Derry, Michener, Booth & Wahl Consultants Ltd. Page 8At Las Colinas HQ type Core and Hydro-Winke NQ type core drilling was also undertaken in<strong>2007</strong>, prior to the discovery and delineation of Los Planes. <strong>The</strong> Los Planes discovery wassubsequently made by partial completion with the same drill of three core holes and oneadditional Hydro-Winke drill hole. <strong>The</strong> balance of the geological and assay data is provided in adigital version of summary logs and complete assays from the 1998 Echo Bay Exploration(EBX) program report.<strong>The</strong>re are other gold-bearing target areas, such as Fandango and La Virgen, which have beeninvestigated by Pediment Exploration and by a contractor geophysical survey on the property.(See Exploration Section 10)Unless otherwise stated all units used in this report are metric. Gold assays are reported in gramsAu per tonne (g Au/t), or ppm Au, unless ounces are specifically stated. Grades of silver arereported in ppm Ag. Currencies are US Dollars, or Mexican Pesos, as indicated.3.0 RELIANCE ON OTHER EXPERTS<strong>The</strong> authors have relied on the documents listed in the References and the site visit(s) for theinformation in this report, however, the conclusions and recommendations are ours. We haveassumed that all of the information and technical documents listed in the References section ofthe report are accurate and complete in all material aspects; however, the accuracy andcompleteness of the data cannot be guaranteed.Portions of Sections 4.0 to 9.0 are reproduced from an earlier NI <strong>43</strong>-<strong>101</strong> report by R. Wallis,P.Geo. of Roscoe Postle Associates. (RPA -2004)Portions of Sections 6.0 and 7.0 are reproduced from an earlier publication of Northwest MiningAssociation presentation in 1998 by Brown, Reynolds, and Hauck III.Portions of Section 10.0 are reproduced from an internal exploration report by J.E. Stephens,P.Geo. and by data and commentary by J.Reynolds of Durango Geophysical Operations.<strong>The</strong> results and opinions in this report are dependent upon the information provided beingcurrent, accurate and complete. No information has been withheld that would impact theconclusions or recommendations made.DMBW has relied on Cia. Minera Pitalla and Pediment for providing information regarding:current status of legal title, property boundaries, property agreements and environmental matters.DMBW has examined a document from the Direccion General de Minas listing the MineraPitalla title document numbers and the concession names, as well as semesters that theconcessions have been renewed semi-annually, from inception in 2003 through <strong>2007</strong>.<strong>The</strong> original concessions covering the explored area were the CIRIO and EMILY concession,which were filed by Pitalla in 2003, and title was subsequently granted by the Mexican Federal
Derry, Michener, Booth & Wahl Consultants Ltd. Page 9Government. <strong>The</strong> agreement between El Dragon LLC and Skinny in 2005 resulted in the fullacquisition of Pitalla, including these concessions held by Pitalla.4.0 PROPERTY DESCRIPTION AND LOCATION<strong>The</strong> SAN ANTONIO PROPERTY is located on the <strong>Baja</strong> Peninsula, Mexico, adjacent to thehistoric mining town of <strong>San</strong> <strong>Antonio</strong> and about 45 km southeast by paved Highway No.1 fromthe port city of La Paz, population (170,000) and about 160 km north of the resort town of Cabo<strong>San</strong> Lucas. Good gravel roads traverse most of the project area and a 115 kV power line passesthrough <strong>San</strong> <strong>Antonio</strong>. <strong>The</strong> road crossing the deposit area is currently being paved withsimultaneous installation of 80 kva electric power line.<strong>The</strong> property consists of six exploration concessions staked and 100% owned by Pediment,through its wholly-owned Mexican subsidiary, Cia. Minera Pitalla S.A. de C.V., that cover37,800 hectares (ha) and an additional 14 km of favorable geological trend.DMBW reviewed the title documents for two of the concessions which indicated that theproperty taxes have been paid for the current period ending September 30, <strong>2007</strong>. <strong>On</strong> the TRINIconcession the license has not yet been received, but DMBW has read the Letters of Applicationand their receipt by the Mining department. At the current exchange rate of 0.10, the yearly taxesare about US $15,300. <strong>The</strong> concessions are listed in Table 4.1 and their location relative to LaPaz is shown in Figure 4.1.DMBW observed and photographed a common Discovery Monument for EMILY, CIRIO andTRINI, located at UTM 0597728E; 2638467N (NAD 27 Mexico). This lies next to the main NE-SW gravel road to <strong>San</strong> <strong>Antonio</strong> village passing just east of the EMILY concession.<strong>The</strong> properties were originally held by Cia. Minera Pitalla. Skinny Technologies Ltd., thepredecessor company of Pediment, issued 5,000,000 shares in 2004 to acquire all the outstandingshares of El Dragon Minerals LLC, which company then owned 100% of the issued shares ofCia. Minera Pitalla. Melvin Herdrick, Vice President Exploration and a Director of Pediment, isthe majority shareholder in El Dragon. This company owned six properties, five in Sonora andthe Las Colinas property in <strong>Baja</strong> California Sur. Additional bonus shares of Pitalla, totaling2,500,000, were to be issued to the original shareholders of El Dragon, should a minimum of1,000,000 ounces of gold be found on three or less of the properties; also one of these propertiesneeded to contain a minimum 500,000 ounces of gold. This agreement is still in effect. <strong>The</strong>re areno underlying royalties according to Pediment.
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