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 25,000 hectares (95 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). In addition, stream-sediment sampling produced a number of gold anomalies throughout the property.
Current Status	By the end of 2007 drilling on the Ayelén Vein had confirmed the high grades along strike for 650 meters and down dip for 225 meters. A pre-feasibility study will begin in early 2008. Other veins will be tested for additional high-grade shoots and underground exploration will commence on Ayelén as soon as permits are in place. Drilling in late 2007 identified significant silver/base metals mineralization within one or more breccia pipes of the BP Zone. Geologic indications point towards a distinct porphyry-type system. More detailed exploration has commenced on other areas of the property to locate the source of stream sediment anomalies identified in reconnaissance work late in 2006. To date, only 25% of the property has been prospected.

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 property encompasses over 25,000 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 - Five Kilometers of Identified Veins

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

Mineralization within the veins is characteristic of classic quartz-adularia, low-sulfidation epithermal systems. Vein textures, such as well-developed banding and brecciation, indicate that repeated episodes of gold and silver deposition have occurred. Epithermal vein systems typically form multiple ore deposits spaced along the veins.

Bonanza-grade mineralization 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.

Underground Exploration Program Being Permitted

Silver Standard, as joint venture operator, is applying for permits for an underground exploration program of the Ayelén Vein. This underground work will determine the continuity of precious metal mineralization and form the basis of an updated resource and a feasibility study.

Exploring for Other High-Grade Structures

Exploration continues on other known quartz veins in the vicinity of Ayelén to identify additional high-grade structures. This work consists of prospecting, geological mapping and geophysical studies, to be followed by drilling. Recent field work has identified several other vein structures on the 25,000-hectare property. These will be systematically sampled and, if warranted, drilled in the coming field campaign.

Early Feasibility Study Planned

Silver Standard has announced that a feasibility study for the development of Ayelén is expected to begin in early 2008. Preliminary metallurgical test work using conventional hydrometallurgical processing has yielded recoveries of 90% for gold and 80% for silver. Additional studies are underway to optimize recovery rates.

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.

Drilling Encounters Porphyry-Style Mineralization

At the end of the 2007 drill program, four diamond drill holes tested a number of geophysical anomalies that are coincident with the BP Zone. Noteworthy results include:

Drill hole SL-131 was drilled within the outcrop area of hydrothermal breccia and from surface encountered 45 meters containing 0.53% copper, 62.7 grams per tonne silver, 0.02 grams per tonne gold, 0.11% lead and 0.10% zinc.

Drill hole SL-130 was drilled approximately 300 meters northwest of the outcropping breccias and was designed to test a geophysical anomaly. This hole encountered a 54-meter section of hydrothermal breccia containing 0.11% copper and anomalous silver, gold, lead and zinc. This intersection possibly expands the area of the mineralized breccia or indicates the presence of multiple breccia bodies.

Drill holes SL-132 and SL-133 were drilled west and southwest respectively of the outcropping breccia and were designed to test additional geophysical anomalies. Although there was porphyry-style alteration they did not yield significant metal values.

Aggressive BP Zone Drill Program in 2008

Extensive rock alteration and the hydrothermal breccias, as found both at surface and in the drill holes in the BP Zone, are indicative of a porphyry-style environment and potential associated mineralization. Silver Standard is planning an aggressive drill campaign on completion of permitting.

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.