APPENDIX A – Letter Regarding the Status of Title to the Mining Concessions in Ecuador, For ExplorCobres, S.A. and EcuaCorriente, S.A., Trejo, R. 2006.

APPENDIX B – Capital Expenditures Table.

This Preliminary Assessment report identifies the economic potential and outlines an overall development plan for the Panantza and San Carlos porphyry copper deposits, located some 40 kilometres north of the Mirador copper-gold deposit, in southeast Ecuador. The Panantza and San Carlos projects would be developed as a single large copper development opportunity, a concept presented by Corriente Resources Incorporated (“Corriente”) initially in 2001, in a National Instrument (“NI 43-101”) Preliminary Assessment Technical Report (Makepeace, 2001). This report identifies current resource estimates and mining proposals that optimize the stakeholder returns, as well as provide social and economic benefits to the communities in the region. It is prepared as a Preliminary Assessment based on Inferred resources, as defined by NI 43-101.

The Panantza and San Carlos deposits are within the Panantza and San Carlos concessions, which together cover an area of 3200 hectares (32 square km) in the province of Morona-Santiago, in southeast Ecuador. The proposed project infrastructure would extend to parts of adjacent and contiguous concessions Panantza 2, San Carlos, Curigem 3, Curigem 7, and Curigem 8.

The project area is characterized by steep sided valleys, with elevations ranging from approximately 700 metres above sea level (masl) to over 1400 masl. The Rio Zamora flows northeast, through a canyon, bisecting the project area. Vegetation is predominantly dense rainforest cover. The climate is wet equatorial, with relatively small monthly variations in temperature and precipitation throughout the year.

Billiton Ecuador B.V. (“Billiton”), now BHP Billiton S.A. (“BHP Billiton”), discovered a number of porphyry copper deposit clusters in the Rio Zamora region of south eastern Ecuador in the mid to late 1990’s, during a five-year grassroots exploration programme. In 1999, Billiton announced a restructuring of its new business initiatives to maximise its investment returns in new ventures and projects. Consequently, a joint venture opportunity became available over a major part of the Pangui porphyry copper province. Billiton found a suitable JV participant in Vancouver-based Corriente. Agreements covering the north and south tenures, now called the “Corriente Copper Belt”, were announced on October 18, 1999 and April 7, 2000. BHP Billiton holds a 2% Net Smelter Royalty interest in the deposits.

Corriente advanced the Panantza deposit in 2006 by completing 25 additional drill holes totalling 8399 metres, as well as additional mapping and complete relogging of older core. This recent work has shown that the deposit is larger than previously defined, with mineralization extending farther south, west, and to depth than previously recognized.

The Panantza and San Carlos copper porphyry deposits of Corriente are the northern-most of the advanced deposits in the Corriente Copper Belt, which includes the Mirador and Mirador Norte copper-gold porphyry deposits about forty kilometres to the south. All the deposits contain mainly hypogene copper, with relatively minor overlying oxide and secondary enrichment horizons.

The host rocks are Late Jurassic granite of the Zamora batholith and associated slightly younger porphyritic intrusions. At Panantza there are also minor Tertiary-age dikes. Mineralization is mainly disseminated and finely veined chalcopyrite, with secondary chalcocite significant in thin and discontinuous overlying supergene zone.

The initial NI 43-101-compliant Preliminary Assessment Technical Report for the Panantza and San Carlos deposits, taken as a joint project, was completed by Geospectrum Consultants and was filed on SEDAR by Corriente in June, 2001. The report was written following the second phase of drilling at Panantza in year 2000.

The current Panantza resource was first released in August 2007 in the NI 43-101 Technical Report “Update on Inferred Resource Estimate – Panantza Project” (Drobe, 2007). The updated resource is defined on the basis of 16,644 metres of drilling in 53 holes. Drilling previous to the last programme at Panantza in 2006 includes the initial 2984-metre drill programme by Billiton in 1998 and, subsequent to the joint venture agreement, additional drilling by Corriente in 2000 totalling 5262 metres.

The San Carlos resource presented here is defined on the basis of 5936 metres of drilling in 26 holes, all by Billiton.

Corriente engaged Mine Development Associates (“MDA”) in April 2007 to provide a block-model based mineral resource estimate for Panantza in order to provide a current resource estimate. In addition, MDA was asked to provide a block-model based mineral resource estimate for San Carlos so that the mining potential of both projects could be evaluated using block-model based mine scheduling and floating pit cones.

In working with MDA, Corriente re-estimated the resources of both deposits by developing block models incorporating the 2006 drill data for Panantza, and using new geology solid models for San Carlos. Unlike previous reporting, the new resource excludes oxide copper mineralization within the leached zone of the deposits. Grades and tonnages are reported over a range of copper cutoff grades. Inferred mineral resource estimates based on a cutoff of 0.4 % Cu, and including only sulphide-mineralized material, are 463 Mt at 0.66 % Cu (Inferred Resource category as per CIM, 2005) for Panantza, and 600 Mt at 0.59 % Cu at San Carlos.

Minor quantities of molybdenum, silver, and gold are associated with the copper and have limited economic interest in both deposits.

Moose Mountain Technical Services (“MMTS”) provided an assessment of the potential surface resource for the Panantza and San Carlos mineral deposits. MMTS used the Lerchs-Grossman pit optimization methodology to develop optimized pit shells and potential resource estimates. The ore and waste quantities, as well as copper content contained in the pit shells, were generated from the 3D block model provided by Corriente. The results are summarized in the Table 1-1. The design parameters for generating the pit shells are preliminary and based on those from a similar project belonging to Corriente. A more detailed assessment of these parameters is proposed for the next phase of study, and adjustments made where necessary.

The resource that could be potentially mined at San Carlos was restricted due to the limited capacity of the currently designed Waste Management Facility (WMF). With an expanded design, the portion of the resource that could be mined would significantly increase.

For this level of study, designing detailed pits would be pre-mature, and therefore this work has not been carried out. Selected optimized pit shells were used as pit phases to develop a mine production forecast. Pit wall smoothing and incorporating haul roads from a pit design process would likely lower the potential resource generated from an optimized pit shell.

The mine would feed the crusher at a rate of 90,000 tonnes per day. Mining would commence in the Panantza pit, and then move over to the San Carlos pit. The San Carlos pit is a lower strip ratio pit than the Panantza pit, and there are potential economic benefits to commence mining in the San Carlos pit. However, co-disposal of the pit waste with tailings would require a haul road to be constructed over difficult terrain, including a crossing over the Rio Zamora. These challenges are difficult to assess at this stage of the project study. Therefore the option of commencing in the San Carlos pit should be evaluated in future studies.

Ore would be hauled out of the pits to a crusher located at the pit rim, and then conveyed overland to the mill. For the purpose of this conceptual level study, it is conservatively assumed that the pit waste rock would be potential acid generating (PAG) and would be co-disposed with tailings. Waste from the Panantza pit would be hauled to the WMF, while the majority of the waste from the San Carlos pit would backfill the Panantza pit when it is completed.

Electric powered, 26 m³ shovels and 218 tonne haul trucks are proposed as the primary load and haul fleet. It is estimated that the fleet would consist of 4 shovels and 30 to 40 trucks during the first nine years when the average strip ratio would be higher and the haulage distances lengthy due to the tailings co-disposal plan for the Panantza waste rock. The fleet size would be reduced substantially in the subsequent years when the strip ratio decreases at the bottom of the Panantza pit and mining is shifted to the San Carlos pit.

The primary load and haul fleet would be complemented with production drills and pit support equipment such as graders and dozers. The fleet type and number of units are preliminary at this stage, and on-site evaluations of the site conditions would provide a better understanding for equipment selection in future studies.

At the proposed production rate, the potential life of mine would be 21 years.

The Panantza – San Carlos process plant will be designed to process an estimated 90,000 tonnes per day (t/d) of copper ore containing 0.62% Cu, 0.008% Mo, 1.3 g/t Ag and 0.05 g/t Au over the life of the mine (Table 1-2). A total of 678 Mt of ore would be processed over the life of the mine. Recoveries are estimated to be 91% Cu to the copper concentrate and 43% Mo to the molybdenum concentrate. Copper concentrate production is expected to average 29.5% Cu and 57 g/t of Ag and molybdenum concentrate is expected to average 49% Mo. A total of 3.8 Mt of copper would be recovered to the copper concentrate over the mine’s life.

In years 1 to 10, the primary crusher feed would come from the Panantza pit, then from years 11 to 13 the ore would transition to the San Carlos pit, with all the ore planned to come from the San Carlos pit until the end of the mine life.

The concentrator would have conventional primary gyratory crushing feeding a stockpile. Grinding would have a SAG-BM-pebble crusher configuration with approximately 77.2 MW available power for grinding to a flotation feed size of p80 = 150 µm. The flotation circuit would concentrate the copper to a final concentrate grade before feeding a thickener and then the molybdenum separation circuit. The molybdenum concentrate would be dewatered and dried on-site while the copper concentrate from the molybdenum separation circuit would be thickened and sent via a 420 km pipeline to the coast for dewatering before being shipped to the smelter.

