RUSORO MINING LTD.

Vancouver, B.C.

TECHNICAL REPORT

ON THE

MINING AND PROCESSING OPERATIONS

OF HECLA MINING COMPANY
ESTADO BOLIVAR, VENEZUELA

Robert J. Leader, P. Eng.

Dave Laudrum, P. Geo.
Ian R. Ward, P. Eng.
Luke Evans, P. Eng.

August 1, 2008

SUITE 900 - 390 BAY STREET, TORONTO ONTARIO, CANADA M5H 2Y2
Telephone (1) (416) 362-5135 Fax (1) (416) 362 5763

SUITE 205 – 700 WEST PENDER, VANCOUVER, BRITISH COLUMBIA V6C 1G8
Telephone (1) (604) 647-6463 Fax (1) (604) 647 6455
 Table of Contents
Page

1.0 SUMMARY ....................................................................................................................1

1.1 CONCLUSIONS..........................................................................................................3
1.1.1 Isidora Mine.........................................................................................................3
1.1.2 La Camorra Mine and Plant.................................................................................4
1.1.3 Exploration on Block B and El Dorado Concessions..........................................5
1.1.4 Social and Environmental Issues.........................................................................5
1.1.5 Risk Factors .........................................................................................................6
1.1.6 Potential Opportunities ........................................................................................7
1.2 RECOMMENDATIONS .............................................................................................7
1.2.1 Recommendations Regarding Twin Shear Zone .................................................8

2.0 INTRODUCTION AND TERMS OF REFERENCE.................................................9

2.1 GENERAL ...................................................................................................................9
2.2 SITE VISITS................................................................................................................9
2.3 CURRENCY AND ABBREVIATIONS ...................................................................10
2.4 CORPORATE NAMES.............................................................................................11

3.0 RELIANCE ON OTHER EXPERTS.........................................................................12

4.0 PROPERTY DESCRIPTION AND LOCATION ....................................................13

4.1 CONCESSION...........................................................................................................13
4.2 HECLA’S CORPORATE STRUCTURE IN VENEZUELA....................................14
4.3 ACQUISTION OF THE ASSETS OF HECLA BY RUSORO.................................15

5.0 ACCCESSIBILITY AND INFRASTRUCTURE, CLIMATE AND

PHYSIOGRAPHY ...................................................................................................17
5.1 ACCESSIBILITY AND INFRASTRUCTURE ........................................................17
5.2 CLIMATE AND PHYSIOGRAPHY ........................................................................17

6.0 HISTORY .....................................................................................................................18

7.0 GEOLOGICAL SETTING .........................................................................................20

7.1 BLOCK B CONCESSIONS GEOLOGICAL ENVIRONMENT .............................20

8.0 DEPOSIT TYPES ........................................................................................................22

9.0 MINERALIZATION ...................................................................................................23

10.0 EXPLORATION ..........................................................................................................25

10.1 EXPLORATION TARGETS.....................................................................................25
10.2 DISCUSSION OF BLOCK B EXPLORATION TARGETS....................................26
10.2.1 Chile East...........................................................................................................26
10.2.2 Panama Vein......................................................................................................26
10.2.3 A Lode ...............................................................................................................26

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 10.3 DISCUSSION OF EL DORADO EXPLORATION TARGETS ..............................26

11.0 DRILLING ...................................................................................................................28

11.1 ISIDORA MINE ........................................................................................................28
11.2 TWIN SHEAR ...........................................................................................................28

12.0 SAMPLING METHOD AND APPROACH..............................................................30

12.1 TWIN SHEAR SAMPLING......................................................................................31

13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY ...................................32

14.0 DATA VERIFICATION AND QA/QC PROGRAMS .............................................33

14.1 DATABASE ..............................................................................................................33
14.2 QA/QC PROGRAMS FOR ASSAY RELIABILITY ...............................................34
14.3 QA/QC FOR TWIN SHEAR DRILLING .................................................................37

15.0 ADJACENT PROPERTIES .......................................................................................40

15.1 CHOCO 10 MINE .....................................................................................................40
15.2 LA VICTORIA AND TOMI MINES........................................................................40
15.3 INCREIBLE 6 DEPOSIT ..........................................................................................40
15.4 COLOMBIA MINE ...................................................................................................41

16.0 MINERAL PROCESSING AND METALLURGICAL TESTING........................42

16.1 ORE TRANSPORT AND MINERAL PROCESSING .............................................42
16.2 TWIN SHEAR METALLURGY...............................................................................43

17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES ...................44

17.1 MINERAL RESOURCE ESTIMATES FOR ISIDORA MINE ...............................44
17.1.1 Isidora Mine Mineral Resources........................................................................44
17.1.2 Database.............................................................................................................44
17.1.3 Assay Compositing............................................................................................45
17.1.4 Geological Domain Modelling ..........................................................................45
17.1.5 Resource Estimation Parameters .......................................................................45
17.1.6 Resource Cut-off Grades ...................................................................................46
17.2 MINERAL RESOURCE ESTIMATE FOR TWIN SHEAR ZONE
BY SCOTT WILSON RPA .......................................................................................46
17.2.1 Interpretation and Conclusions regarding Twin Shear Resource
Estimate .............................................................................................................50
17.3 MINERAL RESERVE ESTIMATES........................................................................52
17.3.1 Isidora Mine Reserves .......................................................................................52
17.3.2 Reserve Estimate Methodology.........................................................................53

18.0 OTHER RELEVANT DATA AND INFORMATION .............................................55

18.1 ISIDORA MINE ........................................................................................................55
18.1.1 Summary............................................................................................................55
18.1.2 General Mine Description .................................................................................56

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 18.1.3 Mining Method ..................................................................................................58
18.1.4 Ground Support .................................................................................................59
18.1.5 Past Production ..................................................................................................59
18.1.6 Life-of-Mine Production Plan ...........................................................................60
18.1.7 Surface Facilities and Mining Equipment .........................................................62
18.1.8 Site Access and Infrastructure ...........................................................................64
18.1.9 Off-Site facilities ...............................................................................................64
18.2 LA CAMORRA MINE..............................................................................................64
18.2.1 Historical Mine Production ...............................................................................65
18.2.2 Reserves.............................................................................................................65
18.2.3 Mine Closure and Reclamation .........................................................................65
18.2.4 Mine Surface Infrastructure...............................................................................66
18.3 LA CAMORRA PROCESSING PLANT..................................................................66
18.3.1 Overview of Plant..............................................................................................66
18.3.2 Tailings ..............................................................................................................68
18.3.3 Plant Production – Past and Potential................................................................68
18.3.4 Reagent and Steel Consumptions ......................................................................69
18.3.5 Recovery............................................................................................................70
18.4 ECONOMIC ANALYSIS..........................................................................................71
18.4.1 Currency, Royalties and Gold Sales ..................................................................71
18.4.2 Capital and Operating Costs ..............................................................................72
18.4.3 Cash Flow Projection.........................................................................................73
18.5 ENVIRONMENTAL CONSIDERATIONS .............................................................77
18.5.1 Evaluation of Existing Environment and Proposed Compliance
with Local, Regional and National Regulations................................................77
18.5.2 Environmental Management..............................................................................79
18.5.3 Labour and Working Conditions .......................................................................79
18.5.4 Pollution Prevention and Abatement .................................................................80
18.5.5 Community Health, Safety and Security ...........................................................81
18.5.6 Land Acquisition and Involuntary Resettlement ...............................................81
18.5.7 Biodiversity Conservation and Sustainable Natural Resource
Management ......................................................................................................82
18.5.8 Indigenous Peoples ............................................................................................82
18.5.9 Cultural Heritage ...............................................................................................82

19.0 INTERPRETATION AND CONCLUSIONS ...........................................................83

19.1 ISIDORA MINE OPERATIONS ..............................................................................83
19.2 LA CAMORRA MINE AND PLANT ......................................................................85
19.2.1 Future Plant Options..........................................................................................86
19.3 CONCLUSIONS ON ENVIRONMENTAL AND SOCIAL
ASPECTS...................................................................................................................86

20.0 RECOMMENDATIONS.............................................................................................88
20.1 RECOMMENDATIONS REGARDING THE ISIDORA MINE AND
LA CAMORRA PROPERTIES.................................................................................88
20.2 RECOMMENDATIONS REGARDING TWIN SHEAR.........................................88

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21.0 REFERENCES.............................................................................................................90

22.0 SIGNATURE PAGE....................................................................................................91

CERTIFICATES

APPENDIX 1 SIGNIFICANT INTERCEPTS ON BLOCK B TARGETS

OUTSIDE THE ISIDORA MINE RESOURCE AREA......................97

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 List of Tables

Table 1.1 Isidora Mine Mineral Resource Estimate at March 31, 2008 ............................1
Table 1.2 Inferred Mineral Resource Estimate at Twin Shear Zone (June, 2008).............2
Table 1.3 Mineral Reserves at Isidora Mine, December 31, 2007.....................................2
Table 1.4 Summary of Reserves at Isidora Mine as of March 31, 2008............................3
Table 1.5 Isidora Mine Exploration Budget.......................................................................8
Table 1.6 Twin Shear Zone Exploration Budget ...............................................................8
Table 2.1 List of Abbreviations .......................................................................................10
Table 2.2 Corporate Names, Abbreviations and Relationships .......................................11
Table 14.1 Gemcom Database for Isidora Mine ................................................................34
Table 14.2 Triad Core Pulp Replicate RSD Values for Isidora Mine................................35
Table 14.3 Triad Core Reject Duplicate RSD Values for Isidora Mine ............................35
Table 14.4 Historical Certified Reference Material for the Isidora Mine..........................36
Table 15.1 Choco 10 Deposit, Reserves and Mineral Resources.......................................40
Table 15.2 La Victoria and Tomi, Production and Mineral Resources..............................40
Table 15.3 Increible 6 Mineral Resource Estimate by Micon (November, 2007) .............41
Table 17.1 Isidora Mine Mineral Resources at March 31, 2008........................................44
Table 17.2 Descriptive Statistics for Resource Estimation Samples, Twin Shear.............49
Table 17.3 Intersections for Resource Estimate for Twin Shear Zone ..............................50
Table 17.4 Mineral Resource Estimate for Twin Shear Zone at June, 2008......................51
Table 17.5 Mineral Reserves by Vein and Category for the Isidora Mine at
December 31, 2007 ..........................................................................................52
Table 17.6 Summary of Reserves for the Isidora Mine as of March 31, 2008 ..................52
Table 17.7 Cut-off Grade Determination for 2007 Isidora Mine Reserves Report............53
Table 18.1 Cut-off Grade Determination used for LOM Plan at $750/oz Gold
Price .................................................................................................................61
Table 18.2 Isidora Mine LOM Production Schedule - December, 2007 ...........................61
Table 18.3 Isidora Mine Budget Cut-off Grade Using Budget Costs for 2008 .................62
Table 18.4 Equipment Availabilities for Third Quarter, 2007...........................................63
Table 18.5 Historical Production at La Camorra Mine......................................................65
Table 18.6 Reported Reserves at Time of Closure of the La Camorra Mine.....................65
Table 18.7 La Camorra Plant Operating Statistics.............................................................69

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Table 18.8 Unit Operating Costs for 2007 - 2009..............................................................73
Table 18.9 Isidora Mine LOM Production Schedule - December, 2007 ...........................74
Table 18.10 Life-of-Mine Cash Flow Projection .................................................................75
Table 18.11 Permit Financial Compliance Summary ..........................................................78
Table 18.12 Key Permit Summary.......................................................................................78
Table 19.1 Mineral Resource Estimate for Twin Shear Zone at June, 2008......................85
Table 20.1 Isidora Mine Exploration Budget.....................................................................88
Table 20.2 Twin Shear Exploration Budget.......................................................................89

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 List of Figures

Figure 4.1 Locations of Hecla Concessions in Bolivar State ............................................13

Figure 4.2 Concession Map for Block B ...........................................................................14
Figure 4.3 Concession Map and Exploration Targets for El Dorado Block .....................15
Figure 7.1 Geological Map of Block B Area.....................................................................20
Figure 9.1 Three Dimensional Image of the Mina Isidora Veins with Associated
Development ....................................................................................................24
Figure 9.2 Cross-section Looking West and Showing Relationship of Veins at
Isidora Mine .....................................................................................................24
Figure 10.1 Drilling by Hecla on Block B Concessions......................................................25
Figure 11.1 Twin Shear Drill Hole Plan..............................................................................29
Figure 14.1 Twin Shear Quality Control Procedures of Sample Assays.............................38
Figure 16.1 Crushing and Sampling Station Outside Perú-Chile........................................42
Figure 17.1 Three-dimensional View of Twin Shear and Lenses Looking
Northwest.........................................................................................................47
Figure 17.2 Twin Shear Zone, Section 2200E ....................................................................48
Figure 17.3 Twin Shear Zone Section 2650E .....................................................................48
Figure 17.4 Resource Assay Histogram (N=157) ...............................................................49
Figure 17.5 Twin Shear Zone 1, Vertical Longitudinal Projection, Looking North ...........51
Figure 18.1 Summary of Mina Isidora Milled Production ..................................................56
Figure 18.2 Portal to Mina Isidora Ramp ............................................................................57
Figure 18.3 Headframe on Inclined Shaft – Pozo de Aqua .................................................57
Figure 18.4 Diagram of Typical Up-dip Panel ....................................................................58
Figure 18.5 View Up-dip Showing Typical Panel Stope with Sill Pillars and Local
Timber Support ................................................................................................59
Figure 18.6 Monthly Production at the Isidora Mine ..........................................................60
Figure 18.7 View of the Surface Repair Shops ...................................................................63
Figure 18.8 La Camorra View over the Mine Workshops and Office, and View of
Equipment Left on Surface ..............................................................................66
Figure 18.9 View of the Two Grinding Mills......................................................................67
Figure 18.10 View over Tailings Pond No. 4........................................................................68
Figure 18.11 Isidora Mine Ore – Grade Versus Gold Extraction..........................................71

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Figure 18.12 Cash Flow Projection .......................................................................................76
Figure 18.13 NPV at 10% Sensitivity Chart..........................................................................77

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 1.0 SUMMARY

Micon International Limited (Micon) has been retained by Endeavour Financial Limited
(Endeavour) and Rusoro Mining Ltd. (Rusoro) to prepare an Independent Technical Report
compliant with Canadian National Instrument 43-101 (NI 43-101) on the Isidora gold mine
property and La Camorra gold mine and processing plant of Hecla Mining Company (Hecla)
located in Bolivar State, Venezuela. This report has been prepared in respect of the approved
purchase of Hecla’s Venezuelan properties by Rusoro.

The Isidora Mine is situated within the Minerven M-2 concession on the Block B concessions
located just to the southwest of the town of El Callao. The closed La Camorra mine and
active La Camorra processing plant are located on the La Camorra concession in the El
Dorado block and are located approximately 20 km northeast of the town of El Dorado. The
La Camorra plant is approximately 120 km distant from the Isidora Mine.

Hecla’s operations in Venezuela are controlled by two local companies. Hecla Minera
Venezolana S.A. (HMV) controls the El Dorado block concession while the Block B land
package is under the Mina Isidora Joint Agreement between HMV and El Callao Gold Mining
Company de Venezuela S.C. Hecla’s total land position in Venezuela is 18,272 ha of which
Block B is an area of 1,787 ha that encompasses several past-producing gold mines and the El
Dorado block is an area of 8,635 ha that encompasses 11 contiguous properties.

Mineralized veins in the Block B area are typical, shear-hosted mesothermal quartz veins that
formed under greenschist-grade metamorphic conditions. The veins contain free gold and
gold and bismuth tellurides in quartz with pyrite and minor chalcopyrite. Vein contacts with
the wallrocks are generally sharp but contain some local complexities such as splays and
stockworks at their margins.

Dave Laudrum, P. Geo., Senior Associate of Micon, completed a detailed review of the
Isidora Mine Mineral Resource Estimate which included re-running the resource model using
the database, deposit wireframes, and estimation parameters as supplied by Hecla. Luke
Evans P.Geo., of Scott Wilson Roscoe Postle Associates Inc. (Scott Wilson RPA) completed
a Mineral Resource Estimate of the Twin Shear Zone.

The Mineral Resource Estimate at Isidora Mine, estimated by Hecla as of March 31, 2008 is
summarized in Table 1.1.
Table 1.1
Isidora Mine Mineral Resource Estimate at March 31, 2008
1, 2
(8 g/t Au cut-off grade)

Grade
Category Tonnes Ounces Gold
(g/t Au)
Measured 107,534 29.06 100,495
Indicated 362,738 19.75 230,376
Total Measured and Indicated 470,272 21.88 330,871
Inferred 99,038 14.13 45,006

1
The mineral Resource Estimate shown in Table 1.1 is inclusive of the mineral reserves shown
in Table 1.4.

The mineral Resource Estimate set out in Table 1.1 are reduced from the December 31, 2007
Resource Estimate and were discounted for past production up to March 31, 2008.

The Mineral Resource Estimate at the Twin Shear Zone, as estimated by Luke Evans of Scott
Wilson RPA is summarized in Table 1.2. The cut-off date for drill hole data utilized in the
mineral resource estimate is September, 2007. The effective date of the mineral resource
estimate is June, 2008. There are currently no defined Mineral Reserves at the Twin Shear
Zone.

Table 1.2
Inferred Mineral Resource Estimate at Twin Shear Zone (June, 2008)
(8 g/t Au cut-off grade)

Category Tonnes Grade Grade Cap Ounces

(g/t Au) 50 g/t Au Gold
Inferred 1,195,000 14.9 12.5 481,900
1. Mineral resource estimates which are not mineral reserves do not have demonstrated economic viability.
The estimate of mineral resources may be materially affected by environmental, permitting, legal, title,
taxation, socio-political, marketing, or other relevant issues.
2. The quantity and grade of reported inferred resources in these estimates are uncertain in nature and there has
been insufficient exploration to define these inferred resources as an indicated or measured mineral resource
and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.

Proven and Probable reserves reported by Hecla for the Isidora Mine are summarized by
category in Table 1.3.

Table 1.3
Mineral Reserves at Isidora Mine, December 31, 2007
(17 g/t Au cut-off grade)

Category Tonnes Grade Ounces Gold

(g/t Au)
Proven 70,298 37.20 84,029
Probable 109,149 28.80 101,056
Total Proven and Probable Reserves 179,447 32.10 185,085

In Table 1.4, Hecla’s March 31, 2008 estimate is fully discounted for all mine production
which had taken place prior to the update, as shown in Table 1.4. Mine production in the first
quarter was subtracted from the December 31, 2007 reserves.

There are no reportable reserves for the La Camorra mine as it has been permanently closed
owing to excessively high costs and problematic ground conditions at depth.

2
 Table 1.4
Summary of Reserves at Isidora Mine as of March 31, 2008

Tonnes Grade Grams Ounces

(g/t Au) Gold Gold
Reserves - Dec 31, 2007 179,447 32.1 5,760,249 185,085
Less Production, Jan - Mar, 2008 17,558 30.21 530,427 17,054
Remaining Reserves - Mar 31, 2008 161,889 32.30 5,229,822 168,031

The most advanced of Hecla’s other exploration targets are the Chile East target on Block B,
and the Canaíma target in the La Camorra area on the El Dorado concessions.

1.1 CONCLUSIONS

The following are a series of conclusions and risk factors based on the site visits and review
of the data provided to date.

1.1.1 Isidora Mine

In Micon’s view, Hecla has used an appropriate methodology in producing its March 31, 2008
Isidora Mine Mineral Resource Estimate and has incorporated appropriate Quality
Assurance/Quality Control (QA/QC) measures in the production of that estimate.

When actively mining, prior to April, 2008, the Isidora Mine produced approximately 250 to
300 t/d of high grade gold ore. Micon concludes that production rates are constrained by the
lack of working faces and experienced miners. There is also reported to be a shortage of
underground haulage trucks. Production has also been affected by work stoppages and road
blockades the most recent being in June, 2008. Production has now restarted at the mine.

The up-dip panel stoping method being used at Isidora mine is a method appropriate for the
ore body configuration, ground conditions and level of technical experience of the work force.
Ground conditions observed in the mine were generally good, with only local support
required in stopes.

As of December, 2007 Hecla had defined approximately 18 months of mineral reserves for
the Isidora Mine using a cut-off grade of 17 g/t Au. Hecla had also developed a conceptual
life-of-mine plan based on a lower cut-off grade of 10 g/t Au that would extend the mine life
to between 24 to 26 months by incorporating additional developed reserves that are above the
lower cut-off grade. Micon does not consider that it has been clearly demonstrated that
profitable mining at a 10 g/t cut-off grade is achievable.

The mine is a high cost producer owing to the low production levels and manual methods of
mining. The potential to reduce mining costs over the short term is considered limited since
the present lack of experienced miners and supervisory staff poses a restriction on the number
of new working areas that may be developed.

3
Non-mining/processing costs form a significant portion of overall operating cost, specifically
the cost of re-handling and transport of ore to the La Camorra mill is 9% of total unit costs
and site services cost is 20% of unit costs. There may be possible savings in operating costs if
haulage distances to a processing plant are reduced and overhead and head office costs
streamlined.

Micon considers that given current levels of gold spot prices, the use of a higher price than
$570/oz for calculation of mineral reserves can be justified in the short term. The price of
$750/oz used by Hecla for its life-of-mine plan appears to be reasonable

By using higher gold prices and savings in some operating costs it is Micon’s opinion that a
reduction of the cut-off grade to around 12-14 g/t Au might be achieved.

Theft of ore and supplies from the mine property appears to be an ongoing problem,
especially where there is a significant amount of visible gold in the stoping areas.

1.1.2 La Camorra Mine and Plant

La Camorra mine is now closed and there is no likelihood that it can be economically
reopened. Most static equipment has been withdrawn from the mine and the pumps turned
off. The mine is flooding at an estimated rate of 1.0 vertical metres per day. Consequently
there are no remaining economically extractable reserves at La Camorra.

The mine surface infrastructure is still in place but is not being well-maintained. Most mobile
equipment observed on surface is in poor condition. Venezuelan regulations require the
equipment to remain on the concession and, therefore, little of it can be transferred to the
Isidora Mine.

In Micon’s opinion the La Camorra processing plant is well operated, is in reasonable

mechanical condition, employs conventional gold extraction technology, and achieves good
recoveries with the high grade ore from the Isidora Mine. Ore mined from Isidora mine is
trucked 120 km to the La Camorra process plant.

There is insufficient production from the Isidora Mine and other ore sources to enable the 700
t/d capacity plant to operate continuously over a 24 hour, seven day per week period. Work is
underway to supplement the feed by reprocessing tailings and, thereby, to achieve continuous
operation. This will improve operational efficiency and also reduce high wear and potential
damage to the existing equipment.

