resource evaluations serve to form a strong basis for recommending
        aggressive exploration of the Vianey Mine, which is recommended, and is set
        forth below in greater detail.

      

      

      	7.  	
              Geological
                Setting

            

      

      The
        Vianey Mine property is located in the Sierra del Sur Metallogenic Province
        in
        the

      Guerrero
        Gold and Massive Sulfide Belts (Hawley 2000a. See also Figure 3). This province
        is characterized by Cretaceous sedimentary and volcanic rocks intruded by
        Lower
        Tertiary intermediate composition stocks. It hosts intrusive associated
        gold-copper-silver deposits. To the west, the massive sulfide belt hosts
        several
        silver-lead-zinc and copper deposits.

       

      
 

      
        
          
          

        

        
          Page
            11

          
            

          

        

        
          
          

        

      

      The
        Vianey Mine is located in the Morelos Guerrero Basin of Cretaceous age, mostly
        composed of a folded and faulted limestone sequence up to 2500 meters thick,
        intruded by granodiorite and monzonite plutons, which are responsible for
        development of silver-lead-zinc mineralization in veins, skarn and breccia
        bodies.

      

      Various
        types of deposits occur in this geological context, i.e. mesothermal lenses,
        veins and breccias (Vianey Mine), iron- and gold-bearing skarns, disseminated
        iron-gold-copper or hydrothermal veins and epithermal gold-mercury deposits.
        In
        the Guerrero basin, the Morelos Mineral Reserve is under going intense mineral
        exploration by Teck-Cominco Corporation and other companies, which control
        large
        concessions near the Vianey Mine. 

    

     

    

    Figure
      7:
      Regional geology map of the Vianey Mine area. Map after Hawley (2000a). Black
      stars indicate other mineral deposits and prospects in skarn and
      intrusive-related environments.

    
       

      	7.1  	
              Stratigraphy
                of Sedimentary Rocks

            

      

      The
        Vianey property is underlain by limestones, limestone breccias, calcareous
        and
        carbonaceous siltstones, and argillites intruded locally by felsic dikes
        and
        plugs with affiliated skarn. The local Stratigraphy consists of limestone
        underlain by limy siltstone of undetermined thickness, but known to exceed
        2500
        meters thick. These rocks are part of regionally extensive shallow marine
        sedimentary sequence that form an elliptical exposure of Cretaceous carbonate
        lithologies known as the Morelos-Guerrero Basin.

      

      
        
          
          

        

        
          Page
            12

          
            

          

        

        
          
          

        

      

      

      	7.2  	
              Intrusive
                Rocks

            

      

      The
        Vianey
        Mine carbonate sequence is intruded by granodiorite and monzonite plutons,
        dikes, sills and irregular plugs. These intrusive masses are intimately
        associated with mineral deposits throughout the region. 

      

      	7.3  	
              Structural
                Framework

            

      

      The
        structural trends are predominantly northerly and northwesterly. These principal
        trends have spatial affinity with several of the silver- and poly-metallic
        deposits on a regional basis, including at Vianey Mine. The combination of
        intrusive rocks and proximity to major structures is believed to be especially
        important in localization of important mineral deposits (see Figure 7).

      

      The
        carbonate Stratigraphy in the Vianey Mine region is broadly folded and domed.
        Major folds, with amplitudes of fifty- to hundreds of meters are common.
        Drag
        folds and distortions of the bedded rocks are common in the underground
        exposures at the subject property.

      

      

      	8.  	
              Deposit
                Types

            

      

      Various
        types of mineralization occur as a result of the interplay between Stratigraphy,
        structure, and proximity to intrusive centers in the district. The different
        types of deposits known to occur are as follows:

      

      	·  	
              Lenses,
                veins, mantos or breccias containing silver and poly-metallic Pb-Zn-Cu
                (Vianey deposit)

            

      	·  	
              Skarn
                zones and replacement concentrations or iron and gold (Nukay
                deposit)

            

      	·  	
              Disseminated
                and hydrothermal vein type Fe-Au-Cu (La Subsida
                deposit)

            

      	·  	
              Epithermal
                and hot springs deposits of mercury (Hg) and gold (Brasil and Laguna
                deposits).

            

      

      Mineralization
        at the Vianey Mine includes veins, breccias, lens and mantos of silver -
        and
        poly-metallic (Pb-Zn) mineralization with local concentrations of gold and
        copper. The veins and breccia zones predominate in apparent importance. Most
        of
        the veins are localized along NW-SE trending structures and E-W structures;
        the
        lenses occur in fault zones and as sulfide concentrations with calcite, gypsum
        and quartz between some bedding planes. 