Results were based on preliminary drilling and test work carried out by BHP Billiton in 1998 and 1999. Further drilling and metallurgical test work is required to confirm the estimated ore hardness, throughput, metal recovery and concentrate quality as stated in the table above.

The Mill location is relatively close to the Zamora River, and the elevation of about 1100 m above sea level would allow gravity discharge of tailings to the Waste Management Facility (WMF) for the initial part of the mine life. Plant related facilities include administration building, access road, primary crusher, overland conveyors, coarse ore stockpile, coarse ore reclaim facilities, grinding plant, pebble plant, fresh water tank, process water tank, fire protection system, warehouse, storage yard, sewage treatment plant, water treatment plant and waste management facilities. Open pit mine support facilities would include mine roads, a truck shop, truck wash building, tire shop, warehouse, sample building and sewage treatment plant.

Access to the Mill site would primarily be by 15 km of new road into the Panantza site from the existing gravel road near the village of Rocafuerte. A bridge to the San Carlos deposits is required prior to the start of the Phase II of the project and has been included in the first phase of the project.

The proposed mine infrastructure layout includes optimized conveyor alignments for ore and waste rock, and gravity discharge of tailings from the Mill to the WMF during the initial years of operation. A conveyor is proposed to transport crushed waste rock from the San Carlos Pit to a transfer point near the Stockpile. A crusher has been located near the San Carlos Pit to reduce the waste rock to a conveyable size. During the initial crossover period in Years 11, 12, and 13, waste rock would be trucked from the transfer point to the WMF. When mining has concluded at the Panantza Pit in Year 13, a second conveyor would carry the waste rock from the transfer point to the inactive Panantza Pit. Ore would be conveyed from the two open pits to a common stockpile located north of the Mill.

A reclaim barge, booster pump station, and associated pipeworks would deliver process water from the WMF supernatant pond to the Mill, cyclone sand plant, and for treatment and release. The system would require adjustment throughout the project life, as the elevations in the facility, as well as the extent of the tailings beach and pond, would vary from year to year.

Fresh water would be collected at the outlet of the Panantza Open Pit diversion tunnel and pumped to a head tank at the Mill. This tank would supply the fresh water requirements at the Mill, as well as at other mine facilities.

Knight Piésold Consulting Limited (“KP”) completed a preliminary assessment of a WMF for potential tailings and waste rock storage for the San Carlos and Panantza copper projects. Prospective WMF sites would be suitable for the co-storage of approximately 663 million tonnes (Mt) of tailings and 600 Mt of waste rock, generated throughout the 21 year life of the two deposits.

The mean annual rainfall at the site is estimated to be approximately 2,500 mm. Mean annual evaporation is estimated to be approximately 1,200 mm. Based on a preliminary review of the regional seismicity and tectonics, a conservative Magnitude 8.0 intraplate earthquake causing a maximum bedrock acceleration of 0.6g is considered to represent a reasonable Maximum Credible Earthquake event for the project. A preliminary review of the regional seismicity and tectonics suggests that ground motions at the project site would be significantly lower than the large magnitude interface subduction earthquakes, which occur along coastal Ecuador approximately 300 km west of the project site. The maximum bedrock acceleration determined for the project area from the Global Seismic Hazard Assessment Program (GSHAP, 1999) hazard map is approximately 0.2g with a 10% chance of exceedance in 50 years, corresponding to a return period of 475 years

Five potential WMF options were identified within a 10 km radius of the two deposits; one of these was preferable for its compatibility with the preferred mine layout option. The sites were assessed on criteria including volumetrics, distance from other mine facilities, and water management considerations. A number of mine development alternatives were considered, incorporating the two preferred WMF options, and other mine components.

The current mine plan proposal estimates a total 678 Mt of ore milled, and approximately 750 Mt of waste rock. Approximately 600 Mt of waste rock would be stored in the WMF while the remaining 150 Mt would be conveyed to the Panantza Pit beginning part way through Year 13, and continuing until the end of the mine life.

The confining embankment construction would begin with a starter dam, using pre-stripping material from the Panantza Pit, and suitable borrow, as required. The embankment would be continually raised using non-reactive cyclone sand tailings. Coarse cyclone sand would be deposited and compacted in cells to form the downstream embankment shell. The fine cyclone overflow would be deposited on the upstream side of the embankment, forming a low angle beach to serve as a low permeability upstream barrier between the supernatant pond and the embankment.

Two separate tailings streams would be produced at the Mill: Cleaner Scavenger Tailings (CST) and Rougher Scavenger Tailings (RST). The RST would flow by gravity to a cyclone sand plant located at approximately elevation 1070 masl, above the north abutment of the embankment. Coarse cyclone underflow, or cyclone sand, would be pumped along the embankment crest and deposited as fill for the downstream shell. Cyclone overflow would be discharged along the embankment crest, as well as for approximately two kilometres along each side of the facility. A reclaim barge, booster pump station, and associated pipeworks would deliver process water from the supernatant pond to the Mill and cyclone sand plant.

Waste rock would be hauled to the WMF for permanent storage. The rock would be placed in the facility, where it would be progressively submerged by the rising tailings solids and the supernatant pond. Subaqueous storage of the waste rock has the potential to significantly reduce or prevent the onset of acid rock drainage or metal leaching. It may also be possible to use non-reactive material for embankment construction.

A supernatant pond of approximately 6 million cubic metres would be accumulated for initial processing requirements, beginning approximately six to nine months before start-up. The WMF supernatant pond volume would be managed throughout operations to provide sufficient detention time for tailings solids to settle, as well as provide a buffering volume for process water requirements, while maintaining sufficient freeboard and providing cover for the cleaner tailings. The results of the water balance model suggest that the facility would operate at a mean surplus of up to approximately 2 m³/s. Surplus water would be treated and released as required downstream of the WMF.

The effects on water quality resulting from construction and operation of the WMF would be significantly mitigated through subaqueous deposition of tailings and waste rock. While there would be a loss of land and associated flora and fauna habitat, portions of the WMF would be reclaimed at closure, replacing some of the lost vegetation and wildlife habitat. The remaining portions of the WMF would likely become marsh and wetlands, transforming some of the existing terrain to a new land use.

Quantity and cost estimates for the materials and work required for the initial construction and for ongoing operations of the WMF have been completed for the following areas:

The Pacific Coast can be reached via two routes starting from where the gravel access road from the mine intersects with the main highway: to the north through Cuenca, or to the south and through Loja. The southern route is shortest and is in better condition because it is mostly paved. Both routes have to pass through mountainous terrain to arrive at the port city of Machala, on the Pacific Coast. The Loja route is 473 km to the port at Machala. Farther north along the coast is the port of Guayaquil, a much larger centre, which could be used for the shipping of concentrates. However, it is an additional 200 km from the site, for a total of at least 673 km from the Panantza – San Carlos property to Guayaquil.

The Machala port selection was based on satisfying the criteria of low cost and convenient access through the city of Machala. The key advantages of this location include:

The process plant is estimated to produce approximately 1,730 t/d of dry concentrate over the life of mine. Three options were investigated for the concentrate handling: 1) trucking of approximately 1,900 t/d of wet concentrate to the coast, 2) constructing a pipeline and slurring the concentrate to a dewatering facility on the coast, and 3) constructing a Hydrometallurgical facility in the Copper Belt area and refining the concentrate locally. Option 2 is currently considered the most viable and used in the economic analysis in this report.

Corriente’s strategic power plan includes utilizing low cost, environmentally friendly, and readily available hydropower to supply the Panantza – San Carlos Project’s power demand. The electrical demand of the Panantza – San Carlos Project is estimated at 120 MW and 970 GWh/a. The average total energy cost for hydro power is typically around $0.057/kWh. Approximately 11 MW would be generated on the project site using the water diverted from the catchment west of the Panantza open pit. The design flow is 4.8 m³/s and the gross head is 300 m.

The balance of power required can either be purchased from an existing hydro generator, or can be supplied by a project developed for the mine. Approximately 50% of Ecuador’s power demand is supplied by hydroelectric generation, which is the least expensive form of energy commercially available in Ecuador. Many promising potential hydroelectric projects have been identified, and several are located near the Panantza – San Carlos Project.

Whether Corriente develops its own hydro project or purchases power from an existing hydro generator, the strategy is to interconnect with the Ecuadorian electrical grid: Sistema Nacional Interconectado (“SNI”). This allows the mine to purchase power from an alternate source should the primary source be unavailable, and allows the sale of excess energy in the case of an Corriente owned hydro plant.

The conceptual design for the project to SNI interconnection is a new 111 km, 230 kV transmission line connecting Sinincay and the substation at the Panantza – San Carlos project site. The transmission line route follows an existing 138 kV transmission line route connecting Cuenca to Limón, and then continues south to the project site. Sinincay is directly connected to the Paute generating complex through Zhoray at 230 kV and is one of the strongest, most stable SNI interconnections in Ecuador.

Final reclamation measures would be carried out as soon as final surfaces are created. Post operational reclamation would return the disturbed areas to the pre-mine conditions and habitat. Certain mine features may be left in place as permanent control measures to prevent environmental pollution, for long-term community use, or as a post-mining enhancement, which include the administration buildings, water treatment structures and water diversion/hydropower facilities.