Plant operations would benefit from the following:

• Reduction in double handling of Isidora ore. This will be difficult as long as ore needs
to be transported in truck convoys.
• Improvements to carbon column operation by standardizing equipment sizes.
• Improvements in processing operations to reduce losses of carbon fines.

4
1.1.3 Exploration on Block B and El Dorado Concessions

Hecla has conducted a systematic surface exploration program on its Block B and El Dorado
Concessions that has included geophysics, airphoto structural interpretation, topographic
surveys, rock and soil sampling and drilling. Hecla’s exploration efforts have successfully
defined several significant mineralized zones on exploration targets outside of the Isidora
Mine area. Micon has not examined these exploration targets beyond a superficial review of
the data.

Scott Wilson RPA believes there is excellent potential to expand the Twin Shear resource,
particularly in the vicinity of Zone 1, Lenses 2 and 3 (see Figure 17.5). Scott Wilson RPA’s
view is that Twin Shear is still at an early exploration stage and that more drilling is needed to
better define the various styles of mineralization and to develop appropriate models to guide
future interpretation and resource estimation work. There are clearly some parts of the shear
zones that are more prospective than others. When more drilling data become available, Scott
Wilson RPA recommends developing a predictive structural model that identifies favourable
dilation zones and plunge directions that are likely associated with specific types of shear
zone flexures, kinks and cross-structures. This would help future targeting and modelling
work.

Hecla’s in-house evaluations of other exploration targets (i.e., Chile East and Canaíma)
indicated that the mineralization did not have reasonable prospects for economic extraction,
given the parameters used at the time of the evaluations. Most of the currently defined
exploration targets are partially open at depth and, in some cases, also along strike.
Significantly expanding these zones, or justifying more optimistic evaluation criteria such as a
higher gold price, might change the economic picture. Further study will be required to
determine if these exploration targets stand any potential of becoming economic resources.

1.1.4 Social and Environmental Issues

At the time of Micon’s site visit the Hecla operations had lost a significant number of senior
management and senior technical staff. Sourcing, training and retaining replacement staff
will be challenging in the current mining boom and given the unique challenges and risks
involved in working at Venezuelan operations.

There were no social or environmental fatal flaws identified. However, community relations,
security, and labour relations need to be extensively managed and resources need to be
committed to these areas to manage the risks from these factors.

During Micon’s review, a number of items were identified as areas for consideration and
improvement. The main points are summarized below:

• The alternate transportation route from the Isidora Mine to the plant at La Camorra
that avoids the main communities should be developed as early as possible or if ore

5
 haulage continues along the current route, the company should look at options to assist
with funding highway maintenance and safety upgrades.

• The community relations coordinator is a key position, Should the present incumbent
leave, the position needs to be filled with an equally competent person or the risk of
mine closure from community blockades will once again increase.

• Mine site and general security needs to be extensively and carefully managed with a
commitment of human and financial resources.

• Soil contamination by hydrocarbons at La Camorra should be cleaned up in the near

future.

1.1.5 Risk Factors

Various risks to the Hecla operations in Venezuela have been identified during Micon’s
review. These are summarized as follows:

• The potential inability to replace the mined-out reserves within the Isidora Mine. The
current reserve base remaining as of March 31, 2008 at the Isidora Mine provides for
between 15 to 23 months of operation at current production rates.

• The potential inability to convert other areas of mineralization into resources and,
further, into mineable reserves in time to allow for mine development and continuation
of mining prior to exhaustion of current Isidora Mine reserves.

• The possibility of a reduction in mined grade owing to an increase in hanging wall

dilution caused by inexperienced mining operators, with a direct effect on cash flow.

• Accelerated reduction in the current reserve base owing to lower than anticipated
recovery from the sill pillars due to poor ground conditions and/or loss of access thus
shortening mine life.

• Loss of the remaining experienced ex-patriate management and engineering staff,

resulting in a loss of direction and control of the operation.

• Potential for lengthy interruptions in operations by strikes or road blockades in the

surrounding communities affecting ability to produce.

Notwithstanding the above identified risks, it is Micon’s opinion that based on the
information provided to date, there are no significant technical risks that might adversely
affect the economic viability of the current operations at the Isidora Mine and the facilities at
La Camorra. However, if any of the above risks factors were to materialize, they will likely
have a detrimental impact on cash flow.

6
1.1.6 Potential Opportunities

Several opportunities exist to improve the operational organization and efficiencies now that
Rusoro has acquired the Block B and El Dorado Block Concessions from Hecla. The
potential opportunities resulting from the acquisition by Rusoro include:

• A possible savings in operating costs (compared to 2007) if haulage distances to a

processing plant are reduced and overhead and head office costs streamlined.

• Opportunity to utilize the present excess capacity at the 700 t/d La Camorra mill by
treating ores from other Rusoro projects nearby, for example the San Rafael/El Placer
(SREP) property of Rusoro. Where, if further work demonstrates that a mineral
resource with reasonable prospect of economic extraction is present, the proximity of
the mill at La Camorra will be a positive factor in project viability.

• Opportunity to resolve on-going conflicts with neighbouring villages and reduce the
cost of double handling of the ore at the transfer station by constructing a bypass in the
transportation route to avoid the village of Perú-Chile or alternatively processing ore
from Isidora at the Choco 10 operation of Rusoro that is located approximately 10 km
west of the Isidora Mine.

Further study is needed to evaluate these options.

1.2 RECOMMENDATIONS

Work is recommended to optimize the existing operation at the Isidora Mine in terms of cut-
off grade, reducing double handling of material, and solving equipment and labour issues to
maximize income for the remainder of the mine life. Further study will be required to
determine if exploration targets within at Chile East and Canaíma stand any potential of
becoming economic resources.

Micon recommends that options and opportunities be investigated to coordinate Rusoro’s

various reserves and processing operations at Isidora, La Camorra, San Rafael/El Placer,
Choco 10, and Increible 6.

In connection with the potential opportunities to be gained as a result of the coordination of

operations of the former Hecla assets with those of Rusoro, it is recommended that alternate
ore transportation routes are assessed in order to resolve on-going conflicts in affected
communities.

It is Micon’s opinion that the exploration budget proposed by Rusoro for the Isidora Mine,
shown in Table 1.5, is warranted and that the budget of $1.5 million is reasonable.

7
 Table 1.5
Isidora Mine Exploration Budget

Description Amount
($)
Diamond drilling 1,100,000
Assaying 50,000
Geology and support 125,000
Metallurgical testwork 30,000
Environmental and permitting work 25,000
Updated Resource Model 25,000
Subtotal 1,355,000
Plus contingency 145,000
Grand Total 1,500,000

1.2.1 Recommendations Regarding Twin Shear Zone

It is Scott Wilson RPA’s opinion that the exploration work proposed by Rusoro is warranted
and that the proposed budget of approximately $1.6 million is reasonable. The main work
items are listed in Table 1.6.

Table 1.6
Twin Shear Zone Exploration Budget

Description Amount
($)
Diamond drilling 1,100,000
Assaying 50,000
Geology and support 125,000
Metallurgical testwork 30,000
Environmental and permitting work 50,000
Preliminary economic assessment 100,000
Subtotal 1,455,000
Plus 10% contingency 145,000
Grand Total 1,600,000

It is recommended that the proposed program be implemented by Rusoro.

8
 2.0 INTRODUCTION AND TERMS OF REFERENCE

2.1 GENERAL

Micon International Limited (Micon) was retained by Endeavour Financial Limited

(Endeavour) and Rusoro Mining Ltd. (Rusoro) to prepare an Independent Technical Report
compliant with Canadian National Instrument 43-101 (NI 43-101) on the Isidora Mine
property and La Camorra mine and process plant of Hecla Mining Company (Hecla), that is
contained within the Block B and El Dorado Concessions, located in Bolivar State,
Venezuela.

This report has been prepared in respect of the purchase of Hecla’s Venezuelan properties by
Rusoro that has been approved by the government of Venezuela. The transaction for the
acquisition was described in a news release by Rusoro on June 19, 2008.

The present Technical Report has been produced following an initial fatal flaw review carried
out by Micon and which was documented in an internal report prepared for Endeavour and
Rusoro in April, 2008.

This report also presents the mineral resource estimate prepared by Scott Wilson RPA on the
Twin Shear zone.

2.2 SITE VISITS

Visits were made by Micon personnel (Robert J. Leader, Victor Bryant and Jenifer Hill) to the
Hecla concessions in Bolivar State between March 11 and March 20, 2008. The principal
focus of the site visits were the Isidora Mine (Mina Isidora) and the La Camorra operating
gold processing facility and former gold mine.

As part of the site visit, the group visited the head office in Puerto Ordaz of Hecla Minera
Venezolana S.A. (HMV) prior to visiting the properties.

During and subsequent to the site visits discussions were held with the following personnel:

• Carlos Sanchez, VP of Administration and Finance.

• Dominic Duffy, Senior Mine Engineer.
• Martin Balucho, Senior Exploration Geologist.
• Halenci Flores, Mining Engineer.
• Carlos Agular, Plant Manager.
• José Luis Roca, Sustainability Coordinator.

In addition, Dave Laudrum P.Geo., completed a two-day site visit to the Isidora Mine on
March 17 and 18, 2008. The objective of the visit was to examine geological records and drill
core as part of a detailed review of Hecla’s geological model and resource estimation
methodology for the mineralized zones in the Isidora Mine.

9
Ian Ward P.Eng. visited the La Camorra property and plant on two occasions in 1997 and
2003, in connection with other assignments, and has supervised the work performed for this
report by Victor Bryant.

A site visit was made to the Isidora Mine and exploration properties by Luke Evans, P. Geo.
of Scott Wilson RPA from September 10 to 14, 2007 as part of a Mineral Resource Audit
Report completed by Scott Wilson RPA in October, 2007.

The Qualified Persons responsible for this report are; Robert J. Leader P. Eng., Senior Mining
Engineer, Micon; Dave Laudrum, P. Geo., Senior Associate Geologist, Micon; Ian R. Ward P.
Eng., President and Principal Metallurgist, Micon; and Luke Evans, P. Geo., Senior
Consulting Geologist, Scott Wilson RPA.

2.3 CURRENCY AND ABBREVIATIONS

All currency amounts are stated in US dollars ($) or Venezuelan Bolivars (Bs.F.), as
specified, with costs and commodity prices expressed in US dollars unless otherwise noted.
Unless stated to the contrary quantities are generally stated in Système International d’Unités
(SI) metric units, the standard Canadian and international practice, including metric tons
(tonnes, t) and kilograms (kg) for weight, kilometres (km) or metres (m) for distance, hectares
(ha) for area, grams (g) and grams per tonne (g/t) for gold grades (g/t Au). Troy ounces (oz)
may also be referred to for quantities of gold, a common practice in the mining industry.

Table 2.1 is a list of the various abbreviations used throughout this report.

Table 2.1
List of Abbreviations

Name Abbreviations
Canadian Institute of Mining, Metallurgy and Petroleum CIM
Canadian National Instrument 43-101 NI 43-101
Carbon in leach CIL
Centimetre(s) cm
Coefficient of variance CoV
Cubic yard(s) yd3
Cut-off grade COG
Day d
o
Degree(s)
o
Degrees Celsius C
Dollar(s), Canadian and US $, CDN$ and US$
Foot, feet ft
Gram(s) g
Grams per tonne g/t
Greater than >
Hectare(s) ha
Hour(s) hr(s)
Inch(es) in
Internal rate of return IRR
Kilogram(s) kg
Kilometre(s) km

10
 Name Abbreviations
Kilowatt hours per tonne kWh/t
Less than <
Life-of-mine LOM
Litre(s) L
Litres per second L/s
Metre(s) m
Metres above sea level masl
Million(s) M
Million tonnes Mt
Million ounces Moz
Million years Ma
Million tonnes per year Mt/y
Milligram(s) mg
Millimetre(s) mm
Net present value NPV
Net smelter return NSR
Not available/applicable n.a.
Ounces oz
Ounces per year oz/y
Percent(age) %
Run of mine ROM
Quality Assurance/Quality Control QA/QC
Second s
Specific gravity SG
System for Electronic Document Analysis and Retrieval SEDAR
Système International d’Unités SI
Tonnes t
Tonnes per cubic metre t/m3
Tonnes per day t/d
Tonnes per hour t/hr
Tonnes per month t/m
Universal Transverse Mercator UTM
Year y

2.4 CORPORATE NAMES

Frequently used corporate names are abbreviated throughout this report. The list in Table 2.2
summarizes the abbreviations and corporate relationships.

Table 2.2
Corporate Names, Abbreviations and Relationships

Abbreviation Full Name Comment

Rusoro Rusoro Mining Ltd.
Endeavour Endeavour Financial Limited
Hecla Hecla Mining Company The US parent company that owns the local operating companies.
Micon is independent of Endeavour, Rusoro and Hecla. Micon is
Micon Micon International Limited
responsible for preparation of this report.
Scott Wilson RPA is responsible for preparation of certain sections
Scott Wilson RPA Scott Wilson Roscoe Postle Associates Inc.
of this report and is independent of Endeavour, Rusoro and Hecla.
CVG Corporacion Venezolana de Guayana - Minerven C.A. A Venezuelan government mining corporation.
HMV Hecla Minera Venezolana S.A. A Venezuelan corporation owned by Hecla
El Callao GM Co El Callao Gold Mining Company de Venezuela S.C. A Venezuelan mining company indirectly owned by Hecla.
Monarch Monarch Resources Limited Previous owner of the Venezuelan assets prior to Hecla.

11
 3.0 RELIANCE ON OTHER EXPERTS

Micon reviewed and evaluated the data pertaining to the Isidora Mine property and the La
Camorra mine and plant and has drawn its own conclusions therefrom. Micon has not carried
out any independent exploration work, drilled any holes or carried out any sampling and
assaying of material from the property.

While exercising all reasonable diligence in checking, confirming and testing it, in the
preparation of this report Micon has relied upon the data provided by Hecla and Rusoro and
their consultants, and that found in public domain sources.

The status of the mining claims under which Hecla held title to the surface and mineral rights
for this property has not been investigated or confirmed by Micon. Micon offers no opinion
as to the validity of the title claimed by Rusoro as a result of its acquisition of the Venezuelan
assets of Hecla. The description of the property, and ownership thereof, as set out in this
report, is provided for general information purposes only. Legal title review was completed
by Rusoro’s legal counsel, ALFA Group Legal Consulting, as part of the acquisition due
diligence.

Many of the maps and tables for this report were reproduced or derived from reports written
by or for Hecla.

The present report draws extensively on material from the following sources:

Hecla “Report of Reserves and Resources as of 31st December, 2007 Isidora Mine”,
December 31, 2007.

Hecla “Report on Resource Modelling Parameters for the Isidora Mine”, August 8,
2007.

Scott Wilson RPA “Mineral Reserve Audit of the Isidora Mine”, October 10, 2007.

Micon “Due Diligence Report on the Block B and El Dorado Concessions of Hecla
Mining Company”, April, 2008.

12
 4.0 PROPERTY DESCRIPTION AND LOCATION

The Block B, which contains the operating Isidora Mine, is located just to the southwest of
the town of El Callao. The El Dorado block, which contains the inactive La Camorra Mine
and operating La Camorra gold recovery plant, is located approximately 20 km northeast of
the town of El Dorado and 70 km south of Tumeremo, in Bolivar State, Venezuela. The La
Camorra plant is approximately 120 km by road from the Isidora Mine. See Figure 4.1 for a
map of the area.

Figure 4.1
Locations of Hecla Concessions in Bolivar State

EL MIAMO
Caracas
GUASIPATI PuertoOr
daz
12
EL CALLAO10
11
9 8 7 6

Mina 1 2 3 4 5

TUMEREMO
Isidora
Block ‘B’ MAP AREA
PASTORA
GREENSTONE
BELT BOTANAMO
GREENSTONE
EL DORADO
BELT
N CONCESSIONS
Mineria MS
Canaima CUYUN
I
EL DORADO
La Camorra RIVE R

4.1 CONCESSION

Hecla’s total land position in Venezuela, and which supports the Venezuelan assets of the
company purchased by Rusoro, was 18,272 ha.

Block B is an area of 1,787 ha that encompasses several past-producing gold mines and
numerous prospects and informal working areas in the El Callao municipality.

CVG obtained 12 mining contiguous concessions in the El Callao area in 1998 and has held
them for 25 years. In Block B, the lease held by Hecla covers all or a portion of six of those
concessions: all of Minerven 1 and 2, and portions of the Minerven 3, 4, 8 and 9 concessions.

13
The Isidora deposit is located within Minerven 2 (or M-2). Pursuant to Hecla’s agreement
with CVG, Hecla paid CVG $500,000 on September 6, 2002. In March, 2003, Hecla made an
additional payment of $1.25M. A final payment of $1.0M was made in September, 2003.
Hecla also pays CVG a royalty of 2% to 3% on all production from Block B, depending on
the price of gold. Hecla leased the concessions from CVG. See Figure 4.2.

Figure 4.2
Concession Map for Block B

Note: M-1 indicates the Minerven 1 concession, et cetera.

The El Dorado block is an area of 8,635 ha that encompasses 11 contiguous properties. Two
of these properties are concessions granted by the Ministry of Mines (now Ministerio para las
Industrias Básicas y Minería, MIBAM) and nine are CVG contracts. The two concessions
currently have exploitation permits. Hecla had been in the process of re-submitting its
application for exploration permits on the CVG contracts at the time of acquisition by Rusoro.
The now closed La Camorra mine and the active La Camorra process plant are located on the
La Camorra concession in the Eldorado Block. See Figure 4.3.

4.2 HECLA’S CORPORATE STRUCTURE IN VENEZUELA

It is Micon’s understanding that Hecla’s operations in Venezuela were controlled by two local
companies. Hecla Minera Venezolana S.A. (HMV) controlled the La Camorra concession as
well as Niña I, II, III, IV, VI and VII, and Yessica, La Medusa, Sudor and Canaíma.

14
 Figure 4.3
Concession Map and Exploration Targets for El Dorado Block

Hecla
El Dorado Block
CVG Exploration Contract
Exploitation Concession
Exploration Target

TO TUMEREMO

NINA LA
VII MEDUSA
NINA RIO CUYUNI
EMILIA
VI
III
NINA
N IV
CANAIMA
Alvarez Esperanza
1.0 Km Pescador
Canaima
Rosita
Marta
Prinicipal
Isbelia
EMILIA EL
PLACER LA
II Main CAMORRA NINA I SUDOR
TO Betzy
EL SAN
DORADO RAFAEL
Resortera YESSICA
NINA
III NINA II

The Block B land package was held under the Mina Isidora Joint Agreement between HMV
and El Callao Gold Mining Company de Venezuela S.C. Profits from the Isidora Mine on
Block B have been shared 50% to each partner. El Callao Gold Mining Company de
Venezuela S.C. was a partnership between HMV (2%) and El Callao Gold Mining Company
US (98%). The parent company to HMV was Drake Bearing Holdings BV, a Netherlands
company owned by Hecla Limited.

4.3 ACQUISTION OF THE ASSETS OF HECLA BY RUSORO

On June 19, 2008, Rusoro announced the acquisition of the Venezuelan assets of Hecla
Mining Company, including the Block B Isidora mining leases and the La Camorra mill. The
assets were acquired for $20M in cash and 4,273,504 Rusoro shares (worth $5M).

On July 10, 2008, Rusoro announced further that it:

“has been selected as the partner of choice by the Venezuelan Government for gold mining
opportunities in Venezuela. Rusoro is also pleased to confirm the Venezuelan Government’s
approval for the previously announced acquisition of Hecla Mining Company’s Venezuelan
assets.”

15
The press release of July 10, 2008 referred also to a Commitment Agreement between Rusoro
and the Venezuelan Ministry of Mines and Basic Industries (MIBAM), as follows:

“Rusoro has agreed with the Venezuelan Ministry of Mines and Basic Industries (“MIBAM”)
to establish a mixed enterprise between Empresa de Produccion Social Minera Nacional C.A.
(an indirect subsidiary of MIBAM) and Rusoro on a 50-50 basis (the “Mixed Enterprise”).
The Mixed Enterprise is expected to be formalized within the next 6 months and will carry on
gold exploration, development and mining activities in the areas being acquired from Hecla.
The Mixed Enterprise also creates an operating gold company for Rusoro and the Venezuelan
government to examine further gold mining and development opportunities in the country for
the benefit of all stakeholders.

“The definitive terms of the Mixed Enterprise remain to be finalized between MIBAM and
Rusoro. Until such terms are finalized, Rusoro will own and operate the Hecla-Venezuela
assets. None of Rusoro’s existing assets, such as the Choco 10 Mine, are to be contributed to
the Mixed Enterprise.”

Sections 4.2 and 4.3 are provided for general information purposes only and Micon offers no
opinion as to the validity of the title claimed by Rusoro as a result of its acquisition of the
Venezuelan assets of Hecla or the validity of the Commitment Agreement between Rusoro
and MIBAM..

16
 5.0 ACCCESSIBILITY AND INFRASTRUCTURE, CLIMATE AND
PHYSIOGRAPHY

5.1 ACCESSIBILITY AND INFRASTRUCTURE

The Isidora property is 6 km from the town of El Callao, and it is 3 km from the town to the
Block B concession limits. El Callao has been a mining centre for more than 100 years. Both
underground and open pit mining operations have occurred, or are operating, around the city.

The town of El Callao has a population of about 20,000 and there are considered to be
adequate supplies of water, waste disposal facilities and power to support mining production.
There is a supply of local labour, many with artisanal mining experience. However, technical
skills are generally low and the local supply of skilled professional personnel is limited.

Access to the mine sites is by public paved roads and less than 500 m of all-weather gravel
road. The ramp portal and inclined shaft sites are connected to the national power grid system.

El Callao can be reached by a paved national highway, which is in reasonably good condition.
The nearest major city is Ciudad Guyana (also named Puerto Ordaz), where Hecla’s
Venezuelan administrative offices are located. Travel time from El Callao to Ciudad Guyana
(180 km) is approximately 2.5 hours. There are daily flights (45-minute flying time) to
Caracas from Ciudad Guyana (Puerto Ordaz). There are daily flights from Caracas to the
United States and Europe.

5.2 CLIMATE AND PHYSIOGRAPHY

The Block B concessions are located in an area of humid tropical rainforest. The following
climatic data are taken from the records of the Dirección de Hidrología y Meteorología that
maintains a weather station at Puente Blanco near El Callao. The climate at El Callao is
tropical and has an average temperature of about 25.7ºC and humidity ranging from 76% to
82%. The average rainfall is 1,325 mm per year. The wettest months are June, July, and
August. Each of these months receives about 150 mm of precipitation. During the remainder
of the year, the average monthly rainfall is about 80 mm, except in February and March when
the precipitation is about 36 mm per month. The average evaporation is about 1,780 mm per
year.

Most of the vegetation is secondary as the area has been actively intervened for over one
hundred years. The topography consists of rolling hills with elevations between 250 masl and
350 masl.

