S-1/A

As filed with the Securities and Exchange Commission on August 9, 2011

Registration No. 333-175389

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SUNSHINE SILVER MINES CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	1040	27-2654848
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

370 17th Street, Suite 3800

Denver, CO 80202

(303) 784-5350

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Stephen Orr

Executive Chairman and Chief Executive Officer

Sunshine Silver Mines Corporation

370 17th Street, Suite 3800

Denver, CO 80202

(303) 784-5350

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:

Richard D. Truesdell, Jr., Esq. Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4000 Michael J. Zeidel, Esq. Riccardo Leofanti, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 (212) 735-3000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer  ¨
Non-accelerated filer  x (Do not check if a smaller reporting company)	Smaller reporting company  ¨

CALCULATION OF REGISTRATION FEE

Title Of Each Class Of Securities To Be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount Of Registration Fee
Common Stock, par value $0.001 per share	$250,000,000	$29,025(3)

(1) Includes offering price of shares of common stock which the underwriters have the right to purchase pursuant to their over-allotment option.

(2) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

(3) Previously paid

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED AUGUST 9, 2011

PROSPECTUS

            SHARES

SUNSHINE SILVER MINES CORPORATION

COMMON STOCK

We are selling             shares of common stock to the underwriters in a firm commitment offering.

Prior to this offering, there has been no public market for our common stock. We currently estimate that the initial public offering price will be between $             and $             per share. We intend to apply to list our common stock on the New York Stock Exchange under the symbol “AGS.” We have applied to list our common stock on the Toronto Stock Exchange under the symbol “SM.”

The underwriters have an option to purchase a maximum of             additional shares from us to cover over-allotments. The underwriters can exercise this right at any time within 30 days from the date of this prospectus.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 13 of this prospectus.

	Per Share	Total
Public Offering Price	$	$
Underwriting Discounts and Commissions	$	$
Proceeds, before expenses, to Sunshine Silver Mines Corporation	$	$

Delivery of the shares of common stock will be made on or about                     , 2011.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

UBS Investment Bank Morgan Stanley RBC Capital Markets

The date of this prospectus is                     , 2011.

SUNSHINE SILVER MINES CORPORATION PRINCIPAL PROJECTS

Sunshine Mine Property

Silver Valley

Idaho, U.S.A.

Los Gatos Project

Chihuahua, Mexico

TABLE OF CONTENTS

	Page
Prospectus Summary		1
Risk Factors		13
Special Note Regarding Forward-Looking Statements		28
Use of Proceeds		30
Dividend Policy		30
Capitalization		31
Dilution		32
Selected Consolidated Financial Data		34
Management’s Discussion and Analysis of Financial Condition and Results of Operations		36
Silver Industry Overview		49
Business		54
Management		76
Compensation Discussion and Analysis		81
Certain Relationships and Related Party Transactions		93
Principal Stockholders		97
Description of Capital Stock		99
U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock		102
Canadian Federal Income Tax Consequences for Non-U.S. Holders		104
Shares Eligible for Future Sale		107
Underwriting		109
Legal Matters		116
Experts		116
Change in Independent Registered Public Accounting Firm		116
Where You Can Find More Information		117
Glossary of Technical Terms		118
Index to Consolidated Financial Statements		F-1

In this prospectus, “Sunshine Silver,” the “Company,” “we,” “us” and “our” refer to Sunshine Silver Mines Corporation and its subsidiaries. We and the underwriters have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock.

MARKET AND INDUSTRY DATA AND FORECASTS

This prospectus includes market and industry data and forecasts that we have developed from independent research reports, publicly available information, various industry publications, other published industry sources or our internal data and estimates. Independent research reports, industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Although we believe that the publications and reports are reliable, neither we nor the underwriters have independently verified the data. Our internal data, estimates and forecasts are based on information obtained from trade and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions. Although we believe that such information is reliable, we have not had such information verified by any independent sources.

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CONCURRENT CANADIAN PROSPECTUS OFFERING

On July 8, 2011, we filed a prospectus with the securities regulatory authorities in each province of Canada other than the Province of Québec in connection with our initial public offering in Canada and our application to list our shares of common stock on the Toronto Stock Exchange. As part of the filing process, we were required to prepare and file with Canadian securities regulators a technical report on each of our material properties prepared in accordance with National Instrument 43-101, or NI 43-101, which is an instrument developed by the Canadian Securities Administrators and administered by the provincial securities commissions that governs how issuers in Canada disclose scientific and technical information about their mineral projects to the public. United States reporting requirements for disclosure of mineral properties are governed by Industry Guide 7 promulgated by the U.S. Securities and Exchange Commission, or the SEC. NI 43-101 and Industry Guide 7 standards are substantially different. This prospectus has been prepared in accordance with Industry Guide 7 and not NI 43-101. The NI 43-101 technical reports include the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” and “inferred mineral resource,” which are not terms recognized by the SEC for purposes of disclosure regarding mineral properties and, pursuant to the requirements of Industry Guide 7, may not be used in reports or registration statements filed with the SEC. Persons in the United States considering an investment in our common stock are cautioned not to place any reliance on the information regarding our mineral properties presented in our technical reports filed in Canada or the prospectus filed with Canadian securities regulatory authorities and should rely solely on the information presented in this prospectus for purposes of evaluating an investment in us.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus carefully, including the “Risk Factors” section and the consolidated financial statements and the notes to those statements. As used herein, references to “$” or “dollars” are to United States dollars.

SUNSHINE SILVER MINES CORPORATION

The Company

Sunshine Silver Mines Corporation is a U.S.-based precious metals exploration and development company with the objective of becoming a premier silver producer. The Company is currently focused on the advancement of its two principal projects: (i) the Sunshine Mine in Idaho, one of the highest-grade known remaining primary-silver discoveries worldwide, which is estimated to have produced a total of over 365 million ounces of silver, and (ii) the Los Gatos Project in Chihuahua, Mexico, where the Company holds a 81,651 hectare land position, constituting a new mining region. The Company has completed independent technical studies on both projects, which were prepared in accordance with NI 43-101 and, in the case of the Sunshine Mine, which has mineralized material, the requirements of Industry Guide 7. In total, as of the date of this prospectus, the Company owns or controls a portfolio of 20 exploration properties in the United States and Mexico covering an area of approximately 449,550 hectares.

Principal Projects

Sunshine Mine

The Sunshine Mine, acquired by the Company in the first half of 2010, is located within the Coeur d’Alene Mining District in Idaho. It is a past-producing mine, which is estimated to have produced a total of over 365 million ounces of silver from 1904 to 2008. In 1990, the last year the Sunshine Mine operated at full

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capacity, silver production from the Sunshine Mine was approximately 5.4 million ounces. In 2008, Sterling Mining Company, or Sterling, the prior owner of the Sunshine Mine, ceased production and in early 2009 went into bankruptcy due to, we believe, among other factors, falling silver prices and inadequate capital.

The Sunshine Mine has significant existing on-site infrastructure, including a primary shaft, which is operational and being upgraded and refurbished, and a secondary shaft, which is being refurbished. The Company’s consolidated land position at the Sunshine Mine property currently consists of approximately 2,408 hectares. The property has an abundant water supply, is connected to the electricity grid and is accessible by paved roads.

The underground workings at the Sunshine Mine consist of multiple levels developed off the primary shaft, extending from the surface to a depth of over 1,825 meters. The Company estimates that the Sunshine Mine contains more than 160 kilometers of underground workings.

Though a significant historical producing mine, the Company believes that the Sunshine Mine property remains highly prospective. As a result, the Company is undertaking significant exploration and re-development of the property. An independent technical report prepared by Behre Dolbear & Company from July 2011 estimated 1,991,169 tons of mineralized material at an average silver grade of 21.2 ounces per ton at the Sunshine Mine property. Sunshine Silver’s objectives are to: (i) increase the confidence of this mineralized material into the proven and probable reserve categories; (ii) define additional mineralized material through extensive surface and underground exploration; (iii) complete a pre-feasibility study within 24 months from the consummation of the offering to determine the costs to re-commission and operate the Sunshine Mine as a sustainable and efficient silver producer; and (iv) upgrade existing infrastructure and re-establish access to developed portions of the resource. The Sunshine Mine property will require significant time and capital before the property returns to production. The Company anticipates that it will continue to incur operating costs without realizing any revenues at the Sunshine Mine for the foreseeable future. See “Business—The Sunshine Mine Property” beginning on page 59.

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Los Gatos Project

The Los Gatos Project is located approximately 128 kilometers south of the state capital of Chihuahua City, in Northern Mexico and consists of two identified silver discoveries, the Cerro Los Gatos zone and the Esther zone, and 14 other priority targets with over 100 kilometers of outcropping quartz and calcite veins. The area is characterized by a predominant silver-lead-zinc mineralization.

Prior to Sunshine Silver’s initial acquisition of exploration concession rights in 2006, only very limited historical prospecting and exploration activities had been conducted at the Los Gatos Project. The Company was able to acquire concessions covering approximately 81,651 hectares and, through its exploration, has identified a virgin silver region containing high-grade vein style mineralization throughout its Los Gatos concession package.

In 2008, the Company negotiated surface access rights with local ranch owners and obtained environmental permits for drilling. Environmental baseline data collection began in May 2010 to prepare for the development of future environmental studies required for the Los Gatos Project. The present field camp is located in a community of approximately 200 persons, with electrical and water services, an elementary school and basic health services.

To date, Sunshine Silver’s primary areas of focus have been defining and extending mineralization along the Cerro Los Gatos and Esther zones that currently extend more than 2,500 meters along strike and remain open at depth and to the southeast. Through November 2010, Sunshine Silver had completed 154 drill holes in the Cerro Los Gatos and Esther zones, totaling 69,745 meters. The Los Gatos Project has a known strike distance of over 100 kilometers, of which only 15 kilometers has been explored by drilling. In addition to the Cerro Los Gatos and Esther zones, the Los Gatos Project has 14 other priority targets.

The Company’s objectives at the Los Gatos Project are to: (i) increase the drilling rate by increasing the number of exploration drills from four to seven; (ii) conduct social, environmental and technical work on the property with the objective of completing a pre-feasibility study on the Cerro Los Gatos and Esther zones within 24 months from the consummation of the offering; and (iii) acquire additional prospective mineral and surface rights. The Los Gatos Project will require significant time and capital before the Project is brought into production. The Company anticipates that it will continue to incur operating costs without realizing any revenues at the Los Gatos Project for the foreseeable future. See “Business—The Los Gatos Project” beginning on page 66.

Silver Industry Overview

Silver occurs naturally in its solid metallic state and is commonly associated with deposits of gold, copper, lead and zinc. According to GFMS Limited, or GFMS, 2010 global supply and demand totaled approximately 1.1 billion ounces of silver; approximately 70% of 2010 global supply came from mine production.

Silver has strong supply and demand fundamentals with significant demand rooted in diverse sectors. The demand for silver is driven primarily by three uses: industrial, consumer and investment. According to GFMS, in 2010, industrial, consumer and investment represented 46.1%, 37.0% and 16.8% of silver demand, respectively.

Industrial—Silver has a number of properties that make it an essential component in several industrial applications, including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to and high reflectance of light, and its ability to endure extreme temperature ranges. These properties restrict its substitution in most applications. In addition to traditional industrial uses, such as batteries, bearings, catalysts and electronics, increases in emerging applications for silver are expected to continue to augment industrial demand. Emerging applications include utilizing silver’s reflectivity as a component in solar cells to produce “green” electricity, and utilizing silver’s antimicrobial properties in medical applications and in the prevention of algae build-up in water purification systems.

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Consumer—Consumer use of silver is primarily for the fabrication of jewelry, silverware and coins, which rely on silver’s lustre, resistance to tarnishing and malleability. For these uses silver is often alloyed to a small proportion of other metals, such as copper, to harden it. Sterling silver, for example, is 92.5% silver and 7.5% copper and has been the standard in many countries for silver jewelry since the 14th century.

Investment—Investment demand for silver has increased significantly in the last 10 years, with the most significant investment demand coming from silver exchange traded funds, or ETFs, and bullion funds. Historically, the price of silver has shown at times a high correlation to the price of gold as a result of investment demand, and has been at times viewed as an attractive hedge against a decrease in the value of the U.S. dollar and inflation, attracting investors during times of uncertainty.

Business Strengths and Competitive Advantages

Attractive Assets in Two of the World’s Premier Silver Regions

Sunshine Silver’s principal assets are located in two of the world’s premier silver regions. The Sunshine Mine property is located in the Coeur d’Alene Mining District in Idaho, which district is estimated to have produced over one billion ounces of silver over the Mine’s 107-year history, and the Los Gatos Project is located in the Mexican Silver Belt, the world’s largest silver producing region in 2010. In addition to being located in premier silver regions, both assets possess characteristics that differentiate them from other silver projects:

Sunshine Mine Property

• A prolific past-producing mine, once one of the largest silver producers in the United States, which is estimated to have produced a total of over 365 million ounces of silver

• One of the highest-grade known remaining primary-silver discoveries worldwide, estimated to contain 1,991,169 tons of mineralized material at an average silver grade of 21.2 ounces per ton

• Consolidated land position of approximately 2,408 hectares

• Significant existing infrastructure, including a primary shaft that is operational and being upgraded and refurbished, and a secondary shaft that is being refurbished and access to roads, power and water

• Strong community support coupled with an experienced and skilled workforce

Los Gatos Project

• Control over an emerging silver region; land position of 81,651 hectares

• The identified Cerro Los Gatos and Esther zones, high-grade mineralization occurrences that currently extend more than 2,500 meters along strike, remain open at depth and to the southeast

• Widespread mineralization beyond the Cerro Los Gatos and Esther zones, with 14 other priority targets

Reduced Operating Risks at Sunshine Mine Given Historical Production

Sunshine Silver believes that the significant historical production at the Sunshine Mine, combined with the recent and planned mine improvements, reduces the risk of the project relative to other silver development projects. However, significant time and capital will be required before the Sunshine Mine returns to production and the Company anticipates that it will continue to incur operating costs without realizing any revenues at the Sunshine Mine for the foreseeable future.

The Sunshine Mine covers 171 hectares of surface rights, and the Company estimates that the Mine contains more than 160 kilometers of underground workings. The underground workings consist of multiple levels developed off the main production shaft, extending from the surface to a depth of over 1,825 meters.

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Since acquiring the Sunshine Mine, the Company has acquired additional surface rights and improved the existing infrastructure, repaired surface facilities and equipment and completed a number of environmental, health and safety upgrades. The Company has added experienced and highly-trained professionals to lead such improvements.

Significant Exploration Potential for Additional Silver Resources

Sunshine Silver believes it has numerous opportunities to define additional mineral resources through continued exploration of its properties:

• Sunshine Mine: Sunshine Silver has rights to approximately 2,408 hectares of exploration ground at the Sunshine Mine property. The property has numerous well-defined exploration targets, many of which are extensions of past-producing silver veins. In addition, Sunshine Silver has acquired additional surface rights to further consolidate its ownership of this mineralized trend. Despite being a prolific silver producing region, Sunshine Silver believes that the Coeur d’Alene Mining District is still highly under explored.

• Los Gatos Project: Sunshine Silver expects to expand the Cerro Los Gatos and the Esther zones, which remain open to extensions. Sunshine Silver also has identified 14 other priority targets.

• Other opportunities: Sunshine Silver owns 18 other exploration properties in Mexico, which could provide additional opportunities for resource growth.

Politically Stable and Mining-Friendly Jurisdictions

Both Idaho and Mexico are jurisdictions with a long history of successful mineral development and operations. Both are considered desirable jurisdictions in which to conduct mining operations due to stable political, tax and regulatory policies. Based on a survey published in March 2011 by the Fraser Institute, an independent research organization, Idaho and Mexico rank among the top silver mining jurisdictions worldwide in terms of the attractiveness of government policies, access to infrastructure and qualified labor availability.

Attractive Market Dynamics

Investment demand for silver exposure remains strong, driven in part by continued U.S. dollar weakness, ongoing economic uncertainty in Europe and political unrest in the Middle East. Historically, silver has been viewed as an effective hedge against a decrease in the value of the U.S. dollar and inflation, attracting investors during times of uncertainty. In addition, industrial demand for silver continues to increase, driven by new emerging applications for silver such as solar energy, medical applications and water purification, which the Company believes will enhance the strong supply and demand fundamentals of silver.

Despite this strong investment and industrial demand, the universe of primary silver companies is small, which limits investor options for silver exposure. Sunshine Silver represents an opportunity for investors to gain exposure to a primary silver company with two attractive assets.

Experienced Management Team and Board

Sunshine Silver has an experienced and growing management team with a track record of successfully identifying and developing mineral discoveries. The Company’s Executive Chairman & Chief Executive Officer, Stephen Orr, has 34 years of experience in the minerals industry principally with Homestake Mining Company, where he ultimately served as President of Homestake Canada Inc.; Barrick Gold Corporation, where he was Managing Director of Australia & Africa operations; OceanaGold Limited, where he served as Chief Executive Officer; and Ventana Gold Corp., where he was President & Chief Executive Officer. The Company’s Chief

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Financial Officer, Roger Johnson, has 32 years of experience in financial management of the minerals industry with Coopers & Lybrand, as a public accountant; Kennecott Utah Copper Corporation, as Vice President, Controller; Pasminco Zinc, Inc., as Senior Vice President, Finance and Administration; and Newmont Mining Corporation, where he was Vice President, Chief Accounting Officer. The Company’s Chief Operating Officer, John Galassini, has 24 years of experience in the minerals industry with Phelps Dodge Corporation, where he ultimately served as Senior Vice President North America; Freeport McMoRan Copper & Gold, Inc., as Senior Vice President; and Kinross Gold Corporation, where he served as Regional Vice President North America.

The Board will be comprised of senior mining and financial executives who have broad domestic and international experience in mineral exploration, development and mining. The Company’s senior management and Board have in excess of 300 years of combined mining experience. Sunshine Silver believes the specialized skills and knowledge of the management team and the Board will significantly enhance Sunshine Silver’s ability to explore and develop the Sunshine Mine property and the Los Gatos Project and pursue other regional growth opportunities.

Shareholder Sponsorship

The Company and its predecessors were founded by the Electrum Groups of Companies, or Electrum. Electrum is a leading private equity investment firm engaged in mining exploration and development. Led by Dr. Thomas S. Kaplan, a highly-respected natural resources investor, Electrum brings together decades of combined investment and operating experience, proven execution abilities and capabilities, a broad and diverse background and a deep knowledge of the natural resources sector and mining disciplines. By maintaining a disciplined and professional approach to acquisition and value enhancement, Electrum has developed a strong track record and a multi-billion dollar asset base in the natural resource sector. Electrum holds significant stakes in public and private metals and mining companies, including NovaGold Resources Inc., Gabriel Resources Ltd., Taung Gold Limited, Tintina Resources Inc., Niocan Inc. and Sunward Resources Ltd. The Company believes that access to the specialized skills and knowledge within Electrum will significantly enhance Sunshine Silver’s ability to execute its business strategy. When we refer to “Electrum” in this prospectus, we are including, where appropriate, Electrum Silver Holdings LLC, Tigris Financial (International) L.P., Tigris Financial Group Ltd. and CGT Management Ltd., all of which are our stockholders.

In March 2011, Liberty Metals & Mining Holdings, LLC, or Liberty Metals & Mining, purchased 15% of the Company’s common stock. Liberty Metals & Mining, is a wholly-owned subsidiary of Boston-headquartered, Liberty Mutual Group. As of June 30, 2011, Liberty Mutual Group had more than $72 billion of total invested assets. As a subsidiary of Liberty Mutual Group, Liberty Metals & Mining makes investments in the metals and mining sector for Liberty Mutual Group.

Following completion of the offering, Electrum and Liberty Metals & Mining will beneficially own approximately     % and     % of the Company’s outstanding common stock, respectively, assuming the over-allotment option is not exercised by the underwriters.

Business Strategy

Sunshine Silver’s business strategy is focused on creating value for stakeholders through the ownership and advancement of its two principal projects, the Sunshine Mine property and the Los Gatos Project, and through the pursuit of similarly attractive silver-focused projects. Sunshine Silver does not expect to enter into production or generate revenue at either the Sunshine Mine or the Los Gatos Project in the near future. The Company believes that the anticipated net proceeds from this offering and its existing cash and cash equivalents will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirements for at least the next              months. However, the Company may elect to seek additional funding prior to that time.

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Sunshine Silver plans to:

Continue Exploration and Development at the Sunshine Mine property to Convert Existing Mineralized Material to Reserves and Expand the Resource Base

Sunshine Silver intends to complete a pre-feasibility study at the Sunshine Mine property to determine the costs to re-commission and operate the Sunshine Mine as a sustainable and efficient silver producer. Sunshine Silver expects this study will be completed within 24 months from the completion of this offering. In addition, the Company intends to continue with its surface and underground exploration drilling program to provide sufficient sampling to estimate grade, tonnage and location of additional potentially economic veins and deposits for future production and to upgrade mineralized material to reserves.

Re-Commission the Sunshine Mine to Long-Term Sustainable Production

Sunshine Silver intends to refurbish or replace existing infrastructure at the Sunshine Mine in connection with its modernization and rehabilitation efforts and to review process optimization alternatives. The re-commissioning of the Sunshine Mine will be designed to allow the Company to reach a safe and sustainable production rate utilizing its newly optimized facilities.

Accelerate Exploration at the Los Gatos Region and Advance the Los Gatos Project

The Company plans to accelerate its exploration program at the Los Gatos region through additional drilling with the intent of identifying mineralized material. In the near term, the Company also intends to progress the most advanced exploration sites, the Cerro Los Gatos and Esther zones, through to pre-feasibility study.

Conduct Further Exploration at Sunshine Silver’s Mexican Properties outside the Los Gatos Region and Apply for Additional Exploration Acreage

Sunshine Silver plans to expand its exploration programs at its Mexican properties outside the Los Gatos region and continue to grow its land position. The Company owns or controls a portfolio of 18 other exploration properties in Mexico covering an area of 361,882 hectares, with significant additional hectares under application for mineral concession. There are two projects underway with significant drill results, El Doctor in Oaxaca and Zaragoza in Chihuahua. Additional drilling is planned at both of these projects as well as additional targets through 2012. The Company is planning sufficient drilling in an effort to outline continuous geometry of mineralization at El Doctor and Zaragoza, which could lead to initial estimates of mineralized material.

Identify and Pursue Other Growth Opportunities that Add Value to Stockholders

Given the management and Board’s strong track record in exploration, development and asset integration, the Company may pursue acquisitions and joint ventures that are value accretive to its stockholders through the pursuit of similarly attractive silver-focused projects.

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Recent Developments

Philip Pyle, Vice President Exploration, who is a Qualified Person as set out in NI 43-101, has supervised the preparation of the technical information that forms the basis of the information contained in this section “—Recent Developments.”

Exploration drilling at the Los Gatos Project has recently detected a new trend of mineralization that has been named the Amapola zone. It is located 4.5 kilometers northwest of the Cerro Los Gatos zone. Results indicate a minimum of four separate mineralized quartz veins with high levels of silver at upper levels and silver, lead and zinc at deeper levels. Highlights from the drilling include holes AM22 and AM25:

Hole	From (meters)		To (meters)		Thickness (meters)		Ag (g/t)		Pb (%)		Zn (%)
AM22		651		651.85		0.85		588.0		13.70		0.70
AM25		533		560		27.0		81.8		0.53		1.33
Included in AM25		542.5		544.3		1.8		709.0		4.91		11.90

Continuous mineralization has been identified over a strike length of 600 meters in two of the four known veins and additional drilling is planned to verify the geometry of this mineralization.

In other developments at the Los Gatos Project, a new zone of quartz veining has been identified in the southwestern portion of the Los Gatos claim block. This zone has been named Boca de Leon and has, to date, been detected over a strike length of 900 meters. The zone’s surface outcrops contain similar looking textures and mineralogy to the Cerro Los Gatos quartz vein mineralization. Surface sampling of the vein outcrops has generated values that range from 68 to 411 grams of silver per tonne. The Company expects that the Boca de Leon zone will become a priority area for future exploration drilling.

Corporate Information

Sunshine Silver Mines Corporation is incorporated in Delaware. Sunshine Silver’s principal executive office is located at 370 17th Street, Suite 3800, Denver, Colorado 80202. The Company’s telephone number is (303) 784-5350.

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THE OFFERING

Common stock offered in firm commitment offering             shares

Common stock to be outstanding after this offering             shares

Option to purchase additional shares of common stock             shares

Use of proceeds We estimate that the net proceeds to us from this offering will be approximately $             million, or $             million if the underwriters exercise their over-allotment option in full, assuming an initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses. We intend to allocate $             million of the net proceeds of the offering towards our operations at the Sunshine Mine property, $             million towards our operations at the Los Gatos Project and $             million towards the exploration of our properties in Mexico outside of the Los Gatos Project. The remaining amount of the proceeds will be used for general corporate purposes. See “Use of Proceeds” on page 30.

Voting rights Holders of our common stock are entitled to one vote per share.

Dividend policy We have never declared or paid any cash dividends on our capital stock. We do not intend to pay any dividends in the foreseeable future and currently intend to retain all future earnings to finance our business.

Directed Share Program At our request, the underwriters have reserved for sale up to 5% of the common stock being offered by this prospectus for sale at the initial public offering price to our directors, officers, employees, consultants and existing stockholders and other persons having a relationship with us, such as suppliers, or having a relationship with our existing stockholders. We do not know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. See “Underwriting—Directed Share Program.”

Risk factors See “Risk Factors” beginning on page 13 for a discussion of factors you should carefully consider before deciding whether to invest in our common stock.

Common stock listing We intend to apply for listing of our common stock on the New York Stock Exchange under the symbol “AGS.” We have applied to list our common stock on the Toronto Stock Exchange under the symbol “SM.”

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The number of shares of our common stock that will be outstanding after this offering includes 58,810,113 shares of common stock outstanding as of June 30, 2011. Unless otherwise indicated, all information in this prospectus, including the number of shares that will be outstanding after this offering and other share-related information:

• excludes 321,548 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2011 with a weighted average exercise price of $13.55 per share;

• excludes an option to purchase 125,000 shares of common stock to be granted to our Executive Chairman and Chief Executive Officer upon the consummation of this offering at a purchase price equal to the offering price. See “Compensation Discussion and Analysis—Grants of Plan-Based Awards;”

• excludes              additional shares of common stock reserved for future issuance under our stock option plans;

• assumes no exercise of the underwriters’ option to purchase from us up to              additional shares to cover over-allotments; and

• assumes a              for              stock split of our common stock to be effected prior to completion of this offering.

See “Description of Capital Stock” beginning on page 99.

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SUMMARY CONSOLIDATED FINANCIAL DATA

We prepared the summary consolidated financial data using our consolidated financial statements for each of the periods presented. The summary consolidated financial data for each fiscal year in the three-year period ended December 31, 2010 was derived from our audited consolidated financial statements appearing elsewhere in this prospectus.

The summary consolidated financial data for the six months ended June 30, 2010 and as of and for the six months ended June 30, 2011 was derived from our unaudited interim consolidated financial statements appearing elsewhere in this prospectus. In our opinion, such unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of our results of operations and financial position. Results as of and for the six months ended June 30, 2011 are not necessarily indicative of results that may be expected for the entire year.

We were formed on February 2, 2011 when our predecessor, Precious Metals Opportunities LLC, converted to a Delaware corporation. On March 1, 2011, Los Gatos Ltd. merged with and into us. In accordance with U.S. generally accepted accounting principles, or U.S. GAAP, all financial results have been prepared as if the combination of the companies under common control (Precious Metals Opportunities LLC and Los Gatos Ltd.) had occurred prior to the earliest period presented. Accordingly, the financial results have been prepared on the following basis:

• the 2008 and 2009 results of operations are derived solely from the activities of Los Gatos Ltd.;

• the 2010 results of operations reflect the combined activities of Precious Metals Opportunities LLC and Los Gatos Ltd.; and

• the 2011 results of operations reflect the combined activities of Precious Metals Opportunities LLC and Los Gatos Ltd. through February 28, 2011; subsequent to this date, the results of operations reflect the consolidated activities of Sunshine Silver.

As a result of our acquisition of the Sunshine Mine in May 2010, we believe that period-over-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as a good indicator of our future performance.

You should read this financial data in conjunction with our audited and unaudited consolidated financial statements and related notes included elsewhere in this prospectus. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	Year ended December 31,							Six months ended June 30,
	2010			2009		2008		2011			2010
	(in thousands)
								(unaudited)
Statements of Loss Data:
Expenses:
Exploration	$	14,653		$	9,771	$	2,718	$	8,150		$	6,938
Care and maintenance		2,534			—		—		2,543			404
General and administrative		5,490			818		415		7,055			2,742
Total expenses		22,677			10,589		3,133		17,748			10,084
Net other expense		1,891			597		24		298			755
Loss before income tax benefit		24,568			11,186		3,157		18,046			10,839
Income tax benefit		(30	)		—		—		(6	)		(14	)
Net loss	$	24,538		$	11,186	$	3,157	$	18,040		$	10,825

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	Year ended December 31,									Six months ended June 30,
	2010			2009			2008			2011			2010
	(in thousands)
											(unaudited)
Cash Flow Data:
Net cash used by operating activities	$	(21,479	)	$	(10,876	)	$	(2,866	)	$	(15,777	)	$	(7,698	)
Net cash used by investing activities	$	(30,856	)	$	(31	)	$	(4	)	$	(1,471	)	$	(29,193	)
Net cash provided by financing activities	$	54,592		$	11,885		$	3,250		$	166,773		$	37,924

	June 30, 2011
	Actual		As Adjusted(1)
	(in thousands)
	(unaudited)
Balance Sheet Data:
Cash and cash equivalents	$	153,161	$
Working capital	$	152,917	$
Total assets	$	187,629	$
Total indebtedness		—		—
Total shareholders’ equity	$	182,736	$

(1) Assumes net proceeds to us from this offering of $             million. Assuming an initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, a $1.00 increase (decrease) in the assumed initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) as adjusted cash and cash equivalents, working capital, total assets and total shareholders’ equity by $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

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RISK FACTORS

You should carefully consider the following risk factors that may affect our business, future operating results and financial condition, as well as the other information set forth in this prospectus, before making a decision to invest in our common stock. If any of the following risks actually occurs, our business, financial condition or results of operations would likely be materially adversely affected. In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment. The risks below are not the only ones we face. Additional risks not currently known to us or that we currently deem immaterial may also adversely affect us.

Risks Related to Our Business

We are an exploration company that has no operating history on which to base an evaluation of our business and prospects and we cannot provide investors with any assurance that we will generate any operating revenues at our mineral properties or ever achieve profitable operations.

We were formed in December 2009 and have not yet generated any operating revenue. The Sunshine Mine has not been a producing mine since 2008, prior to its acquisition by us. We anticipate that we will continue to incur operating costs without realizing any revenues at the Sunshine Mine and the Los Gatos Project for the foreseeable future. We expect to continue to incur losses until such time as one or more of our mineral properties enters into commercial production and generates sufficient revenues to fund our continuing operations. If we are unable to generate significant revenues at the Sunshine Mine or the Los Gatos Project, we will not be able to earn profits or continue operations. We cannot provide investors with any assurance that we will be successful in resuming production at the Sunshine Mine, or that we will ever develop a mine at the Los Gatos Project.

We are dependent on our two principal projects for our future operating revenue, the Sunshine Mine property and the Los Gatos Project, neither of which currently has proven or probable reserves.

The Sunshine Mine property and the Los Gatos Project do not have identified proven and probable mineral reserves. The costs, timing and complexities of upgrading the mineralized material at the Sunshine Mine property to proven and probable reserves may be greater than we anticipate. Mineral exploration and development involves a high degree of risk that even a combination of careful evaluation, experience and knowledge cannot eliminate, and few properties that are explored are ultimately developed into producing mines. There is no assurance that our mineral exploration programs at either the Sunshine Mine property or the Los Gatos Project will establish the presence of any proven or probable mineral reserves. The failure to establish proven or probable reserves would severely restrict our ability to implement our strategies for long-term growth.

Mineralized material calculations at the Sunshine Mine are only estimates and are based principally on historic data.

Our calculation of the mineralized material at the Sunshine Mine is only an estimate and depends on geological interpretation and statistical inferences or assumptions drawn from drilling and sampling analysis, which might prove to be materially inaccurate. There is a degree of uncertainty attributable to the calculation of mineralized material. Until mineralized material is actually mined and processed, the quantity of metal and grades must be considered as estimates only and no assurance can be given that the indicated levels of metals will be produced. In making determinations about whether to advance any of our projects to development, we must rely upon estimated calculations for the mineralized material and grades of mineralization on our properties. Our current estimates at the Sunshine Mine are mainly based on historical drilling and on data compiled by a previous owner of the Sunshine Mine that cannot be completely verified due to water levels in the Mine, lack of access to the historically mined areas and the lack of quality assurance and quality control information on the historic assays.

The estimating of mineralized material is a subjective process that is partially dependent upon the judgment of the persons preparing the estimates. The process relies on the quantity and quality of available data and is based on knowledge, mining experience, statistical analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available.

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Estimated mineralized material may have to be recalculated based on changes in metal prices, further exploration or development activity or actual production experience. This could materially and adversely affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence mineralized material estimates. The extent to which mineralized material may ultimately be reclassified as mineral reserves is dependent upon the demonstration of their profitable recovery. Any material changes in volume and grades of mineralization will affect the economic viability of placing a property into production and a property’s return on capital. We cannot provide assurance that mineralization can be mined or processed profitably.

Our mineralized material estimates have been determined and valued based on assumed future metal prices, cut-off grades and operating costs that may prove to be inaccurate. Extended declines in the market price for silver may render portions of our mineralization uneconomic and result in reduced reported volume and grades, which in turn could have a material adverse effect on our financial performance, financial position and results of operations.

Historical production at the Sunshine Mine may not be indicative of the potential for future development.

There is currently no commercial production at the Sunshine Mine and, since acquiring ownership, we have never recorded any revenues from commercial production at the Sunshine Mine. You should not rely on the fact that there were historical mining operations at the Sunshine Mine as an indication that we will ever have future successful commercial operations at the Sunshine Mine. In order for us to develop new mining operations at the Sunshine Mine, we will be required to incur substantial operating expenses and capital expenditures to refurbish and/or replace existing infrastructure.

We have not prepared a pre-feasibility study for the Sunshine Mine. We expect to produce a pre-feasibility study for the Sunshine Mine with a portion of the proceeds of the offering. Our evaluations of our business and prospects are subject to change after the study has been conducted, which could materially adversely effect our prospects. Additionally, the actual amount and timing of expenditures at the Sunshine Mine will depend on the progress of drilling, exploration and development, the results of consultants’ analyses and recommendations, the rate at which operating losses are incurred, the formation of any joint ventures with strategic partners, our acquisition of additional mineral properties, the market price of silver and other factors, many of which are beyond our control. Due to any of these or other factors, the capital costs required to take the Sunshine Mine into production may be significantly higher than anticipated.

Land reclamation and mine closure may be burdensome and costly.

Land reclamation and mine closure requirements are generally imposed on mineral exploration companies, such as ours, which require us, among other things, to minimize the effects of land disturbance. Such requirements may include controlling the discharge of potentially dangerous effluents from a site and restoring a site’s landscape to its pre-exploration form. The actual costs of reclamation and mine closure are uncertain and planned expenditures may differ from the actual expenditures required. Therefore, the amount that we are required to spend could be materially higher than current estimates. Any additional amounts required to be spent on reclamation and mine closure may have a material adverse effect on our financial performance, financial position and results of operations and may cause us to alter our operations. In addition, we are required to maintain financial assurances, such as letters of credit, to secure reclamation obligations under certain laws and regulations. The failure to acquire, maintain or renew such financial assurances could subject us to fines and penalties or suspension of our operations. Letters of credit or other forms of financial assurance represent only a portion of the total amount of money that will be spent on reclamation over the life of a mine’s operation. Although we include liabilities for estimated reclamation and mine closure costs in our financial statements, it may be necessary to spend more than what is projected to fund required reclamation and mine closure activities. Additionally, even if we cease exploration at the Sunshine Mine we will be required to expend cash and other resources to satisfy ongoing care and maintenance obligations at the Sunshine Mine, which obligations include controlling ground water, monitoring and sampling permitted facilities and ultimately reclaiming our tailings impoundment.

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We do not have sufficient funds to bring the Sunshine Mine into sustained commercial operation or to develop a mine at the Los Gatos Project, and we expect that we will require additional financing in the future.

We are an exploration company and do not currently have sufficient capital for sustained operations. We expect that the proceeds from this offering will be used to fund sufficient technical work to complete a pre-feasibility study at the Sunshine Mine property and to complete a pre-feasibility study on the Cerro Los Gatos and Esther zones at the Los Gatos Project. In addition, we may have sufficient funds to initiate production at the Sunshine Mine. However, we do not expect that the funds raised from this offering will be sufficient to bring the Sunshine Mine into sustained commercial operation or to develop a mine at the Los Gatos Project. We expect that we will require additional funds at a later date to bring the Sunshine Mine into sustained commercial operation and develop a mine at the Los Gatos Project. Our future financing needs may be substantial if we encounter unexpected costs or delays in re-commissioning the Sunshine Mine or developing a mine at the Los Gatos Project.

We expect to raise additional funds through equity, debt or a combination of equity and debt. Access to additional capital may not, however, be available on terms acceptable to us or at all. Failure to obtain sufficient financing may result in the delay or indefinite postponement of exploration, drilling, development or production at the Sunshine Mine or the Los Gatos Project. Furthermore, even if we raise sufficient additional capital, there can be no assurance that we will achieve profitability or positive cash flow. In addition, any future equity offering will further dilute your equity interest in us and any future debt financing will require us to dedicate a portion of our cash flow to payments on indebtedness and will limit our flexibility in planning for or reacting to changes in our business.

If the development of one or more of our mineral projects is found to be economically feasible, we will be subject to all of the risks associated with establishing new mining operations.

If the development of one of our mineral projects is found to be economically feasible, such development will require obtaining permits and financing, and the construction and operation of mines, processing plants and related infrastructure. As a result, we will be subject to all of the risks associated with establishing new mining operations, including:

• the timing and cost, which can be considerable, of the construction of mining and processing facilities and related infrastructure;

• the availability and cost of skilled labor, mining equipment and principal supplies needed for operations, including explosives, fuels, chemical reagents, water, power, equipment parts and lubricants;

• the availability and cost of appropriate smelting and refining arrangements;

• the need to obtain necessary environmental and other governmental approvals and permits and the timing of the receipt of those approvals and permits;

• the availability of funds to finance construction and development activities;

• industrial accidents;

• mine failures, shaft failures or equipment failures;

• natural phenomena such as inclement weather conditions, floods, droughts, rock slides and seismic activity;

• unusual or unexpected geological and metallurgic conditions;

• exchange rate and commodity price fluctuations;

• high rates of inflation;

• potential opposition from non-governmental organizations, environmental groups or local groups, which may delay or prevent development activities; and

• restrictions or regulations imposed by governmental or regulatory authorities.

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The costs, timing and complexities of developing our projects may be greater than anticipated. Cost estimates may increase significantly as more detailed engineering work is completed on a project. It is common in mining operations to experience unexpected costs, problems and delays during construction, development and mine start-up. In addition, the cost of producing silver-bearing concentrates that are of acceptable quality to smelters may be significantly higher than expected. We may encounter higher than acceptable contaminants in our concentrates such as arsenic, antimony, mercury, copper, iron, selenium or other contaminants that, when present in high concentrations, can result in penalties or outright rejection of the metals concentrates by the smelters. Silver-bearing concentrates at our Sunshine Mine are known to contain relatively high percentages of arsenic and antimony. Accordingly, we cannot provide assurance that our activities will result in profitable mining operations at our mineral properties.

Our operations involve significant risks and hazards inherent to the mining industry.

Our operations involve the operation of large pieces of drilling and other heavy equipment. Hazards such as fire, explosion, floods, structural collapses, industrial accidents, unusual or unexpected geological conditions, ground control problems, cave-ins, flooding and mechanical equipment failure are inherent risks in our operations. These and other hazards can cause injuries or death to employees, contractors or other persons at our mineral properties, severe damage to and destruction of our property, plant and equipment and mineral properties, and contamination of, or damage to, the environment, and can result in the suspension of our exploration activities and any future development and production activities. Safety measures implemented by us may not be successful in preventing or mitigating future accidents.

In addition, from time to time we may be subject to governmental investigations and claims and litigation filed on behalf of persons who are harmed while at our properties or otherwise in connection with our operations. To the extent that we are subject to personal injury or other claims or lawsuits in the future, it may not be possible to predict the ultimate outcome of these claims and lawsuits due to the nature of personal injury litigation. Similarly, if we are subject to governmental investigations or proceedings, we may incur significant penalties and fines, and enforcement actions against us could result in the closing of certain of our mining operations. If claims and lawsuits or governmental investigations or proceedings are ultimately resolved against us, it could have a material adverse effect on our financial performance, financial position and results of operations. Also, if we mine on property without the appropriate licenses and approvals, we could incur liability or our operations could be suspended.

The mining industry is very competitive.

The mining industry is very competitive. Much of our competition is from larger, established mining companies with greater liquidity, greater access to credit and other financial resources, newer or more efficient equipment, lower cost structures, more effective risk management policies and procedures and/or a greater ability than us to withstand losses. Our competitors may be able to respond more quickly to new laws or regulations or emerging technologies, or devote greater resources to the expansion or efficiency of their operations than we can. In addition, current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties. Accordingly, it is possible that new competitors or alliances among current and new competitors may emerge and gain significant market share to our detriment. We may not be able to compete successfully against current and future competitors, and any failure to do so could have a material adverse effect on our business, financial condition or results of operations.

The title to some of our mineral properties may be uncertain or defective, thus risking our investment in such properties.

Certain of our United States mineral rights consist of “patented” and “unpatented” mining claims created and maintained in accordance with the U.S. General Mining Law of 1872. Unpatented mining claims are unique U.S. property interests, and are generally considered to be subject to greater title risk than other real property interests because the validity of unpatented mining claims is often uncertain. This uncertainty arises, in part, out of the complex federal and state laws and regulations that supplement the General Mining Law. Also, unpatented

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mining claims and related rights, including rights to use the surface, are subject to possible challenges by third parties or contests by the federal government. The validity of an unpatented mining claim, in terms of both its location and its maintenance, is dependent on strict compliance with a complex body of federal and state statutory and decisional law. In addition, there are few public records that definitively control the issues of validity and ownership of unpatented mining claims.

The Sunshine Mine property is part of a historic mining district that was established prior to 1900. The history of ownership of the properties comprising the Sunshine Mine property is complex and involves numerous individuals and entities. In addition, title to many of the mineralized ore veins at the Sunshine Mine property is based on ownership of the patented claims within which those ore veins have their apex, as under the General Mining Law the owner of a mining claim within which a mineralized vein has its apex owns the so-called “extralateral rights” to that vein as it may extend downward outside the vertical boundaries of the claim. As the vein extends downward, however, its actual location becomes less and less certain. As a result, ownership of these mineralized veins often becomes more a question of geology than of public records. Over the years, because of the age of the district and the existence of extralateral rights that render title to the actual minerals beneath any particular claim more uncertain, our predecessors and adjoining landowners entered into several agreements establishing boundary lines between claims, dividing ownership of portions of claims, agreeing to the sharing of ore produced from mineralized veins within claims, and agreeing to joint exploration and development activities on certain claims. There can be no assurance that our predecessors successfully consolidated the properties at the Sunshine Mine property so that third parties will not make claims to our properties or a share of some portion of any mineral production in the future or that we have identified every agreement establishing our property rights.

With respect to several of the patented mining claims at the Sunshine Mine property, we own the mineral estate but not the surface estate. Although we expect we would continue the development of the Sunshine Mine as an underground mine, which would not require us to make use of the surface of those patented claims where we do not own the surface estate, as we develop our mine plan for the Sunshine Mine and as that plan changes over time, there can be no assurance that we will not need to use the surface of portions of those claims. If that need arises there can be no assurance that the owners of the surface estate of any of those claims will recognize our common law rights or be willing to enter into agreements with us to allow for such surface use.

Additionally, our mineral properties in Mexico may be subject to prior recorded and unrecorded agreements, transfers or claims, and title may be affected by, among other things, undetected defects. A title defect on any of our mineral properties (or any portion thereof) could adversely affect our ability to mine the property and/or process the minerals that we mine.

Title insurance is generally not available for mineral properties and our ability to ensure that we have obtained secure claim to individual mineral properties or mining concessions may be severely constrained. We rely on title information and/or representations and warranties provided by our grantors. Any challenge to our title could result in litigation, insurance claims and potential losses, delay the exploration and development of a property and ultimately result in the loss of some or all of our interest in the property. In addition, if we mine on property without the appropriate title, we could incur liability for such activities.

We do not intend to enter into hedging arrangements with respect to silver and our hedging activities, or our decision not to hedge, with respect to our expenses could expose us to losses.

We do not intend to enter into hedging arrangements with respect to silver. As such, we will not be protected from a decline in the price of silver. This strategy may have a material adverse effect upon our financial performance, financial position and results of operations.

We report our financial statements in U.S. dollars. A portion of our costs and expenses are incurred in Mexican pesos. As a result, any significant and sustained appreciation of the Mexican peso against the U.S. dollar may materially increase our costs and expenses. Additionally, we are, and will be, exposed to the

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potentially adverse effects of fluctuations in input costs, such as diesel fuel, and, if we borrow funds at a floating rate, interest rates. We may seek to enter into hedging arrangements to hedge some of our input costs, such as diesel fuel, and our currency exposure with respect to the portion of our costs and expenses incurred in Mexican pesos. In the future we may also seek to enter into interest rate hedge agreements in connection with future indebtedness we may incur that bears interest at a floating rate. We currently, however, have not entered into any such hedging arrangements, or made a decision to do so, and cannot assure you that we will be able to do so on acceptable terms, or at all. Even if we seek and are able to enter into hedging contracts, there is no assurance that such hedging program will be effective, and any hedging program would also prevent us from benefitting fully from applicable input cost or rate decreases. In addition, we may in the future experience losses if a counterparty fails to perform under a hedge arrangement.

Our insurance may not provide adequate coverage.

Our business and operations are subject to a number of risks and hazards including, but not limited to, adverse environmental conditions, industrial accidents, labor disputes, unusual or unexpected geological conditions, ground control problems, cave-ins, changes in the regulatory environment, metallurgical and other processing problems, mechanical equipment failure, facility performance problems, fires and natural phenomena such as inclement weather conditions, floods and earthquakes. These risks could result in damage to, or destruction of, our mineral properties or production facilities, personal injury or death, environmental damage, delays in exploration, mining or processing, increased production costs, asset write downs, monetary losses and legal liability.

Our property and liability insurance may not provide sufficient coverage for losses related to these or other hazards. Insurance against certain risks, including those related to environmental matters or other hazards resulting from exploration and production, is generally not available to us or to other companies within the mining industry. Our current insurance coverage may not continue to be available at economically feasible premiums, or at all. In addition, we do not carry business interruption insurance relating to our properties. Accordingly, delays in returning to any future production could produce near-term severe impact to our business. Any losses from these events may cause us to incur significant costs that could have a material adverse effect on our financial performance, financial position and results of operations.

If we are unable to retain key members of management, our business might be harmed.

Our exploration activities and any future mining and processing activities depend to a significant extent on the continued service and performance of our senior management team, including our Executive Chairman and Chief Executive Officer. We depend on a relatively small number of key officers, and we currently do not, and do not intend to, have key-person insurance for these individuals. Departures by members of our senior management could have a negative impact on our business, as we may not be able to find suitable personnel to replace departing management on a timely basis. The loss of any member of our senior management team could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, results of operations and financial condition. In addition, the international mining industry is very active and we are facing increased competition for personnel in all disciplines and areas of operation. There is no assurance that we will be able to attract and retain personnel to sufficiently staff our development and operating teams.

High metal prices in recent years have encouraged increased mineral exploration, development and construction activity, which has increased demand for, and cost of, exploration, development and construction services and equipment.

High metal prices in recent years have encouraged increases in mineral exploration, development and construction activities, which has resulted in increased demand for, and cost of, exploration, development and construction services and equipment. There has also been a shortage of skilled workers in the mining industry in recent years particularly with respect to experienced mine construction and mine management personnel. As a

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result of this shortage, the wages that we are required to pay to our skilled workers have increased. In addition, employee turnover rates in the mining industry have increased as participants in the minerals industry compete for skilled personnel. Increased demand for services and equipment could result in delays if services or equipment cannot be obtained in a timely manner, and may cause scheduling difficulties due to the need to coordinate the availability of services or equipment, any of which could materially increase our project exploration and any future development and/or construction costs.

The price of silver is subject to change and a substantial or extended decline in the price of silver could materially and adversely affect our revenues and the value of our mineral properties.

Our business and financial performance will be significantly affected by fluctuations in the price of silver. The price of silver is volatile, can fluctuate substantially and is affected by numerous factors that are beyond our control. During the last ten years, the price of silver ranged from a low of $4.06 per ounce in November 2001 to a high of $48.44 per ounce in April 2011. While the price of silver has increased significantly in recent years, such price movement is not a predictor of the future price of silver, which may decrease significantly as silver prices are affected by numerous factors beyond our control, including:

• prevailing interest rates and returns on other asset classes;

• expectations regarding inflation, monetary policy and currency values;

• speculation;

• governmental and exchange decisions regarding the disposal of precious metals stockpiles, including the decision by the CME Group, the owner and operator of the futures exchange, to raise silver’s initial margin requirements on futures contracts;

• political and economic conditions;

• available supplies of silver from mine production, inventories and recycled metal;

• sales by holders and producers of silver; and

• demand for products containing silver.

Because we expect to derive the substantial majority of our revenues from sales of silver, our results of operations and cash flows will fluctuate as the price of silver increases or decreases. A sustained period of declining silver prices would materially and adversely affect our financial performance, financial position and results of operations.

We may fail to identify attractive acquisition candidates or joint ventures with strategic partners or may fail to successfully integrate acquired mineral properties or successfully manage joint ventures.

As part of our development strategy, we may acquire additional mineral properties or enter into joint ventures with strategic partners. However, there can be no assurance that we will be able to identify attractive acquisition or joint venture candidates in the future or that we will succeed at effectively managing their integration or operation. In particular, significant and increasing competition exists for mineral acquisition opportunities throughout the world. We face strong competition from other mining companies in connection with the acquisition of properties producing, or capable of producing, metals as well as in entering into joint ventures with other parties. If the expected synergies from such transactions do not materialize or if we fail to integrate them successfully into our existing business or operate them successfully with our joint venture partners, or if there are unexpected liabilities, our results of operations could be adversely affected.

In connection with any future acquisitions or joint ventures, we may incur indebtedness or issue equity securities, resulting in increased interest expense or dilution of the percentage ownership of existing stockholders. Unprofitable acquisitions or joint ventures, or additional indebtedness or issuances of securities in connection with such acquisitions or joint ventures, may adversely affect the price of our common stock and negatively affect our results of operations.

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We may be subject to claims and legal proceedings that could materially adversely impact our financial position, financial performance and results of operations.

We may be subject to claims or legal proceedings covering a wide range of matters that arise in the ordinary course of business activities. These matters may result in litigation or unfavorable resolution which could materially adversely impact our financial performance, financial position and results of operations. See “Business—Legal Proceedings.” In addition, the purchase agreements entered into in connection with our 2011 private placements to a series of investors, including Liberty Metals & Mining, contained customary indemnification provisions in favor of the investors.

Risks Related to Government Regulations and International Operations

The U.S. and Mexican governments, as well as state and local governments, extensively regulate mining operations, which imposes significant actual and potential costs on us, and future regulation could increase those costs or limit our ability to produce silver and other metals.

The mining industry is subject to increasingly strict regulation by federal, state and local authorities in the United States and Mexico, including in relation to:

• limitations on land use;

• mine permitting and licensing requirements;

• reclamation and restoration of properties after mining is completed;

• management of materials generated by mining operations; and

• storage, treatment and disposal of wastes and hazardous materials.

The liabilities and requirements associated with the laws and regulations related to these and other matters, including with respect to air emissions, water discharges and other environmental matters, may be costly and time-consuming and may restrict, delay or prevent commencement or continuation of exploration or production operations. We cannot assure you that we have been or will be at all times in compliance with all applicable laws and regulations. Failure to comply with applicable laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of cleanup and site restoration costs and liens, the issuance of injunctions to limit or cease operations, the suspension or revocation of permits or authorizations and other enforcement measures that could have the effect of limiting or preventing production from our operations. We may incur material costs and liabilities resulting from claims for damages to property or injury to persons arising from our operations. If we are pursued for sanctions, costs and liabilities in respect of these matters, our mining operations and, as a result, our financial performance, financial position and results of operations, could be materially and adversely affected. See “Business—Environmental, Health and Safety Measures.”

Any new legislation or administrative regulations or new judicial interpretations or administrative enforcement of existing laws and regulations that would further regulate and tax the mining industry may also require us to change operations significantly or incur increased costs. Such changes could have a material adverse effect on our financial performance, financial position and results of operations.

In addition, the operation of our Sunshine Mine in the United States is subject to regulation by the Federal Mine Safety and Health Administration, or the MSHA, under the Federal Mine Safety and Health Act of 1977 and the Occupational Safety and Health Administration, or the OSHA, under the Occupational Safety and Health Act of 1970. MSHA and OSHA inspect the Sunshine Mine on a regular basis and issue various citations and orders when they believe a violation has occurred under the relevant statute. Subsequent to passage of the Mine Improvement and New Emergency Response Act of 2006, the number of violations cited by the MSHA has significantly increased, as have the dollar penalties associated with those citations.

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Our Mexican properties are subject to regulation by the Political Constitution of the Mexican United States, and are subject to various legislation in Mexico, including the Mining Law, the Federal Law of Waters, the Federal Labor Law, the Federal Law of Firearms and Explosives, the General Law on Ecological Balance and Environmental Protection and the Federal Law on Metrology Standards. Our operations at our Mexican properties also require us to obtain local authorizations and, through the Agrarian Law, to comply with the uses and customs of communities located within the properties. Mining, environmental and labor authorities may inspect our Mexican operations on a regular basis and issue various citations and orders when they believe a violation has occurred under the relevant statute.

If inspections in the United States or Mexico result in an alleged violation, we may be subject to fines, penalties or sanctions, our mining operations could be subject to temporary or extended closures, and we may be required to incur capital expenditures to re-commence our operations. Any of these actions could have a material adverse effect on our financial performance, financial position and results of operations.

Our Mexican operations are subject to additional political, economic and other uncertainties not generally associated with domestic operations.

We have a significant exploration project in Mexico, the Los Gatos Project, along with 18 other exploration properties in the country, and we are subject to significant risks inherent in exploration and resource extraction by foreign companies in Mexico. Exploration, development, production and closure activities in Mexico are potentially subject to heightened political, economic, regulatory and social risks that are beyond our control. These risks include:

• the possible unilateral cancellation or forced re-negotiation of contracts;

• unfavorable changes in laws and regulations;

• royalty and tax increases;

• claims by governmental entities or indigenous communities;

• expropriation or nationalization of property;

• political instability;

• uncertainty regarding the enforceability of contractual rights and judgments; and

• other risks arising out of foreign governmental sovereignty over areas in which our mineral properties are located.

Local economic conditions also can adversely affect the security of our operations and the availability of supplies. Higher incidences of criminal activity and violence in the area of some of our properties could adversely affect our ability to operate in an optimal fashion or at all. Recently, we declared a force majeure at our Niko concession, a Mexican property outside the Los Gatos region, due to ongoing gang violence, and we are considering cancelling the concession related to such project.

Additionally, the right to export silver-bearing concentrate and other metals may depend on obtaining certain licenses, which could be delayed or denied at the discretion of the relevant regulatory authorities, or meeting certain quotas. Any of these conditions could lead to lower productivity and higher costs, which would adversely affect our financial performance, financial position and results of operations.

Any of these developments could require us to curtail or terminate operations at our mineral properties in Mexico, incur significant costs to meet newly-imposed environmental or other standards, pay greater royalties or higher prices for labor or services and recognize higher taxes, which could materially and adversely affect our results of operations, cash flows and financial condition.

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We are required to obtain, maintain and renew environmental, construction and mining permits, which is often a costly and time-consuming process.

Mining companies, including ours, need many environmental, construction and mining permits, each of which can be time-consuming and costly to obtain, maintain and renew. In connection with our current and future operations, we must obtain and maintain a number of permits that impose strict conditions, requirements and obligations, including those relating to various environmental and health and safety matters. To obtain, maintain and renew certain permits, we have been and may in the future be required to conduct environmental studies, and make associated presentations to governmental authorities, pertaining to the potential impact of our current and future operations upon the environment and to take steps to avoid or mitigate those impacts. Permit terms and conditions can impose restrictions on how we conduct our operations and limit our flexibility in developing our mineral properties. Many of our permits are subject to renewal from time to time, and renewed permits may contain more restrictive conditions than our existing permits, including those governing impacts on the environment. For example, we may be required to upgrade our wastewater treatment system in connection with the renewal of our National Pollutant Discharge Elimination System, or NPDES, permit for the Sunshine Mine. In addition, we may be required to obtain new permits to expand our operations, and the grant of such permits may be subject to an expansive governmental review of our operations. Alternatively, we may not be successful in obtaining such permits, which could prevent us from commencing or expanding operations or otherwise adversely affect our business. Renewal of existing permits or obtaining new permits may be more difficult if we are not able to comply with our existing permits. Applications for permits, permit area expansions and permit renewals can also be subject to challenge by interested parties, which can delay or prevent receipt of needed permits. In addition, the permitting process can vary by jurisdiction in terms of its complexity and likely outcomes. The applicable laws and regulations, and the related judicial interpretations and enforcement policies, change frequently, which can make it difficult for us to obtain and renew permits and to comply with applicable requirements. Accordingly, permits required for our operations may not be issued, maintained or renewed in a timely fashion or at all, may be issued or renewed upon conditions that restrict our ability to conduct our operations economically, or may be subsequently revoked. Any such failure to obtain, maintain or renew permits, or other permitting delays or conditions, including in connection with any environmental impact analyses, could have a material adverse effect on our business, results of operations and financial condition.

In addition, in regards to the Los Gatos Project and other Mexican projects, Mexico has adopted laws and guidelines for environmental permitting that are similar to those in effect in the United States and South American countries. We are currently operating under permits regulating road construction and drilling at our El Doctor, Los Gatos, Mina Grande, Niko, Zacatlan and Zaragoza projects contingent upon paying annual fees and providing annual reports, which cover the work accomplished on the property, to the Mexican government. We are also preparing a larger scale permit at the Los Gatos Project which requires a detailed environmental assessment and impact study for the future possibility of establishing underground access for further exploration. There can be no certainty as to whether, or the terms under which, such permit will be granted. In addition, we will be required to apply for corresponding authorizations prior to any production at each of our Mexican properties and there can be no certainty as to whether, or the terms under which, such authorizations will be granted or renewed. Any failure to obtain authorizations and permits, or other authorization or permitting delays or conditions, could have a material adverse effect on our business, results of operations and financial condition.

We are subject to environmental laws, regulations and permits that may subject us to material costs, liabilities and obligations.

We are subject to environmental laws, regulations and permits in the various jurisdictions in which we operate, including those relating to, among other things, the removal and extraction of natural resources, the emission and discharge of materials into the environment, including greenhouse gas emissions, plant and wildlife protection, remediation of soil and groundwater contamination, reclamation and closure of properties, including tailings and waste impoundments, groundwater quality and availability, and the handling, storage, transport and disposal of wastes and hazardous materials. Pursuant to such requirements we may be subject to inspections or reviews by governmental authorities. Failure to comply with these environmental requirements may expose us to

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litigation, fines or other sanctions, including the revocation of permits and suspension of operations. We expect to continue to incur significant capital and other compliance costs related to such requirements. These laws, regulations and permits, and the enforcement and interpretation thereof, change frequently and generally have become more stringent over time.

We could be liable for any environmental contamination at or from our or our predecessors’ currently or formerly owned or operated properties or third-party waste disposal sites, including the Bunker Hill Superfund Site. Certain environmental laws impose joint and several strict liability for releases of hazardous substances at such properties or sites, without regard to fault or the legality of the original conduct. Accordingly, we may be held responsible for more than our share of the contamination or other damages, up to and including the entire amount of such damages. In addition to potentially significant investigation and remediation costs, such matters can give rise to claims from governmental authorities and other third parties, including for orders, inspections, fines or penalties, natural resource damages, personal injury, property damage, toxic torts and other damages.

Our costs, liabilities and obligations relating to environmental matters could have a material adverse effect on our financial performance, financial position and results of operations.

Legislation has previously been proposed that would significantly affect the mining industry.

Periodically, members of the U.S. Congress have introduced bills which would supplant or alter the provisions of the U.S. General Mining Law of 1872, which governs the unpatented claims that we control with respect to the Sunshine Mine. One such amendment has become law and has imposed a moratorium on patenting of mining claims, which reduced the security of title provided by unpatented claims such as those on the Sunshine Mine property. Other bills have proposed, among other things, to make permanent the patent moratorium, to impose a federal royalty on production from unpatented mining claims and to declare certain lands as unsuitable for mining. If additional legislation is enacted, it could substantially increase the cost of holding unpatented mining claims by requiring payment of royalties, and could significantly impair our ability to develop mineral estimates on unpatented mining claims. Although it is impossible to predict at this time what royalties may be imposed in the future, the imposition of such royalties could adversely affect the potential for development of such mining claims. Passage of such legislation could adversely affect our business.

Risks Related to this Offering and our Common Stock

There is no existing market for our common stock and we do not know if one will develop. Even if a market does develop, the stock price in the market may not exceed the offering price.

Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in our Company will lead to the development of an active trading market on the New York Stock Exchange, the Toronto Stock Exchange or otherwise, or how liquid that market may become. An active trading market for our common stock may not develop and even if it does develop, may not continue upon the completion of this offering and the market price of our common stock may decline below the initial public offering price. The initial public offering price for the common stock will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price you pay in this offering.

The market price of our common stock may be volatile, which could result in substantial losses for you.

The initial public offering price for our common stock will be determined through negotiations between us and the representatives of the underwriters. This initial public offering price may vary from the market price of our common stock after this offering. Some of the factors that may cause the market price of our common stock to fluctuate include:

• failure to identify mineral reserves at our properties;

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• failure to achieve production at our mineral properties;

• actual or anticipated changes in the price of silver and base metal by-products;

• fluctuations in our quarterly and annual financial results or the quarterly and annual financial results of companies perceived to be similar to us;

• changes in market valuations of similar companies;

• success or failure of competitor mining companies;

• changes in our capital structure, such as future issuances of securities or the incurrence of debt;

• sales of large blocks of our common stock;

• announcements by us or our competitors of significant developments, contracts, acquisitions or strategic alliances;

• changes in regulatory requirements and the political climate in the United States, Mexico or both;

• litigation involving our Company, our general industry or both;

• additions or departures of key personnel;

• investors’ general perception of us, including any perception of misuse of sensitive information;

• changes in general economic, industry and market conditions;

• accidents at mining properties, whether owned by us or otherwise;

• natural disasters, terrorist attacks and acts of war; and

• our ability to control our costs.

In addition, if the market for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be both costly to defend against and a distraction to management.

Our anti–takeover defense provisions may cause our common stock to trade at market prices lower than it might absent such provisions.

Our Board of Directors has the authority to issue blank check preferred stock. Additionally, our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws that we will adopt prior to the closing of this offering will contain several provisions that will apply after Electrum, or any person which is an express assignee or designee of Electrum, ceases to own in the aggregate more than 50% of our outstanding common stock. These provisions may make it more difficult or expensive for a third party to acquire control of us without the approval of our Board of Directors. These provisions include provisions that set forth advance notice procedures for stockholders’ nominations of directors and proposals of topics for consideration at meetings of stockholders, provisions restricting stockholders from calling a special meeting of stockholders or requiring one to be called, provisions limiting the ability of stockholders to act by written consent, provisions requiring a 66 ²/3% stockholder vote to amend our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, a staggered board, and provisions providing for the filling of vacancies on our Board of Directors. Our Amended and Restated Certificate of Incorporation will also provide that Section 203 of the Delaware General Corporation Law, or DGCL, which relates to business combinations with interested stockholders, will not apply to us until such time as Electrum ceases to own more than 50% of our outstanding common stock, after which time we will be governed by those provisions. These provisions may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock. In addition, these provisions may cause our common stock to trade at a market price lower than it might absent such provisions.

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You will suffer immediate and substantial dilution as a result of this offering.

The initial public offering price per share of our common stock is substantially higher than our net tangible book value per share immediately after this offering. As a result, if you purchase shares in this offering, you will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. At an offering price of $             per share, which is the midpoint of the offering price range set forth on the front cover of this prospectus, you will incur immediate and substantial dilution of your investment in the amount of $             per share. See “Dilution.”

Future sales of our common stock after the lock-up period has expired, or the perception that such sales may occur, could depress our common stock price.

After this offering, we will have              shares of common stock outstanding. This includes the shares of common stock we are selling in this offering, which may generally be resold in the public market immediately after this offering. We expect that the remaining shares of common stock, representing     % of our total outstanding shares of common stock following this offering, will become available for resale in the public market as set forth under the heading “Shares Eligible for Future Sale.” All of our directors and executive officers, and the holders of substantially all of our common stock, have signed lock-up agreements for a period of 180 days following the date of this prospectus, subject to extension in the case of an earnings release or material news or a material event relating to us. Morgan Stanley & Co. LLC may, in its sole discretion and without notice, release all or any portion of the common stock subject to lock-up agreements. There are no agreements, understandings or intentions, tacit or explicit, to release any of the common stock subject to lock-up agreements prior to the expiration of the lock-up period. As restrictions on resale end, the market price of our common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common stock or other securities.

In addition, immediately following this offering, we intend to file a registration statement registering under the Securities Act of 1933, or the Securities Act, the shares of common stock reserved for issuance in respect of incentive awards to our directors and certain of our employees. This would result in approximately              shares of common stock underlying options vested as of the date of this prospectus being available for resale into the public markets after the expiration of lock-up agreements to which substantially all of those shares are subject.

We do not currently intend to pay dividends on our common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We have never declared or paid any cash dividend on our capital stock. We do not intend to pay any cash dividends on our common stock for the foreseeable future. We currently intend to retain all future earnings, if any, to finance our business. The payment of any future dividends, if any, will be determined by our Board of Directors in light of conditions then existing, including our earnings, financial condition and capital requirements, business conditions, corporate law requirements and other factors. See “Dividend Policy.”

Certain non-U.S. investors may be subject to U.S. income tax with respect to gain on dispositions of our common stock if we are or become a U.S. real property holding corporation.

Based on our estimates of the current relative fair market values of our U.S. real property interests and other assets, we believe that we are not currently a U.S. real property holding corporation, or a USRPHC, for U.S. federal income tax purposes. However, both because the determination of the value of our mineral assets is uncertain and requires the use of subjective estimates, and because the relative fair market values of our assets will likely fluctuate over time (based on, for example, the results of the exploration and development of our properties), there can be no assurance that we are not, or will not become, a USRPHC. If we are or have been a USRPHC, certain non-U.S. investors will generally be subject to U.S. federal income tax on gain realized on a sale or other disposition of our common stock. However, for so long as our common stock is regularly traded on

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an established securities market (such as the NYSE), a non-U.S. investor will not recognize taxable gain on a sale of our common stock under the rules applicable to USRPHCs unless the investor actually or constructively owns more than 5% of our common stock at any time during the five-year period ending on the date of disposition or, if shorter, its holding period for our common stock. See “U.S. Federal Tax Considerations for Non-U.S. Holders of Common Stock—Gain on Disposition of Common Stock.”

Electrum and its affiliates will continue to have substantial control over us after this offering, which could delay or prevent a change of corporate control or result in the entrenchment of management and/or the Board of Directors.

After this offering, Electrum, together with its affiliates and related persons, will beneficially own, in the aggregate, approximately     % of our outstanding common stock (approximately     % if the underwriters’ over-allotment option is exercised in full). As a result, Electrum will have control over the outcome of matters submitted to our stockholders for approval, including the election and removal of directors and any merger, consolidation or sale of all or substantially all of our assets. Also, Electrum will have the ability to control the management and affairs of our Company. Currently, one out of the nine members of our Board of Directors is an affiliate of Electrum. In addition, following this offering, Liberty Metals & Mining will beneficially own, in the aggregate, approximately     % of our outstanding common stock (approximately     % if the underwriters’ over-allotment option is exercised in full) and will have one member on the Board of Directors. Accordingly, this concentration of ownership may harm the market price of our common stock by, among other things:

• delaying, deferring or preventing a change of control, even at a per share price that is in excess of the then-current price of our common stock;

• impeding a merger, consolidation, takeover or other business combination involving us, even at a per share price that is in excess of the then-current price of our common stock; or

• discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, even at a per share price that is in excess of the then current price of our common stock.

We will incur increased costs and be required to carry out activities we have not previously undertaken as a result of becoming a public company, specifically as a result of Section 404 of the Sarbanes-Oxley Act of 2002.

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, applicable Canadian securities laws and the rules and regulations of the New York Stock Exchange and the Toronto Stock Exchange. Such requirements will increase our legal, accounting and financial compliance costs, will make some activities more difficult, time-consuming and costly and may also place undue strain on our personnel, systems and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Commencing with our fiscal year ending December 31, 2012, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts. Prior to this offering, we have never been required to test our internal controls within a specified period and, as a result, we may experience difficulty in meeting these reporting requirements in a timely manner, particularly if material weaknesses or significant deficiencies are identified and persist. If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, the market price of our stock could decline and we could be subject to sanctions or investigations by any stock exchange on which our common stock is listed, the SEC, Canadian securities regulators or other regulatory

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authorities, which would require additional financial and management resources. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations. Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual auditor attestation reports regarding the effectiveness of our internal control over financial reporting that we will be required to include in our periodic reports filed with the SEC, beginning with our fiscal year ending December 31, 2012, under Section 404 of the Sarbanes-Oxley Act. Ineffective disclosure controls and procedures or internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock.

Our Amended and Restated Certificate of Incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities.

Our Amended and Restated Certificate of Incorporation provides for the allocation of certain corporate opportunities between us and Electrum and Liberty Metals & Mining. Under these provisions, neither Electrum or Liberty Metals & Mining, their affiliates and subsidiaries, nor any of their officers, directors, agents, stockholders, members or partners will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. For instance, a director of our Company who is not employed by us and also serves as a director, officer or employee of Electrum or Liberty Metals & Mining or any of their subsidiaries or affiliates may pursue certain acquisition or other opportunities that may be complementary to our business and, as a result, such acquisition or other opportunities may not be available to us. These potential conflicts of interest could have a material adverse effect on our financial performance, financial position and results of operations if attractive corporate opportunities are allocated by Electrum or Liberty Metals & Mining to themselves or their subsidiaries or affiliates instead of to us. The terms of our Amended and Restated Certificate of Incorporation are more fully described in “Description of Capital Stock.”

If securities or industry analysts downgrade recommendations regarding our stock, the price and trading volume of our stock could decline.

The research and reports that securities or industry analysts publish about us or our business may vary widely and may not predict accurate results, but will likely have an affect on the trading price of our common stock. If one or more of the analysts that cover us downgrade recommendations regarding our stock, or if our results of operations do not meet their expectations, our stock price could decline rapidly and such decline could be material.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements.” Those statements include, but are not limited to, statements with respect to our expected costs and timing for the further exploration and development of the Sunshine Mine property in Big Creek, Idaho (including the timing for completion of a pre-feasibility study at the Sunshine Mine property) or of the Los Gatos Project in Mexico (including the timing for completion of a pre-feasibility study for the Cerro Los Gatos and Esther zones of the Los Gatos Project) or of our other prospective properties, estimated calculations of mineralized material at the Sunshine Mine property, our quality assurance/quality control protocols for our exploration drilling campaign at the Sunshine Mine property, our business strategy, expected cost savings, our prospects, plans and objectives, industry trends, our requirements for additional capital, government regulation, environmental risks, reclamation and rehabilitation expenses, title disputes or claims, synergies of potential future acquisitions, expected actions of third parties, and limitations of insurance coverage. These statements may be under the captions “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Silver Industry Overview,” “Business” and in other sections of this prospectus. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our industry.

All forward-looking statements speak only as of the date on which they are made. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions concerning future events that are difficult to predict. Therefore, actual future events or results may differ materially from these statements. We believe that the factors that could cause our actual results to differ materially from those expressed or implied by forward-looking statements include the following:

• our status as an exploration company that has no operating history;

• our dependence on our two principal projects for our future operating revenue, neither of which currently has proven or probable reserves;

• our mineralized material calculations at the Sunshine Mine property are only estimates and are based principally on historic data;

• historical production at the Sunshine Mine property may not be indicative of potential future development;

• land reclamation and mine closure may be burdensome and costly;

• we will require additional financing in the future to bring the Sunshine Mine property into sustained commercial production and to develop a mine at the Los Gatos Project;

• exposure to all of the risks associated with establishing new mining operations, if the development of one or more of our mineral projects is found to be economically feasible;

• significant risk and hazards associated with mining operations;

• competition within our industry;

• title to some of our mineral properties may be uncertain or defective;

• our exposure to losses because of our hedging activities or our decision not to hedge;

• our insurance may not provide adequate coverage;

• our inability to retain key members of management;

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• increased demand for, and cost of, exploration, development and construction services and equipment in recent years;

• changes in the price of silver;

• our failure to identify attractive acquisition candidates or joint ventures with strategic partners or inability to successfully integrate acquired mineral properties or successfully manage joint ventures;

• claims and legal proceedings against us;

• extensive regulation by the U.S. and Mexican governments as well as state and local governments;

• our Mexican operations are subject to additional political, economic and other uncertainties not generally associated with domestic operations;

• the requirements that we obtain, maintain and renew environmental, construction and mining permits, which is often a costly and time-consuming process; and

• our exposure to material costs, liabilities and obligations as a result of environmental laws and regulations (including changes thereto) and permits.

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements included in this prospectus. These risks and uncertainties, as well as other risks of which we are not aware or which we currently do not believe to be material, may cause our actual future results to be materially different than those expressed in our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements. We do not undertake any obligation to make any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events, except as required by law.

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USE OF PROCEEDS

We will receive net proceeds from this offering of approximately $             million, or approximately $             million if the underwriters exercise their option in full to purchase additional shares, assuming an initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses. A $1.00 increase (decrease) in the assumed initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds from the offering by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. We intend to allocate the proceeds as follows:

Sunshine Mine property
Upgrade existing infrastructure	$	million		%
Surface and underground exploration	$	million		%
Pre-feasibility study	$	million		%
Various consolidation expenses	$	million		%
Sunshine Mine property Total	$	million		%
Los Gatos Project
Exploratory drilling	$	million		%
Technical expenses, including a pre-feasibility study	$	million		%
Various consolidation expenses	$	million		%
Los Gatos Project Total	$	million		%
Other Mexican properties
Exploratory drilling	$	million		%
General Corporate Purposes	$	million		%
Total	$	million	100	%

Our objectives with respect to the use of proceeds at the Sunshine Mine property are to define additional mineralized material, complete a pre-feasibility study, upgrade existing infrastructure and re-establish access to developed portions of the resource. Our objectives with respect to the Los Gatos Project and additional exploration in Mexico are to double the number of exploration drills from four to eight, complete a pre-feasibility study at the Cerros Los Gatos and Esther zones and acquire additional prospective mineral and surface rights.

While we currently anticipate that we will use the net proceeds of this offering as described above, we may reallocate the net proceeds from time to time depending upon market and other conditions in effect at the time. Pending their application, we intend to invest the net proceeds in short-term, interest-bearing, investment grade securities or short-term deposits or shares of money market mutual funds.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock. We do not intend to pay any dividends in the foreseeable future and currently intend to retain all future earnings to finance our business. Any determination to pay dividends to holders of our common stock in the future will be at the discretion of our Board of Directors and will depend upon such factors as our earnings levels, capital requirements, requirements under the DGCL and other factors as our Board of Directors deems relevant.

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CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2011

• on an actual basis; and

• on an as adjusted basis to reflect the sale by us of              shares of common stock pursuant to this offering, assuming an initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses.

This table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto appearing elsewhere in this prospectus. Unless otherwise stated, all dollar amounts expressed below are in thousands, except for per share amounts.

	June 30, 2011
	Actual			As Adjusted
Cash and cash equivalents	$	153,161		$
Stockholders’ equity:
Common Stock, $0.001 par value per share, 100,000,000 shares authorized, actual;             shares authorized, as adjusted; 58,810,113 shares issued and outstanding, actual;             shares issued and outstanding, as adjusted	$	59		$
Paid-in capital		240,920
Accumulated Deficit		(58,297	)
Unrealized gains on investments, net of tax		54
Total stockholders’ equity	$	182,736		$
Total capitalization	$	182,736		$

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share, which is the midpoint of the range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash equivalents, total stockholders’ equity and total capitalization by $             million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

The table above does not include:

• 321,548 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2011 with a weighted average exercise price of $13.55 per share;

• an option to purchase 125,000 shares of common stock to be granted to our Executive Chairman and Chief Executive Officer upon the consummation of this offering at a purchase price equal to the offering price. See “Compensation Discussion and Analysis—Grants of Plan-Based Awards;’’ and

•              additional shares of common stock reserved for further issuance under our stock option plans.

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DILUTION

Our consolidated net tangible book value as of June 30, 2011 was $(            ) or $(            ) per share of common stock. Consolidated net tangible book value per share represents consolidated tangible assets, less consolidated liabilities, divided by the aggregate number of shares of common stock outstanding. After giving effect to the sale by us of the shares of common stock in this offering, at an assumed initial public offering price of $             per share, the midpoint of the range set forth on the cover page of this prospectus, our consolidated net tangible book value as of June 30, 2011 would have been $             or $             per share. This represents an immediate increase in consolidated net tangible book value to existing stockholders of $             per share and an immediate dilution to new investors purchasing shares in this offering of $             per share. Dilution per share represents the difference between the price per share to be paid by new investors for the shares of common stock sold in this offering and the consolidated net tangible book value per share immediately after this offering. The following table illustrates this per share dilution:

Assumed initial public offering price		$
Consolidated net tangible book value per share as of June 30, 2011	$
Increase in consolidated net tangible book value per share attributable to new investors
Consolidated net tangible book value per share after this offering
Dilution per share to new investors		$

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share (the midpoint of the range set forth on the cover page of this prospectus), would increase (decrease) our pro forma consolidated net tangible book value per share after this offering by $             and the dilution per share to new investors purchasing shares in this offering by $            , in each case assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters’ over-allotment option to purchase common stock is exercised in full, our consolidated net tangible book value per share after giving effect to this offering would be $            , and the dilution per share in net tangible book value to new investors purchasing shares in this offering would be $            .

The following table sets forth, as of June 30, 2011, the number of shares of common stock purchased from the Company, the total consideration paid, or to be paid, to the Company and the average price per share paid, or to be paid, by existing stockholders and by new investors purchasing shares in this offering, at an assumed initial public offering price of $             per share, the midpoint of the range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and offering expenses payable by the Company:

	Shares Purchased				Total Consideration				Average Price Per Share
	Number	Percent			Amount	Percent
Existing stockholders				%	$			%	$
New Investors
Total			100	%	$		100	%	$

If the underwriters’ over-allotment option to purchase common stock is exercised in full, the number of shares of common stock held by existing stockholders would decrease to     % of the total number of shares of common stock outstanding after this offering, and the number of shares of common stock held by new investors would increase to     % of the total number of shares of common stock outstanding after this offering.

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A $1.00 increase (decrease) in the assumed initial public offering price of $             per share (the midpoint of the range set forth on the cover page of this prospectus) would increase (decrease) total consideration paid by new investors, total consideration paid by all stockholders and average price per share paid by all stockholders by $             million, $             million and $            , respectively, in each case assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

The foregoing tables exclude 321,548 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2011 with a weighted average exercise price of $13.55 per share and exclude an option to purchase 125,000 shares of common stock to be granted to our Executive Chairman and Chief Executive Officer upon the consummation of this offering at a purchase price equal to the offering price. See “Compensation Discussion and Analysis—Grants of Plan-Based Awards.” To the extent these options are exercised, there will be further dilution to new investors.

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SELECTED CONSOLIDATED FINANCIAL DATA

We prepared the selected consolidated financial data using our consolidated financial statements for each of the periods presented. The selected consolidated financial data for each fiscal year in the three-year period ended December 31, 2010 and the balance sheet data as of December 31, 2009 and 2010 was derived from our audited consolidated financial statements appearing elsewhere in this prospectus.

The selected consolidated financial data for the period from April 24, 2006 (Inception) to June 30, 2011 and for the six months ended June 30, 2010 and as of and for the six months ended June 30, 2011 was derived from our unaudited interim consolidated financial statements appearing elsewhere in this prospectus. In our opinion, such unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of our results of operations and financial position. Results for the six months ended June 30, 2010 and as of and for the six months ended June 30, 2011 are not necessarily indicative of results that may be expected for the entire year.

We were formed on February 2, 2011 when our predecessor, Precious Metals Opportunities LLC, converted to a Delaware corporation. On March 1, 2011, Los Gatos Ltd. merged with and into us. In accordance with U.S. GAAP, all financial results have been prepared as if the combination of the companies under common control (Precious Metals Opportunities LLC and Los Gatos Ltd.) had occurred prior to the earliest period presented. Accordingly, the financial results have been prepared on the following basis:

• the April 24, 2006 (Inception) to December 31, 2006, 2007, 2008 and 2009 results of operations are derived solely from the activities of Los Gatos Ltd.;

• the 2010 results of operations reflect the combined activities of Precious Metals Opportunities LLC and Los Gatos Ltd.; and

• the 2011 results of operations reflect the combined activities of Precious Metals Opportunities LLC and Los Gatos Ltd. through February 28, 2011; subsequent to this date, the results of operations reflect the consolidated activities of Sunshine Silver.

As a result of our acquisition of the Sunshine Mine in May 2010, we believe that period-over-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as a good indicator of our future performance.

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You should read this financial data in conjunction with our audited and unaudited consolidated financial statements and related notes included elsewhere in this prospectus. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	Year ended December 31,												Period from April 24, 2006 (Inception) to December 31, 2006			Six months ended June 30,						Period from April  24, 2006 (Inception) to June 30, 2011
	2010			2009			2008			2007						2011			2010
	(in thousands)
																(unaudited)
Statements of Loss Data:
Expenses:
Exploration	$	14,653		$	9,771		$	2,718		$	926		$	240		$	8,150		$	6,938		$	36,459
Care and maintenance		2,534			—			—			—			—			2,543			404			5,077
General and administrative		5,490			818			415			112			72			7,055			2,742			13,962
Total expenses		22,677			10,589			3,133			1,038			312			17,748			10,084			55,498
Net other expense		1,891			597			24			24			2			298			755			2,835
Loss before income tax benefit		24,568			11,186			3,157			1,062			314			18,046			10,839			58,333
Income tax benefit		(30	)		—			—			—			—			(6	)		(14	)		(36	)
Net loss	$	24,538		$	11,186		$	3,157		$	1,062		$	314		$	18,040		$	10,825		$	58,297
Cash Flow Data:
Net cash used by operating activities	$	(21,479	)	$	(10,876	)	$	(2,866	)	$	(1,199	)	$	(342	)	$	(15,777	)	$	(7,698	)	$	(52,539	)
Net cash used by investing activities	$	(30,856	)	$	(31	)	$	(4	)	$	(1	)		—		$	(1,471	)	$	(29,193	)	$	(32,363	)
Net cash provided by financing activities	$	54,592		$	11,885		$	3,250		$	950		$	613		$	166,773		$	37,924		$	238,063

	December 31,														June  30, 2011
	2010		2009			2008			2007			2006
			(in thousands)
															(unaudited)
Balance Sheet Data:
Cash and cash equivalents	$	3,636	$	1,379		$	401		$	21		$	272		$	153,161
Working capital	$	4,485	$	1,689		$	(241	)	$	(409	)	$	(314	)	$	152,917
Total assets	$	36,076	$	2,610		$	709		$	187		$	312		$	187,629
Related-party debt	$	31,000	$	15,990		$	4,298		$	968			—			—
Total shareholders’ equity (deficit)	$	2,663	$	(14,270	)	$	(4,532	)	$	(1,376	)	$	(314	)	$	182,736

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. These forward-looking statements involve risks and uncertainties. You should review “Risk Factors” and “Special Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by these forward-looking statements. Unless otherwise stated, all dollar amounts expressed below are in thousands, except for share and per share amounts.

Overview

Sunshine Silver Mines Corporation is a U.S.-based precious metals exploration and development company with the objective of becoming a premier silver producer. We are currently focused on the advancement of our two principal projects: (i) the Sunshine Mine property in Idaho, one of the highest-grade known remaining primary-silver discoveries worldwide, which is estimated to have produced a total of over 365 million ounces of silver, and (ii) the Los Gatos Project in Chihuahua, Mexico, where we hold a 81,651 hectare land position, constituting a new mining region. In total, we own or control a portfolio of 20 exploration properties in the United States and Mexico covering an area of approximately 449,550 hectares.

We were formed on February 2, 2011 when our predecessor, Precious Metals Opportunities LLC, converted to a Delaware corporation. On March 1, 2011, Los Gatos Ltd. merged with and into us. Prior to the merger, Los Gatos Ltd. eliminated all of its outstanding related-party debt through the issuance of preferred shares, which were subsequently exchanged for shares of our common stock in connection with the merger. In connection with the merger, outstanding ordinary shares of Los Gatos Ltd. and options to purchase ordinary shares of Los Gatos Ltd. were also converted into shares of our common stock and options to purchase shares of our common stock, respectively. The assets and liabilities of each predecessor company are presented at historical cost as this transaction was reported for accounting purposes as a combination of companies (Los Gatos Ltd. and Precious Metals Opportunities LLC) under common control. In accordance with U.S. GAAP, common control exists between the predecessor Sunshine and Los Gatos entities as both entities were primarily owned by certain trusts under the control of one individual. In accordance with U.S. GAAP, all financial reports have been prepared as if the combination of the companies under common control had occurred prior to the earliest period presented.

Substantially, all of our source of funds to date has been proceeds from financing activities. From March 1, 2011 to June 30, 2011, we received proceeds of $163,733 through private placements of our common stock to investors.

We have not yet generated any operating revenue. We anticipate that we will continue to incur significant operating costs without realizing any revenues at the Sunshine Mine or the Los Gatos Project for the foreseeable future. We believe that the anticipated net proceeds from this offering and our existing cash and cash equivalents will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirements for at least the next      months. However, we may elect to seek additional funding prior to that time. We expect that we will require additional funds at a later date to bring the Sunshine Mine into sustained commercial operation and develop a mine at the Los Gatos Project which, depending upon the circumstances, may be in the form of equity, debt or a combination of equity and debt. There can be no assurance that additional funds will be available to us on acceptable terms or at all.

Principal Projects

Sunshine Mine

The Sunshine Mine is located within the Coeur d’Alene Mining District in Idaho. In May 2010, we acquired from Sterling the majority of the operating facilities and equipment at the Sunshine Mine, including a lease on

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the Sunshine Mine that included a purchase option for title to the Sunshine Mine. In July 2010, we closed the purchase option in the lease to obtain title to the Sunshine Mine and acquired the remaining operating facilities and equipment. The total consideration paid in cash was comprised of (i) $23,500 for the net assets acquired and liabilities assumed and (ii) $5,750 for the right, title and interest acquired in connection with the purchase option.

The Sunshine Mine covers 171 hectares of surface rights, and the Company estimates that the Mine contains more than 160 kilometers of underground workings. Our consolidated land position at the Sunshine Mine property consists of approximately 2,408 hectares.

We are undertaking significant exploration and re-development of the Sunshine Mine property. Since acquiring the Sunshine Mine, we have successfully completed or are currently working on the following significant exploration and re-development activities at the Sunshine Mine property:

• acquired additional surface rights;

• repaired surface facilities and equipment, including the Jewell hoists and shaft, and compressed air, water and pumping systems;

• commissioned the ConSil hoist and completed work to enable rehabilitation of the ConSil shaft from the top station downward to the 910 meter level;

• de-watered the Sunshine Mine to just below the 1,130 meter level;

• re-established utility services to the Sunshine Mine ramp, enabling commencement of improvements required for ventilation and re-access to mining blocks;

• made significant progress towards compiling a drill hole database review for areas of immediate exploration and began compiling the entire historical geologic database to create a three dimensional model of the resources; and

• designed a new development plan to re-establish access in the lower mine levels for exploration and development.

Our objectives at the Sunshine Mine property through 2013 are to:

• define additional mineralized material through extensive surface and underground exploration;

• complete a pre-feasibility study to determine the costs to re-commission and operate the Sunshine Mine as a sustainable and efficient silver producer; and

• upgrade existing infrastructure and re-establish access to developed portions of the resource.

The Sunshine Mine property will require significant time and capital before this property returns to production.

Los Gatos Project

The Los Gatos Project is located approximately 128 kilometers south of the state capital of Chihuahua City, in Northern Mexico and consists of two identified silver discoveries, the Cerro Los Gatos and the Esther zones, and 14 other priority targets over 100 kilometers of outcropping quartz and calcite veins. The area is characterized by a predominant silver-lead-zinc mineralization.

Prior to our initial acquisition of exploration concession rights in 2006, only very limited historical prospecting and exploration activities had been conducted at the Los Gatos Project. We were able to acquire concessions covering approximately 81,651 hectares and, through our exploration, we have identified a virgin silver region containing high-grade vein style mineralization throughout our Los Gatos concession package.

In 2008, we negotiated surface access rights with local ranch owners and obtained environmental permits for drilling. Environmental baseline data collection (climate, water, vegetation, air and social) began in May

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2010 in anticipation of future development activities at the Los Gatos Project. Geological work continued with detailed surface mapping, sampling and prospecting of new zones. Data on flora, fauna, water, air, climate, security and social impacts are generally collected on a regular basis and we intend to integrate this data into future social, environmental and technical studies for the Los Gatos Project.

To date, our primary areas of focus have been defining and extending mineralization along the Cerro Los Gatos and Esther zones that currently extend more than 2,500 meters along strike and remain open at depth and to the southeast. Through November 2010, we had completed 154 drill holes in the Cerro Los Gatos and Esther zones, totaling 69,745 meters.

Our objectives at the Los Gatos Project through 2013 are to:

• increase the drilling rate by increasing the number of exploration drills from four to seven;

• conduct social, environmental and technical work on the property with the objective of completing a pre-feasibility study on the Cerro Los Gatos and Esther zones; and

• acquire additional prospective mineral and surface rights.

The Los Gatos Project will require significant time and capital before the Project is brought into production.

Achievement of our objectives at the Sunshine Mine property and the Los Gatos Project is subject to a number of risks and uncertainties, a number of which are beyond our control. We cannot assure you that we will successfully achieve our objectives at the Sunshine Mine property or the Los Gatos Project. See “Risk Factors.”

Operating Expenses

Exploration Expenses

We conduct exploration activities on patented and unpatented mining claims in the United States and Mexico. We expect our exploration expenses to increase significantly as we continue to expand our exploration activities at the Sunshine Mine property, the Los Gatos Project and our other exploration properties. As access to the underground platforms at the Sunshine Mine is achieved through re-establishment of a secondary escape shaft, our exploration costs will further increase. Our exploration expenses primarily consist of drilling costs, lease concession payments, and environmental, geological and technical studies, at both the Sunshine Mine property and the Los Gatos Project.

Care and Maintenance Expenses

Our care and maintenance expenses relate to the care and maintenance of the Sunshine Mine, which has been in the care and maintenance stage since our acquisition of the Sunshine Mine in May 2010. Our care and maintenance expenses include facility and surface repair and re-development costs, mineral surface lease payments, utility costs and mine-dewatering costs.

General and Administrative Expenses

Our general and administrative expenses consist of salaries and benefits, stock compensation, professional and consultant fees, insurance and other general administration costs. Our general and administrative expenses are expected to increase significantly as we prepare to operate as a public company. We expect higher costs related to salaries, benefits, stock compensation, legal fees, compliance and corporate governance, accounting and audit expenses, stock exchange listing fees, transfer agent and other stockholder-related fees, directors and officers’ and other insurance fees, and other administrative costs.

In May 2011, we opened a corporate office in Denver, Colorado, moved many advisory and shared-service functions performed in New York to Denver, and began establishing a senior executive team primarily based in Denver. We expect higher costs related to compensation and benefits, rent and occupancy, and other

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administrative costs as we continue to add to our senior executive team and hire additional corporate employees. Additionally, we expect to incur higher costs from share-based compensation plans established by our Board of Directors.

Income Taxes

As we have incurred substantial losses from our exploration and re-development activities, we may receive further benefits in the form of deferred tax assets that can reduce our future income tax liabilities, if it is more likely than not the benefit will be realized before expiration. We have not recognized these potential benefits in our financial statements and have fully reserved for such net deferred tax assets, as we believe the benefit of these net deferred tax assets will not be realized before expiration. At December 31, 2010, we recorded a full valuation allowance of $9,639 against these net deferred tax assets. In addition, due to our net losses since inception, we have not paid income taxes to date and therefore there has been no impact on our income tax expense of operating as a Delaware corporation compared to the legal structures of our predecessor entities.

Royalties

We conduct exploration activities on patented and unpatented mining claims at both the Sunshine Mine property and the Los Gatos Project. We are required to make mineral and concession lease payments to various entities to secure the appropriate claims or surface rights. For the fiscal year ended December 31, 2010, we paid $191 for such royalties. Certain of these agreements also have royalty payments that are triggered when we begin producing and selling metal-bearing concentrate. There are currently no instances where we are paying any royalty based upon production and sales. See “Business—The Sunshine Mine Property—Royalties,” “Business—The Los Gatos Project—Location of the Los Gatos Project” and note 6 to our December 31, 2010 audited consolidated financial statements.

Comparability of Periods

As a result of our acquisition of the Sunshine Mine in May 2010, we believe that period-over-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as a good indicator of our future performance. Prior to our acquisition of the Sunshine Mine in May 2010, our operating results were derived solely from the activities of Los Gatos Ltd. and Precious Metals Opportunities LLC. We commenced activities at the Sunshine Mine after our purchase of the Sunshine Mine net assets out of bankruptcy from Sterling in May 2010. This acquisition was accounted for as a business combination and the Company applied purchase accounting to the assets acquired and liabilities assumed.

Results of Operations

The following table presents certain information relating to our operating results for the years ended December 31, 2010, 2009 and 2008, and the six months ended June 30, 2011 and 2010. In accordance with U.S. GAAP, all financial reports have been prepared as if the combination of the companies under common control occurred prior to the earliest period presented. Accordingly, the financial results have been prepared on the following basis:

• the 2008 and 2009 results of operations are derived solely from the activities of Los Gatos Ltd.;

• the 2010 results of operations reflect the combined activities of Precious Metals Opportunities LLC and Los Gatos Ltd.; and

• the 2011 results of operations reflect the combined activities of Precious Metals Opportunities LLC and Los Gatos Ltd. through February 28, 2011; subsequent to this date, the results of operations reflect the consolidated activities of Sunshine Silver.

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	Year Ended December 31,									Six Months Ended June 30,
	2010			2009			2008			2011			2010
										(unaudited)
Statements of Loss Data:
Expenses:
Exploration	$	14,653		$	9,771		$	2,718		$	8,150		$	6,938
Care and maintenance		2,534			—			—			2,453			404
General and administrative		5,490			818			415			7,055			2,742
Total expenses		22,677			10,589			3,133			17,748			10,084
Other (income) expense:
Interest expense		1,887			360			79			198			736
Interest and other income		(36	)		(13	)		(8	)		(24	)		(24	)
Foreign exchange (gain) loss		40			250			(47	)		124			43
Net other expense		1,891			597			24			298			755
Loss before income taxes		24,568			11,186			3,157			18,046			10,839
Income tax benefit		(30	)		—			—			(6	)		(14	)
Net Loss	$	24,538		$	11,186		$	3,157		$	18,040		$	10,825

Financial information relating to our segments is a follows:

	Six Months Ended June 30, 2011									Six Months Ended June 30, 2010
Expenses	U.S.			Mexico		Corporate		Total		U.S.		Mexico		Corporate		Total
	(unaudited)
Exploration	$	286		$	7,843	$	21	$	8,150	$	—	$	6,938	$	—	$	6,938
Care and maintenance		2,543			—		—		2,543		404		—		—		404
General and administrative		1,790			531		4,734		7,055		2,185		557		—		2,742
Net other (income) expense		(26	)		324		—		298		—		755		—		755
	Year Ended December 31, 2010									Year Ended December 31, 2009
	U.S.			Mexico		Corporate		Total		U.S.		Mexico		Corporate		Total
Exploration	$	207		$	14,446		—	$	14,653		—	$	9,771		—	$	9,771
Care and maintenance	$	2,534			—		—	$	2,534		—		—		—		—
General and administrative	$	3,936		$	1,326	$	228	$	5,490		—	$	818		—	$	818
Net other (income) expense	$	(7	)	$	1,898		—	$	1,891		—	$	597		—	$	597
	Year Ended December 31, 2008
	U.S.			Mexico		Corporate		Total
Exploration		—		$	2,718		—	$	2,718
General and administrative		—		$	415		—	$	415
Net other expense		—		$	24		—	$	24

Six Months Ended June 30, 2011 Compared to Six Months Ended June 30, 2010

For the six months ended June 30, 2011, we experienced a consolidated net loss of $18,040 compared to a consolidated net loss of $10,825 for the same period in 2010. The $7,215 increase in consolidated net loss is primarily due to increases in exploration, care and maintenance and general and administrative expenses partially offset by a decrease in interest expense. The primary reasons for the fluctuations were as follows:

• Exploration expense increased $1,212 to $8,150 for the six months ended June 30, 2011 compared to $6,938 in the comparable period of 2010. Exploration costs at the Sunshine Mine were $286 and nil for

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the six months ended June 30, 2011 and 2010, respectively. Exploration costs for our Mexico operations increased by approximately $905 for the six months ended June 30, 2011 compared to the same period in 2010 due to our expanded drilling at the Los Gatos Project and various other targets.

• Care and maintenance expense increased $2,139 to $2,543 for the six months ended June 30, 2011 compared to $404 for the six months ended June 30, 2010 due to the May 2010 acquisition of the Sunshine Mine, which has been in a care and maintenance stage since that date.

• General and administrative expense increased by $4,313 to $7,055 for the six months ended June 30, 2011 compared to $2,742 in the comparable period of 2010. The increase was primarily due to legal, accounting and consulting costs to execute our merger with Los Gatos Ltd., to raise additional equity financing and to prepare for our initial public offering. In addition, compensation and benefit costs increased due to our acquisition of the Sunshine Mine in May 2010 and our establishment of a corporate office in Denver.

• Other expense decreased $457 primarily due to a reduction in interest expense to $198 for the six months ended June 30, 2011 from $736 for the six months ended June 30, 2010, partially offset by an increase in foreign exchange loss of $81 for the six months ended June 30, 2011 compared to the same period in 2010. The reduction in interest expense is due to the conversion of all of our $31,000 of related-party indebtedness in January 2011 to shareholders’ equity. The increase in foreign exchange loss is due to a higher average exchange rate of the Mexican Peso to the U.S. dollar and our net Mexican Peso monetary liability for the six months ended June 30, 2011 compared to the six months ended June 30, 2010.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

For the year ended December 31, 2010, we experienced a consolidated net loss of $24,538 compared to a consolidated net loss of $11,186 for the year ended December 31, 2009. The $13,352 increase in consolidated net loss is primarily due to increases in exploration, care and maintenance, general and administrative, and interest expense following the May 2010 acquisition of the Sunshine Mine. These increases were partially offset by increases in interest and other income and by reduced foreign exchange losses. The primary reasons for the fluctuations are as follows:

• Exploration expense increased $4,882 to $14,653 in 2010 compared to $9,771 in 2009 primarily due to an increase in the number of exploration drills in operation at the Los Gatos Project in 2010, the expansion of the known mineralization to three veins through the additional drilling of 92 holes at the Los Gatos Project, and the retention of additional employees and consultants required to support the increased exploration at the Los Gatos Project. At the Sunshine Mine, $207 in exploration costs were also incurred in 2010 compared to nil in 2009.

