The Bonanza District and producing mines are located in northeast Nicaragua near the west central border of Region Autonoma Atlantica Norte (RAAN).

The concession is located 230 air kilometers northeast of Managua and 100 air kilometers west of the Caribbean port town of Puerto Cabezas. There are three main population centers within the concession, Bonanza, Siuna, and Rosita, often referred to as the “mining triangle”. Land access to the area is gained via unpaved roads from south, east and west.

Basement rocks in northeast Nicaragua consist of an interbedded sequence of limestone, mudstone, greywacke and calcareous mudstone (lutite) of the Early Cretaceous Todos Santos Formation. The sedimentary rocks are locally interbedded with andesite tuffs and flows and transected by subvolcanic andesite sills and dikes also of Cretaceous age. These basement rocks are intruded by a variety of fine to medium grained diorite, granodiorite, syenite, monzonite and alaskite stocks, plugs and dikes. Most of these intrusives occur along a northeast trend similar to the distribution of the sedimentary rocks.

Within the concession, volcanic rocks consist of fine grained and porphyritic andesite flows, fine grained andesite tuff, andesite agglomerate and fine grained basalt flows assigned to the re-Matagalpa volcanics. These rocks are widely distributed throughout northeast Nicaragua and likely represent a nearly continuous period of subaerial volcanic activity from the Late Cretaceous to mid-Tertiary period.

The Bonanza area is underlain by two broad, parallel, northeast trending sequences of andesite volcanics on either side of a central sequence of andesite agglomerate of intermediate composition. To the northeast, these pyroclastics become more felsic in composition. These more felsic units also occur adjacent to the andesite volcanics along the northwest contact of the northern sequence. This area is in contact with a felsic intrusive.

All sequences are displaced by a series of parallel to subparallel northwest trending faults that are interpreted to have undergone both dextral and sinistral displacement of up to 1-8 km in some faults. These faults also truncate many of the veins and historically have been the bounding structures for the three groups of veins.

The Siuna area is underlain by a Lower Cretaceous-aged interbedded sedimentary-volcanic sequence comprising limestone, limy mudstone, conglomerate, greywacke, mudstone, tuff, and andesite of the Todos Santos Formation. Subvolcanic mafic dikes and sills have intruded the sequence. These rocks occur in a 12 km long, 1-2 km wide arcuate belt, which trends north-northwest in the south and northeast in the north. The rocks are steeply dipping and tightly folded as a result of pre-Tertiary ENE-WSW compressive forces.

The Rosita area is underlain by remnants of Cretaceous calcareous and siliceous sediments and minor andesite volcanic flows and tuffs of the Todos Santos Formation. These rocks are uncomfortably overlain by Tertiary volcanics composed chiefly of andesite flows and tuffs. All of these units have been intruded by a series of intermediate to felsic, high level, stocks, plugs and dikes.

Two main types of mineralization occur within the district; volcanic hosted gold-silver-copper, lead, zinc epithermal quartz veins (Bonanza, Nueva America) and gold-copper, copper-gold and iron with gold, copper deposits near the contact between limestone and intrusive rocks (Siuna, Rosita).

Gold mineralization in the Bonanza district occurs in three separate vein groups; Panama, Pioneer, and Constancia, that collectively define a 20 km long mineralized corridor. The Panama Group comprises 70 principal veins and vein segments that have a predominant northeast strike and subordinate northwest strike. The former have a moderate to steep northwest dip, although several veins have a moderate to steep southeast dip. The northwest striking veins are vertical to steeply southwest dipping. The currently producing Bonanza Mine occurs within this group of veins. Historic reported production is over 2 million ounces of gold from the Panama Group, mainly from 4 principal vein systems, Neptune, Neblina, Tesoro and Venus/Capitan. Important production was also achieved at the Nugget, Adan, Culebra and Atlas veins. Historically, exploration has focused on narrow high grade veins. Conditions for wide, bulk tonnage, low-grade deposits are present, particularly at Washington-Elefante Blanco, Capitan and possible

Orpheus. The Esperanza Vein represents the most attractive, undeveloped narrow high grade target within the Panama Group. Potential for base metal mineralization occurs at the deeper parts of Neblina, Venus, Culebra and Tigre Negro veins.

There are 18 principal gold bearing quartz veins in the Pioneer Group and 35 in the Constancia Group. Only gold was produced at the Pioneer Group, mainly from the Pioneer mine where over 300,000 ounces were produced from both the oxide and sulfide zones. Minor production from other veins in the group included Lone Star, Highland Mary, and Colorado. At the Constancia Group, base metals and gold were produced from the Vesubio Mine from 1971 to 1979. Gold was also produced from the Constancia Mine (Siempre Viva and Cottam veins), Real McCoy, San Antonio and San Joaquin. There is considerable upside exploration potential for gold mineralization within the Pioneer and 9 Constancia Groups. Principle among them are; Pioneer, Vesubio, Real McCoy, Highland Mary and Lone Star veins. Potential for base metal mineralization occurs at Vesubio.

At the past producing La Luz mine in Siuna, gold occurs associated with epidote-rich zones containing hematite, fine pyrite and chalcopyrite in silicified limestone and limy mudstone skarn. Production of gold and copper was from 2 ore zones; the first one occurs along the east side of the concordant, subvolcanic Hanging Wall Andesite (HWA), and the second orebody which is about 90 meters east of the east HWA contact. Historic production of nearly 300,000 ounces of gold are reported from this mine.

The original Rosita deposit consisted of a central core of alaskite which intruded the sedimentary and volcanic rocks giving rise to garnet-epidote skarn, marble, and hornfels. These units lie along the flanks of a larger diorite intrusive and nearby monzonite which occur along a northwest trend. A northeast-trending shear zone, which contains extensive brecciation and hydrothermal alteration, is believed to have been the major conduit during ore-deposition. Copper-gold mineralization in the Rosita area is associated with garnet bearing calcic skarn overlain by calcareous tuffs, sediments and andesite and underlain by a diorite intrusive. Historic production of 138,000 tonnes copper, 160,000 ounces gold and 2.6 million ounces of silver are reported from the Rosita mine.

The combination of well mineralized ‘province’, favourable geology, presence of mineralization in epithermal quartz veins and skarn environments and the lack of any systematic exploration augurs well for the potential to discover additional mineralization within the District.