17
 6.0 HISTORY

In September, 2002, Hecla signed a contract to lease the Block B land package from CVG
Minerven C.A. (CVG) the state-owned mining company. The term of this lease expires when
the concessions expire in 2023. Production from the Isidora Mine commenced in 2005 and
was the first deposit put into production on Block B.

Hecla had previously acquired the Venezuelan assets of Monarch Resources Limited
(Monarch) in June, 1999. These assets consisted of the La Camorra Mine and mill, and the
surrounding land package known as the El Dorado concessions. The La Camorra Mine
operated from 1994 until June, 2007 producing over 1 Moz of gold. The plant continues to
process material from the Isidora Mine and other material from the region.

Block B encompasses three important past-producing mines: Chile, Laguna, and Panama.
The Chile mine began recorded production in 1875 and continued until 1946 when the mine
shut down due to several factors, including declining grades and the effects of a restricted
gold market during and after World War II. Fragmental data suggest that the mine produced
600,000 ounces at an average grade of 46 g/t Au. Reported mine grades range from 8 g/t to
85 g/t Au. The underground workings were developed over 1,400 m of vein strike length and
275 m down dip.

After a long hiatus, a drilling program was carried out by the firm Geoscience Inc. for the
Venezuelan Ministry of Mines and Hydrocarbons and which spanned five years starting in the
1960s. This campaign recovered mostly AX and EX core from 44 drill holes located adjacent
to, and along strike with the western part of the Chile mine and artisanal workings above
(Guilloux, 1998). This drilling identified a new ore shoot to the west and beneath the old
Chile mine along the Chile vein.

During the period 2002 through to 2004, Hecla completed a total of 152 drill holes in several
phases of drilling at Isidora. Over this period, Hecla also produced periodic updates to its
resource estimates. In the first half of 2005, a 27 infill diamond drill hole program, targeting
the S vein, was completed. In the first half of 2006 an additional 40 infill diamond drill holes
from both surface and underground were completed targeting the S and M veins.

From 2005 onwards, in addition to drill hole information, Hecla incorporated the results of
underground channel samples into its estimates of the M vein resource. At that time, the
channel data for the S vein was too sparse for resource estimation.

In August, 2006, Hecla updated a geostatistical study on the S and M veins and completed an
updated resource estimate for both the M and S veins incorporating data from 2006 drilling.
In 2007, 15 additional exploration and infill holes were drilled from the surface. No
additional exploration drilling was performed from within the mine.

In December, 2007, Hecla produced a comprehensive update to the Isidora Mine Mineral
Resource Estimate and Reserves which incorporated recommendations from the Mineral

18
Resource Audit Report completed by Scott Wilson RPA in October, 2007. At the end of
March, 2008 Hecla produced an updated resource estimate using substantially the same
methodology and database as was used for the December, 2007 estimate but which accounted
for the three months of mine production which had taken place prior to the update.

In June, 2008 Scott Wilson RPA completed a mineral resource estimate on the Twin Shear
deposit. The results of that estimate are in incorporated in the present report.

19
 7.0 GEOLOGICAL SETTING

7.1 BLOCK B CONCESSIONS GEOLOGICAL ENVIRONMENT

The El Callao mining district is underlain by the Carichapo Group that includes the El Callao
Formation, a series of largely mafic volcanic rocks intercalated with tuffs, sedimentary
exhalatives and chert. Regionally, this group is part of the Pastora Greenstone Belt of early
Proterozoic age. See Figure 7.1 for a general geological map of the Block B area.

Figure 7.1
Geological Map of Block B Area

In the Block B/Isidora concession area, the El Callao Formation comprises principally
massive basaltic flows, a hyaloclastite marker horizon and a feldspar-porphyry dike contained
in a northeasterly trending belt of dextral shearing. Local dikes of mafic to ultramafic
composition occur within greenstone units.

The Chile mine area appears to have originated as a compressional zone that jogs to
approximately N80E. The mine lies along the southern margin of the larger sheared belt.

Rocks in the project area are affected by phases of metamorphism and hydrothermal
alteration. Ankerite alteration, followed by emplacement of quartz veins with pyrite occurred
in the first stage. Subsequent to shearing and brecciation of the sequence and introduction of
graphitic material and chlorite veins, a second event of weak carbonate alteration was
followed by sericite/illite alteration. Gold, gold-silver tellurides, and bismuth tellurides are

20
associated with the sericite event. Sericite, chlorite, and ankerite alteration accompanied by
pyrite form halos around foliated, schistose shear zones.

Several sub-parallel shears that strike east-west and dip 50o to the south occur in the
Isidora/Chile mine area. The zone of shearing is approximately 65 m thick, within which
occur the three principal vein structures (see Figures 9.1 and 9.2 below).

21
 8.0 DEPOSIT TYPES

Mineralized veins in the Block B area are typical, shear-hosted mesothermal quartz veins that
formed under greenschist-grade metamorphic conditions. The veins contain free gold and
gold and bismuth tellurides in quartz with pyrite and minor chalcopyrite. Vein contacts with
the wallrocks are generally sharp but contain some local complexities such as splays and
stockworks at their margins.

Gangue minerals include ankerite, sericite and chlorite, and accessory minerals formed from
the breakdown of mafic minerals in the host rock.

22
 9.0 MINERALIZATION

The auriferous quartz veins at the Isidora mine strike approximately east-west and dip fairly
uniformly 50o to the south. The Isidora deposit (Chile vein extension) is now interpreted as a
broad shear zone containing several different veins.

Known gold mineralization at the Isidora Mine is hosted in four parallel structures that have
been named, from top down, J, M, S and SP. Locally, a quartz-feldspar-porphyry dike occurs
in the hanging wall of the M and S structures and in the footwall of the J structure.

The ore grade mineralization jumps between the various structures in a step-wise pattern so
that, at any point along the strike of the zone, a drill hole perpendicular to the strike will
intercept four structures of which only one, or rarely two, will contain ore grade
mineralization.

On the ‘mine scale’ (tens to hundreds of metres), an important structural control is the change
in strike of the veins. The changes in strike may represent dilational jogs. Veining and
mineralization displays strong pinch and swell characteristics both along strike and down dip,
with true widths varying from near zero to nearly 5 m. The wavelengths of the pinch and
swells are not well defined but appear to fall in a range of between 20 and 100 m along strike,
and perhaps similar distances down dip.

The high-grade lens in the M vein is sub-horizontal and the geological interpretation suggests
that the lens is related to the intersection of a quartz-porphyry dike and the shear zone. The
high-grade lens in the S vein plunges moderately southwestward in the plane of the vein.

Figures 9.1 and 9.2 below show the relationships between the main veins in the Isidora Mine

Overall, the Isidora mineral resource is partially open to the east and at depth. The M vein is
open at depth since there are insufficient drill holes to close off mineralization. On the
southwest portion of the M vein, there are some very high grade intercepts that warrant
additional drilling. There is some additional potential in the J vein to the east. There is also
some lower potential in areas to the west of the S vein shoot.

Surface elevation is approximately 300 masl. The potential for deeper mineralization, below
-100 masl (or 400 m below surface) is essentially untested.

23
 Figure 9.1
Three Dimensional Image of the Mina Isidora Veins with Associated Development

Figure 9.2
Cross-section Looking West and Showing Relationship of Veins at Isidora Mine

24
 10.0 EXPLORATION

10.1 EXPLORATION TARGETS

Hecla has conducted a systematic surface exploration program on its Block B and El Dorado
concessions that has included geophysics, airphoto structural interpretation, topographic
surveys, rock and soil sampling and drilling. This program has successfully identified high
grade targets which the company is advancing with ongoing exploration programs.

The most advanced of Hecla’s other exploration targets are the Twin Shear and Chile East
targets on Block B, and the Canaíma target in the El Dorado concession area.

Figure 10.1 below shows the location of the exploration targets on Hecla’s Block B
concession.

Figure 10.1
Drilling by Hecla on Block B Concessions

A resource estimate has been completed for the Twin Shear deposit and is presented in
Section 17 of this report.

25
10.2 DISCUSSION OF BLOCK B EXPLORATION TARGETS

10.2.1 Chile East

Incomplete records suggest that between 1875 and 1946 the Chile Mine produced
approximately 600,000 oz of gold at a grade of 46 g/t Au. The Isidora Mine is located in an
area west of and below the historic workings of the Chile Mine. Drilling by Hecla to the east
of and below the old Chile Mine (‘Chile East’ area) has identified a mineralized shoot. To
date, out of a total of 21 drill holes, six intercepts have returned values exceeding 10 g/t Au
with the highest grade hole returning 16.17 g/t Au over 1.83 m (see Appendix 1). Drilling on
this target is at an early stage with insufficient information to complete a compliant mineral
resource estimate. Although this shoot is still open at depth, the average grade estimated to
date suggests that it is unlikely that economic mineral resources for underground mining
could be developed, based on current costs experienced at the Isidora Mine.

10.2.2 Panama Vein

During 2006-2007, Hecla completed 19 diamond drill holes on the Panama/Santa Rita project
to test down dip extensions and vein intersections. Drilling on the Panama structure below
the old Panama Mine has identified a potential shoot that contains intercepts of 364 g/t Au
over 0.4 m, 21.92 g/t over 0.49 m and 60 g/t over 0.28 m. Mineralization on this shoot is
partially open down plunge to the south-southeast.

10.2.3 A Lode

The A Lode Mine has a total recorded historical production of 465,000 t grading 14.3 g/t Au.
Hecla began drilling on the A Lode in the fall of 2007 with a program intended to test the
intersection of the A Lode and Pryor structures. Of the initial three drill holes completed on
this zone one returned an intercept of 38 g/t Au over 0.6 m.

10.3 DISCUSSION OF EL DORADO EXPLORATION TARGETS

At the time of Micon’s site visit the La Camorra mine was closed and no longer accessible
and the area of the Canaíma concession was flooded and access was not possible. No site
visit or geological review of El Dorado exploration targets was carried out as part of Micon’s
fatal flaw review.

The Canaíma mineralization is overlain by a navigable river and a flooded open pit which
connects to that river. To the extent possible, Hecla completed the drilling from surface and,
in 2003, carried out an in-house scoping study, with assistance from consulting firms, Golder
Associates and McIntosh Engineering. The study was conducted to decide if the deposit
warranted an underground exploration program to establish drill stations which would allow
completion of the resource drilling.

26
That study concluded that most of the currently defined mineralization occurs within 60 m of
surface (note that ‘surface’is the bottom of the river) so that, according to the study, it would
fall within the permanent crown pillar and that, based on the criteria used in the evaluation,
“[t]he Canaíma resource of Minera Hecla as identified during previous drilling programs does
not include sufficient tonnes and/or grade to offset the projected capital and operating costs
and achieve any return of Hecla’s investment.”

27
 11.0 DRILLING

11.1 ISIDORA MINE

See Section 6.0 for a history of drilling campaigns on the Isidora property.

Significant drill intercepts from Hecla’s exploration targets outside the Isidora mine are listed
in Appendix 1 of this report.

11.2 TWIN SHEAR

The Twin Shear mineralization was discovered by HMV in late 2003. Since then the shear
system has been tested by 66 HQ-diameter diamond drill holes totalling 23,507 m. All of the
holes were drilled in 2004 and 2005. HMV (2006b) reports that core recovery was generally
good. Drill hole intersections are spaced approximately 70 m to 150 m apart on drill sections
spaced mostly 50 m apart, with some 100 m to 150 m apart. Figure 11.1 shows drill hole
collars and traces.

The drill hole intercepts included in the Twin Shear Mineral Resource estimate are listed in
Table 17.3, Section 17.2 of this report.

28
 Figure 11.1
Twin Shear Drill Hole Plan

29
 12.0 SAMPLING METHOD AND APPROACH

All of the data in the current Isidora Mine Mineral Resource Estimate are from diamond drill
core or channel samples. The majority of resource drill holes with vein intercepts were drilled
using HQ-size core, with the remainder (28 holes with vein intercepts) being drilled with NQ-
size core. Drill hole spacing averages approximately 20 to 30 m in the resource area.

The following describes the practice of Hecla.

The core is collected from the rig and transported to the project logging facility in El Callao.
The core is measured and logged for geotechnical parameters; care is taken to fit pieces
together and check distances on the blocks. After graphic geologic logging, the core is
marked for sampling. Sampling intervals respect geologic contacts, especially the vein
contacts: Almost all of the sample intervals are less than 1.0 m long and, as a general rule,
very few samples are less than 0.3 m long.

The HQ-size core is sawn into halves for assay, with one half of the core being retained for
reference and the other half submitted for assay. The NQ-size core intervals are sampled in
their entirety. Sample recovery is very high. Recovery statistics remain to be compiled
because it does not appear to be a significant issue.

Wedges are available on-site to re-drill any lost intervals that occur in vein material before the
drill hole is abandoned. The project geologist is responsible for ensuring that the vein is
recovered and is instructed to request a wedge or hole-size reduction if vein recovery is not
acceptable.

There is one wedged hole, HCH036, which was completed more because of concerns about
nugget effect than core recovery. One hole, HCH071, had to be re-drilled (HCH071A), due to
rods being stuck in the hole. A number of holes, such as HCH177A, were re-started after the
initial down-the-hole survey at 9 to 15 m showed excessive deviation.

The channel samples are collected from the mine in the two working shifts (7am to 3pm and
3pm to 11pm) by a group comprised of geologists and technicians. The samples are taken
using hammer and chisel and placed in polyethylene bags. Every sample is marked and
located with a number.

The samples are sent daily to the laboratory. The established procedure consists of sampling
every development face in mineralization. The distance between faces varies from 1.5 m to
3.0 m. In the production stopes samples are taken every 2.0 m. In the development faces the
channel samples are taken from the floor of the drive to the backs perpendicular to the vein. A
typical development sample will have a length from 2.0 m to 3.0 m, with an average of 2.5 m,
and normally consisting of 3, 4 or 5 samples with the inclination close to 45° (perpendicular
to the dip of the vein).

30
Samples are taken of the vein, the hanging wall and the footwall. The length of the samples
varies from 0.2 m to 1.5 m with the average being 0.65 m.

12.1 TWIN SHEAR SAMPLING

Sample length varies between 0.17 m and 1.30 m, with 93 samples below 0.25 m and three
samples above 0.95 m out of a total of 5,440 samples. Approximately 92% of the samples are
0.30 m to 0.80 m long, generally between 0.30 m and 0.50 m within, and 0.50 m to 0.80 m
outside, the mineralized intervals. Shorter samples were taken to match quartz vein
boundaries and longer samples to match natural core fractures.

Sample intervals were marked on the core and then cut with a diamond saw into halves for
assay. Sample tickets were placed in the sample bags and in the core tray for each sample.
The entire drill core is stored in a secure, fenced core logging facility at the Isidora Mine.

31
 13.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY

The following describes the practice of Hecla.

Drill core samples are sent to the laboratory of Triad Laboratories (Triad) at the La Camorra
Mine and the underground face samples are sent to the Triad laboratory in El Callao.

The laboratories use a drill hole sample preparation protocol which was developed for the La
Camorra Mine, described below:

• Drying in sample ovens for 6 – 12 hours.

• Coarse-crushing to ¼-inch in a jaw crusher.
• Rolls crush to better than 90% passing -2 mm sieve.
• Blending with Jones splitter.
• Split <250 g sub-sample in Jones splitter.
• Pulverize in Bico ring pulverizer to 95% passing -150 mesh.
• Prepare fusion of 1 assay ton sub-sample using electronic balance.
• Perform 1.0 assay ton (30-g charge) fire assay with gravimetric finish.
• Report preliminary assay by e-mail and final by paper certificate.

The detection limit for gold is 0.03 g/t.

Triad receives all core, reject, and pulp material directly from the project. Sample materials
are stored in secured locations after assay. The vast majority of pulps and rejects are
recovered and returned to the Block B exploration core logging and storage facility at El
Callao.

Hecla utilizes ALS Chemex, Vancouver, Canada, for outside check assays. ALS Chemex
assays the samples for gold by fire assay using a 50 g charge with gravimetric finish. Pulps
used for outside assay checks are retained in storage at ALS Chemex, Vancouver for six
months before discarding them.

32
 14.0 DATA VERIFICATION AND QA/QC PROGRAMS

Based on its review of Hecla’s QA/QC procedures and the resulting data, Micon believes that
Hecla used appropriate procedures for:

• Drill core logging, sampling, sample preparation and assaying.

• Confirmation of assay precision and accuracy.
• Data entry and database verification.

Hecla carried out periodic internal and external audits of its resource estimation procedures
and has shown diligence in making, and documenting, any improvements suggested as a
result of those audits.

14.1 DATABASE

Micon is of the opinion that Hecla has shown above average diligence in compiling and
validating a digital database of drill hole and channel sampling data suitable for use in mineral
resource estimation. Previous database audits by Associated Mining Consultants in 2003, and
by Scott Wilson RPA in 2007 reached generally the same conclusions as to the quality of the
database.

At the Isidora Mine, assay data are received electronically from the laboratory and copied into
annual Excel spreadsheets for manipulation and formatting and then imported into Gemcom
(which creates and uses data in an Access database) or Vulcan. The geological and
engineering staff at the Isidora Mine uses Gemcom software for database management and
Vulcan software for resource estimation and mine planning. Hecla head office staff
reviewing the resource/reserve data use Gemcom software.

The Gemcom validation functions are regularly run during import of data into Gemcom.
These functions include checks for surveys that do not match hole depths, out-of-sequence
assay records, missing records, and duplicate records. Data are also plotted graphically in
Gemcom in plan and section to check for kinks, incorrect locations, and incorrect orientations.
For the modeling, .csv databases were loaded into Vulcan’s Isis data management utility and
additional validation procedures performed.

Data captured in the database includes: Header (Hole-ID, X,Y,Z, Length), Survey (Distance,
Azimuth, Dip), Assay (From, To, Sample#, Au g/t, Vein code) and Composite (From, To, Au
g/t, TW, GT, Vein code). Limited geological data are captured in the database; fields for vein
core angles, the average vein strike and dip at the intercept, and whether the hole drills toward
the dip or away from it were entered. The Hecla site geologists manually enter all of the vein
intervals from the logs after referencing the geologic cross-sections and inspection of core
from many of the vein intervals.

The assay data are then composited across the vein intervals and flagged as M, S, J or SP
veins.

33
The same composing procedure is currently in use at all of Hecla’s gold and silver properties.
The quartz vein contacts are selected as compositing limits because they correspond to both
the economic and mining reality. The miners will follow the quartz vein and will not recover
marginal assays in the hanging wall and footwall stockworks unless they are part of the
required mining dilution. Resource composites comprise only the quartz vein or shear
structure (where vein is absent or present as a stockwork veining zone) without any minimum
width dilution added. Dilution was considered in the mineral reserve estimates (Section 17.3
below).

The channel data were composited in a similar manner to the drill holes with a few notable
exceptions. Many channels not only have an initial channel but a secondary sample across
only the vein. By using the channel orientation in relation to the vein, a true width composite
is created that uses all of the available assay results. Some channels cannot sample the entire
width of the vein, but the approximate contact of the vein with either the footwall or hanging
wall can be estimated. In these cases, the width of the vein composite will not match the width
of the sampled portion of the vein.

Drill hole database management is under control of the exploration department. While
management of channel sample data uses a similar system, the process is under control of
mine geology department.

The final combined database for the current resource estimate consists of 281 diamond drill
holes and 3,260 channel samples as shown in Table 14.1.

Table 14.1
Gemcom Database for Isidora Mine

No of Holes/ Total Length Average Length

Workspace Channels (m) (m)
Canal 3,260 42,391.4 13.0
HCH 281 71,545.6 254.6

At the time of preparation of Micon’s report, all of the hardcopy drill logs, assay certificates
and core were stored on-site at Hecla’s Block B exploration office. A backup of all of the
electronic files was archived at Hecla’s head office in the United States.

14.2 QA/QC PROGRAMS FOR ASSAY RELIABILITY

Based on its review of Hecla’s QA/QC procedures and the resulting data, Micon believes that
Hecla used appropriate procedures for:

• Drill core logging, sampling, sample preparation and assaying.

• Confirmation of assay precision and accuracy.
• Data entry and database verification.

34
Micon agrees with the following assessment of QA/QC procedures which is taken from the
internal company report titled “Mineral Reserve Audit of the Isidora Gold Mine” produced by
Scott Wilson RPA for Hecla in October, 2007:

“Minera Hecla’s procedure is to check all vein intercepts in the vicinity of ore shoots, regardless
of their grades. A typical vein intercept has four separate assays from an original, a blind pulp
rerun, a reject split, and an external check assay. Minera Hecla performs accuracy and precision
checks through use of:

• Blind standard reference materials (SRMs) at Triad and ALS Chemex

• Blind pulp re-assaying at Triad
• Blind reject re-assaying at Triad
• External pulp check assaying at ALS Chemex
• Inserting blanks

There are 6,048 core assays in the drill holes used for the resource estimate (up to HCH-217 and
HIM-14). Some 1,203 pulps were replicated, 1,187 rejects were duplicated, and 1,126 samples
were sent to ALS Chemex. The quality control (QC) assays total 58% of the core samples, which
is approximately a five to ten times higher insertion rate than typically encountered. Nevertheless,
Scott Wilson RPA concurs with these high insertion rates because the overall precision of the key
resource samples is improved by the averaging of four 1AT fire assays.

Scott Wilson RPA compiled the relative standard deviation (RSD) values for the pulp replicates
[Table 14.2] and the reject duplicates (Table 14.3) over a number of grade ranges that represent
waste, marginal ore, ore, and high grade ore. The overall RSDs for the pulps and rejects are high at
29.9% and 43.2%, respectively.”

Table 14.2
Triad Core Pulp Replicate RSD Values for Isidora Mine

Grade Range N RSD

(g/t Au) (%)
0 to 5 549 287.0%
5 to 15 574 35.4%
15 to 200 366 16.6%
+200 70 8.0%
All 1,203 29.9%

Table 14.3
Triad Core Reject Duplicate RSD Values for Isidora Mine

Grade Range N RSD

(g/t Au) (%)
0 to 5 544 63.8%
5 to 15 290 41.6%
15 to 200 321 21.5%
+200 33 13.2%
All 1,187 43.2%

35
“The elevated RSDs indicate that there is an assaying precision issue, particularly for waste and
marginal ore grade Isidora samples sent to Triad that might warrant further investigation, in Scott
Wilson RPA’s view. Overall, however, Scott Wilson RPA believes that the RSDs in the vicinity of
the 16 g/t Au cut-off grade are reasonable for nuggety gold mineralization with a lot of visible
gold.

