Mundo Minerals

Snapshot

Torrecillas Gold Project, Peru

• High-grade gold project located in Nazca- Ocoña region of SE Peru
• 13,000ha tenement package in well-established gold belt
• Successful trial mining underway for ~2 years:
  - has achieved average grades of 18-22g/t Au
  - shows the mineralisation is continuous
• Targeting commercial production:
  - from three high-grade vein systems
  - forecast 15g/t head-grade to the mill, <US$400/oz operating cost and US$34M capital cost
• Bankable Feasibility Study and JORC Resource – Q3 2010
• Conceptual Exploration Target* of 420-480kt @ 15-20g/t Au for 220-250koz

Overview

The Torrecillas Gold Project is an advanced development project located 640km south of Lima in south-eastern Peru within the prolific Nazca-Ocoña geological belt, a well-established mining region which hosts number of medium-sized, high-grade operating gold mines.

Comprising approximately 13,000 hectares of tenements in two locations, the Torrecillas Project consists of a multitude of narrow vein, high-grade mineralised structures across both tenement groups.

The Company has defined approximately 6.5km of high-grade vein structures on the main tenement block, where it is managing a Feasibility Study to develop commercial production from 2012.

After acquiring the Torrecillas asset, Mundo Minerals recognised that the best way of establishing initial resources for this style of mineralisation would be to assess the vein structures by undertaking trial development to enable an appropriate assessment to be made of the mineralisation.

Trial development has also yielded valuable information for the Feasibility Study process, enabling the Company to make an accurate assessment of mining methods, productivity, grade distribution and ground conditions.

Toll treatment of the ore recovered from the trial mining also provides excellent indications of recoveries, consistency of production profiles as well as the ability to generate a positive cash flow.

The Torrecillas Feasibility Study is focused on three vein structures initially: Torrecillas, 5 Noviembre and Torre Chico. The tenement area includes a several additional vein structures which, if successfully exploited in future, will provide outstanding potential for future production growth.

Trial mining has been undertaken on the Torrecillas vein for approximately two years, yielding head grades of more than 18g/t Au delivered to the mill. In-situ vein grades range from 8g/t Au to in excess of 50g/t and typical mining widths range between 0.3 metres and 1.2 metres.

Peruvian miners are experienced at mining these narrow veined deposits and are able to efficiently exploit the mineralisation and maintain excellent recovered grades as demonstrated through the consistency achieved through trial mining.

Exploration & Resource Development

The initial approach to assessing the vein structures was to focus on the Torrecillas vein and assess this vein through actual development rather than drill testing the mineralistion.

The benefits of this approach are that it allowed the narrow vein structures to be properly tested by exposing the actual vein structure and being able to properly measure productivity in terms of tonnes per vertical metre, grade, ground conditions, mining methods and productivities as well as providing ore for treatment.

Treatment of the ore provides excellent information for the Feasibility Study. Average grades delivered to the treatment facility during the two years of trial mining have yields in excess of 18 g/t on a consistent basis.

The current focus of vein assessment has now moved to assessing the 5 Noviembre and Torrechicco vein structures and, combined with the information, assessed through development on the Torrecillas vein structure, this work will form the basis of the commercial production profile for the Feasibility Study.

While the Feasibility Study is focused on developing three veins, future productivity from the project should be sustained by the potential of developing numerous additional vein structrues that are located on the tenements.

Processing

The Feasibility Study is predicated on the basis of constructing the treatment facilities adjoing the mining operations. While the area where the project is located is arid, consulting hydrogeologists have identified a number of water sources within an 8km radius of the propsed treatment site. These sources will be sibject to pump testing in the near term.

Treatment of ore from the trial mining has confirmed that the ore is free milling and able to be efficiently treated through normal carbon in leach processing.

Metallurgcal testing from bench testing indicate that recoveries should be between 93% and 95%.

Power will be provided to the project using generators and all other infrastructure on site will be standard equipment.

Location and Logistics

The region where the Torrecillas Gold Project is situated offers a strategic and excellent location from which to develop an emerging mining project.

While the area is arid, the Company’s consulting hydro-geologists have located a number of underground aquifers in the immediate vicinity of the mine location which are expected to provide water. These will be pump tested in the near term.

Given its location approximately 40km from the nearest town, no perceived negative community issues are expected, the Project does not compete with other land-uses and there are no other near-mine agricultural or other economic influences.

Because it is a known mining region, access to experienced mining personnel is excellent and the area is close enough to communities that service regional mines to be able to gain access to quality mine support services and infrastructure.

Community Relationships

While the nearest town is 40km away, Mundo has developed a strong relationship with the local community based on mutual respect and is an important employer in the region.

* JORC – Exploration Targets
It is common practice for a company to comment on and discuss its exploration in terms of target size and type. The information relating to exploration targets should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves. Hence the terms Resource(s) or Reserve(s) have not been used in this context. The potential quantity and grade is conceptual in nature, since there has been insufficient work completed to define them beyond exploration targets and that it is uncertain if further exploration will result in the determination of a Mineral Resource.