• Care and maintenance expense was $2,534 in 2010 compared to nil in 2009, specifically due to the May 2010 acquisition of the Sunshine Mine, which has been in a care and maintenance stage since that date.

• General and administrative expense increased $4,672 to $5,490 in 2010 compared to $818 in 2009 primarily due to increased activities of $508 in Mexico and $3,936 of general and administrative expense related to the Sunshine Mine. The 2010 costs principally include $2,106 for legal and due diligence costs related to the acquisition of the Sunshine Mine, $814 for consulting and legal costs, $611 related to advisory and shared service costs and expenses charged by Tigris Financial Group Limited, a related-party, and compensation and benefits costs of $170. In addition, $235 of general and administrative costs were incurred at the Sunshine Mine in 2010 primarily related to other administrative costs.

• Interest expense increased $1,527 to $1,887 in 2010 compared to $360 in 2009 primarily due to higher indebtedness levels and associated interest rates. As of December 31, 2010, total indebtedness was $31,000 as compared to $15,990 as of December 31, 2009.

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• Foreign exchange losses decreased $210 to $40 in 2010 compared to $250 in 2009 primarily due to the lower average exchange rate of the Mexican Peso to the U.S. dollar in 2010 compared to 2009.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

For the year ended December 31, 2009, we experienced a consolidated net loss of $11,186 compared to a consolidated net loss of $3,157 for the year ended December 31, 2008. The $8,029 increase in consolidated net loss is primarily due to increases in exploration, general and administrative and interest expense, and increases in foreign exchange losses. The primary reasons for the fluctuations are as follows:

• Exploration expense increased $7,053 to $9,771 in 2009 compared to $2,718 in 2008. In 2009, we placed additional exploration drills into operation at the Los Gatos Project, resulting in the further drilling of 58 holes. Also during 2009, headcount increased with respect to drilling employees and consultants to accommodate the additional core handling and sampling. In 2008, only one exploration drill was exploring in the Los Gatos region and it only drilled eight holes.

• General and administrative expense increased $403 to $818 in 2009 compared to $415 in 2008 due to additional employees and consultants required to support the increased exploration activities during 2009 and an increase of $225 for advisory costs charged by Tigris Financial (International) L.P., a related-party, under the services agreement.

• Interest expense increased $281 to $360 in 2009 compared to $79 in 2008 due to higher indebtedness and associated interest rates. As of December 31, 2009, total indebtedness was $15,990 as compared to $4,298 as of December 31, 2008.

• Foreign exchange loss increased $297 to $250 in 2009 compared to foreign exchange gain of $47 in 2008 primarily due to the higher average exchange rate of the Mexican Peso to the U.S. dollar in 2009 compared to 2008.

Liquidity and Capital Resources

As of June 30, 2011, we had cash and cash equivalents of $153,161 and working capital of $152,917 compared to cash and cash equivalents of $3,636 and working capital of $4,485 as of December 31, 2010. The significant increase in cash and cash equivalents was primarily due to proceeds from sales of common stock to investors of $163,733, stock option exercise proceeds of $2,056 and proceeds from capital contributions of $1,000, during the six months ended June 30, 2011.

As of June 30, 2011, December 31, 2010 and December 31, 2009, our related-party debt was nil, $31,000, and $15,990, respectively. Subsequent to December 31, 2010, all of the $31,000 of related-party debt was converted into preferred shares of Los Gatos Ltd. Pursuant to our merger with Los Gatos Ltd., all Los Gatos Ltd. ordinary and preferred shares were converted into shares of our common stock. We have no lines of credit or other bank financing arrangements and do not anticipate additional future funding from related parties.

Substantially all of our source of funds to date has been proceeds from financing activities. From inception through June 30, 2011, we have received net proceeds of $238,063 from these financing activities.

We believe that the anticipated net proceeds from this offering and our existing cash and cash equivalents will provide adequate funds for ongoing operations, planned capital expenditures and working capital requirements for at least the next      months. However, we may elect to seek additional funding prior to that time. We expect that we will require additional funds at a later date to bring the Sunshine Mine into sustained commercial operation and develop a mine at the Los Gatos Project, which, depending upon the circumstances, may be in the form of equity, debt or a combination of equity and debt. There can be no assurance that additional funds will be available to us on acceptable terms or at all.

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Cash Flows

The following table presents our sources and uses of cash for the periods indicated:

	Year Ended December 31,									Six Months Ended June 30,
	2010			2009			2008			2011			2010
										(unaudited)
Net cash provided by (used in)
Operating activities	$	(21,479	)	$	(10,876	)	$	(2,866	)	$	(15,777	)	$	(7,698	)
Investing activities		(30,856	)		(31	)		(4	)		(1,471	)		(29,193	)
Financing activities		54,592			11,885			3,250			166,773			37,924
Total change in cash	$	2,257		$	978		$	380		$	149,525		$	1,033

Cash used in operating activities was $15,777 and $7,698 for the six months ended June 30, 2011 and 2010, respectively. The increase in cash used in operating activities is primarily due to a net loss of $18,040 for the six months ended June 30, 2011, compared to a net loss of $10,825 for the six months ended June 30, 2010. This increase in net loss was partially offset by increases in accounts payable and other accrued liabilities of $1,351 and a reduction in non-trade receivables of $218. Cash used in operating activities was $21,479, $10,876 and $2,866 for the years ended December 31, 2010, 2009 and 2008, respectively. The increase between 2010, 2009 and 2008 was primarily attributed to increased net losses and changes in working capital.

Cash used in investing activities was $1,471 and $29,193 for the six months ended June 30, 2011 and 2010, respectively. This decrease is primarily due to our purchase of the Sunshine Mine during the six months ended June 30, 2010. Cash used in investing activities was $30,856, $31 and $4 for the years ended December 31, 2010, 2009 and 2008, respectively. The increase from 2008 to 2009 is related to additional property, plant and equipment purchases. The increase in 2009 to 2010 is attributable to our purchase of the Sunshine Mine in 2010 for $29,250 and $1,580 of property, plant and equipment purchases during 2010.

Cash provided by financing activities was $166,773 and $37,924 for the six months ended June 30, 2011 and 2010, respectively. The increase is due to sales of common stock and capital contributions of $165,789 and $1,000, respectively, during the six months ended June 30, 2011 compared to $29,810 of capital contributions and $8,000 related-party debt during the six months ended June 30, 2010. Cash provided by financing activities was $54,592, $11,885 and $3,250 for the years ended December 31, 2010, 2009 and 2008, respectively. These increases were the result of capital contributions of $35,978 and related-party debt funding of $18,500 in 2010, and $11,885 and $3,250 of related-party debt funding in 2009 and 2008, respectively.

Cash dividends are not expected to be paid in the foreseeable future. See “Dividend Policy.”

Contractual Obligations

As of December 31, 2010, we had the following contractual obligations:

	Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Reclamation and remediation obligations	$	1,836	$	—	$	—	$	—	$	1,836
Advance royalty payments(1)(2)(3)		21,312		237		1,049		5,164		14,862
Total	$	23,148	$	237	$	1,049	$	5,164	$	16,698

(1) Does not contain product and sale royalty payments. See “—Royalties.’’

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(2) The lease from Metropolitan Mines Corporation relating to certain mining claims at the Sunshine Mine property requires monthly payments of $1 until ore is produced from the Metropolitan property. This obligation has not been included in the table above as the time for commencing production is unknown.

(3) The San Jose de Minas Finder’s Fee Agreement requires an annual payment of 5% of the exploration costs incurred by us on the concession covered by this agreement, limited to a maximum payment of $100. This obligation has not been included in the table above as the amount of future exploration costs is unknown.

Off Balance Sheet Arrangements

Other than the advanced royalty payments included in “—Contractual Obligations” above, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Critical Accounting Policies

Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability or expense that is being reported.

Mineral Properties and Carrying Value of Long-Lived Assets

Mineral property acquisition costs are recorded at cost and are deferred until the viability of the property is determined. Exploration, mineral property evaluation, option payments, related acquisition costs for mineral properties acquired under option agreements, general overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. When proven and probable reserves are determined for a property, subsequent development costs on the property are capitalized. If a project were to be put into production, capitalized development costs would be depleted on the units of production basis determined by the proven and probable reserves for that project.

We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on estimated quantities of recoverable minerals, expected silver and other commodity prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. No impairment tests have been required since our acquisition of the Sunshine Mine in 2010.

Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other than proven and probable reserves and other material that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of silver or other commodities that will be obtained after taking into account losses during ore processing and treatment and ultimate sale. Estimates of recoverable minerals from such exploration stage mineral interests are risk-adjusted based on management’s relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups.

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Various factors could impact our ability to achieve our forecasted production schedules from proven and probable reserves. Additionally, production, capital and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material could ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.

Reclamation Obligations

Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. Reclamation obligations are based on when the spending for an existing environmental disturbance will occur. We review, on at least an annual basis, the reclamation obligation at the Sunshine Mine site in accordance with guidance for accounting for asset retirement obligations.

Accounting for reclamation obligations requires management to make estimates unique to the Sunshine Mine of the future costs we will incur to complete the reclamation work required to comply with existing laws and regulations. Actual costs incurred in future periods could differ from amounts estimated. Additionally, future changes to environmental laws and regulations could increase the extent of reclamation work required. Any such increases in future costs could materially impact the amounts charged to earnings for reclamation.

Income and Mining Taxes

We recognize the expected future tax benefit from deferred tax assets when the tax benefit is considered to be more likely than not of being realized. Assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecasted cash flows and the application of existing tax laws in the United States and Mexico. Refer above to “—Mineral Properties and Carrying Value of Long-Lived Assets” for a discussion of the factors that could cause future cash flows to differ from estimates. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize deferred tax assets recorded at the balance sheet date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which we operate could limit our ability to obtain the future tax benefits represented by our deferred tax assets recorded at the reporting date.

Our properties involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and Mexico tax audits. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues, if any, in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If an estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Stock-Based Compensation

Our stock based compensation includes both stock options granted to employees and stock sold to or given to related parties (including their employees) and vendors.

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The following table sets forth information for our option grants from January 1, 2010 through June 30, 2011:

Grant Date	Options Granted		Exercise Price		Fair Value Per Share
2010		—		—		—
2011(1)(2)(3)		163,600		13.83 - 27.65		13.83

(1) We granted 38,600 options on March 9, 2011 with an exercise price of $13.83.

(2) We granted 125,000 options on May 4, 2011 with an exercise price of $27.65.

(3) We granted 100,000 and 150,000 options on July 18, 2011 and August 8, 2011, respectively, with an exercise price of $27.65.

In addition, on June 30, 2010, Los Gatos Ltd. issued 174,949 ordinary shares (valued at $0.20 per share) for an aggregate of $2 to an employee of a related entity.

Significant Factors, Assumptions and Methodologies used in Determining Fair Value of Options

Stock-based compensation expense for options is based on the estimated fair value for each award on the grant date. We calculate the grant date fair value based on an option pricing model using estimated amounts for risk-free interest rate, dividend yield, estimated volatility of our common stock, the expected life of the awards and the fair value of the underlying common stock. In addition to the assumptions used to calculate the fair value of the options, we are required to estimate the expected forfeiture rate of the option awards, and only recognize stock-based compensation expense for those option awards expected to vest. We recognize stock-based compensation expense as a component of either exploration or general and administrative expense on a straight-line basis over the requisite service period of the award.

We calculated the fair value of options granted during the six months ended June 30, 2011 using the following assumptions:

	March 9,  2011 Grant			May 4,  2011 Grant
	(unaudited)
Risk-free interest rate		2.46	%		2.28	%
Dividend Yield		—			—
Estimated volatility		87.23	%		90.06	%
Expected option life		6 years			6 years
Fair value of common stock	$	13.83		$	13.83

The risk-free interest rate assumption was based on the U.S. treasury constant maturity yield at the date of the grant over the expected life of the option. No dividends are expected to be paid. We calculated the estimated volatility based on the historical volatility of a group of peer companies’ common stock over the expected option life. The peer information was used because we were not publicly traded at the time of the grant, and therefore did not have the market trading history required to calculate a meaningful volatility factor. The computation of expected option life was determined based on a reasonable expectation of the option life prior to the option being exercised or forfeited.

We estimated a forfeiture rate of zero based upon our expectation of forfeiture for these grants.

[We are still evaluating the fair value of the common stock underlying the July and August option grants of 100,000 and 150,000 options, respectively.] We intended that the exercise price for the options granted in May, July and August 2011 would be well in excess of the underlying value of our common stock as the options are intended to be incentive in nature.

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As of June 30, 2011, there were approximately $1,398 of unrecognized stock-based compensation expense related to non-vested stock option awards that we expect to recognize over a weighted average vesting period of 2.6 years.

Assuming an initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, the intrinsic value of stock options outstanding at June 30, 2011, after giving effect to the 125,000 options to be granted to our Executive Chairman and Chief Executive Officer upon the consummation of this offering, was $            , of which $             related to options that were vested and $             related to options that were unvested. See “Compensation Discussion and Analysis—Grants of Plan-Based Awards.”

Common Stock Valuation

We estimated the fair value of our common stock in March and May 2011 based on a market value approach of our common stock. During March 2011, an unrelated party purchased 15% of our common stock for $13.83 per share. Subsequent to this purchase through June 30, 2011, investors purchased approximately 6% of our common stock for $13.83. Accordingly, based on this market data, a fair value of $13.83 per share of common stock was used in valuing the options granted in March and May 2011.

Los Gatos Ltd. Ordinary Share Valuation

Stock based compensation for stock sold to or given to related parties (including their employees) and vendors has been recorded at the fair value of the shares in excess of the price paid for the stock. For the 174,949 ordinary shares sold in 2010, the fair value of the ordinary shares was determined by our Board of Directors with the assistance of management. We utilized the guidance set forth by the American Institute of Certified Public Accountants, or the AICPA, in the AICPA Technical Practice Aid when establishing the fair value of the ordinary shares at the purchase date.

The 2010 ordinary share valuation (which also required valuing the outstanding Los Gatos Ltd. preferred shares) was based on an enterprise value and option pricing model. As an active market for our Los Gatos Ltd. shares did not exist, our analysis was based on estimates of the enterprise value discussed below attributable to the ordinary shares of Los Gatos Ltd. From guidance in the AICPA Technical Practice Aid, we selected an option pricing model that treated Los Gatos Ltd.’s ordinary and preferred shares as call options on the enterprise value, with the exercise price based on the liquidation preference of the preferred shares. Given the liquidation preference of the preferred shareholders, in some cases a majority of the enterprise value was attributed to the preferred shares in the option pricing model. We calculated an estimate of share price volatility based on a sample of comparable company volatilities since Los Gatos Ltd. shares were not actively traded. Additionally, our option pricing model included discount factors of 35% and 20% for lack of marketability and control by a single shareholder, respectively. Based on the assumptions used and the model described above, a value of $0.20 per share was allocated to the ordinary shares granted to an employee of a related entity on June 30, 2010. To estimate the enterprise value, we used the following information:

• No offers to sell or solicitations to purchase any portion of Los Gatos Ltd.’s assets or shares occurred from the period January 1, 2010 to June 30, 2010.

• A valuation of the assets (exploration properties) held by Los Gatos Ltd. by reference to comparable sales of exploration property and the likelihood of exploration success at our Los Gatos Ltd. properties. Our valuation compiled information on transactions recently completed by companies listed on various stock exchanges and having precious-metals exploration properties in similar geographic areas and political jurisdictions; specifically Mexico. From the review of numerous transactions, a number of appropriate transactions were selected for analysis to establish a range of values for the subject properties as of June 30, 2010. The likelihood of success was determined based upon the activities performed on the various exploration concessions held by Los Gatos Ltd.

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• We obtained information on several underground silver-dominated, vein resources/deposits in Mexico that were either in production or the infrastructure was in construction. We estimated a value per silver equivalent ounce for each resource/deposit, where possible.

In addition, we considered the following subsequent events in support of our valuation:

• A proposed transaction (with an unrelated party that was never consummated) to acquire a portion of Los Gatos Ltd.

• The discussions and negotiations with Liberty Metals and Mining, an unrelated party, that ultimately purchased 15% of Sunshine Silver Mines Corporation in March 2011.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see note 2(o) to the December 31, 2010 consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

We intend to engage in the production of silver and concentrates containing silver, lead, zinc and antimony at the Sunshine Mine and the Los Gatos Project. Accordingly, we expect the principal source of future revenue to be the sale of silver, and to a lesser extent, lead and zinc. A significant and sustained decrease in the price of these metals from current levels could have a material and negative impact on our business, financial condition and results of operations.

Foreign Currency Risk

Although most of our expenditures are in U.S. dollars, certain purchases of labor, operating supplies and capital assets are denominated in other currencies, primarily the Mexican Peso. As a result, currency exchange fluctuations may impact the costs of our operations. To reduce this risk, we maintain limited cash balances in foreign currencies and transact most of our purchases in U.S. dollars.

Concentration of Risk

We have placed nearly all of our cash investments with a single, high-quality financial institution. All cash equivalents are invested in high-quality, short-term money market instruments, including government securities, bankers’ acceptances, bank notes, certificates of deposit, commercial paper and repurchase agreements of domestic and foreign issuers. At no time have we had funds invested in asset-backed commercial paper. We have not experienced any losses on our cash investments.

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SILVER INDUSTRY OVERVIEW

The Silver Market

Silver is one of the eight precious, or noble, metals; the others are gold and the six platinum-group metals. Silver occurs naturally in its solid metallic state and is commonly associated with deposits of gold, copper, lead and zinc.

As an industrial and monetary asset, silver has a dual personality that differentiates it from other precious metals. On the one hand, silver has a number of distinctive physical and chemical properties that makes it an essential component in several industrial applications, including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to and high reflectance of light, and its ability to endure extreme temperature ranges. These properties restrict its substitution in most applications.

On the other hand, silver has been used as a medium of exchange since earliest recorded history. From the time of the Roman Empire until the 19^th century, most nations were on a silver standard with silver coins forming the main circulating currency. While silver is no longer widely used as circulating currency, the metal is still widely sought by investors for its store of value attributes. In particular, silver is viewed as an attractive hedge against a decrease in the value of the U.S. dollar and inflation during times of economic uncertainty.

Silver Demand

Silver has strong supply and demand fundamentals with significant demand rooted in diverse sectors. The demand for silver is driven primarily by three uses: industrial, consumer and investment. According to GFMS, in 2010, industrial, consumer and investment represented 46.1%, 37.0% and 16.8% of silver demand, respectively.

Industrial and consumer demand for silver, which is in the form of manufactured end-products, increased across all major end uses in 2010, with the exception of photography and silverware, primarily due to strong gross domestic product gains in emerging markets and the industrialized world’s improving economic outlook. According to GFMS, total global demand for these two uses grew by 12.8% in 2010, to a 10 year high of 878.8 million ounces. This increase was led by the industrial demand category, which, according to GFMS, rose by 20.7% to 487.4 million ounces in 2010.

With rapid population and income growth, surging demand for consumer electronics and a burgeoning housing market, China is the largest global silver marketplace fueling industrial and consumer demand for silver. According to GFMS, silver industrial and consumer demand in China is estimated to have risen from 50.8 million ounces in 2001 to 127.2 million ounces in 2010, an increase of 150.4%.

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The graph below denotes global silver demand from 2001 to 2010:

Global Silver Demand

Source: GFMS, World Survey 2011

Industrial Demand

Traditional industrial applications of silver include batteries, bearings, brazing and soldering, catalysts and electronics. In addition to traditional industrial uses, increases in emerging applications for silver are expected to continue to augment industrial demand. Emerging applications include utilizing silver’s reflectivity as a component in solar cells to produce “green” electricity and utilizing silver’s antimicrobial properties in medical applications and in the prevention of algae build-up in water purification systems.

According to GFMS, between 2009 and 2010, industrial demand for silver rose by 20.7%, to 487.4 million ounces. A major source of the increase in industrial demand for silver in 2010 was the electrical and electronics sector. Silver’s electrical and thermal conductive properties make it ideal for multiple high performance electronics and high voltage circuits, connectors and other electrical components, which are all integral parts of electronics. Such uses include switches, contacts, fuses, superconductors and printed circuit boards, which are contained in computers, mobile phones and other smart technologies. According to GFMS, silver demand from the electrical and electronics sector reached 242.9 million ounces in 2010, the highest level on record, up 30.9% from 2009.

Accelerated growth in the solar panel market also contributed to the rise in silver industrial demand in 2010. Silver is used both as a conductor in solar cells and as a reflector in mirrors used to concentrate solar energy. Demand for silver from the solar panel industry surged in 2010, up 70% over 2009 levels, to approximately 50 million ounces according to GFMS.

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Consumer Demand

Consumer use of silver is primarily for the fabrication of jewelry, silverware and coins, which rely on silver’s lustre, resistance to tarnishing and malleability. According to GFMS, the jewelry sector accounted for 15.8% of total demand for silver in 2010, followed by coins and medals with 9.6% of total demand and silverware with 4.8% of total demand. For these uses silver is often alloyed to a small proportion of other metals, such as copper, to harden it. Sterling silver, for example, is 92.5% silver and 7.5% copper and has been the standard in many countries for silver jewelry since the 14th century.

Historically, photographic uses represented silver’s second largest source of demand, after industrial applications. However, photographic off-take has been on a steady decline since 2001, driven by the move from silver halide to digital technology, especially in the area of consumer film. In 2010, photographic uses accounted for 6.9% of total silver demand, according to GFMS.

According to GFMS, between 2009 and 2010, consumer demand for silver rose by 4.2%, to 391.3 million ounces. A major source of the increase in consumer demand for silver in 2010 was the increase in demand for silver coins and medals. The fabrication of coins and medals has increased gradually for much of the past decade, but growth has accelerated since the onset of the financial crisis in 2008. According to GFMS, silver demand for coins and medals in 2010 increased 28.2% from 2009, to 101.3 million ounces.

Investment Demand

Silver has been a store of monetary value for over 4,000 years. Historically, the price of silver has shown at times a high correlation to the price of gold as a result of investment demand, and has been at times viewed as an attractive hedge against a decrease in the value of the U.S. dollar and inflation, attracting investors during times of uncertainty.

Investment demand for silver has increased significantly in the past 10 years, with the most significant investment demand coming from investment products such as bullion funds and silver ETFs. In 2010, net investment in silver rose to 178.0 million ounces, representing 16.8% of silver demand, up 47.5% from 2009 levels, according to GFMS. Macro-developments such as concerns regarding the sovereign debt crisis in Europe, political problems worldwide, high unemployment in developed countries and rising inflation in developing countries were all factors that attracted investors to silver in 2010.

Silver Supply

Silver supply comes from two principal sources, namely mine production and scrap supply. In 2010, according to GFMS, mine production comprised 69.6% of total silver supply while scrap silver constituted 20.3% of total silver supply.

According to GFMS, only 30.4% of mined silver is produced at mining operations where silver is the primary metal mined. The remaining 69.6% of silver mined is extracted in zinc, copper and gold mines. As a result, silver supply is relatively inelastic and tends to lag demand during periods of strong growth. According to GFMS, silver mine production grew 2.5% in 2010 versus total demand growth of 14.6%.

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Mexico was the world’s largest silver mining country in 2010 (128.6 million ounces), followed by Peru (116.1 million ounces), China (99.2 million ounces), Australia (59.9 million ounces) and Chile (41.0 million ounces). The graph below illustrates the world’s leading primary silver mines in 2010, based on their production:

World’s Leading Primary Silver Mines, 2010

Source: GFMS, World Survey 2011

Markets and Outlook

Over the last twenty five years, the price of silver, which proved relatively volatile in that timeframe, increased 571.6%. The price of silver averaged approximately $4.71 per ounce from 2000 through the end of 2003. Beginning in 2004, the price of silver began to appreciate, reaching a high of $48.44 per ounce in 2011.

Rising silver prices have boosted investor interest in the metal and led to a significant increase in silver’s investor base. The silver market expanded significantly in both volume and value in 2010, as prices increased over 83% between January 1, 2010 and December 31, 2010. Trading volumes at futures and options exchanges increased significantly and the dollar value of silver flows among market participants nearly doubled from 2009 levels. According to GFMS, a steep rally in the price of silver in 2010 was also assisted by the increase in industrial and consumer demand for silver in 2010.

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A chart indicating silver prices between January 1, 1986 and August 8, 2011 is set out below. As of August 8, 2011, the price of silver was $39.02 per ounce.

Historical Silver Price

Source: Bloomberg

The following chart shows the comparative return of an investment in silver versus certain other investments.

Comparative Returns to August 8, 2011

	1 Year			5 Year			10 Year			20 Year			25 Year
Silver		112.8	%		212.2	%		822.5	%		885.4	%		610.7	%
Gold		43.1	%		164.5	%		527.2	%		380.0	%		366.3	%
Oil		28.1	%		33.5	%		309.3	%		426.5	%		724.4	%
S&P 500		(0.7	%)		(11.6	%)		(5.4	%)		189.2	%		372.6	%
FTSE		(6.3	%)		(13.5	%)		(6.2	%)		97.2	%		232.0	%
Nikkei		(5.0	%)		(41.9	%)		(22.6	%)		(61.2	%)		(47.8	%)
MSCI World Index		(2.2	%)		(14.6	%)		7.9	%		124.8	%		241.0	%
$/EUR		7.2	%		10.2	%		58.9	%		—			—
13 Week T-Bill		0.1	%		1.6	%		1.9	%		3.3	%		4.0	%
10 Year Bond		3.0	%		3.7	%		4.0	%		5.1	%		5.8	%
30 Year Bond		4.2	%		4.4	%		4.7	%		5.6	%		6.2	%

Notes: T-bills and T-bonds are average rates of return

Source: Bloomberg

In the short- to mid-term, GFMS believes that the economic backdrop for investment in silver will remain supportive as monetary policy is unlikely to significantly tighten in 2011 with ongoing economic, inflation and sovereign debt concerns. This is expected to encourage investment demand for silver and enhance industrial and consumer demand.

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BUSINESS

The Company

Sunshine Silver Mines Corporation is a U.S.-based precious metals exploration and development company with the objective of becoming a premier silver producer. The Company is currently focused on the advancement of its two principal projects: (i) the Sunshine Mine in Idaho, one of the highest-grade known remaining primary-silver discoveries worldwide, which is estimated to have produced a total of over 365 million ounces of silver, and (ii) the Los Gatos Project in Chihuahua, Mexico, where the Company holds a 81,651 hectare land position, constituting a new mining region. The Company has completed independent technical studies on both projects, which were prepared in accordance with NI 43-101 and, in the case of the Sunshine Mine, which has mineralized material, the requirements of Industry Guide 7. In total, as of the date of this prospectus, the Company owns or controls a portfolio of 20 exploration properties in the United States and Mexico covering an area of approximately 449,550 hectares.

Charts of the Company’s corporate structure before and after this offering are set forth below.

* Immaterial corporate subsidiaries excluded. The after offering corporate structure chart assumes no exercise of the over-allotment option. See “Principal Stockholders.”

Principal Projects

The Sunshine Mine, acquired by the Company in the first half of 2010, is located within the Coeur d’Alene Mining District in Idaho. It is a past-producing mine, which is estimated to have produced a total of over 365 million ounces of silver from 1904 to 2008. In 1990, the last year the Sunshine Mine operated at full capacity, silver production from the Sunshine Mine was approximately 5.4 million ounces. In 2008, Sterling, the prior owner of the Sunshine Mine, ceased production and in early 2009 went into bankruptcy due to, we believe, among other factors, falling silver prices and inadequate capital.

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The Sunshine Mine has significant existing on-site infrastructure, including a primary shaft, which is operational and being upgraded and refurbished, and a secondary shaft, which is being refurbished. The Company’s consolidated land position at the Sunshine Mine property currently consists of approximately 2,408 hectares. The property has an abundant water supply, is connected to the electricity grid and is accessible by paved roads.

The Los Gatos Project is located approximately 128 kilometers south of the state capital of Chihuahua City, in Northern Mexico and consists of two identified silver discoveries, the Cerro Los Gatos zone and the Esther zone, and 14 other priority targets with over 100 kilometers of outcropping quartz and calcite veins. The area is characterized by a predominant silver-lead-zinc mineralization.

Business Strengths and Competitive Advantages

Attractive Assets in Two of the World’s Premier Silver Regions

Sunshine Silver’s principal assets are located in two of the world’s premier silver regions. The Sunshine Mine property is located in the Coeur d’Alene Mining District in Idaho, which district is estimated to have produced over one billion ounces of silver over the Mine’s 107-year history, and the Los Gatos Project is located in the Mexican Silver Belt, the world’s largest silver producing region in 2010. In addition to being located in premier silver regions, both assets possess characteristics that differentiate them from other silver projects:

Sunshine Mine Property

• A prolific past-producing mine, once one of the largest silver producers in the United States, which is estimated to have produced a total of over 365 million ounces of silver

• One of the highest-grade known remaining primary-silver discoveries worldwide, estimated to contain 1,991,169 tons of mineralized material at an average silver grade of 21.2 ounces per ton

• Consolidated land position of approximately 2,408 hectares

• Significant existing infrastructure, including a primary shaft that is operational and being upgraded and refurbished, and a secondary shaft that is being refurbished and access to roads, power and water

• Strong community support coupled with an experienced and skilled workforce

Los Gatos Project

• Control over an emerging silver region; land position of 81,651 hectares

• The identified Cerro Los Gatos and Esther zones, high-grade mineralization occurrences that currently extend more than 2,500 meters along strike, remain open at depth and to the southeast

• Widespread mineralization beyond the Cerro Los Gatos and Esther zones, with 14 other priority targets

Reduced Operating Risks at Sunshine Mine Given Historical Production

Sunshine Silver believes that the significant historical production at the Sunshine Mine, combined with the recent and planned mine improvements, reduces the risk of the project relative to other silver development projects. However, significant time and capital will be required before the Sunshine Mine returns to production and the Company anticipates that it will continue to incur operating costs without realizing any revenues at the Sunshine Mine for the foreseeable future.

The Sunshine Mine covers 171 hectares of surface rights, and the Company estimates that the Mine contains more than 160 kilometers of underground workings. The underground workings consist of multiple levels developed off the main production shaft, extending from the surface to a depth of over 1,825 meters.

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Since acquiring the Sunshine Mine, the Company has acquired additional surface rights and improved the existing infrastructure, repaired surface facilities and equipment and completed a number of environmental, health and safety upgrades. The Company has added experienced and highly-trained professionals to lead such improvements.

Significant Exploration Potential for Additional Silver Resources

Sunshine Silver believes it has numerous opportunities to define additional mineral resources through continued exploration of its properties:

• Sunshine Mine: Sunshine Silver has rights to approximately 2,408 hectares of exploration ground at the Sunshine Mine property. The property has numerous well-defined exploration targets, many of which are extensions of past-producing silver veins. In addition, Sunshine Silver has acquired additional surface rights to further consolidate its ownership of this mineralized trend. Despite being a prolific silver producing region, Sunshine Silver believes that the Coeur d’Alene Mining District is still highly under explored.

• Los Gatos Project: Sunshine Silver expects to expand the Cerro Los Gatos and the Esther zones, which remain open to extensions. Sunshine Silver also has identified 14 other priority targets.

• Other opportunities: Sunshine Silver owns 18 other exploration properties in Mexico, which could provide additional opportunities for resource growth.

Politically Stable and Mining-Friendly Jurisdictions

Both Idaho and Mexico are jurisdictions with a long history of successful mineral development and operations. Both are considered desirable jurisdictions in which to conduct mining operations due to stable political, tax and regulatory policies. Based on a survey published in March 2011 by the Fraser Institute, an independent research organization, Idaho and Mexico rank among the top silver mining jurisdictions worldwide in terms of the attractiveness of government policies, access to infrastructure and qualified labor availability.

Attractive Market Dynamics

Investment demand for silver exposure remains strong, driven in part by continued U.S. dollar weakness, ongoing economic uncertainty in Europe and political unrest in the Middle East. Historically, silver has been viewed as an effective hedge against a decrease in the value of the U.S. dollar and inflation, attracting investors during times of uncertainty. In addition, industrial demand for silver continues to increase, driven by new emerging applications for silver such as solar energy, medical applications and water purification, which the Company believes will enhance the strong supply and demand fundamentals of silver.

Despite this strong investment and industrial demand, the universe of primary silver companies is small, which limits investor options for silver exposure. Sunshine Silver represents an opportunity for investors to gain exposure to a primary silver company with two attractive assets.

Experienced Management Team and Board

Sunshine Silver has an experienced and growing management team with a track record of successfully identifying and developing mineral discoveries. The Company’s Executive Chairman & Chief Executive Officer, Stephen Orr, has 34 years of experience in the minerals industry principally with Homestake Mining Company, where he ultimately served as President of Homestake Canada Inc.; Barrick Gold Corporation, where he was Managing Director of Australia & Africa operations; OceanaGold Limited, where he served as Chief Executive Officer; and Ventana Gold Corp., where he was President & Chief Executive Officer. The Company’s Chief Financial Officer, Roger Johnson, has 32 years of experience in financial management of the minerals industry with Coopers & Lybrand, as a public accountant; Kennecott Utah Copper Corporation, as Vice President,

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Controller; Pasminco Zinc, Inc., as Senior Vice President, Finance and Administration; and Newmont Mining Corporation, where he was Vice President, Chief Accounting Officer. The Company’s Chief Operating Officer, John Galassini, has 24 years of experience in the minerals industry with Phelps Dodge Corporation, where he ultimately served as Senior Vice President North America; Freeport McMoRan Copper & Gold, Inc., as Senior Vice President; and Kinross Gold Corporation, where he served as Regional Vice President North America.

The Board will be comprised of senior mining and financial executives who have broad domestic and international experience in mineral exploration, development and mining. The Company’s senior management and Board have in excess of 300 years of combined mining experience. Sunshine Silver believes the specialized skills and knowledge of the management team and the Board will significantly enhance Sunshine Silver’s ability to explore and develop the Sunshine Mine property and the Los Gatos Project and pursue other regional growth opportunities.

Shareholder Sponsorship

The Company and its predecessors were founded by Electrum. Electrum is a leading private equity investment firm engaged in mining exploration and development. Led by Dr. Thomas S. Kaplan, a highly-respected natural resources investor, Electrum brings together decades of combined investment and operating experience, proven execution abilities and capabilities, a broad and diverse background and a deep knowledge of the natural resources sector and mining disciplines. By maintaining a disciplined and professional approach to acquisition and value enhancement, Electrum has developed a strong track record and a multi-billion dollar asset base in the natural resource sector. Electrum holds significant stakes in public and private metals and mining companies, including NovaGold Resources Inc., Gabriel Resources Ltd., Taung Gold Limited, Tintina Resources Inc., Niocan Inc. and Sunward Resources Ltd. The Company believes that access to the specialized skills and knowledge within Electrum will significantly enhance Sunshine Silver’s ability to execute its business strategy.

Los Gatos Ltd. was founded by Electrum in April 2006. Prior to the merger of Los Gatos Ltd. with and into the Company in March 2011, Electrum principally funded the activities of Los Gatos Ltd. In addition, pursuant to a services agreement effective January 1, 2008, Tigris Financial (International) L.P. provided services consisting primarily of business and financial advice with respect to the strategic business development and corporate finance activities of Los Gatos Ltd. and its subsidiaries. This agreement was terminated on August 1, 2011. Precious Metals Opportunities LLC, our predecessor, was founded by Electrum in December 2009. Prior to the merger of Los Gatos Ltd. with and into the Company in March 2011, Electrum funded the activities of the Company. Prior to Mr. Orr and Mr. Johnson joining us in 2011, Electrum employees served as our officers and directors and were responsible for the management of all aspects of our business, including the acquisition of the Sunshine Mine and our financing activities in March through June 2011. In addition, pursuant to a services agreement, effective May 11, 2010, between Silver Opportunity Partners LLC and Tigris Financial Group, Ltd. (which has been assigned by Silver Opportunity Partners LLC to the Company), and a services agreement, effective March 1, 2011, between the Company and Tigris Financial Group, Ltd. (which was terminated on August 1, 2011), Tigris Financial Group, Ltd. has provided services to the Company and its subsidiaries, including: general business; investment, management and/or financial advice; internal bookkeeping services; general administrative services; network and communications services; supervision of outside service providers; and other services as requested from time to time. William Natbony, Chairman of Tigris Financial Group, Ltd., serves as a member of our Board of Directors.

In March 2011, Liberty Metals & Mining purchased 15% of the Company’s common stock. Liberty Metals & Mining is a wholly-owned subsidiary of Boston-headquartered, Liberty Mutual Group. As of June 30, 2011, Liberty Mutual Group had more than $72 billion of total invested assets. As a subsidiary of Liberty Mutual Group, Liberty Metals & Mining makes investments in the metals and mining sector for Liberty Mutual Group.

Prior to Liberty Metals & Mining’s purchase of the Company’s common stock, the Company had no business relationship with Liberty Metals & Mining. Diana Walters, President and Chief Executive Officer of Liberty Metals & Mining, serves as a member of our Board of Directors.

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Following completion of the offering, Electrum and Liberty Metals & Mining will beneficially own approximately     % and     % of the Company’s outstanding common stock, respectively, assuming the over-allotment option is not exercised by the underwriters, and both Electrum and Liberty Metals & Mining will continue to have a presence on the Board.

Business Strategy

Sunshine Silver’s business strategy is focused on creating value for stakeholders through the ownership and advancement of its two principal projects, the Sunshine Mine property and the Los Gatos Project, and through the pursuit of similarly attractive silver-focused projects. Sunshine Silver does not expect to enter into production or generate revenue at either the Sunshine Mine or the Los Gatos Project in the near future. The Company believes that the anticipated net proceeds from this offering and its existing cash and cash equivalents will provide adequate funds for ongoing operations, planned capital expenditures and working capital requires for at least the next             months. However, we may elect to seek added funding prior to that time.

Sunshine Silver plans to:

Continue Exploration and Development at the Sunshine Mine property to Convert Existing Mineralized Material to Reserves and Expand the Resource Base

Sunshine Silver intends to complete a pre-feasibility study at the Sunshine Mine property to determine the costs to re-commission and operate the Sunshine Mine as a sustainable and efficient silver producer. Sunshine Silver expects this study will be completed within 24 months from the completion of this offering. In addition, the Company intends to continue with its surface and underground exploration drilling program to provide sufficient sampling to estimate grade, tonnage and location of additional potentially economic veins and deposits for future production and to upgrade mineralized material to reserves.

Re-Commission the Sunshine Mine to Long-Term Sustainable Production

Sunshine Silver intends to refurbish or replace existing infrastructure at the Sunshine Mine in connection with its modernization and rehabilitation efforts and to review process optimization alternatives. The re-commissioning of the Sunshine Mine will be designed to allow the Company to reach a safe and sustainable production rate utilizing its newly optimized facilities.

Accelerate Exploration at the Los Gatos Region and Advance the Los Gatos Project

The Company plans to accelerate its exploration program at the Los Gatos region through additional drilling with the intent of identifying mineralized material. In the near term, the Company also intends to progress the most advanced exploration sites, the Cerro Los Gatos and Esther zones, through to pre-feasibility study.

Conduct Further Exploration at Sunshine Silver’s Mexican Properties outside the Los Gatos Region and Apply for Additional Exploration Acreage

Sunshine Silver plans to expand its exploration programs at its Mexican properties outside the Los Gatos region and continue to grow its land position. The Company owns or controls a portfolio of 18 other exploration properties in Mexico covering an area of 361,882 hectares, with significant additional hectares under application for mineral concession. There are two projects underway with significant drill results, El Doctor in Oaxaca and Zaragoza in Chihuahua. Additional drilling is planned at both of these projects as well as additional targets through 2012. The Company is planning sufficient drilling in an effort to outline continuous geometry of mineralization at El Doctor and Zaragoza, which could lead to initial estimates of mineralized material.

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Identify and Pursue Other Growth Opportunities that Add Value to Stockholders

Given the management and Board’s strong track record in exploration, development and asset integration, the Company may pursue acquisitions and joint ventures that are value accretive to its stockholders through the pursuit of similarly attractive silver-focused projects.

The Sunshine Mine Property

The technical information appearing below concerning the Sunshine Mine property, including estimates of mineralized material, was derived from the reports of Behre Dolbear & Company, independent mining consultants.

Location of the Sunshine Mine Property

The Sunshine Mine property is located within the Coeur d’Alene Mining District in Northern Idaho. Most of the district’s production has come from within a 24.1 kilometer-long band from the Bunker Hill mine to the Galena mine. The Sunshine Mine is approximately in the center of the Bunker Hill and Galena Mine belt. The Sunshine Mine property includes both owned and leased properties containing 187 patented mining claims and 200 unpatented mining claims, for a mineral rights position of approximately 2,408 hectares and 171 hectares of surface rights.

The Sunshine Mine property is approximately 71 kilometers east of Coeur d’Alene along U.S. Interstate 90. The Jewell Shaft, the mine’s main shaft, is located in the Big Creek Valley at Latitude 47°, 30’, 6” North, Longitude 116°, 4’, 10” West, near the base of a steep hill that lies to the east. The Mine’s infrastructure is located in proximity to the Jewell shaft. Access to the Sunshine Mine property from Coeur d’Alene is by I-90 east to the Big Creek turnoff and then south on about 4.0 kilometers of secondary paved road to the Mine site. The nearest town is Kellogg, Idaho, which is about 7.2 kilometers from the Mine.

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Ownership and Properties

In May 2010, the Company acquired from Sterling, through Sterling’s bankruptcy proceedings, the majority of the operating facilities and equipment at the Sunshine Mine, including a lease on the Sunshine Mine that included a purchase option for title to the Mine. In July 2010, the Company closed the purchase option in the lease to obtain title to the Sunshine Mine and acquired the remaining operating facilities and equipment.

The Sunshine Mine property also includes the Metropolitan, Chester, Bismark and Mineral Mountain properties that are leased by the Company.

The following table sets out the various property rights that comprise the Sunshine Mine property:

Property	Owner	Patent Claims		Unpatented Claims		Hectares
Sunshine	Sunshine Silver		165		118		1,746
Metropolitan	Metropolitan Mines Corporation		2		70		413
CAMP Project	Sunshine Silver (below 274 meters below sea level)		20		12		163
Chester	Chester Mining Company		6		0		43
Bismark	Chester Mining Company		3		0		25
Mineral Mountain	Mineral Mountain Mining and Milling Company		4		0		18
Total			200		200		2,408

Sunshine and CAMP Project

The Company owns 185 patented and 130 unpatented mining claims covering 1,909 hectares at the Sunshine Mine property, including the CAMP Project claims below 274 meters below sea level. This property includes the Sunshine Mine and mill, the Jewell shaft, surface facilities, a tailings impoundment area and

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extensive underground workings, including shafts, levels, raises and ramp systems, extending to a depth of over 1,825 meters. The property also includes the ConSil mine and mill and related buildings and equipment. Except in this paragraph and where the context otherwise requires, when describing the Sunshine Mine property in this prospectus, we include the leases set forth below.

Metropolitan

The Metropolitan property consists of 2 patented and 70 unpatented mining claims covering 413 hectares. These claims lay immediately to the south of the primary workings of the Sunshine Mine and immediately to the west of the ConSil mine. At depth the claims intersect several veins that were historically mined from the Sunshine Mine.

Other Sunshine Properties

In addition to the Sunshine, CAMP Project and Metropolitan properties, the Company leases other claims representing 13 patented claims covering 86 hectares.

Royalties

Many parts of the Sunshine Mine property are subject to royalties that are payable to parties from whom mineral rights are leased or to others who have a right to royalties on certain areas of the property. Certain of these agreements have royalty payments that are triggered when the Company begins producing and selling metal-bearing concentrate. These royalties are based on proceeds paid by smelters less certain costs, including costs incurred to transport the concentrates to the smelters, or NSR, for ore produced in the property area subject to the royalties. All royalty payment amounts below are in thousands of dollars.

Sunshine Mine

The Company is required to pay between a 0% (at a silver price below $6 per ounce) and 7% (at a silver price of $10 per ounce or higher) NSR royalty under a settlement agreement with the U.S. government and the Coeur d’Alene Indian tribe. All funds from the royalty must be used to pay for the remediation, restoration and other actions to address certain environmental damage to the Coeur d’Alene River and other natural resources located in the Idaho Silver Valley. The area subject to the royalty covers substantially all of the Sunshine Mine property, owned or leased by the Company, and extends outward within a one mile boundary of the property as set forth in the settlement agreement, which includes the leases set forth above under “—Ownership and Properties.”

Metropolitan Mines Corporation Mining Claims

The Company’s lease with Metropolitan Mines Corporation requires the Company to pay advanced royalties of $12.0 annually until such time as ore is produced from the Metropolitan property. Upon ore production, Metropolitan Mines Corporation is to be paid either 16% or 50% of the net proceeds from the sale of materials produced from the ore processed from these claims, depending upon the location of production.

Chester Mining Company Mining Claims

The Company’s lease with Chester Mining Company, or CMC, requires the Company to pay an advance royalty of $7.2 annually until such time as an NSR royalty of 4% or royalty of 20% of net profits on ore processed is payable. The net profit royalty is in lieu of and not in addition to the advance royalty and the NSR royalty. The lease also provides CMC with the option to acquire a 20% working interest in all ores, concentrates, metals or other mineral substances produced from the property. CMC may exercise this option by releasing the Company from its obligation to pay the 20% net profits royalty and by tendering an amount of cash equal to 20% of the then-current working capital fund. The initial lease team ends in 2029 and is renewable for an additional 25 years.

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Mineral Mountain Mining Claims

The Company’s lease with Mineral Mountain Mining and Milling Company, or Mineral Mountain, requires the Company to pay a royalty of $3.6 annually or a royalty of 3% of net profits, if net profits from the ore processed from these claims exceeds such amount. The lease also provides Mineral Mountain with the option to acquire a 3% working interest in all ores, concentrates, metals or other mineral substances produced from the property. Mineral Mountain may exercise this option by releasing the Company from its obligation to pay the 3% net profits royalty and by tendering an amount of cash equal to 3% of the then-current working capital fund. The initial lease term ends in 2029 and is renewable for an additional 25 years.

Infrastructure, Climate and Topography

The Sunshine Mine property has a mild, northern-U.S. climate with snow, rain and fog in the winter. The Sunshine Mine property is tied into the regional power grid, water is abundant from Big Creek, and there are sufficient sources of manpower. Adequate waste disposal areas are present at both the Jewell and the Silver Summit shaft areas. A tailings pond is located on the property. The Company expects that the capacity of the tailings pond as currently configured will be sufficient for approximately ten years after commercial production resumes and that additional capacity may be added thereafter by increasing the height of the pond dam. Ore processing facilities are located on site and will be refurbished or replaced. The topography is typical of northern Idaho’s countryside, hilly to mountainous and forested. The primary shaft is located above the base of a very steep mountain, while the hoist room and other infrastructure facilities are located on a relatively level area of property at the mountain base. The Company is still evaluating potential smelting locations, related transportation and smelting contract terms for the Company’s future production.

Geological Setting

The Coeur d’Alene Mining District is hosted by the rocks of the Pre-Cambrian Belt super group. These sedimentary rocks were deposited approximately 1.6 billion years ago. At various times these rocks were faulted, leached, altered and re-mineralized. The Belt super group has been divided into the Prichard group, Ravalli group, Middle Carbonate group and Missoula group. Within the District, rocks of the Prichard, Ravalli, Missoula and Middle Carbonate groups can be found. The formations comprising the Ravalli group are, listed from oldest to youngest, the Burke, Revett, and Saint Regis Formations. The District has a history of intense faulting and folding of these rock formations. Two major east-west fault zones, the Osburn and Placer Creek faults, cut through the District.

Ore deposits in the District are localized in the 182.9 meter thick St. Regis Formation and the underlying upper members of the 914.4 meter thick Revett Formation. Four major west-northwest trending faults cut the Sunshine Mine property area, and some have been mapped for several kilometers. The faults dip steeply to the south. The main vein systems at the Sunshine Mine property include the Sunshine, Chester, Copper, Yankee Girl and West Chance veins. Mineralized silver veins are present within a zone approximately 3,810 meters long by 1,524 meters wide and over a vertical distance of 1,890 meters from the surface at 1,036.3 meters above sea level to 853.4 meters below. The mineralization is open at depth below the 1,707 meter Mine level.

The Crescent mine is immediately adjacent to the west and the Silver Summit mine is immediately adjacent to the east of the Sunshine Mine. Many of the productive vein structures and faults in those adjacent mines pass directly across the Company’s mineral rights position.

History of the Sunshine Mine Property

The Sunshine Mine, one of the highest-grade known remaining primary silver discoveries worldwide, is estimated to have produced a total of over 365 million ounces of silver. In 1884, the Blake brothers staked the Yankee Lode mining claim, and various contiguous holdings were consolidated to become the Sunshine Mining Company in 1920. In 1921, operations continued and grew at the Sunshine Mine until it was at full production by

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the end of 1988. In 1992, Sunshine Mining Company merged into Sunshine Precious Metals, Inc., or SPMI. From 1991-2001, there was limited production at the Sunshine Mine primarily as a result of several factors, including a drop in the price of silver and the lack of regular and consistent exploration and development activities. The Mine eventually ceased production in the first quarter of 2001 and Sunshine Mining and Refining Company, or SMRC, the parent of SPMI, declared Chapter 11 bankruptcy. Sterling acquired control of the Sunshine Mine in 2003 through a lease with SPMI, which included an option to purchase the Mine. Beginning in August 2003, and followed by the initial drilling in the fall of 2004, Sterling began an exploration program, and the process of rehabilitation of the underground areas of the Mine began in 2004. The Sunshine Mine returned to production under Sterling for a short period in late 2007. In 2008, Sterling ceased production and in early 2009 went into bankruptcy, due to, we believe, among other factors, falling silver prices ($10.79 per ounce as of December 31, 2008) and inadequate capital. At that time, SNS Silver Corporation took over care and maintenance of the Mine under contract with SPMI. In May 2010, the Company acquired, through Sterling’s bankruptcy proceedings, the majority of the operating facilities and equipment at the Sunshine Mine, including the lease on the Sunshine Mine from SPMI that included a purchase option for title to the Mine. In July 2010, the Company closed the purchase option in the lease to obtain title to the Sunshine Mine and acquired the remaining operating facilities and equipment.

Exploration

The Sunshine Mine is without known reserves and the proposed program is exploratory in nature. It is estimated that there are approximately 5,000 underground drill holes on the Sunshine Mine property. Approximately two thirds of the footage drilled was for exploration, both for long-term and short-term mine planning and development. The longest underground hole is approximately 914 meters. Long underground exploration holes are required to locate structures and veins because most development, except in the West Chance deposit, has been on the veins and thus drilling platforms for shorter holes at appropriate angles to the targets have not been available.

The Company is undertaking significant exploration and re-development of the Sunshine Mine property that will require significant time and capital before the property returns to production. Since acquiring the Sunshine Mine, the Company has successfully completed or is currently working on the following significant re-development activities at the Sunshine Mine property:

• acquired additional surface rights;

• repaired surface facilities and equipment, including the Jewell hoists and shaft, and compressed air, water and pumping systems;

• commissioned the ConSil hoist and completed work to enable rehabilitation of the ConSil shaft from the top station downward to the 910 meter level;

• de-watered the Sunshine Mine to just below the 1,130 meter level;

• re-established utility services to the Sunshine Mine ramp, enabling commencement of improvements required for ventilation and re-access to mining blocks;

• made significant progress towards compiling a drill hole database review for areas of immediate exploration and began compiling the entire historical geologic database to create a three dimensional model of the resources; and

• designed a new development plan to re-establish access in the lower Mine levels for exploration and development.

Historic exploration at the Sunshine Mine property was focused on progressive delineation of mineralization at depth leaving potential near-surface targets unexplored. However, long-known but previously unexplored target areas now are planned to be explored, through new drilling and new drill stations. The Company has identified important and prospective targets and multiple areas of exploration are planned to be tested for all accessible underground levels. The Company has also planned an extensive multi-year underground exploration program, focusing on eight primary veins. Total depth to be drilled under this program is estimated to be about

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110,000 meters. The first phase of the planned 2011 exploration program will be concentrated on three of the eight areas of focus, the Yankee Girl Vein, the Sunshine Vein and the Chester Vein/Fault, and require about 10,000 meters of underground diamond drilling.

The Company’s objectives at the Sunshine Mine property through 2013 are to:

• define additional mineralized material through extensive surface and underground exploration;

• complete a pre-feasibility study to determine the costs to re-commission and operate the Sunshine Mine as a sustainable and efficient silver producer; and

• upgrade existing infrastructure and re-establish access to developed portions of the resource.

The Sunshine Mine has on-site infrastructure already in place, including a primary shaft, which is operational and in the process of being refurbished, and a secondary shaft, which is being refurbished. There is currently no production at the Sunshine Mine.

Sunshine Mine Mineralogy

Over 30 veins have been named and mined at the Sunshine Mine property. The principal vein systems in the property include the Sunshine, Chester, Copper, Yankee Girl and West Chance veins. The Sunshine Vein and Chester Vein are each estimated to have produced over 100 million ounces of silver to date. Major veins strike east-west and typically dip 60º-70º to the south. Locally, dips range from 45º to 90º. Vein strike lengths are up to 610 plus meters, with down dip lengths two to three times that of the strike length. Major veins are located between the regional and property-wide faults at an angle of about 25º to the boundary faults. Veins vary in width from a few inches to over nine meters, but are generally between one to 1.5 meters thick. Typically, the Sunshine Mine mineralized material consists principally of tetrahedrite, the high silver-content copper antimony sulfide. Tetrahedrite occurs as very fine grains in fracture filings, veinlets or discontinuous blebs in the vein-filled faults. This silver-bearing tetrahedrite is more properly called freibergite and contains 3% to 30% silver substituting for the copper in the crystal structure. Gangue minerals are predominantly siderite with lesser amounts of quartz. Galena is present in the West Chance Vein, the Silver Syndicate Vein and the Chester Hook Vein. Other metallic minerals seen in the gangue are pyrite, arsenopyrite, and, rarely, boulangerite, bournonite, pyrargyrite and magnetite.

Sampling and Analysis

Existing records and information from predecessor owners/operators of the Sunshine Mine show that the samplings, sample locations and descriptions, and sample handling were done in accordance with accepted industry standards. The reported method was that a geologist took one-to-five pound chip samples of the vein at the bottom, middle and top of the face as development on the vein proceeded. On the sample ticket, the location was recorded, the sample was described, and a sketch of the vein and face was made for most samples. The sample ticket was placed in a bag, and the geologist delivered the sample to the sample preparation facility. That sample data is available in the filed sample ticket books and in the electronic database beginning in 1995 and for some select samples prior to that year.

The drifts on the veins were generally sampled at five to six foot intervals. Both raises and stopes were sampled at regular intervals that vary based on data requirements at any given time. As needed, the paper data has been digitized and entered into an electronic database. Most of the drilling data from 1972 forward and about half of the data prior to 1972 has been entered into the database. Locations and analyses from the underground face samples beginning in 1995 have been entered into the electronic database. Data from the face samples prior to 1995 has been digitized and entered into the database, as needed. Historic underground sampling assay results were plotted on paper and canvassed-back paper maps. A nearly complete set of historic sampling maps have been stored in the Sunshine Mine archives and vaults. The maps are quite detailed and document the results of extensive drift and stope sampling.

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Core and underground samples were delivered to the sample preparation facility on-site by the geologist who logged the core or took the sample. The samples were crushed and ground and delivered to the laboratory for analyses. Predecessor employees did all of the sample preparation, analyses and posting of results on-site. This chain of custody maintained the sample integrity.

Sample preparation protocol used by the predecessor owner/operators of the Sunshine Mine has been reviewed and deemed to meet industry standards, and the likelihood of biased analytical results at the Sunshine Mine is not significant.

Historic assaying was undertaken at the in-house predecessor assay laboratory. Assaying of silver was by fire assay and in the future will be by fire assay with an atomic absorption, or AA, finished by the American Analytical Services laboratory. Details of the historic predecessor analytical protocol are not available. There is no quality assurance or quality control data from the predecessor laboratory to verify the precision and accuracy of the results, and the quality of the results may have varied over time. The Company does not believe that the lack of such data is a significant reason to question the analytical results for the following reasons: (i) nothing in the history of the Mine exists to cause doubt about the analytical results; (ii) the large number of analyses, over more than 50 years, makes any errors over a short period of time or on relatively few samples insignificant as regards the whole database; and (iii) as reported by the predecessor, the lack of questions by the smelter and refinery of the analyses of concentrates from the Sunshine Mine indicates that the predecessor laboratory produced quality analyses.

Historically, the predecessor employees did all of the sample preparation, analyses and posting of results on-site. This chain of custody maintained the sample integrity. For the up-coming exploration drilling campaign, it is expected that core samples will be collected by trained personnel and transported to a secure area at an assay lab for analysis. The assay lab is expected to perform internal lab checks that include laboratory duplicate assays for fire and AA assays and additional assays for base metals at the core storage facility, with the coarse rejects and sample pulps stored in a secure location in the core storage building for future use. All samples that remain on site, prior to delivery to the laboratory (onsite or offsite), are intended to be kept in a secure location not accessible by anyone other than approved personnel. On a random basis, it is expected that approximately every thirtieth sample pulp will be re-analyzed to determine reproducibility by a secondary certified laboratory.

Sunshine Mine Mineralized Material Estimate

All blocks in this estimate have been delineated by appropriately spaced underground sampling and/or drilling. Grade and tonnage has been estimated using classic industry-accepted methods for narrow vein deposits that are typical in the Coeur d’Alene Mining District. The Company refers to this method as the “McKinstry” method. It was developed by H.E. McKinstry early in the 20^th century.

The ton and grade estimates in a block are based primarily on chip sampling vein widths and analyses from development and production headings. The vein widths are diluted to the planned mining width with wall rock at a zero grade to account for mining dilution and mining losses. Drill core assays were used to extend or limit a block.

To be classed as mineralized material, at least one lineal dimension of a mineralized vein had to be exposed by mine workings and adequately sampled. Mining history at the Sunshine Mine has shown that the vertical (down-dip) dimension of the mineralized shoots is generally twice the horizontal dimension. Conservatively, the down-dip or up-dip projection from the exposed vein was generally limited to half the horizontal dimension in the absence of conflicting drill-hole information. A tonnage factor of 10 cubic feet per ton is used to convert volumes to tonnage except for the West Chance Vein where a tonnage factor of 9.4 cubic feet per ton is used. The current West Chance “Legacy Blocks” were defined using the McKinstry method with more drill intercepts than are available elsewhere.

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The table below summarizes the mineralized material at the Sunshine Mine property as of April 1, 2011 using a cutoff grade of 10 ounces per ton (opt). The mineralized material in the table below contains the expected mining dilution and mining losses and does not reflect in-situ grades.

Sunshine Mine Mineralized Material at a cutoff of 10 opt —April 1, 2011 (includes expected mining dilution and losses)
Category	Tons		Average Grade (ounces per ton)
Total		1,991,169		21.20

The Los Gatos Project

The technical information appearing below concerning the Los Gatos Project was derived from the report of Behre Dolbear & Company, independent mining consultants.

Location of the Los Gatos Project

The Los Gatos Project, an exploration stage property, covers approximately 81,651 hectares in the south-central part of the State of Chihuahua in Northern México within the municipality of Satevó. The Project is located approximately 128 kilometers south of the state capital of Chihuahua City, approximately 88 kilometers northwest of the Parral Mining District and immediately northwest of and surrounding the town of San José del Sitio, within the municipality of Satevó.

San José del Sitio is accessible by an improved gravel road from the turnoff of Federal Highway 24 at the 81 kilometer marker between the cities of Chihuahua and Hidalgo de Parral. The access road can be traveled by any motorized vehicle and has regular bus and supply services to the surrounding communities. The Project area is accessible by a large network of dirt and gravel roads that are used by local owners to access grazing areas for cattle and local ranches. Northern areas of the Project are also accessible from several gravel roads connecting with Mexican Federal Highway 24 between the 60 kilometer to 81 kilometer markers. In more remote areas, the rolling topography permits easy access by foot into areas where roads do not exist.

The Los Gatos Project is made up of a series of claim titles for 81,651 hectares and a series of concession applications for a total surface area of approximately 83,452 hectares. The titled mining concessions are summarized below:

Los Gatos Project—Titled Mining Concessions
	Concession Name	Title Number		Date Granted	Hectares		Concessionaire
1	Los Gatos		231498	3/4/08		19,712	La Cuesta International
2	Los Gatos 2		228950	2/22/07		10,720	Minera Plata Real
3	Los Gatos 3		231076	1/16/08		27	Minera Plata Real
4	Mezcalera		228249	10/17/06		4,992	Minera Plata Real
5	Mezcalera 2 Fracción I		228929	2/21/07		39	Minera Plata Real
6	Mezcalera 2 Fracción II		228930	2/21/07		26	Minera Plata Real
7	Mezcalera 2 Fracción III		228931	2/21/07		29	Minera Plata Real
8	Paula Adorada		223392	12/9/04		40	Grupo Minero Factor
9	Gavilana		237137	11/19/10		10	Minera Plata Real
10	Etna		237167	11/19/10		45,996	Minera Plata Real
11	San Luis		236908	10/5/10		16	Minera Plata Real
12	La Gavilana Fracción I		237461	12/21/10		44	Minera Plata Real
Total						81,651

These concessions are held by a wholly owned Mexican subsidiary of the Company, Minera Plata Real, S. de R. L. de C.V., or MPR. The concessions have a period of validity that ranges between 2054 and 2058. MPR

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holds the rights to the concessions of Los Gatos and Paula Adorada through exploration agreements with purchase options. These agreements have been duly recorded in the Méxican Public Registry of Mines. Details of these exploration agreements are provided below. All royalty payments below are in thousands of dollars.

Los Gatos Concession: MPR may purchase the Los Gatos concession (Title Number 231498) from La Cuesta International S. A. de C.V., or La Cuesta International, for a total of $15,000, which is payable through advance royalties of $20 every six months and a 2% NSR on production from the Los Gatos concession and 0.5% NSR from the lands within a one kilometer boundary of the Los Gatos concession. Once the total payment of royalties reaches $10,000, the 2% NSR on production will decrease to 0.5%. Once the total payment of royalties reaches $15,000, the concession ownership will transfer to MPR with no further payment obligation to La Cuesta International.

Paula Adorada Concession: MPR may purchase the Paula Adorada concession from Grupo Factor for $500, according to a payment schedule. Once the final payment is made in 2013, the concession will be transferred to MPR with no further ongoing payment obligations to Grupo Factor.

MPR has also filed the following mining concession applications that have not yet been titled by the México Direccion de Minas (the Department of Mines), or DGM:

Mining Concession Applications Filed
Application Name	File Number		Hectares
Los Gatos 4		38,770		53,500
Los Estados		39,246		241
Veranos		39,506		15,164
Atenas		39,507		14,547
Total				83,452

In addition, there are several small concessions within the Los Gatos Project area that have been cancelled and not yet liberated by the DGM, which the Company intends to apply for once liberated. The Company has also arranged for permission to enter and perform exploration activities in a number of private land properties in the Project area.

Infrastructure, Climate and Topography

The Company’s present field camp is located in San José del Sitio, a community of approximately 200 persons, with electrical and water services, an elementary school and basic health services. Water resources in the region are mostly related to the Conchos River Basin, which includes the San Pedro, San Francisco de Borja and Satevó River Sub-Basins. Locally, there is significant groundwater in the area, with shallow groundwater recorded from most exploration drilling conducted by the Company. San José del Sitio is served by a 13.8-KV line, providing sufficient capacity for domestic needs but not enough for industrial needs. Larger-capacity electrical lines service the nearby city of Valle de Zaragoza, 45 kilometers to the southeast of the project area, where the 113-MW Santiago (Valle de Zaragoza) electrical sub-station is located.

The Project area is located in the Sierras y Llanuras del Norte Physiographic Province near the boundaries between the Gran Meseta y Cañones and the Sierras y Llanuras Tarahumara Sub Provinces. The general geography of the Los Gatos area is characterized by low to middle rolling volcanic hills with local escarpments and flat valley floors. Altitudes vary with between 1,550 masl at the base of the Santo Toribio Creek and 1,780 masl at the top of the Los Gatos Hill, one of the highest peaks of the Project area. Vegetation is characterized by a semi-desert landscape, with typical low brush vegetation in the slopes, including lechuguilla, sotol, yucca, sage, bear grass and other types of indigenous grasses. Larger brush and trees are common along the main watercourses, with the presence of oak, cypress, poplar, huizache and mesquite, among others.

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The climate in the area is not expected to interfere with exploration and mining activities at the Project, with the exception of short-lived storms producing floods and damage to access roads.

There are a limited number of qualified workers on site, however, technical workers (miners, electricians, mechanics, computer skilled, etc.) can be found in the area and at Parral, 88 kilometers southeast, including heavy equipment and specialized operators. Primary and secondary-level technical schools are available in Valle de Zaragoza, and all levels of schooling are available in Parral and/or Chihuahua, each 2.5 hours away.

The Company is still evaluating potential smelting locations, related transportation and smelting contract terms for the Company’s future production.

Geological Setting

The Los Gatos Project is located in the transition zone between the Sierra Madre Occidental volcanic province of western Mexico and the Mesozoic Chihuahua basin to the east. It is also located in the general union of the Sierra Madre Occidental, Chihuahua, and Parral tectonostratigraphic terranes.

The area is largely characterized by a thick sequence of Tertiary volcanic rocks that are generally dissected by a strong north-northwest bearing fault system that divides the area into the plateau and barranca sections and are subdivided in two major units, the Lower Volcanic Group and Upper Volcanic Group, host to several well known gold-silver producing mining districts in Mexico, such as Concheño, Batopilas, San Dimas-Tayoltita and Ocampo, one of the largest epithermal precious metal metallogenic provinces. The dominant rocks of the Los Gatos Project are a sedimentary sequence that occur to the southwest of the Cerro Los Gatos discovery.

History of the Los Gatos Project

The Los Gatos Project has been the subject of very limited historical prospecting and mineral exploration, including the development of shallow workings and preliminary exploration activities by Consejo de Recursos Minerales (now SGM) at the Esther, Gavilana (Paula) and San Luis zones with references to the occurrence of silver, lead, and zinc. As a result, the Los Gatos Project will require significant time and capital before the Project is brought into production. The Company’s surface work has not uncovered any evidence of past modern prospecting activities in the area although VVC Exploration has commenced an active exploration program on the southern site of the Los Gatos concession block. Other active projects in the area of southern Chihuahua are the joint venture at San Juan Cordero between Valley High Ventures and Levon Resources and the La Cigarra project of International Northair Mines. The Los Gatos Project was initially recognized by reconnaissance activities by La Cuesta International, a Mexican mine exploration company, in 2005.

Exploration

The Los Gatos Project is without known reserves and the Project is exploratory in nature. The Los Gatos Project consists of two identified silver discoveries, the Cerro Los Gatos and the Esther zones, and 14 other priority targets with over 100 kilometers of outcropping quartz and calcite veins.

In 2007, MPR initiated its first phase of exploration in the Los Gatos Project area with a program of surface mapping and rock sampling covering approximately 60% of the original Los Gatos concession within the core of the claim block. This work, conducted through a local Mexico-based consulting group, Grupo Azta, identified in excess of 100 kilometers of strike length of quartz and calcite veins, many of which contained lead, zinc and silver mineralization. Of the 1,217 rock samples taken from surface outcrops of vein and wall rocks, 200 samples contained values in excess of 10 grams of silver per tonne.

From June 2008 to October 2008, environmental permits for drilling and road construction were obtained. In addition, during this period, proposed drill areas were re-mapped and re-sampled, surface access rights were

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negotiated with local ranches, and drill access roads were constructed. In January 2009 and September 2009, corresponding notices of activity were submitted to the Federal Environmental Agency to cover the development of access roads and drill sites to drill 50 holes, along with a request to increase the number of drill holes to 250.

MPR began drilling in the Los Gatos Project in October 2008 using a hydracore rig. Drilling from this rig was conducted from October 2008 to May 2009. In June 2009, the hyrdacore drill rig was replaced with a Major 5000, a larger capacity rig. Two additional Major 5000 rigs were brought in during July 2009 to September 2009. The first significant identification of silver occurred in the Cerro Los Gatos zone in April 2009, in which 73.6 grams of silver per tonne was found over four meters from 152 meter to 156 meter depth. This was followed by significant intercepts in two other drill holes, which contained 34 meters of 414 grams of silver per tonne, 2.0% lead and 4.85% zinc. At this point in the drilling program, the geometry and the preferred level for mineral deposition was identified, and a series of holes was drilled that indicated a continuous mineralized body of apparent ore grade with lead, zinc and silver mineralization over a strike length in excess of 2.5 kilometers, a dip extent in excess of 200 meters, and an average thickness of 6.2 meters within the Cerro Los Gatos zone.

Also in early 2009, drilling in the Esther zone commenced with one rig moving back and forth between the Cerro Los Gatos and Esther zones. At the Esther zone, significant mineralization was identified in one hole in which 79.8 grams of silver per tonne was found over 14 meters from 102 meter to 116 meter depth. This was followed with significant offsets in two other holes, proving an average thickness of more than 3.4 meters and a minimum down dip extent of 200 meters.

Drill sites are selected based on surface vein outcrops and geometric projections in the subsurface, as well as geochemical, geophysical and geological targets. Access to surface parcels has been negotiated with the individual ranch owners in exchange for improvements to roads and water supplies. In addition, two ranch parcels have been purchased in the Cerro Los Gatos and Amapola areas that will facilitate further development work. For a discussion of Amapola, see “—Recent Developments.” Drilling is conducted using a wire line rig with diamond core capabilities. All of the Company’s drilling at the Los Gatos Project is conducted by third parties.

Detailed soil geochemistry programs have been conducted over the Esther zone and the area between the Cerro Los Gatos and Esther zones. Results of the sampling identified new veins in the Esther zone and revealed four separate structures between the Esther and Cerro Los Gatos zones.

Detailed topographic mapping has been created using Photosat, a Canadian contractor. The topography was created at one meter, five meter, 10 meter and 50 meter contours from Geoeye satellite coverage captured exclusively for the survey. Survey control points were established on the surface, with coordinates by total station in order to guarantee the accuracy of the survey.

A detailed 3D Induced Polarization survey was conducted during July 2010 using SJ Geophysics, a contractor from Canada. Lines were initially spaced at 100 meters with stations every 25 meters, and later tightened to 50 meters by 25 meters. The results of the geophysical surveys show correlations between measured electrical properties of the rocks in the subsurface and known zones of mineralization on both the Cerro Los Gatos and Esther zones.

Environmental baseline data collection began in May 2010 for the development of future environmental studies required for the Project. Data on flora, fauna, water, air, climate, security and social impacts are generally collected on a routine basis for integration into future environmental studies required for the Project.

Due to the success of the exploration activities at the Los Gatos Project, the Company operated on average three drill rigs during 2010 and expanded the known mineralization to three veins through an additional 90 drill holes. The Company expects to continue its surface and core sample exploration activities at Los Gatos throughout 2011.

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The Company’s objectives at the Los Gatos Project through 2013 are to:

• increase the drilling rate by increasing the number of exploration drills from four to seven;

• conduct social, environmental and technical work on the property with the objective of completing a pre-feasibility study on the Cerro Los Gatos and Ester zones; and

• acquire additional prospective mineral and surface rights.

Los Gatos Project Mineralogy

The Los Gatos Project hosts a series of quartz, quartz-calcite and calcite veins in at least eight separate vein systems that are exposed along a strike length of approximately 12 kilometers and an outcrop belt width of approximately five kilometers. Vein width is generally in the order of one meter, but local wide zones up to eight meters in outcrop and true vein widths in excess of 30 meters have been identified by diamond drilling. Structurally, the veins form two sets, with north and northwest strikes and mostly steep dips.

Mineralization at the Los Gatos Project is characterized by silver, lead, zinc and copper sulphides and their oxides, along with fluorite, manganese, barite and traces of gold associated with quartz and calcite veins. The veins vary in orientation from west-northwest to northwest to north-northwest to north-northeast. Study of the veins in hand specimen and thin section suggests that they are epithermal in origin and are likely of intermediate sulfidation composition, showing vein textures and gangue mineralogy that indicate a relatively high-level hydrothermal system in the boiling environment. Breccia with clasts of vein quartz indicates a protracted hydrothermal system during multiple faulting events, a positive sign for economic epithermal veins. It has been interpreted that ore shoots may extend relatively far down dip, possibly to at least 230 meters.

Sampling and Analysis

The Company has carried out sampling campaigns that have included surface, limited underground, and core samples. As of November 8, 2010, during the first stages of exploration, approximately 1,215 surface samples were taken and 15,537 core samples were taken from 154 drill holes for a total of 68,772 meters. Sampling intervals were, in most cases, two meters, with local variations depending on vein geology, to a minimum of 0.8 meters where structures were found. Detailed sampling was carried out with intervals directed by geological criteria. Pulp samples are delivered to ALS Chemex laboratory in Vancouver, Canada for analysis.

The Company believes that core sampling is representative of mineralized intersections, with minor variation due to irregularities in mineralization.

The Company has established a sampling protocol followed through the drilling campaign that in summary includes: supervision by Company personnel, with the verification of core handling, recovery, core accommodation and depth recording by the contractor; and core collection, measurement, core recovery, photographing, specific gravity analysis, geotechnical information analysis and sampling interval selection by Company geologists.

Detailed logging of the sample intervals is conducted once the core samples are sawed, with detailed descriptions and estimations of mineralogy and mineral content, hydrothermal alteration, veining and fracturing. Assay intervals are divided in two equal parts by diamond saw, with most sampling conducted on two meter intervals, except for specific vein intervals. Vein intervals are selected for more detailed sampling, with a minimum of 0.8 meters per interval in the sample, and a maximum of two meters.

Samples are collected in standard plastic sample bags and tagged with a unique sample number recorded for each interval. Samples are grouped by drill hole and transported by pickup truck to the ALS Chemex laboratory sample receiving location in Chihuahua City, Mexico. From the time the core samples leave the drill site to the time the samples are delivered to ALS Chemex, they are escorted and under the supervision of personnel from the Company.

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ALS Chemex has developed and implemented at each of its locations a Quality Management System designed to ensure the production of consistently reliable data. As a result, the lab has received, including its sample preparation section in Guadalajara, the ISO 9001:2000 Quality Management System registration from QMI-SAI Global. The ALS Laboratory Vancouver branch has also been accredited as conforming to applicable Canadian regulatory requirements.

Other Mexican Properties

The Company owns or controls a portfolio of 18 other exploration properties in Mexico covering an area of 361,882 hectares, with significant additional hectares under application for mineral concession. There are two projects underway with significant drill results, El Doctor in Oaxaca and Zaragoza in Chihuahua. Additional drilling is planned at both of these projects as well as additional targets through 2012. The Company is planning sufficient drilling in an effort to outline continuous geometry of mineralization at El Doctor and Zaragoza, which could lead to initial estimates of mineralized material. All these properties are without known reserves and are exploratory in nature.

Recent Developments

Philip Pyle, Vice President Exploration, who is a Qualified Person as set out in NI 43-101, has supervised the preparation of the technical information that forms the basis of the information contained in this section “—Recent Developments.”

Exploration drilling at the Los Gatos Project has recently detected a new trend of mineralization that has been named the Amapola zone. It is located 4.5 kilometers northwest of the Cerro Los Gatos zone. Results indicate a minimum of four separate mineralized quartz veins with high levels of silver at upper levels and silver, lead and zinc at deeper levels. Highlights from the drilling include holes AM22 and AM25:

Hole	From (meters)		To (meters)		Thickness (meters)		Ag (g/t)		Pb (%)		Zn (%)
AM22		651		651.85		0.85		588.0		13.70		0.70
AM25		533		560		27.0		81.8		0.53		1.33
Included in AM25		542.5		544.3		1.8		709.0		4.91		11.90

Continuous mineralization has been identified over a strike length of 600 meters in two of the four known veins and additional drilling is planned to verify the geometry of this mineralization.

In other developments at the Los Gatos Project, a new zone of quartz veining has been identified in the southwestern portion of the Los Gatos claim block. This zone has been named Boca de Leon and has, to date, been detected over a strike length of 900 meters. The zone’s surface outcrops contain similar looking textures and mineralogy to the Cerro Los Gatos quartz vein mineralization. Surface sampling of the vein outcrops has generated values that range from 68 to 411 grams of silver per tonne. The Company expects that the Boca de Leon zone will become a priority area for future exploration drilling.

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Amapola Zone Details

Listed below are the results of all of the drilling at the Amapola zone from which the highlights above were extracted.

Hole	From (meters)		To (meters)		Thickness (meters)		Ag (g/t)		Pb (%)		Zn (%)
AM01		270		272		2.0		36.5		0.00		0.00
AM02		266		274		8.0		87.3		0.02		0.03
AM03		272		286		14.0		117.1		0.07		0.02
AM03		354		358		4.0		63.7		0.01		0.01
AM03		396		400		4.0		30.2		0.00		0.01
AM04		408.3		414.4		6.1		407.0		0.18		0.58
AM07		564		570		6		21.1		0.05		0.04
AM09		528.7		530.1		1.4		547.0		0.58		3.49
AM11		52		60		8.0		18.0		0.00		0.02
AM11		407.4		416		8.6		28.7		0.06		0.13
AM12		478		487.7		9.7		77.0		0.05		0.07
AM13		42		44		2		100.0		0.01		0.06
AM13		253.55		254.45		0.9		37.8		0.03		0.01
AM14		406.6		417.25		10.65		49.1		0.02		0.04
AM15		224		228		4		66.2		0.00		0.01
AM16		232		232.9		0.9		59.0		0.04		0.02
AM18		70.5		72.85		2.35		33.1		0.00		0.01
AM19		464		464.8		0.8		50.6		0.34		0.17
AM19		469.2		470		0.8		50.6		0.47		0.52
AM19		510		512		2		41.3		0.04		0.56
AM19		522		528.8		6.8		256.5		0.62		0.40
AM22		651		651.85		0.85		588.0		13.70		0.70
AM25		533		560		27.0		81.8		0.53		1.33
Included in AM25		542.5		544.3		1.8		709.0		4.91		11.90
AM28		396.85		398		1.15		58.7		4.50		9.48
AM28		594.5		595.3		0.8		54.3		0.27		0.25
AM28		625.75		626.65		0.9		44.2		4.47		0.63
AM28		784		785.2		1.2		279.0		0.61		0.26
AM30		244		246		2.0		43.7		0.00		0.01
AM30		728.3		729.7		1.4		34.4		0.20		0.33
AM31		577		578.55		1.55		45.5		0.07		0.02
AM31		579.5		581		1.5		37.6		0.04		0.00

Drilling of AM05, AM06, AM08, AM10, AM17, AM20, AM21, AM23, AM24, AM26, AM27 and AM29 did not show significant mineralization.

Sampling and analysis of the Amapola zone materials continue to be performed in the manner as described above under “—The Los Gatos Project—Sampling and Analysis.”

Competition

There is aggressive competition within the silver industry. The Company competes in efforts to obtain financing to explore and develop its projects with other silver companies such as Coeur d’Alene Mines Corporation and Hecla Mining Company, as well as other mineral miners including Stillwater Mining Company and Kinross Gold Corporation, some of whom currently have greater resources than the Company does. In the future, the Company may compete with such companies to acquire additional properties.

In addition, the Company also encounters competition for the hiring of key personnel. The mining industry is currently facing a shortage of experienced mining professionals, particularly with respect to experienced mine

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construction and mine management personnel. This competition affects the Company’s operations at the Sunshine Mine property and the Los Gatos Project. Larger regional companies such as Coeur d’Alene Mines Corporation, Hecla Mining Company, Stillwater Mining Company and Kinross Gold Corporation in the Pacific Northwest can offer better employment terms as compared to smaller companies such as the Company.

The Company also competes for mine service companies, in particular drilling companies. Potential suppliers may choose to provide better terms and scheduling to larger companies in the industry due to the scale and scope of their operations.

Environmental, Health and Safety Matters

The Company is subject to stringent and complex environmental laws, regulations and permits in the various jurisdictions in which it operates. These requirements are a significant consideration for the Company as its operations involve, or may in the future involve, among other things, the removal, extraction and processing of natural resources, emission and discharge of materials into the environment, remediation of soil and groundwater contamination, reclamation and closure of waste impoundments and other properties, and handling, storage, transport and disposal of wastes and hazardous materials. Compliance with these laws, regulations and permits can require substantial capital or operating costs or otherwise delay, limit or prohibit the Company’s development or future operation of its properties. These laws, regulations and permits, and the enforcement and interpretation thereof, change frequently and generally have become more stringent over time. If the Company violates these environmental requirements it may be subject to litigation, fines or other sanctions, including the revocation of permits and suspension of operations. Pursuant to such requirements the Company also may be subject to inspections or reviews by governmental authorities.

Permits and Approvals

Numerous environmental permits and approvals are required for the Company’s current and future operations. Many of these permits are subject to renewal from time to time and can impose strict conditions, requirements or obligations on, or otherwise delay or prohibit, certain activities.

In particular, the Company is subject to permitting requirements in connection with water discharges at the Sunshine Mine. The Company operates under a National Pollutant Discharge Elimination System, or NPDES, permit that expired in 1996 but has been administratively extended. The Company applied to the U.S. Environmental Protection Agency for a renewal of its NPDES permit in July 2007 and is awaiting a response. The NPDES permit covers, among other matters, the waste streams from mining and ore concentrating operations at the Sunshine Mine and drainage water from discontinued mining operations. Beginning in the 1990s, the predecessor began allowing the lower mined-out levels of the mine to flood, which resulted in elevated iron and manganese concentrations in the mine water. In the future, more stringent limits could be imposed under the NPDES permit, whether as part of the permit renewal process or otherwise. The Company believes that it will incur significant costs to upgrade the existing wastewater treatment facility to meet more stringent permit limits, including those relating to total dissolved solids.

To obtain, maintain and renew its environmental permits, the Company may be required to conduct environmental studies and collect and present to governmental authorities data pertaining to the potential impact that its current or future operations may have upon the environment. For example, in order to commence underground exploration activities at the Los Gatos Project, the Company will need to submit an environmental analysis to the applicable governmental authorities. In May 2010, the Company began collection of the environmental baseline data for the Los Gatos Project. The Company expects that data collected on flora, fauna, water, air, climate, security and social impacts will be integrated into future environmental studies required for the Project.

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The Company will require additional permits and approvals to conduct future exploration, development and processing activities, including at both the Sunshine Mine property and the Los Gatos Project. Any failure to obtain, maintain or renew required permits, or other permitting delays or conditions, may delay, limit or prohibit its current or future operations.

Hazardous Substances and Waste Management

The Company could be liable for environmental contamination at or from its or its predecessors’ currently or formerly owned or operated properties or third-party waste disposal sites. Certain environmental laws impose joint and several strict liability for releases of hazardous substances at such properties or sites, without regard to fault or the legality of the original conduct. In addition to potentially significant investigation and remediation costs, such matters can give rise to claims from governmental authorities and other third parties for fines or penalties, natural resource damages, personal injury and property damage.

In connection with the Sunshine Mine, the Company is involved in the Bunker Hill Superfund Site. Pursuant to a 2001 Consent Decree that resolved certain liabilities arising under the U.S. Comprehensive Environmental Response, Compensation and Liability Act relating to the Bunker Hill site, the Company is required to pay to the U.S. government and the Coeur d’Alene Indian tribe between a 0% (at a silver price below $6 per ounce) and 7% (at a silver price of $10 per ounce or higher) NSR royalty. This Consent Decree did not resolve all liabilities associated with the Bunker Hill site, including any liability for contamination at or migrating from the Company’s owned, leased or operated properties, which are located within the Bunker Hill Superfund Site. As a result, the Company may incur additional costs, liabilities or obligations in connection with the Bunker Hill site.

The tailings pond at the Sunshine Mine currently receives mine water and process water discharges from the Company’s operations, as well as similar discharges from the nearby Crescent Mine. The Company expects that the capacity of the tailings pond as currently configured will be sufficient for approximately ten years after commercial production resumes and that additional capacity may be added thereafter by increasing the height of the pond dam.

The Company is required to maintain financial assurances for certain future closure obligations, including with respect to the tailings pond at the Sunshine Mine. As of June 30, 2011, the Company has recorded an asset retirement obligation of approximately $772,000 reflecting the estimated present value of future closure obligations.

Mine Health and Safety Laws

The Federal Mine Safety and Health Act of 1977 and the Occupational Safety and Health Act of 1970 impose stringent safety and health standards on all aspects of mining operations at the Sunshine Mine property. Also, Idaho has state programs for mine safety and health regulation and enforcement. In addition, the Company’s Mexican properties are subject to regulation by the Political Constitution of the Mexican United States, and are subject to various legislation in Mexico, including the Mining Law, the Federal Law of Waters, the Federal Labor Law, the Federal Law of Firearms and Explosives, the General Law on Ecological Balance and Environmental Protection and the Federal Law on Metrology Standards. Mining, environmental and labor authorities may inspect the Company’s operations on a regular basis and issue various citations and orders when they believe a violation has occurred under the relevant statute. Regulations and the results of inspections, whether in the United States or Mexico, may have a significant effect on the Company’s operating costs.

Legislative and regulatory bodies at the federal and state levels, including MSHA and OSHA, have recently promulgated or proposed various new statutes, regulations and policies relating to mine safety and mine emergency issues. Although some new laws, regulations and policies are in place, these legislative and regulatory efforts are still ongoing. At this time, it is not possible to predict the full effect that the new or proposed statutes, regulations and policies will have on the Company’s operating costs, but it may increase its costs and those of its competitors.

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Other Environmental Laws

The Company is required to comply with numerous other foreign, federal, state and local environmental laws, regulations and permits in addition to those previously discussed. These additional requirements include, for example, the U.S. Emergency Planning and Community Right-to-Know Act and Resource Conservation and Recovery Act and various permits regulating road construction and drilling at the Company’s Los Gatos, El Doctor, Mina Grande, Niko, Zacatlan and Zaragoza zones.

Facilities and Employees

As discussed above, the Company owns and leases land at the Sunshine Mine property, the Los Gatos Project and the Company’s other exploration properties in Mexico. The Company also leases its executive office space at 370 17th Street, Suite 3800, Denver, Colorado, which lease expires April 30, 2012, subject to a renewal option.

As of June 30, 2011, the Company had 45 full-time employees in the United States and 95 full-time employees in Mexico. The Company also has a management agreement, which will continue following the offering, with Tigris Financial Group Ltd., one of the Company’s stockholders, and several consultants providing additional management, accounting and financial services. See “Certain Relationships and Related Party Transactions.” The Company believes that its employee relations are good, and plans to continue to hire employees as its operations expand. The Company expects the number of employees to increase following the offering as it increases its exploration efforts and prepares to operate as a public company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Expenses—Exploration Expenses” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Expenses—General and Administrative Expenses.”

Legal Proceedings

From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.

Debtor-in-possession, or DIP, lenders to SPMI, a prior owner of the Sunshine Mine, have asserted a mortgage claim regarding much of the property at the Sunshine Mine that the Company acquired from SPMI in June 2010. The DIP financing loan was made in connection with SPMI’s bankruptcy in 2000, in the amount of $5 million, but the DIP lenders are also claiming right to accrued interest, at a default rate of 25%, and penalties, in an alleged aggregate amount of $71.2 million. The Company is currently engaged in discovery and no motions are scheduled for hearing. The Company intends to defend vigorously against the claim and does not believe that this matter is likely to have a material adverse effect on its operations or financial condition. Litigation is inherently unpredictable, however, and while the Company believes it has valid defenses in this matter, there can be no assurance as to the ultimate outcome of this action.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding the executive officers, directors and director nominees of Sunshine Silver, as of the date of this prospectus:

Name	Age		Position
Stephen Orr		56	Executive Chairman and Chief Executive Officer
Roger Johnson		54	Chief Financial Officer
John Galassini		47	Chief Operating Officer
Philip Pyle		55	Vice President Exploration
Jeffrey Reeser		44	General Counsel
John Ellis		75	Director Nominee
Marc Faber		65	Director Nominee
Wayne Kirk		67	Director Nominee
William Natbony		60	Director
Michael S. Parrett		59	Director Nominee
David Peat		58	Director Nominee
Robert A. Quartermain		56	Director Nominee
Diana Walters		48	Director

Biographical Information

Stephen Orr has served as our Executive Chairman since May 2011 and Chief Executive Officer since June 2011. Mr. Orr has 34 years of experience in the mining industry, including international commercial experience at both executive and operational levels. Most recently, Mr. Orr was President, Director and Chief Executive Officer at Ventana Gold Corp., a Vancouver-based mineral exploration and development company. Prior to joining Ventana Gold Corp. in September 2009, Mr. Orr was a Director and Chief Executive Officer of OceanaGold Limited, a position he held for five years, where under his leadership OceanaGold built and commissioned two new mines in New Zealand and increased production by 90%. Prior to that time, Mr. Orr was Vice President of North American Operations, then Managing Director of Australia and Africa operations, for Barrick Gold Corporation. Before joining Barrick, he spent 20 years with Homestake Mining Company in a number of increasingly senior positions, including President and Chief Executive Officer for Homestake Canada Inc. Since June 2010, Mr. Orr has been a Director of GoldQuest Mining Corp. Mr. Orr’s more than 30 years of experience in the international mining industry at both executive and operational levels renders him qualified to be one of our Directors. Mr. Orr is a resident of Denver, Colorado.

Roger Johnson was appointed Chief Financial Officer in March 2011. Mr. Johnson previously served in a number of senior roles for Newmont Mining Corporation from 2003-2011, most recently as Vice President and Chief Accounting Officer from 2008-2011. Mr. Johnson also served as Senior Vice President, Finance and Administration at Pasminco Zinc, Inc. in 2002 and 2003. He also served in a number of senior roles, including as Vice President, Controller, for Kennecott Utah Copper Corporation, a major business unit of Rio Tinto plc, from 1989-2002. Prior to joining Rio Tinto, Mr. Johnson practiced public accounting for ten years with Coopers & Lybrand (now PricewaterhouseCoopers LLP). Mr. Johnson is a Certified Public Accountant. He has two degrees from the University of Utah, a Masters of Professional Accountancy and a B.S. in Accounting. Mr. Johnson is a resident of Denver, Colorado.

John Galassini was appointed Chief Operation Officer in August 2011. Mr. Galassini served as Regional Vice President, North American Operations for Kinross Gold Corporation from 2009 to 2011. In this role, he was responsible for all of the company’s exploration and mining operations in North America. Prior to joining Kinross Gold Corporation, Mr. Galassini had a 22-year career with Phelps Dodge (now Freeport McMoRan). He

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held various positions of increasing responsibility, including assignments with Phelps Dodge in Arizona, New Mexico and Chile. In 2006 he was named Senior Vice-President, North America, and in 2007 was appointed Senior Vice-President, Americas. Mr. Galassini serves on the Board of Directors for the National Mining Association, and is a member of the Society for Mining, Metallurgy, and Exploration, or SME. He is past chairman of the Morenci Section of SME, and in 2006 he was named Distinguished Alumnus at the College of Engineering at New Mexico State University. Mr. Galassini received his Bachelor of Science degree in chemical engineering from New Mexico State University. Mr. Galassini is a resident of Denver, Colorado.

Philip Pyle was appointed Vice President Exploration in June 2011. Mr. Pyle has served as Vice President – Exploration for Los Gatos Ltd. since June 2008. Mr. Pyle previously served in the role of Exploration Manager for Linear Gold Corp. (now Brigus Gold Corp.) from September 2003 to June 2008. Mr. Pyle served as Exploration manager for MIM Exploration Pty Ltd. from June 1997 to September 2003. Mr. Pyle served as Exploration Manager for BHP Minerals International Exploration Inc. from 1985 to 1997. He also served as a geologist for AMAX Exploration Inc. from 1979 to 1985. Mr. Pyle is a resident of Houston, Texas.

Jeffrey Reeser was appointed General Counsel in July 2011. Mr. Reeser previously served as Vice President and Corporate Secretary of Newmont Mining Corporation between 2007-2011. Prior to joining Newmont, Mr. Reeser was legal director at Sun Microsystems, a Fortune 500 technology company, where he was lead counsel responsible for establishing and managing legal support for the company’s global joint ventures and technical services organizations. Prior to this, Mr. Reeser practiced law for seven years as a partner and associate at the law firms of Baker & Hostetler, LLP, and Parcel, Mauro, Hultin & Spaanstra, P.C., where he focused on mining law and corporate matters for various regional and multinational natural resources companies. He holds two degrees from the University of Colorado, a J.D. from the School of Law and a B.S. (with honors) in business finance. Mr Reeser is a resident of Denver, Colorado.

John Ellis will become a member of our Board of Directors upon the consummation of this offering. Mr. Ellis is a professional engineer registered in British Columbia. He has worked in senior management positions in the mining industry for the past 45 years, including the past 11 years as a consultant. He was a Director of the Mining Association of Manitoba, the Mining Association of Canada and the National Mining Association. He has served as Director of Anglogold North America Inc., Hudson Bay Mining and Smelting Company, Inc., Inspiration Resources Corp., Cashman Equipment Co., Queenstake Resources, Ltd., Lunden L.C., Mexivada Mining Corp., Canadian Potash Corp. and Royal Coal Corp. Mr. Ellis was Chairman and CEO of Anglogold North America Inc., Independence Mining Company, Inc., Hudson Bay Mining and Smelting Co., Limited and was Senior Vice-President of Inspiration Resources Corp., Inspiration Copper Co. and Inspiration Coal Inc. He was also Vice-President of Operations for CVRD-Inco PTI Indonesia and Managing Director CVRD-Inco for Voisey’s Bay Nickel Company. For the past 11 years he has consulted for AngloGold Ashanti Limited, CVRD-Inco, Queenstake Resources, Ltd., BHP Billiton Ltd., Century Aluminum Company, NovaGold Resources Inc. and a number of other companies. Mr. Ellis graduated from Haileybury School of Mines and from Montana University of Science and Technology with a degree in Metallurgy. Mr. Ellis’ academic training in the field of metallurgy, plus his many years of experience in the mining industry, in both technical and managerial positions, render him qualified to serve as one of our Directors. Mr. Ellis is a resident of Spring Creek, Nevada.

Marc Faber will become a member of our Board of Directors upon the consummation of this offering. Dr. Faber has over 35 years of experience in the finance industry and is the Managing Director of Marc Faber Ltd., an investment advisory and fund management firm. He is an advisor to a number of private investment funds and serves as a Director of Ivanhoe Mines Ltd., Sprott Inc. and NovaGold Resources Inc. Dr. Faber publishes a widely read monthly investment newsletter entitled The Gloom, Boom & Doom Report and is the author of several books including Tomorrow’s Gold—Asia’s Age of Discovery. A renowned commentator on global market trends and developments, he is also a regular contributor to several leading financial publications around the world, including Barron’s, where he is a member of the Barron’s Roundtable. Dr. Faber received his Ph.D. in Economics magna cum laude from the University of Zurich. Through his many years of experience in the finance and investment management industry, Dr. Faber provides our Board of Directors with financial

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analysis, risk management and strategic expertise, which render him qualified to serve as one of our Directors. Mr. Faber is a resident of Chiangmai, Thailand.

Wayne Kirk will become a member of our Board of Directors upon the consummation of this offering. Mr. Kirk currently holds directorships and is the Chairman of the Nominating and Corporate Governance Committees at each of Anooraq Resources Corporation, Gabriel Resources Ltd., Great Basin Gold Ltd., Northern Dynasty Minerals Ltd. and Taseko Mines Ltd. He is also Chairman of the Corporate Governance and Nominating Committee and Compensation Committee of Electrum Ltd. Mr. Kirk spent 26 years specializing in corporate and business law, including mergers and acquisitions, securities law and mining, with the firm of Thelen, Marrin Johnson & Bridges in San Francisco, California. From 1992-2001, he was Vice President, General Counsel and Corporate Secretary for Homestake Mining Company, which was acquired by Barrick Gold Corporation in December 2001. From 2002 until his retirement in 2004, Mr. Kirk was Special Counsel at Thelen Reid & Priest LLP, where he specialized in corporate and business law, including public company corporate governance. Mr. Kirk holds a B.A. in Economics from the University of California-Berkeley and an LL.B. from Harvard Law School. Mr. Kirk’s legal training and experience as a seasoned corporate and business lawyer, as well as his expertise in public company corporate governance, render him qualified to serve as one of our Directors. Mr. Kirk is a resident of Orcas, Washington.

William Natbony has served as a member of our Board of Directors since June 2011. Mr. Natbony is Chairman of Tigris Financial Group Ltd. Prior to joining Tigris in May 2007, Mr. Natbony was a senior partner at the international law firm of Katten Muchin Rosenman LLP. Mr. Natbony serves on the Advisory Board of the Mount Sinai Department of Medicine and is a member of the Strategic Planning Committee of the University of Miami Miller School of Medicine Transplantation Center. Mr. Natbony is also a member of the Board of Directors of Panthera Corp. and The Orianne Society, charities that are leaders in their areas of conservation and environmental preservation. Mr. Natbony received a B.A., cum laude, from Queens College of the City University of New York, a J.D. from NYU School of Law and an LL.M. (in Taxation) from NYU School of Law. He was a Research fellow at Yale Law School and Professor at New York Law School. Mr. Natbony brings to our Board of Directors his eclectic mix of experience as a chairman of a financial services company, a senior partner of an international law firm and a board member of numerous organizations in both private and public sectors, which renders him qualified to be one of our Directors. Mr. Natbony is a resident of Old Westbury, New York.

Michael S. Parrett will become a member of our Board of Directors upon the consummation of this offering. Mr. Parrett has served as a member of the Board of Directors of Pengrowth Corporation since 2004 and of Stillwater Mining Company since 2009. In June 2011, he was appointed Chairman of Mongolia Minerals Corporation, a private corporation. He was on the Board of Directors of Gabriel Resources Ltd. from 2003-2010 and was Chairman from December 2005 through 2010. From 2003 until 2008, Mr. Parrett was a Director and Trustee of Fording Canadian Coal Trust. During 2002-2003 and the first quarter of 2004, Mr. Parrett served as a financial consultant to Stillwater Mining Company. From 1990-2001 he was, at various times, Chief Financial Officer, President of Rio Algom Mining Corp. and Chief Executive of BHP Billiton Base Metals. From 1983-1989 Mr. Parrett performed various financial functions, including Controller, Chief Financial Officer, Treasurer, Controller Marketing and Director Internal Audit at Falconbridge Limited. Mr. Parrett is a chartered accountant and received his B.A. from York University. Mr. Parrett’s accounting background, plus his past executive roles in and his services on the boards of various mining companies, render him qualified to serve as one of our Directors. Mr. Parrett is a resident of Aurora, Ontario, Canada.

David Peat will become a member of our Board of Directors upon the consummation of this offering. Mr. Peat has over 25 years of experience in financial leadership in support of mining corporations. Since 2006, he has been a Director and Chairman of the Audit Committee of Brigus Gold Corp. He has also been a Director and Chairman of the Audit Committee of Gabriel Resources Ltd., since 2010. Mr. Peat was Acting Chief Financial Officer of Gabriel Resources Ltd. from December 10, 2010 through March 9, 2011. Mr. Peat was Vice President and Chief Financial Officer of Frontera Copper Corporation from 2006-2009, Vice President and

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Global Controller of Newmont Mining Corporation from 2002-2004, and Vice President of Finance and Chief Financial Officer of Homestake Mining Company from 1999-2002. Mr. Peat started his career with Price Waterhouse in Toronto and he has been a member of the Institute of Chartered Accountants of Ontario since 1978. He received his B.Com., Honors in Business Administration from the University of Windsor in 1976 and a B.A., Economics from the University of Western Ontario in 1975. Mr. Peat’s academic training in business and economics and his extensive experience in corporate finance and accounting render him qualified to serve as one of our Directors. Mr. Peat is a resident of Fernandina Beach, Florida.

Robert A. Quartermain will become a member of our Board of Directors upon the consummation of this offering. Dr. Quartermain is the President and Chief Executive Officer of Pretium Resources Inc., a gold development company with projects in Northern British Columbia. He served as the President and Chief Executive Officer of Silver Standard Resources Inc. from January 1985 to January 2010. Over this period, Silver Standard grew from a small exploration company to a major silver company with a market capitalization of over $2 billion, one producing mine, five advanced exploration and development properties and a pipeline of early stage exploration properties. Dr. Quartermain has over 35 years of experience in the resource industry and holds a B.Sc. degree in geology from the University of New Brunswick, an M.Sc. degree in mineral exploration from Queen’s University and was awarded a honorary D.Sc. degree from the University of New Brunswick in May 2009. Mr. Quartermain’s current and past experiences as chief executive officers of small and large companies in the mining industry render him qualified to serve as one of our Directors. Mr. Quartermain is a resident of Vancouver, British Columbia, Canada.