The Minera Hecla channel sample QC insertion rates for 2005 and 2006 average approximately
0.7% for pulp replicates, 1.3% for reject duplicates, and 0.41% for pulps sent to ALS Chemex.
Scott Wilson RPA has not reviewed the channel sampling QC data. The low insertion rates,
however, indicate that unlike the resource related core samples that are mostly supported by the
average of four 1AT assays, most of the channel samples are supported by single 1AT fire assays.
Scott Wilson RPA suggests that Minera Hecla investigate ways to improve the channel sample
assaying precision, particularly for lower grade marginal samples.

Scott Wilson RPA understands that it takes approximately six days to get the channel sample
assay results from the Triad laboratory in El Callao. Mine production does not appear to be
significantly impeded by the slow assaying turn-around, however, investigating alternative
laboratories may be warranted.

The 1,126 pulps sent to ALS Chemex average 27.6 g/t Au, which is approximately 4% less than
Triad. The historical CRM data, however, do not indicate that the Triad assays are biased. Scott
Wilson RPA compiled the historical CRM data available in [Table 14.4]”.

Table 14.4
Historical Certified Reference Material for the Isidora Mine

Name Company Reference Certified N Triad Difference

Grade Grade (%)
(g/t Au) (g/t Au)
BB_1 Geostats G997-9 5.16 51 5.51 6.9%
BB_2 Geostats G397-8 11.65 70 11.69 0.4%
BB_3 Geostats G997-10 3.04 95 3.28 7.9%
BB_4 Geostats G999-6 7.18 106 7.13 -0.7%
BB_5 ROCKLABS SJ10 2.643 1 2.74 3.7%
BB_6 ROCKLABS SK11 4.823 5 4.55 -5.7%
BB_12 Geostats G901-6 21.2 6 21.00 -1.0%
BB_13 Geostats SQ18 30.49 7 23.87 -21.7%
Camorra_D Geostats G399-9 6.27 48 6.27 0.0%
Total 389

Based on the historical CRM data, Scott Wilson RPA concludes the following:

1. Two CRMs (BB_1 and BB_3) indicate that the Triad assays may have a small positive
bias for grades less than approximately 5 g/t Au. The other three CRMs with a significant
numbers of results (BB_2, BB_4, and Camorra_D) show excellent results that indicate
that gold grades in approximately the 6 g/t to 12 g/t range are unbiased.

36
 2. At least 389 CRMs were assayed representing a CRM insertion rate of at least 6.4%,
which is acceptable; however, some of the CRMs do not have sufficient assays to make
statistically valid quantitative conclusions.

3. Most of the CRMs assayed regularly have certified grades that range from approximately
3 g/t Au to 12 g/t Au. Scott Wilson RPA recommends assaying BB_12 and BB-13 or
other higher grade CRMs more frequently.

Triad inserts a number of control samples including an internal reference standard, a replicate
pulp, and a reject duplicate. Triad also assays a CRM on a regular basis. It might be useful to
request and monitor the Triad QC data.

In Scott Wilson RPA’s opinion, Minera Hecla’s QA/QC work exceeds industry standards. Overall,
Minera Hecla does a good job monitoring the QC data and acting on anomalous results. The Triad
sample preparation and assaying protocols warrant modifications that will improve precision.
Options might include:

1. Reduce the Triad pulverizing specification of 95% passing -150 mesh (0.105 mm) to
the ALS Chemex standard of 85% passing -200 mesh (0.075 mm).

2. Increase the aliquot size from 1AT to 2AT or do screened metallic fire assays.

3. Insert blanks more frequently, particularly after high grade samples, to confirm that the
pulverizers are cleaned regularly.

4. Monitor Triad pulp screen check data.

Scott Wilson RPA recommends that Minera Hecla insert more blanks periodically to help monitor
crushing contamination and sample mix-ups. The insertion of blanks is generally becoming
standard industry practice and is mentioned in most industry best practice guidelines. Insertion
ratios tend to vary widely from one blank per drill hole to approximately one blank every twenty
samples to one blank every hundred samples. It is important to find blank material that is
definitely barren. Drill core from barren post-mineralization dikes or other barren unaltered
lithologic units that are located well away from mineralization may make good blank material.”

14.3 QA/QC FOR TWIN SHEAR DRILLING

The following assessment of QA/QC procedures for Twin Shear drilling is taken from the
unpublished internal company report titled, “Twin Shear Gold Deposit - Underground
Potential, El Callao Mining District Bolivar State, Venezuela,” dated November 1, 2007:

“A total of 5,440 samples from Twin Shear drilling were sent for gold assays. A total of 427
samples, or approximately 8% of all of the samples and essentially all of the samples related to the
Twin Shear mineralized intercepts, were selected for quality control purposes. These samples are
referred to as sample A (pulp originals). The quality control procedure is summarized in Figure
14.1. Coarse reject duplicates and pulp replicates, referred to as samples B and C, were routinely
submitted to Triad in order to monitor sampling and assaying precision. The pulp replicates and
coarse reject duplicates were renumbered before submission.

37
Essentially all of the resource related samples have up to four assays available to calculate the
final assay value. For each sample, the outliers were detected by comparing each of the
contributing assay values with their median. A deviation from the median was calculated,
representing the percentage difference between each of the four assay values and the median.
Some 62 outlier values with deviations above 100% were rejected. After removing the outliers,
the final assay value was calculated by averaging the original assay (A) with the pulp replicate
(C), then the resulting value was averaged with the external check assay value (D), and then
averaged with the coarse reject assay duplicate (B).”

Figure 14.1
Twin Shear Quality Control Procedures of Sample Assays

Core Sample
Triad
½ core
Chemex

Split B: Reject
Crushing and
Grinding

250 g split

Coarse reject B
Pulverization Renumbered
Split C:
Reject

30g split Pulp C

Renumbered
Split D:
30g split Reject

Original Assay Assay Blind Pulp Outside Lab Assay B

FAG 30g FAG 30g FAG 50g FAG 30g

A C D B

“Pulps, referred to as sample D, were submitted to ALS Chemex for external accuracy checks.
Overall, the comparison between assays from Triad and ALS Chemex show reasonable
correlation.

Certified Reference Materials (CRM) and Internal Reference Standards were inserted into the
sample streams at a rate of approximately one every fifteen samples to monitor assaying accuracy.
Minera Hecla sent a total of 286 CRMs comprising seven commercial standards, with gold grades
varying from 2.64 g/t to 11.65 g/t. In addition, 158 internal standard pulps, made from Isidora
drilling samples, were sent to Triad. The CRM results confirm that the Triad assays are reliable
and unbiased.

Most of the pulp replicate gold assays are generally within approximately 20% to 30%, which is
not unusual for this style of mineralization.

38
Overall, Scott Wilson RPA is of the opinion that the QA/QC program exceeds industry standards
and the results indicate that the assays are acceptable for resource estimation purposes. In the
future, however, Scott Wilson RPA recommends that CRMs and blanks be included with external
pulp checks and that blanks be inserted on a regular basis.”

39
 15.0 ADJACENT PROPERTIES

15.1 CHOCO 10 MINE

The Choco 10 deposit is located approximately 10 km west of the Isadora Mine. In a news
release dated October 11, 2007, Rusoro announced that it had acquired the Venezuelan assets
of Goldfields Limited, including the Choco 10 gold mine. Current Reserves and Mineral
Resources for the Choco 10 deposit are shown in Table 15.1 and were published in an NI 43-
101 Technical Report completed by Micon and filed on SEDAR on November 29, 2007.

Table 15.1
Choco 10 Deposit, Reserves and Mineral Resources

Category Million Grade Gold

Tonnes (g/t Au) (thousand oz)
Proven & Probable Reserves 17.7 3.2 1,830
Measured Resource 2.6 2.9 243
Indicated Resource 56.3 2.5 4,432
Inferred Resource 42.9 2.2 3,017
Note: Mineral Resources are inclusive of reserves.

15.2 LA VICTORIA AND TOMI MINES

The La Victoria and Tomi mines of Crystallex International Corporation are located
approximately six and 12 km, respectively, northeast of the Isidora mine. Mineral Resource,
and 2006 production figures, are shown in Table 15.2, below as published by Crystallex.

Table 15.2
La Victoria and Tomi, Production and Mineral Resources
(Source: www.crystallex.com)

Category Thousand Grade Ounces

Tonnes (g/t Au) Gold
La Victoria Indicated Mineral Resources 2,422 4.5 349,000
La Victoria 2007 Gold Production 128 2.9 9,356
Tomi 2007 Gold Production 22 - 33,3671
1
Gold production from the Tomi mine includes some ore from Victoria mine and some
from purchased material from local small miners.

15.3 INCREIBLE 6 DEPOSIT

Rusoro’s Increible 6 deposit is located approximately 12 km north of the Isidora Mine. The
Increible 6 Mineral Resource Estimate as reported by Micon International in November 2007
is 43-101 compliant and is shown in Table 15.3 below.

40
 Table 15.3
Increible 6 Mineral Resource Estimate by Micon (November, 2007)

Resource Cut-off Million Grade Gold

Category Grade Tonnes (g/t Au) (thousand oz)
(g/t Au)
Indicated 0.5 17.53 1.95 1,100
Inferred 0.5 23.45 2.11 1,590

15.4 COLOMBIA MINE

The Colombia Mine of CVG-Minerven (a corporation owned by the Venezuelan

Government) is located approximately 4 km east of the Isidora Mine.

Production in 2004 was 100,906 ounces (256,339 t at 13 g/t Au) and reserves were stated at
1.6 million t at a grade of 9.2 g/t Au with ore shoots grading up to 60 g/t Au (Channer, Graffe,
and Vielma, 1996 – SEG Newsletter). Micon cannot confirm whether the latter reserves are
43-101 compliant and they are provided for reference purpose only.

41
 16.0 MINERAL PROCESSING AND METALLURGICAL TESTING

16.1 ORE TRANSPORT AND MINERAL PROCESSING

During the evaluation and planning of the Isidora Mine, it was decided that no gold recovery
plant would be established on the Block B concessions. Instead, it was decided that all ore
from the mine was to be transported 120 km to the already active, 700 t/d capacity processing
plant at La Camorra on the El Dorado Concession. The ore supply from Isidora was to
augment the larger ore feed from the then active La Camorra mine. Now that the La Camorra
mine has been shut down, ore from the Isidora mine forms the majority of the La Camorra
plant feed, with occasional supply of ore from local small miners for custom milling and from
the “tailings” from a local small gold recovery plant.

Ore hauled from underground at Isidora is dumped onto a ROM pad located close to and to
the west of the mine portal. From here, 20-t capacity trucks are loaded for the haul to the
transfer station, also known as the sampling station, which is on the edge of the local
community of Perú-Chile. At the transfer station the ore is reloaded into larger, 40 to 50 t
haul trucks for the 120 km journey to the La Camorra processing plant.

While the smaller 20-t trucks travel independently to the transfer station, the larger 40 t road
haulers travel to La Camorra in an escorted convoy.

Figure 16.1 below shows the general layout of the transfer station outside Perú-Chile.

Figure 16.1
Crushing and Sampling Station Outside Perú-Chile

A full description of the processing plant operation is contained in Section 18.3, La Camorra
Plant.

42
16.2 TWIN SHEAR METALLURGY

Almost the entire amount of gold present in the Twin Shear ore samples is present as native
gold grains. Minor electrum grains were also identified. The majority of gold occurs along
thin fractures in pyrite and at mineral grain boundaries.

Gold recovery of the Twin Shear ore varies from approximately 60% to 87% using a
metallurgical process similar to the one presently in use at the La Camorra plant (grinding and
cyanide leaching of ore). Although based on a limited amount of core samples from seven
drill holes, these values are valid to predict the metallurgical behaviour of ore from specific
locations. Caution should be used in extrapolation of the metallurgical behaviour for the
whole ore body from this limited data set and more metallurgical testwork is warranted.

Gold does not seem to be directly linked to alteration minerals, rather it is a parallel event
overprinted on the alteration assemblages. Gold in the Twin Shear system has a strong
affinity with pyrite. Nonetheless, not all pyrite is associated with gold. The intensity of gold
deposition appears to be related to the extent of pyrite recrystallization (annealing) and late
fracturing rather than the intensity of alteration, or abundance of any alteration mineral. Six
pyrite phases have been recognized in relation to the regime of deformation and temperature
present inside the shear system. There is a strong relationship between the deposition of gold
and the final stages of pyrite annealing and late pyrite fracturing.

43
 17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

17.1 MINERAL RESOURCE ESTIMATES FOR ISIDORA MINE

17.1.1 Isidora Mine Mineral Resources

Currently defined mineral resources at the Isidora Mine, in all categories, are summarized in
Table 17.1 below.

Table 17.1
Isidora Mine Mineral Resources at March 31, 2008
(8 g/t Au cut-off grade)1, 2

Category Tonnes Grade Ounces

(g/t Au) Gold
Measured 107,534 29.06 100,495
Indicated 362,738 19.75 230,376
Total Measured and Indicated 470,272 21.88 330,871
Inferred 99,038 14.13 45,006
1
These quoted mineral resources are discounted for all production up to March 31,
2008.
2
These quoted mineral resources are inclusive of mineral reserves.

Hecla estimated that currently defined reserves at the Isidora Mine, calculated at a cut-off
grade of 17 g/t Au, are sufficient for approximately 15 months of mine life. An in-house
LOM plan, at a cut-off grade of 10 g/t Au, upgrades a larger portion of the Mineral Resource
Estimate to Mineral Reserves and potentially extends the mine life to 24 months. (See
Section 17.3 Mineral Reserves).

17.1.2 Database

The project database is maintained in Gemcom Software. Appropriate database checks and
validation measures are carried out. Assay data are received electronically from the
laboratory and copied into an Excel spreadsheet where it is stored in annual files. Only the
final gold assay (average) is entered in the Gemcom database.

The database used for the March, 2008 Isidora resource estimate contains both drill hole and
channel sampling data. Drill hole data comprise 277 vein intercepts from 281 HQ and NQ
diamond drill holes which targeted the M, S, J and SP vein structures in the area west of and
below the old Chile Mine. Current drill hole spacing is on an approximate 30 m by 30 m grid.
However, recent project audits have suggested that this spacing be reduced to a 20 m by 25 m
grid in order to more confidently estimate Mineral Resources.

Channel sampling data in the database comprises 3260 samples. Sampling is carried out by
teams of geologists and technicians and samples are taken with a hammer and chisel.
Channel samples are typically taken every 1.5 to 3.0 m along drifts and 2.0 to 3.0 m along
raises. Sample lengths range from 0.2 to 1.5 m and average 0.65 m long.

44
17.1.3 Assay Compositing

An attempt was made to composite the vein intercepts to even intervals; however, the degree
of difference in sample width makes these composites unrealistic. The channel samples
average near one metre in width while the drill samples average only 0.4 m. A 0.5 m
composite was attempted but many vein intercepts are less than 0.5 m and are then lost. The
composites were adequate to establish that diamond drill holes and channel samples are both
viable sampling of the vein (see M-vein section), but the composites could not be used for
estimation because of the dropped short intervals.

Previous modeling used true-width and grade times thickness for modeling. The grade-
thickness was divided by width to give the grade. A correlation analysis, however, shows no
correlation between thickness and grade. The conclusion is that the total composite across the
vein is the best support for modeling.

17.1.4 Geological Domain Modelling

Gold mineralization of potentially economic grade and continuity is confined to shear-hosted

quartz veins. Geological modelling of the Isidora deposit to produce appropriate domains for
resource estimation is based on shear and quartz vein contacts. Hanging wall and footwall
mineralization occurring in splays and stockworks is discontinuous and care is required in
modelling in order not to project high-grade hanging wall and footwall assays well beyond
their appropriate range of influence.

Block modelling and grade interpolation are carried out in Vulcan Software. A seam model is
utilized with the model being rotated in both strike and dip to align it parallel to the
mineralized zones. The seam model uses varying block sizes with dimensions of 5 m by 5 m
by true width of the zone. In addition, Vulcan uses the method of sub-blocking to estimate
the volumes along the edge of the zones. Composites are not calculated to a uniform width
for the seam model but are based on a total composite across the full width of the vein.

Based on the current drill hole density it is not possible to produce detailed sub-domains of
the mineralized shoots. Because the entire vein/shear is modelled (both the mineralized and
unmineralized portions) the higher grades tend to be smeared into low grade areas. An
inverse distance cubed (ID3) method combined with an octant search is used for grade
interpolation as it was found to produce the best results in terms of reasonable smoothing of
grades and acceptable amounts of smearing of ore contacts.

17.1.5 Resource Estimation Parameters

A density of 2.67 was used for vein material and a density of 2.88 was used for all waste rock.
High grade samples were capped at 200 g/t Au corresponding to the 95th percentile of the M
vein drill hole and channel assays.

45
The semi-variogram search distances used in interpolating grades into the seam model were
40 m along strike, 30 m down dip, and 15 m along the axis perpendicular to strike/dip.

In Micon’s view Hecla has used an appropriate methodology in producing the December 31,
2007 Mina Isidora Mineral Resource Estimate and has incorporated appropriate QA/QC
measures in the production of that estimate.

17.1.6 Resource Cut-off Grades

A key issue guiding future exploration programs on the Hecla concessions, and on the nearby
Rusoro concessions, will be deriving a realistic cut-off grade to determine what portion of any
identified mineralization has “reasonable prospects for economic extraction”.

The current resource estimate is based on an 8 g/t Au diluted cut-off grade (assuming a
$570/oz gold price). Hecla’s experience with production costs in Venezuela has resulted in
the use of 17 g/t Au cut-off grade for estimating reserves.

In Micon’s opinion Hecla appears to have operated its Venezuelan projects in a professional
and practical manner with competent technical and management staff. Making a material
improvement in overall project costs relative to Hecla’s efforts would appear to be quite
challenging. Although cost reductions may be possible through lower transport costs if ore
from the Isidora Mine can be processed at the Choco 10 mill.

Another key factor in determining changes to the cut-off grade going forward is likely to be
the use of a gold price more reflective of those currently being used in project evaluation
studies.

17.2 MINERAL RESOURCE ESTIMATE FOR TWIN SHEAR ZONE BY SCOTT

WILSON RPA

Scott Wilson RPA used the existing Minera Hecla shear zone wireframes to guide the
resource estimate interpretation. The assays within each mineralized intersection manually
selected by Scott Wilson RPA were composited to obtain an average grade. An intercept cut-
off value of 8 g/t Au and a minimum thickness of approximately 1.2 m were used to define
the final resource intersections. This is the same cut-off grade used to estimate the resources
at the nearby Isidora Mine. Scott Wilson RPA interpreted four mineralized zones based on
their relative positions with respect to the Twin Shear footwall and a fifth zone of wider lower
grade gold mineralization (Zone 3). Each zone comprised a number of lenses. The two Zone
3 lenses were not used in the resource estimate and are not shown in the three-dimensional
view looking northwest (Figure 17.1).

The cut-off date for drill hole data utilized in the mineral resource estimate is September,
2007. The effective date of the mineral resource estimate is June, 2008.

46
 Figure 17.1
Three-dimensional View of Twin Shear and Lenses Looking Northwest

The zones within the Twin Shear resource estimate are described below:

Zone 1: Quartz-pyrite mineralization located near or at the Twin Shear footwall (six
lenses).

Zone 2: Pyrite-quartz mineralization located immediately above Zone 1 (five lenses

with three above 8 g/t Au).

Zone 4: Thin isolated high grade intersection near the Twin Shear hanging wall (two
lenses with one lens above 8 g/t Au).

Zone 5: Thin isolated high grade intersections near the Twin Shear footwall (two
lenses).

Lower grade intersections were cropped from the continuous Zone 1 wireframe to create the
final Zone 1 lenses. The lenses in Zones 2, 4 and 5 were created by approximately 25 m to 35
m lateral extrusions. The wireframe volumes were multiplied by 2.7 t/m³ to estimate tonnage.
Scott Wilson RPA recommends taking density measurements on at least 30 core samples,
however, Scott Wilson RPA is of the opinion that this tonnage factor is reasonable and
possibly even slightly conservative for this style of mineralization The intercepts within each
lens were length-weighted to estimate gold grades.

47
Figures 17.2 and 17.3 show vertical sections with drill hole intercepts, the shear zone
envelope, and mineralized lenses colour-coded by zone: Zone 1 in black; Zone 2 in dark blue;
Zone 4 in magenta; Zone 5 in cyan, and shear zone envelopes in brown.

Figure 17.2
Twin Shear Zone, Section 2200E

Figure 17.3
Twin Shear Zone Section 2650E

48
Descriptive statistics for the 157 resource related uncut gold assays are listed in Table 17.2.
The resource gold assays average 16.0 g/t and the maximum value is 154.55 g/t.

Table 17.2
Descriptive Statistics for Resource Estimation Samples, Twin Shear

Description Combined Zones

1, 2, 4 and 5
Mean 16.00
Standard Error 1.85
Median 7.56
Mode 0.01
Standard Deviation 23.17
Sample Variance 536.72
Minimum 0.01
Maximum 154.55
Count 157
CoV 1.45

Based on the relatively small number of resource assays available to date (Figure 17.4), Scott
Wilson RPA is of the opinion that a capping level in the range of approximately 40 g/t Au to
60 g/t Au might be reasonable. High assays were capped at 50 g/t Au, which represents the
92.4th percentile and reduced the grade by approximately 16%.

Figure 17.4
Resource Assay Histogram (N=157)

Zones 1, 2, 4, and 5 - histogram

35 120.00%

30
100.00%

25
80.00%

20
Frequency

60.00%

15

40.00%
10

20.00%
5

0 0.00%
More
3

15

21

27

33

39

45

51

57

63

69

75

81

87

93

99

105

111

117

123

129

135
141

147

Au g/t

Scott Wilson RPA recommends reviewing the gold capping level as new data become
available.

49
 At an 8 g/t Au cut-off grade, Scott Wilson RPA estimates that the Twin Shear Inferred
Mineral Resource totals 1.2 Mt averaging 12.5 g/t Au containing 482,000 oz of gold (Table
17.3).