      

      Two
        major
        breccia zones of significance have been identified in the limestone (the
        Don
        Pedro and Twilight Zone). These are believed to be in-part structural breccias
        and in-part related to shrinkage of rock units adjacent to- or above intrusive
        masses. In either or both cases, the breccia is associated with
        calcite-gypsum-quartz gangue minerals and weak to moderate hydrothermal
        alteration with disseminated to semi-massive poly-metallic sulfide
        mineralization and important amounts of associated silver. 

      

      
        
          
          

        

        
          Page
            13

          
            

          

        

        
          
          

        

      

      

      	9.  	
              Mineralization
                at the Vianey Mine Concession

            

      

      In
        the
        veins, lenses and mantos, mineralization consists primarily of massive- to
        semi-massive sulfides with gypsum, calcite and silica. The sulfides are mostly
        pyrite, galena (Pb), sphalerite (Zn) chalcopyrite (Cu) and acanthite (Ag).
        The
        veins are usually associated with faults (see Figure 8) and the lenses of
        massive sulfide occur in fault gouge zones (Figure 9) and as inter-bed
        lenses.

       

       

      
        		 	
	 	 	 
	
                Figure
                  8: Massive sulfide on left portion of vein on the -75m
                  level with stringer sulfide mineralization (right). 

              	 	Figure
                9: Lens of massive sulfide in fault zone -in
                headwall with slickensides on right.

      

       

      Both
        photos by R. Blakestad, 2004 - width of view ~1m.

      

      The
        character of the veins is different on different structures. In some cases,
        the
        observed veins are massive sulfide 0.1 to 0.5 meters thick, with or without
        parallel stringer sulfides (0.2 to 1.5 cm thick) in a matrix of
        calcite-silica-gypsum gangue (Figure 8). These veins occur over widths of
        one to
        three meters and may include more than one zone of massive or semi-massive
        sulfide. In other cases, the veins are discrete, zoned veins with calcite
        cores
        and massive galena-sphalerite (minor pyrite) mineralization, as in Figure
        10
        below. 

      

      Numerous
        veins and lenses of mineralization were observed in underground structures
        with
        divergent attitudes on the 0, -38, and -75 levels, indicating that several
        vein
        systems occur. The main vein on the 0 Level (the Tepemesquite Vein) follows
        a N
        110° E trend and dips north at 85°; the principal Vianey Vein and sub-parallel
        veins on the lower levels tend to be more NW-SE trending and dip steeply
        to the
        southwest. These later veins are well suited to exploration by drilling from
        the
        surface, as the dip direction coincides somewhat with the surface topography.
        

      

      The
        principal vein encountered on the -38, -50 and -75 levels is the Vianey Vein.
        It
        averages about one meter in thickness, but increases up to three meters wide
        in
        the southeastern portion of the workings. Drifting on the vein returned
        encouraging values of silver lead, and zinc over 24 meters of advancement
        (Thorpe, 1998). Drilling from underground stations 1, 2, 4, and 6 intercepted
        three to five discrete mineralized zones, which are shown in greater detail
        in
        Section 11 “Drilling” below. 

      

      

      
        
          
          

        

        
          Page
            14

          
            

          

        

        
          
          

        

      

      

      

      Figure
        10: Example of an un-named, near-vertical hydrothermal vein in limestone
        host
        rocks showing the central core of calcite+gypsum+quartz between selvages
        of
        massive galena (gray) and sphalerite (brown). The vein is 0.32 meter wide.
        A
        sub-parallel, sphalerite stringer two to four centimeters thick occurs without
        calcite, 0.6 meters to the right of the main vein. Photo by R. Blakestad,
        2004.

      

       

      At
        least
        two relatively large breccia zones have been encountered by drilling during
        the
        exploration phases conducted by Minera LMX. The Don Pedro breccia, according
        to
        Hawley (2000a), constitutes a broad zone of relatively low-grade mineralization
        with a pipe-like form that plunges 30 degrees to the northwest along the
        hanging
        wall of the Vianey Vein. The Don Pedro breccia is not well characterized
        in the
        available literature on the property, but it is considered to be a significant
        target for further exploration.