Diana Walters has served as a member of our Board of Directors since June 2011, and was designated by Liberty Metals & Mining and elected to our Board of Directors based on a stockholders agreement which will terminate immediately prior to the closing of this offering. Ms. Walters is the President and Chief Executive Officer of Liberty Metals & Mining and has over 20 years of experience in management positions with energy and mining companies. Liberty Metals & Mining is a wholly-owned subsidiary of Liberty Mutual Group, and makes investments in the metals and mining sector. Before joining Liberty Mutual Group, Ms. Walters was a Managing Partner of Eland Partners, LLC, a natural resources advisory firm from 2007-2010. Prior to that, Ms. Walters was Managing Director for the Global Investment Banking Resources and Energy Group of HSBC Securities (USA) Inc. in New York from 2004-2007. From 1987-2007, Ms. Walters held various management positions in financial institutions in New York and Texas where her major emphasis was corporate finance origination and execution for international and independent energy and mining companies. Ms. Walters currently serves as an independent Director of Allana Potash Corp. Ms. Walters graduated from the University of Texas at Austin with a B.A. in Plan II and an M.A. in Energy and Mineral Resources. Ms. Walters’ academic training in energy and mineral resources, her many years of experience in management positions with energy and mining companies and her prior leadership roles in various financial institutions render her qualified to serve as one of our Directors. Ms. Walters is a resident of North Salem, New York.

Board Composition

Our Amended and Restated Bylaws provide that our Board of Directors shall consist of not less than directors and not more than              directors, and the number of directors may be changed only by resolution adopted by the affirmative vote of a majority of the entire Board of Directors (which number shall be subject to increase or decrease by Electrum until it ceases to own more than 50% of our outstanding common stock). Upon the conclusion of this offering, we will have nine directors: Stephen Orr, John Ellis, Marc Faber, Wayne Kirk, William Natbony, Michael S. Parrett, David Peat, Robert A. Quartermain and Diana Walters.

Initially, our Board of Directors will consist of a single class of directors each serving one year terms. Once Electrum no longer beneficially owns more than 50% of our outstanding shares of common stock, our Board of Directors will be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three year terms (other than directors that may be elected by holders of our preferred shares, if any). Following this offering, Electrum will hold     % of our outstanding shares of common stock and have control over the outcome of director elections, including the right to fill vacancies on our Board of Directors.

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We have determined that each of             ,             ,             ,              and              will be an independent director within the meaning of the applicable rules of the SEC and NYSE and that each of             ,              and              is also an independent director under Rule 10A-3 under the Exchange Act for the purpose of Audit Committee membership. In addition, our board has determined that              is a financial expert within the meaning of the applicable rules of the SEC and NYSE.

Board Committees

The Audit Committee will consist of             ,              and             , and will be comprised entirely of independent directors. The Audit Committee will operate pursuant to a charter approved by the Board of Directors. The Audit Committee will approve the engagement of our independent public auditor and the scope of the audit to be undertaken by such auditor. In connection with our Annual Report on Form 10-K, the Audit Committee shall also review with management and the independent auditor the financial information to be included therein. In addition, the Audit Committee will review all proposed related person transactions for the purpose of recommending to the disinterested members of the Board of Directors that the transaction should be ratified and approved. See “Certain Relationships and Related Party Transactions.”

The Compensation Committee will consist of             ,              and             , and will be comprised entirely of independent directors. The Compensation Committee will operate pursuant to a charter approved by the Board of Directors. The Compensation Committee will determine and approve the level of compensation for the Chief Executive Officer and Chairman. The Compensation Committee will also recommend and advise the Board of Directors with respect to the compensation of directors and other executive officers. The Compensation Committee will make recommendations to the Board of Directors regarding the establishment and terms of our employee equity-based incentive plans and will administer such plans.

The Nominating and Corporate Governance Committee will consist of             ,              and             , and will be comprised entirely of independent directors. The Nominating and Corporate Governance Committee will operate pursuant to a charter approved by the Board of Directors. The Nominating and Corporate Governance Committee will identify and nominate members for election to the Board of Directors and develop and recommend to the Board of Directors corporate governance principles applicable to us. The Nominating and Corporate Governance Committee will also oversee the annual evaluation of the Board of Directors’ performance.

Code of Business Conduct and Ethics

Prior to the closing of this offering, our Board of Directors will adopt a code of business conduct and ethics applicable to our employees, directors and officers, in accordance with applicable U.S. federal securities laws and the corporate governance rules of the NYSE. Any waiver of this code to an employee may be granted only by the Chief Executive Officer, Chief Financial Officer or General Counsel. Only the Board of Directors or a designated committee of the Board of Directors may provide waivers involving any of our directors or executive officers. All waivers granted to our directors and executive officers will be promptly disclosed as required by applicable U.S. federal securities laws and the corporate governance rules of the NYSE.

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COMPENSATION DISCUSSION AND ANALYSIS

We were formed on February 2, 2011 when our predecessor, Precious Metals Opportunities LLC, converted to a Delaware corporation. On March 1, 2011, Los Gatos Ltd. merged with and into us. Prior to March 1, 2011, our predecessor companies were managed under advisory services arrangements with our principal stockholders and we did not have employees or executive officers.

Currently, our management consists of our Executive Chairman, who is also our Chief Executive Officer, our Chief Financial Officer, our Chief Operating Officer, our Vice President Exploration, and our General Counsel. In this prospectus, we refer to these individuals as our Named Executive Officers or NEOs. All of our NEOs were hired in 2011 and did not receive any compensation for services to us prior to 2011. We are in the process of hiring additional key executives to complete our management team.

We discuss the employment agreements we have entered into with our NEOs below. Each of these agreements resulted from arm’s length negotiation with the respective executive. We believed that these employment packages were necessary in order to induce these individuals to leave their prior employment, enter into employment with us and strive to make our business plan a success.

We intend to form a Compensation Committee in connection with this offering. We expect that the Compensation Committee will continue the basic elements of compensation that are reflected in the executive employment contracts discussed below: base salary, annual incentive compensation and equity-based long-term incentive awards such as stock options. As we engage additional executives, we expect that the Compensation Committee will further refine its objectives and philosophy with regard to executive compensation, with the goal of attracting and retaining skilled executives to implement our business plan.

Employment Agreements with Named Executive Officers

Employment Agreement with Mr. Orr

We entered into an employment agreement with Mr. Orr, dated as of May 3, 2011. He commenced employment as our Executive Chairman effective as of May 4, 2011 and has been our Chief Executive Officer since June 2011.

Base Salary. Mr. Orr receives an annual base salary of $500,000, which will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Compensation Committee.

Stock Options. Upon commencement of his employment with us, Mr. Orr was granted an option to purchase 125,000 shares of our common stock. Upon the consummation of this offering, Mr. Orr will be granted an option to purchase an additional 125,000 shares of our common stock.

Benefits and Perquisites. Mr. Orr will be entitled to participate in the various employee benefits plans that are, from time to time, made generally available to our employees.

Confidentiality and Non-Solicitation. Mr. Orr has agreed to maintain the confidentiality of our information and not to use or allow or help another to use or access such information at any time during or after his employment with us. Mr. Orr has also agreed not to solicit any of our employees, consultants or service providers during his employment and for one year after termination of his employment.

Termination and Change in Control. Payments and benefits to which Mr. Orr will be entitled upon termination of his employment, whether or not in connection with a change in control, are discussed below in the footnotes to the table under “—Potential Payments Upon Termination or Change in Control.”

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Employment Agreement with Mr. Johnson

We entered into an employment agreement with Mr. Johnson, dated as of February 28, 2011, and he commenced employment as our Chief Financial Officer effective as of March 9, 2011.

Base Salary. Mr. Johnson receives an annual base salary of $330,000, which will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Compensation Committee.

One-Time Bonus. Upon commencement of his employment with us, Mr. Johnson received a one-time bonus of $600,000 as compensation for forgoing his stock options from his prior employer.

Annual Bonus. Mr. Johnson will be eligible to participate in a bonus plan pursuant to which he will be entitled to receive an annual target bonus equal to 67% of his base salary upon achievement by him and the Company of certain targets determined by the Compensation Committee. The amount of target bonus may range from 33% of base salary to 100% of base salary in any given year as determined by the Compensation Committee, and the amount of annual bonus actually paid (if any) will depend on the actual performance of the Company and Mr. Johnson as determined by the Compensation Committee.

Stock Options. Upon commencement of his employment with us, Mr. Johnson was granted an initial option to purchase 35,000 shares of our common stock and a regular option to purchase 3,600 shares of our common stock. If Mr. Johnson is still employed by us on February 1, 2012, he will be granted an option to purchase an additional 3,600 shares of our common stock on February 1, 2012. If Mr. Johnson is still employed by us on February 1, 2013, he will be granted an option to purchase an additional 3,600 shares of our common stock on February 1, 2013.

Benefits and Perquisites. Mr. Johnson will be entitled to participate in the various employee benefits plans that are, from time to time, made generally available to our employees.

Confidentiality and Non-Solicitation. Mr. Johnson has agreed to maintain the confidentiality of our information and not to use or allow or help another to use or access such information at any time during or after his employment with us. Mr. Johnson has also agreed not to solicit any of our employees, consultants or service providers during his employment and for one year after termination of his employment.

Termination and Change in Control. Payments and benefits to which Mr. Johnson will be entitled upon termination of his employment, whether or not in connection with a change in control, are discussed below in the footnotes to the table under “—Potential Payments Upon Termination or Change in Control.”

Employment Agreement with Mr. Galassini

We entered into an employment agreement with Mr. Galassini, dated as of July 7, 2011, and he commenced employment as our Chief Operating Officer effective as of August 8, 2011.

Base Salary. Mr. Galassini receives an annual base salary of $350,000, which will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Compensation Committee.

Annual Bonus. Mr. Galassini will be eligible to participate in a bonus plan pursuant to which, at the end of 2011, he will be entitled to receive an annual target bonus in the amount of 50% of his base salary and up to 100% of his base salary upon achievement by him and the Company of certain targets determined by the Compensation Committee. The amount of annual bonus actually paid (if any) will depend on the actual performance of the Company and Mr. Galassini as determined by the Compensation Committee.

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Stock Options. Upon commencement of his employment with us, Mr. Galassini was granted an option to purchase 150,000 shares of our common stock.

Benefits and Perquisites. Mr. Galassini will be entitled to participate in the various employee benefits plans that are, from time to time, made generally available to our employees.

Confidentiality and Non-Solicitation. Mr. Galassini has agreed to maintain the confidentiality of our information and not to use or allow or help another to use or access such information at any time during or after his employment with us. Mr. Galassini has also agreed not to solicit any of our employees, consultants or service providers during his employment and for one year after termination of his employment.

Termination and Change in Control. Payments and benefits to which Mr. Galassini will be entitled upon termination of his employment, whether or not in connection with a change in control, are discussed below in the footnotes to the table under “—Potential Payments Upon Termination or Change in Control.”

Employment Agreement with Mr. Pyle

We entered into an employment agreement with Mr. Pyle, dated as of June 1, 2011, and he commenced employment as our Vice President Exploration effective as of June 1, 2011.

Base Salary. Mr. Pyle receives an annual base salary of $200,000, which will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Compensation Committee.

Annual Bonus. Mr. Pyle will be eligible to participate in a bonus plan pursuant to which, at the end of 2011, he will be entitled to receive an annual target bonus in the amount of 50% of his base salary and up to 100% of his base salary upon achievement by him and the Company of certain targets determined by the Compensation Committee. The amount of annual bonus actually paid (if any) will depend on the actual performance of the Company and Mr. Pyle as determined by the Compensation Committee.

Benefits and Perquisites. Mr. Pyle will be entitled to participate in the various employee benefits plans that are, from time to time, made generally available to our employees.

Confidentiality and Non-Solicitation. Mr. Pyle has agreed to maintain the confidentiality of our information and not to use or allow or help another to use or access such information at any time during or after his employment with us. Mr. Pyle has also agreed not to solicit any of our employees, consultants or service providers during his employment and for one year after termination of his employment.

Termination and Change in Control. Payments and benefits to which Mr. Pyle will be entitled upon termination of his employment, whether or not in connection with a change in control, are discussed below in the footnotes to the table under “—Potential Payments Upon Termination or Change in Control.”

Employment Agreement with Mr. Reeser

We entered into an employment agreement with Mr. Reeser, dated as of June 20, 2011, and he commenced employment as our General Counsel effective as of July 18, 2011.

Base Salary. Mr. Reeser receives an annual base salary of $300,000, which will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Compensation Committee.

Annual Bonus. Mr. Reeser will be eligible to participate in a bonus plan pursuant to which, at the end of 2011, he will be entitled to receive an annual target bonus in the amount of 50% of his base salary and up to 100% of his base salary upon achievement by him and the Company of certain targets determined by the Compensation Committee. The amount of annual bonus actually paid (if any) will depend on the actual performance of the Company and Mr. Reeser as determined by the Compensation Committee.

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Stock Options. Upon commencement of his employment with us, Mr. Reeser was granted an option to purchase 100,000 shares of our common stock.

Benefits and Perquisites. Mr. Reeser will be entitled to participate in the various employee benefits plans that are, from time to time, made generally available to our employees.

Confidentiality and Non-Solicitation. Mr. Reeser has agreed to maintain the confidentiality of our information and not to use or allow or help another to use or access such information at any time during or after his employment with us. Mr. Reeser has also agreed not to solicit any of our employees, consultants or service providers during his employment and for one year after termination of his employment.

Termination and Change in Control. Payments and benefits to which Mr. Reeser will be entitled upon termination of his employment, whether or not in connection with a change in control, are discussed below in the footnotes to the table under “— Potential Payments Upon Termination or Change in Control.”

Note: Because the NEOs received no compensation for services to us prior to 2011, the following tables summarize the NEOs’ compensation for 2011.

Summary Compensation Table

The table below summarizes the total compensation paid to or earned (or will be paid to or earned) by each NEO in 2011.

2011 Summary Compensation Table

Name and Principal Position(a)	Year(b)		Salary ($) (c)(1)		Bonus ($) (d)			Option Awards ($) (f)(2)			Non-Equity Incentive Plan Compensation ($) (g)			All Other Compensation ($) (i)			Total ($) (j)
Stephen Orr Executive Chairman and Chief Executive Officer		2011		500,000		—			1,122,500			—			—			1,622,500
Roger P. Johnson Chief Financial Officer		2011		330,000		600,000	(3)		392,176			181,302	(4)		13,200	(5)		1,516,678
John Galassini
Chief Operating Officer		2011		350,000		—				(2)		70,000	(6)		—			420,000
Philip Pyle Vice President Exploration		2011		200,000		—			—			59,000	(7)		—			259,000
Jeffrey Reeser
General Counsel		2011		300,000		—				(2)		69,000	(8)		7,500			376,500

(1) This column reflects each NEO’s current base salary.

(2) This column reflects the grant date fair value of stock options granted to each NEO in 2011, determined in accordance with FASB ASC Topic 718. [The grant date fair value of stock options granted to Messrs. Galassini and Reeser will be provided by amendment.]

(3) This figure represents a one-time bonus Mr. Johnson received when he commenced employment with us as compensation for forgoing his stock options from his prior employer.

(4) This figure represents Mr. Johnson’s annual target bonus under his employment agreement, prorated for performance year 2011 because he commenced employment with us in March 2011. The amount actually earned will be determined by the Compensation Committee taking into account the performance of the Company and Mr. Johnson in 2011.

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(5) This figure estimates the Company’s matching contributions to Mr. Johnson’s 401(k) account in 2011.

(6) This figure represents Mr. Galassini’s annual target bonus under his employment agreement, prorated for performance year 2011 because he commenced employment with us in August 2011. The amount actually earned will be determined by the Compensation Committee taking into account the performance of the Company and Mr. Galassini in 2011.

(7) This figure represents Mr. Pyle’s annual target bonus under his employment agreement, prorated for performance year 2011 because he commenced employment with us in June 2011. The amount actually earned will be determined by the Compensation Committee taking into account the performance of the Company and Mr. Pyle in 2011.

(8) This figure represents Mr. Reeser’s annual target bonus under his employment agreement, prorated for performance year 2011 because he commenced employment with us in July 2011. The amount actually earned will be determined by the Compensation Committee taking into account the performance of the Company and Mr. Reeser in 2011.

Grants of Plan-Based Awards

The table below provides information about equity and non-equity awards granted to the NEOs in 2011.

2011 Grants of Plan-Based Awards

Name (a)	Grant Date (b)			Estimated Future Payouts Under Non-Equity Incentive Plan Awards						All Other Option Awards: Number of Securities Underlying Options (#) (j)		Exercise or Base Price of Option Awards ($/Sh)(k)		Grant Date Fair Value of Stock and Option Awards ($) (l)
				Threshold ($) (c)		Target ($) (d)		Maximum ($) (e)
Stephen Orr		5/4/2011			—		—		—		125,000		27.65		1,122,500
		(1)									125,000		(1)		(1)
Roger P. Johnson		3/9/2011	(2)		0		181,302		270,600		—		—		—
		3/9/2011			—		—		—		35,000		13.825		355,600
		3/9/2011			—		—		—		3,600		13.825		36,576
John Galassini		8/8/2011	(3)		0		70,000		140,000		—		—		—
		8/8/2011			—		—		—		150,000		27.65		(4)
Philip Pyle		6/1/11	(5)		0		59,000		118,000		—		—		—
Jeffrey Reeser		7/18/2011	(6)		0		69,000		138,000		—		—		—
		7/18/2011			—		—		—		100,000		27.65		(4)

(1) In addition to the option grant on May, 4, 2011, Mr. Orr will be granted an option to purchase 125,000 shares of our common stock upon the consummation of this offering at a purchase price equal to the offering price. The grant date will be the closing date of this offering, and the exercise price will be the offering price.

(2) Mr. Johnson is eligible to participate in a bonus plan pursuant to which he will be entitled to receive an annual target bonus in the amount of 67% of base salary, prorated for performance year 2011 because he commenced employment with us in March 2011. The maximum payout of Mr. Johnson’s 2011 annual bonus will be 100% of his base salary (also prorated for performance year 2011 because he commenced employment with us in March 2011).

(3) Mr. Galassini is eligible to participate in a bonus plan pursuant to which he will be entitled to receive an annual target bonus in the amount of 50% of base salary, prorated for performance year 2011 because he commenced employment with us in August 2011. The maximum payout of Mr. Galassini’s 2011 annual bonus will be 100% of his base salary (also prorated for performance year 2011 because he commenced employment with us in August 2011).

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(4) [To be provided by amendment.]

(5) Mr. Pyle is eligible to participate in a bonus plan pursuant to which he will be entitled to receive an annual target bonus in the amount of 50% of base salary, prorated for performance year 2011 because he commenced employment with us in June 2011. The maximum payout of Mr. Pyle’s 2011 annual bonus will be 100% of his base salary (also prorated for performance year 2011 because he commenced employment with us in June 2011).

(6) Mr. Reeser is eligible to participate in a bonus plan pursuant to which he will be entitled to receive an annual target bonus in the amount of 50% of base salary, prorated for performance year 2011 because he commenced employment with us in July 2011. The maximum payout of Mr. Reeser’s 2011 annual bonus will be 100% of his base salary (also prorated for performance year 2011 because he commenced employment with us in July 2011).

Outstanding Equity Awards at Fiscal Year-End

The table below provides information on the projected holdings of equity awards (which are comprised of only stock options) by the NEOs on December 31, 2011.

2011 Outstanding Equity Awards at Fiscal Year-End

Name (a)	Option Awards
	Number of Securities Underlying Unexercised Options Exercisable (#) (b)		Number of Securities Underlying Unexercised Options Unexercisable (#) (c)			Option Exercise Price ($) (e)		Option Expiration Date (f)
Stephen Orr		—		125,000	(1)		27.650		5/3/2021
				125,000	(2)		(2)		(2)
Roger P. Johnson		—		35,000	(3)		13.825		3/8/2021
		—		3,600	(4)		13.825		3/8/2021
John Galassini		—		150,000	(5)		27.650		8/7/2021
Jeffrey Reeser		—		100,000	(6)		27.650		7/17/2021

(1) This represents the option granted to Mr. Orr when he commenced employment with us. One-third of this option will vest on May 4 of each of 2012, 2013 and 2014.

(2) This represents the option that will be granted to Mr. Orr upon the consummation of this offering. The exercise price of this option will be offering price, and the option will expire on the ten-year anniversary of the closing date of this offering. The vesting schedule of this option will be specified in the applicable stock option award agreement.

(3) This represents the initial option granted to Mr. Johnson when he commenced employment with us. The first half of this option will vest on March 9, 2012, and remaining half will vest on March 9, 2013.

(4) This represents the regular option granted to Mr. Johnson when he commenced employment with us. One-third of this option will vest on March 9 of each of 2012, 2013 and 2014.

(5) This represents the option granted to Mr. Galassini when he commenced employment with us. One-third of this option will vest on August 8 of each of 2012, 2013 and 2014.

(6) This represents the option granted to Mr. Reeser when he commenced employment with us. One-third of this option will vest on July 18 of each of 2012, 2013 and 2014.

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Potential Payments Upon Termination or Change in Control

The table below describes the payments and benefits to which each NEO will be entitled if his employment is terminated on or before December 31, 2011 (i) by him without good reason, (ii) by us for cause, (iii) by us without cause or by him for good reason (without a change in control), (iv) by us without cause or by him for good reason within one year of a change in control, (v) due to his death or (vi) due to his disability. All amounts are estimates only, and actual amounts will vary depending upon the facts and circumstances applicable at the time of the triggering event.

Name	Termination Scenario	Base Salary ($)		Annual Bonus ($)		Accelerated Vesting of Unvested Stock Options ($)			Health Benefit Continuation ($)			Total ($)
Stephen Orr	Voluntary termination without good reason(1)		—		—		—			—			—
	Involuntary termination for cause(2)		—		—		—			—			—
	Involuntary termination without cause or voluntary termination for good reason(3)		500,000		—		—			21,348			521,348
	Involuntary termination without cause or voluntary termination for good reason within one year of a change in control(4)		1,000,000		—		—			32,022			1,032,022
	Death(5)		—		—		(6	)		—			(6	)
	Disability(7)		—		—		(6	)		—			(6	)
Roger P. Johnson	Voluntary termination without good reason(8)		—		—		—			—			—
	Involuntary termination for cause(9)		—		—		—			—			—
	Involuntary termination without cause or voluntary termination for good reason(10)		550,000		181,302		(6	)		17,556			748,858	(6)
	Involuntary termination without cause or voluntary termination for good reason within one year of a change in control(11)		660,000		181,302		(6	)		26,334			867,636	(6)
	Death(12)		—		181,302		(6	)		—			181,302	(6)
	Disability(13)		—		181,302		(6	)		—			181,302	(6)
John Galassini	Voluntary termination without good reason (14)		—		—		—			—			—
	Involuntary termination for cause (15)		—		—		—			—			—
	Involuntary termination without cause or voluntary termination for good reason (16)		350,000		70,000		(6	)		(17	)		420,000
	Involuntary termination without cause or voluntary termination for good reason within one year of a change in control (18)		700,000		70,000		(6	)		(17	)		770,000	(6)
	Death (19)		—		70,000		(6	)		—			70,000	(6)
	Disability (20)		—		70,000		(6	)		—			70,000	(6)

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Name	Termination Scenario	Base Salary ($)		Annual Bonus ($)		Accelerated Vesting of Unvested Stock Options ($)			Health Benefit Continuation ($)		Total ($)
Philip Pyle	Voluntary termination without good reason(21)		—		—		—			—		—
	Involuntary termination for cause(22)		—		—		—			—		—
	Involuntary termination without cause or voluntary termination for good reason(23)		200,000		59,000		—			21,345		280,345
	Involuntary termination without cause or voluntary termination for good reason within one year of a change in control(24)		400,000		59,000		—			32,017		491,017
	Death(25)		—		59,000		—			—		59,000
	Disability(26)		—		59,000		—			—		59,000
Jeffrey Reeser	Voluntary termination without good reason (27)		—		—		—			—		—
	Involuntary termination for cause (28)		—		—		—			—		—
	Involuntary termination without cause or voluntary termination for good reason (29)		300,000		69,000		(6	)		18,302		387,302
	Involuntary termination without cause or voluntary termination for good reason within one year of a change in control (30)		600,000		69,000		(6	)		27,454		696,454	(6)
	Death (31)		—		69,000		(6	)		—		69,000	(6)
	Disability (32)		—		69,000		(6	)		—		69,000	(6)

(1) If Mr. Orr voluntarily terminates his employment without good reason, he will not be entitled to any payments or benefits. Any outstanding stock options, to the extent exercisable at termination, will remain exercisable until the earlier of (i) the date 30 days following termination and (ii) the expiration of the original option term.

(2) If we terminate Mr. Orr’s employment for cause, he will not be entitled to any payments or benefits. Any outstanding stock options will cease to be exercisable and will be forfeited.

(3) If we terminate Mr. Orr’s employment without cause or Mr. Orr voluntarily terminates his employment for good reason, he will be entitled to: (i) 12 months of base salary and (ii) if he timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 12 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(4) If there is a change in control and within one year of the change in control we terminate Mr. Orr’s employment without cause or Mr. Orr voluntarily terminates his employment for good reason, he will be entitled to: (i) 24 months of base salary and (ii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 18 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(5) If Mr. Orr’s employment is terminated due to death, he will not be entitled to any payments or benefits. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(6) The value of the accelerated vesting of unvested stock options will depend on the closing market price of our common stock on December 31, 2011 and is therefore not reported in this table.

(7) If Mr. Orr’s employment is terminated due to disability, he will not be entitled to any payments or benefits. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

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(8) If Mr. Johnson voluntarily terminates his employment without good reason, he will not be entitled to any payments or benefits. Any outstanding stock options, to the extent exercisable at termination, will remain exercisable until the earlier of (i) the date 30 days following termination and (ii) the expiration of the original option term.

(9) If we terminate Mr. Johnson’s employment for cause, he will not be entitled to any payments or benefits. Any outstanding stock options will cease to be exercisable and will be forfeited.

(10) If we terminate Mr. Johnson’s employment without cause or Mr. Johnson voluntarily terminates his employment for good reason, he will be entitled to: (i) 20 months of base salary, (ii) a prorated annual bonus determined by multiplying the annual bonus he otherwise would have been earned by a fraction, the numerator of which is the number of days that elapsed between January 1 of the year of termination and the termination date, and the denominator of which is 365, or Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 12 months following termination, at our expense. All outstanding stock options will cease vesting, except that his initial option to purchase 35,000 shares of our common stock will fully vest, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(11) If there is a change in control and within one year of the change in control we terminate Mr. Johnson’s employment without cause or Mr. Johnson voluntarily terminates his employment for good reason, he will be entitled to: (i) 24 months of base salary, (ii) his Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 18 months following termination, at our expense. All outstanding stock options will cease vesting, except that his initial option to purchase 35,000 shares of our common stock will fully vest, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(12) If Mr. Johnson’s employment is terminated due to death, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(13) If Mr. Johnson’s employment is terminated due to disability, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(14) If Mr. Galassini voluntarily terminates his employment without good reason, he will not be entitled to any payments or benefits. Any outstanding stock options, to the extent exercisable at termination, will remain exercisable until the earlier of (i) the date 30 days following termination and (ii) the expiration of the original option term.

(15) If we terminate Mr. Galassini’s employment for cause, he will not be entitled to any payments or benefits. Any outstanding stock options will cease to be exercisable and will be forfeited.

(16) If we terminate Mr. Galassini’s employment without cause or Mr. Galassini voluntarily terminates his employment for good reason, he will be entitled to: (i) 12 months of base salary, (ii) a Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 12 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(17) Mr. Galassini currently does not participate in our health plan.

(18) If there is a change in control and within one year of the change in control we terminate Mr. Galassini’s employment without cause or Mr. Galassini voluntarily terminates his employment for good reason, he will be entitled to: (i) 24 months of base salary, (ii) a Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 18 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(19) If Mr. Galassini’s employment is terminated due to death, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(20) If Mr. Galassini’s employment is terminated due to disability, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(21) If Mr. Pyle voluntarily terminates his employment without good reason, he will not be entitled to any payments or benefits. Any outstanding stock options, to the extent exercisable at termination, will remain exercisable until the earlier of (i) the date 30 days following termination and (ii) the expiration of the original option term.

(22) If we terminate Mr. Pyle’s employment for cause, he will not be entitled to any payments or benefits. Any outstanding stock options will cease to be exercisable and will be forfeited.

(23) If we terminate Mr. Pyle’s employment without cause or Mr. Pyle voluntarily terminates his employment for good reason, he will be entitled to: (i) 12 months of base salary, (ii) a Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including

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coverage of his dependents) that we paid immediately prior to termination during the 12 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(24) If there is a change in control and within one year of the change in control we terminate Mr. Pyle’s employment without cause or Mr. Pyle voluntarily terminates his employment for good reason, he will be entitled to: (i) 24 months of base salary, (ii) a Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 18 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(25) If Mr. Pyle’s employment is terminated due to death, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(26) If Mr. Pyle’s employment is terminated due to disability, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(27) If Mr. Reeser voluntarily terminates his employment without good reason, he will not be entitled to any payments or benefits. Any outstanding stock options, to the extent exercisable at termination, will remain exercisable until the earlier of (i) the date 30 days following termination and (ii) the expiration of the original option term.

(28) If we terminate Mr. Reeser’s employment for cause, he will not be entitled to any payments or benefits. Any outstanding stock options will cease to be exercisable and will be forfeited.

(29) If we terminate Mr. Reeser’s employment without cause or Mr. Reeser voluntarily terminates his employment for good reason, he will be entitled to: (i) 12 months of base salary, (ii) a Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 12 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(30) If there is a change in control and within one year of the change in control we terminate Mr. Reeser’s employment without cause or Mr. Reeser voluntarily terminates his employment for good reason, he will be entitled to: (i) 24 months of base salary, (ii) a Pro Rata Annual Bonus and (iii) if he timely elects continuation coverage under COBRA, the portion of COBRA premiums for his group health insurance (including coverage of his dependents) that we paid immediately prior to termination during the 18 months following termination, at our expense. All outstanding stock options will cease vesting, and all vested stock options will remain exercisable until the earlier of (i) the date 180 days following termination and (ii) the expiration of the original option term.

(31) If Mr. Reeser’s employment is terminated due to death, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

(32) If Mr. Reeser’s employment is terminated due to disability, he will be entitled to his Pro Rata Annual Bonus. All outstanding options will fully vest and will remain exercisable until the earlier of (i) the date one year following termination and (ii) the expiration of the original option term.

Sunshine Silver Mines Corporation Long Term Incentive Plan

We have adopted the Sunshine Silver Mines Corporation Long Term Incentive Plan or the LTIP, which allows us to grant an array of equity-based awards to our NEOs, other employees, consultants and non-employee directors. The purpose of the LTIP is to recognize the contributions made by our employees, consultants and directors and provide these individuals with an additional incentive to use maximum efforts for the future success of the Company. Stock options granted to Messrs. Orr, Johnson, Galassini and Reeser in 2011, as disclosed above, were granted under the LTIP. A total of 413,600 stock options were granted and are the only options that have been granted to date under the LTIP. Upon consummation of this offering, 538,600 stock options will have been granted. See “Compensation Discussion and Analysis—Grants of Plan-Based Awards.”

Plan Term. The LTIP expires after ten years, unless prior to that date the maximum number of shares available for issuance under the LTIP has been issued or our Board of Directors terminates the LTIP.

Authorized Shares. Subject to adjustment as described below, 2,000,000 shares of our common stock are available for awards to be granted under the LTIP. The number of shares that may be issued pursuant to stock awards (i.e., awards in the form of shares of our common stock, including restricted stock and share-settled restricted stock units) may not exceed 2,000,000, and the number of shares that may be issued pursuant to

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incentive stock options may not exceed 2,000,000. Following the time at which the Company becomes subject to the deduction limitations of Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, no participant may receive under the LTIP in any calendar year stock options and stock appreciation rights that relate to more than 200,000 shares, stock awards that relate to more than 200,000 shares or cash awards or cash-settled restricted stock units having a value determined on the grant date in excess of $5,000,000. If a stock option or stock appreciation right expires or otherwise terminates without having been exercised in full, or if any shares subject to a stock award are forfeited, the shares for which the stock option or stock appreciation right was not exercised or the shares so forfeited will again be available for issuance under the LTIP.

Administration. Our Board of Directors administers the LTIP and may also designate a committee composed of two or more non-employee directors to administer the LTIP. Any such committee so designated by our Board of Directors to administer the LTIP will comply with the legal requirements (if any) relating to the administration of the types of awards granted under the LTIP imposed by applicable corporate and securities laws, the Code and any stock exchange or national market system on which our common stock is then listed or traded. Our Board of Directors (or the designated committee) has authority to select individuals to whom awards are granted, determine the types of awards and terms and conditions of awards, and construe and interpret the LTIP and awards under it.

Types of Awards. The LTIP provides for grants of stock options, stock appreciation rights, stock awards, cash awards and performance awards.

• Stock Options. A stock option is a contractual right to purchase shares at a future date at a specified exercise price. Generally, the per share exercise price of a stock option will be determined by our Board of Directors (or the designated committee) but may not be less than the closing price of a share of our common stock on the grant date. No stock option will be exercisable more than ten years from the grant date. Stock options that are intended to qualify as incentive stock options must meet the requirements of Section 422 of the Code.

• Stock Appreciation Rights. A stock appreciation right is a contractual right to receive, in cash or shares, an amount equal to the appreciation of a specified number of shares of our common stock from the grant date. Any stock appreciation right will be granted subject to the same terms and conditions as apply to stock options, as described above.

• Stock Awards. A stock award is an award in the form of shares of our common stock, including restricted stock and share-settled restricted stock units. Our Board of Directors (or the designated committee) will determine the terms, conditions and limitations applicable to any stock award, including vesting or other restrictions.

• Cash Awards. A cash award is an award denominated in cash.

• Performance Awards. A performance award is an award that is subject to the attainment of one or more performance goals, which will be set by our Board of Directors (or the designated committee). Our Board of Directors (or the designated committee) will also determine the terms, conditions and limitations applicable to any performance award. Performance awards that are intended to qualify as qualified performance-based compensation under Section 162(m) of the Code will be paid, vested or otherwise deliverable solely on the account of the attainment of one or more pre-established, objective performance goals, which will include revenue and income measures, expense measures, operating measures, cash flow measures, liquidity measures, leverage measures, market measures, return measures, corporate value measures and other measures such as those relating to acquisitions or dispositions.

Eligibility. Our employees, consultants and non-employee directors are eligible to receive awards under the LTIP, except that incentive stock options may only be granted to our employees.

Adjustments. In the event of any subdivision or consolidation of outstanding shares of our common stock, declaration of a dividend payable in shares of our common stock or other stock split, our Board of Directors (or

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the designated committee) will proportionately adjust the terms of any outstanding awards and the number of shares issuable under the LTIP. In the event of any other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting our common stock or any distribution to holders of our common stock of securities or property (other than normal cash dividends or dividends payable in our common stock), our Board of Directors (or the designated committee) will proportionately adjust the terms of any outstanding awards and the number of shares issuable under the LTIP to the extent necessary to maintain the proportionate interest of the award holders and preserve, without exceeding, the value of such awards. In addition, in the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, our Board of Directors may make such adjustments to awards or other provisions for the disposition of awards as it deems equitable, and will be authorized to provide for the substitution or assumption of awards, the acceleration of the vesting and exercisability of, or lapse of restrictions with respect to, awards, or the cash-out of awards.

Termination of Service and Change in Control. Upon a participant’s termination of service, any unexercised, unvested or unpaid awards will be treated as set forth in the applicable award agreement. In the event of a change in control where stock options or stock appreciation rights are not continued, assumed (or substituted) by the Company (or surviving corporation or ultimate parent corporation in a change in control), unless otherwise provided in an applicable award agreement, our Board of Directors (or the designated committee) may provide for full or partial vesting or cash-out of any outstanding stock options or stock appreciation rights. Our Board of Directors (or the designated committee) may also provide in the applicable award agreement the terms and conditions that relate to the lapse of any restrictions on shares subject to any stock awards in the event of a change in control.

Amendment and Termination. Our Board of Directors (or the designated committee) has the right to amend award agreements issued to a participant, subject to the participant’s consent if such amendment is not favorable to the participant. Our Board of Directors may amend, suspend or terminate the LTIP, but no such amendment or termination will be made which would adversely affect any outstanding awards without the written consent of the affected participants. In addition, to the extent necessary to comply with Section 422 of the Code, Section 16b-3 of the Exchange Act or any other applicable law or regulation, including the requirements of any stock exchange or national market system on which our common stock is then listed, the Company will obtain shareholder approval of any plan amendment or termination.

Director Compensation

[Compensation for our directors is still under development.]

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a description of the transactions we have engaged in since January 1, 2008 with our directors and officers and beneficial owners of more than five percent of our voting securities and their affiliates.

Formation and Merger

On February 22, 2011, Los Gatos Ltd. entered into an Agreement and Plan of Merger and Amalgamation, or the Merger Plan, with Sunshine Silver. Both entities were indirectly majority-owned by trusts primarily for the benefit of members of the immediate family of Dr. Kaplan. Pursuant to the Merger Plan, Los Gatos Ltd. merged and was amalgamated with and into Sunshine Silver and the separate corporate existence of Los Gatos Ltd. ceased. Each outstanding preferred share and each issued and outstanding ordinary share of Los Gatos Ltd. was converted into approximately 0.15517 shares of our common stock. In addition, as a result of the Merger Plan, existing outstanding options to purchase one share of Los Gatos Ltd. ordinary shares were converted into an option to purchase approximately 0.15517 shares of our common stock at an exercise price of $2.32 per share.

Capital Contributions and Equity Financings

During the period from October 2, 2009 through December 31, 2009, individuals associated with various related entities purchased 11,425,956 ordinary shares of Los Gatos Ltd. at a price of $0.01 per share (including Philip Pyle, our Vice President Exploration, who purchased 603,015 ordinary shares and Mr. Natbony, our Director, who purchased 3,180,879 ordinary shares). In addition, Los Gatos Ltd. issued 12,000,000 shares to related individuals in payment for services. In June 2011, in consideration for Mr. Pyle accepting employment with Sunshine Silver, we amended his share purchase agreement so that the shares subject to a repurchase option may, in the event of his termination, be repurchased at the option of CGT Management Ltd., or CGT, for 100% of their fair market value.

In July 2011, certain employees and consultants of Tigris Financial Group, Ltd., or Tigris Ltd., a stockholder of the Company, and Electrum Ltd., an affiliate of the Company, agreed to enter into lock-up agreements restricting their ability to sell shares for a period of 180 days following the date of this prospectus. In consideration for the entry into such lock-up agreements, we agreed to amend share purchase agreements and share award agreements between the Company, Tigris Financial (International) L.P., or Tigris L.P., and such employees and consultants.

Pursuant to such amendments, shares held by employees of Tigris Ltd., including shares held by a trust of which our Director, Mr. Natbony, is the trustee, will no longer be subject to transfer restrictions or a repurchase option following expiration of the lock-ups. Additionally, pursuant to such amendments (i) 60% of the shares held by each employee of Electrum Ltd. and each consultant of Tigris Ltd. will no longer be subject to transfer restrictions or a repurchase option following expiration of the lock-ups and (ii) 40% of the shares held by each employee of Electrum Ltd. and each consultant of Tigris Ltd. will be subject to transfer restrictions and a repurchase option until July 1, 2012; reducing to 20% of the shares starting on July 1, 2012 and, commencing on July 1, 2013, no such shares will be subject to restrictions.

In the past, Los Gatos Ltd. maintained loan agreements and advances with CGT, one of our stockholders, and GRAT Holdings LLC (the parent of a current shareholder). See footnote 8 to our audited and unaudited consolidated financial statements. During 2009, Los Gatos Ltd. issued 1,383,682 ordinary shares and 53,901,115 preferred shares to CGT in satisfaction of $553,000 of such indebtedness. During 2009, Los Gatos Ltd. also settled $527,000 due to CGT through the issuance of 52,715,203 preferred shares. During 2010, Los Gatos Ltd. reduced related-party debt to CGT by $5.4 million as consideration for the exercise of 14,934,227 options in lieu of the stated exercise price of such options. In January 2011, the $31.2 million principal and accrued interest outstanding under these loan arrangements was exchanged for 14,542,512 preferred shares of Los Gatos Ltd. and the obligations were cancelled.

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Effective as of May 11, 2010, the two members of Electrum Silver Holdings LLC’s parent, who at the time were direct members of Precious Metals Opportunities LLC, transferred 2% each of their respective interests in Precious Metals Opportunities LLC (totaling 4%) to Tigris Ltd., one of our existing stockholders.

During the six months ended June 30, 2011 and during the year ended December 31, 2010, the members of Precious Metals Opportunities LLC, which included the current members of Electrum Silver Holdings LLC’s parent and Tigris Ltd., contributed $1.0 million and $36.0 million, over the respective time periods, as capital contributions to Precious Metals Opportunities LLC. On February 2, 2011, these capital contributions were converted into an aggregate of 20,000,000 shares of our common stock when Precious Metals Opportunities LLC converted to a Delaware corporation and became Sunshine Silver.

On March 8, 2011, we sold 8,318,264 shares of our common stock at a price of $13.825 per share for a total consideration of $115.0 million to Liberty Metals & Mining (pricing terms were agreed upon in December 2010). In connection with this sale, we entered into a stockholders agreement with certain of our stockholders, which provides certain rights to such holders of our stock, including a preemptive right in favor of Liberty Metals & Mining. The preemptive right does not apply to this offering. In accordance with its terms, the stockholders agreement, including Liberty Metals & Mining’s preemptive right, will terminate in connection with the closing of this offering. On June 1, 2011, Liberty Metals & Mining exercised its preemptive right pursuant to the stockholders agreement, purchasing an additional 527,313 shares of our common stock for total consideration of $7.3 million. Upon the purchase, Liberty Metals & Mining owned 15% of our outstanding common stock.

Between April and May 2011, we sold a total of 95,000 shares of our common stock at a price per share of $13.825 to Ozorrus Investments Limited, an entity affiliated with Stephen Orr, our Executive Chairman and Chief Executive Officer, and to Robert Quartermain, one of our Director nominees. In connection with the sales, we and the Electrum parties entered into a letter agreement and a subscription agreement with each of the stockholders. The agreements provide the stockholder with certain rights and restrictions with respect to the shares, and certain of the terms of the agreements will terminate in connection with the closing of this offering.

On May 2, 2011, certain of our existing Electrum stockholders sold a total of 37,257 shares of our common stock at a price per share of $13.825 to certain key employees of Tigris Ltd. and Electrum party affiliates, including to our current Director Mr. Natbony. In connection with the stock transfers, the transferees entered into letter agreements with us and the Electrum parties which contain certain rights and restrictions with respect to the shares. Certain of the terms of the letter agreements will terminate in connection with the closing of this offering.

Services Agreements

Effective January 1, 2008, Los Gatos Ltd. entered into a services agreement with Tigris L.P., one of our stockholders. The agreement was not negotiated on an arm’s-length basis and was entered into prior to us adopting our related party transaction policy. Pursuant to the agreement, Tigris L.P. agreed to provide Los Gatos Ltd. assistance with services, consisting primarily of business and financial advice with respect to the strategic business development and corporate finance activities of Los Gatos Ltd. and its subsidiaries. Pursuant to the services agreement, Los Gatos Ltd. paid Tigris L.P. $500,000, $375,000 and $150,000 for the years ending December 31, 2010, 2009 and 2008 and $250,000 for the six months ended June 30, 2011, plus out-of-pocket expenses. In addition, pursuant to the services agreement, on October 2, 2009, Los Gatos Ltd. made a one-time grant to Tigris L.P. of 4,771,318 ordinary shares (valued at $48,000) in the capital of Los Gatos Ltd., free of any restrictions on transferability. The services agreement included rights of termination with or without cause upon 30 days’ prior written notice by either party. The agreement included indemnification provisions by Los Gatos Ltd. in favor of Tigris L.P., its affiliates, and each of their officers, directors, employees, partners, shareholders and related persons against all claims, losses, damages, liabilities and expenses (including reasonable attorney’s fees) incurred by Tigris L.P. arising out of or related to the performance by Tigris L.P. of the services pursuant to the agreement. This agreement was terminated on August 1, 2011.

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Effective May 11, 2010, Silver Opportunity Partners LLC, or SOP, a wholly-owned subsidiary of Precious Metals Opportunities LLC entered into a services agreement with Tigris Ltd., one of our stockholders. The agreement was not negotiated on an arm’s-length basis and was entered into prior to us adopting our related party transaction policy. Pursuant to the agreement, Tigris Ltd. agreed to provide SOP assistance with services, including: general business; investment, management and/or financial advice; internal bookkeeping services; general administrative services; network and communications services; supervision of outside service providers; and such other services as SOP and Tigris Ltd. may agree to from time to time. For the year ended December 31, 2010 and for the six months ended June 30, 2011, SOP paid Tigris Ltd. $500,000 and $250,000, respectively, for services under the agreement. The agreement included indemnification provisions by SOP in favor of Tigris Ltd. and its owners, affiliates, officers, directors, employees, agents and representatives against all claims, losses, damages, liabilities and expenses (including reasonable attorney’s fees) incurred by Tigris Ltd. arising out of or related to the performance by Tigris Ltd. of the services pursuant to the agreement. On August 1, 2011, this agreement was assigned to Sunshine Silver Mines Corporation, which replaced SOP as a party, and the agreement was revised so that it can be terminated only upon the mutual consent of the parties. This agreement will remain in place following the offering at a rate of $500,000 per annum.

Effective March 1, 2011, we entered into a services agreement with Tigris Ltd. The agreement was not negotiated on an arm’s-length basis and was entered into prior to us adopting our related party transaction policy. Pursuant to the agreement, Tigris Ltd. agreed to provide us assistance with services, including: general business; investment, management and/or financial advice; internal bookkeeping services; general administrative services; network and communications services; supervision of outside service providers; and such other services as we and Tigris Ltd. may agree to from time to time. We agreed to pay Tigris Ltd. at cost for any out-of-pocket expenses incurred by them. Tigris Ltd. is not entitled to any additional, or other forms of, consideration for its services. The services agreement included rights of termination with or without cause upon 30 days’ prior written notice by either party. The agreement included indemnification provisions by us in favor of Tigris Ltd. and its owners, affiliates, officers, directors, employees, agents and representatives against all claims, losses, damages, liabilities and expenses (including reasonable attorney’s fees) incurred by Tigris Ltd. arising out of or related to the performance by Tigris Ltd. of the services pursuant to the agreement. This agreement was terminated on August 1, 2011.

Exploration Activity

From time to time, we have receivables from or payables to other related parties under common control of Electrum in the normal course of our exploration activities. These typically represent expenditures incurred by one party but paid by another. These amounts are settled by cash payment. As of December 31, 2008, 2009 and 2010 and as of June 30, 2011 total receivables outstanding from these activities were approximately $0, $0, $30,000 and $0, respectively, and total payables outstanding from these activities were approximately $53,000, $39,000, $9,000 and $45,000, respectively.

Stockholders Agreement

[In connection with this offering, we intend to enter into a stockholders agreement with certain of our existing stockholders.]

Indemnity Agreements

In connection with this offering, we intend to enter into indemnification agreements with each of our directors and executive officers. These agreements, among other things, will require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer.

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Statement of Policy on Related Person Transactions

Prior to the closing of this offering we will adopt a related party transaction policy designed to minimize potential conflicts of interest arising from any dealings we may have with our affiliates and to provide appropriate procedures for the disclosure, approval and resolution of any real or potential conflicts of interest that may exist from time to time. This policy will provide, among other things, that all related party transactions will be ratified and approved by disinterested members of our Board of Directors after receiving a recommendation from the Audit Committee that the transaction is fair, reasonable and within our policy. In making its recommendation, the Audit Committee will consider each related person transaction in light of all relevant factors, including without limitation the benefits of the transaction to us, the terms of the transaction and whether they are arm’s length and in the ordinary course of our business, the direct or indirect nature of the related person’s interest in the transaction, the size and expected term of the transaction, and other facts and circumstances that bear on the materiality of the related person transaction under applicable law and NYSE standards.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding beneficial ownership of our common stock as of August 1, 2011, by:

• each person whom we know to own beneficially more than 5% of our common stock;

• each of our directors and named executive officers individually; and

• all of our directors and executive officers as a group.

In accordance with the rules of the SEC, beneficial ownership includes voting or investment power with respect to securities and includes shares issuable pursuant to stock options that are exercisable within 60 days of August 1, 2011. Shares issuable pursuant to stock options are deemed outstanding for purposes of computing the percentage ownership of the person holding such options but are not outstanding for purposes of computing the percentage ownership of any other person. The percentage of beneficial ownership for the following table is based on 58,810,113 shares of common stock outstanding as of August 1, 2011, and              shares of common stock outstanding after the completion of this offering, assuming no exercise of the underwriters’ option to purchase additional shares. Unless otherwise indicated, the address for each listed stockholder is: c/o Sunshine Silver Mines Corporation, 370 17th Street, Suite 3800, Denver, CO, 80202. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

	Shares Beneficially Owned Before the Offering					Shares Beneficially Owned After the Offering
Name and Address of Beneficial Owner	Number		Percent			Number	Percent
Executive Officers and Directors:
Stephen Orr(1)		75,000		*
Roger Johnson(2)		—		—
John Galassini(3)		—		—
Philip Pyle		93,572		*
Jeffrey Reeser(4)		—		—
Marc Faber		—		—
Wayne Kirk		—		—
William Natbony(5)(6)(7)(8)		497,204		*
Michael S. Parrett		—		—
David Peat		—		—
Robert Quartermain		20,000		*
Diana Walters		—		—
All executive officers and directors as a group (13 persons)		685,776		1.17	%
Greater than 5% Stockholders:
Electrum:
CGT Management Ltd.(8)		21,009,506		35.7	%
Electrum Silver Holdings LLC(6)		19,200,000		32.6	%
Tigris Group of Companies(7)		1,473,124		2.5	%
Total		41,682,630		70.8	%
Liberty Metals & Mining Holdings, LLC(9)		8,845,577		15.0	%

* Represents beneficial ownership of less than 1%.

(1) Consists of 75,000 shares of our common stock held by Ozorrus Investments Limited, in which Stephen Orr is a beneficiary. Does not include 125,000 shares of our common stock issued pursuant to employee stock options that are not exercisable within 60 days and does not include an additional option to purchase

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125,000 shares of our common stock to be granted to Mr. Orr upon the consummation of this offering which is not exercisable within 60 days. See “Compensation Discussion and Analysis-Grants of Plan-Based Awards. The address for Ozorrus Investments Limited is 84 Hales Oven Avenue, Mount Eden, Auckland, New Zealand 1041.

(2) Does not include 38,600 shares of our common stock issued pursuant to employee stock options that are not exercisable within 60 days.

(3) Does not include 150,000 shares of our common stock issued pursuant to employee stock options that are not exercisable within 60 days.

(4) Does not include 100,000 shares of our common stock issued pursuant to employee stock options that are not exercisable within 60 days.

(5) Consists of 497,204 shares of common stock held by trusts, of which Mr. Natbony is the sole trustee and over which shares Mr. Natbony holds sole voting and dispositive power. Mr. Natbony is a member of our Board of Directors. Mr. Natbony’s address is 535 Madison Avenue, 11^th Floor, New York, NY 10022.

(6) Mr. Natbony is the manager of Electrum Silver Holdings LLC and GRAT Holdings LLC, which principally owns and controls Electrum Silver Holdings LLC. GRAT Holdings LLC is owned by trusts for the benefit of members of the family of Dr. Thomas Kaplan, of which trusts Mr. Natbony is the trustee. Dr. Kaplan and his wife may be deemed to have beneficial ownership of such shares. Mr. Natbony disclaims beneficial ownership of the shares held by Electrum Silver Holdings LLC, except to the extent of his pecuniary interest therein. The address for each of Electrum Silver Holdings LLC and GRAT Holdings LLC is 535 Madison Avenue, 11^th Floor, New York, NY 10022.

(7) Consists of 765,637 shares held by Tigris Financial Group Ltd. and 707,487 shares held by Tigris Financial (International) L.P. Tigris Financial Group Ltd. is owned and controlled by Dr. Kaplan, who is deemed the beneficial owner of such shares as a result of his indirect voting and dispositive powers over such shares. Mr. Natbony is the Chairman of Tigris Financial Group Ltd. Tigris Financial (International) L.P. is controlled by its general partner, Tigris Management Ltd., which is owned and controlled by Dr. Kaplan, who is deemed the beneficial owner of such shares as a result of his indirect voting and dispositive power over such shares. Mr. Natbony disclaims beneficial ownership of the shares beneficially owned by Tigris Financial Group Ltd., except to the extent of his pecuniary interest therein. The address for Tigris Financial Group Ltd. is 535 Madison Avenue, 11^th Floor, New York, NY 10022. The address for Tigris Financial (International) L.P. and Tigris Management Ltd. is 65 Front Street, Hamilton, Bermuda.

(8) CGT Management Ltd. is owned and controlled by Butterfield Trust (Bermuda) Limited, or Butterfield, as trustee of a trust primarily for the benefit of members of the family of Dr. Thomas Kaplan. Mr. Natbony has the power to remove and replace the trustee of such trust. The directors and control persons of CGT Management Ltd. are Pearline McIntosh and Ceri Turton. Each of Butterfield, Mr. Natbony, Ms. McIntosh and Ms. Turton disclaims beneficial ownership of the shares held by CGT Management Ltd. except to the extent of their pecuniary interest therein. The address for CGT Management Ltd. is 65 Front Street, Hamilton, Bermuda.

(9) Liberty Metals & Mining Holdings, LLC is an indirect wholly owned subsidiary of Liberty Mutual Holding Company Inc. The address for each of Liberty Metals & Mining Holdings, LLC and Liberty Mutual Holding Company Inc. is 175 Berkeley Street, 18^th Floor, Boston, MA 02116.

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DESCRIPTION OF CAPITAL STOCK

The following descriptions are summaries of the material terms of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws. Reference is made to the more detailed provisions of, and the descriptions are qualified in their entirety by reference to, the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, copies of which are filed with the SEC as exhibits to the registration statement of which this prospectus is a part, and applicable law.

General

Following this offering, our authorized capital stock will consist of             shares of common stock, par value $0.001 per share, and              shares of preferred stock, par value $             per share.

Common Stock

Common stock outstanding. As of June 30, 2011 there were 58,810,113 shares of common stock outstanding which were held of record by 37 stockholders. There will be             shares of common stock outstanding, assuming no exercise of the underwriters’ option to purchase additional shares and no exercise of outstanding options, after giving effect to the sale of the shares of common stock offered hereby. All outstanding shares of common stock are fully paid and non-assessable, and the shares of common stock to be issued upon completion of this offering will be fully paid and non-assessable.

Voting rights. The holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders, except on matters relating solely to terms of preferred stock.

Dividend rights. We do not intend to pay any dividends in the foreseeable future and currently intend to retain all future earnings to finance our business. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our Board of Directors out of funds legally available therefor. See “Dividend Policy.”

Rights upon liquidation. In the event of liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.

Other rights. The holders of our common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

Our Board of Directors has the authority to issue the preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of such series, without further vote or action by the stockholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders and may adversely affect the voting and other rights of the holders of common stock. At present, we have no plans to issue any of the preferred stock.

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Certain Amended and Restated Certificate of Incorporation and ByLaw Provisions

Opt-Out of Section 203 of the DGCL

We have expressly elected not to be governed by the “business combination” provisions of Section 203 of the DGCL, until such time as Electrum ceases to own more than 50% of our outstanding common stock, after which we will be governed by those provisions. Section 203 prohibits a person who acquires more than 15% but less than 85% of all classes of our outstanding voting stock without the approval of our Board of Directors from merging or combining with us for a period of three years, unless the merger or combination is approved by a two-thirds vote of the shares not owned by such person. These provisions would apply even if the proposed merger or acquisition could be considered beneficial by some stockholders.

Requirements for Advance Notification of Stockholder Nominations and Proposals

Our Amended and Restated Bylaws establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors that will apply after Electrum ceases to own more than 50% of our outstanding common stock.

Limits on Written Consents

Prior to a transaction or series of transactions that results in Electrum ceasing to own more than 50% of our outstanding common stock, the stockholders may amend our Amended and Restated Certificate of Incorporation in any manner as permitted by the DGCL.

Following Electrum ceasing to own more than 50% of our outstanding common stock, any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders, subject to the rights of the holders of any series of preferred stock.

Limits on Special Meetings

Special meetings of the stockholders may be called at any time only by the secretary at the direction of our Board of Directors pursuant to a resolution adopted by the Board of Directors or by Electrum until it ceases to own more than 50% of our outstanding common stock.

Corporate Opportunities

Our Amended and Restated Certificate of Incorporation provides that we renounce any interest in the business opportunities of Electrum and Liberty Metals & Mining and of our directors who are affiliated with Electrum or Liberty Metals & Mining, other than directors employed by us, and that neither our directors affiliated with Electrum or Liberty Metals & Mining, other than directors employed by us, nor Electrum or Liberty Metals & Mining have any obligation to offer us those opportunities. Electrum and Liberty Metals & Mining and any of our directors who are affiliated with them other than directors employed by us may, in the past, present or future, carry out and engage in any and all activities associated with any business, including, without limitation, any mining business.

Amendments to our Governing Documents

Generally, the amendment of our Amended and Restated Certificate of Incorporation requires approval by our Board of Directors and the vote of holders of at least 50% of the votes entitled to be cast by the outstanding capital stock in the election of our Board of Directors (which amount shall be raised to 66 ²/3% of our outstanding capital stock following the time that Electrum ceases to own more than 50% of our outstanding common stock). Any amendment to our Amended and Restated Bylaws requires the approval of either a majority of our Board of Directors or holders of at least 50% of the votes entitled to be cast by the outstanding capital stock in the election of our Board of Directors (which amount shall be raised to 66 ²/3% of our outstanding capital stock following the time that Electrum ceases to own more than 50% of our outstanding common stock).

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Board of Directors

Initially, our Board of Directors will consist of a single class of directors each serving one year terms. Following Electrum ceasing to own more than 50% of our outstanding common stock, our Board of Directors will be divided into three classes of directors, with each class as nearly equal in number as possible, serving staggered three year terms (other than directors that may be elected by holders of preferred shares, if any).

Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws provide that at such date that Electrum ceases to own more than 50% of our outstanding common stock, directors may be removed only for cause and only by the affirmative vote of the holders of 66 ²/3% of our outstanding voting stock, voting together as a single class, unless approved by our Board of Directors, in which case such removal for cause shall require the affirmative vote of the holders of 50% of our outstanding voting stock, voting together as a single class. Prior to that date, directors may be removed by holders of a majority of our outstanding voting stock, voting together as a single class. Our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws provide that any vacancy on our Board of Directors, including a vacancy resulting from an enlargement of our Board of Directors, at such time that Electrum ceases to own more than 50% of our outstanding common stock, may be filled by vote of a majority of our directors then in office (prior to that date, any vacancy on the Board of Directors may be filled by Electrum). Furthermore, our Amended and Restated Certificate of Incorporation provides that at such time that Electrum ceases to own more than 50% of our outstanding common stock, the authorized number of directors may be changed only by the affirmative vote of 66 ²/3% of our outstanding shares of capital stock or by the resolution of our Board of Directors (prior to that date, the authorized number of directors may be changed by Electrum).

Listing

The Company will list the common stock on the New York Stock Exchange under the symbol “AGS.” The Company has applied to list the common stock on the Toronto Stock Exchange under the symbol “SM.”

Transfer Agent and Registrar

The Transfer Agent and Registrar for the common stock is             .

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U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a discussion of the material U.S. federal income and estate tax consequences that apply to you if you are a “non-U.S. holder,” as defined below, who beneficially owns our common stock but does not own, and has not owned, actually or constructively, more than 5% of our common stock. This discussion applies to you only if you purchase our common stock in connection with this offering and will hold our common stock as a capital asset. You are a “non-U.S. holder” if, for U.S. federal income tax purposes, you are:

• a non-resident alien individual, other than certain former citizens and residents of the United States;

• a corporation, or other entity taxable as a corporation, created or organized in or under the laws of a jurisdiction other than the United States or of any political subdivision thereof; or

• a foreign estate or trust,

but not if you are an individual who is present in the United States for 183 days or more in the taxable year of disposition of our common stock and, certain other requirements being met, is not otherwise a resident of the United States for U.S. federal income tax purposes. If you are such an individual, you should consult your tax adviser regarding the U.S. federal income tax consequences of the sale, exchange or other disposition of common stock.

If you are a partnership for U.S. federal income tax purposes or a partner in a partnership, the U.S. federal income tax consequences of owning and disposing of our common stock will generally depend on the status of the partner and upon the activities of the partnership. Partnerships owning common stock and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of our common stock.

This discussion is based on the Code, administrative pronouncements, judicial decisions and Treasury Regulations, all as of the date hereof, changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address all aspects of U.S. federal income and estate taxation that may be relevant to you in light of your particular circumstances and does not address any tax consequences arising under the laws of any state, local or foreign jurisdiction. You should consult your tax adviser with respect to the particular tax consequences to you of owning and disposing of our common stock, including the consequences under the laws of any state, local or foreign jurisdiction.

Dividends

As discussed under “Dividend Policy” above, we do not currently expect to pay dividends. In the event that we do pay dividends, dividends you receive on our common stock generally will be subject to withholding tax at a 30% rate or a reduced rate specified by an applicable income tax treaty. In order to obtain a reduced rate of withholding, you must provide an Internal Revenue Service Form W-8BEN certifying your entitlement to benefits under a treaty.

The withholding tax does not apply to dividends paid to you if you provide an Internal Revenue Service Form W-8ECI certifying that the dividends are effectively connected with your conduct of a trade or business within the United States and, if required by an applicable tax treaty, is also attributable to a permanent establishment maintained by you in the United States. Instead, the effectively connected dividends will be subject to regular U.S. income tax as if the you were a U.S. resident, subject to an applicable income tax treaty providing otherwise. If you are a non-U.S. corporation receiving effectively connected dividends, you may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).

Gain on Disposition of Common Stock

You will generally not be subject to U.S. federal income tax on gain realized on a sale or other disposition of our common stock unless either (i) the gain is effectively connected with your conduct of a trade or business in the United States and, if required by an applicable tax treaty, is also attributable to a permanent establishment

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maintained by you in the United States, or (ii) the gain is subject to tax under the rules that apply to the disposition of the stock of a “U.S. real property holding corporation,” or USRPHC.

Gain that is effectively connected with your conduct of a trade or business in the United States will be subject to regular U.S. income tax as if you were a U.S. resident, subject to an applicable treaty providing otherwise. If you are a non-U.S. corporation recognizing effectively connected gain, you may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).

A corporation is generally a USRPHC if 50% or more of the fair market value of its real property assets and its other assets used or held for use in a trade or business consist of U.S. real property interests, as defined in the Code and applicable regulations. Based on our estimates of the current relative fair market values of our U.S. real property interests and other assets, we believe we are not currently a USRPHC. However, both because the determination of the value of our mineral assets is uncertain and requires the use of subjective estimates, and because the relative fair market values of our assets will likely fluctuate over time (based on, for example, the results of the exploration and development of our properties), there can be no assurance that we are not, or will not become, a USRPHC. Even if we are a USRPHC, for so long as our common stock is regularly traded on an established securities market (such as the NYSE), you will not recognize taxable gain on a sale of our common stock under the rules applicable to USRPHCs unless you actually or constructively own more than 5% of our common stock at any time during the five-year period ending on the date of disposition or, if shorter, your holding period for our common stock. If our common stock was not considered to be regularly traded on an established securities market for purposes of these rules, you would be subject to U.S. federal income tax on any gain recognized on the disposition of all or a portion of our common stock in generally the same manner as described above with respect to gain that is effectively connected with the conduct of a trade or business in the United States.

Information Reporting and Backup Withholding Requirements

Information returns will be filed with the Internal Revenue Service in connection with payments of dividends on our common stock. You may have to comply with certification procedures to establish that you are not a U.S. person in order to avoid information reporting and backup withholding requirements with respect to payments of dividends or the proceeds of a sale or disposition of our common stock. The certification procedures required to claim a reduced rate of withholding under a treaty will satisfy the certification requirements necessary to avoid the backup withholding as well. You will be allowed a credit against your U.S. federal income tax liability, if any, for, and may be entitled to a refund of, the amount of any backup withholding from a payment of dividends to your or the gross proceeds you receive from a sale or disposition of our common stock, provided that you timely furnish the required information to the Internal Revenue Service.

Recent Legislation

Recent legislation will generally impose, effective for payments made after December 31, 2012, withholding at a rate of 30% on dividends and the gross proceeds of a disposition of common stock paid to certain foreign entities, including financial institutions, unless various information reporting and due diligence requirements are satisfied. As a result, the entity through which our common stock is held by you will affect the determination of whether withholding is required. The new withholding regime will apply in conjunction with the existing rules described in “—Dividends” and “—Information Reporting and Backup Withholding Requirements” above. You should consult your tax adviser regarding the possible implications of this legislation on your investment in our common stock.

Federal Estate Tax

If you are an individual or an entity the property of which is potentially includible in an individual Non-U.S. Holder’s gross estate for U.S. federal estate tax purposes (for example, a trust funded by an individual Non-U.S. Holder and with respect to which the individual has retained certain interests or powers), you should note that, absent an applicable treaty benefit, our common stock will be treated as U.S. situs property subject to U.S. federal estate tax.

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CANADIAN FEDERAL INCOME TAX CONSEQUENCES FOR NON-U.S. HOLDERS

The following summary describes the principal Canadian federal income tax considerations under the Income Tax Act (Canada) and the Income Tax Regulations or, collectively, the Tax Act, generally applicable to a purchaser who acquires as beneficial owner our common stock pursuant to this offering and who, at all relevant times, for purposes of the Tax Act, (i) is, or is deemed to be, resident in Canada, (ii) deals at arm’s length with the Company; (iii) is not affiliated with the Company; (iv) is not in a relationship with us such that we would be considered a “foreign affiliate” of such purchaser; and (v) holds our common stock as capital property, or a Holder. Generally, our common stock will be capital property to a Holder provided the Holder does not acquire or hold our common stock in the course of carrying on a business or as part of an adventure or concern in the nature of trade.

This summary is not applicable to (i) an interest in which is a “tax shelter investment”, (ii) a purchaser that is a “financial institution” for purposes of certain rules referred to as the mark-to-market rules, or (iii) a purchaser that reports its “Canadian tax results” in a currency other than Canadian currency, each as defined in the Tax Act. Such purchasers should consult their own tax advisors.

This summary is based on the current provisions of the Tax Act, and an understanding of the current administrative policies and assessing practices of the Canada Revenue Agency published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof, or the Proposed Amendments, and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative policy or assessing practice whether by legislative, administrative or judicial action nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ from those discussed herein.

This summary is of a general nature only and is not, and is not intended to be, legal or tax advice to any prospective purchaser or holder of our common stock. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, prospective purchasers of our common stock should consult their own tax advisors having regard to their own particular circumstances.

Currency Conversion

Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of our common stock must be converted into Canadian dollars based on the exchange rates as determined in accordance with the Tax Act. The amount of dividends required to be included in the income of, and capital gains or capital losses realized by, a Holder may be affected by fluctuations in the Canadian / U.S. dollar exchange rate.

Dividends

A Holder will be required to include in computing its income for a taxation year the amount of any dividends received on our common stock. In the case of a Holder that is an individual, such dividends will not be subject to the gross-up and dividend tax credit rules applicable to taxable dividends received from taxable Canadian corporations. A Holder that is a corporation will not be entitled to deduct the amount of such dividends in computing its taxable income. The full amount of the dividends including amounts deducted for U.S. withholding tax, if any, in respect of the dividends must be included in income. To the extent U.S. withholding tax is paid in respect of dividends paid on our common stock, the amount of such tax generally will be eligible for foreign tax credit or deduction treatment subject to the detailed rules and limitations under the Tax Act. Holders are advised to consult their own tax advisors with respect to the availability of a credit or deduction to them having regard to their particular circumstances.

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Dispositions

Generally, on a disposition or deemed disposition of a share of our common stock, a Holder will realize a capital gain (or capital loss) equal to the amount, if any, by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Holder of the share immediately before the disposition or deemed disposition.

The adjusted cost base to the Holder of a share of our common stock acquired pursuant to this offering will be determined by averaging the cost of such share with the adjusted cost base immediately before the time of acquisition of all other shares of our common stock owned by the Holder as capital property immediately before that time, if any.

Generally, a Holder is required to include in computing its income for a taxation year one-half of the amount of any capital gain, or a taxable capital gain, realized in the year. Subject to and in accordance with the provisions of the Tax Act, a Holder is required to deduct one-half of the amount of any capital loss, or an allowable capital loss, realized in a taxation year from taxable capital gains realized by the Holder in the year and allowable capital losses in excess of taxable capital gains for the year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years. To the extent U.S. tax is paid in respect of capital gains realized on the disposition or deemed disposition of a share of our common stock, the amount of such tax generally will be eligible for foreign tax credit treatment subject to the detailed rules and limitations under the Tax Act. Holders are advised to consult their own tax advisors with respect to the availability of a credit to them having regard to their particular circumstances.

Eligibility for Investment

On the date of issue, provided that our common stock is listed at that time on a designated stock exchange, which currently includes the Toronto Stock Exchange and the New York Stock Exchange, shares of our common stock will be qualified investments under the Tax Act for trusts governed by registered retirement savings plans, registered retirement income funds, registered education savings plans, deferred profit sharing plans, registered disability savings plans and tax-free savings accounts , or TFSA. Provided the holder of a TFSA does not have a “significant interest” (within the meaning of the Tax Act) in us, and does not have a “significant interest” (within the meaning of the Tax Act) in a corporation, partnership or trust that does not deal at arm’s length with us, such shares will not be a prohibited investment under the Tax Act for such TFSA. In the Canadian federal budget released on June 6, 2011, or the 2011 Federal Budget, the Minister of Finance proposed that the definition and rules in respect of a prohibited investment currently applicable in respect of TFSA be extended to apply to registered retirement savings plans and registered retirement income funds. There can be no assurance that the 2011 Federal Budget proposals will be enacted as proposed, or at all.

Foreign Investment Entity Rules

In the Canadian federal budget released on March 4, 2010, or the 2010 Federal Budget, the Minister of Finance announced that certain previously announced Proposed Amendments to the Tax Act relating to the taxation of Canadian residents investing in certain non-resident entities, or the FIE Proposals, will not be implemented. The Minister of Finance also proposed to replace the FIE Proposals with a slightly revised version of the current offshore investment fund property rules, which Proposed Amendments were released on August 27, 2010. There can be no assurance that the 2010 Federal Budget proposals will be enacted as proposed, or at all.

The existing rules with respect to offshore investment fund property may, in certain circumstances, require a Holder to include an amount in income in each taxation year in respect of the acquisition and holding of our common stock if the value of such common stock may reasonably be considered to be derived, directly or indirectly, primarily from portfolio investments in: (i) shares of the capital stock of one or more corporations, (ii) indebtedness or annuities, (iii) interests in one or more corporations, trusts, partnerships, organizations, funds

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or entities, (iv) commodities, (v) real estate, (vi) Canadian or foreign resource properties, (vii) currency of a country other than Canada, (vii) rights or options to acquire or dispose of any of the foregoing, or (viii) any combination of the foregoing, or Investment Assets. We are of the view that our common stock should not be an offshore investment fund property.

Furthermore, in order for these rules to apply to a Holder in respect of our common stock, it must be reasonable to conclude that one of the main reasons for the Holder acquiring or holding our common stock was to derive a benefit from portfolio investments in Investment Assets in such a manner that the taxes, if any, on the income, profits and gains from such Investment Assets for any particular year are significantly less than the tax that would have been applicable under Part I of the Tax Act if the income, profits and gains had been earned directly by the Holder.

These rules are complex and their application depends, in part, on the reasons for a Holder acquiring or holding our common stock. Holders are urged to consult their own tax advisors regarding the application and consequences of these rules in their own particular circumstances.

Foreign Property Information Reporting

In general, a Holder that is a “specified Canadian entity” for a taxation year or fiscal period and whose total cost amount of “specified foreign property” (as such terms are defined in the Tax Act) including our common stock at any time in the taxation year or fiscal period exceeds $100,000 will be required to file an information return for the taxation year or fiscal period disclosing certain prescribed information. Subject to certain exceptions, a taxpayer resident in Canada will generally be a specified Canadian entity. Our common stock will come within the definition of “specified foreign property” for the purposes of the Tax Act.

In the 2010 Federal Budget, the Minister of Finance proposed to expand the existing reporting requirements with respect to “specified foreign property” so that more detailed information is available for audit use. Revised legislation reflecting such proposal has not yet been released. The reporting rules in the Tax Act are complex and this summary does not purport to explain all circumstances in which reporting may be required. Holders should consult their own tax advisors regarding whether they must comply with these reporting requirements including any expansion thereof pursuant to the above-mentioned 2010 Federal Budget proposal.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock. Future sales of substantial amounts of our common stock in the public market could adversely affect market prices prevailing from time to time. Furthermore, because only a limited number of shares will be available for sale shortly after this offering due to existing contractual and legal restrictions on resale as described below, there may be sales of substantial amounts of our common stock in the public market after the restrictions lapse. This may adversely affect the prevailing market price and our ability to raise equity capital in the future.

Upon completion of this offering, we will have             shares of common stock outstanding assuming no exercise of the underwriters’ option to purchase additional shares and no exercise of any options outstanding as of June 30, 2011. All of the shares sold in this offering will be freely transferable without restriction or registration under the Securities Act, except for any shares purchased by one of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act, including pursuant to the directed share program. See “Underwriting.” The remaining shares of common stock outstanding are “restricted shares” as defined in Rule 144. Restricted shares may be sold in the public market only if registered or if they qualify for the exemption from registration under Rules 144 or 701 under the Securities Act. As a result of the contractual 180-day lock-up period described below and the provisions of Rules 144 and 701, these shares will be available for sale in the public market as follows:

Number of Shares	Date
	On the date of this prospectus.
	After 90 days from the date of this prospectus.
	After 180 days from the date of this prospectus (subject, in some cases, to volume limitations).

Rule 144

In general, under Rule 144, beginning 90 days after the date of this offering, subject to the terms of any lock-up agreement described below, an affiliate who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell within any three-month period a number of such shares that does not exceed the greater of (a) 1% of the number of shares of common stock then outstanding, which will equal shares immediately after this offering, assuming no exercise of the underwriters’ option to purchase additional shares, or (b) the average weekly reported volume of trading of our common stock on the New York Stock Exchange during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. Sales by affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and the availability of current public information about us.

Following this offering, subject to the terms of any lock-up agreement described below, a person that is not an affiliate of ours at the time of, or at any time during the three months preceding, a sale and who has beneficially owned restricted shares of our common stock for at least six months, may sell such shares without complying with the volume limitation, manner of sale or notice provisions described above, and any such person who has beneficially owned restricted shares of our common stock for at least one year may sell such shares without complying with the abovementioned restrictions and the current public information requirement.

We are unable to estimate the number of shares that will be sold under Rule 144 since this will depend on the market price for our common stock, the personal circumstances of the stockholder and other factors.

Rule 701

In general, under Rule 701, any of our employees, directors, officers, consultants or advisors who purchases shares from us in connection with a compensatory stock or option plan or other written agreement before the

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effective date of this offering is entitled to resell such shares 90 days after the effective date of this offering in reliance on Rule 144, without having to comply with the holding period requirements or certain other restrictions contained in Rule 701.

The SEC has indicated that Rule 701 will apply to typical stock options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after the date of this prospectus. Securities issued in reliance on Rule 701 are restricted securities and, subject to the terms of any lock-up agreement described below, beginning 90 days after the date of this prospectus, may be sold by persons other than “affiliates,” as defined in Rule 144, subject only to the manner of sale provisions of Rule 144, and by “affiliates” under Rule 144 without compliance with its one-year minimum holding period requirement.

Stock Options

As of June 30, 2011, options to purchase a total of 321,548 shares of our common stock were outstanding.              of the shares subject to options are subject to lock-up agreements. After this offering, an additional             shares of our common stock will be available for future option grants under our stock plans.

Upon completion of this offering, we intend to file a registration statement under the Securities Act covering all shares of common stock subject to outstanding options or issuable pursuant to our Long Term Incentive Plan. Shares registered under this registration statement will be available for sale in the open market, subject to Rule 144 volume limitations applicable to affiliates, vesting restrictions with us or the terms of any lock-up agreement described below.

Lock-up Agreements

We, our executive officers and directors and the holders of substantially all of our outstanding shares of common stock have entered into lock-up agreements with the underwriters. Under these agreements, subject to certain exceptions, we and each of these persons may not, without the prior written approval of Morgan Stanley & Co. LLC, offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, or hedge our common stock or securities convertible into or exchangeable or exercisable for our common stock. These restrictions will be in effect for a period of 180 days after the date of this prospectus, which period is subject to extension in the circumstances described in the paragraph below. At any time and without public notice, Morgan Stanley & Co. LLC may, in its sole discretion, release some or all the securities from these lock-up agreements. There are no agreements, understandings or intentions, tacit or explicit, to release any of the common stock subject to lock-up agreements prior to the expiration of the lock-up period.

Notwithstanding the above, if (i) during the period beginning on the date that is 15 calendar days plus three business days before the last day of the 180-day period described in the paragraph above, or the initial lock-up period, and ending on the last day of the initial lock-up period, we issue an earnings release or material news or a material event relating to us occurs; or (ii) prior to the expiration of the initial lock-up period, we announce that we will release earnings results during the 16 day period beginning on the last day of the initial lock-up period, then the restrictions imposed by these lock-up agreements will continue to apply until the expiration of the date that is 15 calendar days plus three business days after the date on which the issuance of the earnings release or the material news or material event occurs. See “Underwriting.”

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UNDERWRITING

We are offering the shares of our common stock described in this prospectus through the underwriters named below. UBS Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC are acting as joint book-running managers of this offering and as the representatives of the underwriters. We have entered into an underwriting agreement dated                     , 2011 with the representatives. Subject to the terms and conditions of the underwriting agreement, each of the underwriters has severally agreed to purchase the number of shares of common stock listed next to its name in the following table.

Underwriters	Number of shares
UBS Securities LLC
Morgan Stanley & Co. LLC
RBC Capital Markets, LLC
Total

The underwriting agreement provides for a firm commitment underwriting, and the underwriters must buy all of the shares if they buy any of them. However, the underwriters are not required to pay for the shares covered by the underwriters’ over-allotment option described below. In Canada, the shares are to be taken up by the underwriters, if at all, on or before a date not later than 42 days after the date of this prospectus.

Our common stock is offered subject to a number of conditions, including:

• receipt and acceptance of our common stock by the underwriters; and

• the underwriters’ right to reject orders in whole or in part.

The obligation of the underwriters under the underwriting agreement may also be terminated at their discretion on the basis of their assessment of the state of the financial markets and may also be terminated upon the occurrence of certain stated events.

We have been advised by the representatives that the underwriters intend to make a market in our common stock but that they are not obligated to do so and may discontinue making a market at any time without notice.

In connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses electronically.

Over-Allotment Option

We have granted the underwriters an option to buy up to an aggregate of             additional shares of our common stock. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with this offering. The underwriters have 30 days from the date of this prospectus to exercise this option. If the underwriters exercise this option, they will each purchase additional shares approximately in proportion to the amounts specified in the table above.

Commissions and Discounts

Shares sold by the underwriters to the public will initially be offered at the initial offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $         per share from the initial public offering price. If all the shares are not sold after the underwriters have made a reasonable effort to sell the shares at the initial public offering price, the representatives may change the offering price and the other selling terms, provided that the price for the shares shall not exceed the public offering price and further provided that the compensation that is realized by the underwriters will be decreased

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by the amount that the aggregate price paid by the purchasers for the shares is less than the gross proceeds paid by the underwriters to us. Upon execution of the underwriting agreement, the underwriters will be obligated to purchase the shares at the prices and upon the terms stated therein. The representatives of the underwriters have informed us that they do not expect to sell more than an aggregate of five percent of the total number of shares of common stock offered by them to accounts over which such representatives exercise discretionary authority.

The following table shows the per share and total underwriting discounts and commissions we will pay to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase up to additional shares.

	No exercise	Full exercise
Per share	$	$
Total	$	$

We estimate that the total expenses of the offering payable by us, not including the underwriting discounts and commissions, will be approximately $             million. The underwriters have agreed to reimburse us for a portion of our expenses incurred in connection with the offering.

No Sales of Similar Securities

We, our executive officers and directors and the holders of substantially all of our outstanding shares of common stock have entered into lock-up agreements with the underwriters. Under these agreements, we and each of these persons may not, without the prior written approval of Morgan Stanley & Co. LLC, offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, or hedge our common stock or securities convertible into or exchangeable or exercisable for our common stock. These restrictions will be in effect for a period of 180 days after the date of this prospectus, which period is subject to extension in the circumstances described in the paragraph below. At any time and without public notice, Morgan Stanley & Co. LLC may, in its sole discretion, release some or all the securities from these lock-up agreements.

Notwithstanding the above, if (i) during the period beginning on the date that is 15 calendar days plus three business days before the last day of the 180-day period described in the paragraph above, or the initial lock-up period, and ending on the last day of the initial lock-up period, we issue an earnings release or material news or a material event relating to us occurs; or (ii) prior to the expiration of the initial lock-up period, we announce that we will release earnings results during the 16 day period beginning on the last day of the initial lock-up period, then the restrictions imposed by these lock-up agreements will continue to apply until the expiration of the date that is 15 calendar days plus three business days after the date on which the issuance of the earnings release or the material news or material event occurs.

The lock-up agreement does not apply to the following transactions by us: (1) issuances of common stock upon the exercise of options (or granting or vesting of other equity incentive awards) or warrants disclosed as outstanding elsewhere in this prospectus; (2) the issuance of employee stock options (or other equity incentive awards) and subsequent issuances of common stock upon the exercise of options (or granting or vesting of other equity incentive awards) pursuant to equity incentive plans described elsewhere in this prospectus; (3) the filing of a registration statement on Form S-8 relating to the offering of securities in accordance with the terms of equity incentive plans described elsewhere in this prospectus; and (4) the issuance of common stock in connection with one or more acquisitions by the Company of, or joint ventures between the Company and, another company, or pursuant to equipment leasing arrangements, debt financings or settlement agreements by the Company, provided that the aggregate number of shares of common stock that may be issued pursuant to clause (4) shall not exceed 10% of the total number of shares of common stock outstanding after the completion of this offering and each recipient of shares of common stock issued pursuant to clause (4) agrees to be bound by the terms of a lock-up agreement.

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The lock-up agreement does not apply to the following transactions by our executive officers, directors and holders of our common stock: (1) bona fide gifts; (2) dispositions to any trust for the direct or indirect benefit of the transferor or the transferor’s immediate family; (3) transfers to a wholly-owned subsidiary of the transferor or to direct or indirect stockholders, members, partners or other affiliates of the transferor, provided that the transfer does not involve a disposition for value; (4) transfers by operation of law, such as the rules of intestate succession; (5) dispositions of common stock acquired in open-market transactions after the completion of this offering; (6) transfers to any corporation, partnership or other business entity with whom the transferor shares in common an investment manager or adviser; and (7) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of common stock, provided that such plan does not permit the transfer or other disposition of common stock during the lock-up period. In the case of clauses (1), (2), (3), (4) and (6) above, the transferee must also agree to be bound by the terms of a lock-up agreement.

Indemnification

We have agreed to indemnify the several underwriters against certain liabilities, including certain liabilities under the Securities Act. If we are unable to provide this indemnification, we have agreed to contribute to payments the underwriters may be required to make in respect of those liabilities.

New York Stock Exchange

We intend to apply to have our common stock approved for listing on the New York Stock Exchange under the symbol “AGS.” The listing will be subject to us fulfilling all of the listing requirements of the New York Stock Exchange.

Toronto Stock Exchange

We have applied to list our common stock on the Toronto Stock Exchange under the symbol “SM.” The listing will be subject to us fulfilling all of the listing requirements of the Toronto Stock Exchange.

Price Stabilization, Short Positions

In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price of our common stock during and after this offering, including:

• stabilizing transactions;

• short sales;

• purchases to cover positions created by short sales;

• imposition of penalty bids; and

• syndicate covering transactions.

Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our common stock. These transactions may also include making short sales of our common stock, which involve the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering. Short sales may be “covered short sales,” which are short positions in an amount not greater than the underwriters’ over-allotment option referred to above, or may be “naked short sales,” which are short positions in excess of that amount.

The underwriters may close out any covered short position by either exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.

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The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchased in this offering. Any naked short position would form part of the underwriters’ overallocation position.

The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of that underwriter in stabilizing or short covering transactions.

As a result of these activities, the price of our common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the underwriters at any time. The underwriters may carry out these transactions on the New York Stock Exchange, the Toronto Stock Exchange, other stock exchanges, in the over-the-counter market or otherwise. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of the shares.

Determination of Offering Price

Prior to this offering, there was no public market for our common stock. The initial public offering price will be determined by negotiation by us and the representatives of the underwriters. The principal factors to be considered in determining the initial public offering price include:

• the information set forth in this prospectus and otherwise available to the representatives;

• our history and prospects and the history and prospects for the industry in which we compete;

• our past and present financial performance and an assessment of our management;

• our prospects for future earnings and the present state of our development;

• the general condition of the securities market at the time of this offering;

• the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

• other factors deemed relevant by the underwriters and us.

The estimated public offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors. Neither we nor the underwriters can assure investors that an active trading market will develop for our common stock or that the common stock will trade in the public market at or above the initial public offering price.

Directed Share Program

At our request, the underwriters have reserved up to 5% of the common stock being offered by this prospectus for sale at the initial public offering price to our directors, officers, employees, consultants and existing stockholders and other persons having a relationship with us, such as suppliers, or having a relationship with our existing stockholders. The sales will be made by UBS Financial Services Inc., a selected dealer affiliated with UBS Securities LLC, an underwriter of this offering, through a directed share program. We do not know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. Any shares sold in the directed share program to our directors and executive officers will be subject to the lock-up agreements described above.

Affiliations

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory,

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investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and their affiliates may from time to time in the future engage with us and perform services for us in the ordinary course of their business for which they will receive customary fees and expenses. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of us. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of these securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in these securities and instruments.

Notice to Investors

Notice to prospective investors in the European Economic Area

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state), other than Germany, with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date), an offer of securities described in this prospectus may not be made to the public in that relevant member state other than:

• to any legal entity which is a qualified investor as defined in the Prospectus Directive;

• by the underwriters to fewer than 100, or, if the relevant member state has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or

• in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of securities shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For purposes of this provision, the expression an “offer of securities to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the relevant member state), and includes any relevant implementing measure in the relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU.

We have not authorized and do not authorize the making of any offer of securities through any financial intermediary on our behalf, other than offers made by the underwriters with a view to the final placement of the securities as contemplated in this prospectus. Accordingly, no purchaser of the securities, other than the underwriters, is authorized to make any further offer of the securities on behalf of us or the underwriters.

The EEA selling restriction is in addition to any other selling restrictions set out in this prospectus.

Notice to prospective investors in Australia

This prospectus is not a formal disclosure document and has not been, nor will be, lodged with the Australian Securities and Investments Commission. It does not purport to contain all information that an investor or their professional advisers would expect to find in a prospectus or other disclosure document (as defined in the

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Corporations Act 2001 (Australia)) for the purposes of Part 6D.2 of the Corporations Act 2001 (Australia) or in a product disclosure statement for the purposes of Part 7.9 of the Corporations Act 2001 (Australia), in either case, in relation to the common stock.

The common stock is not being offered in Australia to “retail clients” as defined in sections 761G and 761GA of the Corporations Act 2001 (Australia). This offering is being made in Australia solely to “wholesale clients” for the purposes of section 761G of the Corporations Act 2001 (Australia) and, as such, no prospectus, product disclosure statement or other disclosure document in relation to the common stock has been, or will be, prepared.

This prospectus does not constitute an offer in Australia other than to wholesale clients. By submitting an application for our common stock, you represent and warrant to us that you are a wholesale client for the purposes of section 761G of the Corporations Act 2001 (Australia). If any recipient of this prospectus is not a wholesale client, no offer of, or invitation to apply for, our common stock shall be deemed to be made to such recipient and no applications for our common stock will be accepted from such recipient. Any offer to a recipient in Australia, and any agreement arising from acceptance of such offer, is personal and may only be accepted by the recipient. In addition, by applying for our common stock you undertake to us that, for a period of 12 months from the date of issue of the common stock, you will not transfer any interest in the common stock to any person in Australia other than to a wholesale client.

Notice to prospective investors in Hong Kong

Our common stock may not be offered or sold in Hong Kong by means of this prospectus or any document other than (i) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (ii) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong). No advertisement, invitation or document relating to our common stock may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the common stock which is or is intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Notice to prospective investors in Japan

Our common stock has not been and will not be registered under the Financial Instruments and Exchange Law of Japan, or the Financial Instruments and Exchange Law, and our common stock will not be offered or sold, directly or indirectly, in Japan, or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan, or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Notice to prospective investors in Singapore

This document has not been registered as a prospectus with the Monetary Authority of Singapore and, in Singapore, the offer and sale of our common stock is made pursuant to exemptions provided in sections 274 and 275 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of our common stock may not be circulated or distributed, nor may our common stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in

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Singapore other than (i) to an institutional investor as defined in Section 4A of the SFA pursuant to Section 274 of the SFA, (ii) to a relevant person as defined in section 275(2) of the SFA pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with the conditions (if any) set forth in the SFA. Moreover, this document is not a prospectus as defined in the SFA. Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. Prospective investors in Singapore should consider carefully whether an investment in our common stock is suitable for them.

Where our common stock is subscribed or purchased under Section 275 of the SFA by a relevant person which is:

• a corporation (which is not an accredited investor as defined in Section 4A of the SFA) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

• a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor;

shares of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 of the SFA, except:

• to an institutional investor, for corporations under Section 274 of the SFA, or to a relevant person defined in Section 275(2) of the SFA, or any person pursuant to an offer that is made on terms that such shares of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions, specified in Section 275 of the SFA;

• where no consideration is given for the transfer; or

• where the transfer is by operation of law.

In addition, investors in Singapore should note that the common stock acquired by them is subject to resale and transfer restrictions specified under Section 276 of the SFA, and they, therefore, should seek their own legal advice before effecting any resale or transfer of their common stock.

Notice to prospective investors in Switzerland

This prospectus does not constitute an issue prospectus pursuant to Article 652a or Article 1156 of the Swiss Code of Obligations, or the CO, and the common stock will not be listed on the SIX Swiss Exchange. Therefore, the prospectus may not comply with the disclosure standards of the CO and/or the listing rules (including any prospectus schemes) of the SIX Swiss Exchange. Accordingly, the common stock may not be offered to the public in or from Switzerland, but only to a selected and limited circle of investors, which do not subscribe for the shares with a view to distribution.

Notice to prospective investors in the United Kingdom

This prospectus is only being distributed to and is only directed at: (i) persons who are outside the United Kingdom; (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or the Order; or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons falling within (i)-(iii) together being referred to as “relevant persons”). The shares of common stock are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents.

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LEGAL MATTERS

The validity of the issuance of the shares of common stock offered hereby will be passed upon for us by Davis Polk & Wardwell LLP, New York, New York and for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. Certain matters with respect to Canadian law will be passed upon for us by Osler, Hoskin & Harcourt LLP and for the underwriters by Stikeman Elliott LLP.

EXPERTS

The consolidated financial statements of Sunshine Silver Mines Corporation (formerly Los Gatos Ltd.) as of December 31, 2009 and for each of the years in the two-year period ended December 31, 2009 and the period from April 24, 2006 (Inception) to December 31, 2009 (not presented separately herein), appearing herein and in this registration statement, have been audited by WithumSmith+Brown, PC, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The consolidated financial statements of Sunshine Silver Mines Corporation as of December 31, 2010, and for the year ended December 31, 2010 and information included in the cumulative from inception presentations for the period January 1, 2010 to December 31, 2010 (not separately presented herein), have been included herein and in the registration statement in reliance upon the report of KPMG LLP, or KPMG, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

Except for the information set forth in “Prospectus Summary—Recent Developments” and “Business—Recent Developments” which was reviewed by Philip Pyle, as set forth in the following paragraph, the technical information appearing in this prospectus concerning the Sunshine Mine and the Los Gatos Project, including estimates of mineralized material for the Sunshine Mine, was derived from the technical reports of Behre Dolbear & Company, independent mining consultants. As of the date hereof, Behre Dolbear & Company, beneficially owns none of our outstanding common shares.

Information relating to our mineral properties in this prospectus set forth in “Prospectus Summary—Recent Developments” and “Business—Recent Developments” was reviewed by Philip Pyle, Vice President Exploration, and is included herein in reliance on such person’s expertise. Philip Pyle is a “Qualified Person” as such term is defined in NI 43-101. As of the date hereof, Philip Pyle beneficially owns, directly or indirectly, less than 1% of our outstanding common shares.

CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

On November 19, 2010, Sunshine Silver’s Board of Directors, in contemplating an initial public offering, appointed KPMG as its independent registered public accounting firm to audit its financial statements for the fiscal year ended December 31, 2010; the financial statements for the fiscal years ended December 31, 2009 and 2008 and the period from April 24, 2006 (Inception) to December 31, 2009 were audited by WithumSmith + Brown, PC.

On November 19, 2010, Sunshine Silver’s Board of Directors dismissed WithumSmith + Brown, PC as Sunshine Silver’s independent registered public accounting firm for the periods subsequent to December 31, 2009. Sunshine Silver had no audit committee at such time.

The reports, dated June 29, 2011, of WithumSmith + Brown, PC on the financial statements for the fiscal years ended December 31, 2009 and 2008 and the period from April 24, 2006 (Inception) to December 31, 2009 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.

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During the years ended December 31, 2009 and 2008 and through the date hereof, there were no disagreements with WithumSmith+Brown, PC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to WithumSmith+Brown, PC’s satisfaction, would have caused WithumSmith+Brown, PC to make reference to the subject matter in connection with its report on Sunshine Silver’s consolidated financial statements for such years, and there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. Sunshine Silver has provided WithumSmith+Brown, PC with a copy of the foregoing statements. Attached as Exhibit 16.1 is a copy of WithumSmith+Brown, PC’s letter, dated July 7, 2011, stating its agreement with such statements.

During the fiscal years ended December 31, 2009 and 2008, we had not consulted with KPMG regarding any of the matters described in Item 304(a)(2)(i) or Item 304(a)(2)(ii) of Regulation  S-K.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered hereby. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. For further information with respect to the Company and our common stock, reference is made to the registration statement and the exhibits and any schedules filed therewith. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance, if such contract or document is filed as an exhibit to the registration statement reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each statement being qualified in all respects by such reference. A copy of the registration statement, including the exhibits and schedules thereto, may be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that site is www.sec.gov.

As a result of the offering, we will become subject to the full informational requirements of the Exchange Act. We will fulfill our obligations with respect to such requirements by filing periodic reports and other information with the SEC. We intend to furnish our stockholders with annual reports containing consolidated financial statements certified by an independent public accounting firm. We do not currently maintain a website.

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GLOSSARY OF TECHNICAL TERMS

You may find the following definitions helpful in your reading of this prospectus.

“Ag” is the abbreviation for silver.

“By-Product” is a secondary metal or mineral product recovered in the milling process.

“Concentrate” is a very fine powder-like product containing the valuable metal from which most of the waste material in the ore has been eliminated.

“Development” is work carried out for the purpose of accessing a mineral deposit. In an underground mine, this work includes shaft sinking, crosscutting, drifting and raising. In an open pit mine, development includes the removal of over burden.

“Dilution” is an estimate of the amount of waste or low-grade mineralized rock which will be mined with the ore as part of normal mining practices in extracting an ore body.

“Drilling”

Core: with a hollow bit with a diamond cutting rim to produce a cylindrical core that is used for geological study and assays used in mineral exploration.

In-fill: is any method of drilling intervals between existing holes, used to provide greater geological detail and to help establish reserve estimates.

“Exploration” is prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore.

“Grade” is the amount of metal in each ton of ore, expressed as troy ounces per ton or grams per tonne for precious metals.

“Hectare” is a metric unit of area equal to 10,000 square meters (2.471 acres).

“masl” is meters above sea level.

“Mill” is a processing facility where ore is finely ground and thereafter undergoes physical or chemical treatments to extract the valuable metals.

“Mineralized Material” is silver bearing material that has been physically delineated by one or more of a number of methods, including drilling, underground work, surface trenching and other types of sampling. This material has been found to contain a sufficient amount of mineralization of an average grade of metal or metals to have economic potential that warrants further exploration evaluation. While this material is not currently or may never be classified as ore reserves, it is reported as mineralized material only if the potential exists for reclassification into the reserves category. This material cannot be classified in the reserves category until final technical, economic and legal factors have been determined. Under the SEC’s standards, a mineral deposit does not qualify as a reserve unless it can be economically and legally extracted at the time of reserve determination and it constitutes a proven or probable reserve (as defined below).

“Ore” is rock, generally containing metallic or non-metallic minerals, that can be mined and processed at a profit.

“Ore Body” is a sufficiently large amount of ore that can be mined economically.

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“Ore Reserve” is the part of a mineral deposit that could be economically and legally extracted or produced at the time of the reserve determination.

“Probable Reserve” is a part of a mineralized deposit that can be extracted or produced economically and legally at the time of the reserve determination. The quantity and grade and/or quality of a probable reserve is computed from information similar to that used for a proven reserve, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

“Proven Reserve” is a portion of a mineral deposit that can be extracted or produced economically and legally at the time of the reserve determination. The quantity of a proven reserve is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and the sites for inspections, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of a proven reserve is well-established.

“Reclamation” is the process by which lands disturbed as a result of mining activity are modified to support beneficial land use. Reclamation activity may include the removal of buildings, equipment, machinery and other physical remnants of mining, closure of tailings, leach pads and other features, and contouring, covering and re-vegetation of waste rock and other disturbed areas.

“Recovery Rate” is a term used in process metallurgy to indicate the proportion of valuable material physically recovered in the processing of ore. It is generally stated as a percentage of material recovered compared to the material originally present.

“Refining” is the final stage of metal production in which impurities are removed from the molten metal.

“Silver” is a metallic element with minimum fineness of 995 parts per 1000 parts pure silver.

“Stripping Ratio” is the ratio of the number of tons of waste material to the number of tons of ore extracted at an open-pit mine.

“Tailings” is the material that remains after all economically and technically recovered precious metals have been removed from the ore during processing.

“Ton” means a short ton which is equivalent to 2,000 pounds, unless otherwise specified. We will also reference “Tonne,” which is a metric ton or 2,200 pounds. “Tonne” is referenced under the “Grade” definition.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Sunshine Silver Mines Corporation Audited Consolidated Financial Statements:
Report of KPMG LLP Independent Registered Public Accounting Firm		F-2
Report of WithumSmith + Brown, PC Independent Registered Public Accounting Firm		F-3
Consolidated Balance Sheets as of December 31, 2010 and 2009		F-4
Consolidated Statements of Loss and Comprehensive Loss for the Years Ended December  31, 2010, 2009 and 2008 and the period from April 24, 2006 (Inception) to December 31, 2010		F-5
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Years Ended December 31, 2010, 2009, 2008 and 2007 and the period from April 24, 2006 (Inception) to December 31, 2006		F-6
Consolidated Statements of Cash Flows for the Years Ended December  31, 2010, 2009 and 2008 and the period from April 24, 2006 (Inception) to December 31, 2010		F-7
Notes to the Consolidated Financial Statements		F-8
Sunshine Silver Mines Corporation Unaudited Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010		F-30
Condensed Consolidated Statements of Loss and Comprehensive Loss for the Six Months Ended June 30, 2011 and 2010 and the period from April 24, 2006 (Inception) to June 30, 2011		F-31
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2011		F-32
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010 and the period from April 24, 2006 (Inception) to June 30, 2011		F-33
Notes to the Condensed Consolidated Financial Statements		F-34

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Sunshine Silver Mines Corporation:

We have audited the accompanying consolidated balance sheet of Sunshine Silver Mines Corporation (an exploration stage company) (the Company) as of December 31, 2010, and the related consolidated statement of loss and comprehensive loss, changes in shareholders’ equity (deficit) and cash flows for the year ended December 31, 2010 and the information included in the cumulative from inception presentation for the period January 1, 2010 to December 31, 2010 (not separately presented herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Sunshine Silver Mines Corporation (an exploration stage company) as of December 31, 2010, and the results of their operations and their cash flows for the year ended December 31, 2010, and information included in the cumulative from inception presentations for the period January 1, 2010 to December 31, 2010 (not separately presented herein), in conformity with U.S. generally accepted accounting principles.

