Highlights

• Drilling to begin at Pirquitas and Organullo shortly.
• Two core silver projects immediately adjoin the Silver Standard's Pirquitas Mine.
• Recent acquisition of Organullo an advanced gold project with significant potential to develop resources.
• Projects located in southern end of one of the most mineralised belts in the world- the Bolivian Silver-Tin Belt.
• Properties highly prospective for a range of deposit styles including epithermal gold-silver, replacement massive sulphide and porphyry silver-tin.

Location

Exploration properties are located in NW Argentina in the province of Jujuy. This province is a politically stable area with a proven history of mining.

Two of Artha's properties surround the Silver Standard Pirquitas mine. This mine was completed at a cost of approx $250 million (US), and is expected to produce 8.5 million ounces of silver per year over its 9 year mine life, based on current reserves. Silver Standard reports that Pirquitas is the largest silver mine in Argentina and one of the largest primary silver mines in the world.

Geology and Mineralization

The geology of NW Argentina is divided into three sub-parallel northerly-trending structural belts comprising from east to west, the Sub-Andean Range, the Eastern Cordillera and the Altiplano or Puna belt. The exploration area is in Puna belt, which comprises Ordovician marine sediments, Tertiary continental sediments and, younger intrusives and volcanic rocks.

Mineral deposits in the region are dominated by base and precious metals such as well as sulphur, borax and salts. Proterozoic rocks are dominant and include interbedded sandstones, shales and greywackes of the Ordovician Acoite formation. These rocks are folded, typically with steeply-dipping axes that strike north to N 30 W.

Mineralization at the Pirquitas Mine comprises a polymetallic deposit rich in tin, silver and zinc in the form of veins, stockwork veinlets and disseminations, hosted in the Ordovician acoite formation. The mineralization is located on various groups of fractures of which the most significant are orientated N 75 W and N 45 W.

Accessibility

This remote, high Andean location has very well maintained access routes. The asphalted Highway 9 which heads northwards from the capital town of Jujuy, San Salvador de Jujuy, to the Bolivian border makes the property accessible throughout the year. To the west there is access to the port of Antofagasta in Chile on the newly constructed Highway 52. The nearest commercial airport is in San Salvador de Jujuy. There is a 2km gravel runway at the Pirquitas Mine site and Silver Standard Resources Inc plans to extend this to 3km.

Climate

The Pirquitas area is typical of the Argentine Altiplano: steep, rugged terrain with a distinct wet-dry season with moderate to cool days, cool to cold nights and, frequent strong winds from the west by north-west. The climate is typical for higher Andean regions with cold, dry conditions in winter, more evaporation than rainfall and, an annual temperature of around 80 C. Annual precipitation is around 300mm and is characterized by infrequent torrential rains.

Significant Geological Potential*

• North of the country the high Andean plateau hosts significant concentrations of lead, zinc and silver and of tin and silver.
• World-class deposits such as El Aguilar and Pirquitas are located in northwest Argentina, near Artha's properties.
• An estimated 75 percent of areas with significant mining potential remain unexplored.
• Aerial - geophysical surveys have been conducted in several regions of Argentina (areas in the provinces of Salta, Catamarca, San Juan, Mendoza and La Pampa) where promising anomalies have been registered, and suggest significant mineral concentrations.
• Many mining companies have oriented their activities towards exploration, based on Argentina's geological potential (these include: companies such as MIM, Río Tinto and BHP).

Exploration Incentives

• Double deduction of exploration expenses: the Mining Investment Law (N° 24.196) dictates that participants in the Mining Investment Register will be able to deduct 100 percent of the amounts invested in determination of project feasibility for income tax purposes.Additionally, these expenses may also be deducted or depreciated according to federal income tax laws.
• VAT reimbursement: the Law to Update the Mining Investment Law (N° 25.429) provides that VAT credits on all exploration expenses are to be reimbursed after twelve months. The impact of this fiscal benefit is to reduce present exploration costs by 10 percent.
• Liberation of prospects controlled by the provinces: the Secretariat of Energy and Mining is working very closely with provincial governments to push forward liberation of mining prospects at the moment controlled by provincial mining companies.