Major closure activities after the end of mine life would include removal of all facilities and infrastructure that is not planned to be left for other uses or is needed for closure maintenance. The crushers, concentrator, conveyors, pipelines, and support facilities would be dismantled. Inert materials such as steel, iron, concrete, plastic and wood would be disposed of, buried in on-site disposal areas, or sold to scrap dealers for recycling.

The two open pit mines would be allowed to fill with water when mining operations cease. The Panantza Pit would be utilized to store the waste rock from the San Carlos Pit. The final elevation of the waste rock within the Panantza Pit would remain below the spill elevation so that the flooded pit would permanently saturate the waste rock. The San Carlos Pit would begin to fill with water once mining operations cease. The Panantza Pit is expected to fill to spill elevation some years prior to the San Carlos Pit.

Both open pits are expected to have some portion of their pit walls permanently exposed above flood elevation. Should the materials in these exposed portions be acid generating, some form of water treatment may be required. Once geochemical characterization data has been collected and interpreted for the San Carlos and Panantza Projects, it may be found that one or both of the pits may not require active water treatment, which would decrease the estimated Post-Closure Costs significantly.

A permanent tailings dam spillway would be constructed at an elevation that is suitable for a wetland to remain on a portion of the tailings surface, as well as provide for long-term stability of the embankment. The elevation of the water would be set so that the CST and reactive waste rock would remain permanently saturated. Soil would be placed across the remaining beach so that it can be reclaimed as a wetland, while the embankment crest and downstream slopes would be reclaimed to match the natural surrounding hillside vegetation.

Roads would be left in place to support community, military, and public access. Roads allow greater access to areas previously inaccessible by vehicle. Corriente would cooperate with the relevant authorities following mine closure to develop management plans that would regulate activities that are generated as a result of the new roads to ensure that lands adjacent to the roads are utilized at an appropriate level according to an established plan.

The Preliminary closure costs have been broken down into two periods: Years 1 to 10, and Years 11 to 21. While the Panantza Pit would continue to operate past Year 10, this is approximately the time that mining would commence at the San Carlos Pit. Hence, in the event of pre-mature closure at Year 10, there would be no reclamation associated with the San Carlos Pit.

Direct, Indirect and Contingency Costs are estimated at $12.3 M. Post-Closure Costs, including environmental monitoring, maintenance and operations of water treatment plants for both pits (for a period of 30 years) is estimated at $64.5 M. The Total Closure Costs (Direct, Indirect, Contingency and Post-Closure) is estimated at $76.7 M.

Two major types of licensing vehicles exist for Ecuadorian mine projects (1) Permits/Licenses/Permissions (generally referred to as “permits”), and (2) Environmental Impact Assessments (EIAs). Both permits and EIAs are required for a typical open pit mine operation in order to move from exploration through operations and closure.

Both the exploration phase and the operations phase of the project require approved EIAs. Various permits may be required for exploration. Exploration operations that propose to use significant surface or ground water resources during drilling, divert water for use, build roads etc. would require permits to address activities.

Of the total 39 permits identified as being necessary to commence activities, four (4) are considered Priority Permits (Table 1-3). Priority Permits would likely be required of most major mine operations.

Under Ecuadorian Mining Law and Mining Environmental Regulations, the Ministry of Mines and Petroleum handles the environmental approval system for new mining projects.

The principal needs of the population are employment and infrastructure development. The communities suffer from a constant migration of able workers to other more prosperous regions in the country as well as overseas in order to find employment. Low levels of education and poor health care services also impact the region.

In December of 2006, the project was suspended due to local social unrest. The company is endeavouring to resolve this issue with ongoing discussions with all levels of government and the local communities. ExplorCobres S.A. has installed a local information office in San Juan Bosco to inform the local communities about aspects of modern mining and its capacity in social and environmental responsibilities.

The total Capital Cost Estimate to build a 90,000 tpd ore plant capacity for Panantza – San Carlos Project is US $1,229,594,000 within -5% / +35% accuracy range. It is estimated about 4,500,000 man-hours of direct construction labour, including mine predevelopment. Based on this preliminary analysis, the overall execution period to mechanical completion would be 41 months, and from the construction start to mechanical completion would be 24 months.

The average total processing operating cost is $2.76/t ore processed (see Table 1-4).

Samples of Panantza and San Carlos concentrate were not available to be tested by smelters. Future test work would be necessary to generate a concentrate for evaluation by the smelters for Cu grade, moisture and impurities. The specifications of concentrate from the Mirador porphyry copper-gold deposit, which are expected to be similar to those of the Panantza – San Carlos concentrate, are provided in Table 1-5. It is a very clean concentrate (free of deleterious elements) and has copper, sulphur, gold and silver contents that make it saleable to all smelters and desirable as a blending concentrate. Mirador concentrate has shown to be dewatered at a fine grind produced by the mill cleaning circuit and moisture content is not expected to be a problem.

Molybdenum concentrate as a by-product is expected to be between 48 to 50% Mo with impurities of silicate, iron and copper. Test work is required to confirm the molybdenum concentrate impurities and their affect on the roasting penalties.

The economic analyses are preliminary in nature and are based entirely on Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the operating and financial projections in this preliminary assessment will be realized. It is expected that the findings of this report will change as more information becomes available.

The economic evaluation provided uses a long term average treatment cost of US$75/t of dry concentrate and a refining charge of US$0.075/lb of copper, with price participation of +/- 10% at a breakpoint of 120 cents, with a cap of plus US$0.06/lb of copper. Gold refining costs are based on a 90% payable factor and a gold refining cost of US$5.00/oz. Silver refining costs are based on a 90% payable factor and a silver refining cost of US$0.30/oz. Flat line prices of US$1.50/lb copper, US$10/lb molybdenum, US$550/oz gold, and US$7.50/oz silver were used for this Preliminary Assessment report.

Other assumptions include:

Table 1-6 summarizes the parameters and economic outcomes of the Panantza – San Carlos copper projects.

The effects of changes to commodity prices (copper and molybdenum), capital cost, operating cost, and copper recovered (via grade sensitivity) were examined in a sensitivity analysis (Figure 1-1 and 1-2). This analysis indicated a greater sensitivity of the project to the copper price and copper recovery. The project is much less sensitive to capital and operating cost fluctuations.

This Preliminary Assessment provides a summary of all work conducted at Panantza and San Carlos since the inception of the projects and presents a mine plan and financial model for a joint Panantza – San Carlos mining operation.

The current Inferred resources at Panantza, at a 0.4% copper cutoff, are 463MT at 0.66% Cu, of only hypogene mineralization. Recent drilling has shown that significant mineralization is still open to the south, west, and north sides, as well as at depth.

The updated San Carlos Inferred resource estimate at the same copper cutoff is 600MT at 0.59% Cu, of only hypogene mineralization.

The Inferred resource estimates for Panantza and San Carlos were used to construct preliminary open pit shells and a unified preliminary mine schedule for the two deposits. A preliminary assessment of the economic potential of the project was then completed. The project has a net present value of $676M with an internal rate of return of 15.1%, based on US$1.50/lb copper, US$10/lb molybdenum, US$550/oz gold, and US$7.50/oz silver prices. A total of 668MT of ore would be mined over a 21 year mine life. The total capital costs are estimated at US$ 1229 million.

Based on the positive economic analysis, the authors recommend the following items to forward the project to a feasibility level. The total cost would be about $12 M, which would go mostly into diamond drilling to upgrade and increase the current resource estimates:

1.

Complete sufficient drilling at each project to further delimit and determine their depth extents, and also convert most of the resource to Indicated category. The above mentioned drilling would cost approximately $8M.

2.

Collect geotechnical data concurrent with the drilling mentioned above, with the aim of advancing the geotechnical character of the rock mass and how it would affect both pit design and environmental factors.

3.

Collect geotechnical data at the WMF site at the level required for feasibility level design.

4.

Collect detailed hydrogeological and hydrologic data in conjunction with the geotechnical drilling within the pit areas, as well is the WMF.

5.

Collect bulk samples for studying the acid rock drainage (ARD) issues associated with the future pit and waste dumps.

6.

Continue the metallurgical testing of core samples for conventional flotation, hardness, and for hydrometallurgical treatment of concentrates.

7.

Model molybdenum (Mo) distribution and include Mo in the next block model estimation.

8.

Conduct a more detailed seismicity study for future design work to confirm the seismic design parameters.

9.

Commence social and environmental baseline studies, and permitting, for development of Panantza and San Carlos.

10.

Commence negotiations with the Ecuador government regarding hydroelectric power and project taxation.

A Pre-Feasibility or Feasibility Study can be initiated once the above recommendations are complete, contingent on there not being any fatal flaws discovered.

This Preliminary Assessment study considers the economics of mining the Panantza and San Carlos deposits as a single large copper development opportunity with aggregate Inferred resources of 1.06 billion tonnes at a grade of 0.62% copper. This would potentially be mined at 90,000 tonnes per day, giving a mine life of 21 years. The study outlines the project’s economic potential for investors, as well as provides a starting point for future engineering and development work proposed there.

The Panantza and San Carlos porphyry copper deposits are located some 40 kilometres north of Corriente’s Mirador copper-gold deposit, in the province of Morona-Santiago, in southeast Ecuador. This study is compliant with international social and environmental standards and identifies options that would optimize the stakeholder returns and provide social and economic benefits to the communities in the region. The projects are held by two of Corriente’s subsidiaries in Ecuador, EcuaCorriente S.A. and ExplorCobres S.A.

