El Rayo Project

Bulk Tonnage Silver-Gold
10,036 hectares - 100% title interest
3D image of the Las Bolas Deposit

Click here for PDF: PDAC Presentation by Steve Priesmeyer
Video version with audio: PDAC Presentation by Steve Priesmeyer

Click here for PDF: Updated NI 43-101 EL RAYO PROJECT REPORT

Click here for PDF: Location, History and Geology

The El Rayo Project, located south of the town of Guachinango in Jalisco, Mexico is the site of some of the earliest silver mining in Mexico.  The Project hosts numerous mineralized structures where silver, gold and lead have been extracted from 16 known underground mines, beginning in the mid-1500’s.

Soltoro acquired the Project in 2005 and began drilling in 2007.  From 2007 through 2010, Soltoro’s primary focus was on the Las Bolas, El Rayo and Highway structures, where much of Soltoro’s current silver resource is located and, silver and gold mineralization have been traced over an aggregate distance of five kilometers.  During this time, general prospecting was also performed resulting in the identification of several additional exploration targets.

In 2011, Soltoro focused much of its effort toward defining a resource on the recently discovered high-grade La Soledad structure.  In late 2011, concession-scale soil sampling and ground magnetics programs began.  In 2012, Soltoro drilling efforts were focused on defining the strike extensions of the known mineralization.  Soil geochemistry, ground magnetics and geologic mapping continued throughout the year.

In December of 2011, Soltoro released an updated NI 43-101-compliant resource estimate, completed by Roscoe Postle Associates Inc.  The resource estimate includes an updated estimate of the Las Bolas structure and the Highway Zone as well as the initial resource for the La Soledad structure.  No work was done in the El Rayo gold zone so the El Rayo gold resource remains unchanged from the resource completed in June of 2011.  The 2011 drilling, coupled with higher metallurgical recoveries for La Soledad, resulted in roughly a 25% increase in the measured and indicated silver resource at El Rayo. The results of the current resource are reported below. The 2012 NI 43-101 Technical Report is available on SEDAR.

Las Bolas & Highway Zone & Soledad Deposit Silver Resources
Deposit Area Cut-off grade (g/t Ag) Tonnes
(millions)		 Average Grade
(g/t Ag) 		Contained ounces of Silver
Measured Mineral Resources
Las Bolas 20 6.10 63.44 12,400,000
Indicated Mineral Resources
Las Bolas 20 29.30 49.49 46,600,000
Highway Zone 20 2.90 57.39 5,400,000
La Soledad 20 3.90 104.20 13,000,000
Total Measured and Indicated Resources
Las Bolas, Highway Zone & La Soledad 20 42.20 57.11 77,400,000
Inferred Mineral Resources
Highway Zone 20 0.21 36.34 245,000
La Soledad 20 0.37 82.15 935,000
Total Inferred Mineral Resources
Highway Zone & La Soledad 20 0.58 65.51 1,180,000

Notes:
1. CIM definitions were followed for Mineral Resources.
2. Mineral Resources were estimated using prices of US$27/oz Ag. No credits are assigned for other metals.
3. Metallurgical recovery is assumed to be 72% of the contained silver for the Las Bolas deposit and Highway Zone, and 80% for Soledad.
4. High silver values are cut to 400 g/t Ag.
5. Mineral Resources were estimated using a pit discard cut-off grade of 20.8 g/t Ag for the Bolas and Highway deposits,
and 18.72 g/t Ag for La Soledad deposit.
6. The numbers for tonnage, average grade and contained ounces of silver are rounded figures.
7. The Las Bolas, La Soleded and Highway Zone deposits are modeled at a minimum of 5 m vertical thickness of mineralization.
8. The above resources are constrained by a Whittle optimized pit shell and constitute 87% of total resources within a conceptual open pit for the Bolas Structure, 89% of total resources for La Soledad Structure, and 64% for the Highway Zone.

Las Bolas & Highway Zone primary silver resources:  The Las Bolas deposit consists of a tabular body of a silver-bearing specularite-quartz vein-breccia striking to the northeast and dipping to the northwest at 50 to 60 degrees. The mineralized vein-breccia is up to 40 metres thick with silver-bearing specularite-quartz stockwork occurring in the hanging wall. The vein breccia has been drill-tested for more than 300 metres down dip from the surface and for over 1,000 metres along strike and shows little variation along strike or at depth. The Highway Zone is similar in composition and structural attitude to Las Bolas, and may be the faulted extension of the Las Bolas mineralized zone, which has been offset over 700 m to the east along a west-northwest-trending fault.

Recent drilling at depth in the Las Bolas zone encountered a sulphide-rich zone near the base of the typically sulphide-poor vein-breccia and stockwork zone. This interval averaged 278 g/t Ag and 11.5% Pb over 11.2 m drilled width and was distinctly rich in galena and poor in specularite. The relationship of this mineralization to the typical sulphide-poor, specularite-bearing vein-breccia and stockwork mineralization is currently being investigated.