/s/    KPMG LLP

New York, NY

July 7, 2011

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

of Sunshine Silver Mines Corp. (formerly Los Gatos Ltd.)

We have audited the accompanying consolidated balance sheet of Sunshine Silver Mines Corporation (formerly Los Gatos Ltd.) as of December 31, 2009, and the related consolidated statements of loss and comprehensive loss, shareholders’ equity (deficit) and cash flows for each of the years in the two-year period ended December 31, 2009 and the period from April 24, 2006 (Inception) to December 31, 2009 (not presented separately herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sunshine Silver Mines Corporation (formerly Los Gatos Ltd.) as of December 31, 2009, and the consolidated results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2009 and the period from April 24, 2006 (Inception) to December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.

/s/    WithumSmith+Brown, PC

WithumSmith+Brown, PC

Morristown, New Jersey

June 29, 2011

F-3

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31,

(In thousands, except for share and per share amounts)

	2010			2009
ASSETS
Current Assets:
Cash and cash equivalents	$	3,636		$	1,379
Materials and supplies inventory		779			—
Other current assets		1,739			1,200
Total current assets		6,154			2,579
Non-Current Assets:
Property, plant and equipment, net		29,922			31
Total Assets	$	36,076		$	2,610
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and other accrued liabilities	$	1,669		$	890
Non-Current Liabilities:
Related-party debt		31,000			15,990
Reclamation obligations		744			—
Total non-current liabilities		31,744			15,990
Commitments and contingencies (Note 14)
Shareholders’ Equity (Deficit)
Preferred Shares, $0.01 par value; 106,616,318 shares authorized, issued, and outstanding as of December 31, 2010 and 2009; liquidation preference $0.41 per share ($43,712,690)		1,066			1,066
Ordinary Shares, $0.01 par value; 193,383,682 shares authorized, issued and outstanding 46,916,747 and 31,807,571 shares at December 31, 2010 and 2009, respectively		469			318
Paid-in capital		41,340			65
Accumulated deficit		(40,257	)		(15,719	)
Unrealized gains on investments, net of tax		45			—
Total shareholders’ equity (deficit)		2,663			(14,270	)
Total Liabilities and Shareholders’ Equity (Deficit)	$	36,076		$	2,610

See accompanying notes to the consolidated financial statements.

F-4

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED DECEMBER 31,

(In thousands, except for share and per share amounts)

	2010			2009			2008			Period from April 24, 2006 (Inception) to December 31, 2010
Expenses:
Exploration	$	14,653		$	9,771		$	2,718		$	28,309
Care and maintenance		2,534			—			—			2,534
General and administrative		5,490			818			415			6,907
Total expenses		22,677			10,589			3,133			37,750
Other expense:
Interest expense		1,887			360			79			2,344
Interest and other income		(36	)		(13	)		(8	)		(60	)
Foreign exchange (gain) loss		40			250			(47	)		253
Net other expense		1,891			597			24			2,537
Loss before income taxes		24,568			11,186			3,157			40,287
Income tax benefit		(30	)		—			—			(30	)
Net loss		24,538			11,186			3,157			40,257
Other comprehensive loss:
Unrealized gain on securities, net of tax		(45	)		—			—			(45	)
Comprehensive loss	$	24,493		$	11,186		$	3,157		$	40,212
Pro-forma financial information (unaudited)
Pro-forma net loss per share:
Basic and diluted	$	0.74		$	2.06		$	16.95
Pro-forma weighted average shares outstanding:
Basic and diluted		32,957,239			5,436,534			186,204

See accompanying notes to the consolidated financial statements.

F-5

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(In thousands, except for share amounts)

	Number of Ordinary Shares			Number of Preferred Shares		Amount					Paid-in Capital		Accumulated Deficit			Other Comprehensive Income		Total
						Ordinary Shares			Preferred Shares
Balance at April 24, 2006 (Inception)		—			—	$	—		$	—	$	—	$	—		$	—	$	—
Issuance of ordinary shares		12,000					12			—		—		—					12
Stock subscription receivable							(12	)											(12	)
Net loss		—			—		—			—		—		(314	)		—		(314	)
Balance at December 31, 2006		12,000			—		—			—		—		(314	)		—		(314	)
Net loss		—			—		—			—		—		(1,062	)		—		(1,062	)
Balance at December 31, 2007		12,000			—		—			—		—		(1,376	)		—		(1,376	)
Net loss		—			—		—			—		—		(3,157	)		—		(3,157	)
Balance at December 31, 2008		12,000			—		—			—		—		(4,533	)		—		(4,533	)
Conversion of ordinary shares		(12,000	)		1,200,000		—			—		—		—			—		—
Conversion of debt to ordinary and preferred shares		1,383,682			105,416,318		14			1,066		—		—			—		1,080
Sale of ordinary shares		11,425,956			—		114			—		—		—			—		114
Stock-based payment		18,997,933			—		190			—		—		—			—		190
Stock-based compensation		—			—		—			—		65		—			—		65
Net loss		—			—		—			—		—		(11,186	)		—		(11,186	)
Balance at December 31, 2009		31,807,571			106,616,318		318			1,066		65		(15,719	)		—		(14,270	)
Issuance of ordinary shares		15,109,176			—		151			—		5,297		—			—		5,448
Contribution of capital												35,978							35,978
Unrealized gains on investments, net of tax		—			—		—			—		—		—			45		45
Net loss		—			—		—			—		—		(24,538	)		—		(24,538	)
Balance at December 31, 2010		46,916,747			106,616,318	$	469		$	1,066	$	41,340	$	(40,257	)	$	45	$	2,663

See accompanying notes to the consolidated financial statements.

F-6

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,

(In thousands)

	2010			2009			2008			Period from April 24, 2006 (Inception) to December 31, 2010
OPERATING ACTIVITIES:
Net loss	$	(24,538	)	$	(11,186	)	$	(3,157	)	$	(40,257	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation		773			6			1			780
Loss on disposal of assets		21			—			—			21
Stock issuance in payment for services rendered		70			255			—			325
Accretion expense		55			—			—			55
Income tax benefit		(30	)		—			—			(30	)
Changes in operating assets and liabilities:
Non-trade receivables		311			(798	)		(107	)		(753	)
Deposits		(107	)		—			—			(107	)
Prepaid expenses		(171	)		14			(32	)		(194	)
Receivables from related-party		(30	)		—			—			(30	)
Accounts payable and other accrued liabilities		326			487			333			1,177
Accrued interest on long-term debt to related-party		1,887			360			79			2,344
Warehouse supplies		(16	)		—			—			(16	)
Payable to related-party		(30	)		(14	)		17			(77	)
Net cash used by operating activities		(21,479	)		(10,876	)		(2,866	)		(36,762	)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(1,580	)		(31	)		(4	)		(1,616	)
Acquisitions, net		(29,250	)		—			—			(29,250	)
Transfers to restricted cash		(26	)		—			—			(26	)
Net cash used by investing activities		(30,856	)		(31	)		(4	)		(30,892	)
FINANCING ACTIVITIES:
Capital contributions		35,978			—			—			35,978
Stock subscriptions receivable		114			—			—			114
Related-party debt		18,500			11,885			3,250			35,198
Net cash provided by financing activities		54,592			11,885			3,250			71,290
Net increase in cash and cash equivalents		2,257			978			380			3,636
Cash and cash equivalents, beginning of period		1,379			401			21			—
Cash and cash equivalents, end of period	$	3,636		$	1,379		$	401		$	3,636

See accompanying notes to the consolidated financial statements.

F-7

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share, per share and option amounts)

1. Description of Business, Merger of Entities Under Common Control and Basis of Preparation of Financial Statements

These financial statements represent the consolidated financial position and results of operations of Sunshine Silver Mines Corporation and its subsidiaries (“Sunshine Silver” or “the Company”). Unless the content otherwise requires, references to Sunshine Silver or the Company mean the Sunshine Silver Mines Corporation consolidated companies.

On March 1, 2011, the investors in the Sunshine Silver predecessor entities individually and collectively combined the predecessor entities, which had been previously operated and reported as companies under common control. The predecessor Sunshine mine (“Predecessor Sunshine”) and Los Gatos Ltd. (“Los Gatos”) entities believed a combination of the two entities to consolidate their strategic land positions in the United States and Mexico, respectively, would position Sunshine Silver to become a significant competitor in the silver market. This transaction was reported for accounting purposes as a combination of companies under common control. In accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), common control exists between the Predecessor Sunshine and Los Gatos entities as both entities were primarily owned by certain trusts under the control of one individual. In accordance with U.S. GAAP, all financial reports have been prepared as if the combination of the companies under common control occurred prior to the earliest period presented, and certain amounts have been reclassified to conform to the combined presentation.

The consolidated financial statements herein refer to the consolidated and combined financial statements of Predecessor Sunshine and Los Gatos. The 2008 and 2009 financial information represents the consolidated financial position and results of operations of Los Gatos, as Predecessor Sunshine did not commence operations until 2010. Accordingly, the 2010 information represents the combined financial position and results of operations of Predecessor Sunshine and Los Gatos.

Sunshine Silver

Predecessor Sunshine was formed as Precious Metals Opportunities LLC (“Precious Metals”), a Delaware limited liability company. On February 2, 2011, Precious Metals converted to a Delaware corporation, and became Sunshine Silver. The Company specializes in investing, exploring, and developing assets in the mining industry. On May 11, 2010, Predecessor Sunshine purchased the net assets of the Idaho Sunshine mine from Sterling Mining Company (“Sterling”), through its wholly-owned subsidiary, Silver Opportunity Partners LLC, (“SOP”) a Delaware limited liability company. The Sunshine mine is currently undergoing an advanced exploration drilling program, including maintaining the Sunshine mine facility and developing a refurbishment program for planned operations in the future. Accordingly, Sunshine Silver is deemed to be an exploration stage company.

Los Gatos

Los Gatos was incorporated as a “shelf” holding company under the laws of Bermuda on April 24, 2006 for the purpose of coordinating the activities of subsidiaries exploring for deposits of precious and related metals and was substantially owned by CGT Management Ltd. (a limited liability company incorporated in Bermuda) (“CGT”). Los Gatos intends to realize value from its exploration portfolio over time through selective exploration, sale or joint ventures with third parties, as determined from time to time to be in the best interests of Los Gatos and its shareholders. Los Gatos’ primary exploration efforts are focused on the advancement of the Los Gatos project in northern Mexico, through Minera Plata Real S. de R.L. de C.V (“MPR”), a wholly-owned subsidiary of the Company. Due to the exploratory nature of its operations, Los Gatos is deemed to be an exploration stage company.

F-8

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies

a. Basis of consolidation and combination

Predecessor Sunshine and Los Gatos are consolidated as discussed in note 1. All significant intercompany balances and transactions have been eliminated.

b. Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include mineral properties; environmental reclamation and closure obligations; valuation of stock and stock options; valuation allowances for deferred tax assets; and the fair value of financial instruments.

c. Functional currency and translation of foreign currencies

The U.S. dollar is the functional currency of the Company. Monetary assets and liabilities denominated in foreign currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting gains or losses reported in foreign exchange (gain) loss in the computation of net loss. Non-monetary assets and liabilities are translated at historical exchange rates. Expenses and other income and expense items in foreign currencies are translated into U.S. dollars at average exchange rates, except for depreciation which is translated at historical exchange rates.

d. Cash and cash equivalents

The Company considers all highly liquid short-term investments with a maturity of three months or less when purchased to be cash equivalents. Restricted cash consists of cash and investments which are held as collateral for a letter of credit and other extensions of credit. Restricted cash is included in other current assets.

e. Investments

Investment securities consist of publicly-traded equity securities. Short-term investments include investments with maturities greater than three months, but not exceeding 12 months. Long-term investments include investments with maturities greater than 12 months. The Company classifies its equity securities that have readily determinable fair values as available-for-sale securities. At December 31, 2010, the Company held $194 of short-term available for sale securities with an original cost of $119.

Available-for-sale securities are recorded at fair value. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific-identification basis.

A decline in the market value of any available-for-sale below cost deemed to be other than temporary results in an impairment to reduce the carrying amount to fair value. To determine if an impairment is other than

F-9

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies—Continued

temporary, the Company considers all available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable forecasts when developing estimate of cash flows expected to be collected.

f. Materials and supplies inventory

The Company’s materials and supplies are valued at the lower of cost or market. Cost is determined using the average cost method for all inventories and includes applicable taxes and freight. The Company routinely evaluates the forecasted usage of its material and supplies to determine the existence of obsolete stock.

g. Property, plant and equipment

Mineral property acquisition costs are recorded at cost and are deferred until the viability of the property is determined. Exploration, mineral property evaluation, option payments, related acquisition costs for mineral properties acquired under an option agreement, general overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. When a mineral property is determined to have proven and probable reserves, subsequent development costs are capitalized to mineral properties. For acquired mineral properties the Company allocates the acquisition cost to proven and probable reserves and value beyond proven and probable reserves. When mineral properties are developed and operations commence, the Company expects capitalized costs to be charged to operations using the units-of-production method over proven and probable reserves. Upon abandonment or sale of a mineral property, all capitalized costs relating to the specific property are written off in the period abandoned or sold and a gain or loss is recognized.

Property, plant and equipment are recorded at cost. Depreciation on plant and equipment is calculated on the straight-line method over the estimated useful lives of the assets. The estimated useful lives of plant and equipment and buildings and improvements range from 10 to 20 years. The estimated useful lives of furniture, fixtures and computers range from 3 to 10 years.

Total depreciation for the years ended December 31, 2010, 2009, and 2008 was $773, $6, and $1, respectively.

h. Impairment of long-lived assets

Long-lived assets, such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If circumstances required a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

i. Reclamation and Remediation Costs (asset retirement obligations)

The Company has asset retirement obligations (“ARO”) arising from regulatory requirements to perform certain asset retirement activities at the time that certain machinery and equipment are disposed. An ARO is

F-10

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies—Continued

recognized when incurred and is initially measured at fair value and subsequently adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. The ARO is based on when spending for an existing environmental disturbance is expected to occur. The Company reviews, on an annual basis, unless otherwise deemed necessary, the reclamation obligation at each mine site. The Company recorded an ARO at the May 2010 acquisition of the Sunshine mine assets.

j. Stock-based compensation

The Company recognizes all employee stock-based compensation as a cost in the consolidated financial statements. Equity-classified awards are measured at the grant date fair value of the award. The Company estimates grant date fair value using the Black-Scholes-Merton option-pricing model using estimated amounts for volatility of the Company’s stock, the expected life of the awards, the fair value of the underlying shares, the risk-free interest rate and the expected dividend yield. The related expense is included as a component of general and administrative and exploration expense over the requisite service period of the award.

k. Net loss per share

Pro-forma basic loss per share and diluted loss per share are computed by dividing net loss available to common stockholders by the pro-forma weighted-average number of shares outstanding for each period presented. In accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) earnings per share guidance, the Company has retroactively adjusted the predecessor shares and capital outstanding to common-stock equivalent shares outstanding to determine the weighted-average number of shares outstanding for the periods presented. Changes in ownership interests during any period are weighted for the portion of the period the shares were deemed outstanding. Accordingly, the Company calculated the pro-forma weighted-average number of shares, on a common-stock-equivalent shares basis, for all reporting periods based on the following:

1. Retroactively converted the Los Gatos’ ordinary and preferred shares outstanding to common-stock-equivalent shares outstanding of Sunshine Silver, at a conversion ratio of 0.15517;

2. Retroactively converted the $36,978 of Precious Metals capital contributions to 20,000,000 common-stock-equivalent shares outstanding of Sunshine Silver at the price paid of $1.85 per share; and

3. Sunshine Silver common stock shares issued subsequent to February 2011 have not been adjusted as they represent actual shares of common stock outstanding.

l. Comprehensive Loss

Comprehensive loss is defined as all changes in equity (deficit), exclusive of transactions with stockholders, such as capital investments. Comprehensive loss includes net loss and changes in certain assets and liabilities that are reported directly in equity. For the year ended December 31, 2010, comprehensive income included the change in the market value of available for sale securities, net of tax, and is reported on the Consolidated Statements of Loss and Comprehensive Loss.

F-11

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies—Continued

m. Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in income tax expense.

n. Business Combinations

When the Company acquires a business, the purchase price is allocated based on the fair value of tangible assets and identifiable intangible assets acquired, and liabilities assumed. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Goodwill, if any, is measured as the residual of the excess of the consideration transferred over the fair value of identifiable net assets acquired. If the fair value of the net assets acquired exceeds the purchase price, the resulting bargain purchase is recognized as a gain in the Consolidated Statement of Loss and Comprehensive Loss. The Company engages independent, third-party appraisal firms to assist in determining the fair value of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates, especially with respect to intangible assets. These estimates are based on historical experience and information obtained from the management of the acquired companies. These estimates are inherently uncertain. For all acquisitions, operating results are included in the Consolidated Statement of Loss and Comprehensive Loss from the date of acquisition.

o. Recently Issued Accounting Pronouncements

Fair Value Accounting

In January 2010, ASC guidance for fair value measurements and disclosure was updated to require additional disclosures related to transfers in and out of level 1 and 2 fair value measurements. The guidance was amended to clarify the level of disaggregation required for assets and liabilities and the disclosures required for inputs and valuation techniques used to measure the fair value of assets and liabilities that fall in either level 2 or level 3. The updated guidance was effective for the Company’s fiscal year beginning January 1, 2010. The adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows.

Business Combinations

In December 2010, the ASC guidance for business combinations was updated to clarify existing guidance which requires a public entity to disclose pro-forma revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual period only. The update also expands the supplemental pro-forma disclosures required to include a

F-12

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies—Continued

description of the nature and amount of material, nonrecurring pro-forma adjustments directly attributable to the business combination included in the reported pro-forma revenue and earnings. The updated guidance is effective for the Company’s fiscal year beginning January 1, 2011. The Company does not anticipate that the amendment to the business combination guidance will have an impact on the Company’s financial position and results of operations.

3. Recapitalization and Merger Plan

On January 31, 2011, Los Gatos designated 14,542,512 unissued shares of par value $0.01 ordinary shares (“Ordinary Share”) as par value $0.01 preferred shares (“Preferred Share”), and issued these Preferred Shares in full satisfaction of its then existing $31,000 of related-party debt and $198 of accrued interest.

On February 2, 2011, 20,000,000 shares of common stock were issued to the Company’s owners when Precious Metals converted to a Delaware corporation and became Sunshine Silver.

On February 22, 2011, Los Gatos entered into an Agreement and Plan of Merger and Amalgamation (“Merger Plan”) with Sunshine Silver. Pursuant to the Merger Plan, on March 1, 2011, Los Gatos merged and was amalgamated with and into Sunshine Silver and the separate corporate existence of Los Gatos ceased. All 168,075,577 issued and outstanding Preferred and Ordinary Shares were converted, at an approximate conversion ratio of 0.15517, into 26,080,836 shares of par value $0.001 per share common stock of Sunshine Silver. The merger did not affect the shares of Sunshine Silver’s common stock existing before the merger.

In addition, as a result of the Merger Plan, 6,727,561 outstanding options to purchase one share of Los Gatos Ordinary Shares were converted by operation of law, at an approximate conversion ratio of 0.15517, into 1,043,938 options to purchase Sunshine Silver common stock at an exercise price of $2.32 per share.

Subsequent to the Merger Plan, through June 30, 2011, investors contributed substantially all of $163,700 for 20.1% of the common stock of the Company, and holders of 885,990 options exercised their right to purchase shares of Sunshine Silver common stock at an exercise price of $2.32 per share resulting in proceeds of $2,100.

4. Acquisition of the Sunshine Mine

On May 11, 2010, the Company, through its wholly owned subsidiary SOP, acquired the net assets of Sterling’s Idaho Sunshine Mine by purchase through Sterling’s bankruptcy proceedings. Included in this purchase was Sterling’s mine lease with Sunshine Precious Metals, Inc. (“SPMI”). In July 2010, SOP exercised the option in the lease to buy the Sunshine Mine and facilities from SPMI.

The Sunshine Mine is a past-producing mine. The Sunshine Mine suspended operations in 2008 and remains in a care and maintenance status. The mine facility includes extensive underground workings including shafts, levels, raises and ramp systems.

The total consideration paid in cash was comprised of a) $23,500 for the net assets acquired and liabilities assumed and b) $5,750 for the right, title and interest acquired from SPMI. The payment for the lease was recorded in property, plant and equipment, net in the Company’s consolidated balance sheet at acquisition date. The acquisition was accounted for as a business combination.

F-13

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Acquisition of the Sunshine Mine—Continued

The purchase price of $29,250 was allocated to the following assets and liabilities using the estimated fair values of assets acquired and liabilities assumed at the acquisition date:

Assets:
Receivables	$	147
Property, plant and equipment		29,105
Investments		119
Materials & supplies inventory		763
Restricted cash		289
		30,423
Liabilities:
Reclamation obligations		708
Contingent consideration		465
Net assets acquired	$	29,250

The estimated fair values of the reclamation obligations and the property, plant and equipment are classified as Level 3 of the fair value hierarchy as the valuations were determined based on assumptions that market participants would use in the pricing of such assets and liabilities without observable inputs and little or no market activity. The fair value of the acquired current assets and current liabilities equaled their carrying amounts due to their short-term nature.

Pursuant to the acquisition of the Sunshine Mine, the Company acquired the right to purchase, or have Sterling dissolve, all of the issued and outstanding common stock of Sterling for a payment of $500, subject to the completion of the Sterling bankruptcy proceedings. The Company estimates completion of the bankruptcy proceedings will occur in August 2011 and it is highly probable we will make the $500 payment. Accordingly, the Company calculated the fair value of the August 2011 payment as of the May 2010 acquisition date. A discount rate of 6.14% was determined based on a review of comparable corporate bond yields as of the acquisition date.

The results of the operations of the Sunshine mine have been included in the Company’s consolidated statement of loss and comprehensive loss from the date of acquisition through December 31, 2010. The Company incurred $2,100 in acquisition costs related to the Sunshine mine acquisition. The Company follows the business combination accounting guidance related to acquisition-related costs and expenses these costs as incurred. The acquisition-related costs for the Sunshine mine acquisition are included in general and administrative costs in the consolidated statement of loss and comprehensive loss for the year ended December 31, 2010.

F-14

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Other Current Assets

	December 31, 2010		December 31, 2009
Value added tax receivable	$	823	$	993
Restricted cash and certificate of deposit		315		—
Securities available for sale		194		—
Prepaid expenses		193		22
Vendor deposits		107		—
Non-trade receivables		77		71
Related-party receivable		30		—
Stock subscriptions receivable		—		114
Total other current assets	$	1,739	$	1,200

6. Property, Plant and Equipment, net

	December 31, 2010			December 31, 2009
Mineral properties	$	13,544		$	—
Plant & equipment		6,226			12
Land		1,219			—
Buildings & improvements		9,555			—
Furniture, fixtures & computers		142			25
Property, plant & equipment at cost		30,686			37
Less accumulated depreciation		(764	)		(6	)
Property, plant & equipment, net	$	29,922		$	31

Mineral Properties

The Company conducts exploration activities on patented and unpatented mining claims as follows:

Sunshine Mine

The Company owns the Sunshine mine, which includes patented and unpatented mining claims and related infrastructure buildings and equipment. The property includes the Sunshine mine and mill and all of the proximate support buildings, including the shops, dry, assay office, mine office, warehouse, hoist house, compressor building and surface and underground equipment. The property also includes the ConSil mine and mill and related infrastructure buildings and equipment. The Company is required to pay between a 0% and 7% net smelter return royalty, based upon the price of silver, under a settlement with the US government and the Coeur d’Alene Indian tribe. This royalty covers substantially all of the property, owned or leased by the Company, and extends outward within a one mile boundary of all such property. The Company is concurrently engaging in exploration that has consisted of geochemical and geophysical studies, core diamond drilling, and rehabilitating a second access shaft in preparation for future operations.

F-15

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Property, Plant and Equipment, net—Continued

Chester Group of Mining Claims

The Company leases nine patented mining claims and has a one-third interest in four other patented mining claims from the Chester Group that are adjacent to the mining claims of the Sunshine mine. The lease term is for 25 years ending February 2029 and is renewable for an additional 25 years. The lease is subject to an advance royalty payable by the Company of $0.6 per month until such time as a royalty of 4% on net returns or a royalty of 20% of net profits is payable. The lease also provides Chester Group with the option to acquire a 20% working interest in all ores, concentrates, metals or other mineral substances produced from the property. Chester Group may exercise this option by releasing the Company from its obligation to pay the 20% net profits royalty and by tendering an amount of cash equal to 20% of the then-current working capital fund. The Company is also obligated to deliver 50,000 shares of restricted Sterling Mining Company common stock annually during the lease term.

Metropolitan Mines Mining Claims

The Company leases 2 patented and 70 unpatented mining claims from the Metropolitan Mines Corporation group (“Metropolitan”) that lay immediately to the south of the primary workings of the Sunshine Mine. The lease term is indefinite until cancelled. The leases are subject to advance royalty payments of $1 per month until such time as ore is produced from the Metropolitan property. Net proceeds, when ore is produced, are to be split between Metropolitan (16% or 50%) and the Company (84% or 50%) depending upon the location of the production.

Mineral Mountain Mining Claims

The Company leases the Mineral Mountain Mining and Milling Company group of four patented mining claims that are adjacent to the mining claims of the Sunshine mine. The lease term is for 25 years ending February 2029 and is renewable for an additional 25 years. The lease is subject to an advance royalty payment of $3.6 per year until such time as net profits royalties of 3% are payable. The lease also provides Mineral Mountain Mining and Milling Company with the option to acquire a 3% working interest in all ores, concentrates, metals or other mineral substances produced from the property. Mineral Mountain Mining and Milling Company may exercise this option by releasing the Company from its obligation to pay the 3% net profits royalty and by tendering an amount of cash equal to 3% of the then-current working capital fund.

Rock Creek—Idaho

The Company leases unpatented claims and a patented claim at Rock Creek, Idaho. The lease was signed on March 1, 2006, with a term of 25 years, with a 25% net profits royalty and an advance royalty of $0.5 per month applied against net profits royalty when operational. Contained within the lease is a work commitment of $50 per every 5-year period. The Company is obligated to pay all future taxes relating to the leased property. The Company may cancel the lease with 30 days’ notification.

Mining Concessions and Agreements

In Mexico, mineral concessions from the Mexican government can only be held by Mexican nationals or Mexican-incorporated companies. The concessions are valid for 50 years and are extendable provided the

F-16

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Property, Plant and Equipment, net—Continued

concessions are kept in good standing. For concessions to remain in good standing a semi-annual fee must be paid to the Mexican government and a report must be filed in May of each year which covers the work accomplished on the property between January and December of the previous year. These concessions may be cancelled without penalties by termination notification to the Mexican government.

Los Gatos is the concession holder of a series of claims titles granted by the Mexican government. The rights to five concessions are held through exploration agreements with purchase options or a finder’s fee agreement, as discussed below:

La Cuesta International S.A. de C.V.—Los Gatos concession

The Company may purchase the Los Gatos concession for $15,000, which is payable through advanced royalties and a production royalty of 2% net smelter return on production from the Los Gatos concession (reduces to 0.5% upon all payments reaching $10,000) and 0.5% net smelter return from lands within a one kilometer boundary of the Los Gatos concession. Advance royalties of $40 annually are payable prior to commercial production. Once total payments have reached $15,000, the Los Gatos concession ownership will be transferred to the Company. During the pre-production phase, the Company is obligated to annually complete a minimum of $100 of exploration work on the concession. The agreement has no expiration date; however, the Company may terminate the agreement upon 30 day official termination notification.

Grupo Factor—Paula Adorada concession

The Company is required to make the following future annual payments totaling $405 to obtain ownership of the Paula Adorada concession: 2011—$50; 2012—$100 and 2013—$255. The Company may terminate the agreement upon 30 day official termination notification which results in the forfeiture of payments previously made.

Zaragoza—Peregrina and El Pilar concession

The Company is required to make the following future annual payments in order to continue exploration activities and obtain ownership of the Zaragoza project concession: 2011—$80, 2012—$160, and 2013—$320. The Company may terminate the agreement upon notification which results in the forfeiture of payments previously made.

Niko concession

The Company is required to make the following annual payments in order to continue exploration activities and obtain ownership of the Niko concession: 2011 through 2014—$50 each year; 2015—$5,000 and a production royalty of 2% net smelter return on production of the Niko concession. The Company may terminate the agreement upon notification which results in the forfeiture of payments previously made.

San Jose de Minas Finder’s Fee Agreement

The Company is required to make the following future annual payments in order to continue exploration activities under a Finder’s Fee Agreement: 1% of the net smelter returns for any production from Company concessions covered by the agreement; and, the Company is obligated to pay annually 5% of the exploration costs incurred by the Company, limited to a maximum $100 annual payment pertaining to the specified concessions. Once total payments under the agreement reach $1,000 the Company will have no other obligations under the agreement. No production has taken place since inception of the agreement. The agreement has no expiration date; however, the Company may terminate the agreement upon official termination notification.

F-17

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

6. Property, Plant and Equipment, net—Continued

In summary, these leases, concessions, and agreements are subject to payments as shown in the table below:

	Production Royalties  Payable(1)		2010 Annual Lease Fees
Chester Claim Group(2)		Yes	$	7.2
Metropolitan Mines Claim Group		Yes		12.0
Mineral Mountain Claim Group		Yes		3.6
Rock Creek-Idaho(3)		Yes		6.0
La Cuesta International(4)		Yes		40.0
Grupo Factor		No		45.0
Zaragoza		No		40.0
Niko		Yes		50.0
San Jose de Minas		Yes		—

(1) All agreements except Grupo Factor and Zaragoza are subject to production royalties.

(2) The Chester Claim Group lease also requires an annual payment of 50,000 shares of the Sterling Mining Company’s common stock.

(3) The lease also requires $50 work commitment during each five-year period. Annual lease fees can be credited against a 25% net profits royalty.

(4) The lease also requires $100 of exploration work annually on the concession during the pre-production phase.

7. Accounts Payable and Other Accrued Liabilities

	December 31, 2010		December 31, 2009
Accounts payable	$	450	$	46
Accrued expenses		399		720
Accrued payroll & taxes		327		85
Contingent consideration		484		—
Payable to related-party		9		39
Total accounts payable and other accrued liabilities	$	1,669	$	890

8. Related-Party Transactions

Related-party debt

Los Gatos maintains loan agreements with CGT that bear interest at fixed rates with maturities generally one to two years from their respective issuance together with any accrued unpaid interest thereon.

The Company’s outstanding related-party debt as of December 31, 2010 consists of three obligations totaling $31,000. These obligations mature on October 2, 2012, have a fixed interest rate of 7.5%, and are presented as non-current liabilities.

The Company’s outstanding related-party debt as of December 31, 2009, consists of $11,989, $1,500, and $2,250 obligations maturing on October 2, 2010, October 19, 2010, and December 15, 2010, respectively, and $251 of accrued interest. These obligations have a fixed interest of 7.5%. These obligations were refinanced subsequent to December 31, 2009 with a fixed interest rate of 7.5% and a maturity of October 2, 2012. Accordingly, these obligations are presented as non-current liabilities.

F-18

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Related-Party Transactions—Continued

During 2010, Los Gatos reduced related-party debt by $5,376 to CGT as consideration for the exercise of 14,934,227 options. During 2009, Los Gatos reduced related-party debt of $553 to CGT through issuance of 1,383,682 Ordinary Shares and 53,901,115 Preferred Shares. In January 2011, the $31,198 principal and accrued interest outstanding under these loan arrangements were exchanged for 14,542,512 Preferred Shares and the obligations were cancelled.

During 2010, 2009, and 2008, Los Gatos borrowed $18,500, $11,885, and $3,250, respectively, from CGT. Interest expense on these loan arrangements was $1,887, $360, and $79 for the years ended December 31, 2010, 2009, and 2008, respectively.

Service Agreements

Los Gatos and SOP have service agreements with related parties, Tigris Financial (International) LP (“Tigris Intl”) and Tigris Financial Group Ltd. (“Tigris”), respectively, whereby Tigris and Tigris Intl provide certain business and financial advice, including consulting, administrative, accounting and business development services.

The Los Gatos service agreement was effective January 1, 2008 and pursuant to this agreement, Los Gatos paid Tigris Intl $500, $375, and $150 for the years ended December 31, 2010, 2009, and 2008, respectively, plus out of pocket expenses incurred by Tigris Intl. In addition to the annual payments, as stipulated in the service agreement, Los Gatos issued 4,771,318 Ordinary Shares to Tigris Intl during October 2009, for which the fair value of $48 was charged to general and administrative expense. The service agreement can be terminated by either party with thirty-day notice.

The SOP service agreement was effective May 11, 2010 and pursuant to this agreement, SOP paid Tigris $500 for the year ended December 31, 2010. The service agreement can be terminated by either party with sixty-day notice.

Other Related-party Transactions

During 2009, Los Gatos settled $527 due to CGT through the issuance of 52,715,203 Preferred Shares.

From time to time, the Company may have receivables from or payables to other related parties under common control in the normal course of its exploration activities. These typically represent expenditures incurred by one party but paid by another. These amounts are settled via cash payments.

9. Stockholder’s Equity (Deficit)

Los Gatos

Los Gatos was incorporated in Bermuda in April 2006 as a “shelf” holding company with authorized capitalization through October 2, 2009 of $12,000, for the purpose of coordinating the activities of subsidiaries exploring for deposits of precious and related metals. Los Gatos issued its total authorized $12,000 of capitalization in the form of ordinary shares of $1.00 par in a private placement ultimately to CGT.

2009 Ordinary and Preferred Share Transactions

On October 2, 2009, Los Gatos authorized an increase in its total capitalization to $3,000,000, designated all of its shares to have a $0.01 par (300,000,000 total shares at $0.01 par) and divided its share capital into shares of two classes: Ordinary Shares and Preferred Shares.

F-19

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Stockholder’s Equity (Deficit)—Continued

The holders of Ordinary Shares:

• are entitled to one vote per share;

• are entitled to such dividends as may from time to time be declared;

• in the event of winding-up or dissolution of Los Gatos, whether voluntary or involuntary or for the purpose of a reorganization or otherwise or upon any distribution of capital, are entitled to the surplus assets of Los Gatos after the distribution in full of any and all capital payable in respect of the preferred shares then issued and outstanding; and

• are generally entitled to enjoy all of the rights attaching such shares; and

• may not transfer their shares until all of the Preferred Shares are converted into Ordinary Shares

The holders of Preferred Shares:

• are entitled to one vote per share;

• are entitled to such dividends as may from time to time be declared;

• in the event of winding-up or dissolution of Los Gatos, whether voluntary or involuntary or for the purpose of a reorganization or otherwise or upon any distribution of capital, are entitled to payment of $0.41 per preferred share from the surplus assets of Los Gatos;

• are entitled to convert each Preferred Share to an Ordinary Share at the discretion of the holder of the preferred share by delivery of written notice to the Secretary of Los Gatos; and

• are generally entitled to enjoy all of the rights attaching to such shares.

Los Gatos converted its then existing 12,000 shares of $1.00 par ordinary stock to 1,200,000 Preferred Shares and designated an additional 105,416,318 of its total shares as Preferred Shares. All 106,616,318 Preferred Shares were issued to CGT in payment of the then outstanding advance of $527 and a reduction of long-term debt payable to CGT of $539. In addition, on October 2, 2009, Los Gatos issued 1,383,682 Ordinary Shares to CGT in payment of long term debt payable to CGT of $14.

During the period October 2, 2009 through December 31, 2009, Los Gatos issued 18,997,933 Ordinary Shares in payment for services, as follows: 1) 12,000,000 shares to related individuals; 2) 2,226,615 shares to two vendors; and 3) 4,771,318 shares to Tigris Intl. In addition, individuals associated with various related entities purchased 11,425,956 Ordinary Shares for $114. The December 31, 2009 stock subscription receivable of $114 was paid in full on January 28, 2010.

Certain of the Ordinary Shares issued are subject to agreements which contain a purchase option by the entity (or an affiliate of the entity) at which the respective shareholder is employed or is providing services, as the case may be. In case of termination of employment or the service relationship prior to five years from the initial vesting date set forth in each shareholder’s share purchase agreement or share award agreement, the shareholder can receive from the option holder, at the option holder’s option, payment for the shares amounting to 20% of the shares owned multiplied by the number of years from the initial vesting date to a maximum of 100% at a price determined by the Company’s board of directors. The purchase option ends five years from the initial vesting date. Additionally, certain other Ordinary Shares are subject to a partial purchase option. For the third and fourth vesting years, 40% and 20% of the shares, respectively, will be subject to the purchase option. Thereafter, these shares will no longer be subject to the purchase option.

F-20

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Stockholder’s Equity (Deficit)—Continued

2009 Stock Option Transactions

On October 14, 2009, Los Gatos entered into stock option agreements with various individuals and entities that agreed to serve on its Advisory Board that provide for the purchase of 21,661,788 Ordinary Shares. These options vested on the date of the grant and had a stated exercise price of $0.36 per share expiring the earlier of, a ten year period ending October 14, 2019, or two years after an initial public offering. The stock options were valued using a Black-Scholes model. The following assumptions were used to compute the fair value of the option grants:

Risk free interest rate	3.0	%
Dividend yield	—
Estimated volatility	76.87	%
Expected option life	10 years

The Company’s computation of the estimated volatility was based on the historical volatility of a group of peer companies’ common stock over the expected option life, and included both exploration stage and development stage companies. The peer information was used because the Company is not publicly traded and therefore does not have the market trading history required to calculate a meaningful volatility factor. The computation of the expected option life was determined based on a reasonable expectation of the option life prior to being exercised or forfeited. The risk-free interest rate assumption was based on the U.S. Treasury constant maturity yield at the date of the grant over the expected life of the option.

For the year ended December 31, 2009, the Company recognized stock-based compensation of $65 related to these option grants. As of December 31, 2009, all 21,661,788 options were outstanding and exercisable.

2010 Ordinary Share Transactions

On June 30, 2010, the Company issued 174,949 Ordinary Shares for $2 to an employee of a related entity under the same terms as described above for Ordinary Shares. The Company recognized an additional $34 of expense to reflect the $0.20 fair value of the Ordinary Shares. The fair value was determined based on an enterprise value and option pricing model.

2010 Stock Option Transactions

During the year ended December 31, 2010, there were no stock options granted.

In December 2010, options to acquire 14,934,227 Ordinary Shares were exercised by CGT, of which 14,616,139 options were acquired from an entity serving on the Advisory Board, at an exercise price of $0.36 per share resulting in $5,376 of capital contributions through reduction in related-party debt.

At December 31, 2010, 6,727,561 options with an exercise price of $0.36 per share, expiring the earlier of October 14, 2019, or two years after an initial public offering, were outstanding.

F-21

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Stockholder’s Equity (Deficit)—Continued

The following table is a summary of stock option activity for the years ended December 31, 2010 and 2009:

	Pre-merger					Pro-forma post-merger
Options	Shares			Exercise Price		Shares			Exercise Price		Remaining Life (Years)		Aggregate Intrinsic Value		Unrecognized Compensation Cost
Outstanding at December 31, 2008		—		$	—		—		$	—
Granted		21,661,788			0.36		3,361,327			2.32
Exercised		—			—		—			—
Forfeited or Expired		—			—		—			—
Outstanding at December 31, 2009		21,661,788			0.36		3,361,327			2.32
Granted		—			—		—			—
Exercised		(14,934,227	)		0.36		(2,317,389	)		2.32
Forfeited or Expired		—			—		—			—
Outstanding at December 31, 2010		6,727,561		$	0.36		1,043,938		$	2.32		8.79	$	—	$	—

2011 Ordinary and Preferred Share Transactions

In January 2011, Los Gatos designated 14,542,512 unissued Ordinary Shares as Preferred Shares. On January 31, 2011, Los Gatos issued such Preferred Shares to CGT in full satisfaction of the then existing $31,198 (principal of $31,000 and interest of $198) amounts due to CGT.

In addition, the 6,727,561 options outstanding for the purchase of Los Gatos Ordinary Shares converted to options to purchase 1,043,938 common stock shares of Sunshine Silver at $2.32 per share on March 1, 2011.

Sunshine Silver

Through January 2011, the owners of Precious Metals contributed $36,978 as capital contributions. In February 2011, 20,000,000 shares of common stock were issued when Precious Metals became Sunshine Silver.

Pursuant to the Merger Plan, all issued and outstanding Ordinary Shares and Preferred Shares were converted into approximately 0.15517 shares of Sunshine Silver’s $0.001 par value common stock.

10. Asset Retirement Obligations

In connection with the acquisition of the Sunshine mine, the Company recorded an ARO of $708 related to final closure and reclamation. The liability was initially measured at fair value and subsequently adjusted for accretion and changes in the amount or timing of the estimated cash flows. During the year ended December 31, 2010, the Company recorded accretion expense of $36.

F-22

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Asset Retirement Obligations—Continued

The following table summarizes activity in the Company’s ARO:

	December 31, 2010		December 31, 2009
Balance, beginning of year	$	—	$	—
ARO from acquisition of the Sunshine Mine		708		—
Accretion expense		36		—
Balance, end of year	$	744	$	—

The Company is required to provide the applicable governmental agencies with financial assurances related to its closure and reclamation obligations. At December 31, 2010, the Company had restricted cash in the form of a certificate of deposit totaling $275 as collateral for a letter of credit issued by a financial institution as security to a certain governmental agency for the Company’s reclamation obligations.

11. Fair Value Measurements

The Company establishes a framework for measuring the fair value of financial assets and liabilities and nonfinancial assets and liabilities which are measured at fair value on a recurring (annual) basis in the form of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data.

Level 3: Unobservable inputs due to the fact that there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability.

Financial Assets and Liabilities

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2010 (none at December 31, 2009) by respective level of the fair value hierarchy:

December 31, 2010	Level 1		Level 2		Level 3		Total
Assets:
Short-term available for sale securities		194		—		—		194
	$	194	$	—	$	—	$	194

The Company’s short-term available for sale securities are classified within Level 1 of the fair value hierarchy. These securities are comprised of common stock, which have been valued using quoted prices in

F-23

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Fair Value Measurements—Continued

active markets. The Company did not have any Level 2 or Level 3 financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2010 or 2009. The Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no significant transfers into or out of level 1, level 2, or level 3 for the year ended December 31, 2010.

Non-Financial Assets and Liabilities

The Company discloses or recognizes its non-financial assets and liabilities, such as ARO and purchased businesses at fair value on a non-recurring basis. During the year ended December 31, 2010, the Company recorded the purchase of the Sunshine mine assets at fair value and established a reclamation obligation at fair value in connection with such acquisition in accordance with the ASC business combination standard. The estimated fair values for these non-financial assets and liabilities are classified as Level 3 of the fair value hierarchy as the valuations were determined based on internally developed assumptions that market participants would use in the pricing of such assets and liabilities without observable inputs and no market activity.

Fair Value of Other Financial Instruments

At December 31, 2010 and 2009 the Company’s other financial instruments consist of cash and cash equivalents, restricted cash and certificate of deposit, receivables, accounts payable and other current liabilities. The carrying amounts of these financial instruments approximate fair value due to their short maturities. As of December 31, 2010 and 2009, the carrying value of related-party debt approximates fair value.

12. Income Taxes

The components of loss before income taxes were as follows:

	Year Ended December 31,
	2010 U.S.			2010 Mexico			2009 Mexico			2008 Mexico
Loss before income taxes	$	(6,898	)	$	(17,670	)	$	(11,186	)	$	(3,157	)

The components of the consolidated income tax benefit (provision) from continuing operations were as follows:

	Year Ended December 31,
	2010 U.S.			2010 Mexico		2009 Mexico		2008 Mexico
Current portion of income tax benefit
U.S. Federal	$	—		$	—	$	—	$	—
U.S. State		—			—		—		—
Mexico		—			—		—		—
Deferred portion of income tax benefit
U.S. Federal		(24	)		—		—		—
U.S. State		(6	)		—		—		—
Mexico		—			—		—		—
Total income tax benefit	$	(30	)	$	—	$	—	$	—

F-24

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Income Taxes—Continued

A reconciliation of the actual income tax benefit (provision) and the tax computed by applying the U.S. federal rate (35%) to the loss before income taxes is as follows:

	Year Ended December 31,
	2010			2009			2008
Tax benefit from continuing operations	$	(8,599	)	$	(3,915	)	$	(1,105	)
State tax benefit from continuing operations		(333	)		—			—
Nondeductible expenses		2,460			1,494			351
Foreign tax rate differential		540			484			151
Change in valuation allowance		6,803			2,039			516
Effect of foreign tax rate change		(203	)		—			—
Net operating loss inflation rate adjustment		(620	)		129			190
Foreign exchange rate differential		(78	)		(231	)		(103	)
Total income tax benefit	$	(30	)	$	—		$	—

The net operating loss inflation rate adjustment relates to historical net operating loss carryforwards in Mexico from 2006 to 2009. These historical carryforwards have been inflation-adjusted based upon an inflation factor published by the central bank of Mexico, as any inflationary adjustment would impact the Company’s basis in the net operating losses during the carryforward period.

A summary of the components of the net deferred tax assets is as follows:

	Year Ended December 31,
	2010			2009
Current deferred tax assets
Contingent consideration	$	193		$	—
Total current deferred tax assets		193			—
Non-current deferred tax assets
Mineral reserves		166			—
Asset retirement obligation		297			—
Property, plant and equipment		237			—
Exploration		74			—
Operating loss carryforward		8,736			2,834
Other		6			2
Total non-current deferred tax assets		9,516			2,836
Valuation allowances		(9,639	)		(2,836	)
Total deferred tax assets		70			—
Current deferred tax liabilities
OCI gain on available for sale securities		(30	)		—
Prepaid expenses		(40	)		—
Total current deferred tax liabilities		(70	)		—
Total deferred tax liabilities		(70	)		—
Net deferred income tax assets (liabilities)	$	—		$	—

F-25

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Income Taxes—Continued

Based upon the level of taxable income (loss) and projections of future taxable income (loss) over the periods which the deferred tax assets are deductible, management believes it is more likely than not that the Company will not realize the benefits of these deductible differences, and thus has recorded a valuation allowance against the net deferred tax asset balance of $9,639 and $2,836 as of December 31, 2010 and 2009, respectively. If the Company is profitable for a number of years and the prospects for the realization of the deferred tax assets are more likely than not, the Company will then reverse the valuation allowance and credit income tax expense.

At December 31, 2010 the Company had $4,409 of net operating loss carryforwards in the United States expiring in 2030, and $23,250 of net operating loss carryforwards in Mexico which expire at various dates through 2020. Valuation allowances have been recorded on net operating loss carryforwards where the Company believes it is more likely than not that the net operating loss will not be realized. The Company will monitor the valuation on an ongoing basis and will make the appropriate adjustments as necessary should circumstances change.

The Company has adopted the provisions of ASC 740-10, Income Taxes. The Company files income tax returns in the U.S., Mexico, and Idaho. The statute of limitations for tax returns filed in the U.S. and Mexico is three years and five years, respectively, from the date of filing. The Company’s 2010 U.S. tax return is subject to examinations by U.S. tax authorities until 2014. The Company is no longer subject to examinations by Mexico tax authorities for years prior to 2006.

As of December 31, 2010, the Company has not recognized any increases or decreases in unrecognized tax benefits, as it is more likely than not that all tax positions have a high probability of being upheld by the taxing authorities. The Company recognizes penalties and accrued interest related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented.

13. Cash Flow Information

The following table details supplemental cash and non-cash transactions:

	Year Ended December 31,						Period from April 24, 2006 (Inception) to December 31, 2010
	2010		2009		2008
Contingent consideration at acquisition	$	465	$	—	$	—	$	465
Conversion of loans & accrued, unpaid interest from related parties to equity		5,376		1,080		—		6,456
Conversion of accrued interest to debt		1,506		207		—		1,713
Stock subscription receivable for sale of stock		—		114		—		114

14. Commitments and Contingencies

The Company, in determining its accruals and disclosures with respect to loss contingencies, will charge to income an estimated loss if information available prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the commitments and contingencies are expensed as

F-26

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Commitments and Contingencies—Continued

incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

Environmental Contingencies

The Company’s mining and exploration activities are subject to various laws, regulations and permits governing the protection of the environment. These laws, regulations and permits are continually changing and are generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws, regulations and permits, but cannot predict the full amount of such future expenditures.

Mineral Leases and Concessions:

The Company has the following mineral lease and concessions commitments:

2011	$	237
2012		367
2013		682
2014		107
2015		5,057
Thereafter		14,862
	$	21,312

The Company is required to make mineral and concession lease payments to various entities to secure the appropriate claims or surface rights. Certain of these agreements also have royalty payments that are triggered when the Company produces and sells minerals. Currently there are no such instances where the Company is paying any royalty based upon production and sales. The Finder’s Fee Agreement requires an annual payment of 5% of the exploration costs incurred by the Company, limited to a maximum payment of $100. This obligation has not been included in the table above as the amount of future exploration costs is unknown. One of the leases requires monthly payments of $1 until ore is produced. This obligation has not been included in the table above as the time for commencing production is unknown. Additionally, one of the concessions requires $100 of annual exploration expenditures on the concession, another requires $50 of exploration expenditures per every 5-year period, and one of the leases calls for the Company to deliver annually 50,000 shares of Sterling stock, the previous owner of the Sunshine mine, to the lessor in addition to making monthly lease payments. The Company has made such payments totaling approximately $191, $60 and $45 for the year ended December 31, 2010, 2009, and 2008, respectively.

Other Contingencies

Stonehill / Highwood Litigation

Stonehill Capital Management LLC and Highwood Partners, LP, as debtors-in-possession, or DIP, lenders to Sunshine Precious Metals, Inc. (“SPMI”), a prior owner of the Sunshine Mine, have asserted a mortgage claim regarding certain of the property at the Sunshine Mine that the Company acquired from SPMI in June 2010. The DIP financing loan was made in connection with SPMI’s bankruptcy in 2000, in the amount of $5,000, but the DIP lenders are also claiming right to accrued interest, at a default rate of 25%, and penalties, in an alleged aggregate amount of $71,200. The Company is currently engaged in discovery and no motions are scheduled for

F-27

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Commitments and Contingencies—Continued

hearing. The Company intends to defend vigorously against the claim and does not believe that this matter is likely to have a material adverse effect on its operations or financial condition. Litigation is inherently unpredictable, however, and while the Company believes it has valid defenses in this matter, there can be no assurance as to the ultimate outcome of this action.

The Company is from time to time involved in various legal proceedings related to its business. Except in the above-described proceedings, management does not believe that adverse decisions in any pending or threatened proceeding or that amounts that may be required to be paid by reason thereof will have a material adverse effect of the Company’s financial condition or results of operations.

15. Segment Information

The Company operates in a single industry as a corporation engaged in the acquisition and exploration of silver mineral properties. The Company has mineral property interests in the U.S. and Mexico. The Company’s reportable segments are based on the Company’s mineral interests and management structure, and include the U.S., Mexico, and Corporate segments. The U.S. segment is maintaining the Sunshine mine facility and developing a refurbishment program for planned operations in the future. The Company’s Mexico segment engages in the exploration of the Los Gatos mineral properties.

Financial information relating to the Company’s segments is a follows:

	Year Ended December 31, 2010
	U.S.			Mexico		Corporate		Total
Exploration	$	207		$	14,446	$	—	$	14,653
Care and maintenance		2,534			—		—		2,534
General and administrative		3,936			1,326		228		5,490
Net other (income) expense		(7	)		1,898		—		1,891
Related party debt		—			31,000		—		31,000
Capital expenditures		29,464			1,366		—		30,830
Total assets		31,090			4,986		—		36,076

	Year Ended December 31, 2009
	U.S.		Mexico		Corporate		Total
Exploration	$	—	$	9,771	$	—	$	9,771
General and administrative		—		818		—		818
Net other expense		—		597		—		597
Related party debt		—		15,990		—		15,990
Capital expenditures		—		31		—		31
Total assets		—		2,610		—		2,610

	Year Ended December 31, 2008
	U.S.		Mexico		Corporate		Total
Exploration	$	—	$	2,718	$	—	$	2,718
General and administrative		—		415		—		415
Net other expense		—		24		—		24
Capital expenditures		—		4		—		4

F-28

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Subsequent Events

As discussed in note 3, the Merger Plan was consummated on March 1, 2011.

In March 2011, Roger P. Johnson was appointed as the Company’s Chief Financial Officer. In May 2011, Stephen A. Orr was appointed as the Company’s Executive Chairman and Chief Executive Officer.

In March 2011 and May 2011, the Company granted 38,600 and 125,000 common stock options to employees, respectively.

F-29

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except for share and per share amounts)

	June 30, 2011			December 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents	$	153,161		$	3,636
Materials and supplies inventory		785			779
Deferred financing costs		1,068			—
Other current assets		2,005			1,739
Total current assets		157,019			6,154
Non-Current Assets:
Property, plant and equipment, net		30,610			29,922
Total Assets	$	187,629		$	36,076
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and other accrued liabilities	$	4,121		$	1,669
Non-Current Liabilities:
Related-party debt		—			31,000
Reclamation obligations		772			744
Total non-current liabilities		772			31,744
Shareholders’ Equity
Preferred Shares, $0.01 par value; authorized, issued and outstanding none and 106,616,163 shares as of June 30, 2011 and December 31, 2010, respectively		—			1,066
Ordinary Shares, $0.01 par value; authorized, issued and outstanding none and 46,916,747 as of June 30, 2011 and December 31, 2010, respectively		—			469
Common Stock, $0.001 par value; 100,000,000 shares authorized; shares issued and outstanding 58,810,113 and none as of June 30, 2011 and December 31, 2010, respectively		59			—
Paid-in capital		240,920			41,340
Accumulated deficit		(58,297	)		(40,257	)
Unrealized gains on investments, net of tax		54			45
Total shareholders’ equity		182,736			2,663
Total Liabilities and Shareholders’ Equity	$	187,629		$	36,076

See accompanying notes to the condensed consolidated financial statements.

F-30

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (UNAUDITED)

(In thousands, except for share and per share amounts)

	Six Months Ended June 30,						Period from April 24, 2006 (Inception) to
	2011			2010			June 30, 2011
Expenses:
Exploration	$	8,150		$	6,938		$	36,459
Care and maintenance		2,543			404			5,077
General and administrative		7,055			2,742			13,962
Total expenses		17,748			10,084			55,498
Other (income) expense:
Interest expense		198			736			2,542
Interest and other income		(24	)		(24	)		(84	)
Foreign exchange loss		124			43			377
Net other expense		298			755			2,835
Loss before income taxes		18,046			10,839			58,333
Income tax (benefit) expense		(6	)		(14	)		(36	)
Net loss		18,040			10,825			58,297
Other comprehensive (income) loss:
Unrealized (gain) loss on securities, net of tax		(9	)		(21	)		(54	)
Comprehensive loss	$	18,031		$	10,804		$	58,243
Net loss per share:
Basic and diluted
Pro-forma basic and diluted (unaudited)	$	0.34		$	0.41
Weighted average shares outstanding:
Basic and diluted
Pro-forma basic and diluted (unaudited)		52,964,916			26,156,156

See accompanying notes to the condensed consolidated financial statements.

F-31

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(In thousands, except for share amounts)

	Number of								Amount								Paid-in Capital			Accumulated Deficit			Other Comprehensive Income		Total
	Ordinary Shares			Preferred Shares			Common Stock		Ordinary Shares			Preferred Shares			Common Stock
Balance at December 31, 2010		46,916,747			106,616,318			—	$	469		$	1,066		$	—	$	41,340		$	(40,257	)	$	45	$	2,663
Issuance of preferred shares		—			14,542,512			—		—			146			—		31,052			—			—		31,198
Contribution of capital		—			—			—		—			—			—		1,000			—			—		1,000
Issuance of common stock on conversion of capital contributions		—			—			20,000,000		—			—			20		(20	)		—			—		—
Conversion of ordinary and preferred shares into common stock		(46,916,747	)		(121,158,830	)		26,080,836		(469	)		(1,212	)		26		1,655			—			—		—
Issuance of common stock		—			—			12,729,277		—			—			13		165,776			—			—		165,789
Stock-based compensation		—			—			—		—			—			—		117			—			—		117
Unrealized gains on investments , net of tax		—			—			—		—			—			—		—			—			9		9
Net loss		—			—			—		—			—			—		—			(18,040	)		—		(18,040	)
Balance at June 30, 2011		—			—			58,810,113	$	—		$	—		$	59	$	240,920		$	(58,297	)	$	54	$	182,736

See accompanying notes to the condensed consolidated financial statements.

F-32

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	Six Months Ended June 30,						Period from April 24, 2006 (Inception) to June 30, 2011
	2011			2010
OPERATING ACTIVITIES:
Net loss	$	(18,040	)	$	(10,825	)	$	(58,297	)
Adjustments to reconcile net loss to net cash used by operating activities:
Amortization		631			161			1,411
Loss on disposal of assets		—			—			21
Stock issuance in payment for services rendered		—			34			325
Accretion expense		42			9			97
Income tax benefit		(6	)		(14	)		(36	)
Stock compensation expense		117			—			117
Changes in operating assets and liabilities:
Non-trade receivables		218			(189	)		(535	)
Deposits		(163	)		(10	)		(270	)
Prepaid expenses		(185	)		(191	)		(379	)
Receivables from related-party		30			(28	)		—
Accounts payable and other accrued liabilities		1,351			2,620			2,528
Accrued interest on long-term debt to related-party		198			735			2,542
Warehouse supplies		(6	)		—			(22	)
Payable to related-party		36			—			(41	)
Net cash used by operating activities		(15,777	)		(7,698	)		(52,539	)
INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(1,319	)		(693	)		(2,935	)
Acquisitions, net		—			(28,500	)		(29,250	)
Purchase of investments		(2	)		—			(2	)
Transfers to restricted cash		(150	)		—			(176	)
Net cash used by investing activities		(1,471	)		(29,193	)		(32,363	)
FINANCING ACTIVITIES:
Capital contributions		1,000			29,810			36,978
Stock subscription receivable		—			114			114
Issuance of common stock		165,789			—			165,789
Deferred financing costs		(16	)					(16	)
Related-party debt		—			8,000			35,198
Net cash provided by financing activities		166,773			37,924			238,063
Net increase in cash and cash equivalents		149,525			1,033			153,161
Cash and cash equivalents, beginning of period		3,636			1,379			—
Cash and cash equivalents, end of period	$	153,161		$	2,412		$	153,161

See accompanying notes to the condensed consolidated financial statements.

F-33

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except share, per share and option amounts)

1. Description of Business, Merger of Entities Under Common Control and Basis of Preparation of Financial Statements

These financial statements represent the condensed consolidated financial position and results of operations of Sunshine Silver Mines Corporation and its subsidiaries (“Sunshine Silver” or “the Company”). Unless the content otherwise requires, references to Sunshine Silver or the Company mean the Sunshine Silver Mines Corporation condensed consolidated companies. These unaudited consolidated financial statements are to be read in conjunction with the consolidated financial statements appearing in this registration statement.

On March 1, 2011, the investors in the Sunshine Silver predecessor entities individually and collectively combined the predecessor entities, which had been previously operated and reported as companies under common control. This transaction was reported for accounting purposes as a combination of companies under common control. In accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), all financial reports have been prepared as if the combination of the companies under common control occurred prior to the earliest period presented, and certain amounts have been reclassified to conform to the new presentation.

The condensed consolidated financial statements herein refer to the condensed consolidated and combined financial statements of the Sunshine mine and Los Gatos Ltd predecessor entities (“Predecessor Sunshine” and “Los Gatos”), respectively. Accordingly, the 2010 information represents the combined financial position and results of operations of Predecessor Sunshine and Los Gatos. The 2011 information represents the combined results of operations of the predecessor entities through February 28, 2011, subsequent to this date; the financial results represent the consolidated financial information for Sunshine Silver.

Sunshine Silver

Predecessor Sunshine was formed as Precious Metals Opportunities LLC (“Precious Metals”), a Delaware limited liability company. On February 2, 2011, Precious Metals converted to a Delaware corporation, and became Sunshine Silver. The Company specializes in investing, exploring, and developing assets in the mining industry. The Sunshine mine is currently undergoing an advanced exploration drilling program, including maintaining the Sunshine mine facility and developing a refurbishment program for planned operations in the future. Accordingly, Sunshine Silver is deemed to be an exploration stage company.

Los Gatos

Los Gatos was incorporated as a “shelf” holding company under the laws of Bermuda on April 24, 2006 for the purpose of coordinating the activities of subsidiaries exploring for deposits of precious and related metals and was substantially owned by CGT Management Ltd. (a limited liability company incorporated in Bermuda) (“CGT”). Los Gatos’ primary exploration efforts are focused on the advancement of the Los Gatos project in northern Mexico, through Minera Plata Real S. de R.L. de C.V (“MPR”), a wholly-owned subsidiary of the Company. Due to the exploratory nature of its operations, Los Gatos is deemed to be an exploration stage company.

2. Summary of Significant Accounting Policies

The significant accounting policies of the Company are set forth in the Company’s consolidated financial statements for the year ended December 31, 2010, included herein.

F-34

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies —Continued

Basis of consolidation and combination

Predecessor Sunshine and Los Gatos are consolidated as discussed in note 1. All significant intercompany balances and transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include mineral properties; environmental reclamation and closure obligations; valuation allowances for deferred tax assets; and the fair value of financial instruments.

3. Recapitalization and Merger Plan

On January 31, 2011, Los Gatos designated 14,542,512 unissued shares of par value $0.01 ordinary shares (“Ordinary Share”) as par value $0.01 preferred shares (“Preferred Share”), and issued these Preferred Shares in full satisfaction of its then existing $31,000 of related-party debt and $198 of accrued interest.

On February 2, 2011, 20,000,000 shares of common stock were issued to the Company’s owners when Precious Metals converted to a Delaware corporation and became Sunshine Silver.

On February 22, 2011, Los Gatos entered into an Agreement and Plan of Merger and Amalgamation (“Merger Plan”) with Sunshine Silver. Pursuant to the Merger Plan, on March 1, 2011, Los Gatos merged and was amalgamated with and into Sunshine Silver and the separate corporate existence of Los Gatos ceased. Each issued and outstanding Preferred Share and each issued and outstanding Ordinary Share was converted into approximately 0.15517 shares of par value $0.001 per share common stock of Sunshine Silver. The merger did not affect the shares of Sunshine Silver’s common stock existing before the merger.

In addition, as a result of the Merger Plan, existing outstanding options to purchase one share of Los Gatos Ordinary Shares were converted by operation of law into an option to purchase approximately 0.15517 shares of Sunshine Silver common stock at an exercise price of $2.32 per share.

4. Acquisition of the Sunshine Mine

On May 11, 2010, the Company, through its wholly owned subsidiary SOP, acquired the net assets of Sterling’s Idaho Sunshine mine by purchase from Sterling’s bankruptcy proceedings. Included in this purchase was Sterling’s mine lease with Sunshine Precious Metals, Inc. (“SPMI”). In July 2010, SOP exercised the option in the lease to buy the Sunshine Mine and facilities from SPMI.

The total consideration paid in cash was comprised of a) $23,500 for the net assets acquired and liabilities assumed and b) $5,750 for the right, title and interest acquired from SPMI. The payment for the lease was recorded in property, plant and equipment, net in the Company’s condensed consolidated balance sheet at acquisition date. The acquisition was accounted for as a business combination.

F-35

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4. Acquisition of the Sunshine Mine—Continued

The purchase price of $29,250 was allocated to the following assets and liabilities using the estimated fair values of assets acquired and liabilities assumed at the acquisition date:

Assets:
Receivables	$	147
Property, plant, and equipment		29,105
Investments		119
Materials & supplies inventory		763
Restricted cash		289
	$	30,423
Liabilities:
Reclamation obligations	$	708
Contingent consideration		465
Net assets acquired	$	29,250

The estimated fair values of the asset retirement obligation and the property, plant and equipment are classified as Level 3 of the fair value hierarchy as the valuations were determined based on internally developed assumptions that market participants would use in the pricing of such assets and liabilities without observable inputs and little or no market activity. The fair value of the acquired current assets and current liabilities equaled their carrying amounts due to their short-term nature.

Pursuant to the acquisition of the Sunshine Mine, the Company acquired the right to purchase, or have Sterling dissolve, all of the issued and outstanding common stock of Sterling for a payment of $500, subject to the completion of the Sterling bankruptcy proceedings. The Company estimates completion of the bankruptcy proceedings will occur in August 2011 and it is highly probable we will make the $500 payment. Accordingly, the Company calculated the fair value of the August 2011 payment as of the May 2010 acquisition date. A discount rate of 6.14% was determined based on a review of comparable corporate bond yields as of the acquisition date.

The results of the operations of Sunshine mine have been included in the Company’s condensed consolidated statement of loss and comprehensive loss from the date of acquisition through December 31, 2010. The Company incurred $2,100 in acquisition costs related to the Sunshine mine acquisition. The Company incurred $1,937 of these acquisition costs during the six months ended June 30, 2010, respectively. The Company follows the business combination accounting guidance related to acquisition-related costs and expenses these costs as incurred. The acquisition-related costs for the Sunshine mine acquisition are included in general and administrative costs in the condensed consolidated statement of loss and comprehensive loss for the six months ended June 30, 2010.

F-36

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Other Current Assets

	June 30, 2011		December 31, 2010
Value added tax receivable	$	485	$	823
Restricted cash and certificate of deposit		465		315
Securities available for sale		210		194
Prepaid expenses		378		193
Vendor deposits		270		107
Non-trade receivables		197		77
Related party receivable		—		30
Total other current assets	$	2,005	$	1,739

At June 30, 2011 and December 31, 2010, the Company held $210 and $194 of short-term available for sale securities with an original cost of $121 and $119, respectively.

6. Property, Plant and Equipment, net

	June 30, 2011			December 31, 2010
Mineral properties	$	13,544		$	13,544
Plant & equipment		6,516			6,226
Land		2,077			1,219
Buildings & improvements		9,575			9,555
Furniture, fixtures & computers		293			142
Property, plant & equipment at cost		32,005			30,686
Less accumulated amortization		(1,395	)		(764	)
Property, plant & equipment, net	$	30,610		$	29,922

Mineral Properties

The Company conducts exploration activities on patented and unpatented mining claims at both the Sunshine mine and Los Gatos properties.

The Company is required to make mineral and concession lease payments to various entities to secure the appropriate claims or surface rights. Certain of these agreements also have royalty payments that are triggered when the Company produces and sells minerals. Currently there are no such instances where the Company is paying any royalty based upon production and sales.

F-37

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Accounts Payable and Other Accrued Liabilities

	June 30, 2011		December 31, 2010
Accounts payable	$	296	$	450
Accrued expenses		2,989		399
Contingent consideration		498		484
Accrued payroll & taxes		293		327
Payable to related party		45		9
Total accounts payable and other accrued liabilities	$	4,121	$	1,669

8. Related-Party Transactions

Related-party debt

The Company did not have any related-party debt outstanding as of June 30, 2011. On January 31, 2011, Los Gatos issued 14,542,512 Preferred Shares in full satisfaction of its then existing $31,000 of related-party debt and $198 of accrued interest.

The Company borrowed and repaid $800 for five days in March 2011 from an affiliate, GRAT Holdings LLC (the parent of a current shareholder), for general corporate purposes.

Interest expense on the related party debt was $198 and $736 for the six months ended June 30, 2011 and 2010, respectively.

Service Agreements

Los Gatos, SOP, and Sunshine Silver have service agreements with related parties, Tigris Financial (International) LP (“Tigris Intl”) and Tigris Financial Group Ltd. (“Tigris”), respectively, whereby Tigris and Tigris Intl provide certain business and financial advice, including consulting, administrative, accounting and business development services.

Pursuant to the Los Gatos service agreement, Los Gatos paid Tigris Intl $250 for the six months ended June 30, 2011 and 2010. The Los Gatos service agreement included rights of termination by either party with thirty-day’s notice and was terminated effective August 1, 2011. The SOP service agreement was effective May 11, 2010. Pursuant to this agreement, SOP paid Tigris $250 and $71 for the six months ended June 30, 2011 and 2010, respectively. The SOP service agreement included rights of termination by either party with sixty-day’s notice. The SOP service agreement was assigned to the Company as a party effective August 1, 2011. The Sunshine Silver service agreement was effective March 1, 2011. Pursuant to this agreement, Sunshine Silver paid Tigris $231 for six months ended June 30, 2011. The Sunshine Silver service agreement included rights of termination by either party with thirty-day’s notice, and this service agreement was terminated effective August 1, 2011.

F-38

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Stockholder’s Equity

Los Gatos

2011 Ordinary and Preferred Share Transactions

On January 31, 2011, Los Gatos designated 14,542,512 unissued Ordinary Shares as Preferred Shares. On January 31, 2011, Los Gatos issued such Preferred Shares to CGT in full satisfaction of the then existing $31,198 (principal of $31,000 and interest of $198) amounts due to CGT.

In addition, pursuant to the Merger Plan, the 6,727,561 options outstanding for the purchase of Los Gatos Ordinary Shares converted to options to purchase 1,043,938 common stock shares of Sunshine Silver at $2.32 per share on March 1, 2011.

Sunshine Silver

Common Stock Transactions

During the six months ended June 30, 2011, and during 2010, the owners of Precious Metals contributed $1,000 and $35,978, respectively, as capital contributions. In February 2011, these capital contributions were converted into 20,000,000 shares of issued common stock when Precious Metals became Sunshine Silver.

Pursuant to the Merger Plan, all issued and outstanding Ordinary Shares and Preferred Shares were converted into approximately 0.15517 shares of Sunshine Silver’s $0.001 par value common stock.

During the six months ended June 30, 2011, investors contributed $163,733 for 20.1% of the common stock of the Company, and holders of 885,990 options exercised their right to purchase shares of Sunshine Silver stock at an exercise price of $2.32 per share resulting in proceeds of $2,056.

Stock Option Transactions

During the six months ended June 30, 2011, the Company granted 163,600 employee stock options. These options have a contractual term of 10 years and entitle the holder to purchase one share of the Company’s common stock. Total unrecognized compensation expense as of June 30, 2011 was $1,398, which is expected to be recognized over a weighted average period of 2.6 years. The Company did not grant any stock options for the six months ended June 30, 2010. On July 18, 2011 and August 8, 2011, the Company granted 100,000 and 150,000 stock options, respectively.

F-39

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Stockholder’s Equity —Continued

The following tables summarize the stock option weighted-average grant date fair value, compensation expense and activity:

	Six Months Ended June 30,
	2011		2010
Weighted-average grant-date fair value	$	9.26	$	0.20
Stock based compensation expense (1)		117	$	34

Stock Option Activity	Shares			Weighted-Average Exercise Price
Outstanding at January 1, 2011		6,727,561		$	0.36
Converted - ordinary share options (2)		(6,727,561	)	$	0.36
Converted - common stock options (2)		1,043,938		$	2.32
Granted		163,600		$	24.39
Exercised		(885,990	)	$	2.32
Forfeited or expired		—			—
Outstanding at June 30, 2011		321,548		$	13.55
Vested at June 30, 2011		157,948		$	2.32

(1) On June 30, 2010, the Company issued 174,949 Ordinary Shares for $2 to an employee of a related entity under the same terms as described above for Ordinary Shares. The Company recognized an additional $34 of expense to reflect the $0.20 fair value of the Ordinary Shares. The fair value was determined based on an enterprise value and option pricing model.

(2) On March 1, 2011, pursuant to the Merger Plan, the options to purchase Los Gatos ordinary shares were converted to options to purchase the Company’s stock at a conversion factor of 0.15517. Accordingly, 6,727,561 Los Gatos options outstanding as of March 1, 2011 were converted to 1,043,938 common stock options of the Company at a strike price of $2.32.

10. Asset Retirement Obligations

In connection with the acquisition of the Sunshine mine, the Company recorded an ARO of $708 related to final closure and reclamation. The liability was initially measured at fair value and subsequently adjusted for accretion and changes in the amount or timing of the estimated cash flows. During the six months ended June 30, 2011 and 2010, the Company recorded accretion expense related to the asset retirement obligation of $28 and $9, respectively.

The following table summarizes activity in the Company’s ARO:

	June 30, 2011		December 31, 2010
Balance, beginning of period	$	744	$	—
ARO from acquisition of the Sunshine Mine		—		708
Accretion expense		28		36
Balance, end of period	$	772	$	744

F-40

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Asset Retirement Obligations—Continued

The Company is required to provide the applicable governmental agencies with financial assurances related to its closure and reclamation obligations. At June 30, 2011 and December 31, 2010, the Company had restricted cash in the form of a certificate of deposit totaling $275 as collateral for a letter of credit issued by a financial institution as security to a certain governmental agency for the Company’s reclamation obligations.

11. Fair Value Measurements

The Company establishes a framework for measuring the fair value of financial assets and liabilities and nonfinancial assets and liabilities which are measured at fair value on a recurring (annual) basis in the form of a fair value hierarchy that prioritizes the inputs into valuation techniques used to measure fair value into three broad levels. This hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. Further, financial assets and liabilities should be classified by level in their entirety based upon the lowest level of input that was significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2: Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data.

Level 3: Unobservable inputs due to the fact that there is little or no market activity. This entails using assumptions in models which estimate what market participants would use in pricing the asset or liability.

Financial Assets and Liabilities

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2011 and December 31, 2010 by respective level of the fair value hierarchy:

Type	Location		Level		June 30, 2011		December 31, 2010
Available for sale securities		Current assets		Level 1	$	210	$	194

The Company’s short-term available for sale securities are classified within Level 1 of the fair value hierarchy. These securities are comprised of common stock, which have been valued using quoted prices in active markets. The Company did not have any Level 2 or Level 3 financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010.

Non-Financial Assets and Liabilities

The Company discloses or recognizes its non-financial assets and liabilities, such as ARO and purchased businesses at fair value on a non-recurring basis. During the year ended December 31, 2010, the Company recorded the purchase of the Sunshine mine assets at fair value and established a reclamation obligation at fair value in connection with such acquisition in accordance with the ASC business combination standard. The estimated fair values for these non-financial assets and liabilities are classified as Level 3 of the fair value hierarchy as the valuations were determined based on internally developed assumptions that market participants would use in the pricing of such assets and liabilities without observable inputs and no market activity.

F-41

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Fair Value Measurements—Continued

Fair Value of Other Financial Instruments

At June 30, 2011 and December 31, 2010 the Company’s other financial instruments consist of cash and cash equivalents, restricted cash and certificate of deposit, receivables, accounts payable and other current liabilities. The carrying amounts of these financial instruments approximate fair value due to their short maturities. As of December 31, 2010, the carrying value of related-party debt approximates fair value.

12. Cash Flow Information

The following table details supplemental non-cash transactions:

	Six Months Ended June 30,				Period from April  24, 2006 (Inception) to June 30, 2011
	2011		2010
Conversion of loans & accrued unpaid interest from related parties to equity	$	31,198	$	—	$	37,654
Contingent consideration at acquisition		—		—		465
Conversion of accrued interest to debt		—		—		1,713
Accrued deferred financing costs		1,052		—		1,052

13. Commitments and Contingencies

The Company, in determining its accruals and disclosures with respect to loss contingencies, will charge to income an estimated loss if information available prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the commitments and contingencies are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

Environmental Contingencies

The Company’s mining and exploration activities are subject to various laws, regulations and permits governing the protection of the environment. These laws, regulations and permits are continually changing and are generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws, regulations and permits, but cannot predict the full amount of such future expenditures.

Other Contingencies

Stonehill / Highwood Litigation

Stonehill Capital Management LLC and Highwood Partners, LP, as debtors-in-possession, or DIP, lenders to Sunshine Precious Metals, Inc. (“SPMI”), a prior owner of the Sunshine Mine, have asserted a mortgage claim regarding certain of the property at the Sunshine Mine that the Company acquired from SPMI in June 2010. The DIP financing loan was made in connection with SPMI’s bankruptcy in 2000, in the amount of $5,000, but the DIP lenders are also claiming right to accrued interest, at a default rate of 25%, and penalties, in an alleged

F-42

SUNSHINE SILVER MINES CORPORATION

(AN EXPLORATION STAGE COMPANY)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Commitments and Contingencies—Continued

aggregate amount of $71,200. The Company is currently engaged in discovery and no motions are scheduled for hearing. The Company intends to defend vigorously against the claim and does not believe that this matter is likely to have a material adverse effect on its operations or financial condition. Litigation is inherently unpredictable, however, and while the Company believes it has valid defenses in this matter, there can be no assurance as to the ultimate outcome of this action.

The Company is from time to time involved in various legal proceedings related to its business. Except in the above-described proceedings, management does not believe that adverse decisions in any pending or threatened proceeding or that amounts that may be required to be paid by reason thereof will have a material adverse effect of the Company’s financial condition or results of operations.

14. Segment Information

	Six Months Ended June 30, 2011
	U.S.			Mexico		Corporate		Total
Exploration	$	286		$	7,843	$	21	$	8,150
Care and maintenance		2,543			—		—		2,543
General and administrative		1,790			531		4,734		7,055
Net other (income) expense		(26	)		324		—		298
Capital expenditures		189			960		170		1,319
Total assets		31,678			4,529		151,422		187,629
	Six Months Ended June 30, 2010
	U.S.			Mexico		Corporate		Total
Exploration	$	—		$	6,938	$	—	$	6,938
Care and maintenance		404			—		—		404
General and administrative		2,185			557		—		2,742
Net other expense		—			755		—		755

F-43

Through and including                     , 2011 (the 25th day after the date of this prospectus), federal securities law may require all dealers that effect transactions in our common stock, whether or not participating in this offering, to deliver a prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

	Amount To Be Paid
Registration fee	$	29,025
FINRA filing fee		25,500
NYSE listing fee		*
TSX listing fee		*
Transfer agent’s fees		*
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Blue sky fees and expenses		*
Miscellaneous		*
Total	$	*

* To be completed by amendment

Each of the amounts set forth above, other than the Registration fee and the FINRA filing fee, is an estimate.

Item 14. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law, or the DGCL, provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee or agent to such corporation. The DGCL provides that Section 145 is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise. The Registrant’s Amended and Restated Bylaws provide for indemnification by the Registrant of its directors, officers and employees to the fullest extent permitted by the DGCL.

Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any transaction from which the director derived an improper personal benefit. The Registrant’s Amended and Restated Certificate of Incorporation provides for such limitation of liability.

The Registrant intends to enter into indemnification agreements with each of its directors and executive officers. These agreements, among other things, will require the Registrant to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification for expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of the Registrant, arising out of the person’s services as a director or executive officer.

The Registrant maintains standard policies of insurance under which coverage is provided (a) to its directors and officers against loss arising from claims made by reason of breach of duty or other wrongful act, and (b) to the Registrant with respect to payments which may be made by the Registrant to such officers and directors pursuant to the above indemnification provision or otherwise as a matter of law.

II-1

The proposed form of Underwriting Agreement (to be filed as Exhibit 1 to this Registration Statement) will provide for indemnification of directors and officers of the Registrant by the underwriters against certain liabilities.

Item 15. Recent Sales of Unregistered Securities.

Since three years before the date of the initial filing of this Registration Statement, the Registrant has sold securities without registration under the Securities Act of 1933, as amended (the “Securities Act”), as described below. None of these transactions involved any underwriters or any public offerings, and we believe that each of these transactions was exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(9), Section 4(2), Regulation D or Rule 701 of the Securities Act.

During the fiscal year ended December 31, 2008, we did not issue any unregistered securities.

During the fiscal year ended December 31, 2009 we issued the following unregistered securities for the consideration listed:

1. On October 2, 2009, Los Gatos Ltd. converted 12,000 ordinary shares held by CGT Management Ltd., or CGT, to 1,200,000 preferred shares. 105,416,318 preferred shares of Los Gatos Ltd. were also issued to CGT in payment of the then outstanding advance of $527,152 and a reduction of long-term debt payable to CGT of $539,011.

2. On October 2, 2009, Los Gatos Ltd. issued 1,383,682 ordinary shares to CGT in payment of long term debt payable to CGT of $13,837.

3. During the period October 2, 2009 through December 31, 2009, Los Gatos Ltd. issued 18,997,933 ordinary shares in payment for services, as follows: 1) 12,000,000 shares to related individuals; 2) 2,226,615 shares to two vendors; and 3) 4,771,318 shares to Tigris Financial (International) L.P. In addition, individuals associated with Electrum purchased 11,425,956 ordinary shares of Los Gatos Ltd. at a price of $0.01 per share.

4. On October 14, 2009, Los Gatos Ltd. entered into stock option agreements with various individuals and entities that agreed to serve on its advisory board. The stock option agreements provided for the purchase of 21,661,788 ordinary shares of Los Gatos Ltd. with a stated exercise price of $0.36 per share.

During the fiscal year ended December 31, 2010, we issued the following unregistered securities for the consideration listed:

1. On June 30, 2010, Los Gatos Ltd. issued 174,949 ordinary shares of Los Gatos Ltd. for $1,749 to an employee of Tigris Financial Group Ltd.

2. In December 2010, options to acquire 14,934,227 ordinary shares of Los Gatos Ltd. were exercised by CGT, of which 14,616,139 shares were acquired from a company serving on Los Gatos Ltd.’s Advisory Board, at an exercise price of $0.36 per share resulting in $5.4 million of capital contributions through reduction in related-party debt.

Since January 1, 2011, we have issued the following unregistered securities:

1. On January 31, 2011, Los Gatos Ltd. designated 14,542,512 unissued Los Gatos Ltd. ordinary shares as preferred shares. On January 31, 2011, Los Gatos Ltd. issued such preferred shares to CGT in full satisfaction of the then outstanding $31.2 million (principal of $31.0 million and interest of $198,000) amounts due to CGT.

II-2

2. On March 1, 2011, in connection with the merger of Los Gatos Ltd. into the Registrant (the “Merger”), the 6,727,561 options outstanding for the purchase of Los Gatos Ltd. ordinary shares were converted into options to purchase 1,043,938 shares of common stock of the Company at $2.32 per share. Pursuant to the Merger, all outstanding ordinary shares of Los Gatos Ltd. and preferred shares of Los Gatos Ltd. were converted into approximately 0.15517 shares of the Registrant’s common stock.

3. During the six months ended June 30, 2011, and the year ended December 31, 2010, the members of Precious Metals Opportunities LLC contributed $1.0 million and $36.0 million, respectively, as capital contributions. In February 2011, these capital contributions were converted into an aggregate of 20,000,000 shares of the Registrant’s common stock when Precious Metals Opportunities LLC became the Company.

4. On March 9, 2011, the Company granted 38,600 employee stock options, with an exercise price of $13.825 per option, to Roger Johnson.

5. On May 4, 2011, the Company granted 125,000 employee stock options, with an exercise price of $27.65 per option, to Stephen Orr.

6. Between March 1, 2011 and June 1, 2011, we also issued in the aggregate 11,843,287 unregistered securities to 13 individuals or entities, including Liberty Metals & Mining Holdings, LLC and certain of the Registrant’s directors and officers (or their affiliates) for aggregate consideration of $163.7 million. The recipients of the securities in these transactions represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof.

7. Since the Merger, through June 30, 2011, holders of 885,990 options exercised their right to purchase shares of the Registrant’s common stock at an exercise price of $2.32 per share, resulting in proceeds of $2.1 million.

8. On July 18, 2011, the Company granted 100,000 employee stock options, with an exercise price of $27.65 per option, to Jeffrey Reeser.

9. On August 8, 2011, the Company granted 150,000 employee stock options, with an exercise price of $27.65 per option, to John Galassini.

Item 16. Exhibits and Financial Statement Schedules.

(a) The following exhibits are filed as part of this Registration Statement:

Exhibit Number	Description
1	Form of Underwriting Agreement*
2.1	Asset Purchase Agreement among Sterling Mining Company and Silver Opportunity Partners LLC dated as of April 21, 2010
2.2	Agreement and Plan of Merger and Amalgamation dated as of February 22, 2011 between Los Gatos Limited and Sunshine Silver Mines Corporation
3.1	Amended and Restated Certificate of Incorporation*
3.2	Amended and Restated Bylaws*
4.1	Form of Common Stock Certificate*
5	Opinion of Davis Polk & Wardwell LLP*
10.1	Purchase Agreement dated as of February 8, 2011 by and between Liberty Metals & Mining Holdings, LLC and Sunshine Silver Mines Corporation
10.2	Services Agreement dated as of January 1, 2008 between Los Gatos Ltd. and Tigris Financial (International) L.P.

II-3

Exhibit Number	Description
10.3	Services Agreement dated as of May 11, 2010 between Tigris Financial Group Ltd. and Silver Opportunity Partners LLC
10.4	Assignment and Amendment to Services Agreement dated as of August 1, 2011, to the Services Agreement dated as of May 11, 2010 between Tigris Financial Group Ltd. and Silver Opportunity Partners LLC
10.5	Services Agreement dated as of March 1, 2011 between Tigris Financial Group Ltd. and Sunshine Silver Mines Corporation
10.6	Royalty Deed dated April 12, 2001 among Sunshine Precious Metals, Inc., The United States of America and the Coeur D’Alene Tribe
10.7	Metropolitan Mines Corporation, Limited and Sterling Mining Company Lease Agreement, dated as of September 16, 2004
10.8	Exploration, Exploitation and Unilateral Promise to Sell Agreement between La Cuesta International, S.A. de C.V. and Minera Plata Real, S.A. de C.V., dated as of April 13, 2006
10.9	Title of Concession Mining and Exploration, Grupo Minero Factor S.A. de C.V., dated as of December 9, 2004 (English Translation)
10.10	Sunshine Silver Mines Corporation Long Term Incentive Plan
10.11	Employment Agreement dated as of February 28, 2011 between Sunshine Silver Mines Corporation and Roger P. Johnson
10.12	Employment Agreement dated as of May 3, 2011 between Sunshine Silver Mines Corporation and Stephen Orr
10.13	Employment Agreement dated as of June 1, 2011 between Sunshine Silver Mines Corporation and Philip Pyle
10.14	Employment Agreement dated as of June 20, 2011 between Sunshine Silver Mines Corporation and Jeffrey Reeser
10.15	Employment Agreement dated as of July 7, 2011 between Sunshine Silver Mines Corporation and John Galassini
10.16	Form of Option Agreement
10.17	Stockholders Agreement*
10.18	Form of Indemnification Agreement between Sunshine Silver Mines Corporation and each of its directors and executive officers*
16.1	Letter re: Change in Certifying Accountant#
21	Subsidiaries of the Registrant
23.1	Consent of KPMG LLP
23.2	Consent of WithumSmith + Brown, PC
23.3	Consent of Behre Dolbear & Company
23.4	Consent of Davis Polk & Wardwell LLP (included in Exhibit 5)*
23.5	Consent of Philip Pyle
24.1	Power of Attorney (included on signature page)#
99.1	Consent of John Ellis#
99.2	Consent of Marc Faber#

II-4

Exhibit Number	Description
99.3	Consent of Wayne Kirk#
99.4	Consent of Michael S. Parrett#
99.5	Consent of David Peat#
99.6	Consent of Robert A. Quartermain#

* To be filed by amendment.

# Previously filed

(b) No financial statement schedules are provided because the information called for is not required or is shown either in the financial statements or the notes thereto.

Item 17. Undertakings

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions referenced in Item 14 of this Registration Statement, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes:

(a) To provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(b) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(c) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Denver, State of Colorado, on the 9th day of August, 2011.

SUNSHINE SILVER MINES CORPORATION
By:	/s/ Stephen Orr
	Name:	Stephen Orr
	Title:	Principal Executive Officer

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Stephen Orr	Principal Executive Officer	August 9, 2011
Stephen Orr
/s/ Roger Johnson Roger Johnson	Principal Financial Officer and Principal Accounting Officer	August 9, 2011
*	Director	August 9, 2011
William Natbony
*	Director	August 9, 2011
Diana Walters

* The undersigned, by signing his name hereto, does execute this Registration Statement on behalf of the persons identified above pursuant to a power of attorney.

By:	/s/ Stephen Orr
	Stephen Orr
	Power-in-Fact

II-6

EXHIBIT INDEX

Exhibit Number	Description
1	Form of Underwriting Agreement*
2.1	Asset Purchase Agreement among Sterling Mining Company and Silver Opportunity Partners LLC dated as of April 21, 2010
2.2	Agreement and Plan of Merger and Amalgamation dated as of February 22, 2011 between Los Gatos Limited and Sunshine Silver Mines Corporation
3.1	Amended and Restated Certificate of Incorporation*
3.2	Amended and Restated Bylaws*
4.1	Form of Common Stock Certificate*
5	Opinion of Davis Polk & Wardwell LLP*
10.1	Purchase Agreement dated as of February 8, 2011 by and between Liberty Metals & Mining Holdings, LLC and Sunshine Silver Mines Corporation
10.2	Services Agreement dated as of January 1, 2008 between Los Gatos Ltd. and Tigris Financial (International) L.P.
10.3	Services Agreement dated as of May 11, 2010 between Tigris Financial Group Ltd. and Silver Opportunity Partners LLC
10.4	First Assignment and Amendment to Services Agreement dated as of August 1, 2011, to the Services Agreement dated as of May 11, 2010 between Tigris Financial Group Ltd. and Silver Opportunity Partners LLC
10.5	Services Agreement dated as of March 1, 2011 between Tigris Financial Group Ltd. and Sunshine Silver Mines Corporation
10.6	Royalty Deed dated April 12, 2001 among Sunshine Precious Metals, Inc., The United States of America and the Coeur D’Alene Tribe
10.7	Metropolitan Mines Corporation, Limited and Sterling Mining Company Lease Agreement, dated as of September 16, 2004
10.8	Exploration, Exploitation and Unilateral Promise to Sell Agreement between La Cuesta International, S.A. de C.V. and Minera Plata Real, S.A. de C.V., dated as of April 13, 2006
10.9	Title of Concession Mining and Exploration, Grupo Minero Factor S.A. de C.V., dated as of December 9, 2004 (English Translation)
10.10	Sunshine Silver Mines Corporation Long Term Incentive Plan
10.11	Employment Agreement dated as of February 28, 2011 between Sunshine Silver Mines Corporation and Roger P. Johnson
10.12	Employment Agreement dated as of May 3, 2011 between Sunshine Silver Mines Corporation and Stephen Orr
10.13	Employment Agreement dated as of June 1, 2011 between Sunshine Silver Mines Corporation and Philip Pyle
10.14	Employment Agreement dated as of June 20, 2011 between Sunshine Silver Mines Corporation and Jeffrey Reeser
10.15	Employment Agreement dated as of July 7, 2011 between Sunshine Silver Mines Corporation and John Galassini
10.16	Form of Option Agreement
10.17	Stockholders Agreement*
10.18	Form of Indemnification Agreement between Sunshine Silver Mines Corporation and each of its directors and executive officers*
16.1	Letter re: Change in Certifying Accountant#

Exhibit Number	Description
21	Subsidiaries of the Registrant
23.1	Consent of KPMG LLP
23.2	Consent of WithumSmith + Brown, PC
23.3	Consent of Behre Dolbear & Company
23.4	Consent of Davis Polk & Wardwell LLP (included in Exhibit 5)*
23.5	Consent of Philip Pyle
24.1	Power of Attorney (included on signature page)#
99.1	Consent of John Ellis#
99.2	Consent of Marc Faber#
99.3	Consent of Wayne Kirk#
99.4	Consent of Michael S. Parrett#
99.5	Consent of David Peat#
99.6	Consent of Robert A. Quartermain#

* To be filed by amendment.

# Previously filed

EX-2.1

Exhibit 2.1

ASSET PURCHASE AGREEMENT

among

STERLING MINING COMPANY

and

SILVER OPPORTUNITY PARTNERS LLC

Dated as of April 21, 2010

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS AND INTERPRETATION			1
Section 1.1.	Definitions		1
Section 1.2.	Interpretation		7
ARTICLE II SALE OF ASSETS; SALE OF STOCK; CLOSING			7
Section 2.1.	Purchase and Sale of Purchased Assets		7
Section 2.2.	Excluded Assets		8
Section 2.3.	Assumed Liabilities		9
Section 2.4.	Excluded Liabilities		9
ARTICLE III PURCHASE PRICE			10
Section 3.1.	Purchase Price		10
Section 3.2.	Additional Payments		10
ARTICLE IV CLOSING; CLOSING DELIVERIES			11
Section 4.1.	Closing		11
Section 4.2.	Deliveries by Seller at Closing		11
Section 4.3.	Deliveries by Purchaser at Closing		11
ARTICLE V CONDITIONS TO CLOSING			12
Section 5.1.	Conditions to Obligations of Each Party		12
Section 5.2.	Conditions to Obligations of the Purchaser		12
Section 5.3.	Conditions to Obligations of the Seller		13
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLER			13
Section 6.1.	Authorization		13
Section 6.2.	Organization and Qualification		13
Section 6.3.	Conflicting Agreements and Operating Agreement Provisions		13
Section 6.4. Section 6.5.	Consents Title to Purchased Assets		14 14
Section 6.6.	Real Property		14
Section 6.7.	Cure of Monetary Defaults		14
Section 6.8.	Reserve Report		14
Section 6.9.	No Implied or Other Representation of Warranty		15
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER			15
Section 7.1.	Authorization; Noncontravention		15
Section 7.2.	Organization and Qualification		16
Section 7.3.	Conflicting Agreements and Operating Agreement Provisions		16
Section 7.4.	Consents		16
ARTICLE VIII COVENANTS			16
Section 8.1.	Further Assurances; Books and Records		16
Section 8.2.	Cure of Monetary Defaults		17

Section 8.3.	Stock of Seller	17
Section 8.4.	Ordinary Course of Business	17
Section 8.5.	Notifications	17
Section 8.6.	Insurance	18
Section 8.7.	Press Releases; Publicity	18
Section 8.8.	Use of Proceeds	18
ARTICLE IX TAX MATTERS		18
Section 9.1.	Purchase Price Allocation	18
ARTICLE X TERMINATION		19
Section 10.1.	Termination	19
Section 10.2.	Procedure and Effect of Termination	19
Section 10.3.	Return of Deposit Upon Termination	20
ARTICLE XI MISCELLANEOUS		20
Section 11.1.	Severability	20
Section 11.2.	Specific Enforcement	20
Section 11.3.	Entire Agreement	20
Section 11.4.	Counterparts	20
Section 11.5.	Notices, Requests and Other Communications	20
Section 11.6.	Amendments	21
Section 11.7.	No Third Party Beneficiary	22
Section 11.8.	Successors and Assigns	22
Section 11.9.	Assignment	22
Section 11.10.	Governing Law; Choice of Forum	22
Section 11.11.	Waivers	22
Section 11.12.	Expenses	23
Section 11.13.	Headings	23

Exhibit A         Form of General Assignment and Bill of Sale
Schedule 2.1(a)	Real Property; Improvements
Schedule 2.1(b)	Real Property Leases
Schedule 2.1(c)	Transferred Personal Property
Schedule 2.1(h)	Securities Accounts and Marketable Securities
Schedule 2.1(j)	Contracts
Schedule 6.6	Legal Description of Leased Real Property
Schedule 6.7	Monetary Defaults under Real Property Leases
Schedule 6.8(a)	Disclosures Regarding Reserve Report

- ii -

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of April 21, 2010 (the “Execution Date”), is entered into by and between Sterling Mining Company, a corporation organized under the laws of Idaho (“SMC” or “Seller”), and Silver Opportunity Partners LLC, a Delaware limited liability company (“SOP” or “Purchaser”).

RECITALS

WHEREAS, Seller is debtor in possession under title 11 of the United States Code, 11 U.S.C. § 101 et. seq. (the “Bankruptcy Code”), and filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code on March 3, 2009 in the United States Bankruptcy Court for the District of Idaho (the “Bankruptcy Court”), (Case No. 09-20178-TLM);

WHEREAS, upon the terms and conditions set forth in this Agreement, Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to purchase, acquire and assume from Seller, pursuant to Sections 363 and 365 of the Bankruptcy Code, all of the Purchased Assets and Assumed Liabilities (each as defined below), free and clear of all Liabilities;

WHEREAS, Purchaser and Seller are parties to that certain Stock Purchase Agreement, dated of even date herewith (the “Stock Purchase Agreement”); and

WHEREAS, Purchaser and Seller contemplate that both this Agreement and the Stock Purchase Agreement constitute related but separable components of Seller’s resolution of its petition for relief under the Bankruptcy Code.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual agreements, covenants and provisions contained herein, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

Section 1.1. Definitions. As used in this Agreement each of the following terms shall have the following respective meanings:

“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly

or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” shall have the meaning specified in the preamble.

“Allocation Statement” shall have the meaning specified in Section 9.1(a).

“Appealed Orders” means (i) Order on Motion to Assume Lease and Regarding Administrative Expense Claim, dated August 21, 2009 (Dkt. 327) and (ii) Order on Turnover Motion, dated August 14, 2009 (Dkt. 312).

“Assets and Properties” of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including, without limitation, cash, cash equivalents, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, leasehold estates, real estate, real property and mineral interests, equipment, inventory, goods and Intellectual Property.

“Asset Purchase Closing” shall have the meaning specified in Section 4.1(a).

“Asset Purchase Closing Date” shall have the meaning specified in Section 4.1(a).

“Asset Purchase Price” shall have the meaning specified in Section 3.1(a).

“Assumed Liabilities” shall have the meaning specified in Section 2.3.

“Bankruptcy Code” shall have the meaning specified in the Recitals.

“Bankruptcy Court” shall have the meaning specified in the Recitals.

“Benefit Plans” means “employee benefit plan” as defined in Section 3(3) of ERISA, and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and other material employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, under which any current or former employee of Seller has any present or future right to benefits, maintained or contributed to by either of Seller or under which either of Seller has any present or future liability.

“Books and Records” of any Person means all files, documents, instruments, papers, books and records relating primarily to the Purchased Assets, including, without limitation, files, blueprints, maps, manuals, plans, specifications, letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds, title policies, Contracts, customer lists, computer files, operating data and plans and environmental studies and plans.

2

“Business” means the ownership, exploration and exploitation of mineral rights and interests and mining claims located in and around the Coeur d’Alene Mining District, and activities related thereto.

“Business Day” means a day (excluding Saturday and Sunday) on which banks generally are open for the transaction of business in New York City.

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

“Confirmation Order” means an Order of the Bankruptcy Court in form and substance acceptable to Purchaser in its sole and absolute discretion, confirming Debtor’s Plan.

“Confirmation Date” shall be the date upon which the Bankruptcy Court shall have entered the Confirmation Order.

“Contract” means any binding agreement, arrangement, instrument, lease, license, evidence of indebtedness, mortgage, indenture, security agreement, order or other contract (whether written or oral).

“Cure Amount” shall have the meaning specified in Section 3.1(b).

“Debtor” means Sterling Mining Company.

“Deeds” means the Special Warranty Deeds, in form and substance acceptable to Purchaser in its sole discretion.

“Deposit” shall have the meaning specified in Section 3.1(a).

“Engineers” shall have the meaning specified in Section 6.8(a).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“Execution Date” shall have the meaning specified in the preamble.

“Final Order” means an Order of any court of competent jurisdiction: (a) as to which the time to appeal, petition for writ of certiorari, or otherwise seek appellate review or to move for reargument, rehearing, or reconsideration has expired and as to which no appeal, petition for writ of certiorari, or other appellate review, or proceedings for reargument, rehearing, or reconsideration shall then be pending; (b) as to which any right to appeal, petition for certiorari, or move for reargument, rehearing, or reconsideration shall have been waived in writing by the party with such right; or (c) in the event that an appeal, writ of certiorari, or other appellate review or reargument, rehearing, or reconsideration thereof has been sought, which shall have been affirmed by the highest court to which such order was appealed, from which writ of certiorari or other appellate review or reargument, rehearing, or reconsideration was sought, and as to which the time to take any further appeal, to petition for writ of certiorari, to otherwise

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seek appellate review, and to move for reargument, rehearing, or reconsideration shall have expired.