Table 17.3
Intersections for Resource Estimate for Twin Shear Zone

Core Wireframe Ounces

From To Length Au Au Volume Tonnes 50 g/t cap
Count Zone Lens Hole ID (m) (m) (m) (g/t) 50 g/t cap (m³x1000) (x1000) (x1000)
1 1 1 LAH003 299.11 300.41 1.30 11.3 11.3
Zone 1 Lens 1 average 11.3 11.3 14.9 40.2 14.6
1 1 2 LAH007 287.59 290.67 3.08 12.9 12.7
2 1 2 LAH008 146.97 152.39 5.42 15.2 14.4
3 1 2 LAH021 245.00 246.66 1.66 10.6 10.6
4 1 2 LAH032 192.03 193.75 1.72 19.6 19.6
Zone 1 Lens 2 average 14.6 14.2 99.9 269.6 123.0
1 1 3 LAH011 341.72 348.38 6.66 15.7 13.4
2 1 3 LAH012 368.44 369.88 1.44 9.9 9.9
3 1 3 LAH013 316.50 317.94 1.44 14.6 14.6
4 1 3 LAH014 358.95 364.05 5.10 8.2 8.2
5 1 3 LAH023 256.57 262.63 6.06 16.8 11.4
6 1 3 LAH024 310.20 311.92 1.72 8.6 8.6
7 1 3 LAH027 327.37 329.03 1.66 12.2 12.2
8 1 3 LAH029 433.50 435.89 2.39 9.6 9.6
9 1 3 LAH030 364.09 365.40 1.31 12.2 12.2
10 1 3 LAH031 275.51 277.70 2.19 10.0 10.0
Zone 1 Lens 3 average 12.7 11.1 196.1 529.6 188.3
1 1 4 SJH003 67.29 69.00 1.71 20.8 9.7
2 1 4 SJH005 67.50 68.65 1.15 16.5 16.5
3 1 4 SJH007 36.75 39.00 2.25 11.4 11.4
Zone 1 Lens 4 average 15.7 12.0 79.2 213.7 82.5
1 1 5 SJH009 145.16 149.15 3.99 44.1 21.1
Zone 1 Lens 5 average 44.1 21.1 11.2 30.2 20.5
1 1 6 SJH017 137.51 142.35 4.84 18.0 15.0
Zone 1 Lens 6 average 18.0 15.0 16.2 43.7 21.1
1 2 1 LAH007 279.89 282.39 2.50 12.6 12.6
Zone 2 Lens 1 average 12.6 12.6 6.0 16.3 6.6
1 2 2 LAH023 248.74 251.60 2.86 39.0 27.4
Zone 2 Lens 2 average 39.0 27.4 5.9 16.0 14.1
1 2 3 LAH025 306.36 309.13 2.77 9.4 9.4
Zone 2 Lens 3 average 9.4 9.4 3.5 9.4 2.8
1 4 LAH012 352.08 354.06 1.98 8.0 8.0
Zone 4 Lens 1 average 8.0 8.0 3.9 10.5 2.7
1 5 1 LAH014 372.74 374.55 1.81 9.8 9.8
Zone 5 Lens 1 average 9.8 9.8 2.4 6.4 2.0
1 5 2 LAH045W 625.50 627.50 2.00 12.4 12.4
Zone 5 Lens 2 average 12.4 12.4 3.5 9.4 3.7

Total Inferred Resource 14.9 12.5 442.6 1,195.0 481.9

17.2.1 Interpretation and Conclusions regarding Twin Shear Resource Estimate

At an 8 g/t Au cut-off grade, Scott Wilson RPA estimates that the Twin Shear Inferred
Mineral Resource totals 1.2 million tonnes averaging 12.5 g/t Au containing 482,000 oz gold
(Table 17.4).

50
 Table 17.4
Mineral Resource Estimate for Twin Shear Zone at June, 2008

Zone Tonnes Au Grade Cap Ounces Gold

(x1000) (g/t) 50 g/t Au
1 1,127 14.7 12.4 449,800
2 42 22.0 17.6 23,600
4 10 8.0 8.0 2,700
5 16 11.3 11.3 5,800
Total 1,195 14.9 12.5 481,900
1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The
estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues.
2. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has
been insufficient exploration to define these inferred resources as an indicated or measured mineral resource
and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.

Scott Wilson RPA believes there is excellent potential to expand the Twin Shear resource,
particularly in the vicinity of Zone 1 Lenses 2 and 3 (Figure 17.5). Scott Wilson RPA’s view
is that Twin Shear is still at an early exploration stage and that more drilling is needed to
better define the various styles of mineralization and to develop appropriate models to guide
future interpretation and resource estimation work. There are clearly some parts of the shear
zones that are more prospective than others. When more drilling data become available, Scott
Wilson RPA recommends developing a predictive structural model that identifies favourable
dilation zones and plunge directions that are likely associated with specific types of shear
zone flexures, kinks and cross-structures. This would help future targeting and modelling
work.

Figure 17.5
Twin Shear Zone 1, Vertical Longitudinal Projection, Looking North

51
17.3 MINERAL RESERVE ESTIMATES

17.3.1 Isidora Mine Reserves

The Measured and Indicated resources for the Isidora Mine were evaluated for conversion
into reserves by Hecla using the economic and engineering parameters outlined below and in
Section 18.1. Hecla placed the reserves in the Proven and Probable categories. The diluted
recoverable reserves, as of December 31, 2007, are summarized in Table 17.5 below.

Table 17.5
Mineral Reserves by Vein and Category for the Isidora Mine at December 31, 2007
(17 g/t Au cut-off grade)

Proven Reserves
Vein Tonnes Grade Ounces Gold
(g/t Au)
M 59,718 38.00 72,915
S 9,060 33.90 9,869
J 1,520 25.50 1,244
Total 70,298 37.20 84,029
Probable Reserves
Vein Tonnes Grade Ounces Gold
(g/t Au)
M 58,356 29.20 54,816
S 39,582 28.70 36,528
J 11,211 26.90 9,8546
Total 109,149 28.80 101,056
Proven and Probable Reserves
Vein Tonnes Grade Ounces Gold
(g/t Au)
M 118,073 33.60 127,730
S 48,643 29.70 46,397
J 12,731 26.80 11,099
Total 179,447 32.10 185,085

To arrive at a reserve estimate for the end of March, 2008, the first quarter mine production
(Q1) was subtracted from the December 31, 2007 reserves. The results are shown in Table
17.6.

Table 17.6
Summary of Reserves for the Isidora Mine as of March 31, 2008

Tonnes Grade Grams Ounces

Reserves - Dec 31, 2007 179,447 32.1 5,760,249 185,085
Less Production Jan - Mar, 2008 17,558 30.21 530,427 17,054
Remaining Reserves - Mar 31, 2008 161,889 32.30 5,229,822 168,031

Hecla’s reported Mineral Reserves at the Isidora Mine as of December 31, 2007 used a cut-off
grade of 17 g/t Au, based on then current operating costs, production and recovery rates and

52
assumed gold prices. Using these criteria, the reserve was sufficient for approximately 18
months of mine life (to mid-2009) at the planned production rate of about 350 t/d, or 122,000
t/y. Assuming the same production rate the reserves remaining as of March, 2008 will be
sufficient for another 15 months. However, at the lower production rate of 200 t/d achieved
during Q1, 2008 the remaining reserves will last for approximately 27 months.

17.3.2 Reserve Estimate Methodology

17.3.2.1 Cut-off Grade Determination for Reserves

For the December 31, 2007 Reserve Report, Hecla calculated a cut-off grade using actual
operating costs from January to October, 2007 but excluding the months of May, June and
July when mine production was stopped as a result of community and worker problems.
Thus, the mineral reserve cut-off grade was based on a total direct operating cost of $308.98/t
of diluted ore. The assumed gold price was $570/oz. A mill recovery of 94.4% was used.
The resultant cut-off grade was calculated to be 17.86 g/t Au which was rounded down to 17
g/t for planning and reporting purposes. Table 17.7 shows the calculation of cut-off grade.

Table 17.7
Cut-off Grade Determination for 2007 Isidora Mine Reserves Report

Ore Tonnes Milled 61,186

Operating Costs Total Costs Cost/tonne Cut-off Grade
($) ($/t) (g/t Au)
Underground mining 9,065,290 148.16 8.08
La Camorra Plant 1,819,296 29.73 1.62
Ore Transport to Plant 1,372,992 22.44 1.22
Ore Transfer Station 327,125 5.35 0.29
Site Services 3,821,773 62.46 3.41
General and Admin 1,179,971 19.29 1.05
Total Production Costs 17,586,447 287.43 15.68

Royalties 7.5% 21.56 1.18

Total Incl Royalties 308.98 16.86

Plant Recovery 94.39%

COG incl Plant Recovery 17.86
Rounded to 17.00

17.3.2.2 Dilution and Recovery

Dilution
In August, 2007 Hecla undertook a study on the majority of existing stopes in the S and M
veins in order to establish actual dilution factors based on historical stoping practices and to
reassess minimum mining widths. In that study, Hecla determined that dilution in the M vein
totaled 0.82 m and in the S vein it was 0.97 m. The higher dilution factors calculated for the S
vein reflect the poorer geotechnical rock conditions that exist in the hanging wall. The results
were found to be consistent with the 2006 Reserve Report.

53
The SP and J veins were assigned the respective dilution factors of the S and M veins as their
geotechnical characteristics are similar.

Recovery
Mining recovery is based on a general assessment of the amount of broken ore recovered.
Ore recovery is the amount of broken ore removed from the mine.

The following average recovery percentages were used for the proposed mining method.

• Panel development (shanty) 98%.

• Panel stope production 90%.
• Rib and sill pillar 95%.

Hecla has modified mining plans so that rib pillars are now mined along with the stopes rather
than being left for later recovery. This has increased the expected recovery of rib pillars of
the original 50% to the higher estimate of 95%.

54
 18.0 OTHER RELEVANT DATA AND INFORMATION

The Isidora Mine has been in production since early 2005. The La Camorra gold recovery
plant has been operational since 1994, first treating production from La Camorra mine and
since 2005 all the feed from the Isidora Mine. Thus, the additional information on the mining
and processing operations and environmental considerations of both properties has been
included in this report.

During Micon’s site visit to the Isidora Mine, tours were made of both the underground and
surface facilities. Tours were made of only the surface facilities at La Camorra as the mine is
no longer safely accessible. A brief description of each mine is provided below including
summary statistics on reserves, production and costs.

18.1 ISIDORA MINE

18.1.1 Summary

During 2003 and 2004, an exploration drilling campaign was undertaken that included 131
drill holes and 35,850 m of drilling to the west of the old Chile Mine which had produced
about 600,000 oz at 46 g/t Au. The exploration resulted in the discovery of the Isidora Mine
which is a westward extension of the Chile Mine. A decision was taken by Hecla to place the
Isidora Mine into production and operations commenced in early 2005.

Since the first quarter of 2005, the Isidora Mine production records show that about 183,234 t
of ore have been mined at an average grade of 32.5 g/t Au for a total of 190,275 oz of gold
mined. The distribution of mined tonnage between the veins is broken down as follows:

• Vein S 68,357 t
• Vein M 111,369 t
• Vein J 3,509 t

Of the total mined, approximately 72% was trucked up the ramp in Valle Norte and the
remaining 28% was hoisted up the inclined shaft in Valle Sur. A total of approximately
201,801 t of waste has been mined.

Figure 18.1 shows mine production by quarter. Note that the low performance in the second
quarter of 2007 was due to a two-month road blockade, from May through early-July, and that
resulted in the suspension of mining operations.

Mill production records show that a total of 183,785 t were processed at the mill at La
Camorra at an average grade of 32.4 g/t Au. Recovered gold totalled 183,158 oz indicating an
average recovery rate of 96%.

55
 Figure 18.1
Summary of Mina Isidora Milled Production
(First Quarter 2005 to Fourth Quarter 2007)

Isidora LOM Plant Production, Tonnes & Grade

35,000 50.0

Ore Tonnes
45.0
Recovered Ounces
30,000
Grade
40.0

25,000
35.0

30.0
20,000
Metric Tonnes (t)

Grade (g/t)
25.0

15,000
20.0

15.0
10,000

10.0

5,000
5.0

0 0.0
05

05

05

05

06

06

06

06

07

07

07

07
1-

2-

3-

4-

1-

2-

3-

4-

1-

2-

3-

4-
Q

Q
18.1.2 General Mine Description

The Isidora Mine is a narrow vein underground gold mine. The quartz veins dip at
approximately 45o and are extracted by an up-dip panel stoping method. The two main veins
are the S and M veins, with the J and SP being smaller, parallel veins on other shear zones.
Almost all production to date has come from the S and M veins. Development ore has been
produced from the J vein since March, 2007 but no stoping has commenced.

The main access to the underground workings is via a decline ramp approximately 2.1 km in
length at a slope of 15% that is currently down to the -12 masl level. Figure 18.2 shows the
portal to the main ramp. The final ramp design length is 2.5 km reaching down to the -37 m
level on the S vein and the -30 m level on the M vein.

All ore is currently hauled up the ramp using 10 t underground mine trucks that dump the ore
on a pad near the portal. On surface the ore is transported by small 15 to 20 t dump trucks to
a sampling and transfer station where it is loaded into 40 to 50 t road haulers for the drive of
approximately 120 km to the La Camorra process plant.

56
 Figure 18.2
Portal to Mina Isidora Ramp

A secondary means of access is the inclined shaft, Pozo de Aqua, which is approximately 260
m in depth down to the -74 m level. This is also used as a downcast ventilation shaft and for
emergency egress from the mine. Figure 18.3 shows the headframe and winder house for the
inclined shaft.

Figure 18.3
Headframe on Inclined Shaft – Pozo de Aqua

Upcast ventilation is via a ventilation raise that exits on surface near to the Pozo de Aqua.
Two fans are located on the top of this ventilation shaft. Present ventilation is barely adequate
for the amount of equipment working in the mine. If additional machinery is introduced, the
ventilation fans will require an upgrade to increase air flow volumes to the workings.

The mine experiences a maximum groundwater flow of 4 L/s to 6 L/s in the wet season. Due
to the low flow rate, very few problems are encountered with the pumping of water.

57
18.1.3 Mining Method

All the ore is mined using the up-dip panel stoping method. This is an open stoping method
where a stope block is mined in short longitudinal panels retreating up the dip of the orebody
as each panel is blasted. The stope blocks are not backfilled, but are supported by un-mined
waste or low grade pillars, rock bolts and timber stulls. In wider stopes, 6-m cable bolts are
used for support. Figure 18.4 below shows a cross-sectional depiction of a typical stope.
Note the sill pillars (pilar de piso) at the bottom of the stope and the rib pillars in the middle
and top of the stope. In the original plan, these rib pillars were to be left in place and the sill
pillars recovered in retreat once the stope panel had been mined out.

Recently, the mining method has been changed so that no rib pillars are left behind but are
taken out with the stope. Timber stulls and rock bolts are used to support the back during
stoping. Micon understands that the sill pillars at the bottom of the stopes are left unmined
and the intervening opening is barricaded in order to hold back any loose material from the
stope. It is planned to recover these pillars in retreat. The recovery of ore from the stopes and
pillars is predicted to be around 90 to 96%, including development.

Figure 18.4
Diagram of Typical Up-dip Panel

Figure courtesy of HMV

Figure 18.5 is a photo taken from the production drift and looking up dip into the panel of the
stope. Note the pillars and the use of wooden stulls for local roof support.

58
 Figure 18.5
View Up-dip Showing Typical Panel Stope with Sill Pillars and Local Timber Support

Single or double-boom jumbos are used for most of the development drilling. Jacklegs are
used to drill in the stopes and a pneumatic long-hole drill is used to drill sill pillars prior to
their removal. Ore is blasted down from the stopes into the production drift and generally
mucked using 2- or 3.5-yd3 scoops into 10 t trucks for haulage up the ramp. The use of
slushers, overshot muckers and side dump ore cars will be discontinued with the completion
of levels which are accessed from the inclined shaft. The inclined shaft is equipped with a
2.5-t skip that is mostly used for material supply and emergency egress.

Heading sizes are appropriate for the range of equipment in use at the mine. The main ramp
is 4 m by 4 m and would be able to accommodate larger haulage trucks than the 10 t units
currently in service.

18.1.4 Ground Support

Hecla incorporated recommendations following geotechnical investigations by independent

consultants into the ground support design. Ground support consists of split set rock bolts
with steel pads and steel straps in some areas. In the stopes, in addition to the rock bolts, rock
pillars are left on a 12-m spacing together with wooden stulls on a 2.5-m pattern. If the vein
thickness exceeds 3 m, single strand, 6-m long cable bolts are installed on a 2.1-m spacing.

Ground conditions in areas visited were good and there was no visible sign of convergence of
the hanging wall or severe stress on the timber stulls in the stopes. The ground conditions in
the development drifts were good with little support required.

18.1.5 Past Production

Figure 18.6 shows the past monthly production for Isidora Mine from January 2005 to
December, 2007. The production is shown by vein. The months of no production in 2007
resulted from the two-month work stoppage. Peak production was achieved over the period

59
October, 2006 to April, 2007. Grade has been steadily dropping over the past two years from
a peak of around 70 g/t (about 2 oz/t) down to current levels of about 25 to 30 g/t Au.

Figure 18.6
Monthly Production at the Isidora Mine

Isidora LOM Ore Tonnes & Grade

12,000 80.0

J Vein
M Vein
S Vein 70.0
10,000 Grade

60.0

8,000
50.0
Metric Tonnes (t)

Grade (g/t)
6,000 40.0

30.0
4,000

20.0

2,000
10.0

0 0.0
5

Ju 6

7
05

Ap 5

05

Au 5

Fe 6

M 6

06

Au 6

Fe 7

M 7

07

Au 7
M 5

Ap 6

Ap 7
No 5

No 6

No 7
05

De 5

Se 6

De 6

Se 7

07
Se 5

05

06

06

07

De 7
M 5

M 6

M 7
-0
-0

-0
l- 0
0
-0

0
-0

l-0

l-0
-0
0

0
0

0
r- 0
r-0

r-0
n-

n-

n-
b-

n-

n-

b-

n-
b-

g-

p-

v-

c-

g-

p-

v-

g-

c-
c-

p-

v-
ct-

ct-

ct-
ay
ay

ay
ar

ar

ar
Ju

Ju

Ju
Ja

Ju

Ja

Ja
Fe

Ju
O

O
During the first three months of 2008 (Q1), a total of 17,558 t was recorded as mined at 30.21
g/t Au. This represents an average daily production of about 200 t or an annualized
production of about 70,000 t based on 350 working days per year. This is below the target
production planned for 2008 of 106,000 tonnes shown in Table 18.2.

18.1.6 Life-of-Mine Production Plan

An in-house life-of-mine (LOM) production plan was completed by Hecla in September,

2007, prior to the Report on Mineral Resources and Reserves of December 31, 2007. The cut-
off grade calculation for the LOM plan was based on operating costs and production tonnages
from the first four months of 2007 only and used a gold price of $750/oz. In addition, Mine
operating costs were reduced by removing access development costs on the basis that the
reserves to be mined in the LOM plan already had access development completed. The
royalty rate was 9% compared to 7.5% for the mineral reserve cut-off grade calculation

These modifications resulted in a calculated stoping cut-off grade of 10.79 g/t Au which was
rounded down to 10 g/t Au for planning and reporting purposes. This lower cut-off grade
allowed a greater proportion of the Measured and Indicated Mineral Resources to be

60
converted to a reserve and extended the mine life for a further six months to the first quarter
of 2010.

Table 18.1 below shows the cut-off grade calculation for the LOM plan based on the $750/oz
gold price and assuming no development costs for mining.

Table 18.1
Cut-off Grade Determination used for LOM Plan at $750/oz Gold Price

Ore Tonnes Milled 37,828

Operating Costs Total Costs Unit Cost Cut-off Grade
($) ($/t) (g/t Au)
Underground mining 2,861,080 75.63 3.41
La Camorra plant 741,712 19.61 0.81
Ore transport to plant 844,799 22.33 0.93
Ore transfer station 154,640 4.09 0.17
Site services El Callao 1,238,777 32.75 1.36
Site services La Camorra 1,585,901 41.92 1.74
General and Administration 936,073 24.75 1.03
Total production costs 8,362,981 221.08 9.17

Royalties 9.0% 19.90 0.83

Total including royalties 240.98 9.99

Plant recovery 94.39%

COG including plant recovery 10.79
Rounded to 10.00

Using this lower cut-off grade, Hecla developed a LOM production plan based on an
increased reserve base. Table 18.2 is a summary of the LOM Production Schedule. The
planned production rate was about 305 t/d for 2008 rising to 370 t/d for 2009 and 2010. The
reserves would be exhausted by the middle of the first quarter of 2010.

Table 18.2
Isidora Mine LOM Production Schedule - December, 2007
(10 g/t Au Cut-off Grade)

Summary by Year
2008 2009 2010 Total
Development ore tonnes 11,886 743 0 12,629
Stoping ore tonnes 94,875 131,519 17,263 243,657
Total ore tonnes 106,761 132,262 17,263 256,286
Avg. daily production (t/d) 305 370 370
Grade (g/t Au) 27.1 25.5 25.1 26.3
Average mining rate (t/d ore) 342 424 268 420
Waste tonnes 29,273 0 0 29,273
Total grams of gold 2,897,045 3,374,875 433,741 6,705,661
Total ounces of gold 93,142 108,505 13,945 215,592

61
Hecla also calculated a cut-off grade using its budget forecasts for 2008. Table 18.3 shows
the cut-off grade using a $570/oz gold price, forecast operating tonnes milled and budget
operating costs for 2008. This resulted in a cut-off grade of 20 g/t Au. While Isidora Mine
personnel consider this to be a conservative estimate of the cut-off grade, Micon considers
this to be a reasonable cut-off grade estimate at a gold price of $570/oz and forecasts
operating costs. If the gold price used for the LOM plan i.e. $750/oz is used then the cut-off
grade approximates 15.5 g/t Au.

Table 18.3
Isidora Mine Budget Cut-off Grade Using Budget Costs for 2008

Ore Tonnes Milled 106,739

Operating Costs Total Costs Cost/tonne Cut-off Grade
($) ($/t) (g/t Au)
Underground mining 16,944,379 158.75 8.66
La Camorra Plant 3,869,374 36.25 1.98
Ore transport to plant 2,241,971 21.00 1.15
Ore transfer station (in transport)
Site services El Callao/La Camorra 8,626,767 80.02 4.41
General and Administration 2,533,664 23.74 1.30
Total production costs 34,216,155 320.56 17.49

Royalties 9.0% 28.85 1.57

Total including royalties 349.41

Plant recovery 1.07

COG including plant recovery 20.13
Rounded to 20.00

18.1.7 Surface Facilities and Mining Equipment

All equipment is maintained in a surface workshop facility, shown in Figure 18.7. Other
surface facilities include a mine dry and change house for the underground workers, a series
of mobile trailers used as offices for supervisors and engineering, and the run-of-mine (ROM)
ore pile close to the portal. All the facilities are within a short distance from the portal and are
fenced, but the effectiveness of the security fencing is in doubt. All personnel entering and
exiting the fenced site are supposed to pass through a security check. Again, the effectiveness
of this security measure is questionable. Further comments on security and Hecla’s efforts to
improve site security are provided in Section 18.5.5.

62
 Figure 18.7
View of the Surface Repair Shops

Table 18.4 shows the equipment availability for the third quarter of 2007 (latest quarter for
which Micon has records).

