El Rayo Project

Primary Silver & Gold
10,036 hectares - 100% title interest

Click here for PDF: PDAC Presentation by Steve Priesmeyer

Video version with audio: PDAC Presentation by Steve Priesmeyer

Click here for PDF: Location, History and Geology

The El Rayo Project is located near the town of Guachinango in Jalisco, Mexico and is the site of some of the earliest silver mining in Mexico. The Project hosts numerous mineralized structures where silver, gold and lead were extracted from several underground mines, beginning in the mid-1500's. More recently Agnico Eagle Mines Limited announced the acquisition of Cayden Resources Inc. for $205M in order to explore the El Barqueno deposit. El Barqueno is contiguous to El Rayo and Agnico Eagle has incidcated they plan to spend $15M in 2014-2015 exploring in the Guachinango district. This is significant in that the property has no NI 43-101 compliant resource and suggest they will build a bulk tonnage mill in the district.

Soltoro acquired the Project in 2005 and began drilling in 2007. From 2007 through 2014, Soltoro's has focused mainly on the Las Bolas, Catarina-El Rayo, Highwayand Soledad structures to define silver resources. A small gold resource has been defined on the northwest end of the El Rayo structure. Silver and gold mineralization have been traced in these structures over an aggregate distance of more than five kilometers.

In September of 2014, Soltoro released an updated NI 43-101-compliant resource estimate. The NI 43-101 compliant resources were estimated by Agnerian Consulting Ltd. (“AC”), and includes an updated estimate of the Las Bolas deposit, the La Soledad deposit and a first time disclosure of the Mineral Resources of the historic Catarina mine. The revision considers a smaller tonnage, higher grade resource that could be exploited through a combination of small open pit and underground operations.

The Mineral Resources were prepared in compliance with NI 43-101 and CIM standards by AC by constructing block models and applying a conceptual open pit and underground models on each of the deposits. The estimates of open pit and underground resources are shown in the tables below:

EL RAYO MINERAL RESOURCES AS AT SEPTEMBER 29, 2014
DEPOSIT
CATEGORY
TONNES
AVERAGE GRADE
CONTAINED Ag
CONTAINED Pb
EQUIVALENT Ag
(X1,000)
g/t Ag
% Pb
(million oz)
(million lbs)
(million oz)
OPEN PIT RESOURCES
Las Bolas
Indicated
1,560 139 0.47 7.0 16.1 7.4
Matachines
Indicated
270 25 1.71 0.2 10.2 0.5
La Soledad
Indicated
3,400 121 0.28 13.2 20.9 13.8
TOTAL
Indicated
5,230 121 0.41 20.4 47.2 21.7
Las Bolas
Inferred
220 122 0.34 0.9 1.6 0.9
Matachines
Inferred
70 52 1.15 0.1 1.8 0.2
La Soledad
Inferred
370 104 0.34 1.2 2.8 1.3
Subtotal
Inferred
660 104 0.43 2.2 6.2 2.4
UNDERGROUND RESOURCES
Las Bolas
Inferred
680 305 2.74 6.7 41.0 7.8
Matachines
Inferred
60 91 16.70 0.2 22.0 0.8
La Soledad
Inferred
120 215 1.04 0.8 2.7 0.9
La Catarina
Inferred
420 228 1.70 3.1 15.7 3.5
Subtotal
Inferred
1,280 261 2.89 10.8 81.4 13.0
TOTAL
Inferred
1,940 208 2.05 13.0 87.6 15.4