“First Additional Payment” shall have the meaning specified in Section 3.2(b).

“General Assignment and Bill of Sale” means a General Assignment and Bill of Sale between SMC and SOP, substantially in the form attached hereto as Exhibit A.

“Governmental or Regulatory Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision of any of the foregoing.

“Improvements” shall have the meaning specified in Section 2.1(a).

“Intellectual Property” means all patents and patent rights, trademarks and trademark rights, trade names and trade name rights, service marks and service mark rights, service names and service name rights, brand names, domain names, inventions, processes, formulae, copyrights and copyright rights, trade dress, business and product names, logos, slogans, trade secrets, industrial models, processes, designs, methodologies, computer programs (including all source codes) and related documentation, technical information, manufacturing, engineering and technical drawings, know-how and all pending applications for and registrations of patents, trademarks, service marks and copyrights.

“Inventory” shall have the meaning specified in Section 2.1(e).

“IRS” means the Internal Revenue Service.

“Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law, including the common law, of the United States or any foreign country, or any domestic or foreign state, county, city or other political subdivision of any of the foregoing or of any Governmental or Regulatory Authority.

“Leased Real Property” shall have the meaning specified in Section 6.6.

“Liabilities” means any and all Liens, debts, losses, liabilities, claims (including claims as defined by Bankruptcy Code Section 101(5)), indebtedness, obligation, fine, assessment, penalty, judgment, award, loss, claim, demand, damages, expenses, fines, costs, royalties, proceedings, deficiencies, obligations (including those arising out of any legal proceeding, such as any settlement or compromise thereof or judgment or award therein), encumbrances, or interests of any nature, whether known, suspected, unknown, absolute, accrued, matured, contingent, liquidated, fixed or otherwise and whether due or to become due.

“Licenses” means all licenses, permits, certificates of authority, authorizations, approvals, registrations, franchises and similar consents granted or issued by any Governmental or Regulatory Authority.

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“Lien” means any mortgage, pledge, deed of trust, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale Contract, title retention Contract or other Contract to give any of the foregoing.

“Litigation Trust” means the Litigation Trust established by Debtor pursuant to the Plan.

“Litigation Trustee” means the Litigation Trustee selected by Debtor pursuant to the Plan.

“Material Adverse Effect” means any change, effect, occurrence or state of facts (or any development that has or is reasonably likely to have any change or effect) that is materially adverse, or would prevent or materially delay the consummation of the transactions contemplated by this Agreement.

“Option Enforcement Litigation” shall have the meaning specified in Section 3.2(a).

“Option Enforcement Order” shall have the meaning specified in Section 3.2(b).

“Order” means any writ, judgment, decree, injunction or similar order of any arbitrator or any Governmental or Regulatory Authority (in each such case whether temporary, preliminary or final).

“Party” and “Parties” shall mean, either individually or collectively, as appropriate, SMC and SOP.

“Plan” means the Debtor’s Second Amended Plan of Reorganization dated March 15, 2010, and filed as docket entry 535; as it may be amended from time to time.

“Permit” means any license, permit, franchise, certificate of authority or order, or any extension, modification, amendment or waiver of the foregoing, issued by any Governmental or Regulatory Authority.

“Person” means an individual, partnership, corporation, unincorporated organization, joint stock company, limited liability company, trust or joint venture, or Governmental or Regulatory Authority.

“Purchased Assets” shall have the meaning specified in Section 2.1.

“Purchaser” shall have the meaning specified in the preamble.

“Real Property” shall have the meaning specified in Section 2.1(a).

“Real Property Leases” shall have the meaning specified in Section 2.1(b).

“Related Agreements” means, collectively, the General Assignment and Bill of Sale, and the Deeds.

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“Reorganized Stock” shall have the meaning set forth in the Stock Purchase Agreement.

“Reserve Report” shall have the meaning specified in Section 6.8(a).

“Sale Order” shall be an order or orders of the Bankruptcy Court in form and substance acceptable to Purchaser in its sole and absolute discretion. Without limiting the generality of the foregoing, such order shall find and provide, among other things, that (i) transfers of the Purchased Assets (A) will be legal, valid, and effective transfers of the Purchased Assets; (B) will vest Purchaser with all right, title and interest of Seller in and to the Purchased Assets, free and clear of all Liabilities, such Liabilities to attach to the Asset Purchase Price pursuant to 11 U.S.C. § 363(b); and (C) constitute transfers for reasonably equivalent value and fair consideration under the Bankruptcy Code and under applicable state law; (ii) this Agreement was negotiated, proposed and entered into by the Parties without collusion, in good faith and from arm’s length bargaining positions; (iii) that Seller has complied with the notice requirements of Rules 2002, 6004, 6006 and 9014 of the Federal Rules of Bankruptcy Procedure and any applicable rules of the Bankruptcy Court with respect to the transactions contemplated by this Agreement and by all other agreements, documents, and instruments contemplated in connection with this Agreement; (iv) the Bankruptcy Court shall retain jurisdiction to resolve any controversy or claim arising out of or relating to this Agreement, or the breach hereof as provided in Section 11.10(b) hereof; and (v) that Seller has satisfied all of the requirements of, and is authorized pursuant to, Section 363(b) of the Bankruptcy Code to enter into this Agreement and to consummate the transactions contemplated hereby; and (vi) this Agreement and the transactions contemplated hereby may be specifically enforced against and binding upon, and are not subject to rejection or avoidance by, Seller or any plan trustee, or chapter 11 trustee of Seller.

“Second Additional Payment” shall have the meaning specified in Section 3.2(c).

“Seller” shall have the meaning specified in the preamble.

“SPMI” means Sunshine Precious Metals, Inc., a Delaware corporation.

“SPMI Lease” means that certain Mining Lease and Agreement between SPMI and Seller, dated June 6, 2003, as amended.

“Stock Purchase Agreement” shall have the meaning specified in the Recitals.

“Stock Purchase Price” shall have the meaning specified in the Stock Purchase Agreement.

“Tax Assessment” shall have the meaning specified in Section 8.5(a).

“Tax Returns” means all returns, reports, statements and forms with respect to Taxes, including any schedule, attachment or amendment thereto.

“Taxes” means any and all federal, state, local or foreign taxes, fees, levies, duties, tariffs, import and other charges, imposed by any taxing authority, together with any

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related interest, penalties, or other additions to tax, or additional amounts imposed by any taxing authority, and without limiting the generality of the foregoing, shall include net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, franchise, profits, license, transfer, recording, escheat, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profit, environmental, custom duty, or other tax, governmental fee or other like assessment or charge of any kind whatsoever and includes Taxes of another person that are imposed on or payable by a company under Treasury Regulations Section 1.1502-6 or as a result of any tax sharing, tax allocation, tax indemnification or other similar agreement or as a result of a company being a transferee or successor to another person.

“Title Commitments” means, for each of real properties listed in Schedule 2.1(a), a commitment for an owner’s title insurance policy, and for properties listed in Schedule 2.1(b), a commitment for a leasehold insurance policy, provided by Chicago Title Insurance Company to Purchaser in form and substance acceptable to Purchaser, together with such affidavits or other instruments as Purchaser or Chicago Title Insurance Company may require or reasonably request to delete certain standard exceptions.

“Transferred Personal Property” has the meaning set forth in Section 2.1(c).

Section 1.2. Interpretation. For the purposes hereof, (i) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender or to be gender neutral as the context requires; (ii) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules and Exhibits hereto) and not to any particular provision of this Agreement, and Article, Section, Schedule, and Exhibit references are to the Articles, Sections, Schedules, and Exhibits to this Agreement unless otherwise specified; (iii) the word “including” and words of similar import when used in this Agreement shall mean “including without limitation” unless otherwise specified; (iv) the phrase “ordinary course of business” or “normal course” or any similar phrase shall mean “ordinary course of business consistent with past practice” unless otherwise specified; and (v) all references to any period of days shall be deemed to be to the relevant number of calendar days unless otherwise specified.

ARTICLE II

SALE OF ASSETS; SALE OF STOCK; CLOSING

Section 2.1. Purchase and Sale of Purchased Assets.

Upon the terms and subject to the exclusions, limitations, and conditions hereinafter set forth (including without limitation Section 2.2), at the Asset Purchase Closing, Seller shall sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, free and clear of all Liabilities, all of Seller’s right, title and interest in the Assets and Properties of Seller, as the same shall exist on the Asset Purchase Closing Date (collectively, the “Purchased Assets”). Without limiting the generality of the foregoing, the Purchased Assets shall include all of Seller’s rights, interests in and to the following:

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(a) the real property described in Schedule 2.1(a), and all of the rights arising out of the ownership thereof or appurtenant thereto (the “Real Property”), together with all buildings, structures, facilities, fixtures and other improvements thereto (the “Improvements”);

(b) the leases of real property described in Schedule 2.1(b) as to which Seller is the lessee, and all of Seller’s right, title and interests therein, including all mineral rights and interests and purchase options (including, without limitation, the purchase option set forth in Section 20.3 of the SPMI Lease), (the “Real Property Leases”);

(c) all tangible personal property owned or leased as of the Confirmation Date by Seller, including without limitation, the tangible personal property listed in Schedule 2.1(c), (the “Transferred Personal Property”);

(d) all Intellectual Property owned by Seller or developed by or for the benefit of Seller;

(e) all inventories, office and other supplies, parts, packaging materials and other accessories related thereto which are held at the locations at which the Business is conducted that are used or held by Seller in the conduct of the Business, including any of the foregoing purchased subject to any conditional sale or title retention agreement in favor of any other Person, together with all rights of Seller against suppliers of such inventories (the “Inventory”);

(f) originals or copies of all Books and Records;

(g) subject to Section 2.2(d), all rights, claims or causes of action of Seller against third parties, relating to assets, properties, business or operations of Seller arising out of events occurring prior to the Asset Purchase Closing Date, including insurance proceeds arising therefrom;

(h) all accounts receivable of Seller;

(i) the securities accounts and securities listed on Schedule 2.1(h);

(j) all of Seller’s right in and under all Contracts, including the Contracts listed in Schedule 2.1(j);

(k) to the extent transferable, and subject to any required consents, all Permits relating to the Business and all water rights owned by Seller; and

(1) all other Assets and Properties of Seller except as otherwise provided in Section 2.2.

Section 2.2. Excluded Assets. Notwithstanding anything to the contrary in Section 2.1, the following assets, records, rights and properties of Seller are specifically excluded from the Purchased Assets and shall be retained by Seller or transferred to the Litigation Trust pursuant to the Sale Order and/or Confirmation Order, as applicable (collectively, the “Excluded Assets”):

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(a) the Asset Purchase Price and the Seller’s rights under this Agreement;

(b) all cash, cash equivalents, bank deposits or similar cash items of Seller;

(c) all assets owned or held by any Benefit Plans;

(d) any causes of action arising under chapter 5 of title 11 of the United States Code.

Section 2.3. Assumed Liabilities. On the Asset Purchase Closing Date, in connection with the sale, assignment, transfer, conveyance, and delivery of the Purchased Assets pursuant to this Agreement, on the terms and subject to the conditions set forth in this Agreement, Purchaser shall assume and be liable for, and hereby agree to pay, perform and discharge when due, the following liabilities and obligations of Seller arising in connection with the operation of the Business, as the same shall exist on the Asset Purchase Closing Date (collectively, the “Assumed Liabilities”), and no others:

(a) all obligations of Seller arising under the Real Property Leases arising and to be performed on or after the Asset Purchase Closing Date, and excluding any such obligations arising and to be performed prior to the Asset Purchase Closing Date; and

(b) all obligations of Seller arising under the Contracts listed on Schedule 2.1(j) arising and to be performed on or after the Asset Purchase Closing Date, and excluding any such obligations arising and to be performed prior to the Asset Purchase Closing Date.

Section 2.4. Excluded Liabilities. Except for the liabilities and obligations specifically assumed pursuant to and identified in Section 2.3, by this Agreement, Purchaser shall not assume, shall not take Purchased Assets subject to, and shall not be liable for, any Liabilities of Seller (collectively, the “Excluded Liabilities”). Without limiting the generality of the foregoing, Excluded Liabilities shall include, without limitation:

(a) all liabilities arising out of or relating to the Excluded Assets;

(b) all liabilities for Taxes (i) imposed on Seller or the Purchased Assets with respect to taxable periods, or portions thereof, ending on or before the Asset Purchase Closing Date; and (ii) resulting from, relating to or arising out of or otherwise in connection with the sale of the Purchased Assets pursuant to this Agreement;

(c) any and all liabilities related to current or former employees, directors or officers of Seller or any Benefit Plan of Seller.

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ARTICLE III

PURCHASE PRICE

Section 3.1. Purchase Price.

(a) Subject to the terms and conditions of this Agreement, the aggregate purchase price for the Purchased Assets (the “Asset Purchase Price”) shall be Twenty Three Million Five Hundred Thousand U.S. Dollars ($23,500,000.00). The Purchaser previously delivered an initial deposit in the amount of $1,250,000.00 (the “Deposit”) to Debtor. At the Asset Purchase Closing, (a) the Deposit shall be retained by the Seller or the Litigation Trustee, as the case may be, and applied to the Asset Purchase Price; (b) Purchaser shall pay the excess of (x) the Asset Purchase Price over (y) the sum of the Deposit and the Cure Amount by wire transfer of immediately available funds in U.S. Dollars to an account designated by the Debtor, or if the Litigation Trustee has been designated pursuant to the confirmed Plan, to an account designated by the Litigation Trustee.

(b) To the extent that, prior to the Asset Purchase Closing, Seller has not cured any monetary default under any Real Property Lease, including, without limitation those monetary defaults set forth on Schedule 6.7, Purchaser shall have the option, but not the obligation, to pay such amounts directly to the applicable creditor at the Asset Purchase Closing. The aggregate amount of such payments made by the Purchaser is referred to herein as the “Cure Amount.”

(c) Section 9.1 shall govern the allocation of the Asset Purchase Price and the treatment of such allocation by Seller and Purchaser solely for tax purposes.

Section 3.2. Additional Payments.

(a) As soon as practicable after the Asset Purchase Closing Date, Purchaser intends to deliver notice to SPMI pursuant to Section 20.3 of the SPMI Lease, notifying SPMI of Purchaser’s intent to exercise the purchase option. In the event that SPMI fails to timely perform all of its obligations following delivery of such notice, the Parties to this Agreement recognize that litigation between Purchaser and SPMI may ensue regarding the rights and obligations imposed by the SPMI Lease (“Option Enforcement Litigation”).

(b) In the event that (i) the Option Enforcement Litigation is heard by the Bankruptcy Court and (ii) the Bankruptcy Court enters a Final Order determining the rights and obligations of the parties under the SPMI Lease (the “Option Enforcement Order”), then Purchaser shall promptly pay Seller or Litigation Trustee, as the case may be, an additional sum of $500,000.00 (the “First Additional Payment”). For avoidance of doubt, delivery of the First Additional Payment shall not be conditioned upon entry of an Option Enforcement Order that is favorable to Purchaser.

(c) In the event that SPMI transfers fee title to the “Property” (as such term is defined in the SPMI Lease) to Purchaser on or before December 31, 2010 pursuant to the Option Enforcement Order entered by the Bankruptcy Court, then Purchaser shall promptly pay Seller or

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Litigation Trustee, as the case may be, an additional sum of $500,000.00 (the “Second Additional Payment”).

ARTICLE IV

CLOSING; CLOSING DELIVERIES

Section 4.1. Closing.

(a) The closing of the transactions contemplated by this Agreement (the “Asset Purchase Closing”) shall take place at the offices of Elsaesser Jarzabek Anderson Marks & Elliott, Chtd., 1400 Northwood Center Court, Suite C, Coeur d’Alene, Idaho at 9:00 a.m. Pacific Daylight Time (12:00 p.m. Eastern Daylight Time) on the second Business Day after the conditions set forth in Article V have been satisfied or waived (other than those conditions that by their nature are to be satisfied, or waived by Purchaser, at the Asset Purchase Closing, but subject to the satisfaction or waiver of those conditions), or at such other place, date, and time mutually agreed upon in writing by the parties (the “Asset Purchase Closing Date”).

Section 4.2. Deliveries by Seller at Closing. At the Asset Purchase Closing, Seller shall deliver, or shall cause to be delivered, to Purchaser, the following:

(a) the Deeds, duly executed by Seller in recordable form;

(b) the General Assignment and Bill of Sale, duly executed by Seller; and

(c) such other certificates, instruments, and documents evidencing the consummation of the transactions contemplated hereby, as Purchaser may reasonably request to carry out the intent and purposes of this Agreement.

Section 4.3. Deliveries by Purchaser at Closing. At the Asset Purchase Closing, Purchaser shall deliver to the Seller or Litigation Trust, as applicable, the following:

(a) the excess of (i) the Asset Purchase Price over (ii) the sum of the Deposit and the Cure Amount, by wire transfer of immediately available funds in accordance with Section 3.1(a) to one or more account(s) designated in writing by Seller or the Litigation Trust, as applicable;

(b) the General Assignment and Bill of Sale, duly executed by Purchaser;

(c) such other certificates, instruments, and documents evidencing the consummation of the transactions contemplated hereby, as Seller may reasonably request to carry out the intent and purposes of this Agreement.

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ARTICLE V

CONDITIONS TO CLOSING

Section 5.1. Conditions to Obligations of Each Party. The respective obligations of Seller and Purchaser to consummate the transactions contemplated by the Agreement are subject to the fulfillment, on or prior to the Asset Purchase Closing Date, of each of the following conditions:

(a) The Bankruptcy Court shall have approved and entered the Sale Order and the Sale Order shall not have been reversed, stayed, modified, amended, revoked or remanded;

(b) No Order issued by any court of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby shall be in effect; and

(c) This Agreement shall not have been terminated pursuant to Section 10.1 hereof.

Section 5.2. Conditions to Obligations of the Purchaser. The obligation of the Purchaser to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Asset Purchase Closing Date, of each of the following conditions (any or all of which may be waived by Purchaser in whole or in part to the extent permitted by applicable Laws).

(a) Each representation and warranty of Seller contained in this Agreement shall be true and correct in all material respects as of the Asset Purchase Closing Date with the same effect as though made on the Asset Purchase Closing Date.

(b) Seller shall have delivered, or caused to be delivered, to Purchaser all of the items set forth in Section 4.2;

(c) Neither of the Appealed Orders shall have been reversed, stayed, modified, amended, revoked or remanded;

(d) Purchaser shall have received the Title Commitments in form and substance reasonably satisfactory to Purchaser;

(e) No event shall have occurred or circumstance shall exist which would make it impossible or impracticable to satisfy one or more of the conditions of this Agreement;

(f) Seller shall have observed and performed its covenants in this Agreement in all material respects to the extent that such covenants were to have been observed or performed by Seller at or prior to the Asset Purchase Closing Date;

(g) There shall not have been any events, occurrences or developments during the period commencing on the date of this Agreement and ending on the Asset Purchase Closing

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Date that, individually or in the aggregate, have resulted in or would reasonably be expected to result in a Material Adverse Effect on the Purchased Assets; and

(h) the Sunshine Mine and infrastructure has not flooded to or above the 3,300 foot level at any time during the period from April 1, 2010 to the Asset Purchase Closing Date.

Section 5.3. Conditions to Obligations of the Seller. The obligation of the Seller to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Asset Purchase Closing Date, of each of the following conditions (any or all of which may be waived by Seller in whole or in part to the extent permitted by applicable Laws).

(a) Each representation and warranty of Purchaser contained in this Agreement shall be true and correct in all material respects as of the Asset Purchase Closing Date with the same effect as though made on the Asset Purchase Closing Date; and

(b) Purchaser shall have delivered, or caused to be delivered, to Seller or the Litigation Trust, as applicable, all of the items set forth in Section 4.3.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Purchaser that the statements contained in this Article VI are true and correct as of the Asset Purchase Closing Date:

Section 6.1. Authorization. Subject to approval by the Bankruptcy Court, Seller has full power, capacity and authority to enter into, execute and deliver this Agreement and the Related Agreements, and has all the necessary power and authority to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. This Agreement and each of the other Related Agreements is (or upon its execution by such Seller will be) a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms.

Section 6.2. Organization and Qualification. Seller is a corporation duly organized and validly existing and in good standing under the laws of Idaho and has full corporate power and authority to own, lease or operate the Purchased Assets and to carry on its Business as it is now being conducted. Seller is duly qualified, licensed or admitted to do business and is in good standing in Idaho, which is the only jurisdiction in which the ownership, use, leasing or operation of the Purchased Assets, or the conduct or nature of the Business, makes such qualification, licensing or admission necessary, except for those jurisdictions in which the adverse effects of all such failures by SMC to be qualified, licensed or admitted and in good standing can, in the aggregate, be eliminated without material cost, expense or penalty.

Section 6.3. Conflicting Agreements and Operating Agreement Provisions. None of (a) the execution and delivery of this Agreement or any of the Related Agreements to which Seller is a party, (b) the fulfillment of or compliance with the terms and provisions hereof

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or thereof or (c) the consummation of any of the transactions contemplated hereby or thereby, will:

(i) conflict with or result in a breach or violation of the terms, conditions or provisions of, or give rise to a right of termination under, or constitute a default under, or result in the loss of any right or benefit under, result in any repurchase or redemption obligation or acceleration of any amounts due under, or result in any violation of (in each case with or without giving of notice or the passage of time or both) the articles of incorporation or bylaws of Seller, or any Contract to which Seller or any of the Purchased Assets is subject; or

(ii) conflict with or result in a violation or breach of any term or provision of any License, Order or applicable Law to which Seller or any of the Purchased Assets is subject (other than as would result from the identity or legal or regulatory status of Purchaser).

Section 6.4. Consents. Other than the Sale Order, no consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Authority is required on the part of Seller in connection with the execution and delivery of this Agreement or the Related Agreements, the compliance by Seller with any of the provisions hereof or thereof, the consummation of the transactions contemplated hereby or the taking by Seller of any other action contemplated hereby, except for consents that are deemed to have been satisfied by the entry of the Sale Order.

Section 6.5. Title to Purchased Assets. Other than the Leased Real Property, Seller owns each of the Purchased Assets, and pursuant to the Sale Order, Purchaser will be vested with good and marketable title to such Purchased Assets, free and clear of all Liabilities.

Section 6.6. Real Property. Schedule 6.6 lists and describes all real property leased or subleased to Seller (the “Leased Real Property”). Seller has made available to Purchaser true, correct and complete copies of the leases listed in Schedule 2.1(b).

Section 6.7. Cure of Monetary Defaults. Set forth in Schedule 6.7 is a complete list of all monetary defaults under the Real Property Leases, as such amounts exist as of the date of this Agreement.

Section 6.8. Reserve Report.

(a) With respect to the Leased Real Property and the Real Property, since the effective date of the Seller’s independent engineering report prepared by Behre Dolbear & Company, Inc. (the “Engineers”) and effective April 16, 2007 (the “Reserve Report”), as provided by the Seller to the Purchaser, there has been no change in circumstance which would cause a Material Adverse Effect to the mineral reserves of the Real Property or Leased Real Property that are the subject of the Reserve Report as described therein, except as may have occurred through normal production or otherwise as a result of transactions (including dispositions) in the ordinary course of business. All information provided by the Seller to the Engineers to assist the Engineers in the preparation of the Reserve Report was, to the knowledge of the Seller, as of the time of delivery to the Engineers, and as of the effective dates of the

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Reserve Report, accurate or the best estimate of such information. The Seller provided to the Engineers all information and documents requested by the Engineers and the Seller did not knowingly withhold and is not otherwise aware of any information which, if provided to the Engineers, would have a material impact on the Reserve Report. To the knowledge of the Seller, other than as disclosed in Schedule 6.8(a), the Seller has not done any act or thing whereby any of the mineral rights for which the Engineers have ascribed value in the Reserve Report, may be cancelled or terminated and such mineral rights are free and clear of all encumbrances and royalty burdens, other than those taken into account by the Engineers in the aforesaid Reserve Report, created by, through or under the Seller and, except as disclosed in the aforesaid Reserve Report, none of the mineral rights are subject to reduction except for those created in the ordinary course of business and which are not individually or in the aggregate material to the Seller.

(b) All information provided by the Seller to the Purchaser to assist the Purchaser in the review of the unengineered mineral properties currently owned by the Seller was to the knowledge of the Seller, at the time of the delivery of such information to the Purchaser, complete and accurate in all material respects or the best estimate of such information. The Seller delivered to Purchaser all information and documents requested, and the Seller did not knowingly withhold, and is not otherwise aware of, any information that, if provided to the Purchaser, would have a Material Adverse Effect on the unengineered mineral properties currently owned by the Seller.

Section 6.9. No Implied or Other Representation of Warranty. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT SELLER IS NOT MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE EXPRESSLY GIVEN IN THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS TO ANY OF THE PURCHASED ASSETS, AND IT IS UNDERSTOOD THAT EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, PURCHASER TAKES ALL OF SUCH PROPERTIES AND ASSETS ON AN “AS IS” AND “WHERE IS” BASIS.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

OF PURCHASER

Purchaser hereby represents and warrants to Seller that the statements contained in this Article VII are true and correct as of the Asset Purchase Closing Date:

Section 7.1. Authorization; Noncontravention. Purchaser has full power, capacity and authority to enter into, execute and deliver this Agreement and the Related Agreements, and has all the necessary power and authority to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. This Agreement and each of the other Related Agreements is (or upon its execution by Purchaser will be) a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, except as may be limited by applicable bankruptcy, reorganization,

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insolvency, moratorium and other similar Laws and equitable principles relating to or limiting creditors’ rights generally.

Section 7.2. Organization and Qualification.

SOP is a limited liability company duly organized and validly existing and in good standing under the laws of the State of Delaware and has full limited liability company power and authority to own property and to carry on its business as it is now being conducted. SOP is duly qualified, licensed or admitted to do business and is in good standing in every jurisdiction in which the nature of the respective business conducted or property owned by it makes such qualification necessary, except for those jurisdictions in which the adverse effects of all such failures by SOP to be qualified, licensed or admitted and in good standing can, in the aggregate, be eliminated without material cost, expense or penalty.

Section 7.3. Conflicting Agreements and Operating Agreement Provisions. None of (a) the execution and delivery of this Agreement or any of the Related Agreements to which it is a party, (b) the fulfillment of or compliance with the terms and provisions hereof or thereof or (c) the consummation of any of the transactions contemplated hereby or thereby, will:

(i) conflict with or result in a breach of the terms, conditions or provisions of, or give rise to a right of termination under, or constitute a default under, or result in the loss of any right or benefit under, result in any repurchase or redemption obligation or acceleration of any amounts due under, or result in any violation of (in each case with or without giving of notice or the passage of time or both) the certificate of formation or limited liability company agreement of Purchaser, or any Contract to which Purchaser is subject; or

(ii) conflict with or result in a violation or breach of any term or provision of any License, Order or applicable Law to which Purchaser is subject (other than as would result from the identity or legal or regulatory status of Seller).

Section 7.4. Consents. Other than the Sale Order, no consent, waiver, approval, order, permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Authority is required on the part of Purchaser in connection with the execution and delivery of this Agreement or the Related Agreements, the compliance by Purchaser with any of the provisions hereof or thereof, the consummation of the transactions contemplated hereby or the taking by Purchaser of any other action contemplated hereby, except for consents that are deemed to have been satisfied by the entry of the Sale Order.

ARTICLE VIII

COVENANTS

Section 8.1. Further Assurances; Books and Records.

(a) From time to time after the Execution Date, (i) Seller shall execute and deliver to Purchaser such other documents and instruments, provide such materials and information and take such other actions as Purchaser may reasonably request to more effectively

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transfer title to the Purchased Assets in accordance with Law and, to the full extent permitted by Law, to transfer to Purchaser actual possession and operating control of the Purchased Assets and Books and Records, and otherwise to cause Seller to fulfill its obligations under this Agreement and the Related Agreements; and (ii) Purchaser shall execute and deliver to Seller such other documents and instruments, provide such materials and information and take such other actions as Seller may reasonably request to more effectively transfer title to the Purchased Assets in accordance with Law and, to the full extent permitted by Law, to cause Purchaser to accept delivery of actual possession and operating control of the Purchased Assets and Books and Records, and otherwise to cause Purchaser to fulfill its obligations under this Agreement and the Related Agreements.

(b) Notwithstanding anything to the contrary contained in this Article VIII, if the Parties are in an adversarial relationship in any litigation or arbitration, the furnishing of information, documents or records in accordance with any provision of this Section shall be subject to applicable rules relating to discovery.

Section 8.2. Cure of Monetary Defaults. At or prior to the Asset Purchase Closing, Seller shall cure all monetary defaults under the Real Property Leases, including without limitation, the monetary defaults listed on Schedule 6.7; provided, however, that if Seller has not cured any monetary default under the Real Property Leases prior to the Asset Purchase Closing, Purchaser’s sole remedy with respect to such failure shall be to pay such Cure Amount and reduce such payment from the Asset Purchase Price as provided in Section 3.1(a).

Section 8.3. Stock of Seller.

(a) As soon as practicable on or after the date hereof, Seller shall execute and deliver to Purchaser the Stock Purchase Agreement. Seller covenants and agrees not to seek to amend, cancel, rescind or revoke the Stock Purchase Agreement, or to sell or enter into any discussions with any other Person regarding the sale of, the Reorganized Stock to any Person other than Purchaser.

(b) Seller shall exercise best efforts to cause the Bankruptcy Court to approve the sale of the Reorganized Stock to Purchaser on the terms and conditions set forth in the Stock Purchase Agreement.

Section 8.4. Ordinary Course of Business. From the Execution Date until the Asset Purchase Closing Date, Seller shall conduct its operations in the ordinary and normal course of business and consistent with past practice and in accordance with applicable laws, and shall maintain and preserve its business organization, assets, and advantageous government relationships.

Section 8.5. Notifications. From the Execution Date until the Asset Purchase Closing Date, Seller shall:

(a) within two Business Days of receipt of any written audit inquiry, assessment, reassessment, confirmation, or variation of an assessment, indication that a

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reassessment is being considered, request for filing of a waiver or extension of time of any notice in writing relating to taxes, interest, penalties, or losses (a “Tax Assessment”), deliver to the Purchaser a copy thereof together with a statement setting out, to the extent then determinable, an estimate of the obligations, if any, of Seller on the assumption that such Tax Assessment is valid and binding.

(b) as soon as reasonably practical notify Purchaser of any events, occurrences or developments that, individually or in the aggregate, have resulted in or would reasonably be expected to result in a Material Adverse Effect on the Purchased Assets.

Section 8.6. Insurance. From the Execution Date until the Asset Purchase Closing Date, Seller shall use reasonable commercial efforts to cause its current insurance (or reinsurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse.

Section 8.7. Press Releases; Publicity. Seller shall not issue any press release or initiate any publicity related to this Agreement, the Stock Purchase Agreement or the transactions contemplated hereby or thereby, without the prior written consent of Purchaser.

Section 8.8. Use of Proceeds. At the Asset Purchase Closing, Seller shall first apply the Asset Purchase Price, including the Deposit, to the satisfaction and payment in full of holders of all claims against Seller which are secured against the Purchased Assets.

ARTICLE IX TAX MATTERS.

Section 9.1. Purchase Price Allocation.

(a) Within 180 days after the Asset Purchase Closing Date, Purchaser will provide to Seller copies of IRS Form 8594 and any required exhibits thereto, prepared in accordance with Section 1060 of the Code (the “Allocation Statement”), with SOP’s allocation of the Asset Purchase Price (including any Assumed Liabilities attributable to the Purchased Assets that are treated as part of the purchase price for tax purposes) among the Purchased Assets.

(b) On all Tax Returns, Seller and Purchaser shall report the allocation of the total consideration among the Purchased Assets in a manner consistent with the Allocation Statements. Seller and Purchaser further agree (i) to not assert in connection with any Tax Return, Tax audit or similar proceeding, any allocation that differs from that set forth in the Allocation Statement, except as required pursuant to applicable Law, (ii) to promptly provide one another with any additional information and reasonable assistance required to complete IRS Form 8594 or to compute taxes arising in connection with (or otherwise affected by) the transactions contemplated hereunder, (iii) to notify one another if the IRS or any other Tax authority proposes a reallocation of the Asset Purchase Price, and (iv) that any subsequent allocation necessary as a result of an adjustment to the consideration to be paid hereunder shall be made, to the extent reasonably possible, in a manner consistent with the Allocation Statement.

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ARTICLE X

TERMINATION

Section 10.1. Termination. This Agreement may be terminated at any time prior to the Asset Purchase Closing by:

(a) the mutual written consent of the Seller and the Purchaser;

(b) Purchaser, if the Asset Purchase Closing has not occurred by the close of business on August 3, 2010; provided, that such right to terminate shall not be available to any Party whose breach of this Agreement has been a reason for such failure to close;

(c) either the Seller or the Purchaser, if the other Party shall have breached or failed to perform in any material respect any of its respective representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 5.1(a) or 5.2(a), as applicable; and (ii) cannot be or has not been cured within ten (10) days after the giving of written notice to such breaching Party, as applicable;

(d) either the Seller or the Purchaser in the event that any Final Order permanently restraining, enjoining or otherwise prohibiting or making illegal the consummation of the transactions contemplated hereby, upon notification of the non-terminating Party by the terminating Party;

(e) Purchaser, at any time after the close of the auction on the date hereof, if the Debtor did not select this Agreement and the Stock Purchase Agreement as the winning bid or backup bid at such auction;

(f) Purchaser, if at any time the Bankruptcy Court enters an Order authorizing the sale to any Person other than Purchaser of (i) all or substantially all of the Purchased Assets, or (ii) all or substantially all of the stock of the Debtor or Reorganized Debtor, as the case may be; or

(g) Purchaser, at any time after 5:00 p.m. local time in Coeur d’Alene, Idaho on May 7, 2010, if prior to such time, the Bankruptcy Court did not approve this Agreement and the Stock Purchase Agreement as the winning bid.

Section 10.2. Procedure and Effect of Termination. In the event of termination of this Agreement by either or both of the Seller or the Purchaser pursuant to Section 10.1, written notice thereof shall forthwith be given by the Purchaser or the Seller, as the case may be, to the other Party, and this Agreement shall thereupon terminate and become void and have no effect, and the transactions contemplated hereby shall be abandoned without further action by the Parties hereto; provided, however, that such termination shall not relieve any Party hereto of any liability for any breach of this Agreement, which breach, to the extent capable of being cured, was not cured within ten (10) Business Days following written notice from the other Party specifying the nature of such breach in reasonable detail.

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Section 10.3. Return of Deposit Upon Termination. Seller shall return all of the Deposit to an account designated by Purchaser, without deduction or setoff, promptly after termination of this Agreement pursuant to Section 10.1.

ARTICLE XI

MISCELLANEOUS

Section 11.1. Severability. If any provision of this Agreement or the Stock Purchase Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any Party under this Agreement will not be materially and adversely affected thereby, (i) such provision will be fully severable; (ii) this Agreement and the Stock Purchase Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof and thereof; (iii) the remaining provisions of this Agreement and the Stock Purchase Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom or therefrom; and (iv) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

Section 11.2. Specific Enforcement. It is acknowledged and agreed by the Parties that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof before any court or tribunal of competent jurisdiction, this being in addition to any other remedy to which they may be entitled at Law or equity.

Section 11.3. Entire Agreement. This Agreement, the Related Agreements and the Stock Purchase Agreement (together with the documents attached as exhibits hereto and any documents or agreements specifically contemplated hereby) supersede all prior discussions and agreements among any of the Parties (and their Affiliates) with respect to the subject matter hereof and contain the entire understanding of the Parties with respect to the subject matter hereof and thereof.

Section 11.4. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall be effective when one or more of the counterparts have been signed by each Party and delivered to the other Parties or their representatives, it being understood that all parties need not sign the same counterpart.

Section 11.5. Notices, Requests and Other Communications. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by facsimile transmission or mailed (first class postage prepaid) to the Parties at the following addresses or facsimile numbers:

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If Purchaser:

Silver Opportunity Partners LLC

1370 Avenue of the Americas, 19th Floor

New York, NY 10019

Telephone No.: 646.365.1627

Facsimile No.: 646.365.1637

Attn: Andrew Shapiro

With a copy to (which shall not constitute notice):

Baker Botts L.L.P.

The Warner

1299 Pennsylvania Ave., NW

Washington, DC 20004-2400

Telephone No.: (202) 639-7778

Facsimile No.: (202) 585-1005

Attn: James A. Baker IV

If to Seller:

Sterling Mining Company

2201 North Government Way, Suite E

Coeur D’Alene, Idaho 83814

Telephone No.:

Facsimile No.: 208.676.1629

Attn:

With a copy (which shall not constitute notice to):

Elsaesser Jarzabek Anderson Marks & Elliott, Chtd.

1400 Northwood Center Court

Coeur d’Alene, ID 83814

Telephone No.: (208) 667-2900

Facsimile No.: (208) 667-2150

Attn: Bruce A. Anderson

or to such other address as any Party may, from time to time, designate in a written notice given in a like manner.

Section 11.6. Amendments. This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the Party against whom enforcement of any such amendment, supplement, modification or waiver is sought.

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Section 11.7. No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each Party and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person.

Section 11.8. Successors and Assigns. All covenants and agreements contained herein shall bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns

Section 11.9. Assignment. Neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party.

Section 11.10. Governing Law; Choice of Forum.

(a) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York (without reference to its choice of law principles).

(b) Without limiting any Party’s right to appeal any order of the Bankruptcy Court, (i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the terms of this Agreement and to decide any claims or disputes which may arise or result from, or be connected with, this Agreement, any breach or default hereunder, or the transactions contemplated hereby, and (ii) any and all proceedings related to the foregoing shall be filed and maintained only in the Bankruptcy Court, and the Parties hereby consent to and submit to the jurisdiction and venue of the Bankruptcy Court and shall receive notices at such locations as indicated in Section 11.5; hereof. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the Parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) EACH PARTY TO THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, MATTER, OR PROCEEDING REGARDING THIS AGREEMENT OR ANY PROVISION HEREOF.

Section 11.11. Waivers.

(a) Any Party may (a) extend the time for the performance of any of the obligations or other acts of any other Party; (b) waive any inaccuracies in the representations and warranties of any other Party contained herein or in any document delivered by any other Party pursuant hereto; or (c) waive compliance with any of the agreements of any other Party or conditions to any Party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of

22

this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

Section 11.12. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including, fees and disbursements of counsel and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be borne by the Party incurring such costs and expenses.

Section 11.13. Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, Purchaser and Seller and have caused this Agreement to be duly executed, all as of the date and year first above written.

PURCHASER:
SILVER OPPORTUNITY PARTNERS LLC
By:	/s/ Michael H. Williams
	Name: Michael H. Williams
	Title: President
SELLER:
STERLING MINING COMPANY
By:	/s/ Roger A. VanVoorkess, President
	Name:
	Title: Sterling Mining Company

[Signature page to Asset Purchase Agreement]

EXHIBIT A

FORM OF

GENERAL ASSIGNMENT AND BILL OF SALE

THIS GENERAL ASSIGNMENT AND BILL OF SALE dated as of                     , 2010 (the “Assignment and Bill of Sale”), by and between Silver Opportunity Partners LLC, a limited liability company organized under the laws of Delaware (the “Purchaser”) and Sterling Mining Company, a corporation organized under the laws of Idaho (the “Seller”, and, together with Purchaser, the “Parties”).

WITNESSETH

WHEREAS, Seller and Purchaser entered into the Asset Purchase Agreement, dated as of April 21, 2010 (the “Asset Purchase Agreement”), pursuant to which Seller has agreed to sell, assign, transfer, convey and deliver to Purchaser and Purchaser has agreed to purchase and accept from Seller the Purchased Assets; and

WHEREAS, the Asset Purchase Agreement contemplates the execution and delivery of certain instruments of assignment and bill of sale at the Asset Purchase Closing pursuant to Sections 4.2(b) and 4.3(b), and the Parties are executing this Assignment and Bill of Sale in connection therewith.

WHEREAS, Seller desires to sell, transfer, convey and assign to Purchaser the assets described below pursuant to Section 2.1 of the Asset Purchase Agreement and Purchaser desires to accept the sale, transfer, conveyance, assignment and delivery thereof;

NOW, THEREFORE, for good and valuable consideration (including the assumption of the Assumed Liabilities), the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Section 1. Defined Terms. Capitalized terms used and not defined herein have the respective meanings given to such terms in the Purchase Agreement.

Section 2. Assignment. Effective as of 12:01 A.M. on the date hereof, for and in consideration of the mutual covenants contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Seller hereby irrevocably assigns, sells, transfers and sets over (collectively, the “Assignment”) to Purchaser all of Seller’s right, title, benefit, privileges and interest in, to and under the Purchased Assets set forth in Section 2.1(a)-(1) of the Purchase Agreement (collectively, the “Assigned Assets”) as the same shall exist on the date hereof TO HAVE AND TO HOLD the same unto Purchaser, its successors and assigns, forever. Purchaser hereby accepts the Assignment and assumes and agrees to observe and perform all of the duties, obligations, terms, provisions and covenants, and to pay and discharge all of the liabilities of Seller to be observed, performed, paid or discharged from and after the Asset Purchase Closing, in each case in connection with Assigned Assets. Seller does not assign, and Purchaser does not assume, any obligations with respect to the Excluded Assets.

Section 3. Further Actions. Each Party hereby promises to execute and deliver, upon request of the other Party, to such other Party all such additional instruments, transfer, conveyance, assignment, assumption, and other documents which may be reasonably necessary and convenient to accomplish the intent of this Assignment and Bill of Sale, and to confirm Purchaser’s title to, all of the Assigned Assets, and to the full extent permitted by Law, to put Purchaser in actual possession and operating control of the Assigned Assets and to assist Purchaser in exercising all rights with respect thereto.

Section 4. Terms of the Purchase Agreement. This Assignment and Bill of Sale is executed pursuant to the Purchase Agreement and is entitled to the benefits and subject to the provisions thereof and shall be binding upon and inure to the benefit of the parties thereto and their respective successors and permitted assigns. The scope, nature and extent of the Purchased Assets are expressly set forth in the Purchase Agreement. This Assignment and Bill of Sale is not intended to convey any greater or lesser rights to, or place any greater or lesser burden on, any of the parties hereto than are described in or contemplated by the Purchase Agreement, and in the event the terms of this Assignment and Bill of Sale conflict with the terms of the Purchase Agreement, the terms of the Purchase Agreement shall govern.

Section 5. Governing Law. This Assignment and Bill of Sale and the legal relations between the Parties shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed and performed in such State and without regard to conflicts of law doctrines, except that if it is necessary in any other jurisdiction to have the law of such other jurisdiction govern this Assignment and Bill of Sale in order for this Assignment and Bill of Sale to be effective in any respect, then the laws of such other jurisdiction shall govern this Assignment and Bill of Sale to such extent.

Section 6. Successors and Assigns. This Assignment and Bill of Sale shall be binding on and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.

Section 7. No Third-Party Beneficiaries. Nothing in this instrument, express or implied, is intended or shall be construed to confer upon or give to any person, firm or corporation other than Purchaser, Seller and each such Party’s successors and permitted assigns any remedy or claim under or by reason of this instrument or any term, covenant or condition hereof, and all of the terms, covenants, conditions, promises, and agreements in this instrument shall be for the sole and exclusive benefit of Purchaser, Seller and each such Party’s successors and permitted assigns.

Section 8. Counterparts; Facsimile Signatures. This Assignment and Bill of Sale may be executed by the parties hereto in separate counterparts, including by facsimile transmission, each of which when so executed and delivered shall be an original, but all such counterparts together shall constitute one and the same instrument.

[Remainder of Page Intentionally Left Blank]

2

IN WITNESS WHEREOF, each of the undersigned has caused this Assignment and Bill of Sale to be executed on its behalf as of the date first above written.

SELLER:
STERLING MINING COMPANY
By:
	Name:
	Title:
PURCHASER:
SILVER OPPORTUNITY PARTNERS LLC
By:
	Name:
	Title:

[Signature Page for General Assignment and Bill of Sale]

SCHEDULES TO ASSET PURCHASE AGREEMENT

These are the Schedules (the “Schedules”) referred to in that certain Asset Purchase Agreement (the “Agreement”), dated as of April 21, 2010, by and between Sterling Mining Company, a corporation organized under the laws of Idaho, and Silver Opportunity Partners, LLC, a Delaware limited liability company, and is subject to the terms and conditions set forth below. Capitalized terms used but not defined herein have the respective meanings given to such terms in the Agreement.

1. The introductory language and headings in these Schedules are inserted for convenience of reference only.

2. The Section and Subsection references set forth in these Schedules refer primarily to Sections or Subsections of the Agreement.

Any fact or item which is clearly disclosed on any Schedule in such a way as to make its relevance or applicability to information called for by another Schedule or other Schedules reasonably apparent shall be deemed to be disclosed on such other Schedule or Schedules, as the case may be, notwithstanding the omission of a reference or cross-reference thereto.

Schedule 2.1(a)

Real Property; Improvements

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APPENDIX “A”

Legal description for real property (land)

Tailing Pond

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EXHIBIT A – Sunshine Tailings Pond

Page 1 of 2

A tract of land located in Section 10, Township 48 North, Range 3 East B.M., Shoshone County, State of Idaho; more particularly described as follows:

Beginning at a point from whence the South  ¹/4 corner of Section 10, Township 48 North, Range 3 East B.M. Bears S25zz6’03”E a distance of 1323.22 feet;

Thence N52°02’22”E a distance of 222.39 feet to a point;

Thence N 35°58’40”E a distance of 553.77 feet to a point;

Thence N10°29’08”E a distance of 390.50 feet to a point;

Thence N00°05’28”E a distance of 502.18 feet to the Center  ¹/4 corner of said Section 10;

Thence N46°45’41”E a distance of 1158.30 feet to a point;

Thence N86°59’56”E a distance of 490.92 feet to a point;

Thence S54°24’42”E (Shown of record as S54°20’00”E) a distance of 270.73 feet to a point;

Thence S21°33”07”W (Shown of record as S21°07’17”W) a distance of 25.96 feet to a point;

Thence S39°37’13”E (Shown of record as S40°03’03”E) a distance of 138.64 feet to a point;

Thence S37^o00’24”E (Shown of record as S37°26’ 14”E) a distance of 273.82 feet to a point;

Thence S12°03’47”E (Shown of record as S12°03’45”E) a distance of 190.68 feet to a point;

Thence S12°58’24”W (Shown of record as S12°32’34”W) a distance of 118.62 feet to a point;

Thence N89°38’13”E a distance of 57.82 feet (Shown of record as N89°12’23”E 58.24 feet) to a point on the northerly right-of-way of the Big Creek Road;

Thence along a curve to the right on said right-of-way with a radius of 542.96 feet a distance of 229.96 feet (With a long chord bearing S41°17’05”W a distance of 228.24 feet) to Sta PT 20+01.74 Rt of the Big Creek Road;

Thence S53°25’04”W (Shown of record as S53°44’14”W) a distance of 957.59 feet to Sta PC 29+59.33 30 Rt of the Big Creek Road;

Thence along a curve to the right on said right-of-way with a radius of 4553.66 feet a distance of 537.55 feet (With a long chord bearing S56°47’59”W a distance of 537.23 feet) to Sta PC 35+00.42 30 Rt of the Big Creek Road;

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EXHIBIT A – Sunshine Tailings Pond

Page 2 of 2

Thence S60°10’53”W (Shown of record as S60°30’03”W) along said right-of-way a distance of 99.58 feet to a point Sta 36+00 30 Rt of the Big Creek Road;

Thence S77°20’07”W along said right-of-way a distance of 33.91 feet to Sta 36+32.40 40 Rt of the Big Creek Road;

Thence along a curve to the left on side right-of-way with a radius of 612.96 feet a distance of 231.49 feet (With a long chord bearing S49°21 ‘44”W a distance of 230.12 feet) to Sta PT 38+49.78 40 Rt of the Big Creek Road;

Thence S38°32’35”W (Shown of record as S38°51’45”W) a distance of 692.32 feet to Sta PC 45+41.10 40 Rt of the Big Creek Road;

Thence along a curve to the left on said right of way with a radius of 2934.79 feet a distance of 146.81 feet (With a long chord bearing S37°06’36”W a distance of 146.79 feet) to a point;

Thence N37°48’54”W a distance of 281.25 feet to a point;

Thence N23°26’35”W a distance of 215.98 feet to the true point-of-beginning.

End of Exhibit A

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APPENDIX “A-1”

Legal Descriptions for real property (land)

and patented claims

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434679

Exhibit “A”

Property Description

PATENTED MINING CLAIMS

PARCEL # MC0290

M.S. 1335, Josephine, Patented Mining Claim, situated in Sections 16 and 17, Township 48 North, Range 5 East, B.M., Shoshone County, Idaho. Patent recorded in Book 1, Patents page 154.

M.S. 3081-A, Black Pine, Black Pine No. 2, Erin Amended, Gild Edge, Gilt Edge Fraction, Iron Silver Fraction Amended, Maid of Erin, McSweeny, Nobel Schley, Noble Schley Amended, Patrick Henry Fraction Amended, Patrick, Patrick Henry Amended, Sampson, Snow Cap, Snow Flake Fraction Amended, White Pine Amended, Patented Mining Claims, situated in Sections 8, 16, 17, 20, and 21, Township 48 North, Range 5 East, B.M., Shoshone County, Idaho. Patent recorded in Book 59, Deeds, page 569.

PARCEL # MC0054

M.S. 1354, Snow Drift, Patented Mining Claim, situated in Section 17, Township 48 North, Range 5 East, B.M., Shoshone County, Idaho. Patent recorded in Book B, Patents, page 26.

M.S. 2138, Ben Harrison, Patented Mining Claim, situated in Section 17, Township 48 North, Range 5 East, B.M., Shoshone County, Idaho. Patent recorded in Book B, Patents, page 11.

M.S. 2506, Ranger, Patented Mining Claim, situated in Section 17, Township 48 North, Range 5 East, B.M., Shoshone County, Idaho. Patent recorded in Book 45, Deeds, page 231.

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434680

Exhibit “A”

Property Description

Tract 1:

100% interest in the mineral rights of the following parcel encompassing approximately 106.3 acres, located in Section 31, Township 48 North, Range 6 East, B.M., Shoshone County, Idaho:

  Parcel # 48N06E-31-0700

Government Lots 2 and 7, the NE ¹/4 NE ¹/4 NW ¹/4,

the N ¹/2 SE ¹/4 NE ¹/4 NW ¹/4, the E ¹/2 NW ¹/4 NE ¹/4,

the NW ¹/4 NW ¹/4 NE ¹/4, the N ¹/2 SW ¹/4 NW ¹/4 NE ¹/4,

and the SE ¹/4 SW ¹/4 NW ¹/4 NE ¹/4.

Tract 2:

100% interest of a 95/100 interest in the mineral rights of the following described parcels encompassing approximately 159.64 acres, located in Sections 32 and 33, Township 48 North, Range 6 East, B.M., Shoshone County, Idaho:

  Parcel # 48N06E-32-1550

Section 32:

Government Lots 2, 9, 14, and 15; and

the E ¹/2 NW ¹/4 NE ¹/4 NW ¹/4, the NE ¹/4 NE ¹/4 NW ¹/4,

the NE ¹/4 SE ¹/4 NE ¹/4 NW ¹/4, the W ¹/2 NW ¹/4 NE ¹/4,

the W ¹/2 E ¹/2 NW ¹/4 NE ¹/4, the SE ¹/4 NE ¹/4 SW ¹/4 NW ¹/4,

the S ¹/2 S ¹/2 NE ¹/4 NE ¹/4, the SE ¹/4 NW ¹/4 NE ¹/4,

and the N ¹/2 SE ¹/4 NE ¹/4.

  Parcel # 48N06E-33-3300

Section 33:

The SW ¹/4 SW ¹/4 NW ¹/4 NW ¹/4.

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Document      Page 8 of 43

434680

EXHIBIT “B”

100% Interest in the surface rights of the following (16) patented mining claims, encompassing approximately 301.89 acres, located in Sections 19, 20, 29 and 30, Township 48 North, Range 6 East, B.M., Shoshone County, Idaho:

M.S. 1879: Boxer, Lone Star, Nineteen Hundred, Snow Storm & Snow Storm Fraction

M.S. 2063: Snow Cap, Snow Drift & Snow Peak

M.S. 2066A: Illinois, Liberty, Protection & Snow Storm Cloud

M.S. 2104: Mid Light, Moon Light, Star Light & Sun Light

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Document      Page 9 of 43

Exhibit “C”

Patented Mining Claims, situated in Sections 2 and 3, Township 47 North, Range 6 East, B.M., Shoshone County, Idaho.

M.S. 2539: Banner

M.S. 2539: Oregon

M.S. 2639: Puzzler Boy

M.S. 2539: Sister Roary

M.S. 2539: Smyley

CAMP/Plainview Real Property Description

Mining claims located in the Evolution Mining District of Shoshone County, Idaho:

Fourthought	Mineral Survey No. 3281
Plainview Fraction	Mineral Survey No. 3281
Silver Hill	Mineral Survey No. 3281
Toughnut	Mineral Survey No. 3281
Plainview No. 2	Mineral Survey No. 3281
Plainview No. 1	Mineral Survey No. 3281

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Document      Page 11 of 43

APPENDIX “B”

Unpatented Claims

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Sterling Mining Company

Un-Patented Mining Claims - OWNED as of March 18th, 2009

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
Sunshine Mine Holdings
IMC184825	POL #1	ID	SHOSHONE	0480N	0030E	14
IMC184826	POL #2	ID	SHOSHONE	0480N	0030E	14
IMC184827	POL #3	ID	SHOSHONE	0480N	0030E	11
IMC184828	POL #5	ID	SHOSHONE	0480N	0030E	11
IMC185847	MET #4	ID	SHOSHONE	0480N	0030E	22
IMC185848	MET #3	ID	SHOSHONE	0480N	0030E	22
IMC186399	MARCH OF DIME	ID	SHOSHONE	0480N	0030E	13		412558
IMC186401	ROBB	ID	SHOSHONE	0480N	0030E	23		412560
IMC186402	JACK # 2	ID	SHOSHONE	0480N	0030E	24		412561
IMC186404	JUMBO	ID	SHOSHONE	0480N	0030E	24		412563
IMC186405	MARK	ID	SHOSHONE	0480N	0030E	23		412564
IMC186406	JACK	ID	SHOSHONE	0480N	0030E	24		412565
IMC186408	PAY STREAK	ID	SHOSHONE	0480N	0030E	23		412567
IMC186409	HERCULES	ID	SHOSHONE	0480N	0030E	24		412569
IMC186410	HERCULES #2	ID	SHOSHONE	0480N	0030E	23		412568
IMC186430	EDNA #2	ID	SHOSHONE	0480N	0030E	27		412924
IMC186431	MARY LODE	ID	SHOSHONE	0480N	0030E	27		412923
IMC186434	DENNIS	ID	SHOSHONE	0480N	0030E	13		412794
IMC186435	INTERPID	ID	SHOSHONE	0480N	0030E	24		412795
IMC186436	IZARD	ID	SHOSHONE	0480N	0030E	27		412797
IMC186437	IZARD FR.	ID	SHOSHONE	0480N	0030E	27		412798
IMC186438	COMNER	ID	SHOSHONE	0480N	0030E	27		412816
IMC186439	LINDA	ID	SHOSHONE	0480N	0030E	27		412804
IMC186440	ANN	ID	SHOSHONE	0480N	0030E	27		412803
IMC186441	BURNS	ID	SHOSHONE	0480N	0030E	27		412813
IMC186442	BELL	ID	SHOSHONE	0480N	0030E	27		412812
IMC186443	JOANNA	ID	SHOSHONE	0480N	0030E	27		412806
IMC186444	NANCY	ID	SHOSHONE	0480N	0030E	27		412805
IMC186445	PEARL	ID	SHOSHONE	0480N	0030E	27		412809
IMC186446	EDNA	ID	SHOSHONE	0480N	0030E	27		412796
IMC186449	STAR	ID	SHOSHONE	0480N	0030E	26		412824
IMC186450	SIDNEY	ID	SHOSHONE	0480N	0030E	26		412799
IMC186452	WADLEIGH FR.	ID	SHOSHONE	0480N	0030E	27		412811
IMC186453	NEWSOME	ID	SHOSHONE	0480N	0030E	28		412808
IMC186454	STEVE	ID	SHOSHONE	0480N	0030E	28		412807
IMC186455	STEVENS	ID	SHOSHONE	0480N	0030E	28		412814
IMC186456	MALLIGAN	ID	SHOSHONE	0480N	0030E	28		412815
IMC186457	COLBERT	ID	SHOSHONE	0480N	0030E	28		412823
IMC186458	LONE PINE #1	ID	SHOSHONE	0480N	0030E	20		412664
IMC186459	LONE PINE #2	ID	SHOSHONE	0480N	0030E	20		412663
IMC186460	HILLSIDE	ID	SHOSHONE	0480N	0030E	20		412661
IMC186461	HILLSIDE #1	ID	SHOSHONE	0480N	0030E	28		412817
IMC186462	HILLSIDE #2	ID	SHOSHONE	0480N	0030E	28		412818
IMC186463	HILLSIDE #3	ID	SHOSHONE	0480N	0030E	28

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Document      Page 13 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC186464	HUMBOLT	ID	SHOSHONE	0480N	0030E	21		412672
IMC186465	HUMBOLT #1	ID	SHOSHONE	0480N	0030E	21		412671
IMC188466	HUMBOLT #2	ID	SHOSHONE	0480N	0030E	21		412670
IMC186467	HUMBOLT #3	ID	SHOSHONE	0480N	0030E	21		412669
IMC186468	CRESCENT	ID	SHOSHONE	0480N	0030E	21		412673
IMC186469	CRESCENT #1	ID	SHOSHONE	0480N	0030E	21		412674
IMC186470	CRESCENT #8	ID	SHOSHONE	0480N	0030E	21		412675
IMC186471	CRESCENT #9	ID	SHOSHONE	0480N	0030E	21		412656
IMC186472	S.C.I. #9	ID	SHOSHONE	0480N	0030E	21		412668
IMC186473	S.C.I. #11	ID	SHOSHONE	0480N	0030E	20		412665
IMC186474	S.C.I. #12	ID	SHOSHONE	0480N	0030E	20		412666
IMC186475	S.C.I. #13	ID	SHOSHONE	0480N	0030E	28		412655
IMC186476	S.C.I. #14	ID	SHOSHONE	0480N	0030E	28		412667
IMC186477	S.C.I. #15	ID	SHOSHONE	0480N	0030E	28		412822
IMC186478	S.C.I. #16	ID	SHOSHONE	0480N	0030E	28		412821
IMC186479	S.C.I. #17	ID	SHOSHONE	0480N	0030E	28		412820
IMC186480	SCI. #18	ID	SHOSHONE	0480N	0030E	20		412662
IMC186481	S.C.I. #19	ID	SHOSHONE	0480N	0030E	29		412660
IMC186482	MET #1 FR.	ID	SHOSHONE	0480N	0030E	22		412826
IMC186483	MET #9	ID	SHOSHONE	0480N	0030E	22		412821
IMC186484	MET #12	ID	SHOSHONE	0480N	0030E	21		412681
IMC186485	MET #13	ID	SHOSHONE	0480N	0030E	22		412802
IMC186486	MET #13 FR.	ID	SHOSHONE	0480N	0030E	22		412825
IMC186487	MET #14	ID	SHOSHONE	0480N	0030E	21		412680
IMC186488	MET #15	ID	SHOSHONE	0480N	0030E	21		412679
IMC186489	MET #16	ID	SHOSHONE	0480N	0030E	28		412677
IMC186490	MET #17	ID	SHOSHONE	0480N	0030E	21		412678
IMC186491	MET #18	ID	SHOSHONE	0480N	0030E	28		412676
IMC186492	MET #21	ID	SHOSHONE	0480N	0030E	23		412801
IMC186493	MET #22	ID	SHOSHONE	0480N	0030E	23		412659
IMC186494	MET #23	ID	SHOSHONE	0480N	0030E	23		412658
IMC186495	MET #24	ID	SHOSHONE	0480N	0030E	22		412800
IMC186654	MARCH OF TIME	ID	SHOSHONE	0480N	0030E	13		413903
IMC186655	INTREPID #2	ID	SHOSHONE	0480N	0030E	13		413904
IMC186880	COLBERT 1	ID	SHOSHONE	0480N	0030E	21		415456
IMC186881	COLBERT 2	ID	SHOSHONE	0480N	0030E	21		415454
IMC186897	MARCH OF TIME 2	ID	SHOSHONE	0480N	0030E	13		415455
IMC186898	MARCH OF TIME 3	ID	SHOSHONE	0480N	0030E	13		415619
IMC186899	BARBERELLA	ID	SHOSHONE	0480N	0030E	22		415620
IMC186900	METROPOLITAN 2 FRACT	ID	SHOSHONE	0480N	0040E	22		415566
IMC186901	METROPOLITAN	ID	SHOSHONE	0480N	0030E	22		415567
IMC187706	LITTLE LONE PINE	ID	SHOSHONE	0480N	0030E	21		419295
IMC187707	LITTLE GIANT #1	ID	SHOSHONE	0480N	0030E	21		419296
IMC187708	LITTLE GIANT #7	ID	SHOSHONE	0480N	0030E	21		419297
IMC187709	LITTLE GIANT #8	ID	SHOSHONE	0480N	0030E	21		419298
IMC188140	MET #1	ID	SHOSHONE	0480N	0030E	22		423354
IMC188141	MET #2	ID	SHOSHONE	0480N	0030E	22		423355
IMC188142	MET #5	ID	SHOSHONE	0480N	0030E	22		423356
IMC188143	MET #6	ID	SHOSHONE	0480N	0030E	22		423357

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Document      Page 14 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC188144	MET #7	ID	SHOSHONE	0480N	0030E	27		423358
IMC188145	MET #8	ID	SHOSHONE	0480N	0030E	27		423359
IMC188146	MET #10	ID	SHOSHONE	0480N	0030E	22		423360
IMC188147	MET #11	ID	SHOSHONE	0480N	0030E	22		423361
IMC188148	WADLEIGH	ID	SHOSHONE	0480N	0030E	27		423361
IMC188531	BC 1	ID	SHOSHONE	0480N	0030E	15		424816
IMC188532	BC 3	ID	SHOSHONE	0480N	0030E	15		424817
IMC188533	POL 4	ID	SHOSHONE	0480N	0030E	15		424818
IMC188534	POL 6	ID	SHOSHONE	0480N	0030E	11		424818
IMC188825	RD 6	ID	SHOSHONE	0480N	0030E	27		420951
IMC188826	RD 7	ID	SHOSHONE	0480N	0030E	27		420952
IMC188827	RD 12 FR	ID	SHOSHONE	0480N	0030E	27		420957
IMC188828	RD 13 FR	ID	SHOSHONE	0480N	0030E	27		420958
IMC188829	RD 14 FR	ID	SHOSHONE	0480N	0030E	27		420959
IMC188830	RD 15 FR	ID	SHOSHONE	0480N	0030E	26		420960
IMC188831	RD 16 FR	ID	SHOSHONE	0480N	0030E	27		420961
IMC188832	RD 17	ID	SHOSHONE	0480N	0030E	26		420962
IMC188833	RD 18 FR	ID	SHOSHONE	0480N	0030E	28		420963
IMC188834	RD 19	ID	SHOSHONE	0480N	0030E	28		420964
IMC188835	RD 20 FR	ID	SHOSHONE	0480N	0030E	26		420965
IMC188836	RDMET #1 FR	ID	SHOSHONE	0480N	0030E	23		420966
IMC188837	RDMET #3 FR	ID	SHOSHONE	0480N	0030E	23		420967
IMC188838	RDMET #4 FR	ID	SHOSHONE	0480N	0030E	23		420968
IMC188839	RD 1	ID	SHOSHONE	0480N	0030E	27		420949
IMC188840	RD 2	ID	SHOSHONE	0480N	0030E	27		420950
IMC188841	RD 8 FR	ID	SHOSHONE	0480N	0030E	28		420953
IMC188842	RD 9 FR	ID	SHOSHONE	0480N	0030E	21		420954
IMC188843	RD 10 FR	ID	SHOSHONE	0480N	0030E	21		420955
IMC188844	RD 11 FR	ID	SHOSHONE	0480N	0030E	21		420956
IMC188845	SA 1	ID	SHOSHONE	0480N	0030E	29		420980
IMC188846	SA 2	ID	SHOSHONE	0480N	0030E	29		420981
IMC188847	SA 3	ID	SHOSHONE	0480N	0030E	29		420982
IMC188848	SA 4	ID	SHOSHONE	0480N	0030E	29		420983
IMC188849	SA 5	ID	SHOSHONE	0480N	0030E	29		420984
IMC188850	SA 6	ID	SHOSHONE	0480N	0030E	29		420985
IMC188851	SA 7	ID	SHOSHONE	0480N	0030E	29		420986
IMC188852	SA 8	ID	SHOSHONE	0480N	0030E	29		420987
IMC188853	SA 9	ID	SHOSHONE	O480N	0030E	29		420988
IMC188854	SA 10	ID	SHOSHONE	0480N	0030E	29		420989
IMC188855	GLOBE	ID	SHOSHONE	0480N	0030E	26		420969
IMC188856	SNOOKUMS	ID	SHOSHONE	0480N	0030E	26		420970
IMC188857	US FRACTION	ID	SHOSHONE	0480N	0030E	26		420971
IMC188868	FAHEY	ID	SHOSHONE	0480N	0030E	26		420972
IMC188859	MOXEY	ID	SHOSHONE	0480N	0030E	26		420973
IMC188860	THELMA	ID	SHOSHONE	0480N	0030E	26		420974
IMC188861	SILVER CLIFF	ID	SHOSHONE	0480N	0030E	26		420975
IMC188862	FRANCES	ID	SHOSHONE	0480N	0030E	26		420976
IMC188863	LYNN	ID	SHOSHONE	0480N	0030E	26		420977
IMC188864	LEONARD	ID	SHOSHONE	0480N	0030E	27		420978

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Document      Page 15 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC188865	RYAN	ID	SHOSHONE	0480N	0030E	27		420979
IMC190213	GOOD MORNING FRACTION	ID	SHOSHONE	0480N	0030E	23		432498
IMC190214	GOOD MORNING FRAC 2	ID	SHOSHONE	0480N	0030E	23		433392
Claim Count: 145          @ $125 per claim =       $18,125

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Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
Pine Creek
IMC184522	LIBERAL KING	ID	SHOSHONE	0480N	0020E	16		400642
IMC184523	SUNSET #5	ID	SHOSHONE	0480N	0020E	20		400648
IMC184979	LOOKOUT #7	ID	SHOSHONE	0480N	0020E	20
IMC184980	SUNSET #6	ID	SHOSHONE	0480N	0020E	20
IMC185032	H #12	ID	SHOSHONE	0480N	0020E	24		402185
IMC188033	HI #11	ID	SHOSHONE	0480N	0020E	23		401955
IMC185034	HI #10	ID	SHOSHONE	0480N	0020E	23		401954
IMC186845	LOOKOUT #1	ID	SHOSHONE	0480N	0020E	20		415329
IMC186846	LOOKOUT #2	ID	SHOSHONE	0480N	0020E	20		415328
IMC186847	LOOKOUT #3	ID	SHOSHONE	0480N	0020E	20		415333
IMC186848	LOOKOUT #4	ID	SHOSHONE	0480N	0020E	20		415332
IMC186850	SUNSET #4	ID	SHOSHONE	0480N	0020E	21		415331
IMC187000	DENVER #1	ID	SHOSHONE	0480N	0020E	22		416622
IMC187001	DENVER #2	ID	SHOSHONE	0480N	0020E	22		416623
IMC187002	DENVER #3	ID	SHOSHONE	0480N	0020E	22		.416624
IMC187003	DENVER #4	ID	SHOSHONE	0480N	0020E	22		416625
IMC187004	DENVER #5	ID	SHOSHONE	0480N	0020E	22		416626
IMC187005	DENVER #6	ID	SHOSHONE	0480N	0020E	27		416627
IMC187006	DENVER #7	ID	SHOSHONE	0480N	0020E	27		416628
IMC187007	DENVER #8	ID	SHOSHONE	0480N	0020E	27		416629
IMC187008	DENVER #9	ID	SHOSHONE	0480N	0020E	26		416630
IMC187009	DENVER #10	ID	SHOSHONE	0480N	0020E	26		416631
IMC187010	DENVER #11	ID	SHOSHONE	0480N	0020E	27		416632
IMC187011	DENVER #16	ID	SHOSHONE	0480N	0020E	26		416633
IMC187012	DENVER #17	ID	SHOSHONE	0480N	0020E	26		416634
IMC187013	DENVER #18	ID	SHOSHONE	0480N	0020E	26		416635
IMC187014	DENVER #19	ID	SHOSHONE	0480N	0020E	26		416636
IMC187015	DENVER #20	ID	SHOSHONE	0480N	0020E	26		416675
IMC187016	DENVER #21	ID	SHOSHONE	0490N	0020E	26		416679
IMC187017	DENVER #22	ID	SHOSHONE	0480N	0020E	26		416678
IMC187018	DENVER #23	ID	SHOSHONE	0480N	0020E	26		416680
IMC187019	DENVER #41	ID	SHOSHONE	0480N	0020E	26		416637
IMC187020	DENVER #42	ID	SHOSHONE	0480N	0020E	26		416674
IMC187021	DENVER #43	ID	SHOSHONE	0480N	0020E	26		416673
IMC187022	DENVER #44	ID	SHOSHONE	0480N	0020E	26		416638
IMC187023	EAGLE #2	ID	SHOSHONE	0480N	0020E	27		416639
IMC187024	EAGLE #4	ID	SHOSHONE	0480N	0020E	27		416640
IMC187025	EAGLE #5	ID	SHOSHONE	0480N	0020E	27		416641
IMC187026	EAGLE #6	ID	SHOSHONE	0480N	0020E	27		416667
IMC187027	EAGLE #7	ID	SHOSHONE	0480N	0020E	27		416642
IMC187028	EAGLE #8	ID	SHOSHONE	0480N	0020E	27		416688
IMC187029	EAGLE #9	ID	SHOSHONE	0480N	0020E	26		416643
IMC187030	EAGLE #10	ID	SHOSHONE	0480N	0020E	26		416672
IMC187031	EAGLE #12	ID	SHOSHONE	0480N	0020E	35		416669
IMC187032	EAGLE #13	ID	SHOSHONE	0480N	0020E	26		416676
IMC187033	EAGLE #15	ID	SHOSHONE	0480N	0020E	28		416677
IMC187034	EAGLE #17	ID	SHOSHONE	0480N	0020E	26		416681
IMC187035	EAGLE #19	ID	SHOSHONE	0480N	0020E	26		416682

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Document      Page 17 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC187036	EAGLE #21	ID	SHOSHONE	0480N	0020E	34		416644
IMC187037	EAGLE #22	ID	SHOSHONE	0480N	0020E	34		416645
IMC187038	EAGLE #23	ID	SHOSHONE	0480N	0020E	34		416665
IMC187039	EAGLE #24	ID	SHOSHONE	0480N	0020E	34		416666
IMC187040	EAGLE #25	ID	SHOSHONE	0480N	0020E	34		416670
IMC187041	EAGLE #26	ID	SHOSHONE	0480N	0020E	35		416671
IMC187042	LOOKOUT #8	ID	SHOSHONE	0480N	0020E	20		416646
IMC187043	LOOKOUT #9	ID	SHOSHONE	0480N	0020E	20		416647
IMC187044	LOOKOUT #10	ID	SHOSHONE	0480N	0020E	21		416648
IMC187045	LOOKOUT #11	ID	SHOSHONE	0480N	0020E	20		416649
IMC187046	LOOKOUT #12	ID	SHOSHONE	0480N	0020E	21		416650
IMC187047	LOOKOUT #13	ID	SHOSHONE	0480N	0020E	21		416651
IMC187048	LOOKOUT #14	ID	SHOSHONE	0480N	0020E	21		416652
IMC187049	LOOKOUT #15	ID	SHOSHONE	0480N	0020E	21		416653
IMC187050	LOOKOUT #17	ID	SHOSHONE	0480N	0020E	21		416654
IMC187051	LOOKOUT #18	ID	SHOSHONE	0480N	0020E	21		416655
IMC187052	LOOKOUT #19	ID	SHOSHONE	0480N	0020E	21		416656
IMC187055	LOOKOUT #26	ID	SHOSHONE	0480N	0020E	21		416659
IMC187056	LOOKOUT #32	ID	SHOSHONE	0480N	0020E	28		416660
IMC187057	LOOKOUT #33	ID	SHOSHONE	0480N	0020E	28		416661
IMC187058	LOOKOUT #34	ID	SHOSHONE	0480N	0020E	28		416662
IMC187059	LOOKOUT #35	ID	SHOSHONE	0480N	0020E	28		416663
IMC187060	LOOKOUT #38	!D	SHOSHONE	0480N	0020E	27		416664
IMC187397	SUNSET #7	ID	SHOSHONE	0480N	0020E	21		418563
IMC187398	SUNSET #8	ID	SHOSHONE	0480N	0020E	21		418564
IMC187400	EAGLE #11	ID	SHOSHONE	0480N	0020E	26		418531
IMC187401	EAGLE #18	ID	SHOSHONE	0480N	0020E	35		418532
IMC187402	EAGLE #20	ID	SHOSHONE	0480N	0020E	35		418533
IMC187582	LOOKOUT #20	ID	SHOSHONE	0480N	0020E	21		419664
IMC187583	LOOKOUT #21	ID	SHOSHONE	0480N	0020E	21		419665
IMC187586	LOOKOUT #24	ID	SHOSHONE	0480N	0020E	20		419668
IMC187587	LOOKOUT #25	ID	SHOSHONE	0480N	0020E	21		419669
IMC187588	LOOKOUT #28	ID	SHOSHONE	0480N	0020E	21		419670
IMC187590	LOOKOUT #30	ID	SHOSHONE	0480N	0020E	21		419672
IMC187675	DENVER #15	ID	SHOSHONE	0480N	0020E	27		419996
IMC187676	DENVER #24	ID	SHOSHONE	0480N	0020E	26		419997
IMC187677	DENVER #25	ID	SHOSHONE	0480N	0020E	26		419998
IMC187678	DENVER #26	ID	SHOSHONE	0480N	0020E	26		419999
IMC187679	DENVER #27	ID	SHOSHONE	0480N	0020E	25		420000
IMC187680	DENVER #28	ID	SHOSHONE	0480N	0020E	25		420001
IMC187681	DENVER #29	ID	SHOSHONE	0480N	0020E	25		420002
IMC187682	DENVER #30	ID	SHOSHONE	0480N	0020E	25		420003
IMC187683	DENVER #31	ID	SHOSHONE	0480N	0020E	25		420004
IMC187684	DENVER #32	ID	SHOSHONE	0480N	0020E	25		420005
IMC187685	DENVER #33	ID	SHOSHONE	0480N	0020E	25		420006
IMC187686	DENVER #34	ID	SHOSHONE	0480N	0020E	25		420007
IMC187687	DENVER #35	ID	SHOSHONE	0480N	0020E	25		420008
IMC187688	DENVER #36	ID	SHOSHONE	0480N	0020E	25		420009
IMC187689	DENVER #37	ID	SHOSHONE	0480N	0020E	25		420010

Wednesday, March 18, 2009 Page 6 of 18

Case 09-20178-TLM    Doc 18    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc Main

Document      Page 18 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC187690	DENVER #38	ID	SHOSHONE	0480N	0020E	25		420011
IMC187691	DENVER #39	ID	SHOSHONE	0480N	0020E	25		420012
IMC187691	DENVER #39	ID	SHOSHONE	0480N	0030E	30		420012
IMC187692	DENVER #40	ID	SHOSHONE	0480N	0020E	25		420013
IMC187692	DENVER #40	ID	SHOSHONE	0480N	0030E	30		420013
IMC187693	EAGLE 1	ID	SHOSHONE	0480N	0020E	27		420017
IMC187694	EAGLE 3	ID	SHOSHONE	0480N	0020E	27		420016
IMC187695	EAGLE 14	ID	SHOSHONE	0480N	0020E	35		420022
IMC187696	EAGLE 16	ID	SHOSHONE	0480N	0020E	35		420021
IMC187697	EAGLE 18	ID	SHOSHONE	0480N	0020E	35		420015
IMC187698	EAGLE 20	ID	SHOSHONE	0480N	0020E	35		420014
IMC187699	EAGLE 27	ID	SHOSHONE	0480N	0020E	35		420020
IMC187700	EAGLE 28	ID	SHOSHONE	0480N	0020E	35		420019
IMC187701	EAGLE 29	ID	SHOSHONE	0480N	0020E	26		420018
IMC188504	H 1	ID	SHOSHONE	0480N	0020E	26		424789
IMC188505	H 2	ID	SHOSHONE	0480N	0020E	26		424790
IMC188508	H 3	ID	SHOSHONE	0480N	0020E	25		424791
IMC188507	H 4	ID	SHOSHONE	0480N	0020E	25		424792
IMC188508	W 1	ID	SHOSHONE	0480N	0020E	23		424793
IMC188509	W 2	ID	SHOSHONE	0480N	0020E	23		424794
IMC188510	W 3	ID	SHOSHONE	0480N	0020E	23		424798
IMC188511	W 4	ID	SHOSHONE	0480N	0020E	23		424797
IMC188512	W 5	ID	SHOSHONE	0480N	0020E	24		424798
IMC188513	W 6	ID	SHOSHONE	0480N	0020E	24		424799
IMC188514	W 7	ID	SHOSHONE	0480N	0020E	24		424800
IMC188515	W 8	ID	SHOSHONE	0480N	0020E	24		424801
IMC188516	W 9	ID	SHOSHONE	0480N	0020E	24		424801
IMC188617	W 10	ID	SHOSHONE	0480N	0020E	24		424802
IMC188529	LOOKOUT 5	ID	SHOSHONE	0480N	0020E	20		424814
IMC188530	SUNSET 3	ID	SHOSHONE	0480N	0020E	16		424815
IMC193223	SIDNEY #1	ID	SHOSHONE	0480N	0020E	22		441949;0;0
IMC193224	SIDNEY #2	ID	SHOSHONE	0480N	0020E	22		441950;0;0
IMC193225	SIDNEY #3	ID	SHOSHONE	0480N	0020E	22		441951;0;0
IMC193226	SIDNEY #4	ID	SHOSHONE	0480N	0020E	22		441952;0;0
IMC193227	SIDNEY #5	ID	SHOSHONE	0480N	0020E	22		441953;0;0
IMC193228	SIDNEY #6	ID	SHOSHONE	0480N	0020E	22		441954;0;0
IMC193229	SIDNEY #7	ID	SHOSHONE	0480N	0020E	22		441955;0;0
IMC193230	SIDNEY #8	ID	SHOSHONE	0480N	0020E	22		441956;0;0
IMC193231	SIDNEY #9	ID	SHOSHONE	0480N	0020E	22		441957;0;0
IMC193232	SIDNEY #10	ID	SHOSHONE	0480N	0020E	22		441958;0;0
IMC193233	SIDNEY #11	ID	SHOSHONE	0480N	0020E	22		441959;0;0
IMC193234	SIDNEY #12	ID	SHOSHONE	0480N	0020E	22		441960;0;0
IMC193235	SIDNEY #13	ID	SHOSHONE	0480N	0020E	22		441961;0;0
IMC193236	SIDNEY #14	ID	SHOSHONE	0480N	0020E	22		441962;0;0
IMC193237	SIDNEY #15	ID	SHOSHONE	0480N	0020E	22		441963;0;0
Claim Count: 142          @ $125 per claim =       $17,750

Wednesday, March 18, 2009 Page 7 of 18

Case 09-20178-TLM    Doc 18    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc Main

Document      Page 19 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
Central Silver Belt
IMC183558	IDAHO LEADVILLE #1	ID	SHOSHONE	0480N	0030E	36		391543
IMC183559	IDAHO LEADVILLE #2	ID	SHOSHONE	0480N	0030E	36		391544
IMC183560	IDAHO LEADVILLE #3	ID	SHOSHONE	0480N	0030E	36		391545
IMC183561	IDAHO LEADVILLE #4	ID	SHOSHONE	0480N	0030E	36		391546
IMC183562	IDAHO LEADVILLE #5	ID	SHOSHONE	0480N	0030E	36		391547
IMC183563	IDAHO LEADVILLE #6	ID	SHOSHONE	0480N	0030E	36		391548
IMC183564	IDAHO LEADVILLE #7	ID	SHOSHONE	0480N	0030E	36		391549
IMC183665	IDAHO LEADVILLE #8	ID	SHOSHONE	0480N	0030E	36		391550
IMC183566	IDAHO LEADVILLE #9	ID	SHOSHONE	0480N	0030E	36		391551
IMC183567	IDAHO LEADVILLE #11	ID	SHOSHONE	0480N	0030E	35		391552
IMC183571	IDAHO LEADVILLE #16	ID	SHOSHONE	0480N	0030E	26		391556
IMC183575	IDAHO LEADVILLE #21	ID	SHOSHONE	0480N	0030E	26		391560
IMC185356	IDAHO LEADVILLE #26	ID	SHOSHONE	0480N	0030E	26
IMC185357	IDAHO LEADVILLE #30	ID	SHOSHONE	0480N	0030E	26
IMC186837	IDAHO LEADVILLE #13	ID	SHOSHONE	0480N	0030E	26		415320
IMC186838	IDAHO LEADVILLE #14	ID	SHOSHONE	0480N	0030E	26		415327
IMC186839	IDAHO LEADVILLE #16	ID	SHOSHONE	0480N	0030E	26		415326
IMC186840	IDAHO LEADVILLE #18	ID	SHOSHONE	0480N	0030E	26		415325
IMC186841	IDAHO LEADVILLE #19	ID	SHOSHONE	0480N	0030E	26		415324
IMC186842	IDAHO LEADVILLE #20	ID	SHOSHONE	0480N	0030E	26		415323
IMC186843	IDAHO LEADVILLE #22	ID	SHOSHONE	0480N	0030E	26		415322
IMC186844	IDAHO LEADVILLE #23	ID	SHOSHONE	0480N	0030E	26		415321
IMC187399	SILVER APEX #11	ID	SHOSHONE	0480N	0040E	5		418534
IMC187403	LC #15	ID	SHOSHONE	0480N	0040E	32		418537
IMC187404	LC #16	ID	SHOSHONE	0480N	0040E	32		418538
IMC187405	LC #19	ID	SHOSHONE	0480N	0040E	31		418539
IMC187408	LC #20	ID	SHOSHONE	0480N	0040E	31		418540
IMC187407	LC #21	ID	SHOSHONE	0480N	0040E	31		418541
IMC187408	LC #24	ID	SHOSHONE	0480N	0040E	31		418542
IMC187409	LC #25	ID	SHOSHONE	0480N	0040E	31		418543
IMC187410	LC #26	ID	SHOSHONE	0480N	0040E	31		418544
IMC187411	LC #29	ID	SHOSHONE	0480N	0040E	31		418535
IMC187412	LC #30	ID	SHOSHONE	0480N	0040E	31		418536
IMC187413	LC #31	ID	SHOSHONE	0480N	0040E	31		418545
IMC187414	LC #32	ID	SHOSHONE	0480N	0040E	31		418546
IMC187415	LC #35	ID	SHOSHONE	0480N	0040E	31		418547
IMC187416	LC #36	ID	SHOSHONE	0480N	0040E	31		418548
IMC187417	LC #37	ID	SHOSHONE	0480N	0040E	31		418549
IMC187418	LC #38	ID	SHOSHONE	0480N	0040E	31		418550
IMC187419	LC #39	ID	SHOSHONE	0480N	0040E	31		418551
IMC187420	LC #46	ID	SHOSHONE	0480N	0040E	31		418552
IMC187421	LC #47	ID	SHOSHONE	0480N	0040E	31		418553
IMC187422	LC #48	ID	SHOSHONE	0480N	0040E	31		418554
IMC187423	LC #49	ID	SHOSHONE	0480N	0040E	31		418555
IMC187424	LC #50	ID	SHOSHONE	0480N	0040E	31		418556
IMC187425	LC #53	ID	SHOSHONE	0480N	0040E	31		418557
IMC187426	LC #54	ID	SHOSHONE	0480N	0040E	31		418558
IMC187427	LC #55	ID	SHOSHONE	0480N	0040E	31		418559

Wednesday, March 18, 2009 Page 8 of 18

Case 09-20178-TLM    Doc 18    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc Main

Document      Page 20 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC187428	LC #56	ID	SHOSHONE	0480N	0040E	32		418560
IMC187429	LC #59	ID	SHOSHONE	0480N	0040E	31		418561
IMC187430	LC #60	ID	SHOSHONE	0480N	0040E	31		418562
IMC187433	JD #1	ID	SHOSHONE	0480N	0030E	36		418624
IMC187434	JD #2	ID	SHOSHONE	0480N	0030E	36		418527
IMC187435	JD #3	ID	SHOSHONE	0480N	0030E	36		418525
IMC187436	JD #4	ID	SHOSHONE	0480N	0030E	35		418528
IMC187437	JD #5	ID	SHOSHONE	0480N	0030E	35		418529
IMC187438	JD #6	ID	SHOSHONE	0480N	0030E	35		418530
IMC187439	JD #7	ID	SHOSHONE	0480N	0030E	36		418526
IMC187440	JD #8	ID	SHOSHONE	0480N	0030E	36		418523
IMC187441	JD #9	ID	SHOSHONE	0480N	0030E	35		418522
IMC188497	IDAHO LEADVILLE 24	ID	SHOSHONE	0480N	0030E	26		424782
IMC188498	IDAHO LEADVILLE 26	ID	SHOSHONE	0480N	0030E	26		424783
IMC188499	IDAHO LEADVILLE 28	ID	SHOSHONE	0480N	0030E	26		424784
IMC188500	SILVER APEX 3	ID	SHOSHONE	0480N	0040E	5		424785
IMC188501	SILVER APEX 4	ID	SHOSHONE	0480N	0040E	5		424786
IMC188501	SILVER APEX 4	ID	SHOSHONE	0490N	0040E	31		424786
IMC188502	SILVER APEX 5	ID	SHOSHONE	0490N	0040E	32		424787
IMC188502	SILVER APEX 5	ID	SHOSHONE	0480N	0040E	5		424787
IMC188503	SILVER APEX 6	ID	SHOSHONE	0480N	0040E	5		424788
IMC192917	GOOD NEIGHOBOR FR	ID	SHOSHONE	0480N	0040E	29		441260;0;0
Claim Count: 70          @ $125 per claim =       $8,750
Sterling E-W
IMC175305	BOSTON LODE	ID	SHOSHONE	0480N	0040E	30		366705 0
IMC175306	BOSTON FRACTION	ID	SHOSHONE	0480N	0040E	29		366706 0
IMC175307	CONSTITUTION	ID	SHOSHONE	0480N	0040E	29		366707 0
IMC175308	COLUMBIA	ID	SHOSHONE	0480N	0040E	32		366708
IMC175309	STANFORD	ID	SHOSHONE	0480N	0040E	29		366709 0
IMC175310	LINK	ID	SHOSHONE	0480N	0040E	29		366710 0
IMC175311	STERLING LODE	ID	SHOSHONE	0480N	0040E	29		366711 0
IMC175312	PROVIDENCE	ID	SHOSHONE	0480N	0040E	32		366712 0
IMC175313	BALTIMORE	ID	SHOSHONE	0480N	0040E	32		366713 0
IMC175314	WINNEFRED	ID	SHOSHONE	0480N	0040E	29		366714 0
IMC175315	WINNEFRED FRACTION	ID	SHOSHONE	0480N	0040E	30		366715 0
IMC175316	HARVARD	ID	SHOSHONE	0480N	0040E	30		366716 0
IMC175317	YALE FRACTION	ID	SHOSHONE	0480N	0040E	30		366717 0
IMC175318	YALE	ID	SHOSHONE	0480N	0040E	30		366718 0
IMC175319	PRINCETON LODE	ID	SHOSHONE	0480N	0040E	30		366719 0
IMC175320	PRINCETON FRACTION	ID	SHOSHONE	0480N	0040E	30		366720 0
IMC175321	SANDRA	ID	SHOSHONE	0480N	0030E	25		366721 0
Claim Count: 17          @ $125 per claim =       $2,125

Wednesday, March 18, 2009 Page 9 of 18

Case 09-20178-TLM    Doc 18    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc Main

Document      Page 21 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
East Silver Belt
IMC185294	BL #1	ID	SHOSHONE	0480N	0060E	33
IMC185295	BL #2	ID	SHOSHONE	0480N	0060E	34
IMC185296	BL #3	ID	SHOSHONE	0480N	0060E	33
IMC187109	RQ 1	ID	SHOSHONE	0470N	0050E	1		417551
IMC187110	RQ 2	ID	SHOSHONE	0470N	0050E	1		417552
IMC187111	RQ 3	ID	SHOSHONE	0470N	0050E	1		417553
IMC187112	RQ 4	ID	SHOSHONE	0470N	0050E	1		417554
IMC187113	RQ 5	ID	SHOSHONE	0470N	0050E	1		417555
IMC187114	RQ 6	ID	SHOSHONE	0470N	0050E	1		417556
IMC187115	RQ 7	ID	SHOSHONE	0470N	0050E	1		417557
IMC187116	RQ 8	ID	SHOSHONE	0470N	0050E	1		417558
IMC187117	RQ 9	ID	SHOSHONE	0470N	0050E	1		417559
IMC187118	RQ 10	ID	SHOSHONE	0470N	0050E	1		417560
IMC187119	RQ 11	ID	SHOSHONE	0470N	0050E	1		417561
IMC187120	RQ 12	ID	SHOSHONE	0470N	0050E	1		417562
IMC187120	RQ 12	ID	SHOSHONE	0470N	0060E	6		417562
IMC187121	RQ 13	ID	SHOSHONE	0470N	0060E	1		417563
IMC187121	RQ 13	ID	SHOSHONE	0470N	0060E	6		417563
IMC187122	RQ 14	ID	SHOSHONE	0470N	0050E	1		417564
IMC187122	RQ 14	ID	SHOSHONE	0470N	0060E	6		417564
IMC187123	RQ 15	ID	SHOSHONE	0470N	0050E	1		417565
IMC187123	RQ 15	ID	SHOSHONE	0470N	0060E	6		417565
IMC187124	RQ 16	ID	SHOSHONE	0470N	0060E	8		417566
IMC187124	RQ 16	ID	SHOSHONE	0470N	0050E	1		417566
IMC187125	RQ 17	ID	SHOSHONE	0470N	0050E	1		417567
IMC187126	RQ 18	ID	SHOSHONE	0470N	0060E	1		417568
IMC187127	RQ 19	ID	SHOSHONE	0470N	0050E	1		417569
IMC187128	RQ 20	ID	SHOSHONE	0470N	0050E	1		417570
IMC187129	RQ 21	ID	SHOSHONE	0470N	0050E	1		417571
IMC187130	RQ 22	ID	SHOSHONE	0470N	0050E	1		417572
IMC187131	RQ 23	ID	SHOSHONE	0470N	0050E	1		417573
IMC187132	RQ 24	ID	SHOSHONE	0470N	0050E	12		417574
IMC187133	RQ 25	ID	SHOSHONE	0470N	0050E	1		417575
IMC187134	RQ 26	ID	SHOSHONE	0470N	0050E	1		417576
IMC187135	RQ 27	ID	SHOSHONE	0470N	0050E	1		417577
IMC187136	RQ 28	ID	SHOSHONE	0470N	0050E	1		417578
IMC187137	RQ 29	ID	SHOSHONE	0470N	0050E	1		417579
IMC187138	RQ 30	ID	SHOSHONE	0470N	0050E	12		417580
IMC187139	RQ 31	ID	SHOSHONE	0470N	0050E	1		417581
IMC187139	RQ 31	ID	SHOSHONE	0470N	0060E	6		417581
IMC187140	RQ 32	ID	SHOSHONE	0470N	0050E	1		417582
IMC187140	RQ 32	ID	SHOSHONE	0470N	0060E	6		417582
IMC187141	RQ 33	ID	SHOSHONE	0470N	0050E	1		417583
IMC187141	RQ 33	ID	SHOSHONE	0470N	0060E	6		417583
IMC187142	RQ 34	ID	SHOSHONE	0470N	0060E	6		417584
IMC187142	RQ 34	ID	SHOSHONE	0470N	0050E	1		417584
IMC187143	RQ 35	ID	SHOSHONE	0470N	0050E	12		417585
IMC187143	RQ 35	ID	SHOSHONE	0470N	0060E	7		417585

Wednesday, March 18, 2009 Page 10 of 18

Case 09-20178-TLM    Doc 18    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc Main

Document      Page 22 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC187144	RQ 36	ID	SHOSHONE	0470N	0050E	1		417586
IMC187145	RQ 37	ID	SHOSHONE	0470N	0050E	1		417587
IMC187146	RQ 38	ID	SHOSHONE	0470N	0050E	1		417588
IMC187147	RQ 39	ID	SHOSHONE	0470N	0050E	11		417589
IMC187148	WA 1	ID	SHOSHONE	0470N	0050E	3		417527
IMC187149	WA 2	ID	SHOSHONE	0470N	0050E	3		417528
IMC187150	WA 3	ID	SHOSHONE	0470N	0050E	3		417529
IMC187151	WA 4	ID	SHOSHONE	0470N	0050E	3		417530
IMC187152	WA 5	ID	SHOSHONE	0470N	0050E	3		417531
IMC187153	WA 6	ID	SHOSHONE	0470N	0050E	3		417532
IMC187154	WA 7	ID	SHOSHONE	0470N	0050E	3		417533
IMC187155	WA 8	ID	SHOSHONE	0470N	0050E	3		417534
IMC187156	WA 9	ID	SHOSHONE	0470N	0050E	3		417535
IMC187157	WA 10	ID	SHOSHONE	0470N	0050E	3		417536
IMC187158	WA 11	ID	SHOSHONE	0470N	0050E	3		417537
IMC187159	WA 12	ID	SHOSHONE	0470N	0050E	3		417538
IMC187160	WA 13	ID	SHOSHONE	0470N	0050E	3		417539
IMC187161	WA 14	ID	SHOSHONE	0470N	0050E	3		417540
IMC187162	WA 15	ID	SHOSHONE	0470N	0050E	3		417541
IMC187163	WA 16	ID	SHOSHONE	0470N	0050E	3		417542
IMC187164	WA 17	ID	SHOSHONE	0470N	0050E	3		417543
IMC187165	WA 18	ID	SHOSHONE	0470N	0050E	3		417544
IMC187166	WA 19	ID	SHOSHONE	0470N	0050E	2		417545
IMC187167	WA 20	ID	SHOSHONE	0470N	0050E	2		417546
IMC187168	WA 21	ID	SHOSHONE	0470N	0050E	2		417547
IMC187169	WA 22	ID	SHOSHONE	0470N	0050E	2		417548
IMC187170	WA 23	ID	SHOSHONE	0470N	0050E	2		417549
IMC187171	WA 24	ID	SHOSHONE	0470N	0050E	2		417550
IMC187172	A 1	ID	SHOSHONE	0470N	0050E	3		417502
IMC187173	A 3	ID	SHOSHONE	0470N	0050E	2		417503
IMC187174	A 4	ID	SHOSHONE	0470N	0050E	2		417504
IMC187175	A 6	ID	SHOSHONE	0470N	0050E	2		417505
IMC187176	A 7	ID	SHOSHONE	0470N	0050E	2		417506
IMC187177	A 8	ID	SHOSHONE	0470N	0050E	2		417507
IMC187178	A 9	ID	SHOSHONE	0470N	0050E	2		417508
IMC187179	A 10	ID	SHOSHONE	0470N	0050E	2		417509
IMC187180	A 11	ID	SHOSHONE	0470N	0050E	2		417510
IMC187181	A 12	ID	SHOSHONE	0470N	0050E	2		417511
IMC187182	A 13	ID	SHOSHONE	0470N	0050E	2		417512
IMC187183	A 14	ID	SHOSHONE	0470N	0050E	2		417513
IMC187184	A 15	ID	SHOSHONE	0470N	0050E	2		417514
IMC187185	A 16	ID	SHOSHONE	0470N	0050E	2		417515
IMC187186	A 17	ID	SHOSHONE	0470N	0050E	2		417516
IMC187187	A 18	ID	SHOSHONE	0470N	0050E	2		417517
IMC187188	A 19	ID	SHOSHONE	0470N	0050E	2		417518
IMC187189	A 20	ID	SHOSHONE	0470N	0050E	2		417519
IMC187190	A 21	ID	SHOSHONE	0470N	0050E	11		417520
IMC187191	A 22	ID	SHOSHONE	0470N	0050E	2		417521
IMC187192	A 23	ID	SHOSHONE	0470N	0050E	2		417522

Wednesday, March 18, 2009 Page 11 of 18

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Document      Page 23 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC187193	A 24	ID	SHOSHONE	0470N	0050E	2		417523
IMC187194	A 25	ID	SHOSHONE	0470N	0050E	11		417524
IMC187195	A 28	ID	SHOSHONE	0470N	0050E	2		417525
IMC187196	A 29	ID	SHOSHONE	0470N	0050E	2		417526
IMC187197	AE 1	ID	SHOSHONE	0470N	0060E	6		417489
IMC187198	AE 2	ID	SHOSHONE	0470N	0060E	6		417490
IMC187199	AE 3	ID	SHOSHONE	0470N	0060E	6		417491
IMC187200	AE 4	ID	SHOSHONE	0470N	0060E	6		417492
IMC187201	AE 5	ID	SHOSHONE	0470N	0060E	7		417493
IMC187202	AE 6	ID	SHOSHONE	0470N	0060E	6		417494
IMC187203	AE 7	ID	SHOSHONE	0470N	0060E	6		417495
IMC187204	AE 8	ID	SHOSHONE	0470N	0060E	6		417496
IMC187206	AE 9	ID	SHOSHONE	0470N	0060E	6		417497
IMC187206	AE 10	ID	SHOSHONE	0470N	0060E	6		417498
IMC187207	AE 11	ID	SHOSHONE	0470N	0060E	6		417499
IMC187208	AE 12	ID	SHOSHONE	0470N	0060E	6		417500
IMC187209	AE 13	ID	SHOSHONE	0470N	0060E	6		417501
IMC187325	GH 31	ID	SHOSHONE	0470N	0050E	3		417411
IMC187326	GH 32	ID	SHOSHONE	0470N	0050E	3		417412
IMC187327	GH 33	ID	SHOSHONE	0470N	0050E	3		417413
IMC187328	GH 34	ID	SHOSHONE	0470N	0050E	3		417414
IMC187329	GH 35	ID	SHOSHONE	0470N	0050E	3		417415
IMC187330	GH 36	ID	SHOSHONE	0470N	0050E	9		417416
IMC187331	GH 37	ID	SHOSHONE	0470N	0050E	9		417417
IMC187332	GH 38	ID	SHOSHONE	0470N	0050E	3		417418
IMC187333	GH 39	ID	SHOSHONE	0470N	0050E	10		417419
IMC187334	GH 40	ID	SHOSHONE	0470N	0050E	10		417420
IMC187335	RC 1	ID	SHOSHONE	0470N	0050E	6		417442
IMC187336	RC 2	ID	SHOSHONE	0470N	0050E	6		417443
IMC187337	RC 3	ID	SHOSHONE	0470N	0050E	7		417444
IMC187338	RC 4	ID	SHOSHONE	0470N	0050E	7		417445
IMC187339	RC 5	ID	SHOSHONE	0470N	0050E	7		417446
IMC187340	RC 6	ID	SHOSHONE	0470N	0050E	5		417447
IMC187341	RC 7	ID	SHOSHONE	0470N	0050E	5		417448
IMC187342	RC 8	ID	SHOSHONE	0470N	0050E	7		417449
IMC187343	RC 9	ID	SHOSHONE	0470N	0050E	7		417450
IMC187344	RC 10	ID	SHOSHONE	0470N	0050E	7		417451
IMC187345	RC 11	ID	SHOSHONE	0470N	0050E	7		417452
IMC187346	RC 13	ID	SHOSHONE	0470N	0050E	8		417454
IMC187347	RC 14	ID	SHOSHONE	0470N	0050E	8		417455
IMC187348	RC 15	ID	SHOSHONE	0470N	0050E	8		417456
IMC187349	RC 16	ID	SHOSHONE	0470N	0050E	8		417457
IMC187350	RC 17	ID	SHOSHONE	0470N	0050E	8		417458
IMC187351	RC 19	ID	SHOSHONE	0470N	0050E	5		417460
IMC187352	RC 20	ID	SHOSHONE	0470N	0050E	5		417461
IMC187353	RC 21	ID	SHOSHONE	0470N	0050E	8		417462
IMC187354	RC 22	ID	SHOSHONE	0470N	0050E	8		417463
IMC187355	RC 23	ID	SHOSHONE	0470N	0050E	8		417464
IMC187356	RC 24	ID	SHOSHONE	0470N	0050E	8		417465

Wednesday, March 18, 2009 Page 12 of 18

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Document      Page 24 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC187357	RC 26	ID	SHOSHONE	0470N	0050E	8		417466
IMC187358	RC 26	ID	SHOSHONE	0470N	0050E	5		417467
IMC187359	RC 27	ID	SHOSHONE	0470N	0050E	5		417468
IMC187360	RC 28	ID	SHOSHONE	0470N	0050E	5		417469
IMC187361	RC 29	ID	SHOSHONE	0470N	0050E	8		417470
IMC187362	RC 30	ID	SHOSHONE	0470N	0050E	8		417471
IMC187363	RC 31	ID	SHOSHONE	0470N	0050E	8		417472
IMC187364	RC 32	ID	SHOSHONE	0470N	0050E	8		417473
IMC187365	RC 33	ID	SHOSHONE	0470N	0050E	8		417474
IMC187603	P 1	ID	SHOSHONE	0470N	0050E	6		419890
IMC187603	P 1	ID	SHOSHONE	0480N	0050E	31		419890
IMC187604	P 2	ID	SHOSHONE	0480N	0050E	31		419891
IMC187604	P 2	ID	SHOSHONE	0470N	0050E	6		419891
IMC187605	P 3	ID	SHOSHONE	0470N	0050E	5		419892
IMC187605	P 3	ID	SHOSHONE	0480N	0050E	31		419892
IMC187606	P 4	ID	SHOSHONE	0470N	0050E	5		419893
IMC187606	P 4	ID	SHOSHONE	0480N	0050E	31		419893
IMC187607	P 5	ID	SHOSHONE	0480N	0050E	31		419894
IMC187607	P 5	ID	SHOSHONE	0470N	0050E	5		419894
IMC187608	P 6	ID	SHOSHONE	0470N	0050E	6		419895
IMC187609	P 7	ID	SHOSHONE	0470N	0050E	6		419896
IMC187610	P 8	ID	SHOSHONE	0470N	0050E	5		419887
IMC187611	P 9	ID	SHOSHONE	0470N	0050E	5		419898
IMC187612	P 10	ID	SHOSHONE	0470N	0050E	5		419899
IMC187613	P 11	ID	SHOSHONE	0470N	0050E	6		419901
IMC187614	P 12	ID	SHOSHONE	0470N	0050E	6		419901
IMC187615	P 13	ID	SHOSHONE	0470N	0050E	5		419902
IMC187616	P 14	ID	SHOSHONE	0470N	0050E	5		419903
IMC187617	P 15	ID	SHOSHONE	0470N	0050E	5		419904
IMC187618	P 16	ID	SHOSHONE	0470N	0050E	6		419905
IMC187619	P 17	ID	SHOSHONE	0470N	0050E	6		419906
IMC187620	P 18	ID	SHOSHONE	0470N	0050E	5		419907
IMC187621	P 19	ID	SHOSHONE	0470N	0050E	5		419908
IMC187622	P 20	ID	SHOSHONE	0470N	0050E	5		419909
IMC187623	P 21	ID	SHOSHONE	0470N	0050E	5		419910
IMC187624	P 22	ID	SHOSHONE	0470N	0050E	5		419911
IMC187625	P 23	ID	SHOSHONE	0470N	0050E	5		419912
IMC187626	P 24	ID	SHOSHONE	0470N	0050E	5		419913
IMC187627	P 25	ID	SHOSHONE	0470N	0050E	5		419914
IMC187628	P 26	ID	SHOSHONE	0470N	0050E	5		419915
IMC187629	GH 1	ID	SHOSHONE	0470N	0050E	4		419916
IMC187630	GH 2	ID	SHOSHONE	0470N	0050E	4		419917
IMC187631	GH 3	ID	SHOSHONE	0470N	0050E	4		419918
IMC187632	GH 4	ID	SHOSHONE	0470N	0050E	4		419919
IMC187633	GH 5	ID	SHOSHONE	0470N	0050E	4		419920
IMC187634	GH 6	ID	SHOSHONE	0470N	0050E	4		419921
IMC187635	GH 7	ID	SHOSHONE	0470N	0050E	8		419922
IMC187636	GH 8	ID	SHOSHONE	0470N	0050E	8		419923
IMC187637	GH 9	ID	SHOSHONE	0470N	0050E	8		419924

Wednesday, March 18, 2009 Page 13 of 18

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Document      Page 25 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC187638	GH 10	ID	SHOSHONE	0470N	0050E	8		419925
IMC187639	GH 11	ID	SHOSHONE	0470N	0050E	8		419926
IMC187640	GH 12	ID	SHOSHONE	0470N	0050E	4		419927
IMC187641	GH 13	ID	SHOSHONE	0470N	0050E	4		419928
IMC187642	GH 14	ID	SHOSHONE	0470N	0050E	4		419929
IMC187643	GH 15	ID	SHOSHONE	0470N	0050E	4		419930
IMC187644	GH 16	ID	SHOSHONE	0470N	0050E	4		419931
IMC187645	GH 17	ID	SHOSHONE	0470N	0050E	4		419932
IMC187646	GH 18	ID	SHOSHONE	0470N	0050E	9		419933
IMC187647	GH 19	ID	SHOSHONE	0470N	0050E	9		419934
IMC187648	GH 20	ID	SHOSHONE	0470N	0050E	9		419935
IMC187649	GH 21	ID	SHOSHONE	0470N	0050E	9		419936
IMC187650	GH 22	ID	SHOSHONE	0470N	0050E	9		419937
IMC187651	GH 23	ID	SHOSHONE	0470N	0050E	4		419938
IMC187652	GH 24	ID	SHOSHONE	0470N	0050E	4		419939
IMC187653	GH 25	ID	SHOSHONE	0470N	0050E	4		419941
IMC187654	GH 26	ID	SHOSHONE	0470N	0050E	4		419940
IMC187655	GH 27	ID	SHOSHONE	0470N	0050E	4		419942
IMC187656	GH 28	ID	SHOSHONE	0470N	0050E	4		419943
IMC187667	GH 29	ID	SHOSHONE	0470N	0050E	9		419944
IMC187658	GH 30	ID	SHOSHONE	0470N	0050E	9		419945
IMC187667	R 9	ID	SHOSHONE	0480N	0050E	31		419954
IMC187668	R 12	ID	SHOSHONE	0470N	0050E	5		419955
IMC187669	R 18	ID	SHOSHONE	0470N	0050E	5		419956
IMC188518	BL 4	ID	SHOSHONE	0480N	0060E	33		424803
IMC188519	BL 5	ID	SHOSHONE	0480N	0060E	33		424804
IMC188520	BL 6	ID	SHOSHONE	0480N	0060E	33		424805
IMC188521	BL 7	ID	SHOSHONE	0480N	0060E	33		424806
IMC188522	BL 8	ID	SHOSHONE	0480N	0060E	33		424807
IMC188523	BL 9	ID	SHOSHONE	0480N	0060E	33		424808
IMC188524	BL 10	ID	SHOSHONE	0480N	0060E	33		424809
IMC188525	MU 1	ID	SHOSHONE	0480N	0050E	34		424810
IMC188526	MU 2	ID	SHOSHONE	0480N	0050E	34		424811
IMC188527	MU 3	ID	SHOSHONE	0480N	0050E	34		424812
IMC188528	MU 4	ID	SHOSHONE	0480N	0050E	34		424813
IMC189116	RCM 1	ID	SHOSHONE	0470N	0050E	6		426663
IMC189116	RCM 1	ID	SHOSHONE	0480N	0050E	31		426663
IMC189117	RCM 2	ID	SHOSHONE	0470N	0050E	6		426664
IMC189117	RCM 2	ID	SHOSHONE	0480N	0050E	31		426664
IMC189118	RCM 3	ID	SHOSHONE	0470N	0050E	6		426665
IMC189119	RCM 4	ID	SHOSHONE	0470N	0050E	6		426666
IMC189120	RCM 5	ID	SHOSHONE	0470N	0050E	6		426667
IMC189121	RCM 6	ID	SHOSHONE	0470N	0050E	6		426668
IMC189122	RCM 7	ID	SHOSHONE	0470N	0050E	6		426669
IMC189123	RCM 8	ID	SHOSHONE	0470N	0050E	6		426670
IMC189124	RCM 9	ID	SHOSHONE	0470N	0050E	6		426671
IMC189125	RCM 10	ID	SHOSHONE	0470N	0050E	6		426672
IMC189126	RCM 11	ID	SHOSHONE	0470N	0050E	6		426673
IMC189127	RCM 12	ID	SHOSHONE	0470N	0050E	6		426674

Wednesday, March 18, 2009 Page 14 of 18

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Document      Page 26 of 43

Serial#	Claim Name	State	County	TWP	RNG	SEC	Inst.#
IMC189128	RCM 13	ID	SHOSHONE	0470N	0050E	6		426675
IMC189129	RCM 14	ID	SHOSHONE	0470N	0050E	6		426676
IMC189130	RCM 15	ID	SHOSHONE	0470N	0050E	6		426677
IMC189131	RCM 16	ID	SHOSHONE	0480N	0050E	32		426678
IMC189132	RCM 17	ID	SHOSHONE	0480N	0050E	32		426679
IMC189133	RCM 18	ID	SHOSHONE	0480N	0050E	32		426680
IMC189134	RCM 19	ID	SHOSHONE	0470N	0050E	5		426681
IMC189134	RCM 19	ID	SHOSHONE	0480N	0050E	32		426681
IMC189135	RCM 20	ID	SHOSHONE	0470N	0050E	5		426682
IMC189135	RCM 20	ID	SHOSHONE	0480N	0050E	32		426682
IMC189136	RCM 21	ID	SHOSHONE	0470N	0050E	4		426683
IMC189136	RCM 21	ID	SHOSHONE	0480N	0050E	32		426683
IMC189137	RCM 22	ID	SHOSHONE	0470N	0050E	5		426684
IMC189138	RCM 23	ID	SHOSHONE	0470N	0050E	4		426685
IMC189139	RCM 24	ID	SHOSHONE	0470N	0050E	5		426686
IMC189140	RCM 25	ID	SHOSHONE	0470N	0050E	5		426687
IMC189141	RCM 26	ID	SHOSHONE	0470N	0050E	5		426688
IMC189142	RCM 27	ID	SHOSHONE	0470N	0050E	5		426689
Claim Count: 262          @ $125 per claim =       $32,750
Snowstorm
IMC187368	S 4951	ID	SHOSHONE	0480N	0050E	24		418415
IMC187369	S 4952	ID	SHOSHONE	0480N	0060E	19		418416
IMC187369	S 4952	ID	SHOSHONE	0480N	0050E	24		418416
IMC187370	S 4953	ID	SHOSHONE	0480N	0060E	19		418417
IMC187370	S 4953	ID	SHOSHONE	0480N	0050E	24		418417
IMC187371	S 4954	ID	SHOSHONE	0480N	0060E	30		418418
IMC187371	S 4954	ID	SHOSHONE	0480N	0050E	25		418418
IMC187372	S 4955	ID	SHOSHONE	0480N	0060E	30		418419
IMC187372	S 4955	ID	SHOSHONE	0480N	0050E	25		418419
IMC187373	S 4956	ID	SHOSHONE	0480N	0060E	30		418420
IMC187374	S 4957	ID	SHOSHONE	0480N	0060E	30		418421
IMC187375	S 4958	ID	SHOSHONE	0480N	0060E	30		418422
IMC187376	S 4959	ID	SHOSHONE	0480N	0060E	30		418423
IMC187385	SNOW 1	ID	SHOSHONE	0480N	0060E	29		418407
IMC187386	SNOW 2	ID	SHOSHONE	0480N	0060E	29		418408
IMC187387	SNOW 3	ID	SHOSHONE	0480N	0060E	29		418409
IMC187388	SNOW 4	ID	SHOSHONE	0480N	0060E	29		418410
IMC187389	SNOW 5	ID	SHOSHONE	0480N	0060E	29		418411
IMC187390	SNOW 6	ID	SHOSHONE	0480N	0060E	29		418412
IMC187391	SNOW 7	ID	SHOSHONE	0480N	0060E	20		416413
IMC187392	SNOW 8	ID	SHOSHONE	0480N	0060E	20		418414
Claim Count: 21          @ $125 per claim =       $2,625

Wednesday, March 18, 2009 Page 15 of 18

Schedule 2.1(b)

Real Property Leases

1. Mining Lease and Agreement dated June 6, 2003 by and between Sterling Mining Company and Sunshine Precious Metals, Inc., as amended by Amendment to Mining Lease and Agreement dated February 15, 2006

2. Mining Lease and Agreement dated February 4, 2004 by and between Sterling Mining Company and Chester Mining Company

3. Mining Lease and Agreement dated February 25, 2004 by and between Sterling Mining Company and Mineral Mountain Mining and Milling Company

4. Agreement dated September 16, 2004 by and between Sterling Mining Company and Metropolitan Mines Corporation, Limited

5. Mining Lease dated March 1, 2006 by and between Sterling Mining Company and Rock Creek Mining Company

Schedule 2.1(c)

Transferred Personal Property

Coeur d’Alene (“CDA”) Office Equipment

See attached Appendix “D”

Wallace Office Equipment

See attached Appendix “E”

Now located at CDA office

Sunshine Mine Office Equipment

See attached Appendix “F”

Now located at CDA office

Mine Analyzer, CDA office

Installed Equipment and Rolling Stock located at the Sunshine Mine Complex

See attached Appendix “G”

Tailings Impoundment Facility Equipment

See attached Appendix “H”

Caterpillar Model 904B Wheel Loader and attachments

Vein Runner-II

LT-350 (7)

Mine Rescue

Supply Inventory - Parts and supplies for operation of mine (repair and maintenance)

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 5 of 28

APPENDIX “D”

CDA OFFICE EQUIPMENT

The following is a list of office equipment and furnishings for the office located in Coeur d’Alene, ID.