Table 18.4
Equipment Availabilities for Third Quarter, 2007

Equipment Number Availability Utilization

(%) (%)
Scoop Toro 007 59 40
Scoop Toro 151D 66 68
Scoop Toro 151 66 86
Scoop EJC-145 53 73
Scoop EJC-116 79 65
Scoop ST-3.5 55 85
Truck EJC-417 #01 55 90
Truck EJC-417 #02 56 88
Truck MT-420 #18 13 67
Truck MT-420 #20 87 88
Jumbo Axera D-06 62 54
Jumbo JU-918 0 0
Jumbo HS-105M 0 0
Jumbo Boomer 77 65
Total Hours in period based on 24 hours/working day

The mobile equipment fleet is a mixed fleet of varying ages, operating conditions, capacities
and manufacturers. Considering the difficulties noted in discussions with respect to the
importation of parts and supplies, the mixture of equipment could pose serious problems due
to the wide range of spare parts required for the different units.

63
Generally mechanical availabilities are poor owing to lack of spares and qualified
maintenance personnel. The poor availability of the trucks is a major problem as this restricts
the amount of broken ore that can be hauled out of the mine as there is no other effective
means of raising the ore to surface.

Maintenance efforts are further hindered by having mine equipment of different manufacture
and age, and size of the fleet, since this makes it difficult for maintenance personnel to be
familiar with each type of unit.

18.1.8 Site Access and Infrastructure

The mine is accessed via a road from the east that passes through the villages of Perú-Chile.
The electrical power for the mine is supplied by a line from the Chile processing plant which
is owned by CVG Minerven. The line is in turn fed from the national grid. Line voltage is
34.5 KV which is stepped down to 4,160 V for distribution underground and to surface
facilities.

Water pumped from the mine is recirculated for use underground. The water is settled in a
pond and then fed to a large mine water storage tank. Water can also be delivered to the mine
by truck in times of low groundwater supply. Potable water is sourced from a well on site.

18.1.9 Off-Site facilities

Purchasing is carried out from the Puerto Ordaz head offices and warehousing facility. Small
warehousing faculties exist on site.

The majority of expatriates working at the mine are accommodated at the Santa Barbara
complex located outside of El Callao. This gated community is shared between Minera Hecla
and Crystallex personnel. It has both family and single accommodation. The majority of the
national workforce lives in the town of El Callao with others living in Guasipati and
Tumeremo.

18.2 LA CAMORRA MINE

The La Camorra Mine operated from 1994 until operations ceased in June, 2007. The mine
was a high-grade underground gold mine that exploited two shear-zone hosted quartz veins
known as the Main zone and the Betzy vein. Gold mineralization at La Camorra was
confined to narrow, near vertical quartz veins hosted in east-west trending, left-lateral shear
zones. Most economic mineralization in the La Camorra veins occurred in distinct ore shoots.
Gold occurred as free particles in quartz and attached to, or included in, pyrite.

64
18.2.1 Historical Mine Production

The total production from the La Camorra Mine according to HMV records is shown in Table
18.5 below. This total includes mining by the previous owner of the property, Monarch, as
well as by Hecla.

Table 18.5
Historical Production at La Camorra Mine

Mill Processing of La Camorra Ore

Thousand t Grade Recovered Gold
(g/t Au) (thousand oz)
Monarch 524 14.7 230
Hecla 1,094 24.7 831
Total 1,618 21.5 1,061

18.2.2 Reserves

At the time of mine closure in June, 2007, the remaining reserves were estimated by Hecla as
shown in Table 18.6.

Table 18.6
Reported Reserves at Time of Closure of the La Camorra Mine

Category Tonnes Grade Ounces Gold

(g/t Au)
Proven 5,947 17.51 3,349
Probable 13,810 20.33 9,027
Total 19,757 19.48 12,376

These reserves included both the remaining stoping blocks at depth, plus some remnant sill
pillars higher up in the mine. However, since the rationale for mine closure was that the mine
was no longer economic to operate, this material has now been removed from inventory and
there are no longer any reserves estimated for the La Camorra mine.

18.2.3 Mine Closure and Reclamation

During the early months of 2007, Hecla encountered increasingly difficult ground conditions
at the bottom of the mine around the -600 m level. Fractured rock and bad falls of ground on
this level resulted in suspension of operations in June, 2007. Following suspension of
underground mining activities, pumping from the underground mine workings was sustained
until the end of August, 2007 to facilitate inspections from MIBAM prior to mine closure. As
of August 31, the pumps were turned off and the mine started to flood.

In late September, MIBAM submitted the findings of its investigations to the Ministerio de
Trabajo ratifying the claims of Hecla that continuation of underground production activities
was no longer feasible. Salvage operations were intensified and all mobile equipment and

65
much of the electrical and ventilation equipment removed from the mine. The main portal
and shaft are now closed. The mine is now flooding at an approximate rate of 1.0 vertical
metres per day. At the time of the Micon visit the water level had reached the -270 m level.

Hecla intends to allow the mine to flood to the +10 m elevation where the main pump station
will be left so as to facilitate the possible future usage of mine water in the process plant.

18.2.4 Mine Surface Infrastructure

Site infrastructure and facilities are in reasonable condition but little maintenance is being
carried out now that mining has ceased. The facilities still on site include a water supply
system, maintenance shop, warehouse, living quarters, a dining facility, administration
building and a National Guard post. There is also an off-site housing facility located near the
town of El Callao with units for approximately 50 families. Mine electric power is purchased
from Eleoriente (a state-owned electric company). Diesel-powered electric generators are
available on-site for operation of critical equipment during power outages.

Figure 18.8
La Camorra View over the Mine Workshops and Office, and View of Equipment Left on Surface

18.3 LA CAMORRA PROCESSING PLANT

18.3.1 Overview of Plant

The La Camorra plant has capacity of approximately 700 t/d or 29 t/h. Current throughput is
between 300 to 400 t/d depending on how much custom milling ore is available. The plant is
currently operating on a five days per week basis to allow for higher daily throughputs. The
reason for the under-performance is the lack of ore feed to the plant since the La Camorra
Mine shut down in June, 2007.

Current head grade of milled ore is in the range of 28 to 30 g/t Au.

Processing ore at La Camorra uses a modified carbon-in-leach (CIL) method. ROM ore is
crushed in a two-stage plant including a primary jaw crusher and cone crushers. The primary

66
jaw crusher reduces ROM ore to minus 89 mm. Primary crushed ore is delivered to the
secondary crushing circuit and further reduced through two cone crushers and screened to
100% passing 9.5 mm. The crushed product is deposited in a conical stockpile.

Crushed ore is reclaimed from the stockpile and ground in two 8 ft diameter by 14 ft long ball
mills, in series, to approximately 75% passing -200 mesh. Cyanide is added to the primary
mill feed, which results in up to 75% of the contained gold being dissolved during milling.
The ground slurry reports to a leach feed thickener. The thickener underflow is pumped to the
CIL circuit which consists of six tank stages, in series. Carbon is advanced counter-current to
the slurry flow therefore maximising gold recovery and to ensure maximum gold loading
prior to stripping.

Thickener overflow solution containing dissolved gold is processed through a carbon-in-

column (CIC) circuit. The overflow is pumped to the bottom of the first column in series and
overflows through the other units by gravity. This procedure allows strong pregnant solution
to contact carbon, thereby maximizing the gold content of the carbon. In the past, the
capacity of the three carbon columns was a partial bottleneck as the expansion of carbon
limited solution flow rates. This has been alleviated to a certain extent by adding additional
columns, although these are not the same size as the others and control of carbon loading
requires close attention. Loaded carbon, from both the carbon columns and CIL circuit, is
transferred to a pressure strip vessel.

Figure 18.9
View of the Two Grinding Mills

Gold is removed from the carbon by stripping in the pressure vessel with hot alkaline
solution, then this solution is treated in electrowinning cells to recover metallic gold onto the

67
cathodes. Gold removed from the electrowinning cells is smelted onsite to produce gold doré.
Process tailings are pumped to a tailings storage facility where solids are allowed to settle.
Clear solution is reclaimed from the tailings area for use in the processing facility.

18.3.2 Tailings

There are four tailings ponds adjacent to the plant site. Pond No. 1 was the original pond used
by Monarch and contains relatively coarse material and elevated gold values in the range of
2.0 g/t Au. Hecla proposes to remobilize the tailings in this pond and treat the reclaimed
material through the grinding and CIL plant at La Camorra to recover contained gold. Ponds
Nos. 2 and 3 were installed by Hecla and are also scheduled for retreatment. The current
pond in use for tailings storage is No. 4. This pond has capacity for 3.5 years of operation of
the mill at the current production rate. After that period, another pond or additional capacity
within the existing ponds will need to be designed and constructed. By raising the berms on
Pond No. 4, Hecla estimates that there will be sufficient capacity to contain tailings from
future reserves without requiring a fifth pond.

Figure 18.10
View over Tailings Pond No. 4

18.3.3 Plant Production – Past and Potential

Table 18.7 states the historical production from the plant records for years 2006 and 2007.
Included in the table is the production for the most recent month on record, i.e. February,
2008.

68
 Table 18.7
La Camorra Plant Operating Statistics

Item/Period Year 2006 Year 2007 February, 2008

Tonnes treated 214,513 129,910 14,149
% of actual capacity 93.3 56.5 38.1
% operating time 93.3 69.0 63.4
Head grade, g/t 24.2 21.6 28.0
Tailings grade, g/t 1.12 0.85 1.14
% Recovery 95.4 96.1 95.9

Based on the stated ball mill work index, the two mills have the potential to treat 700 t/d.
From the above table it is apparent that, as the La Camorra Mine neared exhaustion, ore from
other sources was not able to make up the shortfall. Currently Hecla is attempting to fill the
excess capacity with material from small scale miners (at approximately 7.8 g/t Au head
grade) and reclamation of tailings material from the No. 1 Pond (at approximately 2 g/t Au).
However, it appears that these sources will be unable to make up the full plant capacity.
Operating below plant capacity causes excessive wear in several areas of the plant.

Gold recoveries consistently exceed 95% even though head grades exceeding 20 g/t result in
tailings grades of over 1 g/t Au. From the limited amount of testwork examined and
indications from the plant production, there is room for improvement in gold recovery. As a
result of operating at less than the design tonnage the mill discharge surges. This surging
causes inefficient operation of the pumps, screens and cyclones and which can result in poor
separation and non-optimum grind (P80) of the ore going to leach. The extent that this reduces
gold dissolution is difficult to determine as the high head grades mask the impact.

One of the deficiencies in the circuit that has been partially resolved is the capacity of the
carbon adsorption columns. However, the solution involves the use of differently sized
vessels which makes carbon advancing a little more complicated but this is not a serious
problem.

The operation uses NORIT carbon which is more abrasion resistant than coconut carbon, and
a pre-conditioning tank and screen, typical of most plants employing carbon for gold
recovery, was not installed. In Micon’s opinion, however, this conditioning tank and screen
should be installed to improve removal of carbon fines which are produced during
regeneration and which lead to potential gold losses.

Overall, none of the above points are a serious detriment to the operation but if addressed will
improve the plant efficiency. Generally the plant is clean, is in reasonable mechanical
condition and does not have a surfeit of manpower.

18.3.4 Reagent and Steel Consumptions

Leach reagent consumptions are in line with most operations of this nature with the exception
of lime consumption, which is high. Steel ball consumption is high at approximately double

69
that of similar operations. Either the ore is very abrasive or the frequent grind outs, resulting
from shortfalls in feed, is causing the high wear. Ball quality could also be suspect.

Even though the mills are lined with rubber it is recommended that periodic mechanical
inspection of the shells be carried out. ‘Wash out’ between the mill end and shell, in steel
lined mills, can be a severe problem. Whilst this is less likely with rubber liners, it would be
advisable to check.

Mechanical inspections including photographs of the ring and pinion gears were carried out in
March, 2006 and, with the exception of some localized scuffing on the gear teeth, they
appeared to be in good condition.

18.3.5 Recovery

Plant recoveries are influenced by the head grade of the ore being processed. In order to
obtain overall recovery factors for varying head grades the gold extraction (gold which
dissolves during the leaching process) is multiplied by historical soluble recovery (efficiency
of the carbon adsorption process).

Gold extraction as a function of feed grade is determined by regression analysis of the test
results (depicted below in Figure 18.11), as follows:

• The g/t of extracted gold = 0.9784 times (g/t gold head grade) – 0.4886g/t.
• The % extraction = 100[0.9784(g/t gold head grade) – 0.4886g/t]/(g/t gold head grade).
• Historical soluble recovery at the La Camorra process plant is 99.25%.

Resulting in:

• Overall % Recovery = 99.25 x [0.9784 x (g/t gold head grade) – 0.4886g/t]/(g/t gold
head grade)

For example, at a head grade of 32.1 g/t Au, the overall recovery is 95.5%.

This method of calculating recoveries is more complicated than that normally employed in
gold operations, where recovery is calculated from the measured gold feed to the plant plus
inventory change plus production, divided by plant feed. The actual feed assay can then be
back calculated and compared with the measured grade of feed to check on reliability of
sampling. This method also highlights any significant discrepancies which could indicate
potential theft in the plant and/or poor operation.

70
 Figure 18.11
Isidora Mine Ore – Grade Versus Gold Extraction

18.4 ECONOMIC ANALYSIS

Several spreadsheet tables of historical production and cost data were provided by Hecla to
Micon at the time of the site visit, and by Rusoro during the period of preparation of this
report. In addition, Hecla provided to Micon its November, 2007 projected Life of Mine
(LOM) Production Plan and Forecast for the Isidora operation (the LOM Plan) which was
based on the lower (10.0 g/t Au) cut-off grade.

The LOM Plan provided the basis for Micon’s economic analysis of the Isidora Mine, which
is the only producing mine on the concessions. While the LOM summary document has been
reviewed by Micon, the details of the costs for production and other costs were not available
for review. The LOM Plan includes costs for transporting and processing the ore at the La
Camorra Plant and for site services and general and administration costs. It should be noted
that these costs are based on Hecla operating the property rather than Rusoro.

18.4.1 Currency, Royalties and Gold Sales

18.4.1.1 Currency

While the marketing of gold is not an issue, there is some potential difficulty in moving funds
generated from the Isidora operation out of Venezuela.

There are strict monetary controls in place in Venezuela and application must be made for
conversion of Bolivars to US dollars for all purchases of material from outside of Venezuela.
The application for conversion of currency can significantly delay the delivery of parts and
equipment. At the present time the official conversion rate is Bs.F.2.20 to $1.00, but a

71
“parallel” market exists as there are persons and businesses who need access to US currency
and do not have the time or desire to apply for such currency from the government.

18.4.1.2 Marketing and Price of Gold

It is Rusoro’s intention to sell gold from Isidora to a registered gold buyer in Venezuela.

In calculating the cut-off grade to be used for the LOM Plan, Hecla assumed a gold price of
$750/oz. Micon has retained this price in its economic analysis for years 2008 and 2009, and
a lower price of $600/oz for 2010 production. Micon’s sensitivity analysis examines the
effect of a lower gold price during the LOM production period.

During the month of July, 2008 gold has been trading in the range of $920-960/oz.

18.4.1.3 Royalties

According to information provided by Rusoro, the royalties that now apply to the Isidora
property total 6% and are broken down as follows:
• 3% paid to MIBAM-CVG.
• 3% paid to Minerven as part of Block B concession agreement.

These royalties, payable on the gross value of the production, have been accounted for in
Micon’s cash flow forecast.

18.4.2 Capital and Operating Costs

18.4.2.1 Capital Expenditures

Hecla’s LOM Plan shows a single capital cost item of $3,954,000 in year 2008. The
expenditures are allocated for equipment, $1,467,000, construction $133,000 and
underground development, $2,354,000.

18.4.2.2 Operating Costs

Unit operating costs per tonne milled for years 2007 to 2009 are shown below in Table 18.8.
These are for direct operations only, excluding insurance, reclamation, depreciation and
amortization which are carried under “Other Costs”. Units cost for 2007 are actual costs from
Hecla’s reports and costs for 2008 and 2009 were calculated from the Hecla LOM Plan.
Micon observes that the predicted costs for 2008 are higher than the unit costs used for the
cut-off grade determination which, overall, were $221.08/t. (see Table 18.1).

72
 Table 18.8
Unit Operating Costs for 2007 - 2009

2007 2008 2009

Basis of Costs Actual Budget Budget
Annual production (t) 72,536 106,761 132,262
Unit production costs $/t $/t $/t
Underground mining 184.91 136.45 124.74
La Camorra Plant 41.14 34.75 38.83
Transport to La Camorra 24.89 23.19 23.00
Transfer station 00.00 0.00 0.00
Site services 92.83 98.84 84.02
General & Administration 35.34 27.70 11.86
Total production costs 379.11 320.49 282.45
Note: 1 The costs of the transfer station are covered in the transport cost.
2 The G&A costs include Puerto Ordaz head office costs.

From Isidora Mine records, the 2006 operating costs were shown as $178.58/t and, in 2007,
costs had risen to $379.11/t. or by 112%. The budgeted unit costs for 2008 and 2009 are
$320.49/t and $282.45/t, respectively. The increase in 2007 unit costs can, in some measure,
be attributed to the two-month work stoppage and the lower than scheduled ore production.
However, some of the increase is attributable to general increases in operating costs at the
mine. The lower unit costs for 2008 and 2009 can be attributed to the predictions of increased
ore output compared to 2007 and, thus, unit costs reducing as fixed costs are spread over more
tonnes.

Micon recommends that Rusoro carry out a detailed review of the operating costs to verify
annual costs to date and future predictions, to determine the reasons for the high site service
and G&A costs, and whether there are any means to reduce them.

In the LOM Plan, an amount of $241,000 is provided over the period 2008-2010 as an
allowance for rehabilitation or reclamation. Micon considers this inadequate for reclamation
of the Isidora Mine property.

18.4.3 Cash Flow Projection

A summary of the key criteria is provided below.

18.4.3.1 Production Schedule

The LOM production schedule is shown below in Table 18.9.

73
 Table 18.9
Isidora Mine LOM Production Schedule - December, 2007
(10 g/t Au Cut-off Grade)

Summary by Year
2008 2009 2010 Total
Ore tonnes processed 106,761 132,262 17,263 256,286
Head grade (g/t Au) 27.14 25.52 25.13 26.16
Average mining rate (t/d ore) 342 424 268 420
Contained grams of gold 2,897,045 3,374,875 433,741 6,705,661
Plant recovery 95.3% 95.2% 95.2% 95.3%
Recovered ounces of gold 88,782 103,303 13,272 205,357

18.4.3.2 Revenue

Revenue is recognized at the time of production and reflects the following:

Gold price: US$750 per ounce for 2008 and 2009 and US$600 per ounce for 2010.
Refining and transportation costs of 1.1% of gross production gold value.
Exploitation tax of 4.5% on gross production gold value.

18.4.3.3 Operating Costs and Royalties

Operating costs are based on the following:

Exchange rate US$1.00 = BsF.2.20.

Total direct production costs over the mine life is $79.4 million, or $309.88/t milled.
Total other costs (insurance, reclamation, misc. and depreciation) are $40.1 million.
Royalties total 6% of gross gold production value for total of $9.1 million.

18.4.3.4 Capital Expenditure

LOM capital expenditure totals $ 3.954 million in 2008. Thereafter, capital expenditure is
forecast to be nil.

Based on the cash flow model prepared by Micon, the Isidora Project is forecast to have an
estimated undiscounted cash flow of $48.5 million over the remaining mine life and has a Net
Present Value at a 10% discount rate (NPV10) of $41.7 million.

Based on Hecla’s LOM Plan, a pre-tax cash flow projection has been generated and is
presented in Table 18.10 and Figure 18.12.

74
 Table 18.10
Life-of-Mine Cash Flow Projection

Mina Isidora Production and Annual Cashflow - From Hecla Mine Plan and Forecast

2008 2009 2010 Total

Production
Ore production tonnes 106,761 132,262 17,263 256,286
Ore Grade g/t 27.14 25.52 25.13 26.16
Contained Gold Grams 2,897,045 3,374,875 433,741 6,705,661
Contained Gold Oz 93,142 108,505 13,945 215,592

Revenue
Mill recovery % 95.3% 95.2% 95.2% 95.3%
Recovered Gold oz 88,782 103,303 13,272 205,357
Exchange rate 1.00 1.00 1.00 1.00
Metal Price $/oz $750.00 $750.00 $600.00
Gross production value $66,586,500 $77,477,250 $7,963,200 $152,026,950
less Contribution to Science & technology
Less refining & Freight -$731,000 -$852,000 -$92,000 -$1,675,000
Less Exploitation Tax -$2,995,000 -$3,486,000 -$358,000 -$6,839,000
Net production value $62,860,500 $73,139,250 $7,513,200 $143,512,950

Cost of production
Underground mining $14,568,000 $16,499,000 $3,667,000 $34,734,000
Plant $3,711,000 $5,136,000 $1,182,000 $10,029,000
Transport to LC Mill $2,476,000 $3,042,000 $397,000 $5,915,000
Transfer Station $0 $0 $0 $0
Site Services $10,552,000 $11,113,000 $2,305,000 $23,970,000
General & Administration $2,957,000 $1,568,000 $246,000 $4,771,000
Total Production Costs $34,264,000 $37,358,000 $7,797,000 $79,419,000

Unit Cost of Production Average

Underground mining $/tonne $136.45 $124.74 $212.42 $135.53
Plant $/tonne $34.76 $38.83 $68.47 $39.13
Transport to LC Mill $/tonne $23.19 $23.00 $23.00 $23.08
Transfer Station $/tonne $0.00 $0.00 $0.00 $0.00
Site Services $/tonne $98.84 $84.02 $133.52 $93.53
General & Administration $/tonne $27.70 $11.86 $14.25 $18.62
Total Unit Production Costs $/tonne $320.94 $282.45 $451.66 $309.88

Other Costs
Insurrance $540,000 $540,000 $135,000 $1,215,000
Reclamation $108,000 $106,000 $27,000 $241,000
Misc expense $925,000 $120,000 $30,000 $1,075,000
Depreciation/Amortization $15,634,000 $18,570,000 $3,332,000 $37,536,000
Total Other Costs $17,207,000 $19,336,000 $3,524,000 $40,067,000

Total Costs $51,471,000 $56,694,000 $11,321,000 $119,486,000

Net Operating Income $11,389,500 $16,445,250 -$3,807,800 $24,026,950

Royalties
Minerven Royalty 3% $1,997,595 $2,324,318 $238,896 $4,560,809
Govt - CVG Royalty 3% $1,997,595 $2,324,318 $238,896 $4,560,809
Total Royalties $3,995,190 $4,648,635 $477,792 $9,121,617

Capital Costs
Equipment $3,954,000 $3,954,000
Construction $0
Development $0
Total Capital $3,954,000 $0 $0 $3,954,000

Net cash Flow before tax $19,074,310 $30,366,615 -$953,592 $48,487,333

Net Cumulative Cash Flow $19,074,310 $49,440,925 $48,487,333

NPV 5% $44,885,676
10% $41,720,210
IRR N/A

Direct Production Costs per ounce gold 386 362 587 387
Total operating costs per ounce gold 580 549 853 582
Capital/Royalty costs per ounce gold 90 45 36 64
Total costs per ounce gold 669 594 889 646

75
 Figure 18.12
Cash Flow Projection

80,000

70,000

60,000

50,000
USD 000

40,000

30,000

20,000

10,000

0
2008 2009 2010

Net Cash Flow Capital G&A Plant Mining Net Revenue

Over the life-of-mine, the direct operating cost is expected to be US$387/oz and the total cost
including other costs, capital and royalties is US$643/oz of gold. Average annual gold
production during operation is 93,300 oz/y.

