CURRENT STOCK QUOTE:     TSX-T: NOM     Last: 3.09     Volume: 5353     Day High: 3.10     Day Low: 3.01     Date: Aug 28, 2008
 
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This web site contains information about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the SEC’s mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.

GEOLOGICAL SETTING

District Geology
Constancia is located in the Yauri-Andahuaylas metallogenic belt where several porphyry Cu-Mo-Au prospects have been described but none have been exploited. The principal deposits include Antapaccay (~420 Mt @ 0.83 % Cu, 0.16 g/t Au), Quechua (~100Mt @ 0.98% Cu) and Los Chancas (~200 Mt @ 1 % Cu, 0.08 % Mo, 0.12 g/t Au). Several other porphyry prospects are also being explored in the district. The belt is better known for copper skarn deposits such as Tintaya (130 Mt @ 1.7 % Cu, 0.26 g/t Au), Las Bambas, Ccorocohuayco, Atalaya and Katanga.

The oldest rocks in the area correspond to a sequence of white, red, violet or grey medium grained sandstones with intercalations of reddish mudstones of the Lower Cretaceous Chilloroya Formation (also referred to as Murco Formation). In the area, these sediments strike E-W and dip to the North.

The Arcurquina Formation discordantly overlies the Chilloroya Formation and correlates with the Upper Cretaceous Ferrobamba. These rocks are exposed in a North-South elongate area, 15km long by 5km wide, comprising a sequence of limestones, calcarenites and lenses of conglomerates.

The sedimentary Formations have been intruded by plutonic rocks belonging to the Andahuaylas-Yauri Batholith of Oligocene age. The batholith varies from dioritic to granodioritic composition, mostly comprising feldspars, quartz, hornblende, biotite, apatite, zircon and sphene as the main rock forming minerals. Small mantos, veins and lenses of massive magnetite skarn are common in the area and probably related to this batholith emplacement.

Several subvolcanic monzonitic stocks, sills or laccoliths intrude and crosscut all the lithologies mentioned above. Where these rocks have intruded limestones, it is common to find small adjacent skarns, some of which contain Cu-Au-Ag mineralization such as occurs at the Katanga mine. Some of the stocks have characteristics typical of porphyry copper deposits such as at Constancia and the San Jose pit area. At Constancia, Cu-Au-Ag-Mo mineralization is present in both skarns and monzonite porphyries.

Holocene glacial deposits are located on the margins of U-shape valleys as lateral moraines or in the center of the drainage as terminal moraines. Recent alluvial deposits are not common and only are located at the margins of the larger rivers.

The Katanga-Constancia district has moderate relief with shallow glacial valleys and low rolling (400-500m) hills.  Two erosion surfaces can be distinguished, an older one overlain by the Tacaza volcanics, and younger surface that forms the present landscape.  This erosion surface has incipient dendritic drainage indicating the beginning of a more intense erosion cycle.  The geomorphology of the area suggest that the porphyry intrusives were exposed to an extensive period of weathering associated with unusually deep oxidation profile compared to other porphyry deposits in the vicinity of probable similar age.  There are abundant indications of glacial activity corresponding to the last glaciation period.  This glacial erosion formed the present U-shaped valleys and resulted in the deposition of abundant moraines with up to tens of meters in thickness.

Prospect Geology
The Constancia porphyry copper prospect is part of a district, herein referred to as the Katanga District after the abandoned Katanga mine. The geology of the Constancia prospect is characterised by two monzonitic porphyry intrusive centres approximately 1 km apart. The porphyries cut older the Dioritic batholith, limestones and sandstones. Magnetite metasomatic skarn bodies occur along the contacts between the monzonite porphyry and sedimentary rocks/limestones.

The oldest rocks in the Katanga District correspond to the Lower Cretaceous Chilloroya Formation and consist of sandstones, shales and arkoses, with intercalated limestones. These rocks are exposed in the south of the area mapped and are overlain by thick beds of grey limestone with intercalations of black shales and marls. Several meters from the contact with the intrusions these limestones are recrystalised to marbles. The most conspicuous outcrops of the Chilloroya Formation occur as roof pendants in the NW and ENE of the area.

Monzonite porphyries outcrop in the centre of the mapped area, with local variations in composition and texture. The porphyritic rocks vary from monzodioritie to quartz-monzonite composition and contain othoclase or plagioclase crystals which vary in size from 5 to 15mm, hornblende and lesser amounts of biotite. The matrix is generally light pink to light grey with dominant orthoclase. Quartz phenocrysts may be locally present reaching 1-2% in volume. Due to hydrothermal alteration, strong weathering and leaching, primary textures are difficult to differentiate, especially in outcrop.

Field classification of the porphyries has been based on alteration intensity, quartz stockwork intensity and copper mineralisation including MP1, MP2 and MP3 from the oldest to the youngest. MP1 is generally better copper-mineralised compared to MP2 and MP3 and has a more intense stockwork. MP1 shows potassic or phyllic alteration, whereas MP2 and MP3 have phyllic and propylitic alteration respectively. The geometry of the intrusions is not well understood. However, drill hole information suggests some of the porphyry intrusives occur as sills, laccoliths, or roof pendants.

Late andesitic dykes oriented NW-SE and mostly just a few meters thick, cut the monzonitic porphyries. These are typically dark grey to dark violet, with phenocrysts of plagioclase and hornblende in a matrix of plagioclase and abundant primary magnetite. Weak propylitic alteration affecting the andesitic dykes is interpreted as the result of deuteric activity. Lateral moraines cover the northern and eastern margins of the Constancia porphyry.

Oxidation is widespread and no fresh hypogene sulphides are preserved on surface. Oxidation extends to more than 100m depth in some drill holes (e.g. hole KA006). Small areas with secondary copper oxides (probably after supergene chalcocite) are present in some of the creeks. Goethite and jarosite are the most common iron-oxide minerals and are especially abundant in areas with intense stockwork or with magnetite skarns. Hematite is less abundant and probably formed from the weathering of secondary chalcocite. Soils are well developed over the entire area with a maximum thickness of up to 0.5m.

Intense tectonic deformation has affected all the pre-Quaternary lithologies. Folding is evident in the sedimentary sequences with fold axes oriented N-S with associated longitudinal and transverse faults. During the intrusion emplacement, tensional faulting was active and N-S normal faults seem to be the dominant control for emplacement of the intrusions, and accompanying alteration and ore mineralisation. Post-mineral faulting is intense and represented by two main fault orientations, NW- SE and NE-SW. Two large lineaments, probably corresponding to these faults, are apparent in satellite imagery crossing the centre of the prospect. Fracturing is intense in some of the drill core and resulted in poor recovery in some drill holes.

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