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BOLIVAR PROJECT

[Pilot-Mining Program]

In February 2005, Dia Bras launched a pilot-mining program at the Bolivar high-grade deposit to accomplish several goals:

• cumulate key operating data in view of a feasibility study at Bolivar;
• generate positive cash flows to fund exploration for larger deposits on the property and accelerate our growth;
• gain experience in mining and processing in Mexico;
• train of the workforce (mainly local - 95%);
• Dia Bras' key objective remains to explore and develop the Bolivar deposit for full-scale production;

The pilot-mining program reached its monthly targeted production rate of 7,500 tonnes and during 2006 produced 96,575 tonnes averaging 10.63% Zn and 2.03% Cu.  Recoveries averaged 91.9% for zinc and 80.6% for copper.

Mineralization in the deposit consists of lenses of massive sulphide in altered carbonate host rock (skarn).

Pilot-mining activity at the Bolivar deposit is focused on two main mineralized trends, Rosario and Fernandez, which include the Brecha Linda zone. Both are accessible from existing workings and are defined by exploration drilling and underground development.

The Bolivar underground mine is developed with two levels and three sublevels driven from two adits at elevations of 1,820 metres and 1,875 metres above the mean sea level on the main Rosario Trend. Additional sublevels have been developed along the easterly Fernandez Trend.. Ramps have been driven from Level 1 to Level 2, and from Level 6 to Level 7.  Additional sublevels have been developed along the easterly Fernandez Trend.

Mining at Bolivar is fully mechanized. The underground mine fleet includes one single-boom jumbo and two 2-yd. load-haul-dump machines. Mining is by shrinkage stoping with long-hole stoping for the primary stopes. Sublevel retreat may also be used for high-grade pillar recovery. Stopes are not backfilled, as the rock is very competent.

Rock is hauled to the portal entrance where is is loaded on trucks for haulage out of the mine to the Bahuichivo railhead, a distance of some 54 km, and then by rail to the Malpaso plant, some 256 kilometres away.

The Malpaso Mill produces both zinc and copper concentrates, which are sold under commercial smelter terms to MRI Trading AG, a private Swiss-based commodity trading firm.

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