Item	Current Value
File cabinet	$	87.60
NEC Phone System	$	1,054.25
Office furniture	$	1,706.70
Computer for controller	$	294.55
Microsoft Computer & Software	$	20,923.38
3 Compaq Laptops (Ray, Jim, Fred)	$	1,037.30
Great Plains Enhancement	$	870.00
Great Plains Implementation	$	3,238.94
Great Plains Enhancements & Training	$	5,153.97
HP dl360 Server	$	1,434.03
Great Plains Implementation	$	1,457.50
Great Plains Implementation	$	1,744.38
Total Office Equipment	$	39,002.57

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 6 of 28

APPENDIX “E”

WALLACE OFFICE EQUIPMENT

The following is a list of office equipment and furnishings for the office located in Wallace, ID.

Item	Current Value
Exhibit Booth-Marketing	$	1,184.16
Safe in Wallace Office for coins	$	587.92
Customized Telephone	$	542.48
Customized Telephone Wallace Voice Mail	$	125.00
Color Computer printer	$	515.05
Laptop Computer	$	429.97
Computer for M. Hayes	$	278.68
Computer for Nichole	$	161.59
Total Office Equipment	$	3,824.84

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 7 of 28

APPENDIX “F”

SUNSHINE MINE OFFICE EQUIPMENT

The following is a list of office equipment and furnishings for the office located At the Sunshine Mine.

Item	Current Value
Autocad	$	871.41
Computer	$	447.36
Computer	$	378.35
Computer Plotter	$	306.25
2 Computers and printer	$	781.00
Sterling Sign	$	767.53
Geologist computer software	$	912.53
Computer for Accting manager	$	508.94
Computer for Mine Manager	$	293.20
New office equipment	$	303.84
Toshiba Laptop computer	$	503.29
Copy Machine (Purchased from KGM)	$	232.60
Autocad	$	3,076.63
Tererad Phone System	$	3,078.03
PacificCad	$	2,823.58
Server	$	756.58
Laptop - Lisa	$	564.12
Rotors, Modulators, Interface cards	$	1,526.53
Laptop - Jeff	$	928.53
New Server-Yankee Girl	$	984.35
Sonicwall(firewall)	$	1,383.70
MS Office	$	6,756.28
Autocad 2nd License	$	2,065.01
Adobe	$	3,544.87
HP Color Lasejet Printer	$	793.78
MSC digital Camera	$	237.50
MSC Off	$	413.29
TOTAL OFFICE EQUIPMENT	$	35,239.05

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 8 of 28

APPENDIX “G”

INSTALLED EQUIPMENT AND ROLLING STOCK

The following is a detailed list of all installed equipment and rolling stock owned by Sterling Mining Company located at the Sunshine Mine complex.

	Current Value
600 Rotary Compressor	$	2,371.26
Gas Forklift w/ Paper head	$	1,185.63
12B Muckers	$	474.25
12B Muckers	$	474.25
Tugger	$	189.70
1/2 Ton Motors	$	1,422.76
1/2 Ton Motors	$	1,422.76
1/2 Ton Motors	$	1,422.76
1/2 Ton Motors	$	1,422.76
Air Operated Gates/Cons Bin	$	1,422.76
Air Operated Gates/Cons Bin	$	1,422.76
Air Operated Gates/Cons Bin	$	1,422.76
Air Operated Gates/Cons Bin	$	1,422.76
60 Ton Coolers	$	474.25
61 Ton Coolers	$	474.25
62 Ton Coolers	$	474.25
63 Ton Coolers	$	474.25
64 Ton Coolers	$	474.25
New Pan Feeder	$	3,556.89
M8 Pump	$	71.14
Wire Feed Welders	$	355.69
Wire Feed Welders	$	355.69
Electric Forklift	$	4,742.52
Generator Set / Battery Charger	$	118.56
Welder	$	237.13
Air Hoist	$	237.13
Air Hoist	$	237.13
Air Hoist	$	237.13
Air Hoist	$	237.13
Air Hoist	$	237.13
Air Hoist	$	237.13
Air Hoist	$	237.13
Air Hoist	$	237.13
1/2 Ton Motor	$	1,422.76
Charger	$	118.56
22 Muckers	$	2,371.26
23 Muckers	$	2,371.26
24 Muckers	$	2,371.26
25 Muckers	$	2,371.26
12B Mucker	$	474.25

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 9 of 28

LM 56 Mucker	$	1,897.01
Sump Pumps	$	711.38
20HP Sump Pumps	$	948.50
20HP Sump Pumps	$	948.50
10HP Sump Pumps	$	355.69
10HP Sump Pumps	$	355.69
30HP Slushers	$	829.94
30HP Slushers	$	829.94
30HP Slushers	$	829.94
30HP Slushers	$	829.94
30HP Slushers	$	829.94
30HP Slushers	$	829.94
Charger	$	118.56
Charger	$	118.56
Large Tugger	$	355.69
30HP Pumps	$	426.83
30HP Pumps	$	426.83
30HP Pumps	$	426.83
30HP Pumps	$	426.83
30HP Pumps	$	426.83
Small Air Pumps	$	47.43
Small Air Pumps	$	47.43
Small Air Pumps	$	47.43
Small Air Pumps	$	47.43
Small Air Pumps	$	47.43
Small Air Pumps	$	47.43
M15 Pumps	$	94.85
M15 Pumps	$	94.85
M15 Pumps	$	94.85
M15 Pumps	$	94.85
M15 Pumps	$	94.85
M15 Pumps	$	94.85
3HP Flygt Pump	$	355.69
6 Ton Motors	$	1,422.76
7 Ton Motors	$	1,422.76
8 Ton Motors	$	1,422.76
9 Ton Motors	$	1,422.76
10 Ton Motors	$	1,422.76
11 Ton Motors	$	1,422.76
12 Ton Motors	$	1,422.76
5 Ton Motors	$	1,185.63
5 Ton Motors	$	1,185.63
6 Ton Motors	$	2,845.51
6 Ton Motors	$	2,845.51
6 Ton Motors	$	2,845.51
Rebuilt Controller	$	1,659.88
Chargers	$	237.13
Chargers	$	237.13
Chargers	$	237.13
HUL Tugger	$	355.69
Chargers	$	237.13

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 10 of 28

Chargers	$	237.13
Chargers	$	237.13
Chargers	$	237.13
Chargers	$	237.13
1 Ton OH Hoist	$	94.85
Kubota Tractor	$	474.25
Lg Pipe Machine	$	474.25
Small OH Hoist	$	118.56
5 Ton OH Hoist and Trolley	$	1,185.63
Hydraulic Press Welder	$	237.13
15HP Joy Air Slusher w/Bucker	$	948.50
30HP Slushers	$	165.99
30HP Slushers	$	165.99
30HP Slushers	$	165.99
30HP Slushers	$	165.99
30HP Slushers	$	165.99
Shot Crete Machine	$	355.69
Charger	$	237.13
1 Ton OH Hoist	$	94.85
Lathe	$	592.82
Lathe	$	592.82
Tools for Lathe	$	474.25
Pressure Washer	$	355.69
Jewel Shaft Timber	$	0.00
300HP Borehole Fan	$	500.00
200HP 37 Level Fan	$	500.00
Hobart 400 Welder	$	250.00
110 gal Fuel Trucks	$	250.00
110 gal Fuel Trucks	$	250.00
Timber Trucks	$	250.00
Timber Trucks	$	250.00
Timber Trucks	$	250.00
Timber Trucks	$	250.00
Timber Trucks	$	250.00
Timber Trucks	$	250.00
Timber Trucks	$	250.00
Timber Trucks	$	250.00
30KW Gen Set	$	250.00
12ft. Pump Column and Shaft Pipe	$	250.00
Mucker	$	1,875.00
Megger - Hoist Gen - Set	$	287.82
Atlas electric	$	951.25
Pump	$	2,840.00
Tools	$	11,527.90
Mancha with new battery	$	5,394.40
Pump (Hurley)	$	50,603.20
2 Husqavarnas	$	6,065.97
Pumps	$	1,337.50
Fork Lifts	$	8,466.75
Small Pumps	$	958.82
Mancha with new battery	$	4,275.00

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Schedules B    D    E    Page 11 of 28

2 Jack Leg Drills	$	1,947.75
Mine Dewatering Pumps	$	25,891.80
Rail Haulage Equipment Sidedump cars	$	1,875.00
Dewatering Pumps	$	309.17
Transformer	$	11,229.21
Shop Tools	$	14,875.94
U/G Shop Tools	$	921.88
3 Manchas	$	12,375.00
U/G Shop tools for Diesel Shop	$	1,819.40
U/G Shop tools for Diesel Shop	$	1,055.19
2 Pumps	$	3,656.25
Cap Lamp Batteries & Charger	$	6,313.75
2 Loci Battery Chargers	$	965.50
2 Club Cars	$	7,190.78
3CNTA8 Pump	$	27,619.11
4 Pumps	$	1,562.50
Loci Controller	$	3,610.00
Mancha Batteries & Charger	$	5,524.00
Shop Tools	$	4,395.30
2 Coffing Hoists	$	2,940.84
Loci Battery Chargers	$	3,476.50
SS Hoist Eaton Drive Control	$	47,662.49
SS Hoist Drive Transformer	$	10,149.75
Mancha Battery	$	1,044.00
Mancha Battery	$	655.00
Mancha Battery	$	1,517.00
4 Mancha Batteries	$	2,190.00
Loci Battery	$	3,407.25
SS Hoist Switchgear	$	14,802.75
SS Hoist Inverter & Motor	$	26,446.75
2 Manskips Silver Summit	$	15,125.00
UG Power Feed Cable	$	24,032.59
2000/2666 KVA 13,200-2400 Volt Delta Transforme	$	17,956.05
SS Hoist Control Panel	$	27,552.72
SS Hoist Hydraulic Brake Control System	$	36,214.98
5 200 Gallon Tanks	$	2,210.59
3 UG Parts Washers	$	1,124.99
2 3 Ton Coffing Air Hoists	$	2,990.84
2 Rebuilt Jack Leg Drills	$	1,086.50
Compressor Starter #9	$	8,736.94
Starter from PIP SS Elect	$	3,238.19
750 KVA Transformer	$	5,473.86
Silver Summit Hoist	$	190,933.80
Compressed Air Distrib System	$	13,054.97
Chippy Hoist	$	19,129.36
5 Toshiba Breakers	$	4,335.00
3 Ton Coffing Air Hoist	$	1,470.42
3 Ton Coffing Air Hoist	$	1,470.42
Welder	$	1,508.37
Welder	$	1,508.37
2 Galigher Pumps	$	3,750.00

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 12 of 28

Club Car	$	3,599.75
3 Transformers	$	5,880.00
Jewell Shaft	$	44,958.46
Silver Summit Shaft and Underground	$	142,437.65
2 Toshiba Breakers	$	1,749.00
4 - 480V Jumbo GFI	$	7,510.00
4 Pump Impellers	$	3,500.00
Jewell DD Hoist Ropes	$	16,473.00
Jewell Chippy Hoist Rope	$	10,695.63
Silver Summit DD Hoist Rope	$	15,956.85
Gould Pump & Strainer 1ORALC	$	3,494.75
UG Substation Power Feed	$	15,190.02
UG Phone System	$	26,270.64
Leaky Feeder	$	34,798.79
Sandfill System - Surface	$	22,390.66
Sandfill Distribution System	$	10,323.25
3 - Flygt 4GT Pumps - from Hecla	$	3,750.00
Rock House	$	26,738.46
Concentrate Handling	$	26,341.26
Crushing Circuits	$	1,778.72
Grinding Circuits	$	73,390.52
Floatation/Filtration	$	3,139.36
Atlas Copco Compressors	$	35,950.75
GE 5KV 600 Amp Motor Starter on C11	$	3,248.75
Atlas Copco Compressor	$	35,950.75
3 Loky Charges	$	3,507.00
Rebuild Greensburg Cruiser - 6T Battery Loco	$	11,000.00
DPL 100 FPG Diesel Pump & Tank	$	1,483.75
Total Machinery and Equipment	$	1,316,425.12
Shop Tools	$	10,387.34
Shop Tools	$	3,796.89
Shop Tools	$	3,569.88
Battery Packs & Charger - Mine Rescue	$	2,318.50
Mine Rescue Equipment	$	9,685.62
Pipe to Pumphouse	$	6,600.00
Water Line Extension	$	7,162.50
4 Surface Parts Washers	$	1,499.99
Miter Band Saw	$	1,132.41
50 Ton Iron Worker	$	1,875.40
Table Saw	$	1,593.94
Repair Shops	$	14,489.80
Plant Heating System	$	41,042.26
Grinnell Fire System	$	2,990.35
30 Unit Charger	$	3,127.50
30 Unit Charger	$	1,817.63
20 Battery Packs w/Lamps	$	2,600.00
21 Battery Packs w/Lamps	$	2,600.00
5000 Lb Pallet Scale	$	455.00
Radio System	$	2,702.28
Total Surface Equipment	$	121,447.27

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 13 of 28

2000 Chevy Suburban	$	5,314.96
2000 GMC 2500 Crew Cab	$	3,794.56
1998 Dodge Truck	$	2,000.00
Flatbed for Dodge Pick-up	$	300.00
1968 Boom Truck	$	875.00
1999 Chevy Truck	$	1,750.00
1996 Ford Explorer	$	875.00
1997 Chev. Pick-up	$	1,500.00
Flat Bed Trailer	$	200.00
Flatbed for Truck	$	400.00
2000 Ford F250 PU	$	4,207.29
Northwind, 1981 caterpiller 966C	$	5,375.00
Gehl Fork Lift	$	9,540.00
Diesel Forklift with Paperhead	$	3,971.03
Street Sweeper	$	1,300.00
Water Truck	$	1,187.50
1991 GMC Jimmy	$	500.00
Total Vehicles	$	43,064.70
Total	$	1,480,937.09

Case 09-20178-TLM    Doc 18-1    Filed 03/18/09    Entered 03/18/09  17:22:03    Desc

Schedules B    D    E    Page 14 of 28

APPENDIX “H”

TAILINGS IMPOUNDMENT FACILITY

EQUIPMENT AND IMPROVEMENTS

The following is a list of equipment and improvements for the Sunshine Mine tailings impoundment facility.

Item	Capitalized Amount
Tank	$	4,475.00
Tank	$	802.50
Flygt 30HP Submersible Pump	$	1,911.81
Lightning Mixer (Pond)	$	517.25
Water Treatment / Tails	$	53,176.25
2 Atlas Pumps	$	14,123.75
Pump Controls	$	3,930.00
Freight	$	981.00
2 Portable Water Treatment Units	$	30,600.00
Total Equipment	$	110,517.55

Schedule 2.1(h)

Securities Accounts and Marketable Securities

Accounts

D.A. Davidson and Co.: Account No. 72932162

Pennaluna & Company: Account No. LT5-114979

Sterling Mining Company DIP

Equity Holdings

1150-00

12/31/2009

		Shares			Value
In House
Chester	CHMN.PK		106,152	0.51	$	54,137.52
Chester	CHMN.PK		8,000	0.51	$	4,080.00
Metropolitan	MEMLA.PK		464,836	0.06	$	27,890.16
Total In House					$	86,107.68
Pennaluna
King Pine Creek	KPCM		33,000	0.01	$	330.00
Manmin LTD	MCAJF		5,000	0.025	$	125.00
Silver Surprize	SLSR		51,500	0.01	$	515.00
Total Pennaluna					$	970.00
DA Davidson
American Silver Mining	ASLM		1,100	0.25	$	275.00
Kimberly Gold Mines	KMGM		10,000	0	$	—
Mascot Silver Lead Mines	MSLM		350,000	0.02	$	7,000.00
Merger Mines	MERG		4,500	0.08	$	360.00
Mineral Mountain Mining	MMMM		10,000	0.135	$	1,350.00
Total DA Davidson					$	8,985.00
Total					$	96,062.68
Balance as of 9/30/2009					$	95,966.56
Net Change					$	96.12

Schedule 2.1(j)

Contracts

1. Agreement & Assignment by and between Sterling Mining Company and New Jersey Mining Company, dated April 20, 2006

2. Agreement by and among U.S. Silver Corporation (as successor to Coeur d’Alene Mines Corporation), New Jersey Mining Company (as successor to Plainview Mining Company, Inc.) and Merger Mines Corporation, dated July 26, 1978

3. Sterling Mining Lease by and between Sterling Mining Company and Silver Valley Resources Corporation, dated April 23, 1996

4. Lease Agreement by and between Cedar Creek Properties Inc. and Sterling Mining Company, dated March 24, 2006

Schedule 6.6

Legal Descriptions of Leased Real Property

Legal Description of Sunshine Leasehold Property

447230

REAL PROPERTY AND PERSONAL PROPERTY DESCRIPTION

No property subject to this lease may be moved, sold or otherwise disposed of without written permission of Sunshine until such time as Sterling exercises its option to purchase.

The properties described here are subject to immediate possession by Sterling upon execution of the lease agreement unless otherwise noted.

CONSIL MINE PROPERTY

The ConSil is defined as that area lying south of the fenced area. All fixtures, building, personal property inside those buildings are subject to this lease.

Tailings Pond, Access Roads

Specifically excepted from this lease are the properties lying north of the fenced area, including but not limited to, the Tailings Pond, the property East of the Tailings Pond, and the Property West of the Tailings Pond. However, the mineral rights located under these properties are subject to this lease. Sterling also has the right to use existing roads on the West property for the purpose of accessing the upper access road. If required, the ConSil fenced area will be surveyed by Sunshine.

Sunshine agrees to allow Sterling to use the pond area for mine discharge in the event that the ConSil begins production and during production. Sterling’s use of this area will be subject to all state and federal regulations.

SUNSHINE MINE PROPERTY

This property is generally defined as all properties lying to the south of the lay-down yard. Real and personal property subject to the lease are described below:

1) Area commonly referred to as “lay-down” yard. The northernmost boundary of this property is approximately described as the beginning of the fenced area/ beginning of the pad. All lands lying North of this are not subject to this lease and will remain with Sunshine, who will undertake a survey to delineate the property. Notwithstanding that the lay-down yard is included in this agreement, Sterling agrees to permit Sunshine to utilize this property until such time as Sterling formally notifies Sunshine of its need for the premises. This notification will occur no sooner than 90 days after ore production begins at the mine facility. All personal property in the lay-down yard remain the property of Sunshine with the exception of the marked electrical transformers and shaft guides.

2) Area commonly referred to as “Core Shed” The land lying inside the fenced area, and the shed along with its contained core samples. Also included are the spare parts for the hoists and processing machines located in the adjacent shed. All other personal property remains the property of Sunshine. Ownership and liability of the waste rock pile will remain with Sunshine.

EXHIBIT D-l

447230

2) Bus Garage. This property is included in the lease, but the contents and liability for the contents remain with Sunshine.

3) Between Bus Garage and Assay Lab. Personal property located in this area is retained by Sunshine.

4) Diamond Drill Shed. Building along with Batteries and core samples are included within this lease. Sunshine retains the right to determine whether the remaining personal properties are included within this lease during a 180 day period subsequent to its execution.

5) Records Building. The building is included as part of this lease agreement. The contents remain property of Sunshine. Sterling has full access to the contents, but the contents must remain on the Property.

6) Assay Office. Building and contents are subject to the lease.

7) Lab. Building and contents are subject to the lease.

8) Engineering Building. Building and contents are subject to the lease.

9) Brick Office Building. Building and contents are subject to the lease.

10) Hoist Room, Compressor Room, and other buildings lying to the south are subject to the lease with the exception of the contents of the Carpenter’s Shop.

11) Oil Room. Building is subject to lease, Sunshine retains the right to determine whether personal properties located within are included within this lease during a 180 day period subsequent to its execution.

12) Bit Room. Building and Contents are subject to lease.

13) Machine Shop. Building is subject to lease, Sunshine retains the right to determine whether personal properties located within are included within this lease during a 180 day period subsequent to its execution.

14) Repair Shop. Building is subject to lease, Sunshine retains the right to determine whether personal properties located within are included within this lease during a 180 day period subsequent to its execution.

15) Boiler Room. Building and Contents are subject to lease.

16) Processing Building. Building and Contents are subject to lease.

17) All Personal property underground is subject to the lease.

EXHIBIT D-2

447230

18) Sunshine retains the right to determine whether personal properties stored outside are included within this lease during a 180 day period subsequent to its execution.

19) Sunshine retains the right to determine whether personal properties not specifically identified are included within this lease during a 180 day period subsequent to its execution.

20) Warehouse. Parts specific to processing and hoisting equipment is included as part of the lease. All other personal property is subject to Sunshine’s right to determine whether they are included within this lease during a 180 day period subsequent to its execution.

21) Sunshine will designate one forklift as part of this lease.

EXHIBIT D-3

ATTACHEDMENT             

CONSIL

The mine property in its entirety, including complete mill facility. The complete underground system including ventilation fans, shaft pumps and air compressors on the Consil site. Electrical transformers and switch gear required to power this equipment.

SUNSHINE MINE

The hoisting facilities with heed-frames, sheave wheels, ropes, muck skips and man cages.

Main ventilation fans should remain in place and operational.

Air compressors come with the mine.

The mill facility must remain complete and fully functional and includes crushers. The back fill (sand Plant must remain as part of mill.

Any electrical transformers and switch gear required to power remaining infrastructure.

Any remaining spare parts inventory specific to fixed equipment will be included in the purchase.

EXHIBIT “E”

Legal Description of Chester Leasehold Property

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Document      Page 23 of 25

Chester Mining Company Property

Chester Group

Patented Claim Name	Mineral Survey Number
Hanna McKinley Bartlett Step and Half Chester Protection Lode	2083 2083 2083 2083 2083 2083

EXHIBIT “A”

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Document      Page 24 of 25

Chester Mining Company

Bismark Group

Patented Claim Name	Mineral Survey Number
Bismark #1 Bismark #3 New York	3320 3320 3319

EXHIBIT “B”

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Document      Page 25 of 25

Chester Mining Company

Mineral Mountain Group

Chester Mining Company owns an undivided 1/3^rd interest in all minerals located in and on the following claims:

Patented Claim Name	Mineral Survey Number
Dipper Monitor Little Giant Instructive	3310 3240 3240 3240

EXHIBIT “C”

Legal Description of Mineral Mountain Leasehold Property

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Document      Page 23 of 23

Mineral Mountain Mining and Milling Company’s Patented Claims

Patented Claim Name	Mineral Survey Number
Dipper Monitor Little Giant Instructive	3310 3240 3240 3240

EXHIBIT “A”

Legal Description of Metropolitan Leasehold Property

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Document      Page 11 of 12

Metropolitan Mining Company Limited Land Ownership

Table 1: Metropolitan’s unpatented mineral lode claims.

Serial No	Claim Name/Number	County	Mr  Twn        Rng        Sec
IMC22329	JOHN G	SHOSHONE	08 0480N 0030E 023
IMC22332	LAUREL	SHOSHONE	08 0480N 0030E 022
IMC22358	GRANT	SHOSHONE	08 0480N 0030E 022
IMC22359	HUDSON	SHOSHONE	08 0480N 0030E 022
IMC22360	KING	SHOSHONE	08 0480N 0030E 022
IMC22361	LORA NO 1	SHOSHONE	08 0480N 0030E 022
IMC22362	LORA NO 2	SHOSHONE	08 0480N 0030E 022
IMC22365	MADALENE	SHOSHONE	08 0480N 0030E 022
IMC22369	SAXON	SHOSHONE	08 0480N 0030E 023
IMC22373	STEDEBAKER	SHOSHONE	08 0480N 0030E 023
IMC22374	TOUGH GOING	SHOSHONE	08 0480N 0030E 022
IMC22376	UTICA	SHOSHONE	08 0480N 0030E 022
IMC22377	WAYNE	SHOSHONE	08 0480N 0030E 022
IMC22379	NI WOT	SHOSHONE	08 0480N 0030E 022
IMC22380	BOSTON FRACTION	SHOSHONE	08 0480N 0030E 022

Table 2: Metropolitan’s Patented mineral lode claims,

only partially owned by Metropolitan in Shoshone County

Name	Survey Number
Gretchen Plover	3272 3272

Exhibit “1”

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Document      Page 12 of 12

Unpatented claims to be conveyed to Metropolitan, to be subject to the provisions of the Agreement:

Serial No	Serial No	County	Mr  Twn        Rng        Sec
IMC186438	COMNER	SHOSHONE	08 0480N 0030E 027
IMC186445	PEARL	SHOSHONE	08 0480N 0030E 027
IMC186436	IZARD	SHOSHONE	08 0480N 0030E 028
IMC186437	IZARD FR.	SHOSHONE	08 0480N 0030E 027
IMC186441	BURNS	SHOSHONE	08 0480N 0030E 027
IMC186442	BELL	SHOSHONE	08 0480N 0030E 027
IMC186091	MET #2	SHOSHONE	08 0480N 0030E 022
IMC186092	MET #1	SHOSHONE	08 0480N 0030E 022
IMC186093	MET #5	SHOSHONE	08 0480N 0030E 022
IMC185847	MET #4	SHOSHONE	08 0480N 0030E 022
IMC185848	MET #3	SHOSHONE	08 0480N 0030E 022
IMC186088	MET #8	SHOSHONE	08 0480N 0030E 027
IMC186089	MET #6	SHOSHONE	08 0480N 0030E 022
IMC186090	MET #7	SHOSHONE	08 0480N 0030E 027
IMC186094	MET #10	SHOSHONE	08 0480N 0030E 027
IMC186095	MET #11	SHOSHONE	08 0480N 0030E 022
IMC186451	WADLEIGH	SHOSHONE	08 0480N 0030E 028
IMC186452	WADLEIGH FR.	SHOSHONE	08 0480N 0030E 027
IMC186482	MET #1 FR.	SHOSHONE	08 0480N 0030E 022
IMC186486	MET #13 FR.	SHOSHONE	08 0480N 0030E 022
IMC186484	MET #12	SHOSHONE	08 0480N 0030E 028
IMC186485	MET #13	SHOSHONE	08 0480N 0030E 022
IMC186487	MET #14	SHOSHONE	08 0480N 0030E 021
IMC186900	METROPOLITAN 2 FRACT	SHOSHONE	08 0480N 0030E 022
IMC186901	METROPOLITAN	SHOSHONE	08 0480N 0030E 022

Claims, In addition to the above which were previously a part of the Destroyer Group, to be conveyed to Metropolitan, to be subject to the provisions of the Agreement:

IMC186453	NEWSOME (ptn.)
IMC186455	STEVENS (ptn.)
IMC186456	MALLIGAN (ptn.) (was previously Halligan)
IMC186470	CRESENT # 8 (ptn.)
IMC186484	MET #12 (ptn. of new claim)
IMC186487	MET #14 (ptn. of new claim)
IMC186488	MET #15 (ptn. of new claim)
IMC186489	MET #16 (ptn. of new claim)
IMC186490	MET #17 (ptn. of new claim)
IMC186491	MET #18 (ptn. of new claim)
IMC186469	CRESCENT #1 (ptn.)
IMC186881	COLBERT 2 (ptn.)

Exhibit “2”

Lode Mining Claims Listed in the Metropolitan Agreements

But Not Otherwise Listed in Exhibit “1” to the Metropolitan Lease

Claim Name	County
B Lode	Shoshone
Edna	Shoshone
Fuller	Shoshone
Garden	Shoshone
Hopeful	Shoshone
K Lode	Shoshone
Laurel Frac.	Shoshone
Lora No. 3	Shoshone
Lucille	Shoshone
Model	Shoshone
Overland	Shoshone
Pearl	Shoshone
Sidney	Shoshone
Sprague	Shoshone
Star	Shoshone
Sterling Silver	Shoshone
Travel Frac.	Shoshone
Wendell	Shoshone
Wolfton No. 1	Shoshone
Wolfton No. 2	Shoshone
Wolfton No. 3	Shoshone
Wolfton No. 4	Shoshone

Wolfton No. 5	Shoshone
Wolfton No. 6	Shoshone
Wolfton No. 7	Shoshone

Legal Description of Rock Creek Leasehold Property

Case 09-20178-TLM    Doc 230    Filed 06/30/09    Entered 06/30/09    16:46:09    Desc Main

Document      Page 28 of 38

DESCRIPTION OF PROPERTY

A. Unpatented Mining Claims:

IMC#	Claim Name
186366	G12
186367	C.R.
186368	Edna Mae
186369	Silver Coin
186370	Nook
186371	Blue Jay
186372	Woodcutter
186373	Flora
186374	F-l
186375	BJF
186376	BJ Extension
186377	Silver Dollar
186378	Rock Creek Ext. #3
186379	R.C.E. No. 2
186380	R.C.E. No. 5
186381	E-7
186382	Grey Copper #1
186383	D-l
186384	D-7
186385	D-8
186386	D-9
186387	R.C. - 79
186388	R.C. - 80
186389	R.C. - 81
186390	R.C. - 81B
186391	R.C. - 92B

B. Patented Mining Claims:

Cape Nome – Mineral Survey Number 1482

EXHIBIT “A”

Page 1 of 1

Schedule 6.7

Monetary Defaults under Real Property Leases

Real Property Lease	Default(s) Cured	Default(s) Outstanding and to be paid on the Asset Purchase Closing Date1
Mining Lease and Agreement dated June 6, 2003 by and between Sterling Mining Company and Sunshine Precious Metals, Inc., as amended by Amendment to Mining Lease and Agreement dated February 15, 2006	EPA/Coeur d’Alene Tribe Settlement amount of $1,250,000	[Unpaid lease payments of $140,000 ($10,000 monthly lease payments unpaid from March 2009)] [Lien for $99,408.51 (plus interest, costs and attorney fees) filed 9/17/08 by Atlas Mining Company] [Lien for $131,526.62 (plus interest, costs and attorney fees) filed 6/30/08 by Miller Sales & Engineering] [Lien for $22,302.24 (plus interest, costs and attorney fees) filed 12/23/09 by Murphy, Bantz & Bury, P.S. against Sunshine Precious Metals, Inc.]
Mining Lease and Agreement dated February 4, 2004 by and between Sterling Mining Company and Chester Mining Company	Lease payments of [$11,400 ($600 monthly lease payments beginning October 2008)]
Mining Lease and Agreement dated February 25, 2004 by and between Sterling Mining Company and Mineral Mountain Mining and Milling Company	Lease payments of [$7,200 (annual lease payments of $3,600 due each February since February 2009)]

¹  Estimates as of the Execution Date. Debtor’s counsel to confirm such amounts.

Agreement dated September 16, 2004 by and between Sterling Mining Company and Metropolitan Mines Corporation, Limited	Lease payments of [$14,000 (monthly lease payments beginning March 2009)]
Mining Lease dated March 1, 2006 by and between Sterling Mining Company and Rock Creek Mining Company	Lease payments of [$7,000 (monthly lease payments beginning March 2009)]

Schedule 6.8(a)

Disclosures Regarding Reserve Report

After the date of the Reserve Report, Seller has rejected the following leases of real property:

1. Mining Lease and Agreement between Seller and Merger Mines Corporation dated July 20, 2004;

2. Mining Lease and Purchase Agreement between Seller and Larry M. Appelgate and Brian G. White dated January 18, 2006;

3. Mining Lease Agreement between Seller and Shoshone Business Center effective September 26, 2005;

4. [Shoshone Silver Mining Company Lease];

5. [New Jersey Mining Lease]; and

6. [Western Continental Lease]

EX-2.2

Exhibit 2.2

AGREEMENT AND PLAN OF MERGER AND AMALGAMATION

AGREEMENT AND PLAN OF MERGER AND AMALGAMATION, dated as of February 22, 2011 between Los Gatos Limited, a Bermuda exempted company (“Los Gatos”) and Sunshine Silver Mines Corporation, a Delaware corporation (“DelCo”).

WHEREAS, the Boards of Directors of each of Los Gatos and DelCo have determined that it is advisable that Los Gatos be merged with and into DelCo (the “Merger”), on the terms and subject to the conditions contained herein and in accordance with the General Corporation Law of the State of Delaware and the Companies Act 1981 of Bermuda, as amended.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, and in order to set forth the terms and conditions of the Merger and the mode of carrying the same into effect, Los Gatos and DelCo hereby agree as follows:

Section 1. The Merger. At the Effective Time (as defined in Section 2), Los Gatos shall be merged and amalgamated with and into DelCo, the separate corporate existence of Los Gatos shall cease, and DelCo shall continue as the surviving corporation (hereinafter sometimes referred to as the “Surviving Corporation”).

Section 2. Effective Time of the Merger. The Merger shall become effective immediately upon the filing of this Agreement or a Certificate of Merger relating to the Merger with the Secretary of State of the State of Delaware (the time of such filing being the “Effective Time”).

Section 3. Certificate of Incorporation and By-laws. The Certificate of Incorporation of DelCo, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended as provided by law or such Certificate of Incorporation. The By-laws of DelCo, as in effect immediately prior to the Effective Time, shall be the By-laws of the Surviving Corporation until thereafter amended as provided by law, the Certificate of Incorporation of the Surviving Corporation or such By-laws.

Section 4. Directors and Officers. The directors of DelCo immediately prior to the Effective Time as set out in Schedule I shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation, and the officers of DelCo immediately prior to the Effective Time shall be the initial officers of the

Surviving Corporation, in each case until their respective successors are duly elected or appointed and qualified.

Section 5. Conversion of Shares. At the Effective Time, each issued and outstanding preferred share of par value US $0.01 and each issued and outstanding ordinary share of par value US $0.01 per share, of Los Gatos (“Los Gatos Common Stock”) shall, without any action on the part of Los Gatos or DelCo, be deemed converted into approximately 0.15517 issued and outstanding shares of the Common Stock, par value $0.001 per share, of DelCo (“DelCo Common Stock”), and each issued and outstanding share of DelCo Common Stock shall remain outstanding following the Effective Time. At the Effective Time, each holder of options to purchase Los Gatos Common Stock (each, a “Los Gatos Option”) shall, without any action on the part of Los Gatos or DelCo, be deemed to acquire options of DelCo to purchase DelCo Common Stock equal to approximately 0.15517 multiplied by the number of shares of Los Gatos Common Stock underlying such person’s Los Gatos Option, at an exercise price of $2.32 per share.

SECTION 6. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written by their respective officers thereunto duly authorized.

LOS GATOS LIMITED
By:	/s/ Pearline McIntosh
	Title: Director

ATTEST:

/s/ Samantha Hayward

Secretary

SUNSHINE SILVER MINES CORPORATION
By:	/s/ Michael Williams
	Title: President

ATTEST:

/s/ Emily Goldberg

Secretary

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SCHEDULE I

Initial Directors of DelCo:

Guy Weltsch

Michael Williams

Andrew Shapiro

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EX-10.1

Exhibit 10.1

Execution Version

PURCHASE AGREEMENT

by and between

LIBERTY METALS & MINING HOLDINGS, LLC

and

SUNSHINE SILVER MINES CORPORATION

As of February 8, 2011             

TABLE OF CONTENTS

		Page
ARTICLE I CERTAIN DEFINITIONS AND OTHER MATTERS			1
Section 1.01.	Certain Definitions		1
Section 1.02.	Terms Defined in Other Sections		9
Section 1.03.	Interpretation		10
ARTICLE II THE PURCHASE; CLOSING; DELIVERIES; ADJUSTMENT			10
Section 2.01.	Purchase and Sale		10
Section 2.02.	Closing		11
Section 2.03.	Investor Diligence Period		11
Section 2.04.	Company Deliveries at the Closing		12
Section 2.05.	Investor Deliveries at the Closing		12
Section 2.06.	Adjustment to Number and Type of Securities		13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY			13
Section 3.01.	Corporate Existence and Power; Corporate Authorization		13
Section 3.02.	No Consents or Approvals		15
Section 3.03.	Non-Contravention		15
Section 3.04.	Capitalization and Ownership of Subsidiaries		16
Section 3.05.	Absence of Certain Changes; No Material Liabilities		17
Section 3.06.	Compliance with Laws; Non-environmental Permits		17
Section 3.07.	Legal Proceedings		18
Section 3.08.	Employee Benefits		19
Section 3.09.	Labor and Employment Matters		19
Section 3.10.	Real Property; Personal Property		19
Section 3.11.	Material Contracts		23
Section 3.12.	Environmental Matters		24
Section 3.13.	Insurance		26
Section 3.14.	Brokers or Finders		27
Section 3.15.	Taxes		27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INVESTOR			28
Section 4.01.	Corporate Existence and Power; Corporate Authorization		28
Section 4.02.	No Consents or Approvals		28
Section 4.03.	Non-Contravention		29
Section 4.04.	Legal Proceedings		29
Section 4.05.	Private Placement		29
Section 4.06.	Available Funds		30
Section 4.07.	Brokers or Finders		30
ARTICLE V COVENANTS AND AGREEMENTS			30
Section 5.01.	Conduct of Business		30

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Section 5.02.	Access and Information	30
Section 5.03.	Efforts to Consummate; Further Assurances; Certain Covenants	31
Section 5.04.	Confidentiality	32
Section 5.05.	Investigation; No Other Company Representations or Warranties	32
Section 5.06.	Additional Equity Issuances	33
ARTICLE VI CONDITIONS TO CLOSING		34
Section 6.01.	Conditions to Obligations of the Company and Investor	34
Section 6.02.	Conditions to Investor’s Obligations	34
Section 6.03.	Conditions to the Company’s Obligations	35
Section 6.04.	Frustration of Closing Conditions	35
ARTICLE VII TERMINATION		35
Section 7.01.	Termination	35
Section 7.02.	Effect of Termination	36
ARTICLE VIII SURVIVAL; INDEMNIFICATION		36
Section 8.01.	Survival	36
Section 8.02.	Indemnification	37
Section 8.03.	Procedures	38
Section 8.04.	Exclusivity	40
Section 8.05.	Additional Limitations and Adjustments	40
ARTICLE IX MISCELLANEOUS		41
Section 9.01.	Notices	41
Section 9.02.	No Third-Party Beneficiaries	42
Section 9.03.	Amendments; Waivers	42
Section 9.04.	Expenses	42
Section 9.05.	Successors and Assigns	42
Section 9.06.	Governing Law	42
Section 9.07.	Arbitration	43
Section 9.08.	Specific Performance	43
Section 9.09.	Counterparts; Effectiveness	43
Section 9.10.	Captions	44
Section 9.11.	Disclosure Schedule	44
Section 9.12.	Entire Agreement	44
Section 9.13.	Publicity; Public Announcements	44
Section 9.14.	Severability	44
Section 9.15.	No Strict Construction	45
Section 9.16.	Foreign Currencies	45

Exhibits

Exhibit A Form of Stockholders Agreement

ii

PURCHASE AGREEMENT

This PURCHASE AGREEMENT, dated as of February 8, 2011 (this “Agreement”), is entered into by and between LIBERTY METALS & MINING HOLDINGS, LLC, a Delaware limited liability company (“Investor”), and SUNSHINE SILVER MINES CORPORATION, a Delaware corporation (the “Company”).

W I T N E S S E T H:

WHEREAS, prior to the Closing, the Merger shall have been consummated;

WHEREAS, immediately following the consummation of the Merger, Silver Opportunity Partners, LLC, a Delaware limited liability company (“SOP”), and Los Gatos Ltd., a Bermuda company (“Los Gatos”), will be wholly-owned Subsidiaries of the Company;

WHEREAS, the parties have agreed that, as of the date hereof, the fair market value of SOP is approximately $276,500,000.00 and the fair market value of Los Gatos is approximately $375,000,000.00; and

WHEREAS, upon the terms and conditions set forth in this Agreement, Investor desires to purchase from the Company, and the Company desires to sell to Investor, 8,318,264 shares of Company Common Stock (the “Shares”), which will represent, as of the Closing and subject to Section 5.06, approximately 15% of the Company Common Stock that will be issued and outstanding on a fully-diluted basis as of the Closing.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

CERTAIN DEFINITIONS AND OTHER MATTERS

Section 1.01. Certain Definitions. As used in this Agreement and the Disclosure Schedule hereto, the following terms have the respective meanings set forth below.

“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person. For purposes of this definition, the term “Control” (including its correlative meanings, the terms “Controlling”, “Controlled by” and “under common Control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Antitrust Division” means the Antitrust Division of the United States Department of Justice.

“Basket Amount” means $1,000,000.00.

“Business” means the businesses of the Company and its Subsidiaries.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banking institutions in New York City are authorized or required by Law or action of a Governmental Authority to be closed.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company Breach” means the failure of any representation or warranty contained in this Agreement and made by the Company (other than those representations or warranties contained in Sections 3.01, 3.04, 3.10(a), 3.10(b), 3.10(c), 3.10(d), 3.10(e), 3.10(h), 3.14 and 3.15) to be true and correct when made or deemed made.

“Company Exception Breach” means the failure of any representation or warranty contained in Sections 3.01, 3.04, 3.14 or 3.15 to be true and correct when made or deemed made.

“Company Common Stock” means the common stock, par value $0.001 per share, of the Company.

“Company Indemnitees” means, collectively, the Company, its Affiliates and its and their respective stockholders (other than Investor and any of its Affiliates), members, partners, officers, directors, employees and agents.

“Company Material Adverse Effect” means any event, circumstance, change or effect (a) that is materially adverse to the prospects of the Business of the Company and its Subsidiaries after giving effect to the Merger, taken as a whole, but not including any such event, circumstance, change or effect resulting from, arising in connection with or attributable to (i) changes or conditions affecting the industries in which the Company and its Subsidiaries operate generally or affecting the economy, credit or financial or capital markets in the United States or elsewhere in the world, including changes in mineral or commodity prices or interest or exchange rates or (ii) changes in economic, regulatory or political conditions generally, in each case, other than those that affect the Company and its Subsidiaries in a materially disproportionate manner relative to other for profit participants in the industries and the geographic markets in which the Company and its Subsidiaries conduct the Business after taking into account the size of the Company and its Subsidiaries relative to such other for profit participants or (b) that prevents or materially delays the ability of the Company and its Subsidiaries to consummate the Transactions. The foregoing notwithstanding, no event, circumstance, change or effect arising or resulting from any of the following, either alone or in combination, shall constitute or be taken into account in determining whether there has been a Company Material Adverse Effect: (A) the announcement or performance of this Agreement and the Transactions (including compliance with the covenants set forth herein, any action taken or omitted to be taken by the Company and its Subsidiaries at the request or with the prior

2

written consent of Investor), including, to the extent arising therefrom, any termination of, reduction in or negative impact on relationships, contractual or otherwise, with any customers, suppliers, distributors, advertisers, regulators, partners or employees of the Company, its Subsidiaries or the Business, (B) litigation arising from or related to the Transactions or entering into of this Agreement, (C) acts of war (whether or not declared), terrorism, natural disasters or weather or climatic-related conditions (or any other force majeure event, whether or not weather-related), or the escalation or worsening of any such acts, developments or conditions, (D) any change resulting or arising from the identity of, or any facts or circumstances relating to, Investor or its Affiliates, (E) changes or prospective changes in any Laws or applicable accounting regulations or principles or the interpretations or enforcement thereof, or (F) the fact, in and of itself (and not the underlying causes thereof unless otherwise excluded) that the Company or its Subsidiaries failed to meet any internal or external projections, forecasts, or predictions or estimates (I) of revenue, earnings, cash flow or cash position for any period or (II) with respect to any mineral endowment of the properties of the Company and its Subsidiaries.

“Company Title Breach” means the failure of any representation or warranty contained in Sections 3.10(a), (b), (c), (d), (e) and (h) to be true and correct when made or deemed made.

“Confidentiality Agreement” means the Confidentiality Agreement, dated as of October 21, 2010, between Investor and Precious Metals Opportunities Inc.

“Contract” means any mortgage, indenture, lease, contract, agreement, instrument, bond or note.

“Core Idaho Properties” means the Owned Real Property, the Mineral Interests, the Leased Real Property and the Unpatented Claims located in the State of Idaho owned, leased or otherwise held by SOP and listed on Section 3.10(j) of the Disclosure Schedule.

“Damages” means any and all damages, losses, Liabilities, costs, fines, penalties, expenses (including reasonable out-of-pocket legal and accounting fees), assessments, settlements and judgments, whether incurred in connection with any Legal Proceeding or otherwise (including Property Damages), but Damages shall not include (and in no event shall any Indemnifying Party have any liability under this Agreement for) any remote, indirect, consequential, special, speculative, exemplary or punitive damages, damages for lost profits, or any theory of loss based on a multiple of any type of gain, earnings or related measures or diminution of value (other than with respect to a diminution in value solely for purposes of determining Property Damages).

“Debt” means, with respect to any Person at any time, without duplication, (a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all obligations of such Person to pay the deferred purchase price of property or services, except (i) trade accounts payable that arise in the ordinary course of business consistent with past practice and (ii) obligations relating to employee benefits or any other compensatory arrangements in favor of any employee; (d) all obligations of such Person as lessee under capital leases other than capital leases relating to equipment entered into in the ordinary course of business consistent with past practice; (e) all

3

obligations of such Person, which such Person is required to, or may, at the option of any other Person, become obligated to, redeem, repurchase or retire; (f) all Debt of others secured by a Lien on any asset of such Person; and (g) all Debt of others guaranteed by such Person.

“Disclosure Schedule” means the disclosure schedule that the Company has delivered to Investor on the date hereof.

“Employee Plan” means any “employee benefit plan” (as defined in Section 3(3) of ERISA), each employment, severance or similar Contract, plan, arrangement or policy and each other plan, policy, arrangement or practice (written or oral) providing for compensation, bonuses, stock option or other stock related rights or other forms of incentive or deferred compensation, severance, vacation, workers’ compensation, health, life, disability, AD&D, sick leave or medical benefits, insurance (including any self-insured arrangements), or post-employment welfare, retirement or pension benefits, which (a) is maintained or sponsored by the Company or its Subsidiaries and (b) covers any current or former employee, director or consultant of the Company or its Subsidiaries or with respect to which the Company or its Subsidiaries has any current liability or may have any potential liability prior to or immediately following the consummation of the Transactions.

“Environmental Claims” means any and all actions, suits, demands, demand letters, notices of noncompliance or violation, notices of liability or potential liability, investigations, proceedings, consent orders or consent agreements or claims relating to any Environmental Law or any Hazardous Substances.

“Environmental Laws” means any Law as in effect on or prior to the Closing Date relating to pollution, contamination, Hazardous Substances or protection of the environment, including, to the extent applicable, the Clean Air Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Federal Water Pollution Control Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, the Occupational Safety and Health Act, the Emergency Planning and Community Right to Know Act, the Atomic Energy Act, the Oil Pollution Act, the Mine Safety and Health Act, the General Law on Ecological Balance and Environmental Protection and the Federal Law of Waters and Federal Law on Metrology and Standards, each as amended; and any corresponding or analogous foreign, territorial, tribal, state or local Laws which are applicable to the Company, any of its Subsidiaries or the Real Property.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” of any entity means any other entity which, together with such entity, would be treated as a single employer under Section 414 of the Code.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, with respect to all or any portion of the Idaho Properties, the amount of money that would be paid therefor as of the Closing to the Company, if under no compulsion to sell, by a willing buyer unaffiliated with the Company, under no

4

compulsion to buy, where such buyer intended to use such Idaho Properties for mineral exploration, development and mining.

“FTC” means the United States Federal Trade Commission.

“GAAP” means United States generally accepted accounting principles.

“Governmental Authority” means any U.S. federal, state or local or any tribal or foreign court, governmental department, commission, authority, board, bureau, agency or other instrumentality.

“Hazardous Substances” means any substance, whether solid, liquid or gaseous, that, whether by its nature or its use or any other cause, is regulated or from which liability or Environmental Claims might arise under any applicable Environmental Law or which causes or poses a threat to cause contamination or a nuisance on property or a hazard to the environment or to the health, safety and welfare of Persons, including any (a) dangerous, toxic or hazardous pollutant, contaminant, chemical, waste, material or substance defined as or included in the definition of “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,” “toxic substance,” “toxic pollutant” or words of similar meaning or import found in any applicable Environmental Law; (b) petroleum hydrocarbons, petrochemical or petroleum products, natural gas, crude oil or any fraction or derivative thereof; and (c) asbestos-containing materials, polychlorinated biphenyls, explosive or radioactive materials, urea formaldehyde foam or radon gas.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Idaho Properties” means the Core Idaho Properties and the Non-Core Idaho Properties.

“Investor Breach” means the failure of any representation or warranty contained in this Agreement and made by Investor (other than those representations or warranties contained in Sections 4.01, 4.05 and 4.06 of this Agreement) to be true and correct when made or deemed made.

“Investor Exception Breach” means the failure of any representation or warranty contained in Sections 4.01, 4.05 or 4.06 of this Agreement to be true and correct when made or deemed made.

“Investor Indemnitees” means, collectively, Investor, its Affiliates, and its stockholders, members, partners, officers, directors and employees.

“IRS” means the Internal Revenue Service.

“knowledge” means, (a) with respect to the Company, the actual knowledge of each of the Persons set forth on Section 1.01-1 of the Disclosure Schedule, and (b) with respect to Investor, the actual knowledge of the executive officers of Investor. “Know”, “knows” and correlative terms will be read to have similar meanings.

5

“Law” means any law (including common law), statute, code, ordinance, rule, regulation, injunction, registration, permit, order, license, authorization, decree, judgment or other directive of any Governmental Authority.

“Legal Proceeding” means any private or governmental action, suit, complaint, arbitration, legal or administrative proceeding or investigation.

“Liabilities” means any and all debts, liabilities, commitments and obligations, whether or not fixed, contingent or absolute, matured or unmatured, direct or indirect, liquidated or unliquidated, accrued or unaccrued, known or unknown, and whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto.

“Lien” means any lien, mortgage, pledge, security interest, encumbrance or other similar security arrangement which grants to any Person any security interest, including any restriction on the transfer of any asset, any right of first offer, right of first refusal, right of first negotiation or any similar right in favor of any Person, any restriction on the receipt of any income derived from any asset and any limitation or restriction on the right to own, vote, sell or otherwise dispose of any security, but excluding any such restrictions, limitations and other encumbrances for Taxes not yet due and payable; provided, however, that any restrictions, limitations or other encumbrances agreed to in writing between Investor (or any of its Affiliates) and the Company (or any of its Affiliates) will not constitute a Lien with respect to the Shares.

“List” means the United States Environmental Protection Agency’s (EPA) National Priorities List (NPL) of Hazardous Substance Sites or CERCLA Information System (CERCLIS), Leaking Underground Storage Tank (LUST) site lists, voluntary cleanup program (VCP) site lists or any similar publicly available lists maintained by EPA or the Idaho Department of Environmental Quality with respect to sites from which there has been a Release of a Hazardous Substance.

“Maximum Amount” means $115,000,000.00.

“Merger” means the merger of Los Gatos with and into the Company, with the Company as the surviving corporation.

“Mexican Mining Law” means The Mining Law (published in the Official Daily of the Federation of Mexico on June 26, 1992 (and amended in 1996, 2005 and 2006)); and Regulations to the Mining Law (published in the Official Daily of the Federation of Mexico on February 2, 1999).

“Mexican Subsidiary” means Minera Plata Real, S. de R.L. de C.V.

“Mexico” means the United Mexican States.

“Non-Core Idaho Properties” means the Owned Real Property, the Mineral Interests, the Leased Real Property and the Unpatented Claims located in the State of Idaho owned, leased or otherwise held by SOP, other than the Core Idaho Properties.

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“Permitted Lien” means (a) Liens for Taxes, assessments and governmental charges or levies not yet due and payable or that are being contested in good faith and by appropriate proceedings; (b) mechanics’, carriers’, workmen’s, repairmen’s, materialmen’s or other Liens or security interests that arise in the ordinary course of business consistent with past practice or that are being contested in good faith and by appropriate proceedings; (c) leases, subleases and licenses; (d) Liens imposed by applicable Law; (e) pledges or deposits to secure obligations under workers’ compensation Laws or similar legislation or to secure public or statutory obligations; (f) pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature; (g) easements, covenants and rights of way (unrecorded and of record) and other similar restrictions of record, and zoning, building and other similar restrictions; and (h) any other Liens that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. With respect to the items listed in clauses (c) and (f) above, such items shall not constitute Permitted Liens unless they are listed in Section 1.01-2 of the Disclosure Schedule, except to the extent that they would not reasonably be expected to have a Company Material Adverse Effect.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Property Damages” means, with respect to a Company Title Breach, an amount determined by the following calculation: (i) a fraction, (A) the numerator of which is the decrease in the Fair Market Value of the Idaho Properties, as a whole (with such Fair Market Value determined as of the Closing Date), resulting solely from a Company Title Breach, and (B) the denominator of which is the Fair Market Value of the Idaho Properties, as a whole (determined as of the Closing Date and assuming for such purposes that such Company Title Breach had not occurred); multiplied by (ii) $276,500,000.00 (less the aggregate amount of any prior decreases in value of the Idaho Properties related to prior Company Title Breaches for which Investor has made valid Claims); multiplied by (iii) 0.15; multiplied by (iv) a fraction, (A) the numerator of which is the number of Shares owned by Investor at the time a Claim is made by Investor under Section 8.02(a)(i) (as adjusted for stock splits, dividends, recapitalizations and the like) and (B) the denominator of which is the number of Shares owned by Investor immediately following the Closing (as adjusted for stock splits, dividends, recapitalizations and the like). If the parties cannot agree on the Fair Market Value of the Idaho Properties after good faith negotiation, for purposes of calculating the Property Damages, such Fair Market Value determinations shall be made by Behre Dolbear & Company, Inc. or such other independent mining consulting company as may be mutually agreeable to the parties (the “FMV Consultant”). All fees and expenses of the FMV Consultant will be allocated equally between the Company and Investor. For the avoidance of doubt, the calculation set forth in clause (i) above is intended to determine the percentage diminution in value of the Idaho Properties (as of the Closing Date) caused solely by the Company Title Breach. Solely by way of example, if a Company Title Breach is determined to have decreased the Fair Market Value of the Idaho Properties by $20,000,000 (as of the Closing Date) and the Fair Market Value of the Idaho Properties (as of the Closing Date) is determined to be $400,000,000, the Property Damages would be equal to (I) 0.05 (e.g., $20,000,000 divided by $400,000,000); multiplied by (II)

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$276,500,000.00; multiplied by (III) 15% (assuming, at such time, Investor continues to hold the same number of Shares Investor held on the Closing Date).

“Property Material Adverse Effect” means any effect that arises solely from any lien, claim, encumbrance, exception or defect in title with respect to the Core Idaho Properties that is materially adverse to the Fair Market Value of the Core Idaho Properties as of the date hereof, taken as a whole; provided, that any such lien, claim, encumbrance, exception or defect in title would result in a Company Title Breach.

“Real Property Records” means the real property records of Shoshone County, Idaho and the records of the Idaho state office of the United States Bureau of Land Management.

“Regulatory Action” means any Legal Proceeding with respect to the Company or any of its Subsidiaries brought or instigated by any Governmental Authority in connection with any Environmental Claims, Release of Hazardous Substances or any Environmental Law.

“Release” means the spilling, leaking, disposing, discharging, emitting, depositing, ejecting, leaching, escaping or any other release or threatened release, however defined, whether intentional or unintentional, of any Hazardous Substance.

“Stockholders Agreement” means the Stockholders Agreement of the Company, dated as of the Closing Date, in substantially the form attached as Exhibit A hereto.

“Subsidiary” when used with respect to any Person, means (a) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by a Subsidiary of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar Lien, (b) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (i) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (ii) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (c) any other Person (other than a corporation) in which such Person, a Subsidiary of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has (i) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar Lien, or (ii) in the absence of such a governing body, at least a majority ownership interest.

“Tax” means any United States federal, state, local or foreign taxes, including any income, gross receipts, payroll, employment, excise, severance, stamp, business, premium, windfall profits, environmental (including taxes under Section 59A of the Code), capital stock, franchise, profits, withholding, social security or similar tax, unemployment, disability, property, sales, use, service, transfer, registration, value added tax or similar tax, any alternative or add-on minimum tax, and any estimated tax, whether computed on a separate, consolidated, unitary, combined or any other basis, in each case including any interest, penalty or addition thereto.

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“Tax Return” means any return, report, declaration, claim for refund, information return or statement required to be filed with any Taxing Authority, including any related schedules, attachments or other supporting information and any amendment thereto.

“Taxing Authority” means any Governmental Authority having jurisdiction over the assessment, determination, collection or imposition of Taxes.

“Third Party Environmental Claim” means any Legal Proceeding (other than a Regulatory Action) based on negligence, trespass, strict liability, nuisance, toxic tort or any other cause of action or theory relating to any Environmental Claims, Release of Hazardous Substances or any violation of Environmental Law.

“Transactions” means the transactions contemplated by this Agreement and the Stockholders Agreement.

Section 1.02. Terms Defined in Other Sections. The following terms are defined elsewhere in this Agreement in the following Sections:

Agreement	Preamble
Board of Directors	Section 5.06(a)
Broker	Section 3.14
Broker Fees	Section 3.14
Claim	Section 8.03(a)
Claim Notice	Section 8.03(a)
Closing	Section 2.02
Closing Date	Section 2.02
Company	Preamble
Company Closing Documents	Section 3.01(a)
Company Information	Section 5.05(a)
Company Material Contracts	Section 3.11(a)
Company Material Insurance Policy	Section 3.13
Consents	Section 3.02
Defect Notice	Section 2.03(a)
Defect Termination Notice	Section 2.03(b)
Diligence Deadline	Section 2.03(a)
Filings	Section 3.02
FLPMA	Section 3.10(c)
FMV Consultant	Section 1.01
Indemnified Party	Section 8.03(a)
Indemnifying Party	Section 8.03(a)
Investor	Preamble
Investor Closing Documents	Section 4.01
JAMS	Section 9.07
Leased Real Property	Section 3.10(d)
Listed Personal Property	Section 3.10(f)
Los Gatos	Recitals

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Mexican Mining Concessions	Section 3.10(i)
Mexican Subsidiary Securities	Section 3.04(e)
Mineral Interests	Section 3.10(b)
Mining Leases	Section 3.10(d)
Negotiation Deadline	Section 2.03(b)
Non-environmental Permits	Section 3.06(c)
Owned Real Property	Section 3.10(a)
Potential Contributor	Section 8.05(e)
Purchase Price	Section 2.01
Real Property	Section 3.10(d)
Rights of Way and Easements	Section 3.10(e)
Shares	Recitals
SOP	Recitals
Subsidiary Securities	Section 3.04(d)
Termination Date	Section 7.01(b)
Unpatented Claims	Section 3.10(c)
Water Rights	Section 3.10(g)

Section 1.03. Interpretation As used herein, except as otherwise indicated herein or as the context may otherwise require, (a) the words “include,” “includes” and “including” are deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of like import; (b) the words “hereof,” “herein,” “hereunder” and comparable terms refer to the entirety of this Agreement, including the schedules hereto, and not to any particular article, section or other subdivision hereof or schedule hereto; (c) any pronoun shall include the corresponding masculine, feminine and neuter forms; (d) the singular includes the plural and vice versa; (e) references to any agreement or other document are to such agreement or document as amended and supplemented from time to time; (f) references to any statute or regulation are to it as amended and supplemented from time to time, and to any corresponding provisions of successor statutes or regulations; (g) references to “Article,” “Section” or another subdivision or to an “Exhibit” are to an article, section or subdivision hereof or an “Exhibit” hereto; (h) all references to “the date hereof,” “the date of this Agreement” or similar terms (but excluding references to the date of execution hereof) refer to the date first above written, notwithstanding that the parties may have executed this Agreement on a later date; and (i) any reference herein to a “day” or number of “days” (without the explicit qualification of “Business”) shall be deemed to refer to a calendar day or number of calendar days and if any action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice may be taken or given on the next succeeding Business Day.

ARTICLE II

THE PURCHASE; CLOSING; DELIVERIES; ADJUSTMENT

Section 2.01. Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Company will issue and sell to Investor, and Investor will purchase from the Company, the Shares, in

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consideration for which, at the Closing, Investor will pay to the Company $115,000,000.00 in cash (or $13.825 per Share) (as may be adjusted in accordance with Section 2.03(b)(ii), the “Purchase Price”). Upon the Closing, Investor shall pay the Purchase Price to the Company by wire transfer of immediately available funds to an account or accounts designated by the Company in writing for such purpose prior to the Closing and delivery of the Shares.

Section 2.02. Closing. The closing (the “Closing”) of the transactions contemplated hereby shall take place at the offices of Baker Botts L.L.P., 30 Rockefeller Plaza, New York, New York at 9:00 a.m., local time, on the third Business Day following the satisfaction or waiver of the conditions set forth in Article VI (other than conditions that by their nature are to be satisfied and are in fact satisfied at the Closing or, to the extent permitted, waived), or at such other time or place as Investor and the Company may agree; provided, however, that in no event shall the Closing occur prior to March 8, 2011. The date upon which the Closing occurs is referred to as the “Closing Date.”

Section 2.03. Investor Diligence Period.

(a) Investor shall complete its due diligence with respect to title matters related to the Core Idaho Properties by March 4, 2011. If Investor, in the course of its due diligence, reasonably determines, in good faith, that there are any defects in title with respect to the Core Idaho Properties, Investor shall deliver a written notice (a “Defect Notice”), as soon as practicable but in no event later than 5:00 p.m. (Eastern Standard Time) on March 4, 2011 (the “Diligence Deadline”), to the Company, setting forth (i) a list of any and all purported title defect(s), (ii) a detailed summary of any such title defect(s), along with any supporting analysis and documentation, (iii) a statement as to whether Investor has reasonably determined, in good faith, that such title defect(s) constitutes a Property Material Adverse Effect and (iv) if Investor has not determined that such title defect(s) constitutes a Property Material Adverse Effect, Investor’s good faith estimate of the Property Damages with respect to such title defect(s).

(b) If Investor properly delivers a Defect Notice to the Company by the Diligence Deadline, then:

(i) if Investor has reasonably determined, in good faith, that a Property Material Adverse Effect exists, then Investor may give notice to terminate this Agreement pursuant to Section 7.01(e) by indicating Investor’s intention to so terminate this Agreement in the Defect Notice (such a Defect Notice, a “Defect Termination Notice”); and

(ii) if Investor has properly delivered the Defect Notice (and such Defect Notice is not a Defect Termination Notice), then (A) a representative of Investor, who shall be Diana Walters, and a representative of the Company, who shall be Igor Levental (or another executive designated by the Company), shall negotiate, in good faith, for a period of five Business Days following the delivery of the Defect Notice (the “Negotiation Deadline”), to resolve any issues identified in the Defect Notice, including, if so agreed, by means of an adjustment to the Purchase Price; and (b) the Closing shall

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occur on the earlier of (A) the Business Day following the date that Investor and the Company resolve the issues properly identified in the Defect Notice or (B) March 11, 2011 (provided that all of the other conditions to Closing set forth in Article VI have either been satisfied or waived (other than conditions that by their nature are to be satisfied and are in fact satisfied at the Closing or, to the extent permitted, waived)). If Investor and the Company are unable to resolve the issues properly identified in the Defect Notice by the Negotiation Deadline, Investor shall, following the Closing Date, be entitled to make a Claim for indemnification pursuant to Section 8.02(a)(i).

(c) If Investor does not properly deliver the Defect Notice to the Company before the Diligence Deadline, then Investor shall be deemed to have waived its rights under this Section 2.03; provided, however, that Investor shall not be deemed to have waived any of its rights to make a Claim for indemnification under Section 8.02(a)(i) with respect to breaches of representations and warranties set forth in Section 3.10.

(d) Investor shall, in good faith, keep the Company reasonably informed, on a periodic basis, of (i) Investor’s progress in its title due diligence efforts, and (ii) any defect(s) in title with respect to the Core Idaho Properties identified by Investor in connection with its title due diligence efforts.

Section 2.04. Company Deliveries at the Closing. At the Closing, the Company will deliver or cause to be delivered to Investor the following:

(a) one or more certificates representing the Shares;

(b) a written acknowledgment of the Company’s receipt of the Purchase Price;

(c) a certificate of an authorized officer of the Company pursuant to Sections 6.02(a) and 6.02(b);

(d) the Stockholders Agreement, duly executed by the Company; and

(e) such other documents as are reasonably required by Investor to be delivered to effectuate the Transactions or to evidence the authority, existence and good standing of the Company and its Subsidiaries; provided, however, that Investor shall use its reasonable best efforts to identify such documents to the Company in writing reasonably in advance of the anticipated Closing Date.

Section 2.05. Investor Deliveries at the Closing. At the Closing, Investor will deliver or cause to be delivered to the Company the following:

(a) a written acknowledgment of Investor’s receipt of one or more certificates representing the Shares;

(b) the Purchase Price, in immediately available funds, in the manner set forth in Section 2.01;

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(c) a certificate of an authorized officer of Investor pursuant to Sections 6.03(a) and 6.03(b);

(d) the Stockholders Agreement, duly executed by Investor; and

(e) such other documents as are reasonably required by the Company to be delivered to effectuate the Transactions or to evidence the authority, existence and good standing of Investor; provided, however, that the Company shall use its reasonable best efforts to identify such documents to Investor in writing reasonably in advance of the anticipated Closing Date.

Each document of transfer or assumption referred to in this Article II (or in any related definition set forth in Article I) that is not attached as an Exhibit to this Agreement shall be in customary form and shall be reasonably satisfactory in form and substance to the parties hereto, but shall contain no representations, warranties, covenants and agreements other than those specifically contemplated by this Agreement.

Section 2.06. Adjustment to Number and Type of Securities. If, after the date of this Agreement, there is a subdivision, stock split, consolidation, share dividend, combination, reclassification or similar event with respect to the Company Common Stock, then, in any such event, the numbers and types of such securities to be issued pursuant to the Transactions or pursuant to Section 5.06 shall be appropriately adjusted if necessary so as to preserve the economic effect of the Transactions or the transactions set forth in Section 5.06, in each case, as contemplated herein.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

With respect to the representations and warranties contained in this Article III, except as otherwise indicated herein or as the context may otherwise require, the term “the Company” shall mean (a) for purposes of determining whether such representations and warranties (other than the representations and warranties contained in Section 3.01(a), Section 3.02, Section 3.03, Sections 3.04(a) through (d), Section 3.06(c), Section 3.07(c), Section 3.08(b), Section 3.10 and Section 3.12) are true and correct on the date hereof, each of the Company and Los Gatos; and (b) for purposes of determining whether such representations and warranties are true and correct on the Closing Date, the Company, as the surviving corporation in the Merger.

Except as set forth in the Disclosure Schedule, the Company hereby represents and warrants to Investor as follows:

Section 3.01. Corporate Existence and Power; Corporate Authorization.

(a) The Company.

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(i) The Company is a corporation, duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. The Company has full power and authority to execute and deliver this Agreement and to consummate the Transactions, including to issue and sell the Shares to Investor. The Company has full power and authority to execute and deliver the Stockholders Agreement and to consummate the transactions contemplated thereby. The Company has the full power and authority to execute and deliver any other documents in connection with the Closing as contemplated hereby, including the closing certificates required by Sections 6.02(a) and 6.02(b) (collectively, the “Company Closing Documents”). The execution, delivery and performance by the Company of this Agreement and the Stockholders Agreement and the consummation by the Company of the Transactions have been duly authorized by all necessary corporate or other legal action. The execution and delivery by the Company of each Company Closing Document are within the Company’s corporate or other legal powers and have been duly authorized by all necessary corporate or other legal action. This Agreement, when executed and delivered by the Company, will be duly executed and delivered by the Company and, when executed and delivered by the other parties thereto, will constitute a valid, binding and enforceable agreement of the Company enforceable in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally, and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in equity). The Stockholders Agreement, when executed and delivered by the Company in accordance with this Agreement, will be duly executed and delivered by the Company and, when executed and delivered by the other parties thereto, will constitute a valid, binding and enforceable agreement of the Company enforceable in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally, and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in equity). Each Company Closing Document, when executed and delivered by the Company in accordance with this Agreement, will be duly executed and delivered by the Company.

(ii) The Company has all corporate or other legal powers and all Consents required under any Law to own, lease and operate its properties and to carry on the Business as now conducted, except for those Consents the absence of which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the properties owned, leased or operated by it or the nature of its activities makes such qualifications necessary, except for those jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(b) Subsidiaries of the Company.

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(i) Each of the Subsidiaries of the Company is a corporation, limited liability company or other legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation.

(ii) Each of the Subsidiaries of the Company has all corporate or other legal powers and all Consents required under any Law to own, lease and operate its properties and to carry on the Business as now conducted, except for those Consents the absence of which would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Each of the Subsidiaries of the Company is duly qualified to do business as a foreign corporation, foreign limited liability company or other foreign Person and is in good standing in each jurisdiction in which the properties owned, leased or operated by it or the nature of its activities makes such qualifications necessary, except for those jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

Section 3.02. No Consents or Approvals. The execution and delivery by the Company of this Agreement and the Stockholders Agreement does not and will not require the Company or any of its Subsidiaries to obtain any consent, approval, order, permit, license or authorization (collectively, “Consents”) under any Law or any Contract to which the Company or any of its Subsidiaries is a party or by which any of the assets or properties of the Company or any of its Subsidiaries is bound or make or file any requisite registration, qualification, declaration or other statement (collectively, “Filings”) with any Governmental Authority except for (a) such Consents as have previously been obtained, or such Filings as have previously been made, and, in each case, which are in full force and effect as of the date hereof and will be in full force and effect as of the Closing Date, (b) those Consents required to be obtained or Filings required to be made by Investor in connection with the consummation of the Transactions, (c) such Consents or Filings set forth on Section 3.02 of the Disclosure Schedule, and (d) such other Consents the failure of which to have been obtained, and such other Filings the failure of which to have been made would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The performance by the Company of this Agreement and the Stockholders Agreement and the consummation of the Transactions by the Company does not and will not require the Company or its Subsidiaries to obtain any Consent under any Law or any Contract to which the Company or any of its Subsidiaries is a party or by which any of the assets or properties of the Company or any of its Subsidiaries is bound or make or file any Filings with any Governmental Authority, except for (a) Filings made under and the expiration or early termination of the waiting period required by the HSR Act, (b) such Consents as have previously been obtained, or such Filings as have previously been made, and, in each case, which are in full force and effect as of the date hereof and will be in full force and effect as of the Closing Date, (c) those Consents required to be obtained or Filings required to be made by Investor in connection with the consummation of the Transactions and (d) such other Consents the failure of which to be obtained, and such other Filings the failure of which to be made, would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

Section 3.03. Non-Contravention.

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The execution, delivery and performance by the Company of this Agreement and the Stockholders Agreement, and the consummation of the Transactions by the Company and its Subsidiaries, do not and will not (a) contravene, conflict with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws or other organizational or governing documents of such Person, (b) conflict with or breach any provision of a Company Material Contract, or (c) contravene, conflict with, or result in a violation or breach of any provision of any applicable Law subject, in the case of this clause (c), to the matters referred to in clauses (a), (b), (c) and (d) of the last sentence of Section 3.02.

Section 3.04. Capitalization and Ownership of Subsidiaries.

(a) As of the date hereof, (i)(A) the authorized capital of the Company consists of 100,000,000 shares of Company Common Stock, of which 20,000,000 shares are issued and outstanding and (B) the Persons set forth on Part 1 of Section 3.04(a) of the Disclosure Schedule are the sole beneficial owners of shares of Company Common Stock; and (ii)(A) the authorized capital of Los Gatos consists of 300,000,000 preferred and ordinary shares of par value $0.01 per share, of which 168,075,577 shares are issued and outstanding and (B) the Persons set forth on Part 2 of Section 3.04(a) of the Disclosure Schedule are the sole beneficial owners of preferred and ordinary shares of Los Gatos.

(b) As of the Closing Date, the Shares will be duly and validly authorized and, when a certificate evidencing the Shares is issued and delivered against payment of the Purchase Price in accordance with the terms of this Agreement, the Shares will be duly and validly issued, fully paid and non-assessable. The Shares are not subject to and were not issued in violation of any preemptive rights or issued in violation of the securities Laws of the United States.

(c) As of the Closing Date, subject to Section 5.06 and except as set forth in Section 3.04(c) of the Disclosure Schedule, there are no outstanding subscriptions, options, warrants, puts, calls, trusts (voting or otherwise), rights (including conversion or preemptive rights and rights of first refusal), exchangeable or convertible securities or other commitments or agreements of any nature relating to the share capital or other securities or ownership interests in the Company (including any phantom shares, phantom equity interests, stock or equity appreciation rights or similar rights) to which the Company is a party or obligating the Company, at any time or upon the happening of any event, to issue, transfer, deliver, sell, repurchase, redeem or otherwise acquire, or cause to be issued, transferred, delivered, sold, repurchased, redeemed or otherwise acquired, any of its share capital or any phantom shares, phantom equity interests, stock or equity appreciation rights or similar rights, or other ownership interest of the Company or obligating the Company to grant, extend or enter into any such subscription, option, warrant, put, call, trust, right, exchangeable or convertible security, commitment or agreement.

(d) The Company owns directly or indirectly all of the outstanding capital stock or other voting securities or ownership interests in each of its Subsidiaries (the “Subsidiary Securities”) free and clear of all Liens, other than limitations arising under this Agreement or the Stockholders Agreement or under securities Laws of general applicability. All of the Subsidiary Securities are duly authorized, validly issued, full paid and non-assessable.

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The consummation of the Transactions will not result in the creation of any Lien or other restriction or limitation on any Subsidiary Securities, other than limitations arising under this Agreement or the Stockholders Agreement or under securities Laws of general applicability.

(e) As of the date hereof, Los Gatos owns directly or indirectly all of the outstanding capital stock or other voting securities or ownership interests in the Mexican Subsidiary (the “Mexican Subsidiary Securities”), free and clear of all Liens, other than limitations arising under this Agreement or the Stockholders Agreement or under securities Laws of general applicability. All of the Mexican Subsidiary Securities are duly authorized, validly issued, full paid and non-assessable. The consummation of the Transactions will not result in the creation of any Lien or other restriction or limitation on the Mexican Subsidiary Securities, other than limitations arising under this Agreement or the Stockholders Agreement or under securities Laws of general applicability.

Section 3.05. Absence of Certain Changes; No Material Liabilities.

(a) Since May 11, 2010, assuming the Merger has been consummated, there has not been any event, occurrence, development or state of circumstances or facts that would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, except as disclosed in Section 3.05(a) of the Disclosure Schedule.

(b) As of the date hereof, neither the Company nor any of its Subsidiaries has Debt obligations in excess of $100,000.00, except as disclosed in Section 3.05(b) of the Disclosure Schedule.

(c) Except as disclosed in Section 3.05(c) of the Disclosure Schedule, since May 11, 2010, neither the Company nor any of its Subsidiaries has incurred any Liability of any kind, other than (i) in the ordinary course of business consistent with past practice, (ii) Liabilities for Taxes, (iii) Liabilities that have been discharged or paid in full prior to the date of this Agreement, (iv) Liabilities incurred in connection with the Transactions and (v) Liabilities that do not exceed $100,000.00 individually or $1,000,000.00 in the aggregate.

(d) From May 11, 2010 to the date hereof, except as disclosed in Section 3.05(d) of the Disclosure Schedule and except as expressly contemplated or permitted by this Agreement or the Stockholders Agreement or with respect to the Transactions, the Business has been conducted in the ordinary course of business consistent with past practice.

Section 3.06. Compliance with Laws; Non-environmental Permits.

(a) Except as disclosed in Section 3.06(a) of the Disclosure Schedule, the Company and each Subsidiary is, and has been since May 11, 2010, in compliance with all applicable Laws in respect of the conduct of the Business and ownership, possession and maintenance of its assets, in each case, in all material respects.

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(b) This Section 3.06 does not relate to matters with respect (i) to Taxes, which are the subject of Section 3.15, (ii) to Environmental Matters, which are the subject of Section 3.12, (iii) to Employee Benefits matters, which are the subject of Section 3.08 or (iv) to Labor and Employment Matters, which are the subject of Section 3.09.

(c) The Company and each Subsidiary has obtained, in all material respects, all authorizations of a Governmental Authority other than those required by Environmental Laws (the “Non-environmental Permits”) required for it to carry on the operations of the Business as currently conducted and the Company is not in material violation of and has no material liability (other than liability for compliance with existing permits and Laws, including performance of reclamation) under any statute, rule or regulation of any Governmental Authority applicable to the Business. A complete list of the Non-environmental Permits is set forth on Section 3.06(c) of the Disclosure Schedule. Other than as set forth on Section 3.06(c) of the Disclosure Schedule, all material financial assurance for reclamation or other material surety required to be in place in connection with such Non-environmental Permits have been posted or are otherwise in place.

Section 3.07. Legal Proceedings.

(a) There is no Legal Proceeding pending or, to the knowledge of the Company, threatened in writing, against the Company or any of its Subsidiaries, or any of their respective properties, before any Governmental Authority which prohibits, enjoins or otherwise adversely affects, or would reasonably be expected to prohibit, enjoin, or otherwise adversely affect the consummation of the Transactions, and there is no judgment, injunction, order or decree applicable to or by which the Company or any of its Subsidiaries, or any of their respective properties, is bound, which prohibits, enjoins or otherwise adversely affects, or would reasonably be expected to prohibit, enjoin or otherwise adversely affect, the consummation of the Transactions.

(b) Except as set forth in Sections 3.07(b) and 3.12(a) of the Disclosure Schedule, there is no Legal Proceeding pending against, or, to the knowledge of the Company, threatened in writing against, the Company or any of its Subsidiaries, or any of their respective properties, with respect to which such Person would reasonably be expected to be liable (including as a result of indemnity obligations) before any arbitrator or before or by any Governmental Authority that would reasonably be expected (i) to impose, individually or in the aggregate, any material Liability on the Company or any of its Subsidiaries or (ii) to materially and adversely affect the Business. There is no judgment, injunction, order or decree applicable to or by which the Company or any of its Subsidiaries, or any of their respective properties, is bound, that imposes any material Liability on the Company or any of its Subsidiaries or materially and adversely affects the Business.

(c) Except as set forth in Section 3.07(c) of the Disclosure Schedule, the Company and its Subsidiaries have received no citations or orders under the federal Mine Safety and Health Act, as amended, or applicable regulations pertaining thereto, relating to the Real Property which are outstanding.

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Section 3.08. Employee Benefits.

(a) Each Employee Plan sponsored or maintained by the Company or its Subsidiaries has been maintained and operated in compliance with its terms and applicable Law, in each case, in all material respects.

(b) Neither the Company nor any ERISA Affiliate of the Company sponsors, maintains or contributes to, or has in the past six years sponsored, maintained or contributed to, any Employee Plan subject to Title IV of ERISA or Section 412 of the Code or any multiemployer plan, as defined in Section 3(37) of ERISA.

(c) Except as disclosed in Section 3.08(c) of the Disclosure Schedule, the consummation of the Transactions will not (either alone or in conjunction with any other event) (i) entitle any current or former director, employee, contractor or consultant of the Company or its Subsidiaries to severance pay, unemployment compensation or any other payment, or (ii) accelerate the time of payment or vesting, or increase the amount of compensation due to any such director, employee, contractor or consultant, or result in the payment of any other benefits to any Person or the forgiveness of any Debt of any Person.

Section 3.09. Labor and Employment Matters.

Except as disclosed in Section 3.09 of the Disclosure Schedule, neither the Company nor its Subsidiaries is a party or subject to any labor union or collective bargaining agreement. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) there are no pending or threatened strikes, labor disputes, work stoppages, requests for representation, pickets, work slowdowns due to labor disagreements or any actions or arbitrations which involve the labor or employment relations of the Company or its Subsidiaries, (b) no event has occurred or circumstance exists that may provide the basis of any work stoppage or other labor dispute and (c) there has not been within the past 12 months any violation of Law relating to employment of individuals by the Company.

Section 3.10. Real Property; Personal Property.

With respect to the representations and warranties contained in this Section 3.10, (a) Sections 3.10(a), (b), (c), (d), (e), (f), (g), and (h) relate solely to the Business conducted in the State of Idaho; and (b) Section 3.10(i) relates solely to the Business conducted in Mexico.

To the extent that the representations and warranties contained in Sections 3.10(a), (b), (c), (d), (e) and (h) relate to the Core Idaho Properties, (i) solely for purposes of determining whether there has been a breach of such representations or warranties with respect to a defect identified in a properly delivered Defect Notice or a Claim properly made by Investor pursuant to Section 8.02(a)(i) within 60 days of the Closing Date, each such representation and warranty will be interpreted without giving effect to any qualifications or limitations therein as to (A) “knowledge,” (B) liens, claims, encumbrances, exceptions or defects arising under any third party (other than as disclosed in the Disclosure Schedule), (C) reservations in patents or the acts authorizing the issuance thereof or (D) clause (h) of the definition of Permitted Liens; and (ii) for all other purposes, each such representation and warranty will be qualified and subject, in all respects, to all liens, claims, encumbrances, defects and other matters of record in the Real

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Property Records as if such liens, claims, encumbrances, exceptions, defects and other matters of record were specifically set forth in each such section as a specific and express exception to each such representation and warranty.

(a) To the knowledge of the Company, other than as disclosed in Section 3.10(a) of the Disclosure Schedule and Section 3.10(e) of the Disclosure Schedule, the Company or its Subsidiaries own good and marketable title to the real property described in Section 3.10(a) of the Disclosure Schedule (the “Owned Real Property”), free and clear of all liens, claims, encumbrances, exceptions or defects (other than Permitted Liens) arising by, through or under the Company or any of its Subsidiaries or, to the knowledge of the Company, arising by, through or under Sterling Mining Company or Sunshine Precious Metals, Inc., but subject to all reservations in patents or in the acts authorizing the issuance thereof. None of the Company nor any of its Subsidiaries have conveyed, assigned or encumbered its interest in the Owned Real Property or any portion thereof.

(b) To the knowledge of the Company, other than as disclosed in Section 3.10(b) of the Disclosure Schedule and Section 3.10(e) of the Disclosure Schedule, and subject to all reservations in patents or in the acts authorizing the issuance thereof, the Company or its Subsidiaries own good and marketable title to the real property mineral interests described in Section 3.10(b) of the Disclosure Schedule (the “Mineral Interests”), free and clear of all liens, claims, encumbrances, exceptions, or defects (other than Permitted Liens) arising by, through or under the Company or any of its Subsidiaries or, to the knowledge of the Company, arising by, through or under Sterling Mining Company or Sunshine Precious Metals, Inc. None of the Company nor any of its Subsidiaries have conveyed, assigned or encumbered its interest in the Mineral Interests or any portion thereof.

(c) To the knowledge of the Company, other than as disclosed on Section 3.10(e) of the Disclosure Schedule, the Company or its Subsidiaries own indefeasible title to the unpatented mining claims described on Section 3.10(c) of the Disclosure Schedule (the “Unpatented Claims”), free and clear of all liens, claims, encumbrances, exceptions or defects (other than Permitted Liens) arising by, through or under the Company or any of its Subsidiaries, or, to the knowledge of the Company, arising by, through or under Sterling Mining Company or Sunshine Precious Metals, Inc. None of the Company nor its Subsidiaries have conveyed, assigned or encumbered its interest in the Unpatented Claims or any portion thereof. To the knowledge of the Company, (i) all of the Unpatented Claims were properly located and monumented on ground open to appropriation by mineral location and (ii) true and correct copies of location notices or certificates for each of the Unpatented Claims were timely and properly filed and recorded in the appropriate Bureau of Land Management and county offices, in compliance with all applicable Laws including the Federal Land Policy and Management Act of 1976 (“FLPMA”). To the knowledge of the Company, with respect to each of the Unpatented Claims located prior to 1993, necessary and sufficient assessment work performed in accordance with industry standards, and all filings and recordings associated therewith (including all filings and recordings required under FLPMA), were timely and properly performed and made for every applicable assessment year prior to the assessment year ending September 1, 1993. All holding, rental and claim maintenance fees due and payable prior to the date hereof and required to maintain the Unpatented Claims for each of the assessment years ending September 1, 1993 (or, with respect to Unpatented Claims located after September 1, 1993, the year ending September 1

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of such year) through September 1, 2011, were timely and properly made, and appropriate affidavits or notices evidencing such payments were timely and properly filed and recorded in connection therewith as required by applicable Laws.

(d) The Company has provided to Investor true, correct and complete copies of each of the mining leases, as amended (collectively, the “Mining Leases”), by which the Company or its Subsidiaries hold a leasehold interest in the property set forth in Section 3.10(d) of the Disclosure Schedule (the “Leased Real Property,” and with the Owned Real Property and the Mineral Interests, the “Real Property”). A complete list of the Mining Leases is set forth on Section 3.10(d) of the Disclosure Schedule. To the knowledge of the Company, the Company or its Subsidiaries own a leasehold interest in the Leased Real Property, subject to Section 3.10(d) of the Disclosure Schedule and Section 3.10(e) of the Disclosure Schedule, free and clear of all liens, claims, encumbrances, exceptions or defects (other than Permitted Liens) arising by, through or under the Company or any of its Subsidiaries, or, to the knowledge of the Company, arising by, through or under Sterling Mining Company or Sunshine Precious Metals, Inc., but subject to all reservations in patents or in the acts authorizing the issuance thereof. None of the Company or its Subsidiaries have assigned or encumbered its interest in the Leased Real Property or any portion thereof. Other than as disclosed on Section 3.10(d) of the Disclosure Schedule, to the knowledge of the Company, (i) each of the Mining Leases is in good standing, valid and in full force and effect in accordance with its respective terms, (ii) there is not, under any of the Mining Leases, any existing material default (or event which with notice or lapse or time, or both would constitute a material default) of the Company or its Subsidiaries, (iii) no material default exists by any third party under the Mining Leases, and (iv) no event has occurred that is reasonably likely to result in the revocation or termination of any of the Mining Leases.

