The San Juan Mine is located in the village of San Juan near the Chorunga stream in the district of Rio Grande, province of Condesuyos, department of Arequipa. The area has a long mining history dating back to pre-Inca times. Over the last 35 years the San Juan Mine has produced approximately 1.2 million ounces of gold. Mining has followed the veins and has never benefited from modern exploration and development techniques such as drilling. The veins, which outcrop in the 800 meter-high granodiorite cliffs forming the north and south sides of the Chorunga Quebrada, have been mined from the surface to slightly below the river bed but have never been evaluated to depth, or to their full strike extent , or across the bottom of the Quebrada. This leaves a large potential area for further mineralization to be evaluated.

The San Juan deposit has 35 known veins, only two of which, the San Juan and Mercedes veins have been mined to date. The mine workings extend over 1,000 meters horizontally and 1,000 meters vertically where numerous ore blocks remain to be extracted.

Under the previous owner, insufficient capital and maintenance expenditures, and a lack of development, resulted in a decline in production tonnage. Good mining practices have not been followed since the early 1990s when a change in ownership occurred. In addition, low gold prices in the early 2000s brought the mine to the point where pillars were being scavenged and there was minimal ore development ahead of mining.

The Company has commenced mining, development work and mine exploration to return the mine and mill to full production capacity. The results of the exploration program will be included in an NI 43-101 technical report to establish a reserve and resource estimate that will assist mine planning. At present, the mining operation is small-scale and produces approximately 120 tonnes of ore per day. The mine has the potential to operate at approximately 700 tonnes per day. In conjunction with an exploration program currently being carried out at the San Juan Mine, the Company will be mechanizing the mine so that it can operate at full potential.