Table of Contents:
-Introduction
-Background
-Important Geologic, Alteration, Mineralization And Geochemical Zoning Features
In Vertical Cross Section
-Discussion
-Conclusions
-Proposed Drill Program
-Useful References
-Exploration Model Summary

List Of Tables:
Table 1 - Geochemical Analytical Results - Surface Samples
Table 2 - Geochemical Analytical Results - DDH-EK-99-02 - HQ Core
Table 3 - Geochemical Analytical Results - DDH-EK-01-11 - NQ Core
Table 4 - Geochemical Analytical Results - DDH-EK-99-02 – Sludge
Table 5 - Geochemical Analytical Results - DDH-EK-01-11 – Sludge
Table 6 - Length and Features of Mapped Mineralized Zones
Table 7 - Comparison of Eskapa, El Indio-Tambo, Choquelimpie

List Of Figures:
Figure 1 - Map of Igneous Belts/Ore Deposits - Cordillera Occidental
Figure 2 - Schematic Cross Section - Geologic Setting High-Sulfidation/Acid-Sulfate System
Figure 3 - Location of Target Mineralized Zones
Figure 4 - Base Cross Section
Figure 5 - Geologic Cross Section
Figure 6 - Alteration Features In Section
Figure 7 - Distribution in Cross Section of Au, Ag, and Tl
Figure 8 - Distribution in Cross Section of Cu, Pb, and Zn
Figure 9 - Distribution in Cross Section of Hg, As, and Sb
Proposed Holes 1 Through 8

Introduction – A review of the geologic features and geochemical data from drill hole DDH-EK-01-11 has been completed and integrated with similar information from nearby, more-shallow, drill hole DDH-EK-99-02, geologic mapping of the surrounding area, and analytical results of surface rock-chip sampling.  The section line through the holes is positioned across the southeast end of mineralized Zone III in the eroded-out core zone of the Cerro Eskapa stratovolcano (Figure 3).   A series of cross sections have been assembled which well-depict changes with depth of the spatial relationships of geologic features, intensity of alteration, and pathfinder- and base-metal zoning to gold-silver-copper-bismuth-antimony mineralization disclosed by the two holes (see Figures 4 through 9).  A more in-depth technical report influenced by the recent drilling results, detailed re-mapping of geologic features of the eroded-out stratovolcano core zone, review of geochemical analytical results of surface rock-chip samples, and re-interpretation of IP surveys has been compiled into a Form 43-101F1 technical report which will be filed with the BC Securities Commission.  This report will be available for examination by parties who have an interest in participating in financing the continued exploration of the property.

Background – Core hole DDH-EK-01-11 was drilled September-October (2001) and successfully completed a deeper test through mineralized vuggy silica rock intersected at shallow depth by DDH-EK-99-02 several years earlier in March, 1999 (see pertinent previous news releases 8-99 and 25-01).  Both holes were drilled angled at -65^o and in the same line of direction (N55^oE), which is perpendicular to the surface outcrop trace of the vuggy silica rock occupying the central part of mineralized Zone III.  The original exploration interest in this sector is the high-grade silver (to 2259.5 g/mt) occurrences of stephanite and other silver-lead-antimony sulfosalt minerals in outcropping vuggy silica rock (see news release 6-99).  Core recoveries were overall excellent (>95%) in both holes.  DDH-EK-99-02 made a shallow intersection (140 meters vertical depth) of the mineralized zone and DDH-EK-01-11 penetrated the zone at much greater depth (400 meters vertical depth).  Although there is some hole drift (i.e. DDH-EK-01-11), for practical purposes, the two drill holes can be presented within the same plane of vertical section

Important Geologic, Alteration, Mineralization And Geochemical Zoning Features In Vertical Cross Section –

(1) Tracing the vuggy silica zone from surface outcrops down through the two drill hole intersections of DDH-EK-99-02 and DDH-EK-01-11 demonstrates a nearly vertical attitude (very steep southwest dipping) at this location, and a down-dip continuity to great depths (>500 meters - open ended)   with little fault disruption (Figures 4 and 5).  The width over which the vuggy silica rock is developed and outward extent of surrounding halos of alteration and anomalous base metals gradually increase with depth from several meters at the surface to over 12 meters with depth in DDH-EK-99-02.  Below the latter intersection, the vuggy silica rock appears to bifurcate from a single body into numerous closely spaced, prominent strands distributed over a true width of 30 meters.

(2) Surface outcrops and the drill intersection of DDH-EK-99-02 show that ore mineralization is restricted to the centrally positioned vuggy silica rock at shallow levels.  Marked changes in mineral composition and character of ore mineralization occur with depth from moderate- to high-grade, silver-lead-antimony sulfosalt at shallow levels, which is more diffuse (disseminated/vug and fracture infillings), downward into discrete intervals of veins, veinlets and associated dense disseminations of gold-bearing, high-grade, copper-silver-antimony-bismuth-mercury sulfide/sulfosalt intersected in DDH-EK-01-11 (Figures 6 and 7).  The latter veins and veinlets cross cut the footwall, vuggy silica rock strands and are considered to be late-stage or secondary in nature.  Review of analytical results shows downward increase in copper, gold, silver bismuth, and antimony values (Tables 1, 2, and 3).  No systematic investigation to identify the sulfide and sulfosalt mineral assemblages has yet been undertaken of drill-intersected mineralization.  The high amounts of copper, silver, antimony, bismuth, mercury, and some arsenic intersected in DDH-EK-01-11 do suggest the presence of enargite-luzonite (family) and/or various copper-antimony-silver sulfosalt or sulfide minerals, bismuthinite, and mercury-bearing sulfide and sulfosalt minerals.  Significant gold values reflect possible occurrence of gold-telluride minerals and/or native gold-electrum.  Locally common, trace amounts of other minerals observed in vuggy silica above the veins include: orpiment and native sulfur.

TABLE 1 -      GEOCHEMICAL ANALYTICAL RESULTS OUTCROP CHIP SAMPLES ALONG/NEAR MINERALIZED ZONE III VICINITY OF DDH’S EK-99-02 AND -EK-01-11

TABLE 2 -      GEOCHEMICAL ANALYTICAL RESULTS- DDH-EK-99-02 VUGGY SILICA ROCK
                        INTERCEPT SPLIT HQ CORE

                        GRADE/WIDTH INTERVALS

TABLE 3 -      GEOCHEMICAL ANALYTICAL RESULTS - DDH-EK-01-11 FOOTWALL INTERVAL SULFIDE-VEINED, VUGGY SILICA/ALTERED ROCK SPLIT NQ CORE

                        GRADE/WIDTH INTERVALS

(3) Steep envelopes of visibly distinct alteration halos of clay-pyrite (outer) and advanced-argillic (diaspore-clay (illite(?))-alunite-silica-pyrite (inner) are associated with the mineralized vuggy silica zone (Figure 6).  Biotite and hornblende phenocryts in dacite wallrock are completely destroyed approaching and within the advanced-argillic alteration zone.  In cross section, the alteration haloes gradually expand outward with depth affecting a much larger volume of rock.  With the increase in intensity of alteration, major element analyses show a parallel strong depletion of calcium, sodium, potassium, and magnesium in the wallrock toward the vuggy silica body.  High values of potassium return within the vuggy silica rock and, in part, reflect the observed presence of alunite and illitic clay minerals, and may also suggest a potassic metasomatic effect.  A late oxidation effect which produced limonitic iron-oxide minerals in the vuggy silica intercept of DDH-EK-99-02 may be a supergene or late-hypogene alteration which could have leached and considerably diminished silver values of the drill hole.

(4) In vertical cross section, the mineralized vuggy silica zone is surrounded by outlying concentric haloes of anomalous amounts of  pathfinder (thallium, mercury, arsenic, and antimony) and base (lead and zinc) metals which relate (point) to the central position of the high-grade, gold-bearing, copper-silver-antimony-bismuth-mercury ore mineralization at depth (Figures 7, 8, and 9).  At shallow depth, anomalous values of mercury and arsenic form broad haloes which, downward, converge and taper toward where the vuggy silica rock contains high-grade copper-silver-bismuth-antimony mineralization.  Distribution of anomalous zinc and lead is different and diverges with depth, like an inverted “V”, away from the centrally positioned vuggy silica rock and gold-bearing, high-grade, copper-silver-bismuth-antimony mineralization.  Anomalous values of antimony show a similar distribution to the zinc and lead, but are positioned more-proximal to the mineralized vuggy silica rock.  Highest anomalous amounts of silver, mercury, antimony, lead, and copper occur in advanced-argillic-altered hangingwall and footwall wallrock very close to and can reach high grades within the vuggy silica rock.  Low, (barely) detectable levels of gold are not typically present in the surface outcrops of vuggy silica rock, but appear at depth in the intersection made in DDH-EK-99-02 and downward gradually form a halo to the gold-bearing, high-grade, copper-silver-bismuth-antimony mineralization in DDH-EK-01-11.  The broad halo of anomalous mercury, arsenic, and thallium, more tightly restricted antimony, lead, and zinc at the surface is the shallow-level expression of gold-bearing, high-grade, copper-silver-bismuth-antimony mineralization at depth within the vuggy silica rock.

(5) The depth interval over which the significant change in ore minerals and composition from silver-lead-antimony-rich sulfosalt to copper-silver-antimony-bismuth-rich sulfide/sulfosalt with important gold content is not tightly constrained and occurs between vertical depths of between 150 and  350 meters.  Hence, the gold-bearing, copper-silver-rich mineralization, of greatest exploration interest is obviously preserved entirely intact at depth and is not eroded.

(6) In retrospect, the choice of location for drilling DDH-EK-01-11 was not perhaps the best for making an important discovery at Cerro Eskapa. The location was dictated by being able to use the previously completed DDH-EK-99-02, which made a shallow intersection through Zone III, as the control to more confidently position and orient DDH-EK-01-11 for a deeper drill test.  The two holes are located toward the far southeastern end of Zone III where surrounding rock is clay-pyrite-altered porphyritic dacite of massive character, without hydrothermal breccia development, and hosts the mineralized structure (Zone III) in "tight" fashion.  To the West, the mineralized zones cross considerable amounts of pre-mineral hydrothermal breccia which is of more-porous and permeable character and could allow for mineralized widths to be much greater.

Discussion –

(1) The greater-than-planned depth of intersection in DDH-EK-01-11 was unintended and the result of two factors (Figure 4). The hole was perhaps angled slightly too steeply (-65^o) to start with; and the deviation (HQ rods), as the hole progressed, increased this angle to -70^o.  Fortunately, the hole gradually flattened to a -55^o inclination after reducing to NQ diameter core at a depth of 330.00 meters and this allowed the penetration of Zone III to be completed, but at a much greater depth than planned. As a result, a long, up-dip length (260 meters) of Zone III, whose mineralized character is unknown, remains untested above the intersection obtained in DDH-EK-01-11 and eventually drilling an intermediate depth hole may be warranted.

(2) The elevation of the mineralized intersection in DDH-EK-01-11 is approximately 150 meters higher than the base of the stratovolcano (Figure 4).  Should much ore material be discovered in the various mineralized zones at vertical depths of 200 to 600 meters, it would readily be accessible for underground mining via level tunnels and cross cuts, and ramp declines to deeper levels.  Whether the gold-bearing, copper-silver-antimony-bismuth-rich sulfide mineralization could have invaded to higher levels elsewhere along parts of the mineralized zones, especially in the areas of hydrothermal breccia development, remains an important exploration question.  The hydrothermal breccias are pre-mineral, comprise a very favorable, porous and permeable host rock, should have facilitated the invasion and replacement by ore-bearing fluids and could host much-enhanced widths of gold-silver-copper-bismuth-antimony mineralization.

(3) The analytical results of mineralized intersection through Zone III in DDH-EK-01-11 are listed in Table 3 and are slightly revised (corrected) from the earlier news release (see news release 25-01).  The intersected sulfide veins and heavy disseminations contain very high-grade amounts of silver, copper, antimony, bismuth and mercury with an interesting credit in gold.  At today’s metal prices, the gross value of the sulfide vein/heavily disseminated mineralization (Table 3, interval 3) is approximately $365 (U.S.)/metric ton; and the widest part of the intersection (Table 3, interval 2) is $110 (U.S.)/metric ton.  These geochemical analytical results start to give an idea of parameters for the range of likely precious- and base-metal content of vein and densely veinleted and disseminated ore material at depth as being of moderate- to high-grade character.  The increase from virtually no gold at the surface to + one gram values at a moderate depth leaves open the possibility that much higher grades of gold may be eventually encountered along the mineralized zones by further drilling.  The grade of the vein intercept in DDH-EK-01-11 is within the range of typical gold-silver-bearing copper sulfosalt/sulfide veins mined at El Indio (Chile).

(4) Geochemical analytical results revealed that more-than-expected amounts of gold, copper, silver, antimony, and bismuth are present in a bulk sample of rock cuttings and mud produced from cutting (splitting) the core of DDH’s-EK-99-02 and -EK-01-11 (see Tables 4 and 5).  The presence of high levels of these precious and base metals gives rise to concerns over whether excessive amounts of mineralized material were ground/washed out during core cutting of soft altered rock and the grades of both holes are significantly understated.  The possible problem of obtaining an accurate grade of mineralization of split core is of real concern and should be further addressed/investigated in systematic fashion as part of future exploration drilling program.

TABLE 4 -      GEOCHEMICAL ANALYTICAL RESULTS - DDH-EK-99-02 SLUDGE FROM CORE CUTTING - ENTIRE HOLE

TABLE 5 -      GEOCHEMICAL ANALYTICAL RESULTS - DDH-EK-01-11 SLUDGE FROM CORE CUTTING - ENTIRE LOWER PART OF HOLE

(5) Results from the technical review of DDH-EK-99-02 and DDH-EK-01-11 comprise a "Rosetta Stone" for understanding the mineralizing system and implications on exploration possibilities at Cerro Eskapa.  This new understanding provided impetus for geologic re-mapping (1:10 000) of the eroded-out core of the stratovolcano which resulted in the identification of ten, west-northwest-trending, prospective mineralized zones and also well-established their surface position and strike-length extent (Figure 3 and Table 6).  Long segments of some of the zones are comprised of younger, sulfidic-silicified, hydrothermal breccia, and multi-breccia.  Five of the zones (II, III, IV, V, and VI) are marked along the surface by sporadic outcrops of vuggy silica-barite and silver-rich sulfosalt mineralization locally exploited to shallow depths by Spanish Colonial-era mine workings.  Considerable surface outcrop-chip sampling had been completed in previous years and analytical results show all of the zones contain highly anomalous amounts of mercury, antimony, and arsenic.  Values of these can reach very high levels (mercury (>50000 ppb), antimony (to 5000 ppm), silver (to 2259.5 grams/metric ton), and lead (to 6.5%)) in the mineralized exposures of the vuggy silica rock.  Importantly, based on the drilling results of DDH’s-EK-99-02 and -EK-01-11, the surface/shallow-level, high mercury and anomalous levels of other pathfinder/base metals indicate the presence of deeper gold-bearing, high-grade copper-silver-bismuth-antimony sulfide mineralization. The cumulative mapped strike length of the mineralized zones is at least 11.5 kilometers; and, if only 50% of the strike-length proves to be well-mineralized over a mineable (two meter, average) width; perhaps large cumulative tonnages of greater than 25 million metric tons could be discovered.

TABLE 6 -      SUMMARY OF MINERALIZED ZONES ERODED-OUT STRATOVOLCANO CORE ZONE - CERRO ESKAPA 

(6) The geologic mapping shows that the intersected gold-bearing, high-grade copper-silver-mineralization in DDH-EK-01-11 is distal to where a long, strike length of Zone III and other similar mineralized zones cross an extensive area of earlier hydrothermal breccia and possibly the more central part of the mineralizing system.  In these areas, the mineralized zones are comprised of sulfidic-silicified younger hydrothermal breccia and vuggy silica rock which cross the older breccia and are accompanied by clay-alunite alteration and strong mercury content.  The relatively narrow intersection of high-grade mineralization in DDH-EK-01-11 is, as mentioned, hosted in "tight" massive, porphyritic dacite which may have contributed to the restricted width.  Also, some minor fault complications are present which fractured the veined interval and affected/lowered core recoveries.  This sole drill intersection, therefore, should not be construed yet as to uniquely typify the nature and width of occurrence, nor the average metal tenor of the gold content at depth elsewhere in large prospective area - especially in areas dominated by hydrothermal breccia.  Whether copper-silver sulfide mineralization of Zone III (and the other zones) spread outward and upward into appreciably thick widths (greater than three meters, average) and attain much higher gold values in the areas of hydrothermal breccia areas remains the intriguing untested drill target idea at Cerro Eskapa.

Conclusions - The relationships of the shallow-level, silver-lead-antimony mineralization and outlying haloes of anomalous levels of base and pathfinder metals to deeper seated, gold-bearing, high-grade, copper-silver-antimony-bismuth sulfide/sulfosalt mineralization, are firmly established by DDH-EK-99-02 and DDH-EK-01-11, and indicate that all ten of the mineralized zones within the eroded-out stratovolcano core zone should become highly mineralized with gold-bearing, copper-silver-antimony-bismuth mineralization below vertical depths of between 150 to 200 meters.  Their cumulative long strike lengths, great depth extent, and possibilities for considerable tonnages of gold-bearing, high-grade copper-silver-bismuth-antimony sulfide ore occurring over appreciable widths, justifies a concerted effort of further exploration drilling along the mineralized zones.

Proposed Drill Program - An attempt should be made to drill test down into the prospective zones of the eroded-out stratovolcano core zone for El Indio-style, high-grade, gold-bearing, copper-silver-antimony-bismuth sulfosalt-sulfide veins.  Drill holes should test at depths of up to 400 meters. Different strike-length segments of the zones are specifically proposed for drill testing and most locations are to the west of DDH-EK-01-11 where increasing amounts of hydrothermal breccia are present.  A drill program involving 4,500 meters of core drilling in up to 12 holes is proposed to test at depths of up to 400 meters along Zones I-II, III, IV, V, IX, and X at a cost of approximately US $1,000,000 (see Proposed Drill Holes 1 to 8).  The proposed drill holes have been carefully planned using the previous drilling results to ensure the best chance of completing successful intersections.  Most of the targeted segments selected for testing are along Zones III, IV, V, and VI which, at the surface, contain silver-lead-antimony sulfosalt mineralization.  Several holes are proposed to test sulfidic-silicified zones with highly anomalous mercury (Zones I-II and X).  Several IP anomalies are also included in the proposed program.  Many other proposed drill-hole locations could also be chosen to test other segments of less-well defined zones.

¹ metal prices used in U.S. dollars: gold - $330/tr. oz., silver - $4.50/tr. oz., copper - $0.75/lb., antimony - $0.45/lb., bismuth - $3.25lb., and mercury - $145/flask (76 lbs.).

Useful references -

Bonham, H.F., 1988, Models For Volcanic-Hosted Epithermal Precious Metal Deposits, in Bulk-Mineable Precious Metal Deposits Of The Western United States, Symposium Proceedings, The Geologic Society of Nevada, edited by: Schafer, R.W., Cooper, J.J., and Vikre, P.G., p. 259-271.  note: Includes good generalized summary and diagrammatic cross section of high/sulfidation/acid-sulfate, precious-metal, mineralized systems.

Jannas, R.R., Boweres, T.S., Petersen, U., Beane, R.E., 1999, High-sulfidation deposit types in the El Indio District, Chile, in Geology and Ore Deposits of the Central Andes, Special Publication Number 7, Society of Economic Geologists, Skinner, S.J., editor, p. 219-279.  note: technical paper on geologic and geochemical investigations of the El Indio and Tambo copper-gold deposits.

Exploration Model Summary -

HIGH-SULFIDATION/ACID-SULFATE PRECIOUS METAL DEPOSITS
CORDILLERA OCCIDENTAL - PERU-CHILE-BOLIVIA-ARGENTINA

An important group of precious-metal-mineralized, intrusive-related deposits of the Cordillera Occidental (see Figure 1) belong to a geologic type of system referred to as high-sulfidation/acid-sulfate.  Deposits of this type, typically are located in, or associated with, variably eroded stratovolcanoes and/or intrusive/volcanic centers of intermediate composition and of middle Miocene to early Pliocene age. The belt of intrusive/volcanic activity of this age lies in-board (eastward) of the Paleocene-early Eocene belt, which contains the large porphyry copper deposits, and can be traced from Peru down through the border region running between Chile and Bolivia and Argentina.  The more publicized of these precious-metal deposits include: Yanacocha (Peru), Pierina (Peru), Choquelimpie (Chile), La Coipa (Chile), El Indio-Tambo (Chile), Pascua Loma (Chile), and Veladero (Argentina).  The location of Cerro Eskapa clearly falls within the belt and one K-Ar age date points to a minimum age of 6.3 Ma (late Miocene) for the stratovolcano.   The high-sulfidation nature of Cerro Eskapa is exemplified by the ubiquitous amounts of disseminated pyrite in clay-altered dacite and the high sulfur content (between 2 to 4 weight percent) of this rock.  Oxidation (weathering) of the pyritiferous altered rocks has produced a highly visible color anomaly of white clays and red to yellow, iron-oxide mineralization at Cerro Eskapa.  The term acid-sulfate refers to alteration effects produced by invading hot acidic waters/vapors and the resultant development of hypogene, clay and hydrous sulfate minerals (i.e. alunite) and related deposition of precious- and base metals in sulfosalt and sulfide mineralization. Importantly, the occurrence of (copper-arsenic) enargite-luzonite sulfide family minerals is often diagnostic for a deposit belonging to the acid-sulfate-type system and may in-part comprise the high-grade copper mineralization intersected in DDH-EK-01-11 at Cerro Eskapa.  The high-sulfidation alteration and hosted epithermal precious-metal mineralization are commonly positioned within the central core zone of the stratovolcano and directly above a porphyry stock (see Figure 2). The latter stocks can be copper (-molybdenum) porphyry and the source of fluids producing the higher level, high-sulfidation/acid-sulfate alteration and associated mineralization effects. The precious-metal mineralization occurs as veins, veinleted rock, and disseminated.  Ore bodies can occur in altered/silicified intrusive rocks, hydrothermal breccia pipes and elongate bodies, and as mantos replacement in layered volcanic and sedimentary rocks.  A swarm of complex veins host high-grade gold and gold-copper-silver ore at El Indio (Chile).  For the stratovolcano setting, the highest levels of alteration nested in the vent complex contain deposits of native sulfur in argillic/advanced-argillic alteration and deposition of iron-sulfide minerals.  At depth, the alteration may include: clay-pyrite and sulfidic silicification and contain anomalous to appreciable pathfinder elements (mercury, arsenic, antimony, and thallium), but without much, if any, precious metal content.  At further depth and along structures, the precious-metal mineralization occurs as higher grade veins and veinleted rock to lower grade more-disseminated deposits hosted in fractured rock and breccia.  The ratio of gold to silver varies between deposits.  At further depth, copper and base-metal mineralization may be encountered. The level of erosion is an important aspect and dictates whether precious-metal mineralization, if present, will be preserved at shallow to deep depths, partially preserved, or mostly eroded away.  At Cerro Eskapa the erosional level appears to have exposed the top of the system which is silver-lead-antimony-mercury-rich (sulfosalt minerals) with no gold; and changing to gold-bearing, high-grade, copper-silver-antimony-bismuth (sulfide/sulfosalt minerals) at greater depth.  The presence of strong copper sulfide content of mineralization at depth and outcropping oxide-copper mineralized pebble breccia bodies cutting up through the north flank of the stratovolcano would seem to indicate a concealed porphyry copper source intrusion at depth beneath Cerro Eskapa.  This intrusion is the likely source of the ascending mineralizing fluids which produced the intense alteration and widespread mineralization effects.  Porphyry copper intrusions have been proposed to be associated with other high-sulfidation precious-metal deposits (i.e. Yanacocha, Pierina, and El Indio-Tambo).

This technical summary has been prepared by Robert E. Kell, Vice President - Exploration for SAMEX Mining Corp.  Mr. Kell is a “qualified person” pursuant to Canadian Securities National Instrument 43-101 concerning Standards Of Disclosure For Mineral Projects.