18.4.3.5 Sensitivity Analysis

Key economic risks were examined by running cash flow sensitivities for changes in revenue,
operating costs and capital costs. Cash flow sensitivities were prepared over a range of
minus15% to plus 15% for the listed parameters. These are shown in Figure 18.13.

The project cash flow is most sensitive to changes in the revenue and almost equally sensitive
to operating costs. The forecast capital expenditure is small, so as expected the project is least
sensitive to changes in capital. Micon notes that, notwithstanding residual uncertainty
regarding the rate of escalation of operating costs, the project NPV10 is strongly positive
across the +/-15% range of sensitivity tested.

76
 Figure 18.13
NPV at 10% Sensitivity Chart

70,000

60,000

50,000
USD 000

40,000 Revenue
Opex
30,000
Capex
20,000

10,000

0
85% 90% 95% 100% 105% 110% 115%

18.5 ENVIRONMENTAL CONSIDERATIONS

Key environmental and social observations are discussed in the following sections based on
discussions with staff responsible for environmental and social issues, review of reports and
materials available to date, and the site tours.

18.5.1 Evaluation of Existing Environment and Proposed Compliance with Local,

Regional and National Regulations

Micon has only reviewed the environmental-related permits for the Hecla operations, but not
legal titles. Environmental permits and compliance records are up to date except for the
renewal of the Isidora operation payment and the Choco 7 exploration permit, which are
expected shortly. The reason given for the delay in the issuance of the renewal is government
work load.

Table 18.11summarizes the financial compliance status of the affectation permits for Hecla
activities in the El Dorado and El Callao areas. In addition, the government has issued proof
of compliance reports for properties in the Isidora and La Camorra operations.

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 Table 18.11
Permit Financial Compliance Summary

Area/Activity Annual Payment (Bs.F.) Renewal Date

Minerven 1 Exploration 4,361.50 Feb. 10, 2009
Minerven 2 Exploration 6,782 Feb. 10, 2009
La Medusa Exploration 3,000 Dec. 10, 2008
El Sudor Exploration 3,000 Dec. 10, 2008
Yessica Exploration 3,000 Dec. 10, 2008
Niña I Exploration 1,000 May 8, 2008
Niña II Exploration 1,000 May 8, 2008
Niña III Exploration 1,000 May 8, 2008
Niña IV Exploration 1,000 May 8, 2008
Niña VI Exploration 1,000 May 8, 2008
Niña VII Exploration 1,000 May 8, 2008
Puyero I Exploration 3,000 Jan. 28, 2009
Choco 7 Exploration 3,000 Renewal Pending
Canaíma Geotech and Hydrogeology Drilling 3,500 Nov. 25, 2008
La Camorra Tailings Deposition 21,000 Jan. 27, 2009
Mina Isidora 357,905.13 Renewal Pending
Mina Isidora Infrastructure on Minerven 2 13,200 Mar. 8, 2009
Primary Crusher on Minerven IV 8,000 Sep. 2, 2008

Table 18.12
Key Permit Summary

Authorization Authorization Number Date Issued

Territory Occupation Authorization - Isidora Oficio # 42.42.43 Jan. 1996
Territory Occupation Authorization - La Camorra Oficio # 000391 Nov. 19, 2000
Isidora Mine - Permit for Registered Activities to Degrade Oficio #01-00-19-04-02- Dec. 26, 2006
the Environment ( Mineral Extraction) 420/2006
Isidora Mine - Affectation Licence Oficio #01-00-19-05- Nov. 29, 2006
836/2006
La Camorra - Affectation Licence Oficio #01-00-19-04- Aug. 22, 2006
501/2006
Explosives Acquisition, Transport, Use Licence 05523 Feb. 6, 2008 (expires
Apr. 6, 2008)
Cyanide Storage at La Camorra (Bolivar State, Institute of No. IS 04 Mar. 10, 2008 (expires
Public Health) Sep. 10, 2008)
Minerven 1,2,3,4,8 & 9 Exploration Licence Oficio #01-00-19-05- Nov. 29, 2006
834/2006
La Camorra Operation Authorization (including Tailings Oficio #01-00-19-05- Aug. 22, 2006
Ponds 3 & 4) 501/2006
La Camorra Hazardous Waste Compliance Confirmation Oficio #01-00-19-04- June 22, 2007
559/2007
La Camorra Effluent Management Compliance Oficio #01-00-19-04- June 22, 2007
Confirmation 560/2007

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18.5.2 Environmental Management

Hecla acquired the La Camorra operation from Monarch in June, 1999. There was no impact
assessment completed by Hecla for La Camorra. However, the government permitting
required meetings to scope the impacts and mitigation for the mill and to develop the
Supervision Plan requirements. The meetings and correspondence were documented in a final
environmental ‘adaptation’ report in March, 2002. An environmental impact assessment was
completed for the Tailings Area (Pond) No. 4 expansion. The current permitting includes the
operation of the La Camorra mill and four tailings impoundments.

An environmental impact assessment was completed for the Isidora Mine in 2004. Mitigation
measures have been implemented as part of the Supervision Plan as a requirement for
government permitting.

Environmental management plans are required under the context of the Supervision Plan.
Quarterly monitoring reports were submitted to the government for Block B concessions, the
Isidora operations, and the La Camorra operations. Hecla’s environmental policy, permit list,
environmental management requirements for hazardous and non-hazardous materials (e.g.,
recyclables, scrap metal, solid wastes, used oil, hazardous wastes, et cetera), effluents,
emissions, environmental education, and monitoring results are included in these documents.

Social management plans were developed separately from the environmental Supervision
Plan. The Block B area around El Callao is typified by low levels of education, increasing
population, poorly located communities due to the lack of a housing development plan, poor
local organization, and poor qualifications for work. This has resulted in high unemployment,
low incomes, theft and poor quality of life. Hecla has a social responsibility mission and
program to support activities such as direct and indirect employment, support for institutions,
community development, health, culture and sports, and education programs. The social
development plan for the next 12 months is estimated to cost 1.9 million Bs.F.

In Micon’s opinion, the environmental impact assessments and social and environmental
management plans prepared by Hecla cover the environmental and social impacts and provide
the management tools necessary to meet this performance standard.

18.5.3 Labour and Working Conditions

Hecla’s policies promote good worker-management relationships and promote safe and
healthy working conditions. Worker safety measures are evident throughout the operations.

Venezuelan law and labour cooperatives require protection of workers. Venezuelan law also
makes it difficult for an employer to terminate employment or to move people to different
types of work in the operations. Therefore, it can be expected that the number of salaried
employees and termination costs will continue to be higher than would be typical for an
operation of this size.

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Unfortunately, theft and job action were prevalent in 2007 and continue through the time of
writing. In the underground operations at Isidora this has affected the safety of mine workers
(e.g., theft of headlamps and removal of underground pillars). According to the second
quarter 2007 operations report, Mina Isadora supervisors and management (both nationals and
expatriates) were expressing concern about intimidation from the workforce underground and
were implementing precautionary measures, such as not entering work areas without another
supervisor, not travelling alone underground, and requiring all equipment be shut down when
entering a heading. Retaining supervisory staff has been difficult under these conditions and
Hecla had implemented further precautionary measures. Security personnel and cameras
were added in third quarter 2007 to monitor underground works. There are tensions that arise
between workers and management due to seemingly unreasonable employment, legal and
collective agreement requirements in light of worker job-actions and theft. In Micon’s
opinion, Hecla endeavoured to operate in a manner that provides safe working conditions and
to foster worker-management relations within the Venezuelan political and legislative
framework. Labour issues are expected to continue to be a risk to the project and need to
continue to be extensively and carefully managed.

18.5.4 Pollution Prevention and Abatement

The compliance letters from the state government indicate that water quality in the tailings
pond and water storage pond is high in nitrates and nitrites, but the operation remains in
compliance because these waters are not discharged. The tailings ponds are a no discharge
facility. It was evident from the plant, aquatic (including sensitive tadpoles), and bird life
inhabiting the old tailings ponds, that contaminant levels are low enough to allow for natural
rehabilitation to usable habitat over a short period of time.

State government compliance letters state that all of Hecla’s operations were in compliance
with emissions, effluents, and hazardous waste management requirements.

Hazardous material storage areas (e.g., reagents, used oil, and fuel) have the appropriate
storage areas with containment (e.g., 110% capacity berms for tanks), impermeable
foundations, secure fencing, and safe handling provisions. Hydrocarbon storage tanks are
within containment berms. Hydrocarbon contamination was evident in a number of locations
around the fuelling station and machine maintenance area at La Camorra. Provision has been
included in the closure budget to remediate these soils. In Micon’s opinion, soil remediation
should be completed in the immediate future to avoid non-compliance. At the Isidora
operation, hydrocarbon spills are controlled by absorbent liners under all work and storage
areas where hydrocarbons are handled.

Acid rock drainage potential is low for the majority of material at the Isidora Mine. There
may be some higher sulphide material in the western portion of the Isidora Mine where there
are higher copper concentrations. This material will need to be tested and managed if this
area is mined in the future.

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In Micon’s opinion, current pollution control measures are in place to meet the objective of
pollution prevention. As noted above, however, soil contamination at La Camorra should be
cleaned up in the near future.

18.5.5 Community Health, Safety and Security

From May 2 to July 5, 2007, the community of Perú-Chile blockaded the road and stopped
operations at the Isidora Mine. An agreement was signed on July 4, 2007 between the
community and Hecla, and this resulted in a number of provisions to do with maximizing
local employment, developing training programs, and providing infrastructure assistance for
the community.

Hecla hired a new community relations coordinator, Oscar Cruz Moreno, in mid-2007. The
community relations team has improved the situation and is working to manage community
expectations and to work within a consistent, legal framework. This appears to be improving
the overall situation. However, these efforts need to continue. In Micon’s opinion, the
community relations coordinator is a key position for the Isidora operation.

One of the main problems is the transportation of ore through the main street going through
the community of Perú-Chile and a number of other small communities along the route to the
main highway. In addition, the degradation of the main highway, traffic and safety problems
are also likely to be attributed to large haul trucks. Local papers also indicate there is
community concern with degradation of the road from Isidora to La Camorra, in particular
around the El Callao area as a result of trucks from the Isidora Mine and those from another
mining company. In Micon’s opinion, the alternate transportation route that does not go
through the main communities should be developed as early as possible to improve
community safety and to reduce the risk of operation shut downs from protests. If ore haulage
continues along the existing route, it is recommended that the company look at options to
assist with funding highway maintenance and safety upgrades.

Another significant aspect that is a recurring theme in the operational reports is security.
Security measures are reported to be improving at the Isidora Mine including fencing, gated
entry, x-ray machines, turnstiles, and metal covers over ore trucks. While this is said to be
helping, it was evident that security is not uniformly applied. Two members of the public
were in the waste dump area collecting rocks while a loader was operating in the dump area,
and the layout of employee parking easily bypasses the security guards at the guards’
discretion. In Micon’s opinion, security requires further improvement and consistency in
implementation.

18.5.6 Land Acquisition and Involuntary Resettlement

The objectives for Performance Standard 5 are to avoid or minimize involuntary resettlement;
mitigate adverse effects from land acquisition; improve the livelihood and standards of living
of displaced persons; and improve the living conditions of displaced persons through housing
and security of tenure at resettlement sites.

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All necessary land acquisitions were complete for the Hecla operations. Additional land
acquisitions may be necessary for a new access road from Mina Isidora or for any expansions.

18.5.7 Biodiversity Conservation and Sustainable Natural Resource Management

The Hecla facilities are currently in operation. Permits require ongoing reclamation and then
rehabilitation at closure. These are the only legal requirements for natural resource
management. As such, there is a temporary loss of habitat in the operational areas. From
observations at the La Camorra operation, natural revegetation occurs relatively quickly.

In Micon’s opinion, other opportunities for biodiversity conservation could be explored such
as collaborating with government agencies to assist with conservation goals in the Imataca
Forest Reserve or to work with groups such as Conservation International on biodiversity
conservation programs in Venezuela.

18.5.8 Indigenous Peoples

There are few indigenous people in the communities surrounding the Hecla operations, and no
fully indigenous communities. Indigenous communities are generally located farther south on
the Rio Cuyuní. In Micon’s opinion, there are no indigenous rights requirements pertaining to
the Hecla operations that are needed outside of the existing community consultation
programs.

18.5.9 Cultural Heritage

Cultural heritage was considered to some extent in the impact assessments. No heritage
artifacts were identified and the current operations have completed the majority of land
disturbance activities. The majority of the population surrounding the operations are criolla
communities, which are relatively recent, transient, and tied to small mining activities. In
Micon’s opinion, cultural heritage resources have been already impacted in the area, but
should be further considered for any expansion activities in the future.

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 19.0 INTERPRETATION AND CONCLUSIONS

19.1 ISIDORA MINE OPERATIONS

In Micon’s view Hecla has used an appropriate methodology in producing the December 31,
2007 Mina Isidora Mineral Resource Estimate and has incorporated appropriate QA/QC
measures in the production of that estimate. Hecla appears to have operated its Venezuelan
projects in a professional and practical manner with competent technical and management
staff. Making a material improvement in overall project costs relative to Hecla’s efforts would
appear to be quite challenging. Another key factor in determining changes to the cut-off
grade going forward is likely to be the use of a gold price more reflective of those currently
being used in project evaluation studies.

Hecla’s reported Mineral Reserves at the Isidora Mine as of December 31, 2007 used a cut-off
grade of 17 g/t Au, based on then current operating costs, production and recovery rates and
assumed gold prices. Using these criteria, the reserve was sufficient for approximately 18
months of mine life (to mid-2009) at the planned production rate of about 350 t/d, or 122,000
t/y. Assuming the same production rate, the reserves remaining as of March, 2008 will be
sufficient for another 15 months. However, at the lower production rate of 200 t/d achieved
during the first quarter of 2008, the remaining reserves will last for approximately 27 months.

An in-house life-of-mine plan, at a cut-off grade of 10 g/t Au, upgrades a larger portion of the
Mineral Resources to reserves and potentially extends the mine life to 24 months.

Based on Micon’s site visit and review of the information provided by Hecla, the following is
concluded:

• The up-dip panel stoping method is appropriate for the deposit and can provide ore
extraction with a minimum amount of dilution. The method is a high cost, low
productivity mining method but has the flexibility to leave waste pillars if low grade
areas are encountered while mining, thus minimizing dilution.

• The method relies on having an experienced workforce of supervisors and miners and,
also, close control to ensure minimal over-break of waste material in the stopes. The
mine currently suffers from a lack of experienced miners and little supervision.

• The vein is easy to identify visually, there is a good hanging wall contact and stopes
appear to be mined with reasonable attention to minimizing the mining width and,
therefore, dilution.

• Ground conditions observed in the mine were generally good, with little support
required in the development headings. In the stopes, local support is required.

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 • The Isidora Mine is currently producing at a rate of about 200 to 250 t/d. Output is
constrained principally by the lack of working faces and experienced miners. There is
also a reported shortage of underground haulage trucks.

• Based on the most recent estimate of reserves (March, 2008) at a 17 g/t Au cut-off
grade and $570/oz gold price there are sufficient reserves remaining to support
operations for approximately 15 months at planned production rates of 350 t/d, and up
to 27 months at the current 200 t/d production rate.

• Hecla’s LOM cut-off grade of 10 g/t Au appears to be reasonable based on using a

higher gold price of $750/oz and reduced operating costs but only for blocks that
require no further mine development. Mining developed blocks of reserves at this cut-
off grade will extend the life to approximately the first quarter of 2010 at the proposed
mining rate of 350 t/d, or to late 2011 at the current rate of 200 t/d.

• The use of the higher gold price is justified in the short term. In addition, there may
be possible overall savings in operating costs if haulage distances to the plant are
reduced and overhead and head office costs streamlined. Under such scenarios, it may
be possible to reduce the reserve cut-off grade to 11 to 12 g/t Au for all blocks.

• The potential to reduce mining costs over the short term is considered limited since the
present lack of experienced miners and supervisory staff poses a restriction on the
number of new working areas that may be developed. Further study will be needed in
order to assess possible production rates and the requirements for additional
manpower and equipment.

• Among the potential opportunities resulting from the acquisition by Rusoro of the
Hecla properties is the possibility of processing ore from Isidora at the Choco 10
operation of Rusoro that is located approximately 10 km west of the Isidora Mine.
Further study will be required in order to assess the feasibility of this option.

Scott Wilson RPA has prepared an estimate of mineral resources for the Twin Shear Zone,
effective June, 2008, as shown in Table 19.1.

Scott Wilson RPA believes there is excellent potential to expand the Twin Shear resource,
particularly in the vicinity of Zone 1 Lenses 2 and 3. Scott Wilson RPA’s view is that Twin
Shear is still at an early exploration stage and that more drilling is needed to better define the
various styles of mineralization and to develop appropriate models to guide future
interpretation and resource estimation work. There are clearly some parts of the shear zones
that are more prospective than others. When more drilling data become available, Scott
Wilson RPA recommends developing a predictive structural model that identifies favourable
dilation zones and plunge directions that are likely associated with specific types of shear
zone flexures, kinks and cross-structures. This would help future targeting and modelling
work.

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 Table 19.1
Mineral Resource Estimate for Twin Shear Zone at June, 2008

Zone Tonnes Au Grade Cap Ounces Gold

(x1000) (g/t) 50 g/t Au
1 1,127 14.7 12.4 449,800
2 42 22.0 17.6 23,600
4 10 8.0 8.0 2,700
5 16 11.3 11.3 5,800
Total 1,195 14.9 12.5 481,900
1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The
estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation,
socio-political, marketing, or other relevant issues.
2. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has
been insufficient exploration to define these inferred resources as an indicated or measured mineral resource
and it is uncertain if further exploration will result in upgrading them to an indicated or measured category.

19.2 LA CAMORRA MINE AND PLANT

La Camorra mine is now closed and there is no likelihood that it can be economically
reopened. Most static equipment has been withdrawn from the mine and the pumps turned
off. The mine is flooding at an estimated rate of 1.0 vertical metres per day. Consequently
there are no remaining economically extractable reserves at La Camorra.

The mine surface infrastructure is still in place but is not being well-maintained. Most mobile
equipment observed on surface is in poor condition. Venezuelan regulations require the
equipment to remain on the concession and, therefore, little of it can be transferred to the
Isidora Mine.

The La Camorra processing plant is well operated, is mechanically sound and clean, and
achieves good recoveries with the high grade Isidora ore. Ore mined from Isidora Mine is
trucked 120 km to the La Camorra process plant.

There is insufficient production from the Isidora Mine and other ore sources to enable the
plant to operate continuously over a 24 hour, seven day per week period. Work is underway
to supplement the feed by reprocessing tailings and, thereby, to achieve continuous operation.
This will improve operational efficiency and also reduce high wear and potential damage to
the existing equipment.

Plant operations will benefit from the following:

• Reduction in double handling of Isidora ore. This will be difficult as long as ore needs
to be transported in truck convoys.

• Improvements to carbon column operation by standardizing equipment sizes.

85
 • Improvements in processing operations to reduce losses of carbon fines.

19.2.1 Future Plant Options

Micon considers there are potential opportunities resulting from the acquisition by Rusoro of
the Hecla properties including the processing of ore from Isidora at the Choco 10 operation of
Rusoro that is located approximately 10 km west of the Isidora Mine.

However, it should be noted that this plant is not designed for treating high grade and only
hard ore (work index 13-15 kWh/t). A detailed examination of the plant capabilities will need
to be carried out to determine the potential to treat ore from Isidora. It is suggested also that
testwork be carried out to confirm the optimum treatment parameters. It is possible that a
second milling plant in the Choco 10 location could be constructed and, with modifications,
the ground slurry be treated through an expanded leach circuit.

The San Rafael/El Placer (SREP) property of Rusoro is located near the La Camorra mill. If
further work demonstrates that a mineral resource with reasonable prospect of economic
extraction is present at SREP, then the proximity of the mill at La Camorra may be a positive
factor in project viability.

Further study is needed to evaluate these options.

19.3 CONCLUSIONS ON ENVIRONMENTAL AND SOCIAL ASPECTS

There were no social or environmental fatal flaws identified, although community relations,
security, and labour relations need to be extensively managed. Human and financial resources
need to be committed to these areas to manage the risks to operational losses or shutdown
from these factors.

During the review a number of items were identified as areas for consideration and
improvement as summarized below:

• Theft and labour issues are expected to continue to be a risk to the project and security
issues need continued extensive and careful management with a commitment of
human and financial resources.

• Soil hydrocarbon contamination at La Camorra should be cleaned up in the near future

rather than waiting for closure.

• The community relations coordinator is a key position for the Isidora operation to help
manage the risk of mine closure from community blockades.

• The alternate transportation route from Isidora that does not go through the main
communities should be developed as early as possible to improve community safety
and to reduce the risk of operation shut downs due to protests. If ore haulage

86
continues along this route, it is recommended that the company look at options to
assist with funding highway maintenance and safety upgrades.

87
 20.0 RECOMMENDATIONS

20.1 RECOMMENDATIONS REGARDING THE ISIDORA MINE AND LA

CAMORRA PROPERTIES

Work is recommended to optimize the existing operation in terms of cut-off grade, reducing
double handling of material, and solving equipment and labour issues to maximize income for
the remainder of the mine life. Further study will be required to determine if exploration
targets within at Chile East and Canaíma stand any potential of becoming economic Mineral
Resources.

Micon recommends that options and opportunities be investigated to coordinate Rusoro’s

various reserves and processing operations at Isidora, La Camorra, San Rafael/El Placer,
Choco 10, and Increible 6.

It is Micon’s opinion that the exploration program propose by Rusoro for the Isidora deposit
is warranted and the budget of $1.5 million proposed by Rusoro is reasonable. The details of
the budget are shown in Table 20.1.

Table 20.1
Isidora Mine Exploration Budget

Description Amount
($)
Diamond drilling 1,100,000
Assaying 50,000
Geology and support 125,000
Metallurgical testwork 30,000
Environmental and permitting work 25,000
Updated Resource Model 25,000
Subtotal 1,355,000
Plus contingency 145,000
Grand Total 1,500,000

20.2 RECOMMENDATIONS REGARDING TWIN SHEAR

It is Scott Wilson RPA’s opinion that the exploration work proposed by Rusoro is warranted
and that the proposed budget of approximately $1.6 million is reasonable. The main work
items are listed in Table 20.2.

