(*Note* A more complete version of this report, which includes additional information and photos, is available upon request.)


Dear Shareholders:

Although we have been giving you periodic updates on our website to keep you informed as to the status of the expansion at the Clavo Rico mine, we thought that a mid-year report was in order to keep you apprised of our progress.

As you can see from this picture the piping has been laid for the remainder of the recovery field. This is huge for us as it was the final step of the ongoing expansion project, and will allow us to complete the new recovery field and move to all out production:

Completed piping on the new pad, with original pad being sprinkled in the background.


As a reminder, with the expansion we estimate that the capacity of the finished recovery pad will be approximately 600,000 tons. We have loaded approximately 75,000 tons to date and if we are able to meet our goal of crushing and loading 500 tons per day on the recovery field, we will have approximately 4 years of operations at the current mine site without needing to expand to other areas of the concession.

Our goal has always been to be able to load the recovery field with at least 500 tons of ore per day, which we projected would allow us to meet or exceed our financial projections. For the first month after our expansion, bringing in a new crusher and building our own new agglomerator, we have been able to meet our 500 ton per day goal.

Of course, there are still potential hurdles in our path. For example, we are entering the rainiest portion of the year and the area won’t be fully dried out until November, which means our ADR plant will have to work overtime to accommodate the diluted solution. While we still expect our production to continue to surpass all previous records, we don’t anticipate truly breaking out until the end of the rainy season. As always, we will also have to continue to update our equipment, both in the mine and in the lab. We need to conduct an extensive drilling program and to bring maximum value to the mine, and will have to prepare an acceptable ore body reserve report designated by an internationally-recognized NI 43-101. To maximize shareholder value we need a profitable operation and verifiable ore body reserves in excess of 500,000 ounces. Those are the next goals to achieve as we push towards a liquidity event for the shareholders, and to this end we have officially engaged a geologist to commence the initial NI 43-101. We are excited to announce that this Qualified Person is “on the ground” as of the date of this update.

We are looking forward to giving you even more to cheer about in the next quarterly report.



Clavo Rico Ltd