      

      A
        second
        zone of breccia mineralization, the “Twilight Zone” was encountered by drilling
        in the phase two program. This mineralized breccia is interpreted to be a
        stratabound limestone breccia, or manto, striking N 120 E, dipping about
        32
        degrees SW. Sphalerite-galena-pyrite mineralization occurs in the breccia
        matrix
        with pervasive orthoclase alteration and appears to be replacement in nature,
        approximately six meters thick and with undefined strike length exceeding
        32
        meters. Similar to the San Pedro breccia, the Twilight Zone breccia constitutes
        a target for further exploration in the southeastern portion of the underground
        workings. 

      

      

      	10.  	
              Exploration

            

      

      Minerale
        Jazz SA de CV has conducted no exploration of its own during the past three
        years and thus has no additional new information to add to that which was
        summarized and calculated by Thorpe (1998), Hawley (2000a and 2000b) and
        Ciesielski (2001). All exploration is considered to be in a historical
        perspective and is reported in Section 6 “History” above. 

      

      In
        order
        to maintain a consistency of flow for the organization of this technical
        report,
        a more detailed description of the drilling conducted in 1996 is presented
        below.

      

      

      
        
          
          

        

        
          Page
            15

          
            

          

        

        
          
          

        

      

      

      

      	11.  	
              Drilling

            

      

      Drilling
        at the Vianey Mine was carried out under the oversight of Minera LMX in 1996.
        The first phase of drilling was conducted in the mine at Drill Station 1
        by P.H.
        Consultants Ltd of Val d’Or, Quebec, consisting of 252 meters of NQ-size core
        drilling. A second phase of drilling completed an additional 2173 meters
        of
        BQ-size core drilling from stations 1 through 6 in November 1996. Britton
        Hermanos Perforations de Mexico was awarded the second contract. 

      

      All
        1996
        drilling was from underground at stations on the -75 Level (see Figure 11).
        Drill holes were fanned out in a vertical array from each station. The drill
        stations and corresponding holes are as follows:

      

      Table
        1:
        List of holes drilled at Vianey Mine.

       

      PHASE
        1:

      

        
          	
                  STATION

                	
                   

                	
                  HOLE
                    #

                	
                   

                	
                  LENGTH 

                	
                   

                	
                  AZIMUTH

                	
                  DIP

                
	
                  1

                	
                   

                	
                  VM-01

                	
                   

                	
                  31.6m

                	
                   

                	
                  45

                	
                  0

                
	
                  1

                	
                   

                	
                  VM-02

                	
                   

                	
                  72.9m

                	
                   

                	
                  225

                	
                  -45

                
	
                  1

                	
                   

                	
                  VM-03

                	
                   

                	
                  87.8m

                	
                   

                	
                  225

                	
                  -65

                
	
                  1

                	
                   

                	
                  VM-04

                	
                   

                	
                  45.1m

                	
                   

                	
                  225

                	
                  -85

                
	
                  1

                	
                   

                	
                  VM-05

                	
                   

                	
                  54.1m

                	
                   

                	
                  225

                	
                  -20

                
	
                  PHASE
                    2:

                	
                   

                	
                   

                	
                   

                	
                   

                	
                   

                	
                   

                	
                   

                
	
                  STATION

                	
                   

                	
                  HOLE
                    #

                	
                   

                	
                   

                	
                   

                	
                  AZIMUTH

                	
                  DIP

                
	
                  1

                	
                   

                	
                  VM-05

                	
                   

                	
                  77.8m

                	
                   

                	
                  225

                	
                  -20

                
	
                  1

                	
                   

                	
                  VM-06

                	
                   

                	
                  122.3m

                	
                   

                	
                  225

                	
                  +45

                
	
                  1

                	
                   

                	
                  VM-07

                	
                   

                	
                  95.2m

                	
                   

                	
                  225

                	
                  +70

                
	
                  2

                	
                   

                	
                  VM-08

                	
                   

                	
                  92.1m

                	
                   

                	
                  230

                	
                  +60

                
	
                  2

                	
                   

                	
                  VM-09

                	
                   

                	
                  102.8m

                	
                   

                	
                  230

                	
                  +30

                
	
                  2

                	
                   

                	
                  VM-10

                	
                   

                	
                  116.5m

                	
                   

                	
                  230

                	
                  0

                
	
                  2

                	
                   

                	
                  VM-11

                	
                   

                	
                  106.7m

                	
                   

                	
                  230

                	
                  -30

                
	
                  2

                	
                   

                	
                  VM-12

                	
                   

                	
                  22.3m

                	
                   

                	
                  230

                	
                  -60

                
	
                  3

                	
                   

                	
                  VM-13

                	
                   

                	
                  91.5m

                	
                   

                	
                  245

                	
                  +70

                
	
