SHAREHOLDER UPDATE
Nuoco/LDM Gold Project Report
May 30, 2014
Ore assays up to 1 ounce of gold per tonne in 15-meter extension from the shaft area at LDM have now been received.
Under the supervision of Juan Jos? Quijano Fern?ndez, work has progressed on the gold exploration project to the intersection of the DDH-002 drill hole location and 15 meters of tunneling beyond.
The DDH-002 intersection penetrated inside of a gold mineralized, brecciated fault structure at the 68-70 meter point. Assay samples taken from just above this zone have averaged in the10 grams of gold per tonne range.
From the 70-meter depth, a tunnel has been constructed exploring the vein and breccia material from the shaft in a north-easterly direction. The tunnel has now been extended some 15 meters beyond the shaft and the DDH-002 location. Sampling has been done in the shaft and every 2 meters down the tunnel. The mineralization is observed as increasing as we progress in the fault vein and is observed as gold in quartz and massive arsenopyrite. This gold bearing, fractured fault structure is 1.3 meters wide and is progressing from breccia to fractured quartz in nature.
The Company Geologist has sampled the tunnel and shaft areas at 2 meter intervals. All samples have been done in accordance with standard practices and are representative of the grades expected across the width of the structure at each 2 meter interval. Samples taken from the wall rock have returned assays of 0.5 to 0.8 grams of gold per tonne. Assays in the tunnel section of the fault structure returned 16.8 g/t Au, 21.5 g/t Au, 24.5 g/t Au, 10.4 g/t Au and 33.3 g/t Au. The nature of the gold is consistent in all the samples at about 50% fine gold and 50% nugget gold. It is free milling.
Additional sampling has been completed and assays will be reported when results are received from the lab.
A detailed program has now been undertaken to create a comprehensive mining plan for the gold project along with the copper project. Work done to date has shown consistent findings of increasing mineralization in the gold and separately in the copper zones. We are therefore proceeding to implement Phase 2 of our development plan ? a full mining operation.
A consulting Mining Engineer recommended by Enami (Chilean National Mining Corporation) has been hired to work with our on-site Manager to ensure proper detail and documentation of the permit applications. He will also be establishing the best extraction methods and ore targets for this particular operation and mineral structure. While this work is in progress, we are continuing to operate under the current permits. Trucks are hauling copper ore daily to the mill and the mining crew is currently extracting copper ore. Production at the gold zone will begin when we have better defined the target with our geologist and Engineer. We expect to add a second crew shortly to bring the gold into production.
On behalf of the Board of Directors,
Nuoco/LDM