Corriente recently updated the estimate of the Inferred resources at the Panantza porphyry copper deposit following a third drill programme, relogging of core, and significant additional surface mapping. Corriente engaged Mine Development Associates (“MDA”) in the second quarter of 2007 to estimate a current mineral resource for the Panantza deposit based on this recent work, as well as re-estimate the resources at San Carlos using the same data set as previous estimates, but utilizing some new geology models to construct a new block model. MDA’s contribution entailed constructing a block model and estimating grades and tonnes in compliance with the CIM 2005 Mineral Resource and Mineral Reserve definitions. Steven Ristorcelli, P.Geo, Principal Geologist for MDA, assisted in the preparation of these resource estimates. The block modeling and resource estimates were prepared by Steven Ristorcelli and Aaron Hanson based on data provided by Corriente. The NI 43-101 report for Panantza was issued in June 2007 (Drobe, 2007).

The present Preliminary Assessment uses the updated Panantza resource estimate from Drobe (2007) and an updated resource estimate for San Carlos, which is based on historical exploration work by Billiton Ecuador B.V. (“Billiton”) in 1997-1998 (Kirk, 1999), and uses the new MDA block model as presented for the first time in this report. Resources for both deposits are reported in a different manner to that from a previous Preliminary Assessment NI 43-101 Technical Report titled “Corriente Copper Belt Project Southeast Ecuador - Order-of-Magnitude Study (Preliminary Assessment)”, dated June 22, 2001 by David Makepeace, P.Eng, of Geospectrum Engineering (Makepeace, 2001). The historical exploration work on San Carlos by Billiton was reviewed, verified, and edited where necessary for consistency.

The geology and mineral resource sections of this Preliminary Assessment were prepared by John Drobe, P.Geo, Chief Geologist, Corriente Resources Inc. John Drobe visited the project in December 2002, June 2003, and January, June, July-August, and November 2006. The mine scheduling was by Robert Fong of Moose Mountain Technical Services (“MMTS”), the tailings management and closure sections were by Jeremy Haile of Knight Piésold Consulting (“KP”), the milling and process and economic evaluation sections were by John Hoffert of Hoffert Processing Solutions, inc. (“Hoffert”), and the infrastructure and capital cost were by Joseph Rokosh of Merit Consultants International Inc. (“Merit”). KP, Hoffert and Merit visited the area in the vicinity of the project.

Neither MDA, KP, Merit, Hoffert, nor MMTS are associated nor affiliated with Corriente Resources Inc., nor its subsidiaries EcuaCorriente S.A. (“EcuaCorriente”) and ExplorCobres S.A. (“ExplorCobres”, formerly named Minera Curigem S.A.), nor any related companies. Any fees paid to these entities for the work done and reported on in this Technical Report are not dependent in whole or in part on any prior or future engagement or understanding resulting from the conclusions of this report. The fees are in accordance with industry standards for work of this nature.

The sections of this report that discuss other aspects of the project rely on information set out in the following reports:

Hawthorne, Gary, 2003: Status Report On Mineral Processing Characteristics Of
Corriente Copper Belt Ecuador, Prepared for Corriente Resources, July 22, 2003.

Trejo, R., 2006: Letter Regarding the Status of Title to the Mining Concessions in Ecuador
for ExplorCobres S.A. and EcuaCorriente S.A., Trejo, Rodriguez y Asociados,
Abogados Cia. Ltda., Prepared for Corriente Resources Inc, November 27 2006.

The report is also based in part on personal communications with Mr. Ken Shannon, P. Geo., C.E.O. of Corriente Resources Inc, and Dr. Darryl Lindsay, P.Geo, geologist and General Manager of ExplorCobres S.A.

In September 2006, Steve Ristorcelli of MDA visited the Panantza project for two days (Ristorcelli, 2006). His time was spent reviewing core, taking duplicate check core samples and walking over the deposit checking drill-hole locations with a GPS. Two surface samples and 20 core splits (1/4 core) were taken and delivered to Acme Analytical Laboratories (“Acme”) preparation lab. Mr. Ristorcelli also inspected the overall QA/QC of the core logging and sampling procedures at camp.

All currency is expressed in US dollars unless stated otherwise. The coordinate system in use on the property and in all maps and references in this report is UTM zone 17S, Provisional South American Datum (PSAD) 1956. The estimated costs in the Recommendations section include Ecuadorian taxes where applicable.

This preliminary assessment has been assembled by a group of consultants on behalf of Corriente with assistance and information from:

The independent Ecuadorian law firm of Trejo, Rodríguez y Asociados, Abogados Cia. Ltda. provided legal opinions on land tenure, environmental liabilities, and the status of permits.

This report contains the expressions of the professional opinions of the contributors to this Report and other consultants, based upon information available at the time of preparation. The quality of the information, conclusions and estimates contained herein is consistent with the intended level of accuracy as set out in this report, as well as the circumstances and constraints under which the report was prepared which are also set out herein.

This report is intended to be read as a whole, and sections should not be read or relied upon out of context.

The Panantza and San Carlo projects lie near the north end of the Corriente Copper Belt, which runs north along the valley of the Rio Zamora in the Morona Santiago and Zamora Chinchipe provinces of southeast Ecuador, near the border with Peru (Figure 4-1). The area is centered about 340 kilometres south of Quito and 70 kilometres east-south-east of the city of Cuenca. The Copper Belt has dimensions of about 80 kilometres (north-south) x 40 kilometres (east-west) and comprises several advanced and exploration stage porphyry copper prospects, as well as a couple of sediment-hosted copper targets.

Billiton began exploration in south-eastern Ecuador in 1994 and identified a number of possible porphyry copper targets in the region (Billiton, 1999a). Since April 2000, under various agreements signed and completed with certain Ecuadorian subsidiaries of Billiton, Corriente earned a 100% interest in Billiton’s mineral properties located in the Rio Zamora copper porphyry district in Ecuador (Billiton, 1999b). This required issuing shares to Billiton and expending exploration funds under the terms of these agreements. Additionally, these mineral properties are subject to a 2% Net Smelter Royalty (“NSR”) payable to BHP Billiton, though the company has options to reduce the NSR to 1% for the Mirador/Mirador Norte, Panantza and San Carlos mineral properties upon the payment of US$2 million to BHP Billiton for each such option exercised.

Corriente also entered into an exploration management arrangement where Lowell Mineral Exploration (“Lowell”) could earn up to 10% of Corriente’s interest in certain properties in exchange for managing the exploration of the properties. In December 2003, Corriente granted Lowell the option to exchange its 10% interest in the Corriente mineral concessions, including San Carlos, for a 100% interest in the Warintza property. In June 2004, Lowell exercised that option, and Corriente now holds a 100% interest in the Panantza and San Carlos properties through its wholly-owned subsidiary companies in Ecuador: EcuaCorriente S.A. and ExplorCobres S.A.

According to Ecuadorian Mining Law, registered concessions have a term of 30 years, which can be automatically renewed for successive 30-year periods, provided that a written notice of renewal is filed by the registered concession holder before the expiry date (Trejo 2006). The state code numbers, area in hectares, property registration dates and ownership of the concessions are as indicated in Table 4-1 (Trejo 2006). The company listed in Table 4-1, ExplorCobres S.A., is fully owned by Corriente (Trejo 2006; Appendix A). The San Carlos deposit, as currently defined by drilling, is located wholly within the San Carlos concession. The Panantza deposit, as currently defined by drilling, is located wholly within the Panantza concession.

In 2006, Corriente hired Segundo Toledo of Topcon Survey S.A. to survey in the land parcels around Panantza. A surveyor was brought in because previous land title maps acquired from the municipality were found to have poor correlation with geographic features that bound the land parcels. The current surface rights holdings in the Panantza area are shown in Figure 4-3. These parcels cost from $200 to $400 per hectare which is generally equal to or higher than current prices for farm land in this area. With these purchases Corriente has secured surface rights over the Panantza deposit and established a framework for continued land acquisition in the area. Additional surface rights would have to be purchased for construction sites, dumps and mill sites.

At the time of writing, Corriente holds no land title in the San Carlos concession. The land over the mineralization and where the camp located is rented from a local land owner. Purchasing of titles is expected to commence with the next drill programme.

Although Corriente acquires the rights to some or all of the minerals in the ground subject to the tenures that it acquires, or has a right to acquire, in most cases it does not thereby acquire any rights to, or ownership of, the surface to the areas covered by its mineral tenures. In such cases, applicable mining laws usually provide for rights of access to the surface for the purpose of carrying on mining activities, however, the enforcement of such rights can be costly and time consuming. In areas where there are no existing surface rights holders, this does not usually cause a problem, as there are no impediments to surface access. However, in areas where there are local populations or land owners, it is necessary, as a practical matter, to negotiate surface access.

There can be no guarantee that, despite having the legal right to access the surface and carry on mining activities, the company would be able to negotiate a satisfactory agreement with any such existing landowners/occupiers for such access, and therefore it may be unable to carry out mining activities. In addition, in circumstances where such access is denied, or no agreement can be reached, the company may need to rely on the assistance of local officials or the courts in such jurisdiction.