Mining Production Incentives - Competitive Fiscal Policy

• Argentine law also provides a series of economic and fiscal incentives for the extraction and production phases of the mining process, increasing the efficiency of a tax regime that is already considered competitive.
• It is mainly focused on income tax, instead of on assets tax or any other tax unrelated to profits.
• Out of twenty-three provinces, only seven levy royalties. The law establishes a maximum of 3 percent on mine mouth value of the extracted ore for royalty calculation purposes. Royalty incidence on the project's net present value does not exceed 7 percent.
• Several provinces have already adopted a new system of royalties that decrease as value is added to the mineral.
• As a result, Argentina offers a mining fiscal regime with an effective tax rate of 41 percent, that is, 6 points lower than the average of the main Latin American mining countries and almost 20 points lower than that of the main mining jurisdictions in Canada and Australia.
• Mining legislation includes several extraction incentives tending to neutralize the sector's tax liability. These include fiscal and exchange rate stability, accelerated depreciation, duty free capital goods imports and other benefits as described in the Mining Investment Law (N° 24.196) and in the recent Update to this Law (N° 25.429).

Regional Integration

• The Treaty for Mining Integration with Chile came into effect in 2000 providing the framework for integrated exploitation of shared mines, easy border crossing and a framework for tax coordination along the 4,500 km of the Andean frontier, one of the richest remaining geological areas in the world.

• The Mining Integration Treaty between Argentina and Chile is the first of its kind and it was required as a result of the large number of mines in common interest regions. Additionally, several infrastructure projects promote integration between both countries.

  Main features of the mining integration treaty:

  • Allows investors to conduct irrestricted exploration and exploitation in both countries, easy border crossing (people and goods) and right of way possibilities.
  • Provides a framework for tax coordination.
  • Signing countries retain the power to establish benefits and franchises in their own territory. The hiring of workforce and input is free.
  • Promotes the exchange of relevant information concerning the environmental consequences of mining projects among governments.
  • It provides a dispute settlement scheme, including a major issue such as dispute settlements between investors and the State.

High rates of Return

• The high return rates shown by metals production in Argentina are mostly explained by the fiscal incentives that shape a highly competitive mining tax regime and the advantages derived from regional integration.
• Internal rates of return for gold and copper mines in Argentina rank among the highest in the world: fourth in the case of gold according to the Colorado School of Mines.
• Copper mineralizations in Argentina have often been accompanied, so far, by other minerals (gold, silver, molybdenum), mostly in a free state. This metallogenic characteristic of Argentina and the easy recovery of free gold without considerable increase in investment greatly improve these returns.
• Production costs also account for the attractive return rates, given the fact that these costs are among the lowest in the world. Argentina shows clear advantages in almost all of the items of a mining project's cost structure.
• Low extraction costs, together with the abundance of mining resources represent an attractive potential for mining investment.

Sound Legal Framework

• Argentina not only has strong mining potential but it also offers a comprehensive and sound legal framework which provides clear rules of the game for mining investors.

  Argentina provides national treatment for foreign investment and free transfer of capital and earnings. Foreign investors have the same legal treatment as nationals under the Argentine Constitution.

  Foreign companies in Argentina may:

  • Invest without prior approval or registration requirements.
  • Transfer their capital and profits at any time, without any charges or taxes on such transfers.
  • Access foreign exchange markets without any restrictions.

• The Mining Code provides centennial rules on property, exploration and exploitation rights and obligations. It is extremely liberal, offering a wide scope to private enterprise and limiting direct government action.

  The Mining Code generally establishes two large categories of minerals, namely:

  • Those that do not belong to the owner of the land in which they are discovered (gold, silver, copper, lead, lithium, borate, etcetera). In this case, original ownership is vested in the Government (provincial governments own mineral resources within their territories), which grants exploitation concessions to private companies. In return, the concessionaire pays a canon on the property and a royalty on the mineral extracted.
  • Those that belong to the owner of the land who is the sole person entitled to exploit and/or use them. These minerals include construction or industrial minerals, rocks or earthy minerals.

Availability of Production Resources

Adequate Infrastructure:

• Electricity: Argentina has Argentina has one of the most deregulated electricity systems in the world; generators compete to sell their production through the wholesale electrical market.The cost of electricity in Argentina is very low due to the fact that 53 percent of installed capacity for generation is thermoelectric (mostly based on natural gas, which is very lowcost), 42 percent is hydroelectric and only 5 percent nuclear.
• Gas: The abundance of gas resources together with deregulation-generated competition enables Argentina to offer highly competitive gas prices.
• Rail: The Argentine railway network is one of the longest in the world, covering a distance of 35,753 kilometers.
• Roads and Border Crossing: The national road network is 38,744 kilometers long. There are 13 border crossing connecting Argentina with Chile along the Andes range. The newly inaugurated Jama crossing provides access to the Pacific for the Northwest, significantly reducing freight costs.

