Resource World Magazine

Prospero Silver JV's Mexican project with Silver Standard While it has been frequently listed as the top silver producing nation in the world, on an annual basis, Mexico is among the top 10 worldwide producers for at least 17 different minerals, a testament to the productive geology that exists in much of the country. According to the Mexican Ministry of Economy, with more than 328,000 people directly employed at various mining projects in Mexico, the mining sector was estimated to be the fourth largest income source within the country in 2012, ranking ahead of tourism. Part of this boom in domestic mining has come as a result of competitive advantages in Mexico compared to other countries with similar geology. Mexico has a low rate tax structure, an established legal system with secure title for property concessions, and a favorable bias towards permitting and development for mining projects. As a result, these policies have attracted foreign investment. Canadian companies lead the pack for mining and exploration investment by a wide margin. Just during the last 10 years, Canadian companies have invested billions of dollars to advance projects, creating tens of thousands of direct mining jobs in Mexico and hundreds of thousands of new jobs indirectly. While this wave of investment capital has fueled the boom and led to greater prosperity throughout the country, it has perhaps contributed to one less salutatory outcome as well; established Mexican mine operators are now feeling the pressure of competition from foreigners. The presence of Canadian mining companies has contributed many benefits to the local communities where they are active. To maintain a positive relationship, foreign companies actively look for opportunities to assist the community. This can involve small scale initiatives such as restoring local parks and monuments, painting a school, or sponsoring important celebrations and festivals. There is also a need to demonstrate leadership as environmental stewards. Planting trees by the thousand, or organizing litter cleanup efforts, can demonstrate the commitment to protect the environment for future generations. On a larger scale, mining companies may enhance local infrastructure by building roads, community centres, or by putting in place water treatment plants with the capacity to service residential needs as well as providing water directly to mine operations. Another positive social benefit comes from the decision to sponsor scholarship programs in geological sciences, or participate in training programs to upgrade the skills for workers with diploma courses in truck driving, heavy equipment operation, underground drilling, and equipment maintenance, allowing workers to earn higher incomes. There is also an increased focus on safety training. The cross cultural relationship with Canadian mine operators has led to some significant changes within the Mexican mining sector. One obvious example is evident from the number of women now employed at many mines, an avenue of employment once almost exclusively available to men. Mexico has a strong tradition of mining and there are several commendable universities that offer geology and mining engineering that compare with the best universities in Canada or the United States. The cross cultural relationship with Canadian mine operators has led to some significant changes within the Mexican mining sector. APRIL 2013 William Murray, Chairman, reports Prospero Silver Corp. [PSL-TSXV] has signed a definitive agreement with Silver Standard Resources Inc. [SSOTSX; SSRI-NASDAQ] for an option to joint venture Prospero's San Luis del Cordero property in central Durango State, Mexico. Under the terms of the agreement, Silver Standard can earn a 51% interest over three years by spending US $3.5 million, a minimum of 4,000 metres of drilling in year one, and making cash payments totaling US $1.5 million. Upon Silver Standard earning a 51% interest, the initial joint venture program must have a minimum cost of US $4 million over three years and require the preparation of a pre-feasibility level study. The mineral concessions comprising the San Luis del Cordero property are currently held by a Mexican company that is a related party to Prospero. The claimholder and Prospero have entered into an agreement whereby Prospero may acquire a 100% interest in the property (subject to a 2% net smelter royalty payable to the claimholder) contemporaneously with Silver Standard earning in its interest under the joint venture agreement. The San Luis del Cordero property has a mineralized zone grading 630 g/t silver, 1.2% copper and 2.0% zinc in the Sta. Rosa vein. More extensive copper-silver skarn mineralization is in two targets – the Sta. Rosa East skarn zone and La Puerta skarn. Prospero Silver has other projects in Mexico, including the Baborigame gold-silver project located 270 km southwest of Chihuahua City, the Santa Maria del Oro gold property in Durango State, and the Campana gold-silver property in north-central Durango. n www.resourceworld.com 9

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