(e) Section 3.10(e) of the Disclosure Schedule sets forth a list of rights of way, easements and other agreements of record in the real property records of Shoshone County, Idaho that affect the Owned Real Property (“Rights of Way and Easements”). To the knowledge of the Company, (i) each of the Rights of Way and Easements is in good standing, valid and in full force and effect in accordance with its respective terms, (ii) there is not, under any of the Rights of Way or Easements, any existing material default (or event which with notice or lapse or time, or both would constitute a material default) of the Company or its Subsidiaries, (iii) no material default exists by any third party under the Rights of Way and Easements and (iv) no event has occurred that is reasonably likely to result in the revocation or withdrawal of any of the Rights of Way or Easements.

(f) Section 3.10(f) of the Disclosure Schedule sets forth all personal property of the Company and its Subsidiaries with a value of $100,000 or more (the “Listed Personal Property”), including all machinery and equipment of the Company and its Subsidiaries. Other than as disclosed in Section 3.10(e) of the Disclosure Schedule, the Company and its Subsidiaries own indefeasible title to the Listed Personal Property, in each case, free and clear of all Liens other than Permitted Liens.

(g) With respect to the water rights listed in Section 3.10(g) of the Disclosure Schedule (the “Water Rights”), except as disclosed in Section 3.10(g) of the Disclosure Schedule, to the knowledge of the Company, (i) the Company and its Subsidiaries have

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indefeasible title to the Water Rights and the same are free and clear of all liens, encumbrances, defects and other matters of record in the Real Property Records other than as disclosed in Section 3.10(e) of the Disclosure Schedule; (ii) the Water Rights and rights-of-way and easements related thereto are sufficient to meet the current needs of the Company and its Subsidiaries; (iii) the Water Rights have not been severed from the land or transferred, mortgaged, pledged or hypothecated to any third party, are not the subject of any Contract not specifically disclosed to Investor in writing that would interfere with transfer, use and operation of the Water Rights by the Company and its Subsidiaries; (iv) there are no Legal Proceedings pending or threatened in writing against the Company or its Subsidiaries and affecting any portion of the Water Rights, at law or in equity, or before or by any Governmental Authority, and the Company and its Subsidiaries have not received any notice of any violation of any Law of any Governmental Authority pertaining to the Water Rights or any portion thereof; (v) there are no condemnation, environmental, zoning or other land use regulatory proceedings, either instituted or planned to be instituted, which would have a material detrimental affect on the use and operation of the Water Rights by the Company and its Subsidiaries; and (vi) the Water Rights and rights-of-way and easements related thereto are sufficient to meet the needs of the Business as currently conducted.

(h) Except as disclosed in Section 3.10(h) of the Disclosure Schedule or Section 3.10(e) of the Disclosure Schedule, to the knowledge of the Company there are no production royalties or other interests in revenue or profits from production on mineral production affecting the Real Property or the Unpatented Claims.

(i) Section 3.10(i) of the Disclosure Schedule contains a list of the titles of mining concessions granted to the Mexican Subsidiary (or a third party and under contract with the Mexican Subsidiary) by the Federal Executive of Mexico under Mexican Mining Law (the “Mexican Mining Concessions”). Except as set forth in Section 3.10(i) of the Disclosure Schedule or any of the reports set forth in Section 3.12(i) of the Disclosure Schedule:

(i) each Mexican Mining Concession is a legal, valid and binding authorization in favor of the Mexican Subsidiary is in full force and effect and properly registered or recorded in the Public Registry of Mining; the Mexican Subsidiary is in material compliance with all of its material obligations under applicable Laws, including the payment of mining duties and the filing of all assessment work reports required with respect to the Mexican Mining Concessions; and the Mexican Subsidiary holds good, marketable and unencumbered title to the Mexican Mining Concessions and all of its material assets other than Permitted Liens;

(ii) there are no Liens, burdens or Contracts registered or recorded or, to the knowledge of the Company, in process of being registered or recorded with the Public Registry of Mining in Mexico relating to the Mexican Mining Concessions;

(iii) the Mexican Subsidiary is not in material breach or violation of, or default under, any material provision of any Mexican Mining Concession;

(iv) the Mexican Subsidiary has not received written notice of, and the Company has no any knowledge of, any threatened claim of default, including any

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written notice purporting to impose a material obligation on the Mexican Subsidiary to cure a default, under any Mexican Mining Concession or any material agreements related to any Mexican Mining Concession; and

(v) the Mexican Subsidiary has performed and filed all assessments required under Mexican Mining Law with respect to the Mexican Mining Concessions.

Section 3.11. Material Contracts.

(a) Section 3.11(a) of the Disclosure Schedule contains a list of the following Contracts or types of Contracts (together with the names of the parties thereto and the date of each such Contract and each written amendment or modification thereof), by and between the Company or its Subsidiaries and one or more third parties (other than this Agreement or the Stockholders Agreement), pursuant to which the Company or its Subsidiaries is obligated or liable or is entitled to any rights or benefits or pursuant to which the Company or its Subsidiaries or any of its properties or assets is subject, in each case, which fall within any of the following categories (such Contracts as are required to be set forth in Section 3.11(a) of the Disclosure Schedule being the “Company Material Contracts”):

(i) each Contract with vendors or suppliers to or distributors for the Company or any of its Subsidiaries which requires any minimum amount of purchases in excess of $100,000.00 over a period specified therein;

(ii) each Contract not listed elsewhere in Section 3.11(a) of the Disclosure Schedule pursuant to which the Company or its Subsidiaries collectively paid or received consideration of more than $100,000.00, in the aggregate, during such Person’s last fiscal year;

(iii) all employment and management Contracts and Contracts with other consultants involving the payment of royalties or other amounts calculated based upon the revenues or income of the Company or any of its Subsidiaries or income or revenues related to any product of the Company or any of its Subsidiaries to which the Company or any of its Subsidiaries is a party and which is reasonably likely to involve the payment of consideration of more than $100,000.00 in the aggregate over the remaining term of such Contract;

(iv) all Contracts evidencing Debt of the Company or any of its Subsidiaries (A) where the maximum principal or face amount of Debt which may be incurred thereunder exceeds $100,000.00 in the aggregate, or (B) which has a term longer than one year;

(v) all Contracts with any Governmental Authority to which the Company or any of its Subsidiaries is a party, other than individual Contracts involving aggregate consideration over the life of the Contract of less than $100,000.00;

(vi) all material leases with respect to the Leased Real Property;

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(vii) all Contracts that limit, or purport to limit, the ability of the Company or any of its Subsidiaries to compete in any line of business or with any Person or in any geographic area or during any period of time;

(viii) all Contracts and constituent documents relating to material joint ventures of the Company or any of its Subsidiaries; and

(ix) all Contracts pursuant to which the Company or its Subsidiaries is obligated to pay royalties to a third party from or in respect of production or as a result of mining operations on the Real Properties;

provided, however, that any Company Material Contract described in clauses (i), (ii) and (iii) and above that can be cancelled by the Company (or an Affiliate thereof) on 90 days or less notice without the payment of any material consideration or penalty shall not be deemed a Company Material Contract.

(b) Except as set forth in Section 3.11(b) of the Disclosure Schedule, (i) each Company Material Contract is a legal, valid and binding agreement of the Company or its Subsidiaries, as applicable, and the Company or its Subsidiaries, as applicable, is in material compliance with all of its material obligations contained therein; (ii) neither the Company nor any of its Subsidiaries is in material breach or violation of, or default under, any material provision of any Company Material Contract, and, to the knowledge of the Company, no party (other than the Company or any of its Subsidiaries) is in material breach or violation of, or default under, any Company Material Contract; (iii) the Company and its Subsidiaries have not received written notice of, and the Company has no knowledge of, any claim of default, including any notice purporting to impose an obligation on the Company and its Subsidiaries to cure a default, under any such Company Material Contract; and (iv) none of the execution of this Agreement or of the Stockholders Agreement or the consummation of the Transactions would constitute an event of default or a default, or with notice, lapse of time or both would constitute a default, give rise to any right of termination, cancellation, acceleration, vesting, repurchase, prepayment or repayment or to increased payments under, or otherwise adversely affect any rights of the Company and its Subsidiaries in any material respect under, any Company Material Contract.

(c) True, correct and complete copies of all Company Material Contracts, including all amendments thereto, have been made available to Investor or a representative of Investor.

Section 3.12. Environmental Matters. Except as would not reasonably be expected to have a Company Material Adverse Effect:

(a) Except as disclosed on Section 3.12(a) of the Disclosure Schedule, no Third Party Environmental Claim or Regulatory Action with respect to, or that otherwise affects or is related to, the Real Property is pending or otherwise unresolved or is, to the knowledge of the Company, threatened in writing with respect to, or that otherwise affects, the Real Property.

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(b) Except as disclosed on Section 3.12(b) of the Disclosure Schedule, to the knowledge of Company, none of the properties comprising the Real Property are listed on a List.

(c) All transfer, transportation, storage or disposal of Hazardous Substances by the Company and its Subsidiaries and, to the knowledge of the Company, by prior owners or operators at the Real Property after December 1, 2006, to, at or on properties other than the Real Properties in connection with the ownership or operation of the Real Property, has been in compliance with applicable Environmental Laws. Set forth on Section 3.12(c) of the Disclosure Schedule is a list of all sites to which Company and its Affiliates have sent, and third parties with which any of them has arranged for the transportation, treatment, storage or disposal of, Hazardous Substances, and to the knowledge of the Company, all sites to which prior owners or operators of the Real Property have sent, or third parties with which any of them has arranged for the transportation, treatment, storage or disposal of, Hazardous Substances after December 1, 2006.

(d) Except as disclosed on Section 3.12(d) of the Disclosure Schedule, for so long as the Company or its Subsidiaries have owned or operated the Real Property, and to the knowledge of the Company prior thereto but after December 1, 2006, no portion of the Real Property owned or operated by the Company or any of its Subsidiaries has been used as a landfill, dump or other disposal, storage, transfer, handling or treatment area for Hazardous Substances, or as a gasoline service station or a facility for selling, dispensing, storing, transferring, disposing or handling petroleum and/or petroleum products, other than as permitted pursuant to applicable Environmental Laws or under valid plans of operation, mine plans or other Consents of a Governmental Authority pertaining to the Real Property.

(e) Except as disclosed on Sections 3.12(c) and (e) of the Disclosure Schedule, so long as the Company or its Subsidiaries have owned or operated the Real Property, and to the knowledge of the Company, prior thereto but after December 1, 2006, there has been no Release of any Hazardous Substance on, under, about, from, at or in connection with the Real Property, including the presence of any Hazardous Substances that have come to be located on, under, at or about the Real Property from another location, for so long as the Company or its Subsidiaries have owned or operated the Real Property, and to the knowledge of the Company, prior thereto but after December 1, 2006, other than in compliance with applicable Environmental Laws, except for naturally occurring Releases of Hazardous Substances and for amounts below applicable health-based regulatory levels established pursuant to Environmental Law.

(f) Except as disclosed on Section 3.12(f) of the Disclosure Schedule, so long as the Company or its Subsidiaries have owned or operated the Real Property, the mining and other uses of the Real Property at all times have been in compliance with all applicable Environmental Laws.

(g) Except as disclosed in Part 1 of Section 3.12(g) of the Disclosure Schedule, (i) the Company has obtained all Consents of any Governmental Authority required by Environmental Laws necessary for the operations of the Company and its Subsidiaries as currently conducted and (ii) all Consents of any Governmental Authority maintained by the Company or its Subsidiaries required by Environmental Laws necessary for the operations of the

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Company and its Subsidiaries as currently conducted will remain and be valid and in full force and effect on the Closing Date or have otherwise been extended, renewed or replaced. All such Consents held by the Company or its Subsidiaries are listed on Part 2 of Section 3.12(g) of the Disclosure Schedule. Except as disclosed in Part 1 of Section 3.12(g) of the Disclosure Schedule, all financial assurance for remediation or other response(s) to Environmental Claims or other surety required to be in place in connection with any Consent of a Governmental Authority relating to Environmental Laws necessary for the operations of the Company as currently conducted have been posted or are otherwise in place.

(h) Except as disclosed on Section 3.12(h) of the Disclosure Schedule, for so long as the Company or its Subsidiaries have owned or operated the Real Property, and to the knowledge of the Company, prior thereto but after December 1, 2006, no Hazardous Substances have been generated, treated, contained, handled, located, used, manufactured, processed, buried, incinerated, deposited or stored on, under, at or about any part of the Real Property other than in compliance with applicable Environmental Laws, and except for naturally occurring Releases of Hazardous Substances and for amounts below applicable regulatory levels established pursuant to Environmental Law. Except as disclosed in Sections 3.12(b) and 3.12(h) of the Disclosure Schedule, to the knowledge of the Company, the Real Property contains no asbestos, urea formaldehyde foam insulation, radon gas, PCBs or pesticides in concentrations above applicable regulatory levels established pursuant to Environmental Law. Except as disclosed in Section 3.12(h) of the Disclosure Schedule, for so long as Company or its Subsidiaries have owned or operated the Real Property, and to the knowledge of the Company prior thereto but after December 1, 2006, no underground storage tanks have been located on or under the Real Property and/or subsequently removed or filled and abandoned in place. If any aboveground storage tanks exist on the Real Property, such storage tanks have been duly registered with all appropriate Governmental Authorities as required and are otherwise in compliance with all applicable Environmental Laws.

(i) The Company has provided Investor with true, correct and complete copies of or access to all material environmental assessments or audit reports or similar studies, data compilations or analyses conducted in the last three years that the Company has or has had in its possession or control, with respect to the Company or the Real Property, which reports and studies are listed on Section 3.12(i) of the Disclosure Schedule, other than any such reports or studies prepared by counsel to the Company.

(j) Except as disclosed on Section 3.12(j) of the Disclosure Schedule, no encumbrance is currently attached or filed against the Company, any of its Subsidiaries or, to the knowledge of the Company, the Real Property in favor of any third party for (i) any liability under or violation of any applicable Environmental Law, (ii) any Release of Hazardous Substances or (iii) any imposition of costs, damages or injunctive relief relating to Environmental Claims.

Section 3.13. Insurance. Section 3.13 of the Disclosure Schedule sets forth a list of all effective insurance policies that are material to the Business (each, a “Company Material Insurance Policy”) under which the Company or its Subsidiaries is an insured, a named insured or otherwise the principal beneficiary

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of coverage insuring or providing coverage for the benefit of or with respect to any aspect of the Business.

Section 3.14. Brokers or Finders. Except as set forth in Section 3.14 of the Disclosure Schedule, no agent, broker, investment banker, financial advisor or other Person (any such Person, a “Broker”) is or will be entitled to any financial advisory, broker’s, finder’s or similar fee or commission in connection with the Transactions (collectively, “Broker Fees”) based upon arrangements made by or on behalf of the Company or any of its Subsidiaries.

Section 3.15. Taxes.

(a) Each of the Company and its Subsidiaries (i) has timely filed or caused to be filed all Tax Returns required to have been filed and all such Tax Returns are true and correct in all material respects, and (ii) has paid or caused to be paid all material Taxes required to have been paid by it and all material assessments received by it, except Taxes that are being contested in good faith by appropriate Legal Proceedings. Each of the Company and its Subsidiaries has set aside on its books adequate reserves in accordance with GAAP for all Taxes not yet due and payable. Each of the Company and its Subsidiaries is unaware of any proposed or pending material Tax assessments or deficiencies.

(b) All material federal, state and local excise and ad valorem property and other Taxes and assessments pertaining to or assessed against the Real Properties have been timely and properly paid by the Company or its Subsidiaries.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF INVESTOR

Investor represents and warrants to the Company that:

Section 4.01. Corporate Existence and Power; Corporate Authorization. Investor is a limited liability company, duly formed, validly existing and in good standing under the Laws of its jurisdiction of formation. Investor has the full power and authority to execute and deliver this Agreement and to consummate the Transactions. Investor has the full power and authority to execute and deliver the Stockholders Agreement and to consummate the Transactions contemplated thereby. Investor has the full power and authority to execute and deliver any other documents in connection with the Closing as contemplated hereby, including the closing certificate required by Sections 6.03(a) and 6.03(b) (collectively, the “Investor Closing Documents”). The execution, delivery and performance by Investor of this Agreement and the Stockholders Agreement and the consummation by Investor of the Transactions are within Investor’s limited liability company powers and have been duly authorized by all necessary limited liability company or other legal action. The execution and delivery by Investor of each Investor Closing Document are within Investor’s limited liability company or other legal powers and have been duly authorized by all necessary limited liability company or other legal action. This Agreement, when executed and delivered by Investor, will be duly executed and delivered by Investor and, when executed and delivered by the other parties thereto, will constitute a valid, binding and enforceable agreement of Investor enforceable in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally, and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in equity). The Stockholders Agreement, when executed and delivered by Investor accordance with this Agreement, will be duly executed and delivered by Investor and, when executed and delivered by the other parties thereto, will constitute a valid, binding and enforceable agreement of Investor enforceable in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally, and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in equity). Each Investor Closing Document, when executed and delivered by Investor in accordance with this Agreement, will be duly executed and delivered by Investor.

Section 4.02. No Consents or Approvals. The execution, delivery and performance by Investor of this Agreement and the Stockholders Agreement does not and will not require Investor to obtain any Consent under any Law or any Contract to which Investor is a party or by which any of the assets or properties of Investor is bound or make or file any requisite Filing with any Governmental Authority, except for (a) such Consents as have previously been obtained, or such Filings as have previously been made, and, in each case, which are in full force and effect as of the date hereof and will be in full force and effect as of the Closing Date, (b) those Consents required to be obtained or Filings required to be

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made by the Company or its Subsidiaries in connection with the consummation of the Transactions and (c) such other Consents the failure of which to have been obtained, and such other Filings the failure of which to have been made would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of Investor to consummate the Transactions.

Section 4.03. Non-Contravention. The execution, delivery and performance by Investor of this Agreement and the Stockholders Agreement, and the consummation of the Transactions by Investor, do not and will not (a) contravene, conflict with, or result in any violation or breach of any provision of the certificate of formation or limited liability company agreement or other organizational or governing documents of Investor, (b) contravene, conflict with, or result in a violation or breach of any provision of any applicable Law subject, in the case of this clause (b), to the matters referred to in clause (b) of Section 4.02, (c) require any action by Investor under, constitute a default under, or cause or permit, the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which Investor is entitled under any provision of any material agreement or other material instrument to which Investor is a party or by which any of the assets or properties of Investor is bound, or (d) result in the creation or imposition of any Lien, condition, limitation or restriction of any nature on any asset of Investor (other than as expressly contemplated herein or in the Stockholders Agreement, and other than any such Lien, condition, limitation or restriction granted or created by the Company or any of its Affiliates) and except, in the case of clauses (b), (c) and (d) above as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of Investor to consummate the Transactions.

Section 4.04. Legal Proceedings. As of the date hereof, there is no Legal Proceeding pending or, to Investor’s knowledge, threatened in writing against Investor or any of its Subsidiaries before any Governmental Authority relating to the Transactions, and there is no provision of any Law applicable to Investor or any of its Subsidiaries and no judgment, injunction, order or decree applicable to or by which Investor or any of its Subsidiaries is bound which prohibits, delays, enjoins or otherwise adversely affects, or would reasonably be expected to prohibit, delay, enjoin or otherwise adversely affect, the consummation of the Transactions.

Section 4.05. Private Placement.

(a) Investor is acquiring the Shares solely for the purpose of investment for its own account, not as a nominee or agent, and not with a view to, or for offer or sale in connection with, any distribution thereof in any transaction which would be in violation of the securities Laws of the United States of America or any state thereof. Investor has no Contract with any Person to sell, transfer or grant participation to any other Person with respect to any of the Shares. Investor is an “accredited investor,” as that term is defined in Regulation D promulgated under the 1933 Act, and an “institutional buyer,” as that term is defined in 950 CMR 14.401.

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(b) Investor has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Company and is capable of bearing the economic risks and complete loss of such investment.

(c) Investor understands that the Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the 1933 Act, or the availability of an exemption therefrom.

Section 4.06. Available Funds. Investor has available to it, and will have at the Closing, sufficient cash or other immediately available funds necessary to consummate the Transactions (including the payment of the Purchase Price) and to enable Investor to satisfy its obligations under this Agreement (including Article VIII) and the Stockholders Agreement on the terms and conditions set forth herein and therein.

Section 4.07. Brokers or Finders. No Broker is or will be entitled to any Broker Fees based upon arrangements made by or on behalf of Investor.

ARTICLE V

COVENANTS AND AGREEMENTS

Section 5.01. Conduct of Business. Except for (a) matters set forth in Section 5.01 of the Disclosure Schedule, (b) any action taken or omitted to be taken by the Company or its Subsidiaries at the request or with the consent of Investor, and (c) matters otherwise contemplated or specifically provided for in this Agreement (including Section 5.06) or as subsequently consented to in writing by Investor (such consent not to be unreasonably withheld, conditioned or delayed), from the date hereof until the Closing Date, the Company will use its reasonable best efforts to conduct, and to cause each Subsidiary to conduct, the Business in the ordinary course and, to the extent consistent therewith, to use its reasonable best efforts to preserve substantially intact its business organizations and relationships with third parties and to keep available the services of its present key officers and key employees in the ordinary course of business.

Section 5.02. Access and Information. Following the date hereof and prior to the Closing, the Company will permit representatives of Investor to have reasonable access, during normal business hours and upon reasonable notice, to all premises, properties and personnel of or pertaining to the Business or the Company and its Subsidiaries as may be necessary to permit Investor to, at its sole expense, make, or cause to be made, such investigations thereof as Investor may reasonably determine necessary in connection with the consummation of the Transactions, and the Company will reasonably cooperate in good faith with any such investigations; provided, however, that (a) such access does not unreasonably disrupt the normal operations of the Business, the Company or any of its Subsidiaries; (b) neither the Company nor its Subsidiaries will be under any obligation to disclose to Investor any

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information, the disclosure of which is restricted by Contract or Law, except for any disclosure of such information in strict compliance with the applicable Contract or applicable Law; and (c) neither the Company nor its Subsidiaries are under any obligation to disclose to Investor any information as to which the attorney-client privilege may be available and where such disclosure would reasonably be expected to cause the loss of such privilege. No information or knowledge obtained in any investigation pursuant to this Section 5.02 or otherwise shall affect or be deemed to modify any representation or warranty contained herein or delivered pursuant hereto or to modify the conditions to the obligations of the parties hereto to consummate the Transactions.

Section 5.03. Efforts to Consummate; Further Assurances; Certain Covenants.

(a) Subject to the terms and conditions of this Agreement, each party hereto shall use reasonable best efforts to take, or to cause to be taken, all actions and to do, or to cause to be done, all things necessary, proper or advisable, including, using reasonable best efforts to make or obtain or cause to be made or obtained, in each case, as applicable, all Consents and Filings, as promptly as practicable to satisfy the conditions set forth in Article VI and to consummate the Transactions as promptly as reasonably possible. Each party shall cooperate in all reasonable respects with the other parties hereto in assisting such party to comply with this Section 5.03. In the event that after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, the parties to this Agreement will use their reasonable best efforts to take such action and shall reasonably cooperate in good faith with the other parties hereto in respect of any such action.

(b) To the extent they have not done so prior to the date of this Agreement, promptly following the date hereof (and in any event within 10 Business Days hereof), each of the Company or its Affiliates and Investor will file with the FTC and the Antitrust Division the notification and report form(s) required pursuant to the HSR Act in connection with the Transactions and a request for early termination of the waiting periods applicable thereto. Investor and the Company shall use reasonable best efforts to take such action as may be required to cause the expiration of the notice periods under the HSR Act with respect to the Transactions as promptly as practicable. Each of Investor and the Company shall keep the other party apprised of the status of any communications with, and inquiries or requests for information or documents from, any Governmental Authority. Investor and the Company shall comply promptly with any such inquiry or request and shall each provide to the other party any necessary information and reasonable assistance to comply with any such inquiry or request. Each of Investor and the Company shall, subject to this Section 5.03, use reasonable best efforts to resolve such objections, if any, as may be asserted by any Governmental Authority with respect to the Transactions under the HSR Act, the Sherman Antitrust Act of 1890, as amended, the Clayton Antitrust Act of 1914, as amended, the Federal Trade Commission Act of 1914, as amended, and any other United States federal or state or foreign statutes, rules, regulations, orders, decrees, administrative or judicial doctrines or other Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

(c) To the extent it has not done so prior to the date of this Agreement, as promptly as reasonably possible following the date hereof and subject to the terms and

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conditions of this Agreement, the Company shall use reasonable best efforts to take, or to cause to be taken, all actions and to do, or to cause to be done, all things necessary, proper or advisable, to consummate the Merger; provided, however, that, notwithstanding the foregoing, in no event shall the Company be obligated to consummate the Merger prior to March 7, 2011.

Section 5.04. Confidentiality. Investor acknowledges that the information being provided to it by the Company and its Subsidiaries in connection with the Transactions (including all information and access provided pursuant to Section 5.02) is subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein by reference.

Section 5.05. Investigation; No Other Company Representations or Warranties.

(a) Investor acknowledges and agrees that it (i) has conducted its own independent inquiry and investigation into, and based thereon has formed an independent judgment concerning the Company, Los Gatos, the Business, the Subsidiaries of the Company and Los Gatos, the Transactions and any other rights or obligations to be transferred hereunder or pursuant hereto, (ii) has been furnished with, or given access to, information, personnel, books and records, facilities, equipment, contracts and other assets it has desired, requested or required to review about the Company, Los Gatos, the Business, the Subsidiaries of the Company and Los Gatos, the Transactions and any other rights or obligations to be transferred hereunder or pursuant hereto; (iii) it and its representatives have had full opportunity to meet with the management of the Company and to discuss the business and assets of the Company and Los Gatos, including with respect to the Business, the Subsidiaries of the Company and Los Gatos, the Transactions, and any other rights and obligations to be transferred hereunder or pursuant hereto, and (iv) it and its representatives have been afforded the opportunity to ask questions of and receive answers from officers and other personnel of the Company and Los Gatos. Investor further acknowledges and agrees that (A) the only representations and warranties made by the Company are the representations and warranties made in Article III of this Agreement (and that any other representations or warranties are disclaimed), (B) the only covenants and agreements made by the Company are the covenants and agreements made in this Agreement (and all other covenants and agreements are disclaimed) and (C) Investor has not relied upon any other representations or other information made or supplied by or on behalf of the Company or Los Gatos or by any Affiliate or representative of the Company or Los Gatos, including presentations and other diligence materials delivered to Investor, as subsequently updated, supplemented or amended, or any information, documents or material made available to Investor in the due diligence materials provided to Investor, including in any “data room,” other management presentations (formal or informal), statements made by the Company or Los Gatos or representatives, Subsidiaries or Affiliates thereof, or in any other form in connection with the transactions contemplated by this Agreement or the Stockholders Agreement (collectively, the “Company Information”), and that Investor shall not have any right arising out of any such representation or Company Information.

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(b) Without limiting the foregoing, (i) neither the Company (including its Subsidiaries and Affiliates) nor any other Person shall be subject to any liability to Investor or any other Person resulting from making available to Investor or such parties’ use of such information and (ii) except as expressly set forth in Article III of this Agreement, the Company makes no representation or warranty to Investor or any other Person with respect to (A) the information set forth in the Company Information, (B) any financial projection, forecast, prediction or estimate relating to the Company, Los Gatos and their Subsidiaries, or any projection, forecast, prediction or estimate with respect to the mineral endowment of the properties of the Company, Los Gatos and their Subsidiaries, in each case whether or not included in the Company Information or any management presentation, or (C) any other information concerning the Company, Los Gatos and their Subsidiaries, the Business, or the Transactions. Except as expressly set forth in this Agreement, the Company makes no representation or warranty, express or implied, as to the merchantability, satisfactory quality, or fitness for any particular purpose of the Business or any of its assets or properties.

Section 5.06. Additional Equity Issuances.

(a) If, following the date hereof and prior to the Closing Date, the board of directors of the Company (the “Board of Directors”) determines that the Company requires additional funding for its operations, the Company may issue and sell to any Electrum Party (as defined in the Stockholders Agreement), and any Electrum Party may purchase, up to an aggregate of 600,000 shares of Company Common Stock at the per share Purchase Price; provided, however, that the Electrum Parties may not purchase more than 150,000 shares of Company Common Stock in any 30 day period. The Company and Investor acknowledge and agree that (i) no Electrum Party has any obligation, commitment or agreement to purchase any shares of Company Common Stock pursuant to this Section 5.06(a); and (ii) each Electrum Party shall have the right, in its sole and absolute discretion, to refuse or decline to purchase any shares of Company Common Stock pursuant to this Section 5.06(a).

(b) At any time after March 15, 2011 and before the Closing Date, the Company may sell and issue up to an aggregate of 1,000,000 shares of equity securities of the Company (including Company Common Stock) to any Person on customary terms at a per share purchase price greater than or equal to the per share Purchase Price; provided, however, that if the Company sells and issues equity securities of the Company other than Company Common Stock, for purposes of this Section 5.06(b), the total number of shares of such securities sold and issued shall be the total number of shares of Company Common Stock into which such securities are convertible, exchangeable or exercisable. In connection with any such sale of equity securities by the Company, Liberty will have preemptive rights with respect to such sale as Liberty will be entitled to under Section 4.01 of the Stockholders Agreement; provided, however, that Liberty will have no right to purchase any shares pursuant to this provision unless and until the Closing has occurred and any necessary filings or clearances have been received.

(c) Following the date hereof and prior to the Closing Date, the Company may grant restricted Company Common Stock or other equity compensation awards to employees, directors and consultants of the Company or its Subsidiaries; provided, however, that

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the number if such shares or securities so granted shall not exceed 4,712,477 shares of Company Common Stock; provided, further, that if the Company grants equity compensation awards other than Company Common Stock, for purposes of this Section 5.06(c), the total number of shares of such equity compensation awards granted shall be the total number of shares of Company Common Stock into which such awards are convertible, exchangeable or exercisable.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.01. Conditions to Obligations of the Company and Investor. The respective obligations of Investor and the Company to consummate the Transactions will be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived (to the extent such condition may be waived by such party) in writing:

(a) No Injunction. No Law and no injunction or other order issued by any court or other Governmental Authority of competent jurisdiction or other legal or regulatory prohibition shall be in effect, in each case that would prevent or make illegal the consummation of the Transactions.

(b) HSR Act; Governmental Consents. The waiting period (and any extensions thereof) applicable to the Transactions under the HSR Act shall have expired or been terminated.

(c) Merger. The Merger shall have been consummated.

Section 6.02. Conditions to Investor’s Obligations. The obligations of Investor to consummate the Transactions are subject to the satisfaction or waiver of each of the following further conditions:

(a) The representations and warranties of the Company contained in this Agreement shall be true and correct on and as of the Closing Date as though made on the Closing Date, except to the extent expressly made as of an earlier date (in which case they shall be true and correct as of such date), in each case except for such failures to be true and correct, individually or in the aggregate, that would not reasonably be expected to have a Company Material Adverse Effect or prevent or materially delay the ability of the Company to, and to cause its Subsidiaries to, consummate the Transactions. Investor shall have received a certificate, dated the Closing Date, signed on behalf of the Company by an authorized officer of the Company to such effect.

(b) The Company shall have performed in all material respects each obligation and agreement to be performed by it at or prior to Closing, and shall have complied in all material respects with each covenant required by this Agreement to be performed or complied with by it at or prior to the Closing, and Investor shall have received a certificate, dated the Closing Date, signed on behalf of the Company by an authorized officer of the Company to such effect.

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(c) No Property Material Adverse Effect shall have occurred; provided, however, that this condition shall be deemed satisfied in the event that Investor does not properly deliver a Defect Termination Notice.

(d) Prior to or at the Closing, the Company shall have delivered to Investor the items to be delivered pursuant to Section 2.04.

(e) The Company shall have duly executed and delivered the Stockholders Agreement and the Stockholders Agreement shall be in full force and effect.

Section 6.03. Conditions to the Company’s Obligations. The obligations of the Company to consummate the Transactions shall be subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions:

(a) The representations and warranties of Investor contained in this Agreement shall be true and correct on and as of the Closing Date as though made on the Closing Date, except to the extent expressly made as of an earlier date (in which case they shall be true and correct as of such date), in each case except for such failures to be true and correct, individually or in the aggregate, that would not reasonably be expected to prevent or materially delay the ability of Investor to consummate the Transactions. The Company shall have received a certificate, dated the Closing Date, signed on behalf of Investor by an authorized officer of Investor to such effect.

(b) Investor shall have performed in all material respects each obligation and agreement to be performed by it at or prior to Closing, and shall have complied in all material respects with each covenant required by this Agreement to be performed or complied with by it at or prior to the Closing, and the Company shall have received a certificate, dated the Closing Date, signed on behalf of Investor by an authorized officer of Investor to such effect.

(c) Prior to or at the Closing, Investor shall have delivered to the Company the items to be delivered pursuant to Section 2.05.

(d) Investor shall have duly executed and delivered the Stockholders Agreement and the Stockholders Agreement shall be in full force and effect.

Section 6.04. Frustration of Closing Conditions. Neither Investor nor the Company may rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such party’s failure to act in good faith or to use its reasonable best efforts to cause the Closing to occur as required by, and subject to the limitations set forth in, Section 5.03.

ARTICLE VII

TERMINATION

Section 7.01. Termination.

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This Agreement may be terminated at any time prior to the consummation of the Closing under the following circumstances:

(a) by mutual written consent of Investor and the Company;

(b) by either the Company or Investor upon written notice to the other if the Closing shall not have been consummated on or before May 30, 2011 (the “Termination Date”); provided, however, that the right to terminate this Agreement under this Section 7.01(b) shall not be available to a party if such party’s or such party’s Affiliates willful act or willful failure to act has been the cause of or resulted in the failure of the Closing to be consummated on or before the Termination Date;

(c) by Investor upon written notice to the Company if any of the conditions to the Closing set forth in Section 6.02 shall have become incapable of fulfillment by the Termination Date and shall not have been waived in writing by Investor;

(d) by the Company upon written notice to Investor if any of the conditions to the Closing set forth in Section 6.03 shall have become incapable of fulfillment by the Termination Date and shall not have been waived in writing by the Company;

(e) by Investor, if a Property Material Adverse Effect exists and Investor properly delivers a Defect Termination Notice in accordance with Section 2.03; provided, however, that in the event that (i) Investor properly delivers a Defect Termination Notice to the Company and (ii) the Company disputes the existence of a Property Material Adverse Effect, such dispute shall be resolved in accordance with Section 9.07; provided, further, that, notwithstanding any provision in this Agreement to the contrary, there shall be no limitation on the damages payable by Investor to the Company in connection with the foregoing; or

(f) by either Investor or the Company upon written notice to the other if there shall be in effect a final, non-appealable order of a court or government administrative agency of competent jurisdiction permanently prohibiting the consummation of the Transactions.

Section 7.02. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 7.01, this Agreement, except for the provisions of Section 3.14, Section 4.07, Section 5.04, Article IX and this Section 7.02, shall become void and shall be of no further effect, without any liability on the part of any party hereto or its directors, officers or stockholders; provided, however, that nothing herein shall relieve either party from liability for any breach of any covenant contained herein.

ARTICLE VIII

SURVIVAL; INDEMNIFICATION

Section 8.01. Survival.

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(a) The representations and warranties contained in this Agreement and in the closing certificates delivered pursuant to Sections 2.04 and 2.05 shall survive the Closing until the date that is 12 months following the Closing Date.

(b) The covenants and agreements made by each party in this Agreement shall survive the Closing, unless specified to the contrary herein.

(c) The foregoing notwithstanding, if written notice of a claim for indemnification has been given pursuant to Section 8.01(a) or (c) prior to the expiration of the applicable survival period, then the party seeking indemnification in respect of such claim shall continue to have the right to be indemnified (to the extent such indemnification is available pursuant hereto) with respect to such indemnification claim until such claim has been satisfied or resolved pursuant to this Article VIII (which may, for the avoidance of doubt, include a determination that no indemnification is warranted).

Section 8.02. Indemnification.

(a) Subject to this Article VIII, from and after the Closing Date, the Company hereby indemnifies each Investor Indemnitee against and agrees to hold each of them harmless (without duplication) from any and all actual and direct Damages incurred or suffered by any Investor Indemnitee to the extent arising out of or based upon (i) any representation or warranty of the Company contained in this Agreement not being true and correct when made or deemed made or (ii) any breach or nonperformance of any covenant or agreement made or to be performed by the Company pursuant to this Agreement (other than representations or warranties which are solely the subject of the preceding clause (i)).

(b) No indemnification by the Company shall be due and payable under Section 8.02(a)(i) in respect of any Company Breach or Company Title Breach unless and until the cumulative amount of all Damages arising out of or resulting from all such Company Breaches and Company Title Breaches exceeds the Basket Amount, whereupon the Company will be obligated to indemnify the Investor Indemnitees for the cumulative amount of all Damages incurred or suffered by the Investor Indemnitees, including those not in excess of the Basket Amount. The Company shall not be obligated to indemnify any Investor Indemnitee for Damages arising out of or resulting from all Company Breaches and Company Title Breaches under this Agreement in an aggregate amount in excess of the Maximum Amount. The limitations on indemnification set forth in this Section 8.02(b) shall not be applicable to (i) any Company Exception Breach (and the Investor Indemnitees will be entitled to indemnification with respect to any Company Exception Breach without regard to any Basket Amount or Maximum Amount) and (ii) any claim based solely upon fraud. Notwithstanding any other provision in this Agreement to the contrary, under no circumstances will any amount payable by the Company to an Investor Indemnitee under Section 8.02(a)(i) with respect to a Company Title Breach be greater than the Property Damages arising out of or based upon such Company Title Breach.

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(c) Subject to this Article VIII, from and after the Closing Date, Investor hereby indemnifies each Company Indemnitee against and agrees to hold each of them harmless (without duplication) from any and all Damages incurred or suffered by any Company Indemnitee to the extent arising out of or based upon (i) any representation or warranty of Investor contained in this Agreement not being true and correct when made or deemed made or (ii) any breach or nonperformance of any covenant or agreement made or to be performed by Investor pursuant to this Agreement (other than representations or warranties which are solely the subject of the preceding clause (i)).

(d) Investor shall not be obligated to indemnify any Company Indemnitee for Damages arising out of or resulting from all Investor Breaches under this Agreement in an aggregate amount in excess of the Maximum Amount. The limitations on indemnification set forth in this Section 8.02(d) shall not be applicable to (i) any Investor Exception Breach (and the Company Indemnitees will be entitled to indemnification with respect to any Investor Exception Breach without regard to any Maximum Amount) and (ii) any claim based solely upon fraud.

Section 8.03. Procedures.

(a) The Investor Indemnitee or Company Indemnitee seeking indemnification under Section 8.02 (the “Indemnified Party”) agrees to give prompt written notice in accordance herewith (the “Claim Notice”) to the party or parties against whom indemnity is sought (the “Indemnifying Party”) of the assertion or discovery of any claim or demand, or the commencement of any suit, action, investigation or proceeding (any such claim, demand, suit, action, investigation or proceeding, a “Claim”) in respect of which indemnity may be sought under Section 8.02 (and such notice shall be within ten Business Days following the earlier of the Indemnified Party becoming aware of the Claim or receipt by the Indemnified Party of notice of the Claim, or within such shorter time as may be necessary to give the Indemnifying Party a reasonable opportunity to respond to such Claim, and include a statement specifying the basis of such Claim) and will provide the Indemnifying Party such information with respect thereto in its possession that the Indemnifying Party may reasonably request; provided, however, that failure to give such notification within the time provided shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure; provided, further, that it is understood that, prior to seeking the indemnification provided hereunder, the Indemnified Party shall provide the Indemnifying Party with a Claim Notice with respect thereto. The Claim Notice shall set forth in reasonable detail (i) the facts and circumstances giving rise to such claim for indemnification, (ii) the nature of the Damages suffered or incurred or expected to be suffered or incurred, (iii) a reference to the provisions of this Agreement in respect of which such Damages have been suffered or incurred or are expected to be suffered or incurred, (iv) the amount of Damages actually suffered or incurred, and, to the extent the Damages have not yet been suffered or incurred, a good faith estimate, to the extent then reasonably estimable, of the amount of Damages that would reasonably be expected to be suffered or incurred and (v) in the case of a third party Claim, in addition to the foregoing, the amount or estimated amount of damages (including any Damages) sought thereunder by such Person, any other remedy sought by such Person, any relevant time

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constraints relating thereto and, to the extent practicable, any other material details pertaining thereto).

(b) In the case of a Claim asserted by a Person not a party hereto (including a Claim that may be asserted by a Governmental Authority), the Indemnifying Party may, but shall not be required to, elect to exercise full control of the defense, compromise or settlement of any such third party Claim by, within 20 Business Days (or such greater time as may be reasonable) of receiving the Claim Notice concerning such indemnity claim, delivering written notice to such Indemnified Party of the Indemnifying Party’s intention to assume the defense thereof. If the Indemnifying Party does not elect to assume the defense thereof, then the Indemnified Party may retain one counsel, and one local counsel, if necessary for the effective defense of the Claim (each reasonably satisfactory to the Indemnifying Party), and assume control of the defense of such Claim.

(c) If the Indemnifying Party so assumes the defense of any such Claim in accordance herewith, then such Indemnified Party shall cooperate with the Indemnifying Party in any manner that the Indemnifying Party reasonably may request in connection with the defense, compromise or settlement thereof. If the Indemnifying Party so assumes the defense of any such Claim, the Indemnified Party shall have the right to employ separate counsel and to participate in (but not control in any manner) the defense, compromise or settlement thereof, but the fees and expenses of such counsel shall be at the sole expense of such Indemnified Party unless (i) the Indemnifying Party has agreed to pay such fees and expenses, or (ii) such Indemnified Party shall have been advised by its regular outside counsel that a conflict of interest between the Indemnifying Party and the Indemnified Party in the conduct of the defense of such action would reasonably be expected (in which case the Indemnifying Party shall not have the right to control the defense, compromise or settlement of such action on behalf of the Indemnified Party), and in any such case described in clauses (i) or (ii) the reasonable fees and expenses of one counsel, and one local counsel, if necessary for the effective defense of the Claim (each reasonably satisfactory to the Indemnifying Party) for all Indemnified Parties shall be borne by the Indemnifying Party.

(d) No Indemnified Party shall settle or compromise or consent to entry of any judgment with respect to any such action for which it is entitled to indemnification hereunder without the prior consent of the Indemnifying Party. The Indemnifying Party shall not, without the consent of such Indemnified Party, settle or compromise or consent to entry of any judgment with respect to any such Claim (i) in which any relief other than the payment of money damages is or may be sought against such Indemnified Party (other than a relief seeking rescission of this Agreement) or (ii) that does not include as an unconditional term thereof the giving to such Indemnified Party by the claimant, the party conducting such investigation, plaintiff or petitioner of a release from all liability with respect to such Claim.

(e) The Indemnified Party and the Indemnifying Party shall use commercially reasonable efforts to avoid production of confidential information (consistent with applicable Law), and to cause all communications among employees, counsel and others representing any party to a third party Claim to be made so as to preserve any applicable attorney-client or work-product privileges.

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Section 8.04. Exclusivity. Following the Closing, except in the case of (a) common law fraud and (b) with respect to matters for which the remedy of specific performance, injunctive relief or other non-monetary equitable remedies are available, the sole and exclusive remedy of the parties with respect to any and all claims arising from any breach of this Agreement or any of the other matters addressed in Section 8.02 (other than matters relating to the Stockholders Agreement) shall be pursuant to the indemnification provisions set forth in this Article VIII.

Section 8.05. Additional Limitations and Adjustments.

(a) In the event of any Damage in respect of which an Indemnified Party asserts an indemnification claim, the Indemnified Party shall take commercially reasonable measures to mitigate the consequences of such Damage.

(b) No Indemnified Party shall be entitled to any indemnification hereunder to the extent that such indemnification would constitute a duplicative payment for the same Damage.

(c) Any indemnity payment due and payable by the Indemnifying Party under this Agreement shall be net of (and, for the avoidance of doubt, reduced, whether retroactively or otherwise by) any and all insurance proceeds and recoveries in respect of indemnification obligations actually received by the Indemnified Party or Affiliate thereof in respect of such Damages, whether such proceeds are received before or after indemnity payments are made; provided that such proceeds and recovery will be determined net of the reasonable, out-of-pocket costs and expenses incurred in connection with or otherwise related to prosecuting the claims necessary to obtain such proceeds and recovery.

(d) Without limiting the foregoing, if any Indemnified Party receives from any Person any amounts in respect of Damages previously paid by the Indemnifying Party or obtains any judgment or award in any litigation relating to such Damages previously paid by the Indemnifying Party, such Indemnified Party shall promptly distribute to the Indemnifying Party all such amounts received, net of all reasonable, out-of-pocket costs and expenses (including reasonable legal fees and expenses) incurred in connection with obtaining such amounts, judgments or awards, up to the amount of the payment that the Indemnifying Party had made to the Indemnified Party with respect to such Damages.

(e) If an Indemnified Party receives payment from an Indemnifying Party in respect of any Damages, and the Indemnified Party could have recovered all or a part of such Damages from a third party (a “Potential Contributor”) based on the underlying claim or demand asserted against such Indemnifying Party, such Indemnified Party shall, to the extent permitted by applicable Law, assign such of its rights to proceed against the Potential Contributor as are necessary or desirable to permit such Indemnifying Party to recover from the Potential Contributor the amount of such payment.

(f) An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood

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and agreed that no insurer or any other third party shall be entitled to a “wind-fall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof.

(g) No claim may be asserted under this Article VIII (i) by Investor (or any Investor Indemnitee) against the Company if Investor (or any Investor Indemnitee) had knowledge, on or before the Closing, of any fact, event, circumstance or condition giving rise to such claim; or (ii) by the Company (or any Company Indemnitee) against Investor if the Company (or any Company Indemnitee) had knowledge, on or before the Closing, of any fact, event, circumstance or condition giving rise to such claim.

ARTICLE IX

MISCELLANEOUS

Section 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given:

if to Investor, to:	Liberty Metals & Mining Holdings, LLC
	175 Berkeley Street, 18th Floor
	Boston, Massachusetts 02116
	Attention:  Diana Walters, President
	Fax:  (617) 482-3504
with a copy to:	Thompson & Knight LLP
	900 Third Avenue, 20th Floor
	New York, New York 10022-4728
	Attention:  Matthew Cohen, Esq.
	Fax:  (212) 999-1613
if to the Company, to:	Sunshine Silver Mines Corporation
	c/o Tigris Financial Group Ltd.
	535 Madison Avenue, 11th Floor
	New York, New York 10022
	Attention:  Andrew Shapiro, Esq.
	Fax:  (646) 365-1600
with a copy to:	Baker Botts L.L.P.
	30 Rockefeller Plaza
	New York, New York 10112
	Attention:  Jonathan Gordon, Esq.
	Fax:  (212) 259-2508

or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All notices and other communications given to a party in accordance with the provisions of this Agreement shall be deemed to have been given (a) when delivered by hand or transmitted by telecopy (answer back received), if received prior to 5:00

41

p.m. on a Business Day, otherwise on the next Business Day; (b) one Business Day after the same are sent by a reliable overnight courier service, with acknowledgment of receipt requested and received; or (c) if earlier, upon actual receipt by the party.

Section 9.02. No Third-Party Beneficiaries. Other than as provided in Sections 8.02, 8.03 and 9.05, this Agreement is not intended to and shall not confer any rights or remedies upon any Person other than the parties hereto.

Section 9.03. Amendments; Waivers.

(a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. For the avoidance of doubt, any provision of any Exhibit to this Agreement may be amended if, but only if, such amendment is in writing and is signed by each party to this Agreement.

(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable Law.

(c) Any consent provided under this Agreement must be in writing, signed by the party against whom enforcement of such consent is sought.

Section 9.04. Expenses. Regardless of whether the Transactions are consummated, except as otherwise expressly provided herein, each of the parties hereto shall pay its own expenses incident to this Agreement, the Stockholders Agreement and the consummation of the Transactions (including legal fees and filing fees).

Section 9.05. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors (by merger, consolidation, transfer or otherwise) and permitted assigns. None of the parties hereto shall be permitted to assign its rights under this Agreement to any Person without the prior written consent of the other parties hereto; provided, however, that Investor may, upon prior notice to the Company, assign its rights and obligations hereunder to a wholly-owned Subsidiary of Investor but no such assignment shall release Investor from any Liabilities hereunder.

Section 9.06. Governing Law.

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This Agreement shall be governed by and construed in accordance with the Laws of the State of New York (including Section 5-1401 of the General Obligations Law of the State of New York but otherwise without regard to conflicts of Laws principles).

Section 9.07. Arbitration. To the extent permitted by Law, the parties mutually agree to waive any right either may have to seek remedies in court, including a jury trial in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or related to this Agreement. The parties agree that in the event of any dispute arising out of, relating to or in connection with this Agreement, such dispute shall be resolved exclusively by arbitration to be conducted only in the county and state of New York, New York in accordance with the rules of JAMS (“JAMS”) applying the laws of New York. Disputes shall not be resolved in any other forum or venue. The arbitration shall be conducted by a retired judge who is experienced in resolving similar disputes. Discovery shall not be permitted, except as required by the rules of JAMS. The arbitration award shall not include factual findings or conclusions of law, and no punitive damages shall be awarded. The parties understand that their right to appeal or to seek modification of any ruling or award of the arbitrator is severely limited. Any award rendered by the arbitrator shall be final and binding, and judgment may be entered on it in any court of competent jurisdiction. Notwithstanding the foregoing, any party may seek an injunction in any court of competent jurisdiction (a) pursuant to Section 9.08 or (b) to the limited extent necessary to preserve the status quo during the pendency of the final resolution of any dispute arising out of or related to this Agreement in accordance with this Section 9.07; provided, however, that, with respect to the foregoing, (i) any such proceeding shall be brought exclusively in the state courts in the State of New York located in New York, New York or in the federal courts located in the State of New York; and (ii) each party consents to personal jurisdiction in such proceeding in any such court (and of the appropriate appellate courts therefrom) and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now have to the laying of the venue of any such proceeding in any such court or that any such proceeding brought in any such court has been brought in an inconvenient forum.

Section 9.08. Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Company, on the one hand, or Investor, on the other hand, whichever is not in breach of this Agreement, will be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which it may be entitled at Law or in equity, without the necessity of posting or securing any bond with respect thereto.

Section 9.09. Counterparts; Effectiveness. This Agreement may be executed in two or more counterparts, all of which shall be considered the same agreement. Signature pages from separate identical counterparts may be combined with the same effect as if the parties signing such signature page had signed the same

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counterpart. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

Section 9.10. Captions. The table of contents and captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

Section 9.11. Disclosure Schedule. When a reference is made in this Agreement to the Disclosure Schedule, such reference shall be to the Disclosure Schedule delivered or deemed delivered herewith on the date hereof by the Company, and not to any supplement to, or change or modification of, such Disclosure Schedule.

Section 9.12. Entire Agreement. This Agreement (including the Schedules and Exhibits attached hereto or delivered in connection herewith) and the Stockholders Agreement constitute the entire agreement among the parties hereto with respect to the matters covered hereby and thereby, and all written or oral agreements, representations, warranties or covenants previously existing between the parties with respect to such subject matter are cancelled and are not part of this Agreement or the Stockholders Agreement.

Section 9.13. Publicity; Public Announcements. Investor and the Company will reasonably cooperate with each other in connection with the issuance of mutually acceptable press releases to be issued on or promptly after the date of execution hereof announcing the execution of this Agreement. Each of Investor and the Company agrees not to, and to cause each of their respective Affiliates not to, issue, or cause or permit to be issued, any press release or other public statement regarding this Agreement or the Transactions without the prior written consent of the other, except, if, in the reasonable judgment of the party seeking to make disclosure, such release or statement is required by applicable Law (including the rules and regulations of the United States Securities and Exchange Commission) or by any securities exchange or association on which such Person’s securities are listed or traded (including pursuant to any listing agreement), in which case the party required to make the release or announcement shall, to the extent practicable, provide the other party a reasonable opportunity to comment on such release or announcement (so as to confirm the accuracy of any statements therein regarding such other party, among other things) and shall consider in good faith any such timely comments made.

Section 9.14. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith to modify this Agreement so as

44

to effect the original intent of the parties as closely as possible in an acceptable manner in order that the Transactions be consummated as originally contemplated to the fullest extent possible; provided, however, that in the absence of an agreement as to how to modify this Agreement, the remainder of this Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto, and such invalid, void or unenforceable provision of this Agreement shall be replaced with a valid and enforceable provision that will achieve, to the fullest extent possible, the economic, business and other purposes of such severed provision.

Section 9.15. No Strict Construction. The Company and Investor each acknowledge that this Agreement has been prepared jointly by the parties hereto and shall not be strictly construed against any party hereto.

Section 9.16. Foreign Currencies. Unless otherwise stated, all currency specified shall be in U.S. dollars. Except as otherwise provided herein, all foreign currency shall be converted to U.S. dollar equivalents determined on the basis of the spot rate of exchange (closing mid-point) published in the United States edition of the Financial Times on the Business Day immediately prior to the applicable date of determination (or, if the Financial Times is not published on such date, the next preceding date on which it is published).

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

COMPANY:
SUNSHINE SILVER MINES CORPORATION
By:	/s/ Michael Williams
	Name:	Michael Williams
	Title:	President

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INVESTOR:
LIBERTY METALS & MINING HOLDINGS, LLC
By:	/s/ Diana Walters
	Name:	Diana Walters
	Title:	President & CEO

Exhibit A

Form of Stockholders Agreement

SUNSHINE SILVER MINES CORPORATION

STOCKHOLDERS AGREEMENT

AS OF [—], 2011

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TABLE OF CONTENTS

			PAGE NO.
ARTICLE I CERTAIN DEFINITIONS AND OTHER MATTERS				1
	Section 1.01.	Certain Definitions		1
	Section 1.02.	Terms Defined in Other Sections		7
	Section 1.03.	Interpretation		8
ARTICLE II CORPORATE GOVERNANCE				8
	Section 2.01.	Voting Generally		8
	Section 2.02.	Voting Provisions Regarding Board of Directors		9
	Section 2.03.	Matters Requiring Approval of Liberty		10
ARTICLE III TRANSFERS				12
	Section 3.01.	Restrictions on Transfer		12
	Section 3.02.	Permitted Transfers		12
	Section 3.03.	Liberty Tag-Along Rights		13
	Section 3.04.	Electrum Group Holders Right of First Offer		14
	Section 3.05.	Drag-Along Rights		16
	Section 3.06.	Lock-Up		17
ARTICLE IV ADDITIONAL AGREEMENTS				18
	Section 4.01.	Preemptive Rights		18
	Section 4.02.	Financial Statements		19
	Section 4.03.	Confidentiality		19
ARTICLE V CERTIFICATES				20
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS				21
ARTICLE VII TERM AND TERMINATION				22
ARTICLE VIII MISCELLANEOUS				22
	Section 8.01.	Notices		22
	Section 8.02.	No Third-Party Beneficiaries		23
	Section 8.03.	Amendments; Waivers		23
	Section 8.04.	Successors and Assigns		23
	Section 8.05.	Governing Law		24
	Section 8.06.	Arbitration		24
	Section 8.07.	Specific Performance		24
	Section 8.08.	Counterparts; Effectiveness		25
	Section 8.09.	Captions		25
	Section 8.10.	Entire Agreement		25
	Section 8.11.	Severability		25
	Section 8.12.	No Strict Construction		25
	Section 8.13.	Foreign Currencies		25

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STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT (this “Agreement”) is entered into as of [—], 2011 by and among Sunshine Silver Mines Corporation, a Delaware corporation (the “Company”), and each of the stockholders listed on Schedule A hereto (each, a “Stockholder,” and collectively, the “Stockholders”).

W I T N E S S E T H

WHEREAS, the Company and Liberty Metals & Mining Holdings, LLC, a Delaware limited liability company (“Liberty”), have entered into a Purchase Agreement, dated as of February 8, 2011 (the “Purchase Agreement”), pursuant to which Liberty is acquiring the Initial Liberty Securities (as defined below); and

WHEREAS, it is a condition precedent to the Company’s and Liberty’s obligations under the Purchase Agreement that the parties enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

CERTAIN DEFINITIONS AND OTHER MATTERS

Section 1.01. Certain Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below.

“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with such Person; provided, however, that for purposes of this Agreement, neither the Company nor any of its Subsidiaries shall be considered an Affiliate of Liberty or any Electrum Party. For purposes of this Agreement, each Electrum Party shall be deemed to be an Affiliate of each other Electrum Party.

“Beneficial Ownership” (and derivative terms) means beneficial ownership within the meaning of Rule 13d-3 under the Exchange Act and any successor regulation; provided, however, that, in determining Beneficial Ownership, without duplication, equity securities that may be acquired pursuant to Rights to acquire equity securities that are exercisable more than 60 days after a date shall nevertheless be deemed to be Beneficially Owned.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banking institutions in New York City are authorized or required by Law or action of a Governmental Authority to be closed.

“Bylaws” means the bylaws of the Company, as amended.

“capital stock” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock or partnership or membership interests, whether common or preferred.

“Certificate of Incorporation” means the certificate of incorporation of the Company, as amended.

“Common Stock” means the common stock, no par value, of the Company.

“Confidential Information” means any confidential or proprietary information which a Stockholder (or such Stockholder’s Stockholder Designee) obtains from the Company, whether pursuant to financial statements, reports and other materials provided by the Company to such Stockholder (or such Stockholder’s Stockholder Designee) pursuant to the terms of this Agreement or otherwise.

“Contract” means any mortgage, indenture, lease, contract, agreement, instrument, bond or note.

“Control” (including its correlative meanings, the terms “Controlling,” “Controlled by” and “under common Control with”) means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the Beneficial Ownership of voting securities, by Contract or otherwise.

“Drag-Along Rights” means the rights granted to the Electrum Parties pursuant to Section 3.05 to require Liberty to Transfer Liberty Securities.

“Electrum Group Holders” means CGT Management Ltd. and Electrum Silver Holdings LLC.

“Electrum Parties” means the Electrum Group Holders, Tigris and all Electrum Permitted Transferees that hold Equity Securities of the Company.

“Electrum Permitted Transferee” means (a) any Electrum Party; (b) any Affiliate of an Electrum Party; (c) Thomas S. Kaplan or Dafna Recanati Kaplan; (d) any spouse, parent, sibling or descendant (including by adoption) of either of the Persons referred to in clause (c) above; (e) any trust created for the benefit of any of the Persons described in clauses (c) or (d) above or any trust for the benefit of such trust; or (f) any Person Controlled by one or more of the Persons referred to in clauses (a), (b), (c), (d) or (e) above.

“Electrum Securities” means, with respect to an Electrum Party, the Equity Securities owned by such Electrum Party from time to time and at all times.

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“Equity Securities” means Common Stock and any other securities hereafter issued by the Company that are entitled to vote generally in the election of directors.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“GAAP” means United States generally accepted accounting principles.

“Governmental Approval” means any notice to, filing with or approval or consent of a Governmental Authority required by applicable Law with respect to any action, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Governmental Authority” means any U.S. federal, state or local or any foreign court, governmental department, commission, authority, board, bureau, agency or other instrumentality.

“IFRS” means International Financial Reporting Standards.

“Implied Valuation Amount” means, with respect to a Material Subsidiary Transaction, an amount in U.S. dollars equal to the product of (a) the sum of (i) the pre-tax amount of any proceeds received, or to be received, by the Company or a Subsidiary of the Company as consideration in connection with such Material Subsidiary Transaction and (ii) the fair market equity value of the Company and its remaining Subsidiaries (excluding the Material Subsidiary that is involved in the Material Subsidiary Transaction), taken as a whole, calculated as of immediately prior to the consummation of such Material Subsidiary Transaction (by definition excluding, for purposes of such equity value calculation, any liabilities to be assumed by a third party or otherwise transferred with the Material Subsidiary in connection with such Material Subsidiary Transaction), in each case, as determined by the Board of Directors in good faith, multiplied by (b) a fraction, (i) the numerator of which is the number of Initial Liberty Securities Beneficially Owned by Liberty as of immediately prior to the consummation of such Material Subsidiary Transaction (as adjusted for stock splits, dividends, recapitalizations and the like) and (ii) the denominator of which is the total number of shares of the Company’s outstanding Common Stock as of immediately prior to the consummation of such Material Subsidiary Transaction. For the avoidance of doubt, the fair market equity value of the Company and its remaining Subsidiaries shall be calculated as the fair market enterprise value of the Company and such remaining Subsidiaries, taken as a whole, after giving effect to the Material Subsidiary Transaction, less any liabilities retained by the Company and such remaining Subsidiaries. Notwithstanding the foregoing, in the event that the pre-tax amount of any proceeds received, or to be received, by the Company or a Subsidiary of the Company as consideration in connection with such Material Subsidiary Transaction and all liabilities that are transferred or assumed in connection with such Material Subsidiary Transaction is greater than $40,250,000.00, then, at Liberty’s request, the Company shall hire an independent appraiser, selected by the Board of Directors in good faith and reasonably acceptable to Liberty, for the purpose of determining the fair market valuations to be used in the calculation of the Implied Valuation Amount. All fees and expenses of such independent appraiser will be allocated equally between the Company and Liberty.

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“Initial Liberty Securities” means Liberty Securities purchased by Liberty pursuant to the Purchase Agreement at the Closing (as defined in the Purchase Agreement).

“Law” means any law (including common law), statute, code, ordinance, rule, regulation, injunction, registration, permit, order, license, authorization, decree, judgment or other directive of any Governmental Authority.

“Liberty Minimum Return” means, at the time of determination, an amount, in cash, equal to (a) the applicable percentage set forth on Schedule B hereto of the per share purchase price (as adjusted for stock splits, dividends, recapitalizations and the like) paid by Liberty to the Company under the Purchase Agreement for the Initial Liberty Securities multiplied by (b) the number of Initial Liberty Securities then Beneficially Owned by Liberty.

“Liberty Permitted Transferee” means any Person Controlled by Liberty.

“Liberty Securities” means the Equity Securities Beneficially Owned by Liberty from time to time and at all times.

“Lien” means any lien, mortgage, pledge, security interest, encumbrance or other similar security arrangement which grants to any Person any security interest, including any restriction on the transfer of any asset, any right of first offer, right of first refusal, right of first negotiation or any similar right in favor of any Person, any restriction on the receipt of any income derived from any asset and any limitation or restriction on the right to own, vote, sell or otherwise dispose of any security.

“Material Subsidiary” means a Subsidiary of the Company the Material Subsidiary Percentage of which equals at least ten percent.

“Material Subsidiary Percentage” means the percentage determined by dividing the fair market value of a Material Subsidiary by the aggregate fair market value of the Company and its Subsidiaries, taken as a whole, in each case, as determined by the Board of Directors in good faith.

“New Securities” means shares of Equity Securities which the Company proposes to offer, issue or sell following the date of this Agreement; provided, however, that none of the following shall constitute New Securities: (a) securities issued in a public offering pursuant to a registration under the 1933 Act registered with the Securities and Exchange Commission or under the securities Laws of the United Kingdom or Canada or (b) securities, including Rights, issued pursuant to any incentive stock or other plan or Contract of the Company for the benefit of its employees, directors or consultants, provided, however, that the number of such securities so issued by the Company (together with any securities issued pursuant to Section 5.06(c) of the Purchase Agreement) shall not exceed ten percent of the Company’s outstanding Common Stock as of the date hereof (as adjusted for stock splits, dividends, recapitalizations and the like); (c) securities issued by the Company in connection with a joint venture or an acquisition (including by way of merger, consolidation or binding share exchange) by the Company of the capital stock, other equity interests or assets of another Person in a transaction pursuant to which all or part of the consideration payable in connection with such acquisition consists of securities of the Company, including Rights to acquire securities of the Company; (d) securities issued

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pursuant to the exercise of the Preemptive Right pursuant to Section 4.01; (e) securities issued by the Company in connection with any stock split, stock dividend, reverse stock split, recapitalization or the like occurring after the date of this Agreement; or (f) in the case of any right, option, warrant or other securities convertible into, or exercisable or exchangeable for, any other securities that are excluded from the definition of New Securities pursuant to clauses (a) through (e) above, any other securities issued upon the exercise, exchange or conversion of any such right, option, warrant or other convertible, exchangeable or exercisable security.

“Permitted Transferee” means, as applicable, an Electrum Permitted Transferee or a Liberty Permitted Transferee.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Premium Excess Amount” means the sum in U.S. dollars of (a) the amount by which any pre-tax proceeds received, or to be received in connection with a Transfer of Liberty Securities , by Liberty or any Liberty Permitted Transferee in connection with any Transfer (such Transfer, a “Liberty Stock Sale”) of Liberty Securities (other than any such Transfer to a Liberty Permitted Transferee) exceeded the Stock Sale Minimum Amount, as calculated for such transaction as of the consummation of such transaction, and (b) the sum of (i) the pre-tax amount of any cash dividends or distributions made by the Company or any Subsidiary of the Company to Liberty or any Liberty Permitted Transferee, (ii) the pre-tax amount of any cash received by Liberty or any Liberty Permitted Transferee in connection with a redemption or repurchase of Liberty Securities and (iii) the pre-tax fair market value, as determined by the Board of Directors in good faith, of any dividends or distributions of equity securities (excluding any equity securities of the Company) made by the Company or any Subsidiary of the Company to Liberty or any Liberty Permitted Transferee.

“Public Company” means a Person (a) that is subject to the reporting requirements of Sections 13 and 15(d) of the Exchange Act; or (b) whose securities are listed on a major international exchange, including, without limitation, the London Stock Exchange and the Toronto Stock Exchange.

“Purchase Agreement” means that certain Purchase Agreement, dated as of February 8, 2011, between the Company and Liberty.

“Qualifying Sale” means (a) a transaction, or series of related transactions, in which all or substantially all of the Electrum Securities will be Transferred for cash, in connection with which Liberty will receive, if Liberty Transfers Liberty Securities in connection with such Qualifying Sale, a pre-tax amount (plus any Premium Excess Amount) greater than or equal to the Liberty Minimum Return with respect to the Initial Liberty Securities Beneficially Owned by Liberty as of the consummation of such Qualifying Sale (a “Stock Sale”) or (b) a merger or consolidation of the Company with or into a Public Company (or a Subsidiary of a Public Company if, in connection with such merger or consolidation, holders of Equity Securities of the Company receive capital stock of such Public Company in exchange for such Equity Securities).

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“Restriction” means, with respect to any capital stock, equity interest or security, any voting or other trust or agreement, option, warrant, preemptive right, right of first offer, right of first refusal, escrow arrangement, proxy, buy-sell agreement, power of attorney or other Contract that, conditionally or unconditionally, (a) grants to any Person the right to purchase or otherwise acquire, or obligates any Person to sell or otherwise dispose of or issue, or otherwise results or, whether upon the occurrence of any event or with notice or lapse of time or both or otherwise, may result in any Person acquiring, (i) any of such capital stock or other equity interest or security; (ii) any of the proceeds of, or any distributions paid or that are or may become payable with respect to, any of such capital stock or other equity interest or security; or (iii) any interest in such capital stock or other equity interest or security or any such proceeds or distributions; (b) restricts or, whether upon the occurrence of any event or with notice or lapse of time or both or otherwise, is reasonably likely to restrict the transfer or voting of, or the exercise of any rights or the enjoyment of any benefits arising by reason of ownership of, any such capital stock or other equity interest or security or any such proceeds or distributions; or (c) creates or, whether upon the occurrence of any event or with notice or lapse of time or both or otherwise, is reasonably likely to create a Lien or purported Lien affecting such capital stock or other equity interest or security, proceeds or distributions.

“Rights” means, when used with respect to a Person, securities of such Person (which may include equity securities) that (contingently or otherwise) are exercisable, convertible or exchangeable for or into equity securities of such Person (with or without consideration) or that carry any right to subscribe for or acquire equity securities or securities exercisable, convertible or exchangeable for or into equity securities of such Person.

“Subsidiary” when used with respect to any Person, means (a) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by a Subsidiary of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar Lien, (b) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (i) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (ii) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (c) any other Person (other than a corporation) in which such Person, a Subsidiary of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has (i) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar Lien, or (ii) in the absence of such a governing body, at least a majority ownership interest.

“Stock Sale Minimum Amount” means, at the time of determination, an amount equal to (a) the applicable percentage set forth on Schedule B hereto of the per share purchase price (as adjusted for stock splits, dividends, recapitalizations and the like) paid by Liberty to the Company under the Purchase Agreement for the Initial Liberty Securities multiplied by (b) the number of Liberty Securities being Transferred in such Liberty Stock Sale.

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“Stockholder Designee” means, with respect to a Stockholder, any director designated by such Stockholder pursuant to Section 2.02 and elected by the holders of Common Stock.

“Tigris” shall mean Tigris Financial (International) L.P., a limited partnership organized and existing in the Cayman Islands, and Tigris Financial Group Ltd., a company organized and existing under the laws of the State of Delaware.

“Transfer” means any sale, gift, exchange, conveyance, pledge, transfer or other disposition, either directly or indirectly, of capital stock of the Company (including through the sale, exchange, relinquishment or other transfer, directly or indirectly, of a Controlling interest in a Person holding shares of such capital stock); provided, however, that none of the following shall constitute a Transfer: (a) any transfer pursuant to any tender or exchange offer approved by a majority of the Board of Directors; (b) a transfer by operation of Law in connection with any merger, consolidation, statutory share exchange or similar transaction involving the Company; (c) a transfer pursuant to a plan of liquidation of the Company that has been approved by a majority of the Board of Directors.

“Transfer Notice” means, as applicable, an Electrum Transfer Notice or a Liberty Transfer Notice.

“Valuation Threshold” means, with respect to a Material Subsidiary Transaction, the amount in U.S. dollars equal to (a) the Liberty Minimum Return, calculated as of immediately prior to the consummation of such Material Subsidiary Transaction, less (b) any Premium Excess Amount.

Section 1.02. Terms Defined in Other Sections. The following terms are defined elsewhere in this Agreement in the following Sections.

Defined Term	Section
Agreement	Preamble
Company	Preamble
Drag-Along Notice	Section 3.05(a)
Electrum Transfer Notice	Section 3.03(a)
IPO	Section 3.06(a)
JAMS	Section 8.06
Liberty	Recitals
Liberty Stock Sale	Section 1.01
Liberty Transfer Notice	Section 3.04(a)
Material Subsidiary Merger	Section 2.03(c)
Material Subsidiary Sale	Section 2.03(b)
Material Subsidiary Transaction	Section 2.03(c)
Minimum Price	Section 3.04(b)
New Securities Notice	Section 4.01(a)
Preemptive Right	Section 4.01(b)
Preemptive Right Exercise Period	Section 4.01(b)

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Purchase Agreement	Recitals
Representatives	Section 4.03(a)
Right of First Offer	Section 3.04(b)
Right of First Offer Exercise Period	Section 3.04(b)
Stockholder	Preamble
Tag-Along Exercise Period	Section 3.03(b)
Tag-Along Right	Section 3.03(b)

Section 1.03. Interpretation. As used herein, except as otherwise indicated herein or as the context may otherwise require, (a) the words “include,” “includes” and “including” are deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of like import; (b) the words “hereof,” “herein,” “hereunder” and comparable terms refer to the entirety of this Agreement, including the schedules hereto, and not to any particular article, section or other subdivision hereof or schedule hereto; (c) any pronoun shall include the corresponding masculine, feminine and neuter forms; (d) the singular includes the plural and vice versa; (e) references to any agreement or other document are to such agreement or document as amended and supplemented from time to time; (f) references to any statute or regulation are to it as amended and supplemented from time to time, and to any corresponding provisions of successor statutes or regulations; (g) references to “Article,” “Section” or another subdivision or to a “Schedule” are to an article, section or subdivision hereof or a “Schedule” hereto; (h) all references to “the date hereof,” “the date of this Agreement” or similar terms (but excluding references to the date of execution hereof) refer to the date first above written, notwithstanding that the parties may have executed this Agreement on a later date; and (i) any reference herein to a “day” or number of “days” (without the explicit qualification of “Business”) shall be deemed to refer to a calendar day or number of calendar days and if any action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice may be taken or given on the next succeeding Business Day.

ARTICLE II

CORPORATE GOVERNANCE

Section 2.01. Voting Generally. When any action is required to be taken by a Stockholder pursuant to this Agreement, the Certificate of Incorporation or the Bylaws, such Stockholder agrees to take all steps reasonably necessary to implement such action, including voting at any meeting of stockholders all shares of Equity Securities Beneficially Owned by such Stockholder in favor of such action and/or executing or causing to be executed, as promptly as practicable, a consent in writing to the taking of such action. Any agreement by a Stockholder to vote all Equity Securities Beneficially Owned by such Stockholder in a certain manner shall be deemed, in each instance, to include an agreement by such Stockholder to use its commercially reasonable efforts to take all actions necessary to call, or to cause the Company and the appropriate officers and directors of the Company to call, as promptly as practicable, a special or annual meeting of stockholders to consider such action (and such Stockholder shall thereafter attend any such annual or special meeting in person or by proxy), or to cause a written consent to the taking of such action to be

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circulated among the stockholders of the Company (and to execute and deliver any such consent to such action). Except as expressly provided herein, any provision in this Agreement, the Certificate of Incorporation or the Bylaws requiring a Stockholder to cause the Board of Directors to take any action shall require such Stockholder (i) to instruct each of its Stockholder Designees to vote in favor of such action or to consent in writing to the taking of such action and (ii) to take such other actions (including the removal and replacement of its Stockholder Designees) as may be reasonably necessary to cause such action to be taken.

Section 2.02. Voting Provisions Regarding Board of Directors.

(a) Each Stockholder agrees to vote, or cause to be voted, all Equity Securities Beneficially Owned by such Stockholder from time to time and at all times as shall be necessary to ensure that the size of the Board of Directors shall be set at a number of directors to be determined from time to time by the Electrum Group Holders.

(b) Each Stockholder agrees to vote, or cause to be voted, all Equity Securities Beneficially Owned by such Stockholder from time to time and at all times in whatever manner as shall be necessary to ensure that at each annual or special meeting of stockholders at which an election of directors is held or pursuant to any written consent of the stockholders, the following individuals shall be elected to the Board of Directors:

(i) for so long as Liberty continues to Beneficially Own at least five percent of the Company’s outstanding Common Stock (as adjusted for stock splits, dividends, recapitalizations and the like), at least one individual designated by Liberty (who shall be reasonably acceptable to the Company), which individual shall initially be Diana Walters; provided, however, that, for so long as Liberty continues to Beneficially Own at least five percent of the Company’s outstanding Common Stock (as adjusted for stock splits, dividends, recapitalizations and the like), in the event there are more than nine members of the Board of Directors, Liberty shall be entitled to designate one or more additional directors (who shall be reasonably acceptable to the Company), if necessary, in order to ensure that the percentage of Liberty designees serving on the Board of Directors most closely approximates the percentage of ownership of the Company’s outstanding Common Stock (as adjusted for stock splits, dividends, recapitalizations and the like) that Liberty Beneficially Owns at such time; and

(ii) the remainder of the Board of Directors shall be designated by the Electrum Group Holders.

(c) In the absence of any designation from any Stockholder with the right to designate a director as specified in Section 2.02(b), the director previously designated by such Stockholder and then serving shall be reelected if still eligible to serve as provided in this Agreement.

(d) Each Stockholder agrees to vote, or cause to be voted, all Equity Securities Beneficially Owned by such Stockholder, from time to time and at all times, in whatever manner as shall be necessary to ensure that:

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(i) no director elected pursuant to Section 2.02(b) or Section 2.02(c) may be removed from office unless (A) such removal is directed or approved by the affirmative vote of the Stockholder entitled under Section 2.02(b) to designate such director or (B) the Stockholder originally entitled to designate or approve such director pursuant to Section 2.02(b) is no longer so entitled to designate or approve such director;

(ii) any vacancies created by the resignation, removal or death of a director elected pursuant to Section 2.02(b) or Section 2.02(c) shall be filled pursuant to the provisions of this Section 2; and

(iii) upon the request of any Stockholder entitled to designate a director as provided in Section 2.02(b) to remove such director, such director shall be removed.

(e) If Liberty loses the right to designate a director pursuant to Section 2.02(b)(i), Liberty shall cause its Stockholder Designee to resign from the Board of Directors and shall take such action (including to vote, or cause to be voted, all Equity Securities Beneficially Owned by Liberty and its Affiliates from time to time and at all times in whatever manner) as shall be necessary to remove its Stockholder Designee from the Board of Directors.

(f) No Stockholder, nor any Affiliate of any Stockholder, shall have any liability as a result of designating a Person for election as a director for any act or omission by such designated person in such Person’s capacity as a director of the Company, nor shall any Stockholder have any liability as a result of voting for any such designee in accordance with the provisions of this Agreement.

Section 2.03. Matters Requiring Approval of Liberty. For so long as Liberty continues to Beneficially Own at least ten percent of the Company’s outstanding Common Stock (as adjusted for stock splits, dividends, recapitalizations and the like), the Company shall not take, nor cause any of its Subsidiaries to take, any of the following actions without (in addition to any other vote required by Law or the Certificate of Incorporation) the prior written consent of Liberty:

(a) (i) effect any liquidation, dissolution or winding up of the business and affairs of the Company; (ii) file any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium Law or any other Law for the relief of, or relating to, debtors, now or hereafter in effect; or (iii) make any assignment for the benefit of creditors;

(b) (i) sell, or agree to sell, all or substantially all of the assets of the Company, unless, in connection with such sale, Liberty receives, or will receive after the distribution of the proceeds of such sale from the Company to Liberty, a pre-tax amount (plus any Premium Excess Amount) greater than or equal to the Liberty Minimum Return with respect to the Initial Liberty Securities Beneficially Owned by Liberty as of the consummation of such transaction; or (ii) sell, or agree to sell, all or substantially all of the assets or capital stock of any Material Subsidiary (a “Material Subsidiary Sale”) unless, in connection with such Material Subsidiary Sale, the Implied Valuation Amount is greater than or equal to the Valuation Threshold as of the consummation of such transaction;

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(c) enter into any merger, consolidation or other business combination involving the Company or any Material Subsidiary, other than any such transaction (i) with a Public Company (or a Subsidiary of a Public Company, if in connection with such merger, consolidation or other combination, Liberty receives capital stock of such Public Company), (ii) (A) in which the Equity Securities of the Company are exchanged for cash pursuant to which Liberty will receive a pre-tax amount (plus any Premium Excess Amount) greater than or equal to the Liberty Minimum Return with respect to the Initial Liberty Securities Beneficially Owned by Liberty as of the consummation of such transaction, (B) involving the Equity Securities of a Material Subsidiary other than a transaction described in clause (i) above or clauses (iii) or (iv) below (a “Material Subsidiary Merger,” and, together with Material Subsidiary Sale, a “Material Subsidiary Transaction”) and, in connection with such transaction, the Implied Valuation Amount with respect to such Material Subsidiary Merger is greater than or equal to the Valuation Threshold as of the consummation of such transaction, (iii) (A) with a Person that is not an Affiliate of an Electrum Party prior to such merger, consolidation or other business combination and (B) in which, as a result of such merger, consolidation or other business combination, all of the Persons who were the respective beneficial owners of the voting securities of the Company immediately prior to such merger, consolidation or other business combination do, following such merger, consolidation or other business combination, beneficially own, directly or indirectly, more than 50 percent of the aggregate voting power of all classes of voting securities of the surviving entity resulting from such merger, consolidation or other business combination, or (iv) involving two wholly-owned Subsidiaries of the Company;

(d) engage in any material line of business other than the exploration, development, production and sale of minerals;

(e) issue any shares of Common Stock or securities exercisable or convertible into shares of Common Stock (except for grants of restricted stock or other equity compensation awards to employees, directors or consultants, provided, however, that the number of such shares or securities so issued (together with any shares or securities issued pursuant to Section 5.06(c) of the Purchase Agreement) shall not exceed ten percent of the Company’s outstanding Common Stock as of the date hereof (as adjusted for stock splits, dividends, recapitalizations and the like)) at a per share price less than the per share purchase price (as adjusted for stock splits, dividends, recapitalizations and the like) paid by Liberty to the Company under the Purchase Agreement for the Initial Liberty Securities, it being understood that any issuances of such shares or securities in connection with a joint venture, an acquisition (including by way of merger, consolidation or binding share exchange) or similar transaction by the Company of the capital stock, other equity interests or assets of another Person in a transaction pursuant to which all or part of the consideration payable in connection with such acquisition consists of securities of the Company, including Rights to acquire securities of the Company, the per share purchase price for purposes of this Section 2.03(e) will be determined in good faith by the Board of Directors;

(f) guarantee, directly or indirectly, or permit any Material Subsidiary to guarantee, directly or indirectly, any indebtedness of a Person, the aggregate principal amount of which at any time outstanding exceeds $95,000,000, except for trade accounts of the Company or a Subsidiary of the Company arising in the ordinary course of business;

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(g) pledge or otherwise encumber shares of capital stock of the Company or any Material Subsidiary to secure indebtedness of the Company or any of its Material Subsidiaries the aggregate principal amount of which at any time outstanding exceeds $95,000,000;

(h) mortgage or pledge any material assets of the Company or any Subsidiary of the Company to secure indebtedness of the Company or any of its Material Subsidiaries the aggregate principal amount of which at any time outstanding exceeds $95,000,000, or create or suffer to exist a new Lien thereupon;

(i) make, or permit any Material Subsidiary to make, any loan or advance to any Person (including any officer or director of the Company and any Subsidiary), except (i) to the Company or any Subsidiary of the Company, (ii) for advances and similar expenditures made in the ordinary course of business or under Contracts in accordance with mining industry custom, and (iii) for advances and similar expenditures made under the terms of any incentive stock or other plan or Contract of the Company for the benefit of its employees, directors and consultants;

(j) amend, modify or repeal the Certificate of Incorporation, Bylaws or other similar governing instruments of the Company or any Material Subsidiary, unless such amendment, modification or repeal does not materially and adversely affect the rights of Liberty in a manner that materially and disproportionately discriminates against Liberty in relation to the other Stockholders; and

(k) engage in any willful action with the intent to directly avoid the limitations set forth in this Section 2.03.

ARTICLE III

TRANSFERS

Section 3.01. Restrictions on Transfer. Each Stockholder agrees that it will not Transfer any Equity Securities, except as otherwise specifically provided herein. Any purported Transfer of Equity Securities in violation of this Article III shall be void and ineffective against such Stockholder and the proposed transferee. The Company agrees not to record any Transfers of Equity Securities by a Stockholder in the stock transfer books of the Company unless such Transfer complies with all applicable provisions of this Agreement.

Section 3.02. Permitted Transfers.

(a) Any Stockholder may Transfer Equity Securities to a Permitted Transferee without being obligated to first deliver a Transfer Notice to any other party, provided that such Permitted Transferee, prior to the consummation of any such Transfer, undertakes in writing to be subject to each of the terms of this Agreement. Any purported Transfer to a Permitted Transferee shall be void and ineffective as against both the transferring Stockholder and the

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Permitted Transferee, if such Permitted Transferee fails to become subject to this Agreement and subject to the rights and obligations of the transferring Stockholder.

(b) Any of the Equity Securities Beneficially Owned by Tigris as of the closing of the transactions contemplated by the Purchase Agreement may be Transferred without restriction.

(c) The Electrum Parties may Transfer Equity Securities to any 501(c)(3) charitable organization without restriction.

Section 3.03. Liberty Tag-Along Rights.

(a) If any one or more of the Electrum Parties propose to Transfer any Electrum Securities then Beneficially Owned by the Electrum Parties and the Electrum Permitted Transferees to a Person (other than an Electrum Permitted Transferee or in connection with a Transfer permitted by Section 3.02 or that constitutes a Qualifying Sale), such Electrum Party shall first deliver a notice (an “Electrum Transfer Notice”) to Liberty, setting forth (i) the number of Electrum Securities proposed to be Transferred, (ii) the price per share of Electrum Securities at which the Electrum Securities are proposed to be Transferred, (iii) all Liens and Restrictions to which the shares of Electrum Securities proposed to be Transferred will be subject, (iv) whether the shares of Electrum Securities proposed to be Transferred are to be Transferred for cash or other consideration and (v) the other terms of the proposed Transfer.

(b) Liberty shall have the right (the “Tag-Along Right”), exercisable by written notice delivered to the transferring Electrum Party not later than 10 Business Days following the date the Electrum Transfer Notice is given (the “Tag-Along Exercise Period”), to elect to Transfer up to an aggregate number of shares of Liberty Securities equal to the number determined by multiplying (i) the number of shares of Electrum Securities proposed to be Transferred by such Electrum Party by (ii) a fraction, (A) the numerator of which is the number of shares of Liberty Securities then Beneficially Owned by Liberty and (B) the denominator of which is the total number of shares of Electrum Securities then Beneficially Owned in the aggregate by all of the Electrum Parties and the total number of Liberty Securities then Beneficially Owned by Liberty. The number of Electrum Securities to be Transferred by such Electrum Party shall be reduced by the number of Liberty Securities to be Transferred by Liberty in connection with its exercise of its Tag-Along Right.

(c) The terms on which the Electrum Party required to deliver an Electrum Transfer Notice actually Transfers its shares of Electrum Securities shall not be more favorable, and shall include no more cash or other consideration, than the terms on which Liberty Transfers its shares of Liberty Securities. Liberty shall be required to make the same representations, warranties, covenants and agreements as are given by such Electrum Party in connection with any Transfer pursuant to this Section 3.03 (other than any such actions which can reasonably be taken only by such Electrum Party).

(d) If Liberty exercises its Tag-Along Right, the Electrum Party required to deliver an Electrum Transfer Notice shall cause the documents relating to the Transfer of its

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shares of Electrum Securities to the proposed transferee to be amended so that such documents include Liberty as a party, and so as to provide that the proposed transferee shall acquire from Liberty the number of shares of Liberty Securities Beneficially Owned by Liberty as to which the Tag-Along Right has been exercised. The closing of the sale of Liberty Securities by Liberty pursuant to this Section 3.03 shall, to the extent legally practicable, take place at the same time and place as the closing of the Transfer by such Electrum Party giving rise to the Tag-Along Right. At such closing, (i) Liberty shall deliver to the transferee certificates representing the Liberty Securities subject to the Transfer, free and clear of any Lien or Restriction other than those created by this Agreement or the transferee; (ii) the transferee shall deliver to Liberty the consideration to be paid for such Liberty Securities in accordance with the terms of the purchase and sale of such Liberty Securities and of the Electrum Securities of such Electrum Party; and (iii) Liberty shall execute such other documents and take such other actions as are reasonably necessary to consummate the sale of such Liberty Securities and are also being taken by such Electrum Party (other than any such actions as can reasonably be taken only by such Electrum Party).

(e) In the event Liberty fails to exercise its Tag-Along Rights within the Tag-Along Exercise Period or, if so exercised, Liberty is unable to consummate such transaction within 10 Business Days after the closing of the sale of the Electrum Securities because of its failure to obtain any required Governmental Approval or other consent or its failure to comply with its covenants and agreements as required by Section 3.03(c) (including its ability to deliver the applicable Liberty Securities free and clear of all Liens or Restrictions), such Electrum Party shall thereafter be entitled during the period of 60 Business Days following the conclusion of the applicable period to Transfer the Electrum Securities at a price and upon terms no more favorable to the purchasers of such Electrum Securities than were specified in the Electrum Transfer Notice. Notwithstanding the foregoing, if such Transfer is subject to the receipt of any Governmental Approval, the time period during which such Transfer may be consummated shall be extended until the expiration of five Business Days after all such Governmental Approvals or other consents have been obtained, but in no event shall such time period exceed 120 Business Days following the conclusion of the applicable period. In the event the Electrum Party has not Transferred the Electrum Securities within such 60 Business Day period or, if applicable, 120 Business Day period, such Electrum Party shall not thereafter Transfer such Electrum Securities unless such Electrum Party again complies in full with the provisions of this Section 3.03.

(f) Any purported Transfer of Electrum Securities in violation of this Section 3.03 shall be void and ineffective as against both the Electrum Party required to deliver an Electrum Transfer Notice and the proposed transferee.

Section 3.04. Electrum Group Holders Right of First Offer.

(a) For so long as Liberty continues to Beneficially Own at least five percent of the Company’s outstanding Common Stock (as adjusted for stock splits, dividends, recapitalizations and the like), neither Liberty nor any Liberty Permitted Transferee shall Transfer any Liberty Securities to a Person (other than to Liberty or a Liberty Permitted Transferee or pursuant to Section 3.03 or Section 3.05), unless prior to such Transfer, Liberty first delivers a notice (a “Liberty Transfer Notice”) to the Electrum Group Holders, setting forth (i) the number of shares of Liberty Securities that Liberty or any Liberty Permitted

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Transferee wishes to Transfer, (ii) the minimum price per share of Liberty Securities at which such shares of Liberty Securities are proposed to be Transferred and (iii) any other terms of the proposed Transfer; provided, however, that neither Liberty nor any Liberty Permitted Transferee may Transfer any Liberty Securities to a Person (other than to Liberty or a Liberty Permitted Transferee or pursuant to Section 3.03 or Section 3.05) for a period of three months following the date of this Agreement.

(b) The Electrum Group Holders, as a group, or their designee(s) shall have the right (the “Right of First Offer”), exercisable by written notice delivered to Liberty not later than 10 Business Days following the date the Liberty Transfer Notice is given (the “Right of First Offer Exercise Period”), to elect to purchase all or any portion of the Liberty Securities being offered, on the terms set forth in the Liberty Transfer Notice, for cash consideration equal to the product of (i) the number of Liberty Securities sought to be Transferred by Liberty as set forth in the Liberty Transfer Notice and (ii) the minimum price per share of the Liberty Securities as set forth in the Liberty Transfer Notice (the “Minimum Price”).

(c) If any Electrum Group Holder or its designee exercises its Right of First Offer, the closing of the purchase of the Liberty Securities with respect to which such Right of First Offer has been exercised shall take place within 30 Business Days after the giving of notice of such exercise, which period of time shall be extended for a maximum of 60 Business Days in order to comply with applicable Laws. Each of the Company, any Electrum Group Holder which has agreed to purchase the Liberty Securities and/or any designee of an Electrum Group Holder agrees to use its commercially reasonable efforts to secure any Governmental Approvals or other consents, and to comply with any Law necessary, in connection with the Transfer of such Liberty Securities.

(d) In the event any Electrum Group Holder or its designee fails to exercise its Right of First Offer within the Right of First Offer Exercise Period or, if so exercised, such Electrum Group Holder is unable to consummate such purchase within the time period specified in Section 3.04(c) because of its failure to obtain any required Governmental Approval or other consents, Liberty shall thereafter be entitled, during the period of 30 Business Days following the conclusion of the applicable period, to Transfer all, but not less than all, of the Liberty Securities not purchased pursuant to this Section 3.04 or which such electing Electrum Group Holder or its designee is unable to purchase because of such failure to obtain any such Governmental Approval or other consents, to any Person (other than to a competitor of the Company, as determined by the Board of Directors in good faith), on terms no better than the terms set forth in the Liberty Transfer Notice and for cash not less than the Minimum Price. Notwithstanding the foregoing, if such Transfer is subject to the receipt of any Governmental Approval, the time period during which such Transfer may be consummated shall be extended until the expiration of five Business Days after all such Governmental Approvals have been obtained, but in no event shall such time period exceed 60 Business Days from following the conclusion of the applicable period. In the event Liberty has not Transferred the Liberty Securities within such 30 Business Day period or, if applicable, 60 Business Day period, Liberty shall not thereafter Transfer such Liberty Securities unless Liberty again complies in full with the provisions of this Section 3.04.

(e) Any purported Transfer of Liberty Securities in violation of this Section 3.04 shall be void and ineffective as against both Liberty and the proposed transferee.

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Section 3.05. Drag-Along Rights.

(a) If the Electrum Parties approve a Qualifying Sale, then the Electrum Parties may deliver a notice (a “Drag-Along Notice”) to Liberty setting forth (i) the number of shares of Equity Securities proposed to be Transferred in such Qualifying Sale, (ii) the price per share at which the shares of Equity Securities are proposed to be Transferred in such Qualifying Sale, (iii) all Liens and Restrictions to which the shares of Equity Securities proposed to be Transferred in such Qualifying Sale will be subject, (iv) whether the Equity Securities proposed to be Transferred in such Qualifying Sale are to be Transferred for cash or other consideration and (v) the other material terms of the proposed Qualifying Sale.

(b) Upon receipt of a Drag-Along Notice, Liberty shall be required:

(i) if such Qualifying Sale requires Stockholder approval, to vote all Liberty Securities in favor of, and adopt, such Qualifying Sale and to vote in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company or the Electrum Parties to consummate such Qualifying Sale;

(ii) subject to Section 3.05(c), to execute and deliver all related documentation and to take such action in support of the Qualifying Sale as reasonably requested by the Company and the Electrum Parties in order to carry out the terms of this Section 3.05, including executing and delivering instruments of conveyance and Transfer, share certificates duly endorsed for Transfer (free and clear of any impermissible Liens or Restrictions), any purchase, merger or similar Contract, consent, waiver or documents necessary in connection with the receipt of a Governmental Approval, and any similar or related documents;

(iii) not to deposit, and to cause its Affiliates not to deposit, any Liberty Securities in a voting trust or subject any Liberty Securities to any arrangement with respect to the voting of such Liberty Securities, unless specifically requested to do so by the proposed acquirer in connection with such Qualifying Sale;

(iv) to refrain from exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to such Qualifying Sale; and

(v) to Transfer to the proposed transferee, as applicable, (A) all shares of Liberty Securities then Beneficially Owned by Liberty or (B) in the event of a Stock Sale, the (1) number of shares of Liberty Securities then Beneficially Owned by Liberty multiplied by (2) a fraction, (I) the numerator of which is the number of shares of Electrum Securities proposed to be Transferred by the Electrum Parties as set forth in the Drag-Along Notice and (II) the denominator of which is the number of shares of Electrum Securities then Beneficially Owned in the aggregate by the Electrum Parties.

(c) Upon exercise by the Electrum Parties of Drag-Along Rights, the terms on which Liberty actually Transfers Liberty Securities in connection with such Qualifying Sale shall not be less favorable, and shall not include less cash, than the terms on which the Electrum Parties Transfer their Electrum Securities. Liberty shall be required to make the same representations, warranties, covenants and agreements as are given by the Electrum Parties in

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connection with such Qualifying Sale pursuant to this Section 3.05 (other than any such action which can reasonably be taken only by the Electrum Parties).

(d) If the Electrum Parties exercise their Drag-Along Right, the Electrum Parties shall cause the documents relating to the Qualifying Sale to include Liberty as a Transferring party. The closing of the Transfer of any Liberty Securities by Liberty in connection with a Qualifying Sale shall, to the extent legally practicable, take place at the same time and place as the closing of the Transfer of Electrum Securities by the Electrum Parties in connection with such Qualifying Sale. At such closing, (i) Liberty shall deliver to the transferee certificates representing the Liberty Securities subject to the Transfer, free and clear of any Lien or Restriction other than those created by this Agreement or the transferee; (ii) the transferee shall deliver to Liberty the consideration to be paid for the applicable Liberty Securities in accordance with the terms of the purchase and sale of such Liberty Securities and of the Electrum Securities; and (iii) Liberty shall execute such other documents and take such other actions as are reasonably necessary to consummate the sale of such Liberty Securities and are also being taken by the Electrum Parties (other than any such actions as can reasonably be taken only by the Electrum Parties) in connection with such Qualifying Sale.

Section 3.06. Lock-Up.

(a) Liberty and each Electrum Group Holder hereby agrees that, if required by the managing underwriter, it will not, during the period commencing on the date of the final prospectus relating to the Company’s initial public offering (the “IPO”) and ending on the date specified by the Company and the managing underwriter (such period not to exceed l80 days, which period may be extended upon the request of the managing underwriter for an additional period of up to 15 days if the Company issues or proposes to issue an earnings or other public release within 15 days of the expiration of the 180 day lock-up period), lend, offer, pledge, Contract to sell, sell any option or Contract to Transfer, purchase any option or Contract to sell, grant any option, right or warrant to purchase, or otherwise Transfer, directly or indirectly, any shares of Equity Securities Beneficially Owned immediately before the effective date of the registration statement for such offering. The foregoing provisions of this Section 3.06 shall not apply to the sale of any Equity Securities to an underwriter pursuant to an underwriting agreement and shall only be applicable to Liberty and the Electrum Group Holders if all officers, directors and stockholders of more than five percent of the Company’s outstanding Equity Securities are subject to the same restrictions. The underwriters in connection with such registration are intended third party beneficiaries of this Section 3.06 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

(b) Liberty further agrees (i) to execute such agreements as may be reasonably requested by the Company or the underwriters in connection with such registration that are consistent with this Section 3.06 or that are necessary to give further effect thereto; and (ii) if requested by the Company or the underwriters to use its commercially reasonable efforts to provide, within five Business Days of such request, such information as may be required by the Company or the underwriters in connection with the completion of the IPO.

(c) In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the shares of Equity Securities Beneficially Owned by

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Liberty and the Electrum Group Holders (and transferees and assignees thereof) until the end of such restricted period.

ARTICLE IV

ADDITIONAL AGREEMENTS

Section 4.01. Preemptive Rights.

(a) If the Company proposes to offer New Securities, the Company shall first deliver a notice (the “New Securities Notice”) to Liberty, setting forth (i) the New Securities to be offered, (ii) the price per share of the New Securities proposed to be offered, (iii) all Liens and Restrictions to which the shares of New Securities proposed to be offered will be subject, (iv) whether the shares of New Securities proposed to be offered are to be offered for cash or other consideration and (v) the other terms of the proposed offer.

(b) For so long as Liberty continues to Beneficially Own at least 10 percent of the Company’s outstanding Common Stock (as adjusted for stock splits, dividends, recapitalizations and the like), Liberty shall have the right (“Preemptive Right”), exercisable by written notice delivered to the Company not later than 10 Business Days following the date the New Securities Notice is given (the “Preemptive Right Exercise Period”), to elect to purchase up to an aggregate number of shares of New Securities (or in the case of Rights, the total number or such shares covered by Rights) equal to the number determined by multiplying (i) the number of New Securities proposed to be offered by (ii) a fraction, (A) the numerator of which is the number of shares of Equity Securities then Beneficially Owned by Liberty and (B) the denominator of which is the number of Equity Securities then outstanding; provided, however, that for purposes of determining the number of shares of Equity Securities outstanding, such amount shall include, without duplication, shares of Equity Securities issuable upon the conversion of outstanding convertible equity securities of the Company and shares of Equity Securities issuable upon the exercise of outstanding options or warrants to purchase Equity Securities. Such notice shall constitute an agreement of Liberty to purchase the amount of New Securities so specified upon the price and other terms set forth in the New Securities Notice. The number of New Securities to be offered by the Company shall be reduced by the number of New Securities to be purchased by Liberty in connection with its exercise of Preemptive Rights.

(c) If Liberty exercises its Preemptive Right, the closing of the purchase of the New Securities with respect to which such Preemptive Right has been exercised shall take place within 30 Business Days after the giving of notice of such exercise, which period of time shall be extended for a maximum of 120 Business Days in order to comply with applicable Laws. Each of the Company and Liberty agrees to use its commercially reasonable efforts to secure any Governmental Approvals or other consents, and to comply with any Law necessary in connection with the offer, sale and purchase of, such New Securities.

(d) In the event Liberty fails to exercise its Preemptive Right within the Preemptive Right Exercise Period or, if so exercised, Liberty is unable to consummate such purchase within the time period specified in Section 4.01(c) because of its failure to obtain any

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required Governmental Approval or other consent, the Company shall thereafter be entitled during the period of 60 Business Days following the conclusion of the applicable period to offer the New Securities or Rights not elected to be purchased pursuant to this Section 4.01 or which Liberty is unable to purchase because of such failure to obtain any such Governmental Approval or other consent, at a price and upon terms no more favorable to the purchasers of such New Securities than were specified in the New Securities Notice. Notwithstanding the foregoing, if such sale is subject to the receipt of any Governmental Approval, the time period during which such sale may be consummated shall be extended until the expiration of five Business Days after all such Governmental Approvals have been obtained, but in no event shall such time period exceed 120 Business Days following the conclusion of the applicable period. In the event the Company has not sold the New Securities within such 60 Business Day period or, if applicable, 120 Business Day period, the Company shall not thereafter offer, issue or sell such New Securities unless the Company again complies in full with the provisions of this Section 4.01.