                  3

                	
                   

                	
                  VM-14

                	
                   

                	
                  140.3m

                	
                   

                	
                  245

                	
                  +45

                
	
                  3

                	
                   

                	
                  VM-15

                	
                   

                	
                  89.0m

                	
                   

                	
                  245

                	
                  0

                
	
                  3

                	
                   

                	
                  VM-16

                	
                   

                	
                  49.4m

                	
                   

                	
                  245

                	
                  -45

                
	
                  3

                	
                   

                	
                  VM-17

                	
                   

                	
                  101.2m

                	
                   

                	
                  245

                	
                  -70

                
	
                  4

                	
                   

                	
                  VM-18

                	
                   

                	
                  86.0m

                	
                   

                	
                  190

                	
                  +70

                
	
                  4

                	
                   

                	
                  VM-19

                	
                   

                	
                  92.1m

                	
                   

                	
                  190

                	
                  +45

                
	
                  4

                	
                   

                	
                  VM-20

                	
                   

                	
                  107.3m

                	
                   

                	
                  190

                	
                  0

                
	
                  4

                	
                   

                	
                  VM-21

                	
                   

                	
                  107.3m

                	
                   

                	
                  190

                	
                  -45

                
	
                  4

                	
                   

                	
                  VM-22

                	
                   

                	
                  107.3m

                	
                   

                	
                  190

                	
                  -70

                
	
                  5

                	
                   

                	
                  VM-23

                	
                   

                	
                  25.0m

                	
                   

                	
                  125

                	
                  -45

                
	
                  5

                	
                   

                	
                  VM-24

                	
                   

                	
                  50.9m

                	
                   

                	
                  125

                	
                  0

                
	
                  5

                	
                   

                	
                  VM-25

                	
                   

                	
                  113.4m

                	
                   

                	
                  125

                	
                  +45

                
	
                  6

                	
                   

                	
                  VM-26

                	
                   

                	
                  95.1m

                	
                   

                	
                  137

                	
                  0

                
	
                  6

                	
                   

                	
                  VM-27

                	
                   

                	
                  124.1m

                	
                   

                	
                  137

                	
                  -45

                
	
                  6

                	
                   

                	
                  VM-28

                	
                   

                	
                  93.6m

                	
                   

                	
                  137

                	
                  +45

                

        

      

       

       

      

      Significant
        mineralized intercepts and simplified drill cross-sections showing the
        mineralized zones are displayed in Figures 12 through 16 below (reproduced
        with
        permission, P. Hawley, 2005). Cross-section figures for drill stations 3
        and 5
        are not available for reproduction. 

      

      
        
          
          

        

        
          Page
            16

          
            

          

        

        
          
          

        

      

      Drill
        intercepts in the drill intercept tables set forth in Figures 12 through16
        reflect linear sample widths, un-adjusted for intercept angle. Adjustments
        to
        the linear intercept to derive true thickness was calculated by the
        trigonometric formula: HW=(I*COS((90-ZCA)*Pi/180), where HW is the horizontal
        width, I is the intercept width, ZCA is the dip angle of the structure.

       

      

       

      Figure
        11: Plan map of the -75 Level showing 1996 drill stations and trace of drill
        holes completed. Map by R. Blakestad, 2005, redrafted from Thorpe
        (1998).

      

      

      
 

      
        
          
          

        

        
          Page
            17

          
            

          

        

        
          
          

        

      

       

       

      
        		 	

      

       

      Figure
        12: Table of mineralized intercepts and drill hole section for Drill Station
        1
        on the -75 level Vianey Mine. Section view looking N 135 degrees East. Tables
        and section from Hawley 2000b. 

      

      

      
        
          
            
            

          

          
            Page
              18

            
              

            

          

          
            
            

          

        

      

      

      

      

      Figure
        13: Table of mineralized intercepts and drill hole section for Drill Station
        2
        on the -75 level Vianey Mine. Section view looking N 140 degrees East. Table
        and
        section from Hawley 2000b.

      

        
          
            
            

          

          
            Page
              19

            
              

            

          

          
            
            

          

        

    

    

    Figure
      14: Table of mineralized intercepts Drill Station 4 on the -75 level Vianey
      Mine. Section view looking N100 degrees East. Table and section from Hawley
      2000b.

    

    

    

    
      
        
        

      

      
        Page
          20

        
          

        

      

      
        
        

      

    

    

    

    

    Figure
      15: Table of mineralized intercepts and drill hole section for Drill Station
      6
      on the -75 level Vianey Mine. Section view looking N 47 degrees East. Tables
      and
      section from Hawley 2000b.

