William Pincus President and Chief Executive Officer

Location of Esperanza’s major deposits

Virtually any company can encounter a roadblock in the path to success, but by the time a metals company can see the light at the end of the tunnel, the path is almost always clear. Esperanza Silver Corporation has just reached that phenomenal point in development. The path is clear, and the opportunities that lie ahead look rather bright.

A well-funded company, Esperanza started exploration in 2002 with one good idea in mind – leverage the power of an existing team that worked well together to find worthwhile silver projects. As their work moved forward, though, two of their biggest finds turned out to be gold deposits instead, significantly increasing the value of the company. Both projects are significantly advanced in terms of development.

Cerro Jumil – Located in the Morelos State of Mexico is a potential heap-leach gold project. The studies completed on the property to this point have fairly exciting results, too.

“We’ve just recently announced the results of a preliminary economic assessment,” said President William Pincus.  “We have a defined resource of approximately 1.1 million ounces of gold.  We’ve conceived of this project as an open pit, heap leachable project.  In the scoping study, we’re looking at two stages of crushing; open pit mining, as I say.  We will produce on the order of 50,000 ounces of gold per year at a cost estimated right now to be $418 per ounce.  It gives us approximately a 20 percent rate of return and a $47 million net present value at our base case, which is $800 gold . . . the highest we went in our review was $950 gold.  That makes the net present value close to $100 million and a 35 percent rate of return.”

As drilling begins again in October and continues to progress, there’s also some thought that what is now being classified as waste material can be converted to ore, which will only help the profits as this project expands. Thanks to some innovative thinking by the team behind the project, Pincus believes there’s quite a bit of room for improvement on the initial capital estimate of $70 million. What’s more, though, is that the project is closer to production than many in the industry today.

“I think we’ve laid out a pretty clear road map of what we have to do to get to bankable feasibility.  Aggressively, I think we could do it in a year, say year to year and a half.  And then,  assuming smooth financing of the project, it would take maybe another year to build  after that.  So, we’re at late 2011, maybe,” said Pincus.

While there’s certainly quite a bit of planning at Cerro Jumil, Esperanza has another project in development that has shown some fairly promising initial results.

San Luis – Located in Peru, San Luis is a joint venture between Esperanza and Silver Standard Resources. A bonanza grade deposit in a vein system, there’s more than one ounce of gold per ton, and resource estimates indicate it’s just shy of a half-million ounces. Because history suggests these systems have ore shoots throughout the vein and there’s quite a bit of the vein left to explore, the potential looks quite exciting. Silver Standard is in the process of conducting a bankable feasibility.

Part of what makes any company an exciting prospect is the projects they’re undertaking, but it’s often nice to have a bit more to move forward with. In the case of Esperanza Silver, it’s the team behind the projects right up to the president himself.

“I started out, like many, as a geologist graduating from school, and I’ve been in this business now for a little over 35 years, which is somewhat amazing to me . . . I started Esperanza Silver in 2002.  Initially, the idea was to put together the old exploration team from Sunshine Mining, which is a company I used to work for - a couple of people up here in North America and then a small exploration team of Peruvian geologists, folks that I had known very well and worked with.  I should say that the initial idea was that we were going to . . . go out and look for silver projects.  As luck would have it, our two main projects are really gold.  So now, I tell people we started out looking for silver; we found gold, so we will continue to look for silver.  It’s worked out so far and no one’s complained,” said Pincus.

A fairly small organization, both of their biggest assets were grass roots discoveries they made together. There’s quite a bit of history behind this team, too. They were responsible for Pirquitas, and they made the initial discovery at Esquel, now a 3 million ounce deposit in Argentina. Chief geologist Bill Bond factors into this successful history too. He discovered West Chance, a blind ore deposit at the Sunshine Mine thanks to a geologic hunch. It turned out to be 50 million ounces of silver. A team with a track record like that is hard to miss, and it’s an easy predictor of the quality of the people behind the projects.

The market seems to indicate precious metal prices are on the increase, and Esperanza Silver has some exciting projects on hand.

For more information:

http://www.esperanzasilver.com

570 Granville Street, Suite 300
Vancouver, British Columbia
Canada V6C 3P1
Tel: (604) 685-2242
Toll-Free: (866) 890-5509
Fax: (604) 681-1157

US Office:
1580 Lincoln Street
Suite 680
Denver, Colorado
USA 80203
Tel: (303) 830 0988
Fax: (303) 830 9098