$AFYG MACHACHALA PROJECT

The Machacala Project is a hard rock property located in the District of Carabamba, province of Julcan, La Libertad region to the North of Peru, at an elevation of 3,300 meters above sea level. The property contains 966 hectares comprised of 18 contiguous concessions. It is approximately 110 miles southeast of the city of Trujillo, capital of the region, and 574 Km of Lima, capital of Peru.

The La Libertad is one of the largest Gold and Silver producing regions in Perú and in the World, including mines such as Yanacocha which is producing millions of Gold ounces annually; 42 kilometers east of the coastal city of Trujillo in northern Peru.

Machacala Project Highlights

Project offers near-term production potential from both tailings and underground.

Previously producing property with over 235,000 tons of ore mined with estimated average grades of 6.0g/t Au and   340g/t Ag

Large un-leached tailings pile on site
Volume Est.:  210,000 Metric Tone
Grade Est.:  1. 34 g/T Au   56.36g/T Ag (average grade)
Located in a well-known mining area.
Barrick Gold, Rio Alto Mining, and Southern Peak Mining are operating in region.
Exploration drilling programs from 1996 by Gold Hawk Resources, Meridian Gold, and Buenaventura.
Drilling totaled over 8,500 m in 45 core and RC drill holes (Meridian Gold, Gold Hawk Resources).
Metallurgical studies show 87% Au, 50% Ag recoveries in 24 hrs leaching on un-milled tailings, with re-milling (-400 mesh) shows increased recoveries to 90% Au, 73% Ag in 24 hrs leaching.

NOTE: Mine has multiple low sulphidation, epithermal Au-Ag veins on property of which thirteen have been identified and "only" four have been modestly exploited.

MINERAL RIGHTS:
966 hectares comprised of 18 contiguous mineral concessions

SURFACE RIGHTS:
150 hectares of surface rights.  This is where the estimated 210,000 metric tons of tailings are located.

WATER RIGHTS:
Water rights to the nearby Carabamba reservoir. Additional source of water supply exists if necessary.