COMPAC, S.A COMPAA MINERA DEL PACIFICO. S.

FIELD VISIT REPORT

COMPACSA MINING PROPERTIES

MINERALOGICAL POTENTIAL ASSESSMENT OF CONCESSIONS: PITAHAYA, MANCORNADAS AND THE VIRGIN.

Prepared by: Eng. Harold Ramos R.

Managua, Nicaragua October 1, 2013

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I. INTRODUCTION This report is made at the request of the company Minera del Pacifico (COMPAC, SA), which is the concessionaire of three properties located in the extreme northwest of Nicaragua called (La Pitaya, Mancornadas and the Virgin) which together total an area 27,000 hectares. Exploration Concessions: The Pitaya, Mancornadas and The Virgin was granted by the Ministry of Energy and Mines (ESM-MINE), according to ministerial agreements No. (No-67-DM-247-210 - No62-D-245 -2010 - No-Lack The Virgin) respectively, for a period of 50 years.

II. OBJECTIVES The main goal is to increase awareness of existing mineral resources in the concession areas and assess the potential economic metallogenic and the same. Locate the main prospects and existing mineralogical occurrences within concessions to demonstrate the potential of the same and thus justify investments to direct and detailed research of the areas in question.

III. LOCATION AND ACCESS 3.1 LOCATION Mining concessions Pitahayas, Marconadas and the Virgin are mainly located in the department of Chinandega framed within topographic sheets 1: 50,000 of INETER Somotillo, Cinco Pinos, Villa Nueva and Willow. (Fig # 1)

3.2 ACCESS The main path is right through the Panamerican Highway leading from Managua to Somotillo at about 200 km to the northern border of Nicaragua. You can also follow paved roads leading to Cinco Pinos, San Pedro del Norte and North San Francisco. Just as dirt roads all times as the Willow Villa Nueva and a number of secondary roads that are distributed throughout the area with moderate usage mainly in rainy season.

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Location and access map Figure # 1. Location map Concessions

Concesin La Virgen

Concesin Las Mancornadas

NICARA
Concesin La Pitahaya

IV. METHODOLOGY Areas were evaluated preliminarily right through the review, screening and interpretation of data and historical records known prospects in the areas within and surrounding concessions and interpolation of regional geology of Nicaragua. The field work was the identification of regional character and mineral occurrences structures, evidence of mineralization and mineral workings that allowed us sampling in chips for analysis and determine the mineralogical content. V. REGIONAL GEOLOGY - AREAS OF CONCESSIONS General character area consists of Tertiary volcanic rocks mainly composed of andesitic lava flows, interbedded with basalts and pyroclastics, and Tertiary intrusive which together are weathered or affected by hydrothermal alteration.

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VI. AREAS EXPLORED - PROSPECTS Area: The Coyotera - Mina de Agua (Grant La Pitaya) Location: In the far west of the concession Pitahayas, at a distance of 7 km SE of new villa at coordinates: UTM: E524.823-N1431.177 Geology and Mineralization: The hill the Coyotera is characterized by a high hill and elongated in a NE direction, consisting of a rock with porphyritic texture diriotica strong potassium feldspar alteration. On this site you will find a mining work demonstrating the existence of a massive quartz vein, crystalline drusitico at a bearing N20 E, with a capacity of 1-1.5 m located in moderately fractured diorite rock. Go to the Northwest area can be seen aligned fragments of quartz and silicification zone that can be associated to other undiscovered epithermal veins.

Figure # 2. Tagus the Coyotera.

Fig # 3. Quartz Grain

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Figure # 4. Fig Fig # 5 & # 6. Outcrop and Quartz Vein Screening

Area: San Pablo (Grant-La Pitaya) Location: Prospect located in the southern end of the concession Pitahayas, about five kilometers from the junction the Lemon-Villa Nueva, way to Sauce. In the UTM coordinates: E531.461N1424.857 Geology and Mineralization: The area consists of a series of low hills and elongated NW. The geology consists of altered dacitic rocks. The mineralization is evident in the foreground by numerous boulders and fragments of quartz, but in the top of the hills are outcrops that define a system of at least five parallel epithermal vein preferential Rumbo N10 E, with dip varying between 65 -70 to SE, altered dacitic rock emplaced. The main vein structures are: The Minitas, which is a milky quartz structures preferential direction N30 E, with an average power of 2.5 m. Veta Minita I: Separate about 50 meters to the east of the previous one, consists of irregular quartz vein drusitico milky and slightly saccharine coated FeOx.

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Veta Minitas II. About 100 m separate the grain Minitas I. Composed crustiform massive quartz with crystalline quartz crystal growth with dogtooth texture. Veta Santa Clara: Comprising angular blocks of quartz sub-crop, which have a massive texture occasionally banded quartz.

Santa Clara Carmelea Veta: outcrop on a hill high topographic expression, evidenced by a dense stockwork of quartz and an outcrop of about 2 meters thick massive crystalline quartz with iron oxides drusitico. In the entire area can be observed intense hydrothermal alteration of the host rock that houses structures, marked by a reddish to yellowish gray. Some of the seams are defined by numerous fragments and quartz blocks along this projection.