Notes:
1. CIM Standards were used to estimate Mineral Resources.
2. 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-economic, political,
marketing, or other relevant issues.
3. The quality and grade of the Inferred Mineral Resources are conceptual in nature and there has been insufficient exploration
to define them as Measured Mineral Resources or Indicated Mineral Resources. It is uncertain if further exploration will result in
upgrading the Inferred Mineral Resource to an Indicated or Measured category.
4. Silver Mineral Resources were estimated using the price of US$20/oz Ag. Only credits for the contained lead were assigned
for the Las Bolas and Catarina deposits at price of US$0.90/
5. Metallurgical recovery is assumed to be ranging from 15% to 65% of the contained silver for the Las Bolas, 75% of the
contained silver for the La Soledad, and 60% of the constrained silver for the Catarina deposits. Metallurgical recovery for lead
is assumed to be 69% for all of the deposits.
6. A minimum of 5m vertical thickness of mineralization was used for the zones of the open pit deposits.
7. The bulk density of mineralized rock is considered as 2.32 t/m3 (Las Bolas open pit), 2.57 t/m3 (Las Bolas underground),
2.45 t/m3 (Matachines open pit), 2.39 t/m3 (Matachines underground) 3.89 t/m3 (La Soledad open pit), 2.39 t/m3 (La Soledad
underground), 2.42 t/m3 (Catarina underground).
8. Mineral Resources of conceptual open pits are estimated at a Net Smelter Return (NSR) cut-off value of US$13/tonne
9. Underground Mineral Resources are estimated at a horizontal thickness of 2m and an NSR cut-off value of US$65/tonne.
10. Tonnage and average grade numbers are rounded.
11. Catarina Mineral Resources include tonnage from past underground mining. Actual numbers will be different than the above
estimates.
12. The calculation of the equivalent silver is based on metal prices above, the silver-to-lead ratio, and the recovery of lead in
the mineralized material.

In 2012 and 2013, Soltoro's focus was drilling known mineralization along strike and at depth, and testing anomalies identified through soil sampling and geophysics. In late 2012, Soltoro discovered high-grade semi-massive sulfide mineralization at depth at the Las Bolas deposit and extended that mineralization along strike at depth 200 metres to the southeast in early 2013. Due to market conditions, drilling was halted near the end of the first quarter of 2013. The remainder of 2013 and 2014 was spent reevaluating data and permitting future exploration activities.

Las Bolas & Highway Zone Primary Silver Deposits: The Las Bolas deposit consists of a tabular body of silver-bearing specularite-quartz breccia striking to the northeast and dipping to the northwest at 50 to 60 degrees. The mineralized breccia-vein ranges in thickness from around one metre to 40 metres with silver-bearing quartz-specularite stockwork of varying intensity occurring in the hanging wall. At Las Bolas, silver occurs in fine-grained sulphide minerals, such as acanthite, mckinstryite and aguilarite in quartz-specularite veinlets, often in close association with mimetite (lead arsenate) and vanadinite (lead vanadate) with very minor base metal sulphides. The breccia-vein 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.

Recent drilling at depth in the Las Bolas zone encountered a sulphide-rich zone near the base of the typically sulphide-poor breccia-vein and stockwork zone. Hole Ray12-152 averaged 278 g/t Ag and 11.5% Pb over 11.2 metres drilled width and was distinctly rich in galena and poor in specularite. The relationship of this mineralization to the typical sulphide-poor, specularite-bearing breccia-vein and stockwork mineralization is currently being investigated.

The Highway Zone is similar in composition, although somewhat more quartz-rich, and structural attitude to Las Bolas.The relationship between the Highway Zone and other mineralized zones of similar orientation is unclear but they are thought to represent en echelon structures.

La Soledad Primary Silver Deposit: 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.In 2012 and early 2013, Soltoro focused on the strike extensions of the La Soledad deposit. The extension of the Western Zone is complexly faulted and the relationship of this mineralization to the Western Zone is unclear as the intersections are high-grade, but narrow and the dip is distinctly different. Additional drilling is required to define this portion of the Western Zone.

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. Silver occurs as freibergite and mckinstryite with lesser amounts of acanthite, aguilarite and furutobeite. Other metallic minerals consist of pyrite, sphalerite, galena with minor amounts of chalcopyrite and tetrahedrite-tennantite and traces of bornite, covellite and chalcocite.