Human Resources:

• High rate of literacy: Argentina has the lowest illiteracy rate in Latin America, comparable to that of developed countries.

• Educated workforce: Argentina has one of the highest rates of university enrollment in the world and, by far, the highest in Latin America.

  The lowest relative labor productivity gap in Latin America compared to the United States.

Service Supply:

• The Argentine Government is currently working on an initiative to help develop a network of local suppliers for mining projects, in order to help provide the mining sector with an adequate service infrastructure. This initiative consists of several factors: construction of a supply and demand database, analysis of import substitution and encouragement of joint ventures with foreign suppliers to mining projects already operating in the country.

Modern and Efficient Mining Authorities

• State of the art facilities and equipment (software, hardware, vehicles, environment control units).
• Training on application of federal regulations, especially those regarding cadastral and environmental regulation.
• Modern information management systems to improve communications with the Federal Government, deposit provincial information and manage cadastral and environmental data for each province. This information will be published on-line shortly.

Stable Economy

• Since the economic crisis of 2001 Argentina's economy has enjoyed significant economic growth. Real GDP rebounded to grow by an average 8.5% annually over the subsequent six years after 2002, taking advantage of previously idled industrial capacity and labor, an audacious debt restructuring and reduced debt burden, excellent international financial conditions, and expansionary monetary and fiscal policies (CIA Factbook 2011).
• Argentina's Real GDP grew by a reported 7.5 % in 2010.

Major Mining Companies in Argentina

• Due to all these factors, Argentina is a highly attractive destination for mining investment. It is not surprising then, that in the last seven years key players such as Barrick, Homestake, BHP, MIM, Billiton and Río Tinto started operations in Argentina and are now developing their projects.

Highlights

• Staked over 1,500 square kilometres in Jujuy, Salta and Santiago del Estero Provinces, NW Argentina.
• The properties are known to be prospective for a variety of light and heavy rare earths elements, including yttrium.
• Geology is dominated by Ordovician sediments, Tertiary intrusives and Carbonatites with little detailed exploration ever being done.
• Rare earth mineralisation observed to date in Jujuy, is hosted in stockwork veins with the host structures up to 10 metres wide and over 6km in strike length.
• Exploration to begin in Spring 2011.

Susques Property - Jujuy Province

Highlights

The rare earths licenses, covers over 415 square kilometers in southern Jujuy Province, NW Argentina. Susques is known to be prospective for a variety of rare earths elements, including yttrium, and thorium has been historically mined on a small scale. The local geology is dominated by Ordovician sediments and Tertiary intrusives and Carbonatites with little detailed exploration ever being done. Rare earth mineralisation observed to date is hosted in stockwork veins with the host structures up to 10 meters wide.

The properties were identified as part of the Company's continuous target generation strategy where new opportunities are constantly being reviewed to provide ongoing feedstock for our expansion and growth. The properties were selected based on extensive local knowledge and deep experience in the NW Provinces, in particular through our local country manager who has mined and prospected in this region for almost three decades. His expert knowledge has guided our efforts to secure strategically significant and geologically prospective properties, with rare earths providing an important opportunity.

A short reconnaissance program by AHC geologists in December 2009 targeted Susques where mapping and rock chip sampling identified a number of parallel mineralised veins that have been traced for over 6 km in total strike length. The initial results from this sampling included sample 26954 which returned elevated rare earth elements, including Yttrium.

Additional sampling on this property has shown that elevated levels of some rare earth metals are present on similar vein structures on other parts of the property.

These results are important first indicators of potential mineralisation considering the broader geological environment in which they lie. The ratio of heavy to light rare earths is also encouraging. More detailed work is now planned to commence in the coming months to ascertain the extent and economic potential of mineralisation.

The small bodies and dykes of La Poma trondhjemite belt (La Poma Department, Salta) contain tantalum-niobium ( within the Cachi formation).The local geology is dominated by metasedimentary rocks of the Puncoviscana Formation. The trondhjemite bodies are barren in ore-forming elements against the metasedimentary rocks, with higher contents of Tantalum (Ta), Niobium (Nb), Lithium (Li), and Beryllium (Be). The mineralization is suggested to have formed by melting in the aureole contact on the metasediments. The Trondhjemitic magma raised the temperature of the country rocks, as observed in a thermal aureole around the plutons, changing the original rocks to greenshists (granulite facies).

