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| History of G-9 From a blind, greenfield discovery in June 2005, the G-9 Mine has quickly become a fully operational mine. Farallon has advanced the G-9 Mine into Commercial Production that was declared on April 1, 2009. In a period of less than 4 years, the management of staff have succeeded in advancing through a Parallel Track Approach to mine development that is showing to be a very successful method for bringing a mine into production quickly. In June 2005, the first discovery hole #420 was found at G-9 which had very significant grades of zinc over 14%. Management very quickly realized that this new discovery would most certainly be the main thrust of the company moving forward. Activity soon headed toward further exploration activity around the G-9 location through the summer and fall of 2005. Further exploration success at G-9 continued so management soon put into place a preliminary resource estimate that was made available in November 2005. This resource estimate showed that the G-9 had very good potential to be the future engine for growth for the entire Campo Morado district. In the winter months of 2005 and into the spring of 2006, further work continued both in terms of further exploration work and also metallurgical testing on G-9. The G-9 showed promise from a metallurgical stand-point therefore management and directors decided in April 2006 to proceed to build a mine at G-9. Financing activity proceeded to raise funds to pay for the various work programs that would be put into place to lay the ground-work for the mine and mill contstuction. Permitting activities started and the employment of a variety of contractors would begin to start the process behind building the mine at G-9. It is at this timing that company decided to advance on a "Parallel Track Approach" to bring the G-9 Mine to full production. A detailed description of this approach is provided later on this page. In September 2006, work began to focus on building a decline to advance towards the G-9 deposit. Exploration continued under the supervision of Farallon's Mr. Dan Kilby and the results continued to be excellent and the continuation of high-grades in zincs and also in gold and silver continued to be made. Metallurgical work continued on the G-9 and this work was also very positive that recoveries and concentrate grades would be very good once the G-9 mine was in full production. In November/December 2006, the resources at G-9 continued to grow at a rapid pace and financial activities continued on a corporate level to raise additional funds to pay for work programs that were to be put into place during the calendar year in 2007. In later 2006 $80 million was raised to utilize going forward. Beginning, in early January 2007, a variety of equipment purchases started to happen including the purchase of a fully autogenous ball mill. Also grinding mills, flotation cells, and concentrate thickners amongst other items were beginning to be purchased in concert with other activities under the Parallel Track approach. This was deemed to be the quickest and most efficient method to quickly bring the G-9 into production and this would prove true as time passed. In April 2007, Farallon received the mine permit for the G-9 deposit and while planning for construction had been in the works, now construction could begin in earnest. M3 Engineering were engaged to start work on the surface facilities at G-9, while McIntosh Engineering were put in place to advance the decline. Knight Piesold of Vancouver were added to design the tailings facility. In June 2007, the company received the soil permit and also signed an agreement with the National Power utility to supply power to the G-9 Mine. In the fall of 2007, Wabi Development was secured to assist in terms of purchasing/expediting. While at the same time the power line permit was applied for and mill construction advanced. It was a busy time of activity for the company and the contractors as the early stages were being set for the production to move ahead and be producing in 2009. In November 2007, JDS Energy and Mining were secure to provide the EPCM services for the G-9 project. JDS has an excellent reputation and a strong track record in the industry in terms of performance. JDS was instrumental in terms of bringing the G-9 Mine to where we are today as fully operational mining company. In December 2007, the Preliminary Economic Assessment for the G-9 project was completed. Stephen Godden and David Stone of MineFill spearheaded the efforts on the PEA along with Hunter Dickinson's David Gaunt, this PEA proved to be the blueprint for the development of the G-9 Mine. This PEA showed that the project could be robust under the current economic environment at the time and that the G-9 would also have the ability to withstand more serious market corrections. In 2008, the year was filled with a bustle of activity, financing for the project continued to help supplement the on-going effort to build the mine. Farallon received the power line permit in February and new resource estimate was published in March 2008 by David Gaunt and Qinpeng Deng of Behre Dolbear that gave evidence that a mine-life of 7 to 10 years based on the mine-plan at the time could be achieved. This was a significant time for the company because it provided that we had a solid starting point at G-9 that could lay the groundwork for future overall growth at the Campo Morado site. In May 2008, the Silver Wheaton agreement was signed that would give the company $80 million for 75% of the life of mine silver production at Campo Morado. This was a real feather in the cap for Farallon as it signified a very positive outlook from Silver Wheaton in terms of the long-term viability of the whole Campo Morado district. Then in June 2008, Farallon signed off-take agreements with Trafigura for our concentrate production which was another significant step. Throughout the summer of 2008, construction and development was hurrying along and by August 2008, the mill completion was imminent, the decline had advanced to the North zone of G-9 and mining was now underway. In the fall further financing continued including two rounds of notes that raised $32.75 million for final completion of the construction. Union negotiations were also settled to provide for a foundation for future employee relations at the mine. Then in October 2008, everything started to come together. The mine and mill were essentially completed in terms of construction. A new plan was put into place to maximize the potential cash flows during a downtime in the market and the first saleable concentrates were produced. Farallon also started trucking concentrates to the port and receiving payments from Trafigura. At the end of October 2008 Farallon's mine staff took over all activities on site and construction was complete. The commissioning phase was next to come. During November/December 2008, the mine and mill met the commissioning targets for the most part and by-product recoveries were now the focus of improvement. In Ferbuary 2009, Farallon had it's first vessel shipment of concentrates to Asian smelters. Farallon was able to complete two equity placements in Febuary/March 2009. That would be used to take out a portion of the debt of $7.75 million notes from October and shore up the balance sheet to pave a path forward. Also the company took an extension to September 2009 on the $25 million notes outstanding. Then in April 2009, Farallon announced that on April 1, 2009 we were declared to be in commercial production. Less than 4 years after the initial discovery hole #420 at G-9! A truly remarkable achievement! And the G-9 Mine cost $149.7 million to construct which was just 20% above the original PEA estimate in December 2007. In the First Quarter of 2009, the G-9 Mine produced about 17 million lbs of zinc, 1.2 million lbs of copper, 0.3 million lbs of lead, 230,000 ounces of silver and 3,300 ounces of gold. Farallon had it's first Conference call on April 22, 2009 and it is truly a satisfying time for management, staff, and contractors who have all contributed to the point that we are at today. Certainly there are improvements still to be made but with this track record of success it is virtually just a matter of time before we are operating at the full design capacity and then it is onwards and upwards from there! Farallon has had many highlights over the years that have contributed to the overall success of the company, an account of some of these milestones are mentioned here: Highlights:
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G-9 Mine : Overview
Location
History of G-9
Development
Production & Mine Plan
Processing
Marketing
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