PROPOSED G-9 MINE & MILL LAYOUT

One of Farallon's strategic imperatives is to advance mine planning activities for the G-9 deposit toward the goal of production by July 2008 through the parallel track approach. The Company is targeting production output of 120 million pounds of zinc, 15 million pounds of copper and 1 million ounces of silver, 6 million pounds of lead and 9,000oz of gold per year.

Parallel Track Approach

Much of the credit for Farallon's success in moving this project forward can be attributed to its unique "parallel track" approach to exploration and mine development. The concept is to pursue each of the major elements in the design, planning, purchasing of equipment, workforce training, and construction of a mine coincidentally rather than consecutively. The Farallon team is working on all these elements simultaneously, thus compressing the typical amount of time needed when developing a mine. The parallel track method is the reason why the Company believes that it will be able to meet its target production date of July 1, 2008.

MINE DEVELOPMENT APPROACH (PDF)

Mine Development

It is anticipated that a mine at G-9 will be compact in size, producing 1,500 tonnes per day. By using both a dual decline approach and standard mining and processing equipment (off the shelf technology), Farallon will be able to minimize capital expenditure. In addition, the recent contract engagement of both JDS Energy & Mining and Wabi Development for the 4.5m X 4.5m decline puts the company within reach of its target of July 2008.

PROPOSED G-9 UNDERGROUND MINE LAYOUT (PDF)

G-9 Preliminary Mine Development Plan

Project Scope:

Project Throughput	- 1,500 tpd or 525,000 tpy
Projected Mine Life	- 7 -- 10 years
Mine Access	- A dual decline from Tres Mas in Naranjo Valley
Mining Method	- Combination of Drift & Fill and Room & Pillar
Ore Delivery to Crusher	- Truck haulage from underground mine to plant site
Processing	- Flotation of Zinc, Copper, and Lead concentrates - Silver & Gold by-product production
Tailings	- Tailings storage and water sourcing would be in Naranjo Valley

Infrastructure:

Power	- 22 km from main Power transmission line
Road Access	- 34 km from paved Mexican Highway system
Water Supply	- Excellent water supply from contained local rainfall
Terminal	- Concentrate would be trucked to the shipping terminal Port of Manzanillo 700km