Figure # 7. Fig Fig # 8 & # 9. Quartz vein outcrop massive texture, milky banded to saccharine drusitico occasionally. Area: The Water Mine Minitas - Cerro Esquipulas (Grant La Pitaya, The Sauce) Location: Located approximately 12 km west of Willow at the SW end of the concession Pitahayas. In the UTM coordinates: E538.890 - N1424.690 Geology and Mineralization: The main feature is a solid and altered volcanic rocks cut by a diorite intrusive which gives certain aspect hills stretching.

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The mineralization occurs in a large area of silicification that spans the Esquipulas hill (at UTM coordinates: E538.663 - N1424.219) and its surroundings as well as the existence of thin epithermal veins near the contact with the intrusive. In the area you can see active mining workings, and extensive hydrothermal alteration zone with quartz veinlets densification irregularly distributed.

Fig # 10. Fig Fig # 11 & # 12. Mine workings, area of intense hydrothermal alteration. Area: Prospects Lomas Rojas (Concession The Pitaya) Location: Located about two miles east of the joint that connects the mine with Lemon Villa Nueva - road to Willow. In the UTM coordinates: E529.431 - N1425.335 Geology and Mineralization: The area comprises andesitic volcanic rocks, the morphology is defined by a flat to slightly undulating relief with preferential direction NW. A hydrothermal alteration zone is defined at this point as an outcrop of massive texture and reddish colored brechosa by strong iron oxide coating with irregular quartz vetilleo. Area: Prospect Cerro Divisadero (The Mancornadas concession) Location: Located approximately four miles east of Somotillo in San Miguelito district in UTM coordinates (E 515 223 - N 1441.088), respectively. Geology and Mineralization: The hill on Divisadero is defined as a long, low hill to NW. The mineralization occurs in a large area of silicification and hydrothermal alteration that spans the hill, accompanied with crystalline quartz vetilleo moderate.

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At about a mile to the northeast of this area at UTM coordinates: E516.026 - N 1441.633.Existe vein outcrop a preferential direction N65 E, with an average power of 1.5 m massive quartz-like iron oxides . In the tastings and live wells lateral zonation can be observed.

Figure # 13. & # 14 Fig. Outcrop and Quartz Vein Projection strong hydrothermal alteration. Area: San Marcos Prospectus (The Mancornadas concession) Location: At about 7 miles NE of Villa Nueva, following the path that leads to the region Batteries. Prospect located in UTM coordinates: E524.276 - N1440.340 Geology and Mineralization: There are two main areas to active mining workings, characterized by the presence of slightly chloritized tuffaceous pyroclastic rocks, andesitic dikes and dioritic rock fragments. The hydrothermal alteration zones associated with quartz veins and veinlets preferential direction EW. However, the mineralization in the area can be associated with intrusive bodies that are located deep in generating shear fault zones with calcite veinlets development.

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Figure # 15. Fig Fig. # 16 & # 17. Mine workings. Quartz and calcite veins associated with dikes. Area: Prospect Tamarindo (The Mancornadas concession) Location: The prospect is located about 10 miles NE of Villa Nueva accessing the road leading right through to the Olotas-the Obraje. UTM: E525.219 - N 141 503 Geology and Mineralization: The prospects are located in lithic tuffs, several structures with general direction NE-SW outcrop in the area. A series of work surface and discontinuous tunnels tasting and show the existence of at least three main structures formed by massive quartz, calcite veinlets and intense coating malachite (copper mineralization) with dissemination of sulfides (pyrite, chalcopyrite).

Figure # 18. Fig Fig # 19 & # 20. Mine workings. Massive quartz veins and intense malachite coating, (Cooper, gold and silver project)

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Area: Prospect Obraje (The Mancornadas concession) Location: The prospect is located about 10 miles NE of Villa Nueva accessing the road leading right through to the Olotas, Guasimito region - the Obraje. In the UTM coordinates: E526.490 N1444.990 Geology and Mineralization: The prospects are located in lithic tuffs, at least two structures generally NE-SW direction outcrop in the area. A series of work surface and discontinuous tunnels tasting and show the existence of at least two major sub-parallel structures formed by massive quartz, calcite veinlets and intense coating malachite (copper mineralization) with dissemination of sulfides (pyrite, chalcopyrite). Around the veins can be projected and surface followed by numerous angular fragments of quartz.