For the exploration phase of the projects, all the required permits for exploration are included on file with the Ecuadorian Government. For any mine development, an amended Environmental Impact Assessment (EIA) report must be filed and approved by Government authorities. EIA amendment for advanced exploration in project Panantza – San Carlos has been approved (official letter No. 058 SPA-DINAMI-UAM 0700127, dated July 26, 2007).

The following discussion of the Ecuadorian environmental permitting and approval process, including Table 4-2, is paraphrased from the report titled “Feasibility Study Report, Mirador Project, Ecuador”, by AMEC Americas Limited (AMEC 2005), to include recent modifications to the permitting processes.

Under Ecuadorian Mining Law, the Ministry of Mines and Petroleum handles the environmental approval system for new mining projects. Mineral concession holders are required to complete environmental impact studies and environmental management plans to prevent, mitigate, rehabilitate, and compensate for environmental and social impacts as a result of their activities. Annual audits of compliance with regard to the environmental management plans are required as a formal monitoring mechanism by the State. These studies are approved by the Sub secretary of the Environment within the Ministry of Mines and Petroleum.

Access to the area is by scheduled air services of less than one hour from Quito to Cuenca. Road access from Cuenca to the village of Santiago de Pananza is via the towns of Gualaceo, Indanza and San Juan Bosco, mostly by reasonable-quality gravel roads over a distance of about 150 kilometres, or about four hours travel (Figure 4-1 and Figure 5-1). From Santiago de Panantza, access is via a newly established gravel road that continues past the Panantza project camp to the village of 27 de Noviembre, about six kilometres farther south. A mule trail leads east across a footbridge over the Rio Zamora canyon and then 0.5 kilometres north and above the canyon through the village of San Carlos de Limon, and a further three kilometres to the San Carlos field camp.

The coordinates of the Panantza and San Carlos Project and adjacent copper prospects are given in Table 5-1 below:

A new, shorter trail and new footbridge are planned to link the San Carlos camp with the new 27 de Noviembre road directly west of camp. This would cut several kilometres off the current access.

The area has a wet equatorial climate with relatively small monthly variations in temperature and precipitation throughout the year. The mean annual rainfall is estimated to be approximately 2,500 mm but with individual events of over 60 mm in 24 hours. Due to variations in local topography there is a wide range in rainfall levels and the area could be characterized as having numerous microclimates. Mean annual evaporation is estimated to be approximately 1,200 mm.

Fieldwork is possible year round. The optimum period for collecting satellite imagery, airborne surveys or running helicopter supported drilling programmes is from November to January because of the drier weather conditions at this time.

Elevations at the project in the immediate vicinity of the mineralization range from 800 to 1500 metres above sea level (ASL) (see Figure 5-1). The Panantza deposit is crossed by the Rio Panantza, which flows east into the Rio Zamora, entering the gorge at an elevation of about 700 metres ASL.

The San Carlos deposit is bisected by the Quebrada Gorra, which flows west into the Rio Zamora, entering the gorge just northwest of the deposit. The Rio Akerones cuts the northeast corner of the deposit. Both drainages expose the porphyry mineralization.

The Cordillera Oriental on the west and the Cordillera de Condor on the east rise to maximum elevations of 4200 and 1800 metres ASL, respectively. The area is covered by disturbed primary tropical forest and minor rangeland for subsistence-level cattle ranching and agriculture.

The closest city is Cuenca with a population of approximately 420,000. There are a number of small towns and communities in the area of the project such as Indanza, San Juan Bosco, Santiago de Pananza, San Carlos de Limon, San Miguel de Conchay, and 27 de Noviembre. Figure 5-1 shows the infrastructure within the immediate area of the Panantza deposit.

The larger regional centre of Gualaquiza, 40 kilometres to the south, has a population of approximately 15,000 and includes banks, hotels and basic infrastructure. A paved highway now links Gualaquiza with towns to the south, including Pangui, Yanzatza, Zamora and onward to Loja.

There is currently a sub transmission 69kV power line between Cuenca and Limon, some 20 km north of the project; with a planned 138kV transmission line between Cuenca and Gualaquiza. The Panantza camp, five kilometres to the northwest, is now joined by a high tension line from the town of Santiago de Pananza to a 25kV transformer in the camp. The town of San Carlos is connected by a high tension line that runs from the town of 27 de Noviembre. The camp at San Carlos is not yet connected to this line. A diesel generator flown in with helicopter provided power at camp for the exploration in 1997-1998; this has since been moved to the Mirador camp.

There is no established land-based communication system at the site. Communication is currently by high-frequency (VHF) and FM two-way radios.

The closest existing airstrip is just southeast of the town of Gualaquiza, off the paved highway. It has an asphalt runway approximately 2100 metres (6900 ft) long. If warranted, it could be extended by about 300 metres for use by aircraft the size of a Hercules L100.

Billiton discovered a number of porphyry copper deposit clusters in the Pangui region of south eastern Ecuador during a five-year grassroots exploration programme in the mid 1990’s (Billiton, 1999a). A brief history of Billiton’s involvement in the Panantza and San Carlos Project follows:

1993-1994: decision to commence gold exploration in Ecuador, establishment of the Quito exploration office and application for concessions in the Pangui area, commencement of regional exploration and application for the concessions containing San Carlos.

1995: definition of six porphyry copper targets in the Pangui area from regional geochemistry and geological mapping.

1996: identification of the pan concentrate and large Cu-Mo soil geochemical anomaly at San Carlos, leading to the recognition of San Carlos as a large porphyry copper system.

1997: identification of alteration and porphyry mineralization in the area from Panantza to the San Miguel porphyry prospects, completion of five diamond drill holes at the San Carlos prospect with the intersection of significant copper mineralization.

1998: completion of initial IP survey at Panantza and San Miguel, and 11 diamond drill holes intersecting significant mineralization at Panantza, drilling of 4 diamond drill holes intersecting low to moderate grade mineralization at San Miguel, followed by drilling 21 more diamond drill holes at San Carlos.

1999: completion of a helicopter magnetic and electromagnetic survey over the Pangui project area, and completion of an induced polarisation survey at San Luis and IP sounding at Panantza and San Carlos.

In 1999, Billiton announced a restructuring of its new business initiatives to maximise its investment returns in new ventures and projects. Consequently, a joint venture opportunity became available over a major part of the Pangui porphyry copper province. Billiton found a suitable joint venture participant in Vancouver based Corriente Resources Inc., and agreements covering the north and south tenures were announced on October 18, 1999 and April 7, 2000 respectively. These agreements were structured to expedite the continuing exploration and development of what is now called the “Corriente Copper Belt” of which the Panantza and San Carlos porphyries were the most advanced deposits.

Corriente Resources began a 17-hole drill programme at Panantza in October, 2000, directed by David Lowell and under the joint venture agreement with Billiton. Core drilling totalled 5262.08 metres and was completed with a man-portable Hydracore drill rig, transported via a series of hand-excavated trails and platforms. In addition to much lower drill-associated costs, this system allowed more flexibility in the sequencing and spacing of drill holes than the helicopter supported method used by Billiton. The drill spacing was about 100 metres and concentrated on the north side of the Rio Panantza, which bisects the deposit. The drill trail cuts also provided much needed geological exposure, as natural outcrops are limited to the few creeks which cross the prospect. All drill core was stored at camp, together with the core from the Billiton programme. Limited surface mapping was also completed.

The topography and all collars were surveyed using differential GPS equipment, and a contour map with four-metre contours was produced over the area of known mineralization. The road from the nearby village of Santiago de Panantza was extended into the camp.

Four holes (PE01 to 04, total 647m) drilled in November 2000 tested the adjacent Panantza Este soil anomaly, located one kilometre to the east of Panantza; the holes returned low-grade copper results, which did not warrant an immediate follow-up programme.

An internal report for EcuaCorriente S.A. was written at the end of the year 2000 drilling, (Vaca and León, 2001). A polygonal resource estimate was included therein but never reported publicly. This resource estimate was not done in compliance with NI 43-101 and CIM 2000, nor was it ever intended or reported to be.

The ridge immediately northeast of Panantza received another nine holes (PE05 to 14, total 1207m) in October-November 2004. This ridge is included within the western limit of the Panantza Este Mo-Zn soil anomaly, which appeared to be a faulted (sinistrally) extension of the Panantza soil anomaly. The drilling was to test whether mineralization extended northeast of Panantza and connected with the main Panantza East anomaly across a fault. The results were not encouraging and exploration switched to the San Miguel prospect to the north.

For San Carlos, the only other exploration activities in the area since 1999 were reviews of the drill core and limited remapping of the trail system and creek outcrops.

The porphyry copper deposits of the Corriente Copper Belt are associated with porphyritic intrusive phases of the Late Jurassic calcalkaline batholiths of the Cordillera del Condor and other sub-Andean regions of Ecuador. The Zamora Batholith, a granitic intrusion which hosts all the known porphyry deposits, is part of the Abitigua Subdivision.

