LOS FILOS

EXPLORATION

Exploration drilling at 4P adjacent to the Los Filos pit continued during the third quarter of 2009, and is progressing with good results. The objective of the drilling program at 4P is to develop an open pit mine to be included in the Los Filos operations.

Construction of the buttress at the heap leach pad will provide stability and continued as planned. It is expected to be completed during the fourth quarter of 2009. Construction of the conveying system for the crushing and agglomeration plant is also progressing well and is expected to be commissioned during the first quarter of 2010.

The Los Filos underground mine produced 3,900 gold ounces during the third quarter of 2009, compared to 5,700 gold ounces in the prior quarter. As previously reported and consistent with the plan to integrate underground operations to existing infrastructure in the Los Filos open pit, the milling facility that processed the underground ore was closed at the end of August of 2009.  A $2.9 million accrual for severance and related shut-down costs has been reflected in the third quarter results.  Ore from the underground mine is being stockpiled and will be processed through the crushing and agglomeration plant in early 2010 and placed onto the heap leach pad.