(e) Any purported offer of New Securities in violation of this Section 4.01 shall be void and ineffective against both the Company and the proposed transferee. Notwithstanding the foregoing, Liberty shall not be entitled to any Preemptive Rights in respect of the issuance of shares of New Securities issued to satisfy Rights theretofore issued and as to which Liberty theretofore had the opportunity to exercise Preemptive Rights pursuant to this Section 4.01.

Section 4.02. Financial Statements. For so long as Liberty continues to Beneficially Own shares of the Company’s Common Stock, the Company shall deliver to Liberty:

(a) as soon as practicable, an audited balance sheet of the Company as of the end of such fiscal year and audited statements of income and of cash flows of the Company for such fiscal year, in each case, certified by certified public accountants selected by the Company and approved by the Board of Directors and prepared in accordance with GAAP or IFRS; and

(b) as soon as practicable, an unaudited balance sheet of the Company as of the end of the first three fiscal quarters and unaudited statements of income and of cash flows of the Company for such fiscal quarters and for the current fiscal year to the end of such fiscal quarter, in each case, prepared in accordance with GAAP or IFRS.

The foregoing financial statements shall be prepared on a consolidated basis of the Company and each Subsidiary of the Company.

Section 4.03. Confidentiality.

(a) Each Stockholder agrees that such Stockholder shall keep confidential and shall not disclose, divulge or use, and shall cause its Affiliates, trustees, directors, employees, accountants, attorneys, agents, representatives and advisors (collectively, “Representatives”) to keep confidential and not disclose, divulge or use, for any purpose, other than to monitor its investment in the Company, any Confidential Information, unless such Confidential Information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section 4.03 by such Stockholder or its Representatives), (b) is or has been independently

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developed or conceived by such Stockholder without use of the Company’s Confidential Information or (c) is or has been made known or disclosed to such Stockholder by a third Person without a breach of any obligation of confidentiality such third Person may have to the Company or any other Person; provided, however, that a Stockholder may disclose Confidential Information (i) to such Stockholder’s Representatives to the extent necessary to obtain their services in connection with monitoring its investment in the Company, (ii) to any prospective purchaser of any Equity Securities from such Stockholder, provided that such prospective purchaser agrees to be bound in writing by the provisions of this Section 4.03, (iii) to any Affiliate or Permitted Transferee of such Stockholder, provided that such Stockholder informs such Affiliate or Permitted Transferee that such information is confidential and directs such Affiliate to maintain the confidentiality of such information or (iv) as may otherwise be required by Law, provided that such Stockholder shall promptly notify the Company in writing of such requirement and cooperate with the Company to preserve the confidentiality of such information consistent with applicable Law. Each Stockholder shall be responsible for any disclosure or use of the Confidential Information by it or its Representatives in a manner inconsistent with this Agreement.

(b) For so long as Liberty or its Affiliates hold Equity Securities of the Company, neither Liberty nor its Affiliates shall acquire, directly or indirectly, any present or future right, title or interest in any real property interest or mining rights within two kilometers of the current external boundaries of the properties of the Company. If Liberty or its Affiliates acquire any such right or interest in violation of the foregoing, Liberty or its applicable Affiliate shall immediately notify the Company and shall offer to transfer all of its right, title and interest therein to the Company without any payment or reimbursement by the Company other than Liberty’s or its Affiliate’s costs and expenses related to such purchase. Notwithstanding the above, the foregoing prohibition shall not apply to (i) any entity in which Liberty or its Affiliates invest, provided that (A) Liberty or its Affiliates do not actively manage or maintain a Controlling interest, and (B) such entity does not receive any information from Liberty or its Affiliates in violation of this Agreement, and (ii) unsolicited offers to Liberty or its Affiliates by a third party without any violation of the provisions of this Agreement and in the normal course of Liberty or its Affiliates reviewing prospect proposals.

ARTICLE V

CERTIFICATES

The Company shall endorse upon the certificate for each of the Equity Securities Beneficially Owned by a Stockholder a legend substantially the same as the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS AGREEMENT, DATED AS OF [—], 2011, AS MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY UPON REQUEST. ANY VOTING AND SALE, PLEDGE, HYPOTHECATION, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF SUCH SECURITIES IS SUBJECT TO SUCH STOCKHOLDERS AGREEMENT. BY ACCEPTING ANY INTEREST IN SUCH SECURITIES, THE PERSON ACCEPTING SUCH INTERESTS SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT.

The Company, by its execution of this Agreement, agrees that it will cause the certificates evidencing such Equity Securities issued after the date hereof to bear the legend required by this Article V; provided, however, that the parties agree that the failure of the Company to cause the certificates evidencing such Equity Securities to bear the legend required by this Article V shall not affect the validity or enforcement of this Agreement.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS

Each of the Stockholders, severally and not jointly, represents and warrants to the Company and each other Stockholder as of the date of this Agreement as follows:

(a) Such Stockholder has the right, power, legal capacity and authority to enter into and perform such Stockholder’s obligations under this Agreement, and this Agreement constitutes such Stockholder’s valid and binding obligation, enforceable against such Stockholder in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally, and to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in equity).

(b) Such Stockholder has obtained all authorizations, permits, approvals or consents of any Persons, as well as all authorizations, permits, approvals or consents of any Governmental Authorities, necessary to enter into and perform such Stockholder’s obligations under this Agreement, except as would not, individually or in the aggregate, materially adversely affect such Stockholder’s ability to perform its obligations under this Agreement.

(c) Such Stockholder is the lawful and Beneficial Owner of record of the Equity Securities set forth opposite such Stockholder’s name in Schedule A hereto, free and clear of any Lien or Restriction, except for those created by this Agreement or as otherwise set forth in Schedule A hereto.

(d) This Agreement and the transactions it contemplates do not conflict with any applicable Law or any agreement to which such party is a party or constitute a default under any such agreement, except as would not, individually or in the aggregate, materially adversely affect such party’s ability to perform its obligations under this Agreement.

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ARTICLE VII

TERM AND TERMINATION

This Agreement shall terminate in its entirety on the first to occur of: (A) such time as all of the Electrum Parties that are parties to this Agreement as a group no longer Beneficially Own Equity Securities constituting more than 50 percent of the Equity Securities then outstanding; (B) immediately prior to the consummation of the IPO; or (C) immediately prior to the consummation of a Qualifying Sale; provided, however, that (i) with respect to clause (A) above, for purposes of determining the number of shares of Equity Securities outstanding, such amount shall include, without duplication, shares of Equity Securities issuable upon the conversion of outstanding convertible equity securities of the Company and shares of Equity Securities issuable upon the exercise of outstanding options or warrants to purchase Equity Securities; and (ii) the provisions of Section 3.06, Section 4.03, this Article VII and Article VIII shall survive the termination of this Agreement.

ARTICLE VIII

MISCELLANEOUS

Section 8.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission) and shall be given:

if to the Company, to:	Sunshine Silver Mines Corporation
	c/o Tigris Financial Group Ltd.
	535 Madison Avenue, 11th Floor
	New York, NY 10022
	Attention:   Andrew Shapiro, Esq.
	Fax:  (646) 365-1600
with a copy to:	Baker Botts L.L.P.
	30 Rockefeller Plaza
	New York, New York 10112-4498
	Attention:  Jonathan Gordon, Esq.
	Fax:  212.259.2508
if to any of the Electrum Parties, to:	The Electrum Group of Companies
	c/o Tigris Financial Group Ltd.
	535 Madison Avenue, 11th Floor
	New York, NY 10022
	Attention:  Andrew Shapiro, Esq.
	Fax:  (646) 365-1600
with a copy to:	Baker Botts L.L.P.
	30 Rockefeller Plaza
	New York, New York 10112-4498
	Attention:  Jonathan Gordon, Esq.
	Fax:  212.259.2508

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if to Liberty, to:	Liberty Metals & Mining Holdings, LLC
	175 Berkeley Street, 18th Floor
	Boston, MA 02116
	Attention:  Diana Walters, President
	Fax:  (617) 482-3504
with a copy to:	Thompson & Knight LLP
	900 Third Avenue, 20th Floor
	New York, New York 10022-4728
	Attention:  Matthew Cohen, Esq.
	Fax:  212.999.1613

or to such other address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto. All notices and other communications given to a party in accordance with the provisions of this Agreement shall be deemed to have been given (a) when delivered by hand or transmitted by telecopy (answer back received), if received prior to 5:00 p.m. on a Business Day, otherwise on the next Business Day; (b) one Business Day after the same are sent by a reliable overnight courier service, with acknowledgment of receipt requested and received; or (c) if earlier, upon actual receipt by the party.

Section 8.02. No Third-Party Beneficiaries. Other than as provided in Section 3.06, this Agreement is not intended to and shall not confer any rights or remedies upon any Person other than the parties hereto and their permitted successors and assigns.

Section 8.03. Amendments; Waivers.

(a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective; provided, however, that Schedule A hereto may be amended by the Company without the consent of the other parties as necessary to reflect any Transfers permitted under this Agreement.

(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable Law.

(c) Any consent provided under this Agreement must be in writing, signed by the party against whom enforcement of such consent is sought.

Section 8.04. Successors and Assigns.

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The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except as specifically set forth in this Agreement, none of the parties hereto shall be permitted to assign its rights under this Agreement to any Person without the prior written consent of the other parties hereto; provided, however, that any Electrum Party may, upon prior written notice to the Company, assign its rights and obligations hereunder to an Affiliate of such Electrum Party but no such assignment shall release such Electrum Party from any obligations hereunder.

Section 8.05. Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York (including Section 5-1401 of the General Obligations Law of the State of New York but otherwise without regard to conflicts of Laws principles).

Section 8.06. Arbitration. To the extent permitted by Law, the parties to waive any right such party may have to seek remedies in court, including a jury trial in any action, proceeding or counterclaim brought by any party hereto against another party on any matters whatsoever arising out of or related to this Agreement. The parties agree that in the event of any dispute arising out of, relating to or in connection with this Agreement, such dispute shall be resolved exclusively by arbitration to be conducted only in the county and State of New York, New York in accordance with the rules of JAMS (“JAMS”) applying the laws of the State of New York. Disputes shall not be resolved in any other forum or venue. The arbitration shall be conducted by a retired judge who is experienced in resolving similar disputes. Discovery shall not be permitted, except as required by the rules of JAMS. The arbitration award shall not include factual findings or conclusions of law, and no punitive damages shall be awarded. The parties understand that their right to appeal or to seek modification of any ruling or award of the arbitrator is severely limited. Any award rendered by the arbitrator shall be final and binding, and judgment may be entered on it in any court of competent jurisdiction. Notwithstanding the foregoing, any party may seek an injunction in any court of competent jurisdiction (a) pursuant to Section 8.07 or (b) to the limited extent necessary to preserve the status quo during the pendency of the final resolution of any dispute arising out of or related to this Agreement in accordance with this Section 8.06; provided, however, that, with respect to the foregoing, (i) any such proceeding shall be brought exclusively in the state courts in the State of New York located in New York, New York or in the federal courts located in the State of New York; and (ii) each party consents to personal jurisdiction in such proceeding in any such court (and of the appropriate appellate courts therefrom) and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now have to the laying of the venue of any such proceeding in any such court or that any such proceeding brought in any such court has been brought in an inconvenient forum.

Section 8.07. Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that Company or any Stockholder will be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy

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to which it may be entitled at Law or in equity, without the necessity of posting or securing any bond with respect thereto.

Section 8.08. Counterparts; Effectiveness. This Agreement may be executed in two or more counterparts, all of which shall be considered the same agreement. Signature pages from separate identical counterparts may be combined with the same effect as if the parties signing such signature page had signed the same counterpart. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

Section 8.09. Captions. The table of contents and captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

Section 8.10. Entire Agreement. This Agreement (including the Schedules attached hereto or delivered in connection herewith) and the Purchase Agreement constitute the entire agreement among the parties hereto with respect to the matters covered hereby and thereby, and all written or oral agreements, representations, warranties or covenants previously existing between the parties with respect to such subject matter are cancelled and are not part of this Agreement or the Purchase Agreement.

Section 8.11. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect. Upon such determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner; provided, however, that in the absence of an agreement as to how to modify this Agreement, the remainder of this Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto, and such invalid, void or unenforceable provision of this Agreement shall be replaced with a valid and enforceable provision that will achieve, to the fullest extent possible, the economic, business and other purposes of such severed provision.

Section 8.12. No Strict Construction. Each party acknowledges that this Agreement has been prepared jointly by the parties hereto and shall not be strictly construed against any party hereto.

Section 8.13. Foreign Currencies. Unless otherwise stated, all currency specified shall be in U.S. dollars. Except as otherwise provided herein, all foreign currency shall be converted to U.S. dollar equivalents determined on

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the basis of the spot rate of exchange (closing mid-point) published in the United States edition of the Financial Times on the Business Day immediately prior to the applicable date of determination (or, if the Financial Times is not published on such date, the next preceding date on which it is published).

[THIS SPACE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written forth above.

COMPANY:
SUNSHINE SILVER MINES CORPORATION
BY:
	NAME:
	TITLE:

STOCKHOLDER:
LIBERTY METALS & MINING HOLDINGS, LLC
BY:
	NAME:
	TITLE:

STOCKHOLDERS:
CGT MANAGEMENT LTD.
BY:
	NAME:
	TITLE:
ELECTRUM SILVER HOLDINGS LLC
BY:
	NAME:
	TITLE:
TIGRIS FINANCIAL (INTERNATIONAL) L.P.
BY:
	NAME:
	TITLE:
TIGRIS FINANCIAL GROUP LTD.
BY:
	NAME:
	TITLE:

SCHEDULE A

STOCKHOLDERS

Stockholder	No. of Shares of Common Stock
Liberty Metals & Mining Holdings, LLC	8,318,264
CGT Management Ltd.	21,118,004
Electrum Silver Holdings LLC	19,200,000
Tigris Financial (International) L.P.	740,381
Tigris Financial Group Ltd.	800,000

SCHEDULE B

LIBERTY MINIMUM RETURN

Period Following Closing	Applicable Percentage
0 months < 3 months		150	%
3 months < 6 months		150	%
6 months < 9 months		160	%
9 months < 12 months		175	%
12 months < 15 months		181	%
15 months < 18 months		188	%
18 months < 21 months		194	%
21 months < 24 months		200	%
24 months < 27 months		225	%
27 months < 30 months		250	%
30 months < 33 months		275	%
33 months < 36 months		300	%
3 years < 4 years		325	%
4 years < 5 years		350	%
5 years < 6 years		375	%
6 years < 7 years		425	%
7 years or after		450	%

EX-10.2

Exhibit 10.2

SERVICES AGREEMENT

This Services Agreement (this “Agreement”) is dated as of January 1, 2008 (the “Effective Date”), between Los Gatos Ltd. (“Los Gatos”) and Tigris Financial (International) LP (“Tigris”).

The parties agree as follows:

1. Effective as of the Effective Date, Los Gatos engages Tigris as a business and financial adviser, its services consisting primarily of business and financial advice with respect to the strategic business development and corporate finance activities of Los Gatos and its subsidiaries (the “Engagement”).

2. Tigris’s services with respect to the Engagement shall be performed on an as-required basis as mutually determined by Los Gatos and Tigris from time to time. In performing the services hereunder, Tigris shall comply with Los Gatos’s Code of Ethics and applicable laws and regulations.

3. During the term of this Agreement, Tigris shall charge Los Gatos the fees described on Exhibit A to this Agreement (as such Exhibit A may be amended from time to time by the parties hereto). The amounts to be charged to Los Gatos under this Section 3 are referred to herein as the “Fees.”

4. Los Gatos shall, upon request from time to time, promptly reimburse Tigris for all reasonable and necessary out-of-pocket expenses incurred in the performance of its duties hereunder; provided, however, that any single out-of-pocket expense in excess of $10,000 shall require the prior approval of Los Gatos, which approval shall not be unreasonably withheld. Tigris shall furnish reasonably detailed backup documentation evidencing its out-of-pocket expenses.

5. Tigris acknowledges that it is an independent contractor and is not entitled to any compensation or employee benefits (other than as set forth in this Agreement) that would otherwise accrue to any employee provided by Tigris if such employee were an employee of Los Gatos.

6. Tigris shall, and shall cause its employees, advisors, agents and representatives to, keep secret and retain in confidence all confidential information relating to Los Gatos, including, but not limited to, know-how, trade secrets, customer lists, details of contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, personnel information, processes, designs and design projects, inventions and research projects and other business affairs relating to Los Gatos, and shall not disclose such confidential information to anyone outside of Los Gatos, either during or after the term of the

Engagement except (i) as necessary or advisable in the course of performing its duties hereunder or (ii) with Los Gatos’s express written consent. Notwithstanding the foregoing, the obligations of Tigris in this Section 6 shall not apply to information:

(1) which is or becomes a matter of public knowledge without breach by Tigris of this Agreement;

(2) which is required to be disclosed by law, regulation or legal process; or

(3) which is received from a third party not known to Tigris to be bound by any duty of confidentiality to Los Gatos.

7. Los Gatos acknowledges that Tigris provides advisory services to other clients and that this Agreement does not, and shall not be construed to, limit or restrict Tigris’s ability to provide such services to its existing and future clients, including to clients engaged in businesses competitive with Los Gatos.

8. This Agreement may not be assigned by Tigris without the consent of Los Gatos (which consent shall not be unreasonably withheld), provided, however, that Tigris shall have the right to assign all or any portion of the Fees to any affiliated person or entity, and provided, further, that Tigris may delegate any of its obligations hereunder to its affiliates, including, without limitation, Tigris Financial Group Ltd.

9. This Agreement may be terminated by Los Gatos or Tigris at any time upon not less than thirty (30) days’ prior written notice to the other, and upon the effective date of such termination (the “Termination Date”) the Fees otherwise payable shall cease; provided, however, that Los Gatos shall continue to be responsible for, and shall pay, on a pro rated basis, all accrued and unpaid Fees and reimbursements through the Termination Date.

10. Los Gatos hereby agrees to indemnify and hold harmless Tigris, its affiliates, and each of their directors, officers, employees, partners, shareholders and related persons (the “Indemnified Parties”) against any losses, claims, damages or liabilities (joint or several), including, without limitation, all reasonable legal fees and other expenses incurred in connection with investigating, defending, paying, settling or compromising any such loss, claim, damage or liability, to which any Indemnified Party becomes subject and which is related to or arises out of any act, omission, transaction or event contemplated by this Agreement. Los Gatos will promptly reimburse any Indemnified Party for all expenses as reasonably incurred in connection with the foregoing; provided, however, that each Indemnified Party so reimbursed shall repay such

2

expenses in the event that it is ultimately determined that such Indemnified Party is not entitled to indemnification for such loss, claim, damage or liability pursuant to this Section 10. Notwithstanding the foregoing, the indemnity contained herein shall not apply to amounts paid in settlement of any such loss, claim, damage or liability if such settlement is effected without the consent of Los Gatos (which consent shall not be unreasonably withheld), nor shall Los Gatos be liable in any such case for any loss, claim, damage or liability to the extent that a court of competent jurisdiction shall have determined by final judgment that such loss, claim, damage or liability resulted from an Indemnified Party’s gross negligence, willful misconduct or bad faith.

Promptly after receipt by an Indemnified Party of notice of the commencement of any action, such Indemnified Party shall deliver to Los Gatos a written notice of the commencement thereof, and Los Gatos shall have the right to participate in, and, to the extent Los Gatos so desires, to assume the defense thereof with counsel satisfactory to the Indemnified Parties; provided, however, that an Indemnified Party shall have the right to retain its own counsel, with the fees and expenses to be paid by Los Gatos, if representation of such Indemnified Party by the counsel retained by Los Gatos would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to Los Gatos within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve Los Gatos of any liability to the Indemnified Party under this Section 10 but the omission to so deliver written notice to Los Gatos will not relieve it of any liability that it may have to an Indemnified Party otherwise than under this Section 10.

The obligations of Los Gatos referred to in this Section 10 shall be in addition to any rights that any Indemnified Party may have otherwise. The obligations of Los Gatos under this Section 10 shall survive the termination of this Agreement.

11. This Agreement is the entire agreement of the parties and supersedes all prior or contemporaneous written or oral negotiations, correspondence, agreements and understandings regarding the subject matter hereof. No provisions of this Agreement may be changed, varied, discharged, discounted or assigned except in writing by the parties hereto.

12. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any conflict of laws principles. Any amendment hereto or waiver of any right or obligation must be in writing and signed by both parties. All disputes, claims or controversies arising between Los Gatos and Tigris in connection with this Agreement shall be brought exclusively before the

3

Supreme Court of the State of New York, New York County.

[Signature page follows]

4

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

Tigris Financial (International) LP
By:	Tigris Management Limited, its general partner
By:	/s/ Pearline McIntosh        /s/ Patrice  Minors
Name: Pearline McIntosh        Patrice Minors
Title: For and On Behalf of Miners Management (BVD) LTD., Sole Director

Agreed to and Accepted as of the Effective Date:
LOS GATOS LTD.
By:	/s/ Pearline McIntosh        /s/ Patrice  Minors
Name: Pearline Mcintosh        Patrice Minors
Title:   Director                        Director

[Signature page to Services Agreement effective January 1, 2008]

5

Exhibit A – Annual Fees

Effective as of January 1, 2008: $150,000

Effective as of January 1, 2009: $375,000. In addition, effective October 2, 2009, Los Gatos shall make a one-time grant to Tigris of 4,771,318 ordinary shares in the capital of Los Gatos, free of any restrictions on transferability.

Effective as of January 1, 2010: $500,000

6

EX-10.3

Exhibit 10.3

SERVICES AGREEMENT

This Services Agreement (this “Agreement”) is dated as of May 11, 2010, between Tigris Financial Group Ltd. (“Provider”) and Silver Opportunity Partners LLC (“Recipient”).

WHEREAS, Provider has the resources and capacity to provide certain professional consulting and administrative services that may be useful to Recipient; and

WHEREAS, Recipient desires to utilize such services, and Provider is willing to provide such services to Recipient, subject to the terms of this Agreement;

NOW, THEREFORE, the parties agree as follows:

1. Services. During the term of this Agreement, Provider shall provide to Recipient the services described on Exhibit A to this Agreement, as well as any additional services to which the parties may mutually agree from time to time (the “Services”). Provider shall provide the Services on an as-required basis as mutually determined by Provider and Recipient from time to time. Provider shall use that degree of skill, care and diligence in the performance of the Services that (a) a reasonable person would use acting in like circumstances and in accordance with applicable laws and regulations and (b) is no less than that exercised by Provider with respect to comparable services that it performs on its own behalf.

2. Consideration.

a. Fees. During the term of this Agreement, Provider shall receive from Recipient the annual fees described on Exhibit B to this Agreement (as such Exhibit B may be amended from time to time by the parties hereto). Provider shall also charge Recipient at actual cost for any out-of-pocket expenses. The amounts to be charged to Recipient under this Section 2(a) are referred to herein as the “Fees.”

b. Payment. Provider shall bill Recipient for the Fees in advance on a quarterly or other periodic basis as the parties may agree from time to time. For the calendar year 2010, Provider shall bill the Recipient for the Fees at the end of the year. Recipient shall pay the amount of the Fees shown on the applicable invoice within 30 days of receipt of the invoice.

c. Books and Records. Provider shall use commercially reasonable efforts to maintain appropriate schedules, invoices and other documentation substantiating the Fees. Upon reasonable advance notice, Recipient may review such books and records at any time to determine whether the Fees are proper under this Agreement.

3. Termination. The term of this Agreement shall commence on the date hereof. This Agreement may be terminated with or without cause by either party upon 60 days’ prior written notice to the other party. Following termination of this Agreement, Recipient shall remain liable for any accrued but unpaid Fees. Sections 4, 5, 6 and 7 shall survive the termination of this Agreement.

4. Independent Contractor. The relationship of the parties hereto is that of contracting parties, and no partnership, joint venture or other similar arrangement is created hereby. Provider is not entitled to any compensation or employee benefits that would accrue to any employee provided by Provider if such employee were an employee of Recipient.

5. Limitation of Liability. Provider shall not be liable, responsible or accountable, in damages or otherwise, to Recipient for any act or omission performed or omitted by Provider in good faith on behalf of Recipient and in a manner reasonably believed by Provider to be within the scope of the authority conferred upon Provider hereunder and in the interests of Recipient.

6. Confidentiality. Provider shall, and shall cause its employees and representatives to, keep confidential all information in the possession of Provider that in any way relates to Recipient, provided that Provider and its employees and representatives may disclose such information to the extent reasonably necessary or advisable in connection with the performance of the Services. In addition, Provider and its employees or representatives may disclose information (a) which is, or becomes, publicly available, other than by reason of a breach of this Section 6, (b) received from a third party not known to be bound by any duty of confidentiality to Recipient, or (c) required by applicable law or legal process to be disclosed.

7. Indemnity. Recipient shall indemnify, defend and hold harmless Provider and its owners, affiliates, officers, directors, employees, agents and representatives (collectively, the “Provider Parties”) from and against any and all claims, losses, damages, liabilities and expenses (including reasonable attorneys’ fees) of any nature whatsoever arising out of or in connection with this Agreement, except to the extent attributable to the negligence or willful misconduct of one of the Provider Parties.

8. Miscellaneous.

a. Further Assurances. From time to time, each party shall execute and deliver such further instruments and take such further action as the other party reasonably requests in order to discharge and perform the obligations and agreements hereunder.

b. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, that Provider may delegate any of its obligations hereunder to any third party (subject to receiving comparable assurances of confidentiality), including to affiliates of Provider.

c. Reparability. The invalidity or unenforceability of any provision in this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

d. Interpretation; Jurisdiction. This Agreement shall be interpreted and construed in accordance with the laws of the State of New York, without reference to the rules governing conflicts of laws. The parties hereto consent to personal jurisdiction

2

and venue in the State of New York, County of New York, with respect to any action or proceeding brought in connection with this Agreement. The captions of sections of this Agreement have been inserted as a matter of convenience only and shall not control or affect the meaning or construction of any of the terms or provisions hereof.

e. Entire Agreement. The parties agree that all understandings and agreements heretofore made among them are merged in this Agreement, which alone fully and completely expresses their agreement with respect to the subject matter hereof. There are no promises, agreements, conditions, understandings, warranties or representations, oral or written, express or implied, among the parties hereto, other than as set forth in this Agreement.

f. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

g. Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns.

3

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

TIGRIS FINANCIAL GROUP LTD.
By:	/s/ William Natbony
Name:	William Natbony
Title:	Chief Executive Officer
SILVER OPPORTUNITY PARTNERS LLC
By:	/s/ Michael H. Williams
Name:	Michael H. Williams
Title:	President

[Signature page to Services Agreement between Silver Opportunity Partners LLC and

Tigris Financial Group Ltd.]

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EXHIBIT A – SERVICES

• General business, investment, management and/or financial advice

• Internal bookkeeping services

• General administrative services

• Network and communications services

• Supervision of outside service providers (e.g., lawyers, accountants, advisers, human resources)

• Such other services as the parties may agree from time to time

EXHIBIT B – ANNUAL FEES

Effective May 11, 2010 (and for the calendar year 2010): $ 500,000

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EX-10.4

Exhibit 10.4

ASSIGNMENT AND AMENDMENT TO SERVICES AGREEMENT

This Assignment and Amendment (the “Amendment”), effective as of August 1, 2011, among Tigris Financial Group Ltd. (“Provider”), Silver Opportunity Partners LLC (“SOP”) and Sunshine Silver Mines Corporation (“Sunshine”),

WITNESSETH:

WHEREAS, Provider and SOP entered into a Services Agreement, effective as of May 11, 2010 (the “Services Agreement”), and

WHEREAS, effective August 1, 2011, Provider will provide the Services (as such term is defined in the Services Agreement) to Sunshine, and

WHEREAS, effective August 1, 2011, SOP wishes to assign the Services Agreement to Sunshine and to amend the Services Agreement accordingly to remove SOP as the Recipient (as such term is defined in the Services Agreement), such party to be replaced by Sunshine.

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the parties hereto agree as follows:

1. The parties hereto consent to the assignment of the Services Agreement by SOP to Sunshine.

2. The Services Agreement is hereby amended to replace SOP with Sunshine as the Recipient (as such term is defined in the Services Agreement).

3. Section 3 (Termination) of the Services Agreement is hereby amended and restated to read, in its entirety, as follows:

3. Termination. The term of this Agreement shall commence on the date hereof. This Agreement may be terminated upon mutual consent of the parties. Following termination of this Agreement, Recipient shall remain liable for any accrued but unpaid Fees. Sections 4, 5, 6 and 7 shall survive the termination of this Agreement.

4. Except as specifically amended by this Amendment, the Services Agreement, including all exhibits thereto, shall remain in full force and effect.

5. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument.

[signature page to follow]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

TIGRIS FINANCIAL GROUP LTD.
By:	/s/ William Natbony
Name:	William Natbony
Title:	Chairman
SILVER OPPORTUNITY PARTNERS LLC
By:	/s/ Roger Johnson
Name:	Roger Johnson
Title:	Treasurer
SUNSHINE SILVER MINES CORPORATION
By:	/s/ Roger Johnson
Name:	Roger Johnson
Title:	CFO

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EX-10.5

Exhibit 10.5

SERVICES AGREEMENT

This Services Agreement (this “Agreement”) is effective as of March 1, 2011, between Tigris Financial Group Ltd. (“Provider”) and Sunshine Silver Mines Corporation (“Recipient”).

WHEREAS Provider has the resources and capacity to provide certain professional consulting and administrative services that may be useful to Recipient; and

WHEREAS Recipient desires to utilize such services, and Provider is willing to provide such services to Recipient, subject to the terms of this Agreement.

NOW, THEREFORE, the parties agree as follows:

1. Services. During the term of this Agreement, Provider shall provide to Recipient the services described on Exhibit A to this Agreement, as well as any additional services to which the parties may mutually agree from time to time (the “Services”). Provider shall provide the Services on an as-required basis as mutually determined by Provider and Recipient from time to time. Provider shall use that degree of skill, care and diligence in the performance of the Services that (a) a reasonable person would use acting in like circumstances and in accordance with applicable laws and regulations and (b) is no less than that exercised by Provider with respect to comparable services that it performs on its own behalf.

2. Consideration.

a. Expenses. During the term of this Agreement, Provider shall charge Recipient at cost for any out-of-pocket expenses. The amounts to be charged to Recipient under this Section 2(a) are referred to herein as the “Expenses.”

b. Payment. Provider shall bill Recipient for the Expenses at the end of each quarter or other periodic basis as the parties may agree from time to time. Recipient shall pay the amount of the Expenses shown on the applicable invoice within 30 days of receipt of the invoice.

c. Books and Records. Provider shall use commercially reasonable efforts to maintain appropriate invoices and other documentation substantiating the Expenses. Upon reasonable advance notice, Recipient may review such records at any time to determine whether the Expenses are proper under this Agreement.

3. Termination. The term of this Agreement shall commence on the date hereof. This Agreement may be terminated with or without cause by either party upon 30 days’ prior written notice to the other party. Following termination of this Agreement, Recipient shall remain liable for any accrued but unpaid Expenses. Sections 4, 5, 6 and 7 shall survive the termination of this Agreement.

4. Independent Contractor. The relationship of the parties hereto is that of contracting parties, and no partnership, joint venture or other similar arrangement is created hereby. Provider is not entitled to any compensation or employee benefits that would

accrue to any employee provided by Provider if such employee were an employee of Recipient.

5. Limitation of Liability. Provider shall not be liable, responsible or accountable, in damages or otherwise, to Recipient for any act or omission performed or omitted by Provider in good faith on behalf of Recipient and in a manner reasonably believed by Provider to be within the scope of the authority conferred upon Provider hereunder and in the interests of Recipient.

6. Confidentiality. Provider shall, and shall cause its employees and representatives to, keep confidential all information in the possession of Provider that in any way relates to Recipient, provided that Provider and its employees and representatives may disclose such information to the extent reasonably necessary or advisable in connection with the performance of the Services. In addition, Provider and its employees or representatives may disclose information (a) which is, or becomes, publicly available, other than by reason of a breach of this Section 6, (b) received from a third party not known to be bound by any duty of confidentiality to Recipient, or (c) required by applicable law or legal process to be disclosed.

7. Indemnity. Recipient shall indemnify, defend and hold harmless Provider and its owners, affiliates, officers, directors, employees, agents and representatives (collectively, the “Provider Parties”) from and against any and all claims, losses, damages, liabilities and expenses (including reasonable attorneys’ fees) of any nature whatsoever arising out of or in connection with this Agreement, except to the extent attributable to the gross negligence or willful misconduct of one of the Provider Parties.

8. Miscellaneous.

a. Further Assurances. From time to time, each party shall execute and deliver such further instruments and take such further action as the other party reasonably requests in order to discharge and perform the obligations and agreements hereunder.

b. Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, that Provider may delegate any of its obligations hereunder to any third party (subject to receiving comparable assurances of confidentiality), including to affiliates of Provider.

c. Reparability. The invalidity or unenforceability of any provision in this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted.

d. Interpretation: Jurisdiction. This Agreement shall be interpreted and construed in accordance with the laws of the State of New York, without reference to the rules governing conflicts of laws. The parties hereto consent to personal jurisdiction and venue in the State of New York, County of New York, with respect to any action or proceeding brought in connection with this Agreement. The captions of

2

sections of this Agreement have been inserted as a matter of convenience only and shall not control or affect the meaning or construction of any of the terms or provisions hereof.

e. Entire Agreement. The parties agree that all understandings and agreements heretofore made among them are merged in this Agreement, which alone fully and completely expresses their agreement with respect to the subject matter hereof. There are no promises, agreements, conditions, understandings, warranties or representations, oral or written, express or implied, among the parties hereto, other than as set forth in this Agreement.

f. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

g. Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

TIGRIS FINANCIAL GROUP LTD.
By:	/s/ William Natbony
Name:	William Natbony
Title:	CEO

SUNSHINE SILVER MINES CORPORATION
By:	/s/ Michael Williams
Name:	Michael Williams
Title:	President

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EXHIBIT A – SERVICES

• General business, investment, management and/or financial advice

• Internal bookkeeping services

• General administrative services, including setting up Recipient’s banking services, bill paying, investing excess cash balances in U.S. treasury money market funds and authorizing payments to third parties

• Network and communications services

• Supervision of outside service providers (e.g., lawyers, accountants, auditors, advisers, human resources)

• Such other services as the parties may agree from time to time

EX-10.6

Exhibit 10.6

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ROYALTY DEED

THIS ROYALTY DEED is made effective this 12th day of April, by and among SUNSHINE PRECIOUS METALS, INC., whose address is P. O. Box 1080, Kellogg, Idaho 83837 (hereafter “GRANTOR”) and THE UNITED STATES OF AMERICA, whose address is Director, Environmental Cleanup Office, U. S. Environmental Protection Agency, Region 10, 12 00 Sixth Avenue, Seattle, Washington 98191, and Regional Director, U. S. Fish and Wildlife Service, 911 N.E. 11th Ave., Portland, Oregon 97232, and the COEUR D’ALENE TRIBE OF IDAHO, whose address is Chairman, Coeur d’Alene Tribe, P. 0. Box 408, Plummer, Idaho 83851. The United States and Coeur d’Alene Tribe are hereafter referred to as GRANTEE.

For and in consideration of One Dollar ($1.00) and other sufficient consideration, the receipt of which is hereby acknowledged, GRANTOR hereby grants and agrees to pay unto GRANTEE a variable production royalty of the Net Smelter Return as that term is herein defined (hereafter referred to as the “PRODUCTION ROYALTY”) from the sale of minerals from the PROPERTY described in Attachment 1 (hereafter the “PROPERTY”) in accordance with the following schedule:

Silver Price Average	NSR Royalty
$ 0 - $5.99		0.0	%
$6.00 - $6.99		1.0	%
$7.00 - $7.49		2.0	%
$7.50 - $7.99		2.5	%
$8.00 - $8.49		3.0	%
$8.50 - $8.99		4.0	%
$9.00 - $9.49		5.0	%
$9.50 - $9.99		6.0	%
$10.00 and over		7.0	%

The Net Smelter percentage utilized for the purpose of calculating the PRODUCTION ROYALTY payable for any calendar quarter shall be determined by the average daily quotations of the Handy and Harmon New York official quotation as published in Metals Week (or its recognized successor in the publications of silver quotations) for that calendar quarter.

GRANTOR shall, however, have the right to mine and market amounts of minerals and mineral-bearing ores and concentrates reasonably necessary for sampling, assaying, metallurgical

398123

testing and evaluating the minerals potential of the PROPERTY without initiating the obligation to make PRODUCTION ROYALTY payments. The term “Net Smelter Returns” shall mean the net amount paid to GRANTOR by a smelter or other purchaser for minerals mined from the PROPERTY after deductions for the following costs paid by or charged to GRANTOR (whether paid or incurred by GRANTOR or by the smelter or other purchaser in the first instance): (i) all smelting, refining, treatment, selling, and other costs, charges, and penalties charged by the smelter or other purchaser for such minerals; (ii) all costs of loading, transporting, and insuring such minerals and mineral-bearing substances from the PROPERTY to the smelter or other purchaser; and (iii) all taxes paid by GRANTOR on such minerals or mineral-bearing substances, except income taxes, including, but not limited to, production, severance, sales, and privilege taxes. Whenever minerals or mineral-bearing substances are delivered for direct sale or future processing thereof to a processing or sales facility owned or controlled by GRANTOR or which possesses or sells such minerals or mineral-bearing substances for GRANTOR on a toll basis, the Net Smelter Returns from such sale shall be an amount not less than the amount which would have been realized by GRANTOR if the sale had been to the nearest independent purchaser of such product; in such case, GRANTOR may deduct amounts not to exceed the charges, costs, and expenses permitted under the preceding sentence. GRANTOR shall make PRODUCTION ROYALTY payments within thirty (30) days after the end of the calendar quarter in which proceeds from the sale of minerals or mineral-bearing substances are realized. At such time, GRANTOR shall provide GRANTEE with a statement showing in reasonable detail the computation of the PRODUCTION ROYALTY payments. Each quarterly statement furnished to GRANTEE shall be deemed to be correct and binding on GRANTEE unless GRANTEE within ninety (90) days of its receipt, notifies GRANTOR in writing that GRANTEE disputes the correctness of such statement and specifies its objections in detail. GRANTOR shall maintain true and correct records of all minerals and mineral-bearing substances mined and sold from the PROPERTY, and GRANTOR shall permit GRANTEE to inspect, at GRANTEE’S expense, the books and records of GRANTOR which are pertinent to the determination of the PRODUCTION ROYALTY at any reasonable time during normal business hours, provided such inspection is conducted by GRANTEE or by an accounting firm of recognized standing, at least one of whose members is a member of the American Institute of Certified Public Accountants, and provided such inspection does not interfere unreasonably with

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398123

GRANTOR’S operations or procedures.

IN WITNESS WHEREOF, GRANTOR has caused this Royalty Deed to be executed by its undersigned representative as of the date first above written.

SUNSHINE PRECIOUS METALS, INC.
By
	President

*    *    *

STATE OF TEXAS	)
	)    ss.
County of Dallas	)

On this 12th day of April, 2001, before me, the undersigned, a Notary Public in and for the State of Texas, personally appeared WILLIAM W. DAVIS, known or identified to me to be the President of SUNSHINE PRECIOUS METALS, INC., and acknowledged to me that he executed the same for and on behalf of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

Mary Jo Williams

Notary Public for the State of Texas

My Comm’n Expires 3/13/03

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398123

ATTACHMENT 1

All property within one mile of the external boundaries of the following-described parcels:

PARCEL 1:

Sunshine, American, Iron King, McKenzie, McKenzie Fraction, Rambo, Majestic, Thin, Rambo Fraction and Yakima Patented Mining Claims, M.S. 3169 situated in Evolution Mining District in Sections 14, 15, 21 and 22, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

EXCEPT: Those portions of the Sunshine and Yakima Lode Mining Claims, M.S. 3169 more particularly described as follows:

Beginning at a point on the West End line of said Sunshine Lode, whence the Southwest corner, Corner No. 1 of said Sunshine Lode bears South 1°41’ East, 215.22 feet; thence

North 74°13’ East, 1500 feet; thence

North 16°16’ East, 410.88 feet to a point on the Southerly line of said Yakima lode; thence

South 78°04’ West along the Southerly line of said Yakima lode, 170.65 feet to the Southwest Corner, Corner No. 3 of said Yakima lode, identical with the Southeast or Corner No. 4 of the Sunshine lode; thence

South 82°03’ West along the Southerly boundary line of said Sunshine lode, 1343.41 feet to a point on the Southerly line of said Sunshine Lode, whence the Southwest or Corner No. 1 of said Sunshine lode bears South 82°03’ West, 54.79 feet; thence

North 16°16’ West, 216.31 feet to the place of beginning.

ALSO EXCEPT: Those portions of the Sunshine, Iron King, and Thin Lode Mining Claims, all of M.S. 3169 embraced within the following boundaries, to-wit:

Beginning at Corner No. 4 of the Thin Lode, Survey No. 3169 from which the Southwest corner of Section 15, Township 48 North, Range 3 East, B.M., bears North 3°02’ West, 883.62 feet and running thence

North 32°18’ East along line 4-1 Thin Lode, 252.01 feet to a point; thence

South 9°43’ East, 213.90 feet to the Northeast Corner of the Mary E. Lode; thence

South 9°43’ East, 600 feet to the Southeast Corner of the Mary E. lode and the Northeast corner of the Hilda lode; thence

CONTINUED

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PARCEL 1 – Continued:

South 1°20’ East, 338.75 feet along the East end line of the Hilda lode to a point on the North side line of the Boston lode; thence

South 74°13’ West, 156.0 feet to the Northwest Corner of the Boston lode; thence

South 18°16’ East, 202.03 feet along the West End Line of the Boston lode to a point on the South side line of the Hilda lode; thence

South 82°52’ West, 51.11 feet to a point on line 1-2, Sunshine lode, M.S. 3169; thence

North 1°41’ West, 585.20 feet to Corners 2 and 4, Sunshine and Iron King lodes, Survey No. 3169; thence

North 1°41’ West, 600.0 feet to Corner No. 1, Iron King lode, Survey No. 3169; thence

South 82°03’ West, 101.80 feet to Corner No. 4, Thin Lode, Survey No. 3169, and the place of beginning.

PARCEL 2:

Yankee Lode, Sherman, Cleaveland and Norcross Patented Mining Claims, M.S. 2267A and Yankee Millsite Patented Millsite, M.S. 2267B situated in Evolution Mining District in Sections 15 and 22, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

PARCEL 3:

Crane Lode Patented Mining Claim, M.S. 3335 situated in Evolution Mining District in Section 15, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

PARCEL 4:

Chief Lode Patented Mining Claim, M.S. 3299 situated in Yreka and Evolution Mining Districts in Sections 15, 16, and 22, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

PARCEL 5:

May Day Patented Mining Claim, M.S. 3315 situated in Yreka and Evolution Mining Districts in Section 15, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

CONTINUED

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398123

PARCEL 6:

The Zwerg Group Patented Mining Claims consisting of the Gretchen, Hans, Plover, Rothbart, Schiller and Zwerg, M.S. 3272 situated in Evolution Mining District in Sections 15, 22 and 23, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho. Patent recorded in Book 77, Deeds, page 234.

EXCEPT: That portion described in the deed to Metropolitan Mines Corporation and recorded as Instrument No. 153661, records of Shoshone County, State of Idaho.

PARCEL 7:

The Iowa Group Patented Mining Claims consisting of the Iowa, Germania, Good Hope, New York, Buffalo, Bell, U.S., Lotten, Frigga, Des Moines, Orvil, Maple, Last Chance, Ore or No Go, Sven, Anna, Anna No. 2, Mannie, August, May, Ore Grand, June, and H. & K. Claims, M.S. 3292A and the United Lead Millsite Patented Millsite, M.S. 3292B all situated in Evolution Mining District in Sections 11, 13, 14, 15, and 23, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho. Patent recorded as Instrument No. 153118, records of Shoshone County, State of Idaho.

EXCEPT: That portion described in the deed to Wallace Realty Company recorded as Instrument No. 216621, records of Shoshone County, State of Idaho.

ALSO EXCEPT: That portion of the K Lode lying within the South half of Section 11, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

ALSO EXCEPT: That portion described in the Decree recorded May 23, 1968 as Instrument No. 217256, records of Shoshone County, State of Idaho.

CONTINUED

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398123

PARCEL 8:

All that portion of the West End Patented Mining Claim, M.S. 3174, situated in Evolution Mining District in Sections 14 and 23, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho and more particularly described as follows:

Beginning at Corner No. 1 of said West End Lode, Survey No. 3174, and running thence;

South 50° West, 659.54 feet to the intersection with line 3-2 of the Herschey Lode, Survey No. 3305; thence

North 67°32’ West, 1216.34 feet along line 3-2 Herschey Lode to intersection with line 3-4 of said West End lode, Survey No. 3174; thence

North 48°49’ East, 9.11 feet to intersection with line 1-2 Protection Lode, Survey No. 2083; thence

North 71°35’40” East, 321.06 feet to Corner No. 2 Protection and Corner No. 1 Bartlett Lode, Survey No. 2083, and thence

South 83°49’ East, 1334.28 feet to Corner No. 1 of said West End Lode and the place of beginning.

PARCEL 9:

The Southwest quarter of the Northwest quarter of Section 13, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

EXCEPT: That portion lying within the Ore Grand Mining Claim, M.S. 3292.

PARCEL 10:

The Sunshine Consolidated Group consisting of Stevie Corcoran, Oslo, Mary E., Hilda, Gullickson Fraction, Baldur, Baldur Fraction, Contact Mountain, Venue, also known as Venus, Bonanza Fraction, Red Umbrella, Red Umbrella Fraction, Rex, Rex Fraction, Roberts, Roberts Fraction, Roberts No. 1, Gail Fraction, Hattie Anne, S.C.I. No. 5, S.C.I. No. 5 Fraction, S.C.I. No. 6 and S.C.I. No. 10 Patented Mining Claims, M.S. 3273 situated in Yreka and Evolution Mining Districts, Shoshone County, State of Idaho.

CONTINUED

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PARCEL 11:

The Rockford Group Patented Mining Claims consisting of Rockford, Happy Day, Corona, Corona No. 1, Corona No. 2, Corona No. 3, Excellsior, Happy Jack, Bay Horse, Grouse and Gem Lode, M.S. 2807 situated in Yreka Mining District, Shoshone County, State of Idaho.

EXCEPTING THEREFROM: Any portion of said claims lying within the East 1/2 Northeast 1/4 of Section 19 and within the North 1/2 of the Northwest 1/4 of Section 20, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

PARCEL 12:

The S.C.I. Group Patented Mining Claims, consisting of Crescent No. 5, W-5 and Giant No. 9, M.S. 3291 situated in Yreka Mining District, Shoshone County, State of Idaho.

EXCEPTING THEREFROM: Any portion of said claims lying within the East 1/2 Northeast 1/4 of Section 19 and within the North 1/2 of the Northwest 1/4 of Section 20, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

PARCEL 13:

Radio, Prudential, Josephine, Francis, Helen, Lucky Day, Silver State, Spokane, Portland, and Silverine Fraction Patented Mining Claims, M.S. 3318 situated in Evolution Mining District in Section 15, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

PARCEL 14:

Merit Fraction No. 2, Josephine Fraction and Helen Fraction Patented Mining Claims, M.S. 3308 situated in Evolution Mining District in Section 15, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho.

CONTINUED

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PARCEL 15:

A parcel of land lying in the Northwest quarter of Section 15, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho, and more particularly described as follows:

Using the Bunker Hill Company triangulation meridian and beginning at a point where the West right of way line of the Big Creek road intersects the North side line of the Monmouth lode claim, M.S. No. 2274, whence the quarter corner common to Sections 10 and 15, Township 48 North Range 3 East, B.M., bears North 89°48’16” East, 811.42 feet distant; thence

South 32°39’58” West, 293.16 feet along said Big Creek Road right of way to a point, a concrete monument with brass cap MKD 59+00 40 feet to centerline; thence

South 26°58’42” West, 100.50 feet along said right of way to a point; thence

Continuing along said right of way South 32°39’58” West, 279.17 feet to a point identical with the Northeast Corner of Lot 1, Block 1 of Big Creek Subdivision; thence

North 56°58’ West, 243.72 feet to a point identical with Corner No. 5 of the Big Creek Subdivision; thence

Continuing along the Big Creek Subdivision Boundary, North 33°02’ East, 75.00 feet to a point identical with Corner No. 4 of said subdivision; thence

North 56°58’ West, 175.00 feet to a point identical with Corner No. 3 of said subdivision; thence

North 33°02’ East, 210.12 feet to a point identical with Corner No. 2 of said subdivision; thence

Leaving said subdivision boundary and running North 32°49’52” East (shown of record as North 32°59.9’ East), 122.53 feet to a point on the North side line of the Monmouth lode claim, M.S. 2274; thence

North 89°52’ East (shown of record as East), 483.68 feet along said side line to the point of beginning.

CONTINUED

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PARCEL 16:

A parcel of land lying in the Northwest quarter of Section 15, Township 48 North, Range 3 East, B.M., Shoshone County, State of Idaho and more particularly described as follows:

Using the Bunker Hill Company triangulation meridian and beginning at Corner No. 1 of said tract identical with Corner No. 1 of the Monmouth Claim, M.S. 2274 (an iron pipe with copper cap), from whence the quarter corner common to Sections 10 and 15, Township 48 North, Range 3 East, B.M., bears North 89°47’30” East, 710.52 feet distant; thence

South 00°26’30” West, 599.65 feet distant (shown of record as South 00°32’00” West, 600.00 feet) to Corner No. 2, identical with Corner No. 2 of the Monmouth Claim, M.S. 2274; thence

South 02°02’00” East, 271.54 feet distant to Corner No. 3; thence

North 56°58’00” West, 489.21 feet distant to Corner No. 4, a point on the East right of way line of the Big Creek Road, identical with the Northwest corner of Block 1, Big Creek Subdivision; thence

North 32°39’58” East (shown of record as North 32°58’58” East) along said right of way 717.82 feet distant to Corner No. 5, a point on the North line of the Monmouth Lode Claim, M.S. 2274; thence

North 89°52’00” East (shown of record as East) 17.67 feet distant to Corner No. 1, the point of beginning.

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PARCEL 17 – Antimony Plant:

That certain parcel of real estate more specifically described as follows, to-wit:

That portion of the South Half of the Southeast Quarter of the Southwest Quarter of Section 10, Township 43 North, Range 3, East, B.H., lying West of a straight line, beginning at a point 100’ East of the Southwest comer and terminating at a point 560 feet Fast of the Northwest corner of the aforesaid South Half of the Southeast Quarter of the Southwest Quarter of Section 10, Township 48 North, Range 3 E.B.M., Shoshone County, Idaho.

EXCEPT: A parcel of land in the SE 1/4 SW 1/4 of Section 10, Township 48 North, Range 3 E.B.M., Shoshone County, State of Idaho, and more particularly described as follows:

Beginning at Corner No. 1 which bears North 70°56’00”, West, 1,080.81 feet from the Southeast comer of the SW 1/4 of said Section 10; thence

North 55°40’ West, 220.00 to Corner No. 2; thence

North 42°20’ East, 408.98 feet to Corner No. 3; thence

South 55°40’ East, 163.08 feet to Corner No. 4; thence

South 34°20’ West, 405.00 feet to the point of beginning.

TOGETHER WITH an easement for the purpose of ingress and egress located in SE 1/4 SW 1/4 of Section 10, Township 48 North, Range 3 E.B.M., Shoshone County, State of Idaho, as follows:

Being 12.50 feet on either side of the following described centerline:

Beginning at a point which bears South 34°20’ West, 132.5 feet from Corner No. 4 of the above described parcel; thence

South 55°40’ East, 328 feet more or less to its intersection with the right of way of Big Creek Road.

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PARCEL 18 – Refinery:

A parcel of land in the SE 1/4 SW 1/4 of Section 10, Township 48 North, Range 3 E.B.M., Shoshone County, State of Idaho, and more particularly described as follows:

Beginning at Corner No. 1 which bears North 70°56’00” West, 1,080.81 feet from the Southeast Corner of the SW 1/4 of said Section 10; thence

North 55°40’ West, 220.00 to Corner No. 2; thence

North 42°20’ East 408.98 feet to Corner No. 3; thence

South 55°40’ East, 163.08 feet to Corner No. 4; thence

South 34°20’ West, 405.00 feet to the point of beginning.

TOGETHER WITH an easement for the purpose of ingress and egress located in SE 1/4 SW 1/4 of Section 10, Township 48 North, Range 3 E.B.M., Shoshone County, Idaho, as follows:

Being 12.50 feet on either side of the following described centerline:

Beginning at a point which bears South 34°20’ West, 132.5 feet from Corner No. 4 of the above described parcel; thence

South 55°40’ East, 328 feet more or less to its intersection with the right of way of Big Creek Road.

PARCEL 19 – Executive Building:

A parcel of land in the Southeast Quarter of Southwest Quarter of Section 10, Township 48 North, Range 3 E.B.M., Shoshone County, Idaho and being more particularly described as follows:

Using the Bunker Hill Company triangulation meridian and beginning at a point where the West right of way line of the Big Creek Road intersects the section line common to Sections 10 and 15, whence the common quarter corner bears North 89°48’16” East, 811.42 feet distant; thence

Along the right of way line North 32°39.5’ East, 347.02 feet to a point a drill steel marked 8-SU, identical to Corner No. 8 of that certain deed recorded in Deeds, Book 144, Page 131; thence

Along said described deed line North 57°20.5’ West, 115.00 feet to Corner No. 11, identical to 9-SU of said deed; thence

South 32°39.5’ West, 120.00 feet to Corner No. 12, identical to 10-SU of said deed; thence

North 57°20.5’ West, 222.41 feet to Corner No. 13, identical to 1-SU of said deed; thence

South 34°50.88’ West, 454. 45 feet to Corner No. 8, a drill steel monument with copper cap located on the section line between the two said sections; thence

South 89°58’ East, 421.24 feet along said line to the point of beginning.

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The following-described property, parcels 20-30, are subject to that Royalty Deed dated November 17, 1995, from Sunshine Precious Metals, Inc. to Hecla Mining Company granting Hecla Mining Company a Production Royalty from said property.

UNPATENTED MINING CLAIMS

Parcel 20:

Go Between Fraction IMC #175833 T48N R3E Sec 13

Parcel 21:

Co-owned (50%/50%) with Hayden Hill Consolidated Mining Company:

Barbarosa	IMC # 175831	T48N R3E Sec 22, 23
Western Star	IMC # 175832	T48N R3E Sec 22, 23

Subject to the terms and conditions of that Agreement and Correction Deed among ConSil Corp.; Sunshine Precious Metals, Inc.; Hayden Hill Consolidated Mining Company; and Hecla Mining Company recorded on May 17, 1996, with the Shoshone County, Idaho Recorder as Instrument No. 372396.

Parcel 22:

Bow

Bud

All minerals and metals and mineral-bearing rock in place in any and all veins, lodes, ledges and other mineral-bearing structures below an elevation of 900 feet below mean sea level for the following unpatented claims, conveyed to Consolidated Silver Corporation by deeds from Coeur d’Alene Mines Corporation (12/20/68, Instrument No. 221764), Plainview Mining Company (12/20/68, Instrument No. 221765) and Merger Mines Corporation (1/7/69, Instrument No. 221766):

Bill	IMC # 29133
Dennis	IMC # 29140
Gary Lee	IMC # 29137
Grubstake (west portion) Hercules (west portion)	IMC # 29142 IMC # 29144
Intrepid	IMC # 29145
Jack	IMC # 29134
Jumbo (west portion)	IMC # 29143
Justin	IMC # 29139
March of Time (amended)	IMC # 29136
Mark	IMC # 29132
Pat	IMC # 29138
Pay Streak (amended)	IMC # 29141
Ray	IMC # 29135
Robin	IMC # 29131

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I. PATENTED MINING CLAIMS

SURFACE & MINERALS RIGHTS:

Parcel 23:

Homestake M.S. 3220

All surface and mineral interests except the surface of the following described parcel of land conveyed to Ductile Iron & Foundry, November 3, 1955, which is recorded in Book 90 of Deeds at page 408, Shoshone County.

Beginning at the center Section 13, Township 48 North, Range 3 East, B.M., also identical with corner No. 2 Homestake Lode, Mineral Survey 3220;

thence South 00°03’10” East, 247.00 feet, to a point;

thence North 61°11’22” West, 242.78 feet, to a point;

thence North 128.15 feet, to a point on the northerly sideline of said Homestake Lode;

thence North 89°30’ East, 212.51 feet, to corner No. 2 of said Homestake Lode, Mineral Survey 3220, the place of beginning.

Parcel 24:

Maxwell No. 3 M.S. 3220

Except that portion of the surface in conflict with the Orvil claim, M.S. 3292A which was conveyed to Louisiana-Pacific Corporation by special warranty deed dated February 28, 1992, recorded as Instrument No. 351156 in the records of Shoshone County, Idaho.

Excluding mineral rights to any and all ores and minerals in the ground north of the Osburn fault, or any downward extension thereof, but without any right of access thereto through any of the properties.

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SURFACE & MINERAL; RIGHTS (cont.):

Parcel 25:

Goethe M.S. 3271

That portion of the claim situated easterly of that line known as the “Compromise End Line” (said line being described in that certain agreement dated February 15, 1951, by and between Hayden Hill Consolidated Mining Company, Polaris Mining Company, Silver Summit Mining Company, Lincoln Mining Company, and Silver Dollar Mining Company, said agreement being recorded in Book J of Leases and Agreements in the records of Shoshone County, Idaho at Page 155, said portion conveyed by deed dated December 18, 1968, recorded in Book 134, Pages 326-333, Instrument No. 221772.

Parcel 26:

Orvil M.S. 3292A

Except that portion of the Orvil claim lying north of the line described in Tract 2 in those deeds dated January 31, 1969 from Lincoln Mining Company and Silver Dollar Mining Company, recorded in Book 134 at Pages 340-34 5 and Pages 334-339, Instrument Nos. 221772 and 221773, respectively, in the records of Shoshone County, Idaho.

And also excepting that portion of the Orvil claim lying east of the west side line of section 13, Township 48 North, Range 3 East, B.M., Shoshone County, Idaho, which was conveyed to Louisiana-Pacific Corporation by special warranty deed dated February 28, 1992, recorded as instrument No. 351156 in the records of Shoshone County, Idaho.

And also excepting that portion of the Orvil claim lying east of the west side line of section 13, Township 48 North, Range 3 East, B.M., Shoshone County, Idaho, as described in Tract 5 of the deed dated January 3, 1969, recorded in Book 134, Pages 314-319, Instrument No. 221769 in the records of Shoshone County, Idaho.

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MINERAL RIGHTS ONLY

Parcel 27:

Surface rights to the following claims were conveyed to Louisiana-Pacific Corporation by special warranty deed dated February 28, 1992, recorded as Instrument No. 351156 in the records of Shoshone County, Idaho.

Emma Nevada	M.S. 1006
Coeur d’Alene Nellie	M.S. 1006
Grizzly Bear	M.S. 3170
Jumbo No. 1	M.S. 3170
Jumbo No. 2	M.S. 3170
Jumbo No. 3	M.S. 3170
Jumbo No. 4	M.S. 3170
Jumbo No. 5	M.S. 3170
Jumbo No. 6	M.S. 3170
Key West	M.S. 3170
Protection Fraction	M.S. 3170
Go Between	M.S. 3220
Bernardy No. 4	M.S. 3304
Bernardy No. 5	M.S. 3304
Bernardy No. 6	M.S. 3304
Bernardy No. 7	M.S. 3304
Bernardy No. 9	M.S. 3304
Bernardy No. 11	M.S. 3304
Bernardy No. 12	M.S. 3304
Bernardy No. 13	M.S. 3304
Silver Dollar	M.S. 3407
Hidden Treasure	M.S. 3407

Those portions of the following claims situate easterly of that line known as the “Compromise End Line” (said line being described in that certain agreement dated February 15, 1951, by and between Hayden Hill Consolidated Mining Company, Polaris Mining Company, Silver Summit Mining Company, Lincoln Mining Company, and Silver Dollar Mining Company, said agreement being recorded in Book J of Leases and Agreements in the records of Shoshone County, Idaho at Page 155, said portion conveyed by deed dated December 18, 1968, recorded in Book 134, Pages 326-333, Instrument No. 221772.

Torpedo M.S. 3170

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MINERAL RIGHTS ONLY (cont.):

Parcel 27 (cont.):

Bernardy No. 1	M.S. 3304
Bernardy No. 2	M.S. 3304
Bernardy No. 3	M.S. 3304
Bernardy No. 10	M.S. 3304
North	M.S. 3220
Maxwell No. 1	M.S. 3220
Maxwell No. 2	M.S. 3220
Maxwell Fraction	M.S. 3220
Blue Jay No. 1	M.S. 3221
Blue Jay No. 2	M.S. 3221

Mineral Rights to the following claims, excluding, however, any and all ores and minerals in the ground north of the Osburn fault, or any downward extension thereof, but without any right of access thereto through any of the properties.

Shoshone No. 1	M.S. 3290
Wallace No. 1	M.S. 3290
Anna No. 2	M.S. 3292A
August	M.S. 3292A
Bell	M.S. 3292A
Buffalo	M.S. 3292A
Des Moines	M.S. 3292A
Frigga	M.S. 3292A
Good Hope	M.S. 3292A
May	M.S. 3292A
June	M.S. 3292A
U.S.	M.S. 3292A
Anna	M.S. 3292A
Last Chance	M.S. 3292A
Lotten	M.S. 3292A
Mannie	M.S. 3292A
Ore or No Go	M.S. 3292A

Excluding from the Anna, Last Chance, Lotten, Mannie and Ore or No Go claims, those portions lying north of a line described in those certain deeds to Consolidated Silver Corporation on January 31, 1969 by Silver Dollar Mining Company and Lincoln Mining Company, recorded in Shoshone County records as Instrument Nos. 221773 and 221774, as follows:

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MINERAL RIGHTS ONLY (cont.):

Parcel 27 (cont.):

“Starting at the southeast, or No. 1, corner of the Ore Grande claim, M.S. 3292A, which coincides with a point on the north side line of the Orvil claim, M.S. 3292A, which is 131.54 feet northwesterly from the northeast, or No. 1, corner of said Orvil claim;

Thence North 70°48’ West a distance of 5,138 feet to a point on the north side line of the Lotten claim, M.S. No. 3292A, which is approximately 650 feet easterly from the northwest, or No. 1, corner of said Lotten claim.”

Trail	M.S. 3407
Blue Bell	M.S. 3407

Excluding from the Trail and Blue Bell claims all the contained area in conflict with the Bartlett claim, M.S. 2083, and the Jumbo No. 3 claim, M.S. 3170.

Germania	M.S. 3292A
Good Hope	M.S. 3292A                [listed above also]
Iowa	M.S. 3292A

Excluding from the Iowa, Germania and Good Hope claims, the extralateral rights to the Chester vein west of a vertical plane extended indefinitely downward and north and south through the east end line of the Good Hope claim, and all ores lying within a distance of 200 feet north or south of the center of the said Chester vein west of said vertical plane.

Parcel 28:

All minerals and metals and mineral-bearing rock in place in any and all veins, lodes, ledges and other mineral-bearing structures below an elevation of 900 feet below mean sea level for the following patented claims conveyed to Consolidated Silver Corporation by deeds from Coeur d’Alene Mines Corporation (12/20/68, Instrument No. 221764) , Plainview Mining Company (12/20/68, Instrument No. 221765) and Merger Mines Corporation (1/7/69, Instrument No. 221766); and 15% interest and rights to the ores and minerals between mean sea level and 900 feet below mean sea level on the following patented claims as described in that certain Quitclaim Deed from American Smelting and Refining Company, Callahan Mining Corporation, and Day

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MINERAL RIGHTS ONLY (cont.):

Parcel 28 (cont.):

Mines, Inc. to Coeur d’Alene Mines Corporation, Merger Mines Corporation, Plainview Mining Company, Inc. and Consolidated Silver Corporation dated January 31, 1972 (recorded on April 11, 1972 as Instrument No. 239511):

Aetna	M.S. 3261
Bernardy No. 8	M.S. 3261
Little Gem	M.S. 3261
Lucky Boy	M.S. 3261
Lucky Stone	M.S. 3261
Lucky Stone No. 2	M.S. 3261
Lucky Stone No. 3	M.S. 3261
Lucky Stone No. 4	M.S. 3261
Manitoba	M.S. 3261
Morning Glory	M.S. 3261
Morning Glory Fraction	M.S. 3261
Morning Glory No. 2	M.S. 3261
Reid	M.S. 3261
Walters	M.S. 3261
Fourthought	M.S. 3281
Plainview Fraction	M.S. 3281
Plainview No. 1	M.S. 3281
Plainview No. 2	M.S. 3281
Silver Hill	M.S. 3281
Toughnut	M.S. 3281
Commodore Truxton	M.S. 3382

III. OTHER PROPERTY

SURFACE RIGHTS ONLY:

Parcel 29:

Portion of the SE/4 NW/4, Section 13, Township 48 North, Range 3 East

Surface rights conveyed to Consolidated Silver Corporation by Hecla Mining Company by deed dated December 18, 1968, recorded in the records of Shoshone County in Book 134 at Pages 32 6-333, Instrument No. 221772, further described as follows:

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SURFACE RIGHTS ONLY (cont.):

Parcel 29 (cont.):

Beginning at the center of said Section 13, identical with the northeast corner of the Homestake Lode, M.S. 3220; thence South 89°30’ West, 212.51 feet, to a point on the north side line of said Homestake Lode, the real place of beginning;

thence South 89°30’ West along the north side line of said Homestake Lode, 296.98 feet, to corner No. 3 of the Maxwell Lode, M.S. 3220;

thence North 87°48’20” West along the north side line of said Maxwell No. 3 Lode 789.58 feet, to a point on the west boundary of the Southeast Quarter of the Northwest Quarter of Section 13;

thence northerly along the west boundary of said quarter quarter section, 963 feet, more or less to a point on the southerly said railroad right-of-way line of the Union Pacific Railroad Company;

thence southeasterly along the southerly right-of-way line, of said railroad right-of-way 738 feet, more or less, to the northwest corner of the parcel of ground known as the Jensen lease;

thence South 25°27’ West, 160.00 feet, to the southwest corner of said Jensen lease;

thence South 64°33’ East, 82.00 feet, to the southeast corner of said Jensen lease, identical with the southwest corner of that parcel of ground known as the Bitco property;

thence South 31°33’ East, 58.33 feet, on and along the southerly boundary of said Bitco property to a point;

thence South 83°55’57” East on and along the southerly boundary of said Bitco property, 151.32 feet, to the northwest corner of the McKay property;

thence South 250.05 feet, on and along the westerly boundary of said McKay property to a point on the center of the Polaris Mill secondary railroad spur track at station 2+11.0 of said secondary spur track;

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SURFACE RIGHTS ONLY (cont.):

thence northeasterly around a 10° curve to the left, 121 feet more or less to station 0 + 90.00 of said secondary spur track;

thence northeasterly around a 7°22’ curve to the left, 90.00 feet, to station 0 + 00, the beginning of said secondary spur track, identical with station 6 + 24.3 of the main Polaris Mill railroad spur;

thence North 62°33’15” East along the center of said railroad spur, 96.51 feet, to the northwest corner of the Burns Yaak property;

thence South on and along the west boundary of the Burns Yaak property, 194.94 feet, to the real place of beginning;

Excluding therefrom all rights-of-way and easements of record.

Parcel 30:

Portion of the SW/4 NW/4 of Section 13, Township 48 North, Range 3 East

Surface rights conveyed to Consolidated Silver Corporation by Silver Chieftan Company in that deed dated January 3, 1969, recorded in the records of Shoshone County in Book 134 at Pages 314-319, Instrument No. 221769 and by Lincoln Mining Company in that deed dated January 9, 1969 recorded in the records of Shoshone County in Book 134 at Pages 308-313, Instrument No. 221768, described as follows:

Beginning at the west one quarter corner of said section 13;

thence northerly along the west side line of section 13 a distance of 450 feet;

thence easterly to the east side line of the southwest one quarter of the northwest one quarter (SW 1/4 NW 1/4) of section 13;

thence southerly along said east side line a distance of 450 feet to the east-west centerline of section 13;

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SURFACE RIGHTS ONLY (cont.):

Parcel 30 (cont.):

thence westerly along said east-west centerline to the west one quarter corner of said section 13 and the point of beginning,

together with one-half of the waters of springs and other waters on said premises and/or in Rosebud Gulch.

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The following-described property, parcels 31-36, are subject to that Production Royalty, reserved by Hecla Mining Company in that Deed recorded on June 10, 1999, by the Shoshone County, Idaho Recorder as Instrument No. 389125:

SURFACE RIGHTS ONLY:

Parcel 31:

Portion of the SW/4 NW/4, Section 13, Township 48 North, Range 3 East (Con Sil Pump House Area)

Surface rights only (minerals reserved by Sunshine Mining Company) to the following parcel of land conveyed to Hecla Mining Company by Sunshine Mining Company by quitclaim deed dated August 9, 1983, recorded in Shoshone County, Idaho as Instrument No. 306944.

A parcel of land lying within the SW1/4, NW1/4 Section 13, T 48 N, R 3 E, B.M., Shoshone County, Idaho and more particularly described as follows:

Beginning at the West 1/4 corner of said Section 13, thence North 70°27’06” East a distance of 1,378.15 feet more or less to corner No. 1, a point on the east boundary of the SW1/4, NW1/4 and the true place of beginning.

Thence South 89°30’ West, along the present boundary between Consolidated Silver Corporation and Sunshine Mining Company, a distance of 330 feet to a point, corner No. 2;

Thence North 0°01’40” East a distance of 150 feet to a point, corner No. 3;

Thence North 89°30’ East a distance of 305 feet to a point, corner No. 4;

Thence North 0°01’40” East and paralleling the east boundary of the SW1/4 NW1/4 a distance of 409.1 feet more or less to a point on the south right-of-way of the Union Pacific Railroad Company, corner No. 5;

Thence South 54°29’ East a distance of 30.71 feet along the southerly right-of-way of Union Pacific Railroad Company to a point on the east boundary of the SW1/4 NW1/4, corner No. 6;

Thence South 0°01’40” West along the east boundary of the SW1/4 NW1/4 a distance of 541.5 feet more or less to the true place of beginning and containing approximately 1.366 acres.

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Parcel 32:

Two parcels of land in S1/2 NW1/4, Section 11, Township 48 North, Range 3 East

Portions of the July claim, M.S. 2819, Glamorgan claim, M.S. 2149, and Pembroke claim, M.S. 2149 conveyed to Hecla Mining Company by ASARCO Incorporated by quitclaim deed dated October 7, 1981, recorded in Shoshone County as Instrument No. 295884.

MINERAL RIGHTS ONLY:

Parcel 33:

Mineral rights on a 1.22 acre tract of ground just south of the Bitco plant conveyed to Hecla Mining Company by J.E. and Elsie G. McKay, by deed dated November 23, 1960, recorded n Shoshone County in Book 102 at Page 412, described as follows:

Beginning at the northwest corner of the property, this point being on the southerly sideline of Bitco Co. property, whence the center of Section 13, Township 48 North, Range 3 East, B.M., also identical with corner No. 2 Homestake lode, M.S. 3220 bears S 56°23’57” E 597.80 feet; thence S 83°55’57” E, 501.08 feet more or less, on and along a line identical with the southerly boundary of Bitco Co. property to a point on the north-south centerline of Section 13, Township 48 North, Range 3 East, B.M., which is also on the Polaris Spur Track centerline at station 2 + 99.0 and identical with the easterly corner of the Bitco Co. property; thence westerly along the centerline of said Polaris spur track leading to the Polaris Mill around a 10° curve to the left, 175.0 feet to station 4 + 74.0, the end of the curve; thence S 62°33’15” W, 150.3 feet along said centerline to station 6 + 24.3, identical with station 0 + 00.0, the beginning of a secondary Polaris Mining Co. spur track; thence 90.0 feet around a 7°22’ curve to the right to station 0 + 90.0 of said secondary spur track; thence 121.0 feet more or less around a 10° curve to the right to station 2 + 11.0 of said secondary spur track; thence North, 250.05 feet more or less to the northwest corner of said property, the place of beginning.

To be excluded from above described property is a 17.50 foot strip northerly from and parallel to the centerline of said described Polaris Mining Co. spur tracks.

Said tract contains 1.22 acres more or less, and is identical to that tract conveyed by Polaris Mining Company to J.E. McKay on the 24th day of November 1954, and recorded, together with a plat of same, in Book 90 of Deeds at Page 586 on the 5th day of March 1956.

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Parcel 34:

Mineral rights on a parcel of ground conveyed to Hecla Mining Company by quitclaim deed dated January 10, 1955 to Bitco Incorporated, recorded in Shoshone County in Book 89 at Page 315, further described as follows:

Beginning at the southwesterly corner of said tract, whence the center of Section 13, Township 48 North, Range 3 East, also identical with comer No. 2 Homestake Lode, M.S. 3220 bears South 62°07’41” West, 735.64 feet; thence Norm 31°33’ West, 58.33 feet to a point; thence North 25°27 East, 154.50 feet to a point on the southerly right-of-way line of the Union Pacific Railroad Company; thence South 62°06’10” East, 64.59 feet along said southerly Union Pacific right-of-way line to a point; thence South 64° 10’ East, 98.09 feet along said southerly right-of-way line to a point; thence South 70° East, 497.51 feet along said southerly right-of-way line to a point on the east boundary line of the northwest quarter of Section 13, Township 48 North, Range 3 East, B.M.; thence due south, 15.06 feet along-said boundary line to a point on the centerline of a spur track leading to the Polaris Mill at railroad station 2 + 99.0, identical with the northeast corner of J.E. McKay property; thence North 83°55’57” West, 501.08 feet on and along the northerly boundary of said J.E. McKay property to a point, identical with the northwest corner of said J.E. McKay property; thence North 83°55’57” West, 151.32 feet to the southwesterly corner, the place of beginning. Said tract contains 1.44 acres more or less.

This “West” call should be “East”, note made in files, but apparently not corrected in county records.

Parcel 35:

Minerals rights on a parcel of ground conveyed to Hecla Mining Company by Quitclaim Mining Deed dated June 26, 1984, from Sunshine Mining Company recorded in Shoshone County as Instrument No. 311991 referred to as the “NEW PURIM AREA.” described in paragraph (a) south of a system of dividing planes hereinafter defined in paragraph (b) , which New Purim Area is described as follows:

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(a) Beginning at Corner No. 4, Herschey lode claim, Mineral Survey No. 3305, identical with the north end of the compromise Common End Line; whence the corner of Sections 14 and 15, T. 48 N., Range 3, E.B.M., bears North 66°02’28” West 1839.81 feet dist.; thence North 33°04’08” East 439.30 feet on and along line 4-3 of said Herschey lode to its intersection with line 1-4 Torpedo lode, Mineral Survey No. 3170; thence North 62°42’50” West 143.75 feet on and along line 1-4 of said Torpedo lode to its intersection with line 4-1 Hidden Treasure lode, Mineral Survey No. 3383; thence North 47°12’46” East 589.70 feet on and along line 4-1 of said Hidden Treasure lode to Corner No. 1 of said Hidden Treasure lode, identical with Corner No. 1 Trail lode, Mineral Survey No. 3383; thence North 50°16’32” East 213.96 feet on and along line 1-2 of said Trail lode to its intersection with line 2-1 of the Bartlett lode, Mineral Survey No. 2083, also on and along line 1-4 of the West End lode, Mineral Survey No. 3174; thence North 83°56’35” West 1302.00 feet on and along line 2-1 of the said Bartlett lode to Corner No. 1 of said Bartlett lode, identical with Corner No. 2 of the Protection lode, Mineral Survey No. 2083; thence South 71°22’36” West 1258.24 feet on and along line 2-1 of said Protection lode to Corner No. 1 of said protection lode; thence North 12°07’ East 170.75 feet on and along line 1-4 of said Protection lode to its intersection with line 4-1 of the American lode, Mineral Survey No. 3169; thence South 19°19’ West 128.86 feet on and along line 4-1 of the said American lode to Corner No. 1 of said American lode; thence South 88°23’ West 784.05 feet on and along line 1-2 of said American lode to its intersection with line 2-3 of the Rambo lode, Mineral Survey No. 3169, also along line 4-3 of the Rotbart lode, Mineral Survey No. 32 72; thence South 1°41’ East 538.63 feet on and along line 2-3 of said Rambo lode to Corner No. 3 of said Rambo lode, identical with Corner No. 3 of said Rotbart lode, Corner No. 1 of the Schiller lode, Mineral Survey No. 3272, and Corner No. 2 of the Majestic lode, Mineral Survey No. 3169; thence South 1°41’ East 600.00 feet on and along line 2-3 of the said Majestic lode to Corner No. 3 of said Majestic lode; thence South 75°13’30” West 873.67 feet on and along line 3-4 of said Majestic lode to its intersection with line 1-5 of

23

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the Hans lode, Mineral Survey No. 3272; thence South 9°54’ West 53.27 feet on and along line 1-5 of said Hans lode to Corner No. 5 of said Hans lode; thence South 11°16’30” West 653.16 feet on and along line 3-2 of the Plover lode, Mineral Survey No. 3272, to Corner No. 2 of the said Plover lode; thence South 53°51’ East 768.48 feet on and along line 2-1 of said Plover lode to its intersection with the north side line of the Hudson lode, unsurveyed; thence South 83°25’14” East 665.90 feet on and along the north side line of the said Hudson lode to its intersection with line 1-4 of the said Plover lode; thence North 11°16’30” East 290.93 feet on and along line 1-4 of the said Plover lode to Corner No. 4 of the said Plover lode, identical with Corner No. 4 of the Hans lode, Mineral Survey No. 3272, Corner No. 1 of the Gretchen lode, Mineral Survey No. 3272 and Corner No. 2 of the Grimm lode, Mineral Survey No. 3272; thence South 53°51’ East 523.61 feet on and along line 1-4 of the said Gretchen lode to its intersection with the north side line of the Studebaker lode, unsurveyed; thence due East 858.94 feet on and along the north side line of the said Studebaker lode to its intersection with line 4-3 of the said Gretchen lode; thence North 9°54’ East 84.22 feet on and along line 4-3 of the said Gretchen lode to Corner No. 3 of the said Gretchen lode; thence North 53°51’ West 265.25 feet on and along line 3-2 of the said Gretchen lode to its intersection with the south end of the Compromise Common End line; thence North 33°04’08” East 1952.88 feet on and along the Compromise Common End Line to Corner No. 4 of the Herschey lode, the place of beginning of the description of the exterior boundaries.

(b) Said system of dividing planes within said New Purim Area is established as follows: A system of connected southerly dipping planes, which planes are identical to the Southerly boundary of the Polaris Area as established in that certain Agreement dated December 9, 1957, among Sunshine Mining Company, Polaris Mining Company, Lincoln Mining Company, Hayden Hill Consolidated Mining Company and Silver Dollar Mining Company, except that said planes extend easterly to the easterly vertical boundary of said New Purim Area. The intersection of said dividing planes and the

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easterly vertical boundary of the New Purim Area at an elevation of 2215.0 feet is at coordinates S. 79417.18 and E. 81009.44 and where said dividing planes intersect the vertical boundary of said New Purim Area at an elevation of 17.0 feet below sea level is at coordinates S. 80103.24 and E. 80672.44.

EXCLUDING THEREFROM the Omega Area and the Rotbart Area as defined in that agreement of March 3, 1944, among Lincoln Mining Company, Silver Dollar Mining Company, Polaris Mining Company and Sunshine Mining Company, recorded with the Shoshone County, Idaho, Recorder in Book “I” of Bonds and Agreements at page 498; ALSO EXCLUDING THEREFROM the Chester Area as defined in that deed among Lincoln Mining Company, Silver Dollar Mining Company, Polaris Mining Company and Sunshine Mining Company of April 11, 1949, recorded with the Shoshone County, Idaho, Recorder in Book “83” of Deeds at page 60; ALSO EXCLUDING THEREFROM the American Area and Polaris Area as defined in that Agreement of December 9, 1957, among Sunshine Mining Company, Polaris Mining Company, Lincoln Mining Company, Hayden Hill Consolidated Mining Company and Silver Dollar Mining Company recorded with the Shoshone County, Idaho, Recorder in Book “K” of Agreements at page 396.

SUBJECT TO that agreement dated May 7, 1952, among Hayden Hill Consolidated Mining Company, Polaris Mining Company, Silver Summit Mining Company, Lincoln Mining Company and Silver Dollar Mining Company recorded with the Shoshone County, Idaho Recorder in Book “J” of Bonds and Agreements at page 474. And ALSO SUBJECT TO that certain mineral lease between Hayden Hill Consolidated Mining Company and Stratton Silver Summit, Inc., dated March 20, 1934, and recorded with the Shoshone County, Idaho, Recorder in Book “E” of Agreements at page 267 as supplemented by agreements dated May 16, 1938, and May 10, 1947, between Hayden Hill Consolidated Mining Company and Silver Dollar Mining Company.

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Parcel 36:

Mineral rights on a parcel of ground conveyed to Hecla Mining Company by Quitclaim Mining Deed dated June 26, 1984, from Sunshine Mining Company recorded in Shoshone County as Instrument No. 311992 referred to as the “GOOD HOPE AREA” contained in the Chester Vein within that area or block of ground in Evolution Mining District in Shoshone County, Idaho, and being more particularly described as follows:

The Chester Vein within that area or block of ground in Evolution Mining District, Shoshone County, Idaho, which is bounded by the following-described vertical planes, to wit:

On the east by a vertical plane extended downward indefinitely through the east end line of the Good Hope lode mining claim, U.S. Mineral Survey No. 3292-A, and projected indefinitely both northerly and southerly on a course bearing North 12°7’ East and bearing South 12°7’ West; and on the west by a vertical plane extended downward indefinitely through the east end line of the McKinley lode mining claim, U.S. Mineral Survey No. 2083, belonging to Chester Mining Company, an Idaho corporation, and projected indefinitely both northerly and southerly on a course bearing North 12°7’ East and bearing South 12°7’ West, which said block of ground encloses the Chester Vein.

The Chester Vein is described as that certain vein and fault zone disclosed by Silver Summit Mining Company’s north crosscut on its 3000-foot level at a point approximately 930 feet northerly from the center of Silver Summit Mining Company’s shaft; and being the same vein and fault zone which was explored both easterly and westerly by Silver Dollar on its 2800-foot level and also on its 1800-foot level and which was also explored by Silver Dollar by drifts on various levels above its said 1800-foot level.

Said Chester Vein, as hereinabove identified, shall include said vein and fault zone at all points on its strike and dip, as nearly as its course can be

26

determined, together with all ore embraced within a distance of 200 feet to the south and 200 feet to the north of the center of said vein, both distances to be measured horizontally, provided, however, that said Chester Vein shall not include any portion of any vein or veins outside the downward northerly or southerly boundaries of the above-described block of ground unless such vein or veins are branches of or offshoots from said Chester Vein itself.

SUBJECT to the terms and provisions of that certain Amended Agreement and Easement dated January 8, 1979, by and between Sunshine Mining Company and Consolidated Silver Corporation.

27

EX-10.7

Exhibit 10.7

SMC 04 3009

AGREEMENT

Dated: September 16, 2004.

Between:	Metropolitan Mines Corporation, Limited, an Idaho Corporation,	“Metropolitan”
	and
	Sterling Mining Company, an Idaho Corporation.	“Sterling”

RECITALS:

1. Metropolitan is the owner of certain patented and unpatented mining claims in Shoshone County, Idaho, as more particularly set forth in Exhibit “1” attached hereto.

2. Sterling has leased the property and assets known as the Sunshine Mine from Sunshine Precious Metals, Inc. and American Reclamation, Inc. and various leases and agreements held by Sunshine Precious Metals, Inc. were assigned to Sterling in said Lease, including the agreements set forth herein.

3. Metropolitan and Sunshine Precious Metals, Inc (then known as Sunshine Mining Company) have for many years been parties to certain agreements concerning the Metropolitan patented and unpatented claims. Those Agreements are as follows:

a. Agreement dated January 6, 1941 – attached hereto as Exhibit “A” and by this reference incorporated herein.

b. Agreement dated January 11, 1941 – attached hereto as Exhibit “B” and by this reference incorporated herein.

c. Letter Modification dated December 23, 1944 – attached hereto as Exhibit “C” and by this reference incorporated herein.

d. Memorandum of Agreement dated August 17, 1945 – attached hereto as Exhibit “D” and by this reference incorporated herein.

Collectively the foregoing Agreements are referred to as the “Prior Agreements”.

- 1 -

4. Some uncertainty exists as to the status of the Prior Agreements and Sterling and Metropolitan desire to reinstate and reaffirm the Prior Agreements and enter into additional agreements for the purpose of exploring, developing and mining the Metropolitan property.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein set forth and in consideration of the mutual benefits to accrue and expected to accrue to the parties hereto from this Agreement, the adequacy and sufficiency thereof is hereby acknowledge, the parties agree with each other as follows:

Section 1. Adoption of Recitals.

The recitals set forth above are adopted as part of the Agreement of the parties, and the facts set forth therein are acknowledged and agreed to be true, accurate and complete.

1.1 Specifically, Sterling and Metropolitan reaffirm and reinstate the Prior Agreements. All the terms and provisions set forth in said Prior Agreements shall be and remain in full force and effect, except as modified herein.

Section 2. Prior Agreements.

2.1 The Prior Agreements provide, among other things, the granting of right of ways, the right to search, explore, develop and mine Metropolitan’s property and remove rock and ore. The Prior Agreements also provided for ownership of ore within the Metropolitan property and further defined that ownership as follows:

2.1.1 Yankee Girl Vein – net proceeds from ore are to be divided sixteen percent (16%) to Metropolitan and eight four percent (84%) to Sunshine (now Sterling by virtue of the Sterling – Sunshine Lease.

2.1.1.1 The Yankee Girl Vein is defined as anything within two hundred feet (200’) north or south of the Yankee Girl Vein.

2.1.2 Everything south of the Yankee Girl Vein is divided fifty percent (50%) to Metropolitan and fifty percent (50%) to Sunshine (now Sterling – by virtue of the Sterling – Sunshine Lease).

- 2 -

2.2 Subsequent to execution of the Prior Agreements, Sunshine reportedly abandoned twenty five (25) of the unpatented claims, the subject of the Prior Agreements. Sterling relocated said claims and renamed said claims prior to the execution of this Agreement. Sterling shall, as a part of this Agreement convey by appropriate instrument(s) the area previously located by the twenty five (25) unpatented claims set forth in Exhibit “2” to Metropolitan and said unpatented claims shall become a part of this Agreement and Prior Agreements as if the claims had never been abandoned and subsequently relocated by Sterling.

2.2.1 Sterling relocated the twenty five (25) abandoned claims utilizing names and physical locations which are different than those originally utilized by Metropolitan. Notwithstanding said differences, Sterling will use its best efforts to identify the previously abandoned area, convey the area and said unpatented claims shall be treated as the same claims named in the Prior Agreements.

2.2.1.1 If it is subsequently discovered that the claims relocated by Sterling cannot be accurately matched to the original names, the parties agree the claims set forth in Exhibit “2” shall, none the less, be treated as set forth in Section 2.2.

2.2.1.2 If any open ground is discovered within the claim group set forth in Exhibit “2”, Sterling shall locate the same and said claim(s) shall be a part of this Agreement and conveyed to Metropolitan.

2.3 It is intended by Metropolitan that all of its patented and unpatented claims in Shoshone County, Idaho be included in this Agreement. Metropolitan owns a partial interest in the patented claims set forth in Exhibit “1” Table 2.

Section 3. Ores not covered by Prior Agreements.

To the extent the Prior Agreements did not apply to all ores within the Metropolitan property, Metropolitan and Sterling hereby agree that any ores not so covered shall be treated in the same manner as set forth in the Prior Agreements, that is, divided fifty percent (50%) to Metropolitan and fifty percent (50%) to Sterling, subject to the provisions in the Prior Agreements for costs and charges.

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3.1 Destroyer Group. Metropolitan and Sterling agree that the claim group previously owned by Metropolitan and known as the Destroyer Group shall also be a part of this Agreement. Those claims previously consisted of eleven (11) unpatented claims know as Izard, Conner, Burns, Bell, Wadleigh, Moffett, Charrette, Haradon, Halligan, Stevens and Newsome, when owned by Metropolitan. The Destroyer Group had been abandoned and relocated by Sterling, in much the same manner as the 25 unpatented claims set forth in section 2.2. Said claims are listed in Exhibit “2”.

3.1.1 Sterling shall use its best efforts to determine the number and names of the unpatented claims relocated by Sterling which previously comprised the area known as the Destroyer Group and convey those unpatented claims to Metropolitan.

3.1.2 The ores within the unpatented claims set forth in this section 3.1, shall be treated as a part of this Agreement, that is, divided fifty percent (50%) to Metropolitan and fifty percent (50%) to Sterling, subject to the provisions in the Prior Agreements for costs and charges.

Section 4. Other Consideration; Advance Royalties.

4.1 As and for additional consideration for entering into this Agreement, Metropolitan and Sterling agree as follows:

4.1.1 Metropolitan shall deliver to Sterling 200,000 shares of Metropolitan restricted common shares;

4.1.2 Commencing on the Effective Date and monthly thereafter, Sterling shall pay to Metropolitan as advance royalty One Thousand Dollars ($1,000.00) per month until such time as ore is produced from the Metropolitan property. Thereafter, no advance royalties shall be due.

4.1.2.1 All advance royalties paid by Sterling shall be treated as direct cost as provided in paragraph 9 of the Agreement dated August 17, 1945, attached hereto as Exhibit “D”.

- 4 -

Section 5. Claim Maintenance Fee.

Sterling shall pay all governmental rental fees for unpatented claims assessed against Metropolitan’s ownership in the unpatented claims beginning with calendar year 2005.

Section 6. Effective Date.

The “Effective Date” shall be the date of execution of this Agreement by Sterling and Metropolitan.

Section 7. Notices.

7.1 Notices to the parties to this Agreement shall be in writing and shall be effective when delivered, or if mailed, shall be effective on the date following mailing by certified mail addressed to the party indicated below or at such other address as the party may indicate to other in writing:

Sterling:	Sterling Mining Company
	411 Coeur d’ Alene Ave., Suite 1-A
	Coeur d’ Alene, Idaho 83815
Metropolitan:	Metropolitan Mines Corporation, Limited
	P.O. Box 469
	Wallace, ID 83873

Section 8. Miscellaneous.

8.1 This Agreement shall be governed and interpreted in accordance with the laws of the State of Idaho.

8.2 This Agreement shall be executed in one or more counterparts, each of which shall constitute one and the same agreement.

8.3 The headings or captions contained in each section of this lease are for ease of reference and convenience only, and shall not be considered in connection with the construction of this Agreement or any section hereof.

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IN WITNESS WHEREOF the parties hereto have executed this Agreement the day and year shown above by the undersigned thereunto duly authorized.

STERLING MINING COMPANY, INC
By:	/s/ Raymond De Motte
	Raymond De Motte , President
	Printed Name and Title

ATTEST:

Printed Name and Title

METROPOLITAN MINES CORPORATION, LIMITED
By:	/s/ Dale B. Lavigne
	Dale B. Lavigne, President

ATTEST:

/s/ Dennis O’Brien

Dennis O’Brien, Secretary

State of Idaho	)
	) ss.
County of Shoshone	)

On this 15^th day of September 2004, before me, a Notary Public in and for the State of Idaho, personally appeared Raymond Demotte and Carol Stephan, President and Secretary, respectively, of Sterling Mining Company, the corporation that executed the within and foregoing instrument, and acknowledged the said instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and each on oath stated that he/she was authorized to execute said instrument.

- 6 -

SUBSCRIBED AND SWORN to before me this 15^th day of September, 2004.

State of Idaho	)
	) ss.
County of Shoshone	)

On this 16^th day of September, 2004, before me, a Notary Public in and for the State of Idaho, personally appeared Dale B. Lavigne and Dennis O’Brien, President and Secretary respectively, of Metropolitan Mines Corporation, Limited, the corporation that executed the within and foregoing instrument, and acknowledged the said instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and each on oath stated that he was authorized to execute said instrument.

SUBSCRIBED AND SWORN to before me this 16^th day of September, 2004.

Sharon L. Arthur Notary Public in and for the State of Idaho, Residing at: Mullan, Idaho My Commission Expires: 12-22-09

- 7 -

Metropolitan Mining Company Limited Land Ownership

Table 1: Metropolitan’s unpatented mineral lode claims.

Serial No	Claim Name/Number	County	Mr Twn	Rng Sec
IMC22329	JOHN G	SHOSHONE	08 0480N	0030E 023
IMC22332	LAUREL	SHOSHONE	08 0480N	0030E 022
IMC22358	GRANT	SHOSHONE	08 0480N	0030E 022
IMC22359	HUDSON	SHOSHONE	08 0480N	0030E 022
IMC22360	KING	SHOSHONE	08 0480N	0030E 022
IMC22361	LORA NO 1	SHOSHONE	08 0480N	0030E 022
IMC22362	LORA NO 2	SHOSHONE	08 0480N	0030E 022
IMC22365	MADALENE	SHOSHONE	08 0480N	0030E 022
IMC22369	SAXON	SHOSHONE	08 0480N	0030E 023
IMC22373	STEDEBAKER	SHOSHONE	08 0480N	0030E 023
IMC22374	TOUGH GOING	SHOSHONE	08 0480N	0030E 022
IMC22376	UTICA	SHOSHONE	08 0480N	0030E 022
IMC22377	WAYNE	SHOSHONE	08 0480N	0030E 022
IMC22379	NI WOT	SHOSHONE	08 0480N	0030E 022
1MC22380	BOSTON FRACTION	SHOSHONE	08 0480N	0030E 022

Table 2: Metropolitan’s Patented mineral lode claims,

only partially owned by Metropolitan in Shoshone County

Name	Survey Number
Gretchen	3272
Plover	3272

Exhibit “1”

Unpatented claims to be conveyed to Metropolitan, to be subject to the provisions of the Agreement:

Serial No	Serial No	County	Mr Twn	Rng Sec
IMC186438	COMNER	SHOSHONE	08 0480N	0030E 027
IMC186445	PEARL	SHOSHONE	08 0480N	0030E 027
IMC186436	IZARD	SHOSHONE	08 0480N	0030E 028
IMC186437	IZARD FR.	SHOSHONE	08 0480N	0030E 027
IMC186441	BURNS	SHOSHONE	08 0480N	0030E 027
IMC186442	BELL	SHOSHONE	08 0480N	0030E 027
IMC186091	MET #2	SHOSHONE	08 0480N	0030E 022
IMC 186092	MET #1	SHOSHONE	08 0480N	0030E 022
IMC186093	MET #5	SHOSHONE	08 0480N	0030E 022
IMC185847	MET #4	SHOSHONE	08 0480N	0030E 022
IMC185848	MET #3	SHOSHONE	08 0480N	0030E 022
IMC186088	MET #8	SHOSHONE	08 0480N	0030E 027
IMC186089	MET#6	SHOSHONE	08 04S0N	0030E 022
IMC186090	MET #7	SHOSHONE	08 0480N	0030E 027
IMC186094	MET #10	SHOSHONE	08 0480N	0030E 027
IMC186095	MET #11	SHOSHONE	08 0480N	0030E 022
IMC186451	WADLEIGH	SHOSHONE	08 0480N	0030E 028
IMC186452	WADLEIGH FR.	SHOSHONE	08 0480N	0030E 027
IMC186482	MET #1 FR.	SHOSHONE	08 0480N	0030E 022
IMC186486	MET #13 FR.	SHOSHONE	08 0480N	0030E 022
IMC186484	MET #12	SHOSHONE	08 0480N	0030E 028
IMC186485	MET #13	SHOSHONE	08 0480N	0030E 022
IMC186487	MET #14	SHOSHONE	08 0480N	0030E 021
IMC186900	METROPOLITAN 2 FRACT	SHOSHONE	08 0480N	0030E 022
IMC186901	METROPOLITAN	SHOSHONE	08 0480N	0030E 022

Claims, in addition to the above which were previously a part of the Destroyer Group, to be conveyed to Metropolitan, to be subject to the provisions of the Agreement:

IMC186453	NEWSOME (ptn.)
1MC186455	STEVENS (ptn.)
IMC186456	MALLIGAN (ptn.) (was previously Halligan)
IMC186470	CRESENT # 8 (ptn.)
IMC186484	MET #12 (ptn. of new claim)
IMC186487	MET #14 (ptn. of new claim)
IMC186488	MET #15 (ptn. of new claim)
IMC186489	MET #16 (ptn. of new claim)
IMC 186490	MET #17 (ptn. of new claim)
IMC186491	MET#18 (ptn. of new claim)
IMC186469	CRESENT #1 (ptn.)
IMC186881	COLBERT 2 (ptn.)

Exhibit “2”

EX-10.8

Exhibit 10.8

(ENGLISH VERSION)

EXPLORATION, EXPLOITATION AND UNILATERAL PROMISE OF ASSIGNMENT OF RIGHTS AGREEMENT EXECUTED ON THE ONE PART BY LA CUESTA INTERNATIONAL, S. A. DE C. V. (HEREINAFTER CALLED “LA CUESTA”) REPRESENTED BY MR. WILLIAM PERRY DURNING AND ON THE OTHER PART BY MINERA PLATA REAL, S. A. DE C. V. (HEREINAFTER CALLED “PLATA REAL”), REPRESENTED BY MR. VICTOR GARCIA JIMENEZ, IN ACCORDANCE WITH FOLLOWING STATEMENTS AND CLAUSES:

S T A T E M E N T S

I. LA CUESTA states:

a) That it is a mining corporation legally incorporated according to the laws of the Mexican Republic, legally qualified to execute agreements and to be owner of mining concessions;

b) That its sole administrator, Mr. William Perry Durning is dully empowered to represent it and to execute this agreement;

c) That it is the legal titleholder of the rights derived from the application for mining concession filed over the mining lot (“THE LOT”), “LOS GATOS”, File N° 16/33429, with a surface of approximately 19,000 hectares, located in the Municipality of Satevo, State of Chihuahua, within the jurisdiction of the Mining Agency of Chihuahua, Chihuahua, as described in Schedule 1;

d) That in regard to the application for the mining concession existing over THE LOT, to date, it has fulfilled all the obligations imposed upon it by the Mining Law, its Regulations and all other applicable legal requirements and that therefore, it is expected that official title for the mining concession will be issued in the future and likewise, that the rights derived from said application are free and clear from any lien, encumbrance or limitation of dominion; and

e) That it is willing to grant PLATA REAL the right to explore and, when titled, to purchase and to exploit THE LOT in accordance with the terms and conditions stipulated in this agreement.

II. PLATA REAL states:

a) That it is a mining corporation legally incorporated according to the laws of the Mexican Republic, legally qualified to execute agreements and to be owner of mining concessions;

b) That its attorney, Mr. Victor Garcia-Jimenez is dully empowered to represent it and to execute this agreement; and

c) That it is willing to be granted the right to explore and, when titled, to purchase and exploit THE LOT, on the terms and conditions stipulated in this agreement.

In accordance with the former statements, the parties agree the following:

Page 1 of 11

C L A U S E S

FIRST. Right to explore, purchase and exploit THE LOT. Subject to that provided in Clause Third below, LA CUESTA hereby grants PLATA REAL the exclusive right to explore and, when titled, purchase and exploit THE LOT during the entire term for which the existing application for mining concession is valid and enforceable or a mining concession exists over THE LOT, and entitles PLATA REAL to execute during said term all exploration and exploitation works permitted to be executed by the concessionaires under the Mining Laws of Mexico, its Regulations and the titles of mining concessions.

SECOND. Right to terminate this agreement in advance. The term of this agreement will be compulsory for LA CUESTA and optional for PLATA REAL, who consequently will be able to terminate it on at least sixty days prior written notice to LA CUESTA to inform it of the date of termination.

Nevertheless, LA CUESTA will also have the right to terminate this agreement if PLATA REAL does not fulfill the work expenditures set out in the Fourth Clause, does not make the advance royalty payments as set out in the Sixth Clause, or if THE LOT is transferred back to LA CUESTA in connection with the Tenth Clause. La Cuesta should also have the right to terminