San Luis Project

Property	An emerging district in the mining-friendly Ancash Region of Peru includes a high-grade gold and silver vein system and a separate porphyry-style discovery. Elevation: 3,800 meters to 4,700 meters. Size: 32,000 hectares (115 square miles).
Ownership	Joint venture with Silver Standard Resources, which currently owns a 55% interest and can increase this up to 80% by funding the project to production. Silver Standard is now the JV operator; Esperanza is fully carried.
Mineralization	In August 2005, Esperanza discovered high-grade gold and silver veins in an epithermal system covering five kilometers of strike length on surface. Prospecting in late 2007 discovered a zone of porphyry-style mineralization six kilometers southeast of the vein system (see map). On December 2, 2008 the company announced a Measured and Indicated Resource of 485,000 gold equivalent ounces contained in 484,000 tonnes averaging 22.3 gpt gold and 57.8 gpt silver.
Current Status	A bankable feasibility study is currently underway.

Two Mineralized Systems Discovered

The San Luis property is an emerging mineralized district in central Peru. To date, two separate systems Have been discovered: the Ayelén high-grade gold/silver vein system and the BP Zone, a potential silver/base-metal porphyry deposit. The Ayelén vein is the focus of on-going work as it presents the best opportunity for near-term production on a significant scale.

The property encompasses over 32,000 hectares of mineral concessions with good road access to nearby population centers. Elevations range from 3,800 meters to 4,700 meters.

The Ayelén System - A Modern Bonanza System

High-grade gold and silver veins are hosted within Tertiary-age volcanic rocks of the Calipuy Formation. Six separate veins were originally identified on surface and a seventh that does not outcrop was discovered by drilling. Ongoing prospecting has identified additional outcropping veins.

Bonanza-grade mineralization (greater than 1 ounce gold per ton) was originally identified in trenches along the length of the Ayelén and the adjacent Inés veins. A 25,000 meter drill campaign during late 2006 and 2007 confirmed mineralization in the subsurface and defined the deposit.

Current resources have been estimated to be:

Category	Tonnes	Gold Grade (g/t)	Silver Grade (g/t)	Tons	Gold Grade (oz/ton)	Silver Grade (oz/ton)	Contained Gold (ounces)	Contained Silver (ounces)	Gold- Equivalent (ounces)
Measured	55,000	34.3	757.6	61,000	1.00	22.1	60,700	1,339,700	81,300
Indicated	429,000	20.8	555.0	473,000	0.61	16.2	286,900	7,655,000	404,100
Measured and Indicated	484,000	22.3	578.0	534,000	0.65	16.9	347,600	8,994,700	485,400
Inferred	20,000	5.6	270.1	22,000	0.16	7.9	3,600	173,700	6,300
Gold-equivalent ounces assume a 65:1 Au:Ag ratio based on US$600/troy ounce gold and US$9.25/troy ounce silver Contained metal may differ due to rounding. Metallurgical recoveries are assumed to be 100%.

The estimate was prepared by independent qualified person Michael Lechner of Resource Modeling, Inc. and Donald Earnest of Resource Evaluation, Inc.

Feasibility Study Underway

Silver Standard, the project's operator, is now in the final stages of a bankable feasibility study of the Ayelén system. It is anticipated that conventional underground mining and precious metal processing systems will be employed.

The BP Zone – A Potential Porphyry System

The BP Zone lies approximately six kilometers southeast of Ayelén. It is contained within the joint-venture property and represents a separate area of porphyry-style mineralization distinct from the Ayelén area of epithermal-vein mineralization.

The BP Zone was originally recognized through alteration mapping and stream sediment geochemistry. A follow-up program identified large areas where surface grab samples yielded significant base-metals (up to 2.2% copper and 11% zinc) together with precious-metals anomalies. The program was followed by a detailed geophysical study that yielded numerous other anomalies.

The area is characterized by one or more mineralized hydrothermal breccias with identified outcrop dimensions of approximately 250 by 450 meters. The breccias contain pervasively altered fragments of volcanic rock with a sulfide-bearing matrix. The rock-chip sampling determined areas of distinct, yet overlapping, copper, zinc and lead mineralization. Anomalous silver and gold was also found.

An initial discovery drill program focused on defining the extent of the hydrothermal breccia and other nearby mineralization. A silver, base metal rich deposit is emerging. Drill results include:

- 127 meters containg 47 g/t Silver, 2.4% Zinc and 2.5% Lead
- 72 meters containg 45 g/t Silver and 0.4% Copper
- 83 meters containg 27 g/t Silver, 5% Zinc and 1.6% Lead

The Qualified Person (QP), as defined by NI 43-101, for the San Luis project, is Kenneth C McNaughton, M.A.Sc., P.Eng., vice president, exploration, Silver Standard Resources Inc.

The San Luis Communities

There are two indigenous communities encompassing the project’s exploration licenses in the San Luis region. They own the surface rights through formal land title, while the federal government holds the mineral rights.

An effective working partnership has been developed between the joint venture and the various parties – both Esperanza and Silver Standard have plenty of experience managing such relationships elsewhere in Peru and South America.

The communities largely depend on subsistence farming and grazing. They are isolated and very few government services are provided. As a result, there is inadequate access and little infrastructure in the area. Poor schooling has led to a low 30% literacy rate.

The joint-venture partners are committed to working with the communities to improve infrastructure, education and health services, as well as the local economy. The principal consideration is to work as a partner (not benefactor) to define both the ways and means of achieving community goals.