Area: Prospect La Danta (The Mancornadas Concession) Location: Located about 15 km NE of Somotillo, right through the road leading to the regions La Forge - The Caimito to Rodeto and Danto. In the coordinates UTM: 525,100 E - N 1446,085 Geology and Mineralization Lithologically area consists mainly altered silicified andesitic rocks, hills reflects morphology NW direction. According to previous reports the Danto vein is 150 m long and 1-3 m wide measured mainly projecting to the east and evidenced in an outcrop on the left bank of the black river in SW direction inward grant the Mancornadas appears to extend along an alignment of fragments of quartz Area: Prospect The Guasimito - Flower (The Mancornadas Concession)

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Location: The prospect is located about 10 miles NE of Villa Nueva accessing the road leading right through to the Olotas, towards the Guasimito Shire. UTM: E522.465 - N1441.595 Geology and Mineralization: The prospects are located in lithic tuffs, a structure with general direction NE-SW outcrop in the area. A series of jobs as wine discontinuous surface reveal the presence of at least two major subparallel structures formed by massive quartz, calcite veinlets and intense Malachite coating (copper mineralization). Around the veins can be projected and surface followed by numerous angular fragments of quartz sub-outcrop along low hills.

Figure # 24. Fig Fig. # 25 & # 26. Mine workings. Quartz veins with malachite coating, (cooper, gold, silver )

Area: Prospect Las Lajitas-Chive (the Mancornadas concession) Location: Located about 18 km to the NE of Somotillo, right through the road leading to the counties Las Mesitas-The Jiocuao to Rodeo Grande and Las Lajitas. In the UTM coordinates: E525.096 - N1453.105 Geology and Mineralization: The rock of the area make altered volcanic flows cut by granodiorite intrusive bodies. Moderate amount of quartz boulders in the area to the southeast lajitas could be associated with a system of epithermal gold-bearing quartz veins.

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In southern slopes of the hill the artisanal workings exist Chive contact areas granodiorite intrusive bodies that have moderate degree of alteration

Figure # 27. Fig # 28 & Fig # 29. Artisanal workings contact zones granodiorite intrusive bodies. Area: Prospect The Cojinillo (Grant Mancornadas) Location: Located approximately 16 miles NE of Somotillo, dare accessing the road leading to the counties Las Mesitas-The Jiocuao. UTM: E519.850 - N1454.027. Geology and Mineralization: The Cojinillo hill area has a long hill to the NE, consists mainly of granodiorite massive bodies. The mineralization occurs in epithermal quartz veins emplaced in fault zones NS and EW. Earlier reports indicate the existence of three sub-parallel veins of at least 500 meters long separated by 30-50 m respectively. Southbound on the base of the hill you can observe numerous quartz boulders.

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Fig # 30. Fig # 31 & Fig # 32. Artisanal workings epithermal quartz veins emplaced in fault zones. Area: Prospect Hill Ubuto - Lemons (Concession The Virgin) Location: approximately about 8 kilometers east of Cinco Pinos, following the road North to San Francisco. In the UTM coordinates: (E522.700 - N1462.086), respectively. Geology and Mineralization: The morphology of the area is characterized by undulating to steep with elevations ranging from 340 m to 600 m. In the outcrop area moderately altered andesitic volcanic rocks. The main mineralized structure in the area is reflected in active workings where you can see a streak of direction N60 W, which seems to correspond to the extension of the vein Chilamatillo SE which is in the margin of the concession but previous studies he has continued up to 500 m in length.

Fig#33. Fig#34. Morfologa caracterizada por un relieve abrupto. Laboreos activos veta

de rumbo N60W.

VII. DISCUSSION-CONCLUSIONS As a result of preliminary fieldwork conducted during this field visit, we identified at least fifteen major prospects and mineral occurrences a total of 68 rock samples were collected for further analysis. (This samples will be send to Inspectorate INC laboratory in Canada) Obviously there are more areas of interest that could not be recognized, since this stage was to assess the potential regionally mineral concessions. The control of the mineralization is primarily structural, with veins and stockwork mineralization emplaced in volcanic rocks and intrusive granitoids that favor a power for disseminated gold deposits and porphyry copper, as evidenced Obraje area.

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In general it can be concluded that there is sufficient and compelling elements to demonstrate that all concessions (Pitaya, Mancornada and Virgin) have great potential both geological and economic, but should be made more detailed work to follow up on these prospects and discover new areas that allow the development of a large-scale mine. Fig # 35 Resume Map with prospects recognized and sampled.
Concessin La Virgen. 1. Cerro Ubuto Los Limones (Au, Ag). Note: In this time the geologist only recognize personally 1 prospect of this concession but in the next weeks he travel because in this concession we have La Virgen, Chilamatillo, el molino and Montaa de la Hoya, cooper and gold prospects. Concessin Las Mancornadas. 1. Cerro Divisadero (Au, Ag). 2. San Marcos (Au, Ag) 3. El Tamarindo (Cu, Au, Ag). 4. El Obraje (Cu, Au, Ag) 5. La Danta (Au, Ag) 6. El Guasimito La Flor (Cu, Au, Ag). 7. Las Lajitas La Cebolleta (Au, Ag) 8. El Cojinillo (Au, Ag) Concessin La Pitahaya. 1. La Coyotera (Au, Ag). 2. San Pablo (Au, Ag) 3. Las minitas Mina de Agua (Cu, Au, Ag). 4. Lomas Rojas (Cu, Au, Ag) 5. Mina de agua El sauce (Au, Ag)

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