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 Table 20.2
Twin Shear Exploration Budget

Description Amount
($)
Diamond drilling 1,100,000
Assaying 50,000
Geology and support 125,000
Metallurgical testwork 30,000
Environmental and permitting work 50,000
Preliminary economic assessment 100,000
Subtotal 1,455,000
Plus 10% contingency 145,000
Grand Total 1,600,000

It is recommended that the proposed program be implemented by Rusoro.

89
 21.0 REFERENCES

Micon International Limited, Due Diligence Report on the Block B and El Dorado
Concessions of Hecla Mining Company situated in Bolivar State, Venezuela, dated April,
2008 by V. Bryant, J. Leader, D. Laudrum, J. Hill.

Minera Hecla, 2006a, Twin Shear Metallurgical Summary, Internal Memorandum, dated June
12, 2006 from D.R. Dean.

Minera Hecla, 2006b, QA/QC Report, Twin-Conductora Shear Project, Block “B” - El Callao,
Estado Bolívar – Venezuela, dated March, 2006 by L. Millo and A. Cecchi.

Mineral Hecla, 2006c, Hecla Venezuela Overview, dated 2006 by Mike Callahan.

Minera Hecla, 2007a, Resource Modelling Parameters, Mina Isidora Mine, prepared for
Minera Hecla Venezolana, dated August 8, 2007, John D. Taylor.

Mineral Hecla, 2007b, Report of Resources and Reserves as of 31st December, 2007 Isidora
Mine, Estado Bolivar, Venezuela, by M. Balucho, D. Duffy, E. Ceballos, J. Taylor.

Scott Wilson RPA, 2007a, Mineral Reserve Audit of the Isidora Gold Mine, El Callao Mining
District, Bolivar State, Venezuela prepared for Mineral Hecla Venezolana, C.A. dated
October 10, 2007 by L. Evans and D. Bergen.

Scott Wilson RPA, 2007b, Twin Shear Gold Deposit - Underground Potential, El Callao
Mining District Bolivar State, Venezuela, prepared for Minera Hecla Venezolana, C.A., dated
November 1, 2007 by L. Evans and D. Bergen.

Terra Mineralogical Services, 2005, Characterization of Gold Ore From the Twin Shear
Deposit, El Callao, Venezuela, dated November 5, 2005 by G. DiPrisco.

Terra Mineralogical Services, 2005, Petrography Description of Country Rocks from Twin
Shear Deposit, Block B, El Callao, Venezuela, dated June 27, 2005 by G. DiPrisco.

Terra Mineralogical Services, 2005, Picture Gold Twin Shear Samples dated March 15, 2005
by G. DiPrisco.

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 22.0 SIGNATURE PAGE

This report titled “Technical Report on the Mining and Processing Operations of Hecla
Mining Company, Estado Bolivar, Venezuela”, with an effective date of August 1, 2008, was
prepared for Rusoro Mining Ltd. by the following authors:

“Robert J. Leader” Date: August 1, 2008

Robert J. Leader, P.Eng.

Senior Mining Engineer
Micon International Limited

“Dave Laudrum” Date: August 1, 2008

Dave Laudrum, P. Geo.

Senior Associate Geologist
Micon International Limited

“Ian R. Ward” Date: August 1, 2008

Ian Ward, P. Eng.

Principal Metallurgist
Micon International Limited

“Luke Evans” Date: August 1, 2008

Luke Evans, P. Eng.

Consulting Geological Engineer
Scott Wilson Roscoe Postle Associates Inc.

91
 CERTIFICATE OF ROBERT J. LEADER

As a co-author of this report entitled “Technical Report on the Mining and Processing Operations of Hecla
Mining Company, Estado Bolivar, Venezuela”, with an effective date of August 1, 2008, I, Robert James
Leader do hereby certify that:

1) I am employed by, and carried out this assignment for, Micon International Limited, Suite 205, 700
West Pender Street, Vancouver, BC, V6C 1G8, tel. (604) 647-6463, fax (604) 647-6455.

2) I hold the following academic qualifications:

ACSM (First Class) Camborne School of Mines - 1974

M.Sc. (Engineering) Queens University, Kingston, Ontario - 1981

3) I am a registered Professional Engineer with the Association of Professional Engineers and

Geoscientists of British Columbia (Membership #13896), I am a member in good standing of other
technical associations and societies, including:

• Member of the Canadian Institute of Mining and Metallurgy.

• Member of the Institute of Materials, Minerals and Mining, UK.

4) I have worked as a mining engineer in the minerals industry for 32 years; My work experience includes
3 years working as a mining engineer on a base metal underground mine, and over 15 years as a senior
mining engineer and consultant carrying out reserves estimates and mine planning and design for
diverse mining projects both underground and open pit;

5) I have read National Instrument NI 43-101 and, by reason of education, experience and professional
registration; I fulfill the requirements of a Qualified Person as defined in NI 43-101. This technical
report has been prepared in compliance with NI 43-101.

6) In this report I am responsible for preparation of parts of Section 1, all of Section 2, Section 3, Section
4, Section 17.3, Sections 18.1, 18.2, 18.4, 18.5, and parts of Sections 19, 20 and 21.
7) I visited the site and reviewed the operation from March 12 to 14, 2008;

8) I have had no prior involvement with the mineral properties in question;

9) As of the date of this certificate to the best of my knowledge, information and belief, the technical
report contains all scientific and technical information that is required to be disclosed to make this
report not misleading;
10) I am independent of the parties involved in the transaction for which this report is required, other than
providing consulting services;

Dated this 1st of August, 2008

“Robert J. Leader”

Robert J. Leader, M.Sc., P.Eng.

92
 CERTIFICATE OF DAVE LAUDRUM

As a co-author of this report entitled “Technical Report on the Mining and Processing Operations of Hecla Mining Company,
Estado Bolivar, Venezuela”, with an effective date of August 1, 2008, I, Dave Laudrum, a Senior Geologist with Ashloo
Consultants Ltd, 26–1200 Edgewater Drive, Squamish, British Columbia, do hereby certify that:

1) I carried out this assignment as a Senior Associate Geologist of Micon International Limited, 205-700 West Pender
St., Vancouver, BC, Canada.

2) I hold the following academic qualification:

B.Sc, Specialization in Geology, Lakehead University, 1987.

3) I am a registered Professional Geoscientist with the Association of Professional Engineers and Geoscientists of
British Columbia; as well, I am a member in good standing of other technical associations and societies, including:

• Fellow of the Geological Association of Canada.

• Member of the Society of Economic Geologists.
• Member of the Canadian Institute of Mining and Metallurgy.
• Member of the Prospectors and Developers Association of Canada.
• Member of the Association for Mineral Exploration BC.

4) I have worked in the minerals industry for over 20 years on a variety of mine production and exploration projects
with Junior and Senior companies and as a Consultant. I have held senior management roles ranging from Project
Manager, to Senior Mine Geologist to VP Project Development, to President and Director of a public mining
exploration company. My experience includes mineral exploration, advanced exploration and mine development,
underground mine production, mineral resource estimation, Pre-Feasibility and Feasibility Studies, permitting and
environmental compliance. I have managed or consulted on precious and base metal projects in a variety of
geological, and business, environments in North America, Central and South America, the Caribbean, Asia, and
Europe.

5) I have read National Instrument 43-101 and, by reason of education, experience and professional registration, I
fulfill the requirements of a Qualified Person as defined in NI 43-101. This technical report has been prepared in
compliance with NI 43-101.

6) I this report I am responsible for preparation of parts of Section 1, and all of Sections 5, 6, 7, 8, 9, 10,11,
12,13, 14, 15, the Isidora Mine Mineral Resource Estimate in Section 17.1, and parts of Sections 19, 20 and 21.

7) I visited the Isidora mine site on March 17th and 18th, 2008.

8) I have had no prior involvement with the mineral property in question.

9) As of the date of this certificate, to the best of my knowledge, information and belief, the technical report contains
all scientific and technical information that is required to be disclosed to make the technical report not misleading.

10) I am independent of the parties involved in the transaction for which this report is required, other than providing
consulting services.

Dated this 1st day of August, 2008

“Dave Laudrum”

Dave Laudrum, P.Geo.

93
 CERTIFICATE OF IAN R. WARD

As a co-author of this report entitled “Technical Report on the Mining and Processing Operations of Hecla
Mining Company, Estado Bolivar, Venezuela”, with an effective date of August 1, 2008, I, Ian R. Ward do
hereby certify that:

1). I am employed as the President and Principal Metallurgist by, and carried out this assignment for,
Micon International Limited, Suite 900, 390 Bay Street, Toronto, Ontario M5H 2Y2, tel (416) 362-5135
fax (416)362-5763.

2) I hold the following academic qualifications:

B.Sc. (Hons) Minerals Engineering, The University of Birmingham, U.K. 1968

3). I am a registered Professional Engineer of Ontario (membership number 48869010); as well, I am a

member in good standing of the Canadian Institute of Mining, Metallurgy and Petroleum;

4) I have worked as a metallurgist in the minerals industry and in consulting engineering companies for
the last 39 years. My work experience includes processing plant operation, the management of technical
and feasibility studies, management of metallurgical testwork programs and the design of numerous
gold and base metal processing plants;

5) I have read NI 43-101 and, by reason of education, experience and professional registration; I fulfill the
requirements of a Qualified Person as defined in NI 43-101. This technical report has been prepared in
compliance with NI 43-101.

6) In this report I am responsible for parts of Sections 1 and 16.2, all of Section 18.3, and parts of Sections
19 and 20 of this report;

7) I have visited the property which is the subject of this report in 1997 and 2003;

8). I have had no prior involvement with the property or the issuer other than providing consulting service;

9) As of the date of this certificate, to the best of my knowledge, information and belief, the technical
report contains all scientific and technical information that is required to be disclosed to make the
technical report not misleading.

10) I am independent of the parties involved in the transaction for which this report is required, other than
providing consulting services;

Dated this 1st day of August, 2008

“Ian R. Ward”

Ian R. Ward P.Eng.

Micon International Limited

94
 CERTIFICATE OF LUKE EVANS

As a co-author of this report entitled “Technical Report on the Mining and Processing Operations of Hecla Mining Company,
Estado Bolivar, Venezuela”, with an effective date of August 1, 2008, report, I, Luke Evans, M.Sc., P.Eng do hereby certify
that:

1. I am a Consulting Geological Engineer with Scott Wilson Roscoe Postle Associates Inc. of Suite 501, 55 University Ave
Toronto, ON, M5J 2H7.

2. I am a graduate of University of Toronto, Ontario, Canada, in 1983 with a Bachelor of Science (Applied) degree in
Geological Engineering and Queen’s University, Kingston, Ontario, Canada, in 1986 with a Master of Science degree in
Mineral Exploration.

3. I am registered as a Professional Engineer in the Province of Ontario (Reg.# 90345885).

4. I have worked as a professional geologist for a total of 25 years since my graduation. My relevant experience for the
purpose of the Technical Report is:

• Consulting Geological Engineer specializing in resource and reserve estimates, audits, technical assistance,
and training since 1995.
• Review and report as a consultant on numerous exploration and mining projects around the world for due
diligence and regulatory requirements.
• Senior Project Geologist in charge of exploration programs at several gold and base metal mines in Quebec.
• Project Geologist at a gold mine in Quebec in charge of exploration and definition drilling.
• Project Geologist in charge of sampling and mapping programs at gold and base metal properties in Ontario,
Canada.

5. I have read the definition of "qualified person" set out in National Instrument 43-101 ("NI43-101") and certify that by
reason of my education, affiliation with a professional association (as defined in NI43-101) and past relevant work
experience, I fulfill the requirements to be a "qualified person" for the purposes of NI43-101.

6. In this report I am responsible for preparation of parts of Section 1, all of Sections 11.2, 12.2, 16.2, the Twin Shear
Mineral Resource Estimate in Section 17.2 and Section 20.2.

7. I visited the Isidora Mine and Twin Shear property from September 10 to 14, 2007.

8. I have had no prior involvement with the property that is the subject of the Technical Report.

9. As of the date of this certificate to the best of my knowledge, information, and belief, the Technical Report contains all
scientific and technical information that is required to be disclosed to make the technical report not misleading.

10. I am independent of the Issuer applying the test set out in Section 1.4 of National Instrument 43-101.

11. I have read National Instrument 43-101, and the Technical Report has been prepared in compliance with National
Instrument 43-101 and Form 43-101F1.

Dated this 1st day of August, 2008

“Luke Evans”

Luke Evans, M.Sc., P.Eng.

Consulting Geological Engineer
Supervisor, Resource Estimation

95
APPENDIX 1

96
 APPENDIX 1
SIGNIFICANT INTERCEPTS ON BLOCK B TARGETS OUTSIDE THE ISIDORA
MINE RESOURCE AREA

PANAMA - SANTA RITA - A LODE

PANAMA VEIN

From To Width True W

Hole-ID (m) (m) Au (g/t) (m) (m)
PAH001 218.01 218.42 363.91 0.41 0.38
PAH002 267.86 268.57 10.29 0.71 0.70
PAH004 299.82 300.51 2.48 0.69 0.68
PAH005 354.56 355.25 5.07 0.69 0.66
PAH006 300.29 300.63 NSV 0.34 0.33
PAH007 354.89 355.38 21.92 0.49 0.48
PAH008 155.83 156.97 12.43 1.14 1.13
SRH002 214.96 216.02 8.65 1.06 0.46
SRH005 321.13 321.67 NSV 0.54 0.17
SRH006 178.87 179.63 NSV 0.76 0.39

SANTA RITA VEIN

From To Width True W

Hole-ID (m) (m) Au (g/t) (m) (m)
PAH002 205.55 206.70 NSV 1.15 0.62
PAH004 377.33 379.71 NSV 2.38 0.98
PAH005 217.75 218.12 12.18 0.37 0.22
PAH006 244.64 245.67 13.85 0.30 0.16
PAH007 181.85 182.75 2.00 0.90 0.57
SRH001 112.96 113.12 NSV 0.16 0.16
SRH002 191.31 192.52 16.91 1.21 1.20
SRH003 195.51 195.86 3.04 0.35 0.34
SRH004 115.91 116.71 NSV 0.80 0.78
SRH005 303.73 304.10 NSV 0.37 0.36
SRH006 322.63 323.69 NSV 1.06 0.94

"A" Lode

From To Width True W

Hole-ID (m) (m) Au (g/t) (m) (m)
SJH005 301.22 302.75 9.88 1.53 1.32
SJH006 287.69 288.22 25.86 0.53 0.39
SJH007 240.08 242.88 0.80 2.80 2.12
SJH008 296.51 297.23 14.24 0.72 0.54

97
SJH013 295.96 296.55 5.16 0.59 0.41

TWIN/CONDUCTORA/SAN JORGE
- CONDUCTORA SHEAR
TWIN CONDUCTORA SHEAR - QUARTZ VEINING STYLE
MINERALIZATION
From To Width True W
Hole-ID (m) (m) Au (g/t) (m) (m)
LAH005 246.52 251.76 5.58 5.24 5.11
LAH007 288.08 289.51 21.24 1.43 1.39
LAH008 146.97 153.13 13.68 6.16 5.61
LAH009 276.72 280.18 1.64 3.46 3.39
LAH010 336.06 337.95 0.23 1.90 1.39
LAH011 341.72 347.78 16.80 6.06 5.48
LAH012 368.23 370.68 6.04 2.46 1.75
LAH013 316.43 318.01 13.20 1.59 1.39
LAH014 371.36 374.55 6.19 3.19 1.82
LAH015 237.94 241.00 2.04 3.06 2.76
LAH016 316.90 318.50 1.34 1.60 1.53
LAH017 280.92 286.08 0.89 5.01 4.58
LAH019 211.96 218.20 1.37 6.24 5.41
LAH020 352.50 354.22 6.34 1.73 1.41
LAH021 243.45 246.16 6.47 2.71 2.48
LAH022 287.11 290.14 0.97 3.03 2.25
LAH023 257.14 262.63 18.09 5.39 5.30
LAH024 310.10 311.50 9.51 1.41 1.34
LAH025 314.62 317.29 2.65 2.68 1.73
LAH027 327.27 329.13 10.86 1.87 1.34
LAH028 250.79 253.31 3.66 2.53 1.83
LAH029 433.50 435.89 9.62 2.39 2.21
LAH030 340.20 342.30 1.17 2.10 2.09
LAH031 275.11 276.62 11.64 1.51 1.44
LAH032 192.38 194.35 16.00 1.97 1.79
LAH033 185.36 188.91 3.06 3.55 3.36
LAH034 132.12 138.48 5.12 6.36 5.69
LAH035 186.18 188.40 1.45 2.22 1.85
LAH036 355.49 358.04 3.01 2.55 2.43
LAH037 223.88 230.00 2.26 6.12 4.51
LAH038 255.37 256.83 4.78 1.46 1.44
LAH040 243.27 245.21 1.96 1.94 1.64
LAH041 522.22 523.60 2.57 1.39 1.36

98
LAH042 579.56 581.72 2.56 2.16 2.02
LAH043 494.54 496.52 4.92 1.98 1.81
SJH008 115.40 117.00 3.96 1.60 1.50
SJH012 84.02 86.04 5.10 2.02 1.88
SJH016 188.43 193.28 3.12 4.85 3.47
SJH017 137.51 141.95 18.87 4.44 4.02
SJH018 346.56 352.04 3.82 5.48 5.31
CEH005A 563.90 571.46 2.71 7.56 6.65
CEH006 698.62 702.20 2.00 3.58
HCH114 193.55 197.84 9.25 4.29 2.60
HCH114 200.72 205.97 11.08 5.25 3.81
HCH116 170.46 172.02 6.73 1.56 1.41
HCH118 229.93 232.00 10.57 2.07 1.49
HCH120 210.13 211.96 16.17 1.83 1.51
HCH122 244.27 248.23 0.21 3.96
HCH123 237.28 239.85 2.16 2.57 1.81
HCH124 370.96 373.80 0.21 2.84 1.64
HCH125 123.84 125.39 0.55 1.55 1.44
HCH126 216.14 217.94 4.27 1.80 1.51
HCH127 292.14 294.18 0.14 2.04 1.60
HCH128 444.73 446.81 1.16 2.08 1.64
HCH129 372.43 376.46 0.12 4.03 3.33

SAN JORGE

From To Width True W

Hole-ID (m) (m) Au (g/t) (m) (m)
SJH001 196.02 197.54 1.66 1.52 1.47
SJH002 not intercepted
SJH003 not intercepted
SJH004

CONDUCTORA SHEAR

From To Width True W

Hole-ID (m) (m) Au (g/t) (m) (m)
SJH002 78.55 80.76 7.40 2.21
SJH003 67.90 68.23 107.21 0.33
SJH004 65.65 72.35 2.41 6.70
SJH005 67.50 67.90 47.20 0.40
SJH007 36.75 39.00 11.44 2.25 2.13
SJH008 115.40 117.00 3.96 1.60 1.50
SJH009 131.82 138.76 2.61 6.94 5.01
" 141.96 146.76 12.89 4.80 1.64
SJH010 105.97 115.03 1.83 9.06

99
 " 123.00 126.25 1.65 3.25 2.10
SJH011 83.75 99.40 1.59 15.65
SJH012 84.02 86.04 5.10 2.02 1.88
SJH014 143.90 154.70 0.98 10.80
SJH016 195.9 198.71 4.57 2.81 2.01
" 188.43 193.28 3.12 4.85 3.47
SJH018 346.56 352.04 3.80 5.48 5.31
SJH019 236.73 239.88 3.66 3.15 2.91
SJH020 279.10 280.97 1.99 1.87

EUREKA
From To Width True W
Hole-ID (m) (m) Au (g/t) (m) (m)
EUH02 36.51 46.10 3.34 9.59 7.87
36.51 41.54 2.68 5.03 4.12
43.90 46.10 8.19 2.20 1.81
EUH03 43.90 54.00 4.08 10.10 8.64
43.90 46.89 5.97 2.99 2.56
49.27 54.00 4.72 4.73 4.05
EUH04 114.50 116.46 2.78 1.96 1.75

SAN ANTONIO
From To Width True W
Hole-ID (m) (m) Au (g/t) (m) (m)
SAH001 358.55 358.83 79.70 0.28 0.21
SAH002 225.20 226.37 1.41 1.17 1.05
Footwall
From To Width True W
Hole-ID (m) (m) Au (g/t) (m) (m)
SAH001 383.68 384.38 2.14 0.70 0.60
SAH002 298.50 302.72 0.92 4.22 4.14

CHILE EAST - (Liam Shear)

From To Width True W

Hole-ID (m) (m) Au (g/t) (m) (m)
CEH001 392.58 398.65 0.22 6.07
CEH001A 392.6 396.21 1.37 3.61
CEH002 411.05 413.35 9.18 2.3 2.24
CEH003 457.78 460.32 3.33 2.54 2.44
CEH004 386.76 388.33 5.56 1.57 1.44

100
CEH005A 513.04 517.15 0.19 4.11
CEH006 617.79 623.9 2.45 6.11
HCH114 163.6 166.84 9.61 3.24 2.16
HCH116 153.37 155.38 13.66 2.01 1.86
HCH118 183.72 185.17 1.34 1.45 1.34
HCH120 166.89 170.99 4.8 4.1
HCH120 174.2 175.68 6.1 1.48 1.31
HCH122 185.76 194.69 13.94 8.93 6.73
HCH123 195.48 197.84 0.05 2.36 1.81
HCH124 303.12 305.26 9.92 2.14 1.46
HCH125 106.25 111.16 0.52 4.91
HCH127 259.81 261.36 1.57 1.56 1.36
HCH128 384.75 389.6 14.55 4.85
HCH129 334.27 339.1 8.17 4.83 4.3

CHILE EAST - (Chile Shear)

From To Width True W

Hole-ID (m) (m) Au (g/t) (m) (m)
CEH002 455.5 464.58 1.02 9.08 8.47
CEH003 523.2 526.43 1.58 3.23
CEH004 414.67 417.14 6.18 2.47 2.17
CEH005A 563.9 571.46 2.71 7.56 6.65
CEH006 698.62 702.2 2 3.58
HCH114 193.55 197.84 9.25 4.29 2.6
HCH114 200.72 205.97 11.08 5.25 3.81
HCH116 170.46 172.02 6.73 1.56 1.41
HCH118 229.93 232 10.57 2.07 1.49
HCH120 210.13 211.96 16.17 1.83 1.51
HCH122 244.27 248.23 0.21 3.96
HCH123 237.28 239.85 2.16 2.57 1.81
HCH124 370.96 373.8 0.21 2.84 1.64
HCH125 123.84 125.39 0.55 1.55 1.44
HCH126 216.14 217.94 4.27 1.8 1.51
HCH127 292.14 294.18 0.14 2.04 1.6
HCH128 444.73 446.81 1.16 2.08 1.64
HCH129 372.43 376.46 0.12 4.03 3.33

101