    

    

    

      
        
          
          

        

        
          Page
            21

          
            

          

        

        
          
          

        

      

    
      	12.  	
              Sampling
                Method and Approach

            

    

    

    Core
      from
      the drill holes returned good recovery. The drill cores were split in the field
      with a percussion core splitter and 1⁄2 sections of the core were submitted to
      Bondar Clegg Laboratories for ICP, fire assay and aqua regia-AA determinations.
      Sample intervals were generally in one-meter increments with starting and ending
      segments determined by visual attributes of mineralization. Drill intercept
      angles with dipping mineralized structures were corrected by application of
      a
      trigonometric formula to establish true widths after composite sample intervals
      were determined by weighted average methods. Other details of the core sampling
      program are not known.

    

    Underground,
      the writer observed a number of channel samples and determined that the “channel
      samples” were, without exception, not deep enough or wide enough to constitute
      industry standard channel samples for resource-reserve determinations. In most
      cases, the underground sample line was clearly visible and the samples taken
      were probably reasonably representative of the zone sampled, however, heavy
      reliance on channel samples was made in the resource calculation by Hawley
      (2000b), therefore caution in interpreting the sample accuracy is
      justified.

    

    

    
      	13.  	
              Sample
                Preparation, Analyses and Security

            

    

    

    The
      writer is not aware of details of sample preparation and security; therefore
      not
      comments are set forth. The analyses were conducted by Bondar Clegg
      Laboratories, which is a widely respected commercial laboratory. Issues
      regarding the reliability of analyses are not in contention.

    

    
      	14.  	
              Data
                Verification

            

    

    

    The
      writer visited the property and underground workings between August 21-23,
      2004.
      The 0, -38, -50, -68, and -75 levels were inspected and the general layout
      of
      previous mining and more recent exploration was observed. Underground
      observations confirm the layout and general configuration of mining stopes,
      passageways, and drill stations as set forth in the documents pertaining to
      the
      Vianey Mine property. 

    

    Numerous
      files, unpublished reports and exploration data were reviewed in the course
      of
      evaluating the mineral potential of the property. These and the drill logs
      for
      phase one underground drilling and all supporting assay data sheets were
      reviewed and compared for conformity. No transcription errors or omissions
      were
      identified. Though no standards or blank samples were submitted to the Bondar
      Clegg laboratory, numerous duplicate drill and channel samples were submitted
      to
      Inchcape Testing Services (the Mexico subsidiary of Bondar Clegg) for
      comparative assays. A reasonable correlation between the duplicate assays was
      observed.

    

     

    
      
        
        

      

      
        Page
          22

        
          

        

      

      
        
        

      

    

    

      Representative
        drill intercept calculations were reviewed and recalculated to check accuracy.
        No significant errors or omissions were detected. However, drill logs and
        assay
        sheets for phase two underground drilling were not available for review and
        thus
        could not be checked. 

      No
        reference to assay results for drill holes at underground Drill Station 5
        could
        be found, indicating that the assays for drill holes VM-23, VM-24, and VM-25
        are
        not in the database.

      

      	15.  	
              Interpretation
                and Conclusion

            

      

      The
        geological interpretation set forth by previous investigators is reasonable
        and
        supported by observations of the writer on the surface and underground. Veins,
        lenses, breccias and mantos bearing silver-rich massive, semi-massive and
        disseminated sulfide mineralization occur in several areas of the mine with
        a
        dominant trend striking northwest, dipping steeply to the southwest. Most
        of the
        mineralization is structurally controlled by faults and shear zones, with
        lenses
        of sulfide locally occurring between certain bedding planes in a calcareous
        sedimentary rock environment. 

      

      Several
        mineralized zones were observed underground and several parallel to sub-parallel
        mineralized zones were intercepted by drilling vertical fanned drill holes
        at
        all the drill stations except Stations 3 and 5. Drilling and chip-channel
        sampling indicate substantial amounts of potentially economic mineralization
        occur above the -75 meter level adjacent to preexisting stopes. Drilling
        below
        the -75 level has shown that the mineralization extends to the -125 and locally
        to the -150 meter level. Breccia zone mineralization, possibly suitable for
        large-scale underground mining, has been identified, but not fully delineated.
        

      

      The
        writer concludes that the Vianey Mine is an excellent advanced-stage exploration
        target with exceptional opportunity for the definition of additional
        mineralization.