When the rocks were partially melted, pegmatite lenses containing higher values of tantalium and niobium concentrated over ten times higher in the country rocks than in the trondhjemites.The pegmatite bodies have originated by partial melting of the metasedimentary rocks. Due to the process of melting, high contents of the lithophile elements sud as Ta,Nb,U, Th, W, Li and Be have been moved from metasediments to the melted zones. The trondhje,mite magma origin should be related to an active subduction zone during the evolution of the Famatinian arc (480-460 Ma). The Magmatic arc testifies a probable change in the arc configuration leading to melt the basic lower crust or the subducted young oceanic crust (< 25 Ma) or a change in the subduction angle resulting in the partial melting of the already accreted lower crust.

Cachi Property - Salta Province

Highlights

• Property was staked based on large pegmatite intrusions extending for 40km in strike length.
• Property covers over 55 000 hectares in Salta Province NW Argentina
• Offers excellent opportunity for discovery based on very favourable geology and lack of previous exploration.
• Good access to local town of Cachi and only 160km west of Salta city, the capital of Salta Province.
• Geology is prospective for pegmatite related rare earth mineralization based on extensive granitoid intrusions, extending for over 40km in strike, with large (up to 300m wide) pegmatite dykes intruding neo-proterozoic gneiss. Many pegmatites have been economically valuable as sources of clays and feldspars, as well as bismuth, lithium, molybdenum, rare-earths, tantalum-niobium, thorium, tin, tungsten, and uranium minerals.
• Reconnaissance work has been completed with stream sediment sampling and mapping completed, identifying three targets based on surface alteration halos.
• Assays are pending from the 129 stream sediment samples collected.
• Detailed mineralogical studies will be completed on the granitoids and permatites samples collected providing information on their rare earth prospectivity.

Jasimampa Property - Santiago del Estero Province

Highlights

Artha has continued to add to its large and strategic rare earth property portfolio in northern Argentina (Map 1) through the recent staking of 60,000 hectares of ground in Jasimampa area in the Sierra Norte de Córdoba of Argentina Santiago del Estero Province. The new property lies directly east of a number of known small rare earth deposits. This new project is considered highly prospective for rare earth mineralization related to carbonatites, plus hydrothermal precious and base metal mineralization. Target generation work is planned to begin as soon as possible.

Very little modern exploration has ever been done in this new area, with historical records suggesting that the last serious exploration completed dates back to 1968. The project is well located in the province with good road access to the east of the properties (Map 2).

A research paper dated 2005 which focussed on the rare earth mineralization in the immediate vicintity, describes the area as follows"

"The Jasimampa area in the Sierra Norte de Córdoba of Argentina contains light rare earth element (LREE:Th-Nb) mineralization associated with several stages of carbonates and widespread fenitization of marble, granite (496 ± 2.9 Ma), and alkaline and siliceous igneous comendite dikes (U/Pb zircon age of 390 Ma) derived from fractionation of oceanic island basalts. This is the third discovery of LREE mineralization in Argentina and marks a new alkaline intracontinental magmatic event of Devonian age.

...Subsequent hydrothermal stages with carbonates, hematite, pyrolusite monazite, and subordinate celestine and barite caused alteration of marble that was accompanied by an increase in absolute REE abundance, up to 15.45 wt percent, and high Sr (10.5 wt %), Th (4,390 ppm), and Ba (1.8 wt %).

Alteration and mineralization at Jasimampa are the result of late-stage carbonatitic magma fractionation and fluid exsolution. This is indicated by the strongly alkaline character of early alteration, the composition of the hydrothermal carbonates, apatite, and LREE-Sr- and Ba-rich minerals, the chondrite-normalized REE patterns showing strong LREE enrichment without an Eu anomaly, and the replacement of marble by assemblages with very high Ba, Th, LREE, and Sr, and strong K, Zr, and Ti depletions. The alteration style and mineralization at Jasimampa are similar to the giant Fe-LREE-Nb deposit Bayan Obo (the world's largest deposit and producer of rare earth elements, located in Inner Mongolia) and other hydrothermal LREE deposits hosted in carbonatites of China."

The Bayan Obo Fe-REE-Nb deposit is the world's largest rare earth element (REE) resource with estimated reserves of up to 1500 Mt of iron ore (35% wt Fe), 48 Mt REE (6% wt RE 2 O 3 ) and 1 Mt Nb (0.13% Nb). The Bayan Obo Mine produced 55,300 tons of RE 2 O 3 in 2005, accounting for 47% of the total rare earth production of China and 45% of that of the world (in 2006)2.