IMPACT Silver Mine Tour

March 29-31, 2008

Overview

IMPACTSilver is an emerging silver producer whose primary properties

are in an area of Mexico with a centuries-long history of prolific silver
production. The company currently has fourmines that feed a mill,
producing silver-lead and zinc concentrates. The mines and mill are
located in the town of Zacualpan, southwest of Mexico City, about
three hours driving distance. In March 2008, the company invited me
to come to Mexico to participate in a mine tour, described in this
report.

Day One: Arrival

I flew in to Mexico City on the afternoon of March 29th. The members of

the group congregated at the airport, arriving over the course of a few
hours. When all of us had arrived, we headed over to the Marriott
Hotel at the airport for dinner at Los Huertos. The tour group consisted
of:

• Sean R. – IMPACT Silver Investor Relations consultant

• Paul F. – Professional Investor
• Greg M. – Newsletter Writer and Precious Metals Dealer
• Mike P. – Editor, Investor’s Digest of Canada
• Nick W. – Professional Investor and Director of MineServe LTD
(UK)
• Mike Z. – Investment Advisor, Haywood Securities

After dinner, a van arrived at the hotel and we all piled in for the three-
hour drive to Zacualpan. This was not my first trip to Mexico, but it
was the first time I had been in Mexico City. The sheer scale of the city
is almost mind-numbing and it took almost an hour traveling at a
decent clip to reach the outskirts.

Upon arrival in Zacualpan, we checked in to the Hotel Mineros in the

center of town. Zacualpan is a small town with a couple thousand
residents. The closest analogy that came to mind for me was central
Italy with it’s hill towns and stone-paved streets. The rooms at Hotel
Mineros are about as luxurious as a monastery, but I found them to
beclean, well maintained and perfectly suited for our purposes. The
hotel staff is wonderful and their hospitality is sincere and abundant.
Day Two: The Royal Mines of Zacualpan

After breakfast at the hotel, we walked through town to get to the

pickup trucks that were waiting to take us over to the mine offices.
Saturday is market day in Zacualpan and the vendors who had begun
setting up at 4:00 a.m. directly outside the hotel were in their stalls,
ready to do business.

Once at the mine offices, Fred Davidson, IMPACT’s CEO and George
Gorzynski, a senior geologist walked us through the latest corporate
PowerPoint presentation and described the itinerary for the day.

El Chivo

The first mine we went to see is called the El Chivo Mine. El Chivo is a
few kilometersfrom the mine offices, so we got in the trucks and rolled
out. We stopped along the way a couple of times. During these stops,
Hector, a senior exploration geologist would tell us about the
geological features of the landscape and point out where old workings
were located.

Hector would point to half a dozen places, identifying where

mineralized veins had been identified. Each vein is named and Hector
not only knows their names, but also described the type of
mineralization and silver, zinc and lead content for veins they have
sampled. To say that his knowledge of the area is encyclopedic
borders on understatement.
In some cases, the appearance of a tree in the middle of a cornfield is
an indicator that an old shaft or opening is located there. In many
cases, information about locations of old workings comes from simply
speaking to the locals: farmers who work the land and miners who
have lived in the area all their lives.

La Guadalupe/La Gallega

After returning from El Chivo, we went to see the mines which are
adjacent to the mill: La Guadalupe and La Gallega. IMPACT acquired
the mill and associated mines from a car dealer based in Mexico City
who prided himselfon having operated the mill and mines without
having invested a dime into them.

While this was an arrangement that worked well for the owner, over
time it had been detrimental to the mill and the morale of the
workforce. After IMPACTacquired the operation, the mill was
completely refurbished and mining operations were brought into
compliance with modern safety standards and practices. Morale
turned around as it became clear that the company was now being run
in a manner that would benefit everyone.

The entrance to the Guadalupe mine is about 100 metersfrom the mine
office. After walking into the mine entrance, we came to an elevator
that is used to access the lower levels. Another elevator is used to
bring ore to the surface for processing after being mined. Down below,
the underground tunnels run for kilometers. The company is looking at
planning to put in rails that will move the ore more efficiently from
where it is being mined to the ore shaft.

The Mill
First the ore is passed through a large grate, called a “grizzly”. Most of
the ore passes through, but the rocks that are too large are broken up
until they do fit.

The ore is passed along a set of conveyers through a couple of

different types of crushers: a jaw crusher and a cone crusher.

After passing through the crushing circuit, the ore is sent to a ball mill.
IMPACThas a couple of ball mills in operation. These mills are huge
cylinders that contain dozens or hundreds of steel balls. As the
cylinder turns, the balls are raised up by fins on the inside of the mill
and then gravity causes them to drop onto the ore, essentially turning
gravel-sized rocks into powder.

The powder is then run through a concentration circuit that looks like
an industrial mud bath. After this step, the concentrate is run through
a process that removes some of the water, yielding a product that has
the consistency of clay. The concentrate is then taken in batches and
spread across what looks like a parking lot to dry in the sun.
When the concentrate has dried enough, it is scooped up with a front-
end loader and dumped into trucks that bring it to a smelter. The dried
concentrate is the final product from the mine and mill. It is at the
smelter where the concentrate is processed into zinc, silver and lead
ingots.

Day Three: Exploring The Mamatla District

About a year ago, IMPACThired a senior geologist who has been

dedicated to the formidable task of assimilating data regarding the old
mine workings on their properties. In that time, the number of known
workings has increased from fewer than two hundred to over nine
hundred. IMPACT expects that number to grow to over two thousand
by the time the survey is complete and that this effort will require
approximately two more years.

Information about locations of old workings come from: walking the

properties, speaking to miners in the local population, speaking with
farmers, historical data that was acquired from the previous operators
of the Guadalupe mine and data obtained from Valerie Gold.

As IMPACT inventories these workings, information about them is fed

into a Geological Information System (GIS). The information being
collected includes: the condition of the working (collapsed, intact), size
of the working and sample grades of mineralization. As the pictures
below depict, the areas hosting a large number of workings are
beginning to look like blurs. When an old working has been located,
field work includes:

– digging it out
– draining the water
– sampling the rock
– mapping the site
– drilling
For the Mamatladistrict, the company has compiled 27,000 assays and
analyses. Each analysis has 40 cells associated with it, so this effort is
amassing an enormous amount of data and they are still relatively
early on in the process. As they are still collecting data on the
workings that have already been identified, IMPACTis not actively
adding to the list. Even without an active search effort underway, they
are still adding 10-14 new occurrences every week.

Previous Work At Mamatla

Mamatla was previously explored by Valerie Gold, in the mid-1990’s.

The company spent over $10 million exploring and developing the
Aurora and Capire deposits, but werenot able to bring them into
production. The main reason why they were not able to proceed to
production is that they had spent the money they raised quickly in
order to capitalize on what was a hot market at the time. Then the
Bre-X scandal rocked the industry and it was impossible for most
juniors to raise additional funds after that.

Known Mamatla Deposits: Aurora I and Capire

Valerie Gold was able to identify two deposits in the Mamatla district:
Aurora I and Capire. There are resource estimates for each of these
deposits, but the estimates pre-date 43-101 reporting standards and
cannot be relied upon under current regulations. The historical
estimates are:

Capire: 1,154,000 tonnes @ 73g/t Ag, 0.22g/t Au, 0.45% Pb, 1.13% Zn

Aurora I: 194,000 tonnes @ 180g/t Ag, 1.28g/t Au, 2.13% Pb, 4.45% Zn
These deposits are of a different character than the operating mines
that IMPACThas in the Zacualpan district. Those mines are narrow-
vein, high-grade systems. The Mamatla deposits are more widely
disseminated systems and are of a type known as VMS systems or
Volcanogenic Massive Sulphides. While IMPACT has yet to conduct any
deep drilling, one intriguing aspect that may hold the key to massive
upside is the possibility of a copper-gold layer of mineralization that
lies underneath the silver-lead-zinc layer. We did not discuss this in
detail, but it was clear that the geologists believe that this potential
merits further attention.

Summary

I have owned shares in IMPACTSilver since late 2005. Over that time I
have had the opportunity to watch the company grow and develop. My
impression has always been that IMPACTis a company being run by
extremely competent mining professionals, focused on building a
profitable company. It was an honor to have been invited to participate
in this mine tour and I am grateful that I was able to do so. What I
experienced on the tour only served to strengthen my conviction that
initial impressions and instincts were valid.

What you frequently hear cited as the single most critical success
factor in mining is the people. Having a great property is meaningless
without the personnel with the experience, skills and knowledge to
make a successful business from it. Given the ongoing boom in the
mining industry, attracting and retaining the right people is no small
feat in itself.

I was repeatedly struck by the quality of the people I was able to meet
and spend time with on this mine tour. There is just no way that
anybody can get a sense of this any other way. Conversations on a
trade show floor can give you an indication in this direction, but that’s
only scratching the surface. Being able to spend a couple of days with
the management team, the geologists, the mining operations
managers and yes, even investor relations, provided insights that just
cannot be gotten any other way. IMPACTgets high marks on all counts.
The team of senior geologists wereparticularly impressive. Each of
these guys can literally pick the company for which they would to work
and that they have chosen IMPACTspeaks volumes. It’s a great
company in a great locale run by a great management team and that
is what has enabled them to attract professionals of such high caliber.

Another critical success factor in the mining industry is land position.

IMPACT has secured two massive districts, Zacualpan and Mamatla,
thatthe geologists referred to as a “100-year project”. There is no
question that, just as this area has been mined for centuries, that there
is huge potential there for more years than I will see in my lifetime.
While the company has made enormous progress on just
understanding what they have in their concessions, a great deal of
work remains to be done to complete the picture. In a couple more
years, IMPACT will have a much clearer idea as to what they have and
with what has already been done, it will certainly be world-class.

Finally, out of the many hundreds of junior exploration companies out

there, very few of them will be able to make the transition to becoming
a producer. IMPACT, while having the exploration potential of the best
of the juniors, has already made that transition and arewell on their
way towards becoming a mid-tier silver producer. The analogy that
comes to mind is of a well-oiled machine. The pipeline of deposits is
stuffed full and finding the next one to put into production is not the
issue. The issue is to inventory and prioritize the production-worthy
deposits.

Last but not least, I think it is important to mention that the people of
Zacualpan are also beneficiaries in this process. When IMPACTbegan
operations, the town was in a state of decline. Now that they have
gotten the mine turned around, the wealth that is being created is
becoming apparent in the local community. Whereas you would never
have seen new cars, trucks or houses before, they are starting to
appear now. The townspeople have a long affiliation with mining and I
am sure that they are seeing a brighter future in their community with
a renewed confidence.
I am sure that there will be challenges along the way as
IMPACTcontinues to grow the company and their production. But what
is equally clear is that they have the team in place that is up for
anything that comes their way. As I packed my bags, said my
goodbyes and headed out of Zacualpan, I felt very good about being
an owner of this company.

The entire set of photographs from the tour are available here:
http://picasaweb.google.com/Plznohype/ImpactSilverMineTourApril2008