La Soledad Area:In early 2011, Soltoro completed a surface trenching and sampling program followed by an initial four hole diamond drilling program to test the La Soledad structure. The results of this drilling were extremely encouraging and an additional drill rig was added to the program, such that 50 diamond drill holes totaling 8,968 metres were completed in 2011. With this drilling, Soltoro defined two mineralized zones within La Soledad structure: the Central Zone measuring 225 metres in length and the Western Zone measuring 150 m in length. The Central Zone has been drill tested to a depth of 250 metres below the surface. The Western Zone has been drill tested to a depth of approximately 100 metres below the surface and is open at depth.

At La Soledad, mineralization is hosted within a sequence of intermediate to mafic volcanic rocks consisting of massive flows and interbedded fragmental units. The mineralization is associated with hematite-altered structures in association with fine-grained silica as part of wider intervals of highly sheared and brecciated volcanic wall rocks. The hematite occurs as fine pigment throughout the host rock and also as compact particles and aggregates of specularite in veinlets. Sulphides are usually intergrown with each other and/or with the other constituents such as specularite. The sulphides consist of pyrite, sphalerite, galena with minor amounts of chalcopyrite and tetrahedrite-tennantite and traces of bornite, covellite and chalcocite.

In 2012, Soltoro focused on the strike extensions of the La Soledad deposit. The Western Zone is complexly faulted and offset some 100 m to the north; the intersections are high-grade, but narrow, probably due to a change in the host rock to a less favorable lithology. Potential may exist further along strike to the west if the structure once again enters into a favorable lithology.

Catarina Mine Area: The southern portion of the  El Rayo structure hosts the Catarina mine, where high-grade silver ore shoots were mined by the Spaniards beginning in 1546. Mineralization at the Catarina mine was developed on several levels over approximately 500 metres of strike.  In 2010, Soltoro completed detailed mapping and along the surface portion of the Catarina vein. Results can be viewed at the link:

Click here for PDF: July 2010 Catarina mine trench location map with assay results

In late 2011, Soltoro completed seven diamond drill holes in the Catarina Mine area to test mineralization at depth. Results were generally discouraging. In 2013, Soltoro is planning an underground sampling program to validate the historic resource identified by the Mexican geological survey in the 1980’s. If confirmed, this historic resource could add significant additional, high-grade ounces to the current NI43-101-compliant resource.

Piedras Amarillas: Approximately 13,000 soil samples have been collected to date from the El Rayo Property.  Several anomalies have been identified including three parallel soils anomalies in the Piedras Amarillas area approximately 1,500 metres east of the Las Bolas deposit.  The anomalies range from 300 metres to 800 metres in length and 50 metres to 150 metres in width with values ranging up to 34 ppm silver. Follow-up sampling of the eastern soil anomaly identified a northeast-trending zone of quartz stockwork with associated hematite staining in basaltic wall rocks.   At Piedras Amarillas there are a few small prospect pits but no evidence of historic mining activity as the zone sits primarily under cultivated fields and is covered by overburden. Evidence suggests that the stockwork zone extends for nearly 500 m along strike but the width of the stockwork zone is not presently known because the area is largely covered by soil and outcrops are scattered.   In 2012, 16 reverse circulation drill holes totaling 2,445 m were completed in the two soil anomalies at Piedras Amarillas. Most of the drill holes intersected low-grade silver values over modest widths but only one narrow, high-grade interval was intersected.

El Rayo Structure Gold Potential: The Company has also been investigating the gold potential at the north end of the El Rayo structure. Previous drilling identified a gold zone one kilometre in strike length. At a pit discard cut-off grade of 0.35 g/t Au, the resource estimate for the northernmost 250 metres of the gold structure is reported by Roscoe Postle Associates Inc. as follows:

El Rayo Nothern Zone Gold Resource
Deposit Area Cut-off grade (g/t Au) Tonnes
(millions)		 Average Grade
(g/t Au) 		Contained ounces of Gold
Indicated Mineral Resources
El Rayo North 0.35 380 1.85 22,600
Inferred Mineral Resources
El Rayo North 0.35 365 1.61 18,900

Notes:
1. CIM definitions were followed for mineral resources.
2. Mineral Resources were estimated using prices of US$1,300/oz Au. No credits were assigned for other metals.
3. Metallurgical recovery is assumed to be 90% of the contained gold.
4. The Rayo Extension deposit is modeled at a minimum of 5 m vertical thickness of mineralization.
5. The numbers for tonnage, average grade and contained ounces of gold are rounded figures.
6. The above resources are constrained by a Whittle optimized pit shell.

Ground magnetics, followed by a limited trenching program, in 2012 identified the possible northeastern extension of the El Rayo structure in the La Ocotera area. This adds an additional 750 m of prospective structure to be explored. Values from trenching in the La Ocotera area include 1.01 g/t Au over 4.8 m and 0.91 g/t Au over 6.5 m. A limited drilling program in this area is planned for 2013.

Regional Exploration Programs:Soltoro has completed a ground magnetics survey over the entire El Rayo land package. Ground magnetics are a very cost-effective and an invaluable aid in identifying extensions to mineralized structures, in geologic mapping and structural interpretation.  Structures related to the mineralization at Las Bolas and La Soledad exhibit well-developed signatures manifested as magnetic lows, probably caused by the alteration of magnetite to hematite.

Mapping and sampling of geophysical and soil anomalies will continue into 2013. Completion of the regional soil sampling program is expected in early 2013. This data is helpful in the definition of new targets.