Prospecto Minero Don Pancho

PROSPECT: Don Pancho

ORE MODEL: Carbonate replacement deposit (Pb-Zn-Ag-Mn)

SIZE POTENTIAL: Large (50,000,000 MT)

DEPARTMENT: Lima

MAP SHEET: Canta, 23-j

CENTRAL COORDINATES (UTM): 325,000E; 8,761,000N; Zone 18S.

DATE OF FIELD VISIT: May 24-25, 2012

GEOLOGIST: S. Park

PROSPECT SUMMARY

The Don Pancho prospect hosts stratabound Pb-Zn-Ag-Mn mineralization (CRD type?) hosted in

steeply dipping Cretaceous carbonate and clastic sediments. Mineralization occurs in a sedimentary

package forming a dip slope that has 800m of strike length. Mine workings and road cuts provide for

an estimation of a thickness of 170m for this host sedimentary package, although not all units are

mineralized. Mineralization also occurs in breccia zones subparallel to bedding planes of the host

sediments.

Check sampling from the field visit verified values given in the qualifying report written on the

prospect in 2008. High values in the check samples were 6.5% Pb, 10.9% Zn and 5.9 oz/t Ag.

Stellar Mining should proceed to acquire this prospect.

PROPERTY DESCRIPTION

Location

The Don Pancho property is located approximately 100km northeast of the city of Lima in the

Department of Lima, Province of Huaral, District of Altavillos Alto/Santa Cruz de Andamarca.

The property is transected by a dirt road that provides easy access from the nearby town of San Jose de

Banos. Drive time from Lima through the towns of Huaral and Acos is less than 4 hours.

Segment Km Road Surface Time Road Condition

Lima-Huaral 97 PanAm Hwy 1.5 hr Excellent

Huaral-Acos-San Jose de Baños 90 Paved hwy + dirt road 2.5 hrs Good

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Mining Concession

The property is comprised of one mining concession of 600 Has. named “Kukin”.

Concession Code Titleholder Size

(Has.)

UTM

(NW Corner)

UTM

(SE Corner)

Kukin 010414706 Hatum Minas SAC 600 8763000N,

324000E

8760000N,

326000E

COMMUNITY RELATIONS AND SOCIAL FACTORS

The district around the property contains numerous mines, the largest of which is the Santander Mine

operated by Trevali located 8 km east of the Don Pancho prospect. Communities in this district are

reliant on mining for employment; the local folk appear to be amenable to new mining projects.

PROSPECT GEOLOGY

Mesozoic Sediments

The Property is underlain by a sequence of steeply dipping continental shelf sedimentary rocks of

Lower Cretaceous age. The most prominent unit of this stratigraphic section exposed on the property is

the Chimu quartzite that forms the base of the Goyllarisquizga Group. Overlying the Chimu Fm are a

series of medium to fine-bedded units of limestone, sandstone and siltstone of the Farrat, Carhuaz and

Santa Formations. Thick-bedded limestone beds of the Pariahuanca Formation cap the Goyllarisquizga

Group and are in turn overlain by interbedded marl, mudstone and fine-bedded limestone of the Chulec

and Pariatambo Formations.

Disconformably overlying these carbonate sediments is the Calipuy Formation of volcanic flows of

andesitic composition with lesser amounts of rhyolite and dacite.

No intrusive rocks are exposed on the property. INGEMMET mapping shows a felsic stock exposed 3

km north of the property along a fault zone cutting the sedimentary package.

Structure

The INGEMMET mapping shows that the structural grain through the district is oriented NNW as

defined by faulting (reverse and normal) and fold axes in the sedimentary rocks. Folding and faulting

is the result of compressional forces during Late Cretaceous to Early Pleistocene time. Second order

transform faults with strike-slip displacement trend to the NE across the district.

The sedimentary units are tightly folded through the property resulting in steeply dipping units (60o –

70 o), the more resistant of which form ridges that outline the stratigraphy.

The most prominent fault through the property runs NNW and forms the eastern boundary of the

southern mineralized zone (see below). Slickensides on outcrop indicate horizontal strike-slip

movement along this fault.

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Mineralization

Ag-Pb-Zn-Mn mineralization has been found in an area measuring 800 x 300m in the southern portion

of the Kukin concession hosted in steeply dipping carbonate sediments and along fault structures.

Also, a mine working in the northern portion of the concession shows stratabound mineralization

across a 2-3m thick unit that had

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