CERRO PRIETO PROJECT

Highlights

• Gold resource: 390,000 ounces gold and 6,080,000 ounces silver resource, 98% in the Measured and Indicated resource confidence classification
• 85% extraction of gold in preliminary leach tests
• Zinc resource: +550,000,000 pound zinc resource (100% M&I) with 85.3% extraction in preliminary leach tests.
• 14,500 meters diamond drilling in two phases completed. Detailed drilling on 1,000 meters of strike length to a depth of 300 meters to yield Resource
• Excellent resource expansion potential on 7,000 ha of 100% owned concessions encompassing 17.5 km of strike length of geological structure being tested at Cerro Prieto.
• Thickness of zone, topography and grade indicate potential for very low cost initial open pit operation focused on mining oxide gold resource.
• Premier logistics include water source, paved highway and national power grid within 10 kilometers,  and good mining work force less than one hour travel time from project
• Mining friendly Mexico gives the opportunity to put project into production within a short time frame.
• Phase Two metallurgy studies initiated October 2009.Base Line Environmental Study and Preliminary Economic Assessment by an independent mining engineering firm underway.
  

Concessions: San Francisco (15 hectares), San Felix (200 hectares), and Cerro Prieto North (2,508 hectares), and Argonauta (4,200 ha).

Ownership: Oroco owns a 100% interest in each of the three properties. The San Francisco and San Felix properties are subject to a 2% NSR. The Argonauta concession was optioned from Yamana Gold Inc. on May 11, 2009. The Option terms include the issuance of 500,000 common shares to Yamana upon signing of a formal option agreement, the completion of at least 1,500 meters of drilling on the Optioned Property before January 1, 2011, and the issuance of an additional 500,000 common shares to Yamana on or before January 1, 2011.Thereafter the property is 100% owned by Oroco, subject to a 2% net smelter return royalty payable to Yamana.

Location: Sonora State, Mexico, 135 kilometers north of state capital Hermosillo. The concessions cover land that is a privately owned cattle range land with no communities or residents. Access to the property is secured by agreement with the landowner. The nearest community of Cucurpe is 12 kilometres south. The regional center of Magdalena de Kino (population 40,000) is 27 kilometres northwest and is a one hour drive on mostly paved road.

Infrastructure: National Grid power lines and a paved road leading to the State’s major highway are each less than five kilometres from the property. Ground water is available on site and a river flows year round four kilometers south of the property. There are numerous nearby road and rail links to ports in the state of Sonora.

NI 43-101 Compliant Resource: (UPDATED APRIL 29, 2010) The results of an updated independently calculated mineral resource estimate based on data from the Phase 1 and 2 exploration programs were announced on April 29, 2010.

The previously released results of 14,551 meters of drilling in 66 holes now outline a zone containing potentially economic oxide resources over a strike length of 1000 meters to a depth of approximately 300 meters from the crest of the hill which hosts the mineralization.

NI 43-101 COMPLIANT RESOURCE USING 0.25 g/T GOLD CUT-OFF

CONTAINED METAL IN 0.25 g/T GOLD CUT-OFF RESOURCE
 
NI 43-101 COMPLIANT 20.4 MILLION TONNE INDICATED RESOURCE USING 0.5% ZINC CUT-OFF

The San Francisco and San Felix concessions were optioned in November of 2006 and the acquisition completed in March of 2008 with the payment of the full purchase price.  Exploration commenced in April 2008 immediately following Oroco’s initial public offering.  The objective of the Phase I exploration program was to confirm the historical resource reported in 1999 (which was based on a 23 hole reverse circulation drill program and an underground and surface sampling program, and to test for the potential to expand that resource.  The historic, non-NI43-101 compliant resource was considered important as a guide to the potential of the property but the objective of the Phase I exploration program was to both confirm the historical resource and test the potential for the presence of a larger, bulk mineable zone of economic mineralization along strike, and at depth, where mineralization remained open and where the previous operator had not drilled nor reported a sampling program. That Phase I program was completed in October of 2008 with excellent results.  The program consisted of a total of 5,975.1 meters of diamond drilling in twenty-four holes, trenching and sampling across the mineralized shear zone at 50 meter intervals, and mapping on surface.  Twenty-two of the holes drilled intersected the mineralized zone with a true thickness ranging from ten meters to greater than fifty meters, with an average true thickness of approximately forty meters, while two drill holes were abandoned due to poor ground conditions before hitting the structure.  Drilling has now been completed at 100 meter spacing along 600 meters of strike length to a maximum depth of 400 meters, allowing for an initial indicated resource and inferred resource to be calculated.  In addition, a single drill hole drilled 300 meters along strike of intensive drilling intersected a strongly mineralized zone.  Drilling, trenching, and mapping have now traced the mineralized structure for 1250 meters on surface to a maximum depth of 400 meters. 

YAMANA OPTION

The 4,200 ha Argonauta concession was optioned from Yamana Gold Inc. on May 11, 2009. The Option terms include the issuance of 500,000 common shares to Yamana upon signing of a formal option agreement, the completion of at least 1,500 meters of drilling on the Optioned Property before January 1, 2011, and the issuance of an additional 500,000 common shares to Yamana on or before January 1, 2011.Thereafter the property is 100% owned by Oroco, subject to a 2% net smelter return royalty payable to Yamana.

The Optioned Property covers projected extensions to the north and south of the mineralized shear zone on the Company’s 100% owned Cerro Prieto project claims (“Cerro Prieto”) which host the recently announced estimated resource.  The extensions total 9.2 kilometres and include 1.7 kilometres of projected strike length between Cerro Prieto and the Company’s 100% owned Cerro Prieto North claim (“CPN Claim”) and 7.5 kilometres to the south of Cerro Prieto. 

To the north of the estimated resource, the Company has established the continuation of the Cerro Prieto mineralized zone to its northern boundary with the Optioned Property.  In addition, the Company established what it believes to be the continuation of the mineralized zone on the CPN Claim with highly anomalous assays from samples taken over a series of outcrops of the mineralized zone along 400 metres of strike length (see the Company’s April 30, 2008 news release).  Furthermore, Mexican government geologic maps identify the historical gold and silver La Tinaja mine on the projected mineralized zone on the Optioned Property approximately 450 metres north of CP023, the Company’s northernmost drill hole on Cerro Prieto.  Consequently, the Company is of the opinion that the mineralized zone continues to the north on to the Optioned Property and possibly strikes to and through the CPN Claim. 

To the south of Cerro Prieto, the Optioned Property covers a previously unexplored potential 7.5 kilometre extension of the mineralized shear zone.  In total, Cerro Prieto, the CPN Claim and the Optioned Property cover a total potential strike length of the mineralized shear zone of 17.5 kilometres. 

Diamond Drill Results – Table – Cross Sections
Trenching and Sampling Results – Plan View

At the completion of Oroco's Phase 1 exploration program at Cerro Prieto, Giroux Consultants Ltd. of Vancouver, an independent consulting firm specializing in resource and reserve calculations completed a resource calculation using information from 23 of the 24 holes completed by Oroco in 2008 (Drill hole CP023, considered a step out hole, was drilled on strike, 300 meters north of the area of drilling at 100 meter intervals, and intercepted a broad zone of well mineralized rock but data from this hole was not included in the resource calculation).

The results of an independently calculated mineral resource estimate based on data from the Phase 1 exploration program were announced on January 27, 2009. With the completion of preliminary metallurgical demonstrating high percentage recoveries of gold and zinc the resource estimate was redefined and a restated resource estimate was issued on May 12, 2009.

A Phase 2 drill program is planned for 2009 which will include drilling the strike length between this hole and the area of the initial resource calculation, where mineralization has also been confirmed by trenching and sampling on the outcropping structure, as well as drilling on strike north of this hole to the property boundary, as well as a detailed metallurgical study, an environmental study, underground cleaning, mapping, and sampling. Following this program the Company intends to undertake a prefeasibility study on the project.

The Cerro Prieto North concession was acquired through direct application and lottery with the Department of Mines in July 2007. Oroco targeted this area as it was considered prospective for additional strike length of the regional structure hosting the Cerro Prieto Mine. This was confirmed through a limited exploration and sampling program in 2008 which returned channel sample assays as high as 2.8 g/t Au, 200 g/t Ag, 2.26 % Pb, and 3.17% Zn, from samples taken on a 300 meter outcrop of the structure on surface.

METALLURGY

The Company retained SGS de Mexico, S.A. de C.V. (“SGS”), under the direction of the Company’s consultant, Mr. Art Winckers of Arthur H. Winckers and Associates (“Winkers”) to conduct a preliminary metallurgical study on sample rejects from drill holes CP009 and CP019, two holes that are considered to be representative of the deposit.

SGS was asked to deliver results for precious metal extraction using a cyanide leach and for zinc extraction using a sulphuric acid leach.  Highlights of the results of the tests include

1. Gold – using a grind size of 80% minus 200 mesh and a NaCN concentration of 3 g/l extracted an average of 91.5% of the gold and 35% of the silver over 6 tests in a 96 hour leach.
2. Gold – using the minus 10 mesh fraction and a 0.25 g/l sodium cyanide concentration on an overall composite sample resulted in 85% gold extraction and 19.7% silver extraction within less than 48 hours.
3. Zinc – using a grind size of 80% minus 200 mesh, and a sulphuric acid addition of 31 kg/t extracted an average of 64% of the zinc and 13% of the silver in a 6 hour leach. Winckers noted that the relatively low recovery was probably a result of the short leach time.
4. Zinc – using the minus 10 mesh fraction on an overall composite sample and a sulphuric acid addition of 35.8 kg/t resulted in an 85.3% zinc extraction and a 13.0% silver extraction within less than 72 hours.
5. Lead – lead was not recoverable above 10% in any of the tests attempted.

Winckers concluded that: “The results of these very preliminary leach tests are viewed as promising considering that high zinc and gold extractions were obtained with low lixiviant additions that are not considered to be optimized.”

The 85.3% zinc recovery using only 35.8 kg/t of sulphuric acid indicates the lack of problematic carbonate rock and silicate minerals in the Cerro Prieto Project.  Most producing zinc oxide deposits are in carbonate hosts and many also contain zinc silicate minerals.  As zinc is extracted using sulphuric acid, and carbonate rock neutralizes sulphuric acid, extraction of zinc in carbonate hosts requires either a very high amount of sulphuric acid (up to 200 kg/t) to digest both the carbonate and the zinc or a very costly alternative method to reduce the carbonate rock prior to extraction of the zinc.  Zinc silicates are also difficult to extract requiring either very high rates of acid use or other, very costly, alternate techniques.  The preliminary zinc extraction rates achieved indicate that zinc silicates are also not a problem in the Cerro Prieto mineralization. 

Cerro Prieto Project: Mineralization

Polymetallic mineralization (consisting of gold, silver, lead, and zinc with strong indications of copper and molybdenum mineralization in the deepest holes) at the historical Cerro Prieto Mine is contained within a major regional shear zone traceable for a total strike length in excess of 10 kilometers, with approximately 6.5 km of strike length contained on Oroco’s concessions. This shear zone cuts all geological units from Jurassic to Lower Tertiary in age.  Within this shear zone are contained hanging wall and footwall veins, secondary veins, breccia zones and stringer zones, which, where tested, produce continuous mineralized zone from approximately 10 m to in excess of 50 m thick.

At the mine site the geological structure strikes north 350° and dips from vertical to 80° to the east. Mineralization outcrops on surface across the entire length of the San Francisco and San Felix concessions, a distance of approximately 1.7 kilometers, and extends to below the lowest levels yet drill tested, over 400 meters below. It remains open at depth, to the north and to the south.

The Project is interpreted to be a strong epithermal mineralizing system, no older than Tertiary in age, signifying considerable additional depth potential below the deepest drill intercept.

Oxide mineralization has been intersected from surface to a depth of 400 meters with significant sulphide mineralization only intersected in hole CP011, the deepest drilled to date.