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| Campo Morado Overview : Other Deposits (Reforma, El Largo, El Rey, Naranjo) The entire Campo Morado district represents a significant opportunity for the shareholders of Farallon. With the existing mine and mill in commercial production at the G-9 site, the overall plan is to mine the G-9 area for the life of the resource, currently 7 years of mine-life. However at the same time mine-planning for the other deposits Reforma, El Largo, El Rey, and Naranjo will be studied with a view to extending the overall mine life of the G-9 Mine. With the current indicated resource of those areas amounting to approximately 13,000,000 tonnes and assuming a preliminary economic assessment were positive the existing mine life at G-9 could be extended to 20 years or more. Coupled with the significant exploration potential available at a stratigraphic horizon that is 200 metres deeper than existing deposits, the overall potential for further development opportunities at G-9 appear to be very promising indeed. Over time, Farallon's management intends to unlock the value from not only the G-9 Mine but from the other deposits as well. In the meantime, the company will continue to mine at G-9 and re-start exploration to add to the G-9 resource. Management is confident that with this straightforward and prudent approach the ultimate potential of this whole district will be unlocked over time and a truly world-class mining camp will be created. Other Deposits ( El Largo, El Rey, Naranjo, and Reforma) Farallon Mining holds a 100% interest in the 116-square kilometer property, which is located about 160 kilometers southwest of Mexico City in the state of Guerrero, Mexico. La Reforma was the first deposit discovered on the property. Reforma was mined on and off for a total of 20 years from 1898 to 1940, financing parts of Mexico's revolution. The coin used today in Farallon's logo originated from mining at Campo Morado during these historic Mexican times. Farallon has drilled over 320,000 metres of diamond drilling to explore and develop the Campo Morado project. This commitment has resulted in the discovery or delineation of five deposits and numerous other occurrences on the property; a number of these targets have yet to be fully explored. In the Campo Morado district there are a series of volcanogenic massive sulphide deposits that have occurred at or near the contact of felsic flows. These host rocks are part of an area called the Guerrero terrane. Drilling in 2004 and 2005 had been focused on the Reforma, Naranjo, and El Largo areas. The deposits have largely been delineated and used a drill spacing of 50 m. A brief summary of each deposit follows: El Largo - In 2004 and 2005 drilling had significantly increased the size of the El Largo deposit. An increase of 332 percent in total resource tonnage was achieved, along with a 19 percent increase of the average zinc grade. At 5% cut-off the El Largo contains over 2.8 million tonnes grading 6.69% Zn. During this time the El Largo achieved the largest increase in tonnage amongst the group of four deposits. El Rey - In 2004 and 2005 drilling at the El Rey deposit increased tonnage by 25 percent. Another significant gain in size and confidence, this further added to the overall viability of the entire concession. The El Rey deposit is separated into a main tabular VMS body and a smaller VMS body. The main VMS body is nearly horizontal, it is about 250 m in the east-west direction, 200 to 250 m in north-south direction and 2 to 35 m thick. Naranjo - In 2004 and 2005 drilling at Naranjo consisted mainly of infill drilling, which increased the confidence level of the Naranjo deposit. The Naranjo deposit consists of two main tabular VMS bodies and eight small VMS bodies. The VMS bodies are generally striking east-west and dip to the south with an average angle of 17 degrees. The largest VMS body is about 500 m long in the dip direction, 75 to 240 m wide along strike and 5 to 75 m thick. Reforma - The Reforma deposit consists on one main VMS body and two small VMS bodies. The main VMS body has a tabular shape, striking east-west and dipping to the south with an average angle of 40 degrees. The main body has very good continuity; it is about 760m along strike, 60 to 350 m wide in the dip direction and 2 to 50 m thick. These four deposits represent significant upside production potential for Farallon. The existing indicated resources could very well represent the overall Campo Morado district becoming a multi-mine operation supplementing production from G-9 and extending the life of mining at Campo Morado to 20 years or more. Farallon is very focused on unlocking the value in these other deposits over time while at the same time utilizing the G-9 Mine as the engine that funds the future growth. It is a very exciting time to be developing the entire Campo Morado property as it could represent a new world-class base metal district!
Table 5a. Results of Campo Morado Resource Estimates in 2005 Indicated Mineral Resources
Map of the other deposits in red | G-9: Exploration Overview
Underground Exploration
Resources
Drilling Results
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