Historic Catarina Silver Mine Area: The southeastern portion of the Catarina-El Rayo structure hosts the Catarina mine, where five 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 sampling 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. Drilling established that the Catarina mine area is not amenable to open pit mining.

In 2013, Soltoro collected 340 underground channel and chip-channel samples from over a 385 metre strike length on the main level of the Catarina mine.Phase 1 sampling was designed to better understand the geology of the Catarina mine area and confirm the historic silver resource estimate made by the Mexican government in the early 1980's. The best result was 11.57 metres averaging 449 g/t silver, 0.13 g/t gold and 3.54% lead. Complete results are presented in the Soltoro news release dated June 25, 2013.

In the third quarter of 2013, Phase 2 of the Catarina Mine sampling program was initiated and an additional 140 channel samples were collected from the main level. Highlights of this sampling include 1.30 metres averaging 646 g/t silver and 2.13% lead and 2.0 metres averaging 391 g/t silver and over 20% lead. Both of these channels are from near the northwestern end of the workings and may signal the presence of a previously unknown high-grade shoot beyond the current extent of the workings. Drilling will be required to confirm this.

The second level of the Catarina mine, the -50 level, occurs in two separate segments, both of which were flooded.Soltoro was able to partially dewater the eastern segment and collect 93 channel samples.Highlights of sampling from the -50 level include 1.1 m averaging 255 g/t silver and 0.25% lead and 2.2 m averaging 332 g/t silver 0.76% lead.

Piedras Amarillas Silver Discovery Zone: Over 15,000 soil samples have been collected from the El Rayo Property leading to the identification of several multi-element anomalies, including three parallel soils anomalies in the Piedras Amarillas area located 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 silver values ranging up to 34 ppm. 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 pasture land and cultivated fields with little outcrop.Evidence suggests that the stockwork zone extends for nearly 500 m along strike but the width of the stockwork 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 Gold Deposit: Previous drilling identified a zone of gold mineralization one kilometre in strike length at the northwestern end of Catarina-El Rayo structure. At a pit discard cut-off grade of 0.35 g/t Au, the resource estimate for the northwestern-most 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.

In order to better understand the complex geologic relationships at the northwest end of the current El Rayo gold resource, Soltoro began a detailed exploration program in this area in late 2013.Two diamond drill holes and sixteen trenches tested soil and geophysical anomalies but did not locate the extension of the El Rayo mineralization. Of the sixteen trenches, only trench ERY-13 returned significant gold values consisting of 16.97 m averaging 3.45 g/t gold including 1.50 m averaging 20.6 g/t gold. Trench ERY-13 was previously sampled in 2009 as trench R2 and this trenching confirms the values obtained at that time. Trench R2 returned 19.5 m averaging 2.53 g/t gold including 7.5 m averaging 5.36 g/t gold and 1.5 m averaging 10.3 g/t gold. This work was followed-up by three additional trenches with the best result coming from trench ERY-19, which returned 24.00 metres of 2.09 g/t gold where mineralization remains open in both directions.

Soil geochemistry and ground magnetics west of the El Rayo resource area, followed by a limited trenching program in 2012, identified the La Ocotera area, which may represent the extension of the El Rayo structure. 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.

Talayote Gold Discovery Zone: In the second quarter of 2013, the Company discovered the previously unknown Talayote gold target. Initial soil sampling detected several isolated gold anomalies in the area where follow-up geologic mapping and rock sampling revealed a series of northwest-trending quartz stockwork zones located approximately 1.5 kilometres southeast of the El Rayo gold deposit.Chip samples returned values up to 2.3 metres of 2.18 g/t gold including 0.50 metres of 11.40 g/t gold.

Exploration in 2014:
Permitting to drill test the deep sulfides at Las Bolas, the eastern extension of the Soledad deposit,drill testing La Pieda structure, the depth extension of the Catarina deposit and the northwestern extension of the El Rayo gold deposit.