Radiometric dating by Billiton suggests that the porphyry mineralization is associated with the younger Upper Jurassic porphyry intrusive phases of the Zamora granite, with ages of 152 to 157 million years (Ma), with radiometric ages suggesting the intrusion of the actual batholith took place as early as 190 Ma (Gendall et. al., 2000; Coder, 2001).

The intrusions are emplaced within a package of marine sedimentary and volcanic rocks of the mid-late Jurassic Misahualli Formation, and possibly also older rocks of the Triassic Piuntza Formation. These units are exposed mostly along the east side of the batholith, but a small panel occurs southwest of Panantza. The western contact is covered unconformably by Cretaceous arenaceous sandstone of the Hollin Formation, which is conformably overlain by more calcareous shales, limestone, and sandstone of the Napo Group (Figure 7-1).

Tertiary dioritic to rhyolitic dikes, sills, and plugs intrude the overlying sedimentary rocks and Zamora granite along the western edge of the batholith. It is generally observed that later, post-mineral dikes at the deposits trend northeast, while the earlier dikes trend northwest.

A regionally important fault in the area strikes northeast along the base of the main Cordillera Occidental, juxtaposing the Cretaceous units against older rocks to the west. The Cretaceous units are intensely folded and sheared along the fault.

The mineralization is wholly contained within the Zamora batholith and related porphyritic intrusions (Figure 7-1). The granite consists mainly of fine-grained aplite and coarse graphic-textured leucogranite, characterized by absent to sparse mafic content. Medium-grained, equigranular granite and quartz monzonite with 20-30% biotite and hornblende occurs at the limits of mineralization and is more typical of the Zamora batholith.

Hornblende-orthoclase porphyry intrudes the granitic rocks in the form of dikes and tabular plugs. There appear to be two generations of dikes: one slightly predating mineralization, and the other late in the mineralization sequence. The former is typically more seriate in texture, forms larger dikes, and has less quartz ‘eyes’ than the latter. To date they have been distinguished more on how well mineralized they are, rather than lithologic differences. They may form a continuous series of intrusions that co-evolved with the mineralizing fluids and were emplaced over the entire mineralizing event. Alternatively, they represent a single intrusive event, and differences in mineralization are related to how well-fractured and thus open to fluids the units were, relative to the host granite. More drilling and trenching is required to clarify the sequence of intrusion and mineralization.

Hydrothermal breccia occurs adjacent to the one of the late-mineral porphyry dikes on the southwest edge of the deposit. Fragments include unmineralized porphyry and mineralized granite. Copper grades are overall lower in this unit.

The youngest units are Tertiary in age and intrude the Cretaceous Hollin sandstone. They consist of a single northeast-striking, northwest-dipping rhyolite dike in the southeast corner of the deposit, and several narrow (1-2m) diabase dikes, all of which parallel the rhyolite dike and some cutting it.

Alluvial deposits cover the valley of the Rio Panantza, and slide-related colluvium forms a fan under the current camp (south of PA014 to the river).

Potassic alteration predominates in the granite and leucogranite host rocks and the mineralized porphyries. The late-mineral dikes have moderate chlorite-epidote alteration. Argillic alteration extends down from the supergene zone and overprints the potassic alteration along structures. Pervasive quartz-sericite-pyrite alteration zone is marginal to the potassic alteration, extending far to the east into the Panantza Este prospect, and for at least one kilometre west, where it is well exposed in the new road cuts on either side of the bridge over the Rio Panantza. Quartz-sericite alteration is also confined to structural zones within the potassic zone.

As at Panantza, the mineralization at San Carlos is within the Zamora batholith and related porphyritic intrusions (Figure 7-2). The granite consists mainly of medium-grained, equigranular granite and quartz monzonite with 20-30% biotite and hornblende. Aplite and leucogranite are minor, slightly younger intrusive phases.

Billiton (Kirk, 1999) identified three mineralized porphyries, which were differentiated mostly on their state of mineralization and alteration, rather than rock type. The same designations were used at Panantza and Mirador. The porphyries were divided into 1) early mineral monzodiorite porphyry (Corriente’s unit Jefp), 2) intramineral granodiorite porphyry, and 3) late mineral granodiorite porphyry (Corrientes’ unit Jhbp). These porphyries show a progressive decrease in hypogene copper grades, from up to 1% Cu to less than 0.2% Cu, and a progressive decrease in the intensity of hypogene alteration in successive intrusions.

The early mineral porphyry (Jefp) is observed only in the extreme southern part of the system, in drill holes SC1 and SC2 (Kirk, 1999). Billiton also noted a broad though minor occurrence of monzodiorite porphyry dykes of similar composition to the early mineral porphyry within the mineralized envelope. This differs from the other porphyry deposits in the belt, which have significant quantities of early porphyry coincident with the main hypogene mineralization. In the geology map of Kirk (1999), this unit appears to be a strike extension of the central late-mineral dike; the contact is not defined and it is more likely the same unit as the late-mineral dike, albeit more mineralized.

The most volumetrically significant of the porphyritic dikes is the central, late-mineral dike. It bisects the higher-grade hypogene mineralization and is only weakly mineralized in the hypogene zone, though with significant exotic copper oxides at shallow depths, within the lateritic profile (or leached zone, as used in this report). Corriente now interprets this central dike as early porphyry, unit Jefp, for reasons given below.

Partial re-logging of the lithologies at San Carlos, and intensive re-logging and logging of Panantza core, suggests that the porphyritic dikes form a continuum that can not be unequivocally mapped/logged and divided into units. All are essentially hornblende-feldspar porphyries with minor quartz phenocrysts. The less intense mineralized (and altered) dikes tend to be more quartz phyric.

At San Carlos, as at the other porphyry deposits in the copper belt, the porphyritic dikes and stocks have been distinguished more on how well mineralized they are, rather than on lithologic differences. As was proposed by Kirk (1999), they may form a continuous series of intrusions that co-evolved with the mineralizing fluids and were emplaced over the entire mineralizing event. However, there is evidence suggesting they represent a single intrusive event, and differences in mineralization are related to how well-fractured and thus open to fluids the units were, relative to the host granite. The evidence is how grades change across the dike contacts: typically it is not sharp, and Zamora granite adjacent to or within the lower-grade “late” dikes is often also lower grade. The central dike was probably less fractured than the Zamora granite it intrudes, and therefore was less receptive to mineralizing fluids. More drilling and trenching is required to clarify the sequence of intrusion and mineralization.

Clearly post-mineral, weakly porphyritic microdiorite is a volumetrically minor dike phase. These dikes are unaltered and unmineralized. The same dikes are also a common but minor unit at Panantza, and probably related to large Tertiary diorite intrusions farther west.

Potassic alteration, in the form of abundant secondary biotite replacing primary mafic minerals, predominates in the granite and leucogranite host rocks and the mineralized porphyries. The retrograde phyllic and intermediate argillic alteration assemblages overprint the mineral porphyries but the post mineral diorite porphyries are unaffected. The late-mineral dikes have moderate chlorite-epidote alteration. Argillic alteration extends down from the supergene zone and overprints the potassic alteration along structures. In its simplest form, the interpreted alteration sequence from oldest to youngest is:

1)

potassic (biotite)

2)

chlorite

3)

potassic (pale pink K feldspar)

4)

chlorite + epidote + orange-red K feldspar

5)

intermediate argillic (illite + carbonate + chlorite ± smectite ± hematite)

6)

phyllic (quartz + sericite + pyrite)

7)

smectite + carbonate (associated with faulting)

The host rock, alteration, and mineralization of the Panantza and San Carlos deposits are typical of calc-alkaline porphyry copper systems. Copper deposits of a similar style are widespread in the Cordilleras of North and South America. The lateritic weathering profile, and resultant mineral zonation of leached, supergene, and hypogene, is also typical of porphyries exposed in a tropical climate.

The mineralization at Panantza is mostly typical porphyry hypogene with disseminated chalcopyrite; molybdenite occurs mostly as selvages within quartz veins. Higher grades of hypogene copper averaging about 0.8% are restricted to zones of more concentrated and veinlet-controlled chalcopyrite-pyrite ± magnetite. Mineralization has an approximate dimension of 900 metres by 600 metres and remains open at depth. The primary sulphides in the potassic alteration zone are chalcopyrite, molybdenite and pyrite. Anhydrite and gypsum are present locally. An intense, texture-destroying quartz stockwork runs through the centre of the deposit, from southeast to northwest.

Supergene (also called enriched) mineralization consists of both oxide and sulphide enrichment blankets, best developed just north of the river in an area roughly 600–metres long by 200–metres wide. Oxide copper mineralization is preserved in the leached, saprolite zone over the chalcocite mineralization and consists of mainly disseminated and fracture-controlled malachite and chrysocolla. Minor minerals are cuprite, pitch limonite and neotocite. The copper oxide is underlain by thin horizons of chalcocite coating chalcopyrite and pyrite in strongly argillic-altered host rock.

Mineralization drops relatively sharply (within about 50-100m) across a northwest-striking lineament on the east side of the deposit, and more gradually on the south, west, and north sides. Drill holes PA005 and PA006 intersected considerable low-grade, hypogene copper mineralization (about 0.4% Cu average) extending at least 400 metres northwest from the main mineralization modelled in this report. Adjacent drill holes and the soil anomaly suggest the width of this material is on the order of 200-250 metres.

San Carlos mineralization is very similar to that at Panantza, and is mostly typical porphyry hypogene, with mainly disseminated chalcopyrite; molybdenite occurs mostly as selvages within quartz veins. Mineralization has an approximate dimension of 1500 metres by 900 metres and remains open at depth. The primary sulphides are chalcopyrite, molybdenite and pyrite and are associated with the potassic alteration event. Minor subsequent copper mineralisation is vein controlled rather than disseminated (Kirk, 1999). Anhydrite and gypsum are present locally.

Oxide copper mineralization is best developed northeast of Quebrada Gorra, near drill holes SC013-015 and extends into the central dike. The oxide copper mineralization is preserved in the leached, saprolite zone over the chalcocite mineralization and consists of mainly disseminated and fracture-controlled malachite and chrysocolla. Minor minerals are cuprite, pitch limonite and neotocite. The oxide copper mineralisation formed in situ over low-pyrite, primary-sulphide mineralization, and as exotic-oxide copper mineralization transported laterally and precipitated by neutralisation by mafic minerals in late mineral or post mineral porphyries.

Supergene (also called enriched) mineralization consists of sulphide enrichment ‘blankets’ or horizons, which are best developed under the ridge southwest of Quebrada Gorra, and extending from drill holes SC001 at the southeast end to SC006 at the northwest end. Mineralization consists of chalcocite and minor covellite replacing chalcopyrite and to a lesser degree pyrite. Relict pyrite and chalcopyrite is common reflecting the immaturity of the secondary enrichment zones. The upgrading of the supergene copper grade over the hypogene grade is variable from zero to a maximum of about three times the primary grade depending on the pyrite content.

A second phase of exploration drilling at Panantza commenced in June 2006, starting at the south end and moving north, expanding and infilling the previous drilled area. The objective of this programme was to extend mineralization outward, defining at 100 metre centres a 0.4% copper cutoff, as well as to infill previous drilling, bringing the overall drill spacing to 100 metres or less. Holes were also run to greater depths than in previous programmes, to test the vertical limit of mineralization. A total of 8398 metres was drilled in 25 holes by December, when the project was suspended due to social unrest in the area. Remapping of the main creek outcrops and additional mapping of the new drill trails, new road exposures, together with relogging of all drill core, significantly increased the understanding of the geology and mineralization at Panantza.

No further field work has been done at San Carlos since the last work by Billiton in 1999, other than a brief programme of new trail construction in 2003 for a drill phase that was never undertaken. Corriente’s work on the project has consisted of data compilation and review, relogging of several key drill holes, and limited mapping along the west edge of the concession.

The Panantza deposit has been tested by 53 diamond drill holes totalling 16,644 metres, arranged in a rough grid on approximately 100-metre centres. A summary of the drill-hole information is given in Table 11-1.

In 1998, Billiton completed the initial eleven drill holes using a Long-year 25A rig, beginning with HW-size casing and standard HQ size core (6.35 cm), and ending with NQ-size core down to depths of approximately 250-300m. The rigs were moved by means of a Lama helicopter which utilized a 170m Long-line. Subsequent drilling by Corriente utilized Hydracore hydraulic diamond drills belonging to the contractor Kluane International Drilling Inc. (“Kluane”). These were man-portable wireline drill rigs, and recovered standard NTW (5.7 cm) and BTW (4.2 cm) core. The smaller BTW core was recovered from the lower parts of the deeper drill holes. All platforms were accessed from the central camp via hand-built trails or the new road.

Core recoveries are good, averaging 95%. No significant assay bias is expected for core losses in these zones because of the dominantly disseminated character of the mineralization. The Rock Quality Designation (RQD) values measured from the core indicate that rock quality is moderate through most of the deposit. The average RQD value from the drilling over the whole of the deposit is 40.

Down-hole surveys using Tropari (1998) and Sperry-Sun (2000 and 2006) instruments were completed on 28 of the 53 holes. Vertical holes drilled in 1998 (PA001-008) and 2000 (all holes) were not surveyed because the deviation was not expected to be significant; this agrees with deviation data from surveyed holes drilled in 2006. For these holes, the deviations are mostly minimal, with average dip deviations of 1.7 degrees for vertical holes, versus 1.8 degrees for angle holes.

The following field procedures were used in all of the Corriente drilling campaigns:

After the drill holes were completed, the collar locations were marked with a large PVC pipe capped with a plastic cover.

Most of the early drill holes at Panantza were drilled vertically. As the geological knowledge of the deposit increased, it was recognized that there exist various geologic features with sub-vertical geometry, such as syn-mineral to post-mineral dikes and quartz-sulphide stockwork.

Accordingly, in the 2006 drilling programme, a greater percentage of holes with angles of -60° to -80° were drilled to help define such features. No orientated geotechnical drilling has been done at Panantza.

Specific gravity measurements were made on pieces of core that weighed from 10 grams to 30 grams each, collected at 20- to 30-metre intervals. For drill programmes prior to 2006, specific gravity was determined by the displacement method, where the sample was weighed dry, then immersed in water. The amount of water displaced by the sample was measured in order to determine its volume. The specific gravity was calculated by dividing the dry sample weight by the weight of the displaced water. This is not a particularly accurate method, since some water is lost because the sample always retains moisture, and it is difficult to measure the volume of the displaced water with much accuracy. Data for the Billiton drill programme (PA001-011) are erratic, suggesting poor methodology, and are not included in the resource estimation. Data from the 2000 Corriente programme are better, but only eight of the 17 holes from this phase have density data recorded.

For the 2006 drilling programme, the procedure was changed to the more accurate immersion method, where samples weighing between 100 to 400 grams were suspended with thin nylon monofilament and weighed dry, then immersed in water and weighed wet. Porous samples from the leached and supergene zones were sealed with paraffin. There are 394 specific gravity measurements in the present database which were used in tonnage estimations.

The San Carlos deposit has been tested by 26 diamond drill holes (including one short, abandoned hole) totalling 5936 metres, on irregular-spaced, approximately 200-250 metre centres. A summary of the drill-hole information is given in Table 11-2.

Billiton completed the drilling using the same methods employed at Panantza in 1998. Core recoveries are good, averaging 95%. No significant assay bias is expected for core losses in these zones because of the dominantly disseminated character of the mineralization. The RQD values measured from the core indicate that rock quality is low to moderate through most of the deposit. The average RQD value from the drilling over the whole of the deposit is 27 per cent.

The drill hole collars were surveyed using differential GPS equipment to a reported instrument accuracy of ±1 metres horizontally and ±2 metres vertically. Some of the surveys were done on the excavated pads before drilling, and for those the accuracy is less than the accuracy of the equipment; it is expected that the accuracy would be of the order of ±3 metres.

Down-hole surveys using Tropari instruments were completed on the last 13 of the 26 holes. Vertical holes drilled in the first two phases were not surveyed because the deviation was not expected to be significant.

The drill core at the drill platform was sealed in wooden core boxes and moved to the camp logging facility by helicopter. Staff then opened the boxes and converted the drill-hole depth markers from feet to metres. The core boxes were then placed on a stand and photographed in natural light. The core was marked at one-metre intervals by a geotechnician, who then measured the core recoveries and RQD. Technicians completed a preliminary drill log, wherein they recorded the core recovery, structural features, fracture density and orientation, and RQD.

After the drill holes were completed, the collar locations were marked with a large PVC pipe capped with a plastic cover.

Specific gravities were determined at about 20-metre intervals from selected drill holes in the last programme (SC013 to 025). The samples were of half core averaging about 10 cm in length. An Ohaus Dec-o-gram beam balance was used for measuring the mass of the sample to an accuracy of 0.01g. Specific gravity was determined using Archimedes Principle and water immersion (Kirk, 1999). These determinations look reasonable to Corriente. Limited and possibly incomplete data from the first drill programme (SC001 to 005) discovered by Corriente in the Billiton digital database are grossly in error and were apparently not used in the Billiton resource estimates.

Each one-metre interval of core was assigned a sample number by the sample technicians. Based on the style of mineralization, the individual one-metre samples were physically combined into composite samples of different lengths. The sample intervals are taken to the nearest metre and, therefore, extend across geologic boundaries. During the Corriente drill programmes at Panantza, the categories of mineralization used and the corresponding composite sample lengths depended on the rock type and were as follows:

At Panantza, for the 2006 drilling, some sample intervals were adjusted to coincide with dike contacts. Some of the larger, clearly post-mineral dikes were not sampled, and whole core remains in the boxes.

The use of non-random sample lengths in the database does introduce a certain degree of bias, but with compositing and length weighting, the effect is minimized or eliminated.

The sample intervals were recorded and assigned sample numbers. The core was split longitudinally using a diamond saw. In cases where the core fragments were too small to be sawn, core fragments representing one-half of the core volume were randomly picked out of the core boxes by hand. Each core sample was placed in its own double plastic bag, and each bag was weighed and marked with the sample number. Batches of samples were then placed in sealed rice bags for shipment.

For San Carlos and the first two phases of Panantza drilling, the samples were sent to a preparation laboratory in Quito, Ecuador. During the third phase of drilling at Panantza, ExplorCobres used the Acme Analytical Laboratory (“Acme”) preparation laboratory in Cuenca, Ecuador. Technicians at site prepared a list for the insertion of the duplicate and standard reference material (SRM) and quality assurance / quality control (QA/QC) samples, and this list accompanied the sample shipment form to the manager of the preparation facility. The lab manager confirmed the sample shipment and the work orders, and lab batch numbers were scanned and forwarded to both ExplorCobres and to Corriente via email.

Sample pulps from the Billiton programmes in 1997 and 1998 were prepared, processed and analyzed by Bondar-Clegg, prior to the merging of Bondar-Clegg and Chemex. Both of these preparation laboratories were independent from Billiton and Corriente and their Ecuadorian subsidiary companies. Each one-metre sample was crushed to -10 mesh using a TM Rhino primary jaw crusher and split into two equal fractions (Kirk, 1998). Three consecutive (3 x 1metre) core samples of -80 mesh, each weighing about 1.2 or 2.1 kg in size (NQ or HQ core), were then composited by mixing in a vertical axis mixer. The composite sample was then split to approximately 1 kg at -80 mesh and pulverized to -150 mesh, while the remaining -80 mesh composite was stored by Bondar-Clegg Ecuador.

Three 100 g pulp (-150 mesh) samples were taken from the 1 kg sample, and two of these were sent immediately to the quality control officer at Billiton in Ecuador. The officer gave the original 100g pulp, any duplicate 100g pulps, and the 100g internal standards new analytical sample numbers and these were then sent to the Bondar-Clegg laboratory in Vancouver for analysis. If not sent to Bondar-Clegg Vancouver as a pulp duplicates or for re-assay, the second and third 100g pulps were stored by Billiton in Quito. The samples were assayed for gold using the fire assay technique on a 30 g sample with an atomic absorption spectroscopy (“AAS”) finish, and analyzed for copper, silver, molybdenum, lead, and zinc using four acid digestion followed by AAS. In addition, the samples were analyzed for acid soluble copper using citric acid in a one hour agitated leach, and AAS finish.

Panantza sample pulps from 2000 were prepared at Bondar-Clegg laboratories in Quito by laboratory personnel. The whole sample was crushed to 75% passing –10 mesh, and then a one-kilogram sub-sample (“split”) was pulverized to 95% passing –150 mesh. A 100 g split (“pulp sample”) was taken from the 1 kg pulverized sample and shipped to the Chemex laboratory in Vancouver, Canada. Here the pulp samples were fire assayed for gold with an

AAS finish (using a 30 g aliquot), and were analyzed for copper, molybdenum and zinc using four-acid digestion and AAS methods.

The 2006 Panantza drill core samples were prepared at the Acme preparation facility in Cuenca, Ecuador. The sample preparation procedures were the same as were used in 2000 by Bondar-Clegg and Chemex, except that final sample pulverization was to 85% passing -200 mesh. The -200-mesh 100 g split material (pulp sample) was shipped to the Acme lab in Vancouver, Canada, for final analysis. Coarse rejects and remaining pulp from the samples are stored in Quito by ExplorCobres.

For the copper, molybdenum, silver, lead, and zinc determination, 0.5 g of material was digested using a four-acid solvent, followed by inductively coupled plasma/atomic emission spectrometric (“ICP-AES”) analysis. Gold was determined by 30 g fire-assay fusion followed by ICP-AES analysis. All sample preparation procedures are appropriate and well done, and the assays and analyses are of good quality.

In all phases of drilling at Panantza and San Carlos, drill core samples remained under the control of authorized Billiton or Corriente personnel from the time they left the drill platforms until they were delivered to the preparation laboratory (Kirk, 1998). The individual sample bags were put into woven polypropylene bags for shipment, and these bags were marked with the project number, the drill-hole number and a number identifying its place in the sequence of bags in the sample shipment. The shipment bags were secured with tape and rope, and were sent to the preparation laboratory in a contracted vehicle.

In 2006, the practice of marking the shipment bags with the drill hole number was discontinued, and shipment bags were secured by number-coded nylon “zip” ties before shipment.

Quality control and quality assurance (QA/QC) changed from drill phase to drill phase but basically followed procedures set up by Billiton in 1998. Table 14-1 summarizes the QA/QC procedures by drill phase.

Billiton initiated a quality control protocol in 1997 for the San Carlos sample stream which included internal blind standard reference materials (standards, or SRMs) and assay duplicates. McIver 1999 describes the QA/QC procedure as check samples (replicates sent to another lab) inserted after every 20^th sample composite and duplicates after every 10^th sample composite.

In addition, one of three internal SRMs was inserted after every 20th composite. The Billiton internal SRMs were made from compositing drill core sample rejects from San Carlos. Three SRMs representative of low, medium, and high-grade mineralization were prepared and subjected to a “round robin” survey of five reputable laboratories in Canada and Chile.

Quality control graphs for the internal standards show acceptable precision and accuracy for the drill-hole assays with no significant deviations from the second standard deviation confidence limits.

The precision of the pulp duplicate samples is also satisfactory. Approximately 87% of the sample pairs have a precision (mean of pair versus difference in pair) better than 5%, with only three pairs having precisions worse than 10%.

For the Panantza 2000 drill programme, the only QA/QC sample inserted into the sample shipments was a 100 g lab check. This sample was taken on a 1 in 10 basis and was shipped to Chemex in Vancouver for analysis. Results show a 12% positive bias in the Bondar-Clegg average values for copper and 7% bias in the molybdenum values relative to the Chemex check samples. Gold values were at parity. The best explanation for such a bias is that a multi-element ICP package analytical package was used at Chemex, whereas the Bondar Clegg assays were done with an AAS package. This is indicated by the Chemex >1% copper assays, which show no bias between labs: the “over-limit” or “ore-grade” copper analytical method at Chemex was the same as the primary analytical method at Bondar.

As a further check on the apparent lab bias, duplicate 100 g pulps representing about 10% of the samples from holes PA012 – PA029 were sent to Acme in Vancouver for assaying. The accuracy of these audit assays was tested with inserted SRM blind samples.

The results duplicated to a lesser extent the positive bias towards the Bondar-Clegg lab for the year 2000 samples for copper and molybdenum, and lesser so for gold. The most likely cause of the bias between the 2000 data and the audit samples, which is unrelated to the original bias between Chemex and Bondar Cleg, is attributed to a negative or “low” lab bias in the Acme results, as indicated by the low copper and molybdenum assays on the inserted SRMs and confirmed by a subsequent round robin programme.

In conclusion, the original copper bias between Bondar Clegg primary assays and the Chemex check assays in the drill programme from 2000 is due to the difference in analytical methods between the primary and check labs, rather than any systematic over-estimation of copper by the primary lab.

A more comprehensive QA/QC programme was adopted by Corriente at Panantza in 2006, following procedures recommended by AMEC during their review of the Mirador project in 2004. In 2004, Corriente prepared two bulk SRMs from drill core sample reject material from Mirador and submitted these to a five laboratory round-robin. A description of these standards can be found in the Mirador 2005 feasibility study (AMEC, 2005). The SRMs consist of a high-grade (MS1) and low grade (MS2) 100 g pulps, one of which was inserted every 20 samples; which SRM was inserted depended usually on the visually estimated grade of the adjacent samples.

When the standards returned values greater or less than two standard deviations from the mean, Corriente requested reruns of ten samples prior to and ten samples following the “failed” inserted standard of a SRM. If another standard occurred within ten samples, then the rerun interval was half way to the next standard. This programme ensured all assays are within acceptable accuracy limits for copper and gold.

Duplicates were inserted at the coarse fraction (-10 mesh) every 20 samples and at the fine fraction (-100 mesh) every 20 samples, for an overall 1 in 10 insertion rate. The results showed acceptable precisions with 90% of sample pulps having better than 4% precision (absolute difference from the mean of the duplicate pair) for copper.

Based on recommendations from MDA, a blank programme was initiated in late 2006 and only two drill holes had blanks inserted into the sample stream before the project was suspended.

Other than the mineral prospects and exploration activities of Corriente itself, there are no known mineral deposits or advanced mineral exploration projects immediately adjacent to the Panantza and San Carlos properties.

The majority of the metallurgical flotation and oxide leach test work was done in 1998 by CIMM Technical Services in Santiago, Chile for Billiton on a total of fifteen composite samples representing Panantza and San Carlos mineralization (Carreterro, 1999). The test results from the composites were used in this preliminary assessment to infer average recoveries and flotation concentrate grades consistent with porphyry deposits of this type (calcalkaline, granite hosted) in Ecuador and elsewhere globally. The preliminary grinding and flotation flow sheets were developed using conventional copper-gold porphyry milling practices at typical grinds and with typical reagent addition types and dosages.

As shown in Table 16-1, San Carlos ore was represented by one composite from the oxide zone, two composites from the supergene zone, and eight composites from the hypogene zone. Panantza was represented by one composite each from the oxide and supergene zones and two composites from the hypogene zone. In 2001, Corriente conducted three flotation tests and a comparison work index test on a single sulphide composite from Panantza at PRA in Vancouver, BC (Hawthorne, 2003). Figure 16-1 and Figure 16-2 are included to show the approximate location of the DDH collars for the Panantza – San Carlos metallurgical sampling programmes.