      

      	16.  	
              Recommendations

            

      

      Aggressive
        exploration of the Vianey Mine is warranted and recommended. A program of
        detailed mapping and sampling of underground exposures is recommended, coupled
        with a structural analysis of faults and bedding attitudes. The objective
        of the
        underground exploration should be to identify suitable surface drill sites
        that
        will provide for a series of diamond core drill holes to penetrate the areas
        of
        projected mineralization at the -150 meter level and -200 meter levels.
        Additional underground mapping and sampling will also assist in the process
        of
        converting identified mineralization to resource-reserve classifications
        under
        NI 43-101.

      

      Surface
        drill stations should be sited at 50-meter intervals, progressing from the
        portal area to the southeast for a distance of 200 meters (five stations,
        or
        more if drilling indicates that the mineralization continues in the southeast
        direction). With a topographic advantage of drilling from the southwest of
        the
        trace of the Vianey Vein, two holes of 195 and 225 meters each, with a azimuth
        bearing N 35 degrees East, should reach the -150 and -200 levels (with a
        70-meter offset to the southwest) from the vein trace, if inclined at -65
        and
        -77 degrees respectively. Five drill stations of two drill holes each will
        amount to 2,100 meters of drilling. A 10% contingency in the drilling is
        applied
        to account for topographic and structural unknowns, for a total deep drilling
        objective of 2,310 meters. 

       

      
        
          
          

        

        
          Page
            23

          
            

          

        

        
          
          

        

      

       

      Direct
        drilling costs, including mobilization/demobilization, set-up, moves,
        consumables and fuel are estimated at US$60/meter, for $138,600. 

      

      Objectives
        of the proposed drilling are multi-fold:

      

      	1.  	
              Explore
                the extension to deeper levels of the known mineralized structures
                (to the
                -200 meter level), thereby potentially increasing the potential resource
                base. 

            

      	2.  	
              In
                the process of drilling for deeper intercepts, the drill will prospect
                for
                new zones of mineralization in the interval from the surface to known
                mineralization.

            

      	3.  	
              In
                the process of drilling from the surface into the deeper levels of
                the
                mineralized zone, the interval can be evaluated for future development
                work, such as construction of a decline to the lower levels of
                mineralization to facilitate access by modern mechanized mining machinery
                and to facilitate access to the lower levels for future underground
                drilling.

            

      

      Particular
        interest should be placed on penetrating the mineralized San Pedro and Twilight
        Zone breccias to assist in better definition of their mineral potential.
        Eight
        additional drill holes, averaging 115 meters each, bearing N 35 degrees East,
        inclined at -40 to -55 degrees, are recommended to penetrate the breccia
        zones
        at locations to be determined from underground mapping. A direct drilling
        budget
        for 920 meters amounts to $55,200. 

      

      The
        near-term exploration recommended here is designed to provide the impetuous
        for
        consideration of large-scale underground mining of the Vianey Mine. If deeper
        drill exploration is successful in defining similar thickness and grade reported
        for the upper levels, the mass of mineralization will be greatly increased
        and
        scale of future exploration and considerations for potential mining will
        need to
        be scaled up accordingly. 

      

      The
        estimated cost of the recommended exploration program is $461,780 USD ($577,225
        CAD), including 10% contingency.

      

      Table
        2:
        Proposed exploration budget for the Vianey Mine:

      

      
        	
                Geological
                  mapping 

                Drill
                  logging & Support

              	
                Underground
                  mapping and structural + 2 drill geos;

                eight
                  man-months, with field support, lodging, transportation, assistants
&
                  labor OH @ 30%

              	
                $
                  86,700

              
	
                Drilling

              	
                Direct
                  drilling costs for 3,230 meters @ $60/m

              	
                $193,800

              
	
                Geochemical

              	
                1,100
                  rock and core samples, including preparation 

              	
                $
                  22,000

              
	
                Supplies/
                  Misc. field

              	
                Field
                  supplies, lodging, meals, transportation

              	
                $
                  21,300

              
	
                Permits
                  & reporting

              	
                Permit
                  and report preparation

              	
                $
                  20,000

              
	
                Home
                  Office/Mgmt

              	
                $40,000
                  Lump sum + Proj. Manager for 6 mo.

