Mexico Properties

• 2,900 hectares, direct staking and option to acquire 100% title
• Zinc, silver disseminated mineralization
• 35 km northeast of Durango
• Geologic setting similar to San Martin mine of Grupo Mexico
• Excellent infrastructure, power, water, services
• Moderate climate and topography, elevation of 1,800 m to 2,000 m
• Evaluation samples returned up to 6.59% Zn and 39.8 g/t Ag over 3 metres
• 3-D geophysics planned to test for mineralized structures
• Geological mapping and sampling to define drill targets

Location, access and infrastructure

The Salamandra project covers 2,900 hectares (7,613 acres), located 35 km NE of the city of Durango in the El Guadiana valley in Durango State, with good access from Durango via paved and gravel roads. The access, infrastructure, climate and topography at Salamandra provide favourable conditions for exploration and development.

Geology and Exploration History

The geological setting and mineralization at Salamandra is similar to the San Martin Mine of Grupo Mexico, located approximately 80 kilometres to the southeast. The San Martin Mine is the largest underground zinc-copper-silver mine in Mexico and currently operates at 5,600 tonnes per day.

Chip and grab samples at the Salamandra project contain encouraging grades of zinc and silver mineralization, grading up to 7.84% zinc and 25g/t silver over 3.2 metres. The mineralization is associated with fault and fracture replacement zones within a thin band of argilically altered and silicified siltstones and interbedded limestones along the southern contact of a rhyolite porphyry intrusive. The principal mineralized target area at the Salamandra project is a flat covered area to the south of the mineralized sediment outcrops covered by shallow gravel and basalt.

Nine historical samples taken from the area below the main intrusive body reported strong zinc and silver values as presented in the table below. Two check samples taken during a property evaluation visit in January 2006 confirmed the positive zinc and silver values reported, with anomalous copper grades.

Salamandra project, Durango, Mexico – historical and evaluation samples:

Sample Ref.	UTM Coordinates East       North		Elev. (m)	Width (m)	Gold g/t	Silver g/t	Lead %	Zinc %	Copper %
Historical Samples
426	567516	2670933	1937	Dump	0.05	12	0.07	3.76	0.08
427	567522	2670935	1934	Dump	0.16	10	0.05	3.44	0.04
428	567523	2670945	1934	3.20	0.09	25	0.07	7.84	0.34
429	567488	2670967	1944	25.00	0.02	4	0.06	1.62	0.01
430	567586	2670897	1931	12.00	0.08	16	0.23	3.03	0.03
431	567607	2670878	1944	Dump	0.04	16	0.22	1.40	0.04
432	567653	2670838	1943	10.00	0.03	20	0.35	1.35	0.04
433	567714	2670808	1946	15.00	0.02	10	0.17	0.47	0.01
434	567725	2670805	1940	Dump	0.04	10	0.17	0.41	0.02
Check Samples Jan. 2006
1762	567520	2670938	1934	3.00	0.19	39.8	0.10	6.59	0.52
1763	567517	2670929	1934	Dump	0.01	11.6	0.07	5.58	0.11

Canasil Exploration Program

Canasil has completed a 3-Dimensional Induced Plarization geophysical survey at the Salamandra project in October 2006 to test for anomalous structures below the surface. At the same time a geological mapping and surface sampling program has also been completed for additional surface information. Based on the results of these programs it will be possible to evaluate and determine appropriate drill targets for a Phase 1 drill program at the Salamandra project.

3D-Induced Polarisation Geophysical Survey – October 2006 

Canasil has completed a 10 line kilometer 3-Dimensional Induced Plarization (IP) / Resistivity geophysical survey at the Salamandra project in October 2006 to test for anomalous structures below the surface. At the same time a geological mapping and surface sampling program has also been completed for additional surface information.
The initial survey results show two large chargeability anomalies measuring 200 to 400 metres in width by 800 to 1,000 meters in strike, with thicknesses of 200 to 300 meters. The anomalies are located on the southern flank of an intrusive body below the area of previously sampled surface zinc and silver mineralization, as well as beneath the intrusive body at a depth of 200 to 500 meters.

The geophysical survey area covered the apex and southern flank of a rhyolite porphyry intrusive formation into siliceous-limy sediments. The survey was designed to test for sulphide mineralization with associated zinc and silver bearing zones within limestones and siltstones in a poorly exposed bedrock area along the margin of the rhyolite porphyry intrusive formation. Eleven previous rock chip and grab samples from this area range in value from 0.41% - 7.84 % Zinc and 4g/t - 39.8 g/t Silver, averaging 3.1 % Zinc and 15.8 g/t Silver.

The target is a sulphide mantle replacement zinc and silver mineralized formation along the intrusive contacts, similar to the San Martin deposit of Group Mexico located 80 kilometres to the southeast of the Salamandra project. The San Martin Mine is the largest underground zinc-copper-silver mine in Mexico and currently operates at 5,600 tonnes per day.

Based on the results of the geophysical survey and the geochemical sampling program it will be possible to evaluate and determine appropriate drill targets for a Phase 1 drill program at the Salamandra project.