Projects

Azuay, Ecuador

PanTerra Gold holds an option to purchase the 2200ha San Gerardo concession in Southern Ecuador, for US$4.0 million, exercisable by November 2013. The concession covers seven small-scale underground mines operating in high-grade narrow-vein epithermal structures.

Placer Dome Ecuador reported the potential for a plus 1.0 million oz gold ore body on this and adjoining concessions in 1995 based on 9000m of RC drilling, extensive chip sampling, and mapping of surface mineralisation.

Consultants have reviewed existing drill data and extensively sampled underground workings within the concession and adjoining mines and based on results to date the Company believes the expansion of operations to 300,000 tpa of ore is economically and technically feasible.

Based on consistency of historical mining of narrow quartz-pyrite-calcite-chlorite veins (0.5m to 1.0m) grading 10g/t to 15g/t gold within the San Gerardo and adjacent leases, the Azuay project is expected to produce approximately 100,000 oz Au per year for 10 to 12 years. PanTerra Gold will undertake a surface drilling program to confirm this expectation commencing early 2012, in advance of a development decision Q1 2013.

Preliminary metallurgical testwork indicates the process plant will combine gravity, CIL and oxidation circuits. The site for the plant and tailings storage is located 7km from the planned mining operation, and 2km from a major highway and the national power grid.

A scoping study of the proposed project has indicated a total development cost of US$87 million including a substantial contingency allowance, and the cost of acquisition of the San Gerardo property. Operating costs are forecast to be approximately US$420 per oz gold.

PanTerra Gold should be able to fund its equity for the Azuay project development from free cash flow from its Las Lagunas project.

Photos

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Lease contains seven small-scale existing gold mines with historical high grade production

Approximate co-ordinates are 79°38’10”W, 3°01’42”S

Previous exploration results and tunnel development into orebody available for sampling.

Enlarge map for lease details

^{The information in the report which relates to results of underground sampling is based on information compiled by Mr Dale Schultz, Managing Director of Buscore Consulting Ltd, which is a consultant to the PanTerra Gold Group, is a member of the Association of Professional Engineers and Geoscientists of Saskatchewan (APEGS) which is a Recognised Overseas Professional Organisation ("ROPO") accepted for the purpose of reporting in accordance with Appendix 5A of the ASX listing rules. Mr Schultz has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the 'Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Schultz consents to the inclusion of the matters in the report based on information in the form and context in which is appears.}