              	
                $
                  76,000

              
	
                Contingency

              	
                Lump
                  sum @ 10%

              	
                $
                  41,980

              
	
                Total
                  Project Cost

              	
                USD

              	
                $
                  461,780

              

      

      

      
        
          
          

        

        
          Page
            24

          
            

          

        

        
          
          

        

      

      Actual
        costs realized during exploration may be different than projected in this
        section due to cost variables beyond the control of Minerale Jazz and its
        contractors. Delays caused by personnel availability, transportation costs,
        weather conditions, and variable site conditions are among the variables
        to be
        encountered, and actual drilling contract costs may vary. 

      

      The
        scope, objectives, and budget for a follow-up program of increased drill
        hole
        density and decline ramp construction should be determined by a Qualified
        Person
        after analysis of results from completion of the recommended program.

       

      Respectfully
        submitted,

      

      

       

       

      
 

      Rodney
        A.
        Blakestad, J.D., C.P.G.

      
        
          
          

        

        
          Page
            25

          
            

          

        

        
          
          

        

      

      

      16.
        Pertinent References

      

      Ciesielski,
        A., 2001. Qualifying report on the Vianey Mine, State of Guerrero, Mexico.
        Bumigeme Inc., unpublished report. p. 26.

      

      Hawley,
        PJ., 2000a. Scoping study for the qualification of a pre-feasibility report
        and
        proposed bulk sample and exploration program for Robex Resources Inc. On
        the
        Vianey Mine, Guerrero State, Mexico, 38 p. 

      

      Hawley,
        P.J., 2000b. Reserve and drill resource study for Robex Resources Inc. on
        the
        Vianey Mine, Guerrero State, Mexico, 122 p.

      

      Maps
        of
        Mexico, 2004. Web site: http://www.maps-of-mexico.com/mexico_states.shtml

       

      Megaw,
        P.K.M., 2004. Imdex, International Mineral Development & Exploration web
        site: http://www.imdex.com/c_l.htm.
        

      

      Mining
        Engineering, 1994. Mining in Mexico. Societyfor Mining, Metallurgy, and
        Exploration, Vol. 46, No. 4, April 1994. pp. 292-322.

      

      Reyes,
        J.S., Rodarte, G.E., Jimenez, R.B., and Franco, E.R., 2000. Carta
        Geologico-Minera Chilpancinco 14Q-k(1), 1:100,000 Scale. INEGI, 1
        sheet.

      

      Sanchez,
        R.M., 2001. An overview of mining law in Mexico. Latin Lawyer, Nov/Dec. 2001,
        pp. 61-63.

      

      Thorpe,
        J., 1998. Progress report - phase three underground exploration development
        program for LMX Resources Ltd. Unpublished report. 

      
        
          
          

        

        
          Page
            26

          
            

          

        

        
          
          

        

      

      

       

      17.
        Statements of Qualification of Rodney A. Blakestad, J.D., C.P.G..

      

      I,
        Rodney
        A. Blakestad, do hereby certify that:

      

      
        	·  	
                I
                  am an independent Consulting Geologist with a residence at 1602
                  W. Placita
                  Sin Nieve, Sahuarita, Arizona
                  85629.

              

      

      

      
        	·  	
                I
                  am a graduate of the University of Alaska at Fairbanks, having
                  attained a
                  Bachelor of Science degree in Geology,
                  1973.

              

      

      

      
        	·  	
                I
                  am a Professional Geologist, registered in the State of Alaska,
                  1980 (PG
                  #0022).

              

      

      

      
        	·  	
                I
                  am a Certified Professional Geologist in good standing with the
                  American
                  Institute of Professional Geologists, 1980 (C.P.G.
                  #4899).

              

      

      

      
        	·  	
                I
                  am a graduate of the University of Denver Law School, having attained
                  a
                  Juris Doctor degree in Natural Resources Law,
                  1989.

              

      

      

      
        	·  	
                I
                  have practiced my profession of Exploration Geologist for at least
                  15
                  years in matters of gold mining and gold and silver exploration,
                  and for
                  an additional ten years in matters of base metals and PGM
                  exploration.

              

      

      

      
        	·  	
                I
                  have prior personal experience with poly-metallic veins systems
                  occurring
                  in central and northern Mexico.

              

      

      

      
        	·  	
                I
                  personally visited the site subject of this report during the month
                  of
                  August 2004, and spent the greater part of three days (August 21,
                  through
                  23, 2004) on the property or its immediate
                  surroundings.

              

      

      

      
        	·  	
                I
                  am a Qualified Person in conformance with National Instrument
                  43-101.

              

      

      

      
        	·  	
                I
                  have read and understand the National Instrument 43-101 and Form
                  43-101-F1, and declare that I wrote the report in conformance thereof.
                  

              

      

      
        	 	 

      

      
        	· 	
                I
                  am responsible for the technical report entitled “The
                  Vianey Mine - Guerrero State, Mexico”,
                  dated October 18, 2004 and revised March 10, 2005, which is intended
                  to be
                  compliant with the reporting requirements of National Instrument
                  43-101.

              

      

       

      
        	·  	
                I
                  do not know of any material fact or material change with respect
                  to the
                  subject matter of this report which if not reflected in the report,
                  the
                  omission of which or the failure to disclose such, would make the
                  report
                  misleading.

              

      

      

      
        	·  	
                I
                  certify that I do not own, nor do I expect to acquire, directly
                  or
                  indirectly, any interest in the Vianey Mine property or the securities
                  of
                  Minerale Jazz SA de CV, Journey Unlimited Omni Brands Corporation,
                  or any
                  affiliates, or affiliated entities
                  thereof.

              

      

       

       

      
        
          
          

        

        
          Page
            27

          
            

          

        

        
          
          

        

      

       

      
        	 	
                 

              

      

      
        	·  	
                I
                  certify that I am not under any agreement, arrangement, or understanding,
                  nor do I expect to become, an insider, associate, partner or employee
                  of
                  Minerale Jazz SA de CV, Journey Unlimited Omni Brands Corporation,
                  or any
                  affiliates, or affiliated entities
                  thereof.

              

      

      

      
        	·  	
                I
                  certify that I have not received a majority of my income during
                  the past
                  three years preceding the date of the report referred to above
                  from
                  Minerale Jazz Journy Unlimited or any affiliates, or affiliated
                  entities
                  thereof.

              

      

      

      
        	·  	
                I
                  consent to the filing of this Qualifying Report with any stock
                  exchange or
                  other regulatory authority, and I consent to electronic publication
                  of
                  this document, including on the web sites of Minerale Jazz SA de
                  CV and/or
                  Journey Unlimited.

              

      

      

      Prepared
        in Tucson, Arizona effective the date of October 18, 2004, Revised March
        10,
        2005.

      

      

      Rodney
        A.
        Blakestad, J.D., C.P.G.

      

      
        
          
          

        

        
          Page
            28

          
            

          

        

        
          
          

        

      

      
 

      
 

      APPENDIX
        A

      

      

      

      VIANEY
        MINE, TITLE OPINION

      
        

        
          
            
            

          

          
            Page
              29Unassociated Document

    EXHIBIT
      10.3

    

    

    Memorandum
      of Agreement

    

    Joint
      Venture Agreement made Between Wits Basin Precious Minerals Inc. (Optionee)
      and
      Hawk Precious Minerals Inc. (Optionor)

    

    The
      Optionee can acquire a 50% undivided right, title and interest in and to the
      Property (“Hawk MacNugget Claims” as per Schedule A attached hereto) and the
      Property rights free and clear of all Encumbrances except as noted by making
      payments to the Optionee in the following amounts and by the dates indicated
      subject to any regulatory approvals where necessary:

    

    	1.  	
            Issue
              40,000 common shares of Wits Basin common stock to the Optionor on
              or
              before June 30, 2006.

          

    

    At
      the
      commencement of the Joint Venture the Participating Interest of each Party
      shall
      be:

     

     

    
      	Party 	 	Participating
              Interest	 
	Optionee 	 	 	50	%
	Optionor
              (Managing Partner)	 	 	50	%

    

       

      

    Both
      Parties agree that this agreement will form the basis for drafting a formal
      Joint Venture Agreement between the parties in conjunction with legal counsel,
      which will include an industry standard dilution formula for
      non-participation.

    

    

    IN
      WITNESS WHEREOF
      this
      Memorandum has been executed as of the date so indicated below.

    

    Wits
      Basin Precious Minerals Inc.

    By:

    

    /s/
      Stephen D. King     June
      29, 2006

    Authorized
      Signatory     Date

    

    Hawk
      Precious Minerals Inc.

    By:

    

    /s/
      H.
      Vance White     June
      29, 2006

    Authorized
      Signatory     Date

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    Schedule
      “A”

    

    To
      Memorandum of Agreement between Wits Basin Precious Minerals Inc. and Hawk
      Precious Minerals Inc.

    

    Claims
      located in the McFaulds Lake area

    

    
      	
              Claim
                Numbers

            	
              Number
                of Units

            
	
              3019423

            	
              16

            
	
              3019424

            	
              16

            
	
              3019425

            	
              16

            
	
              3019426

            	
              16

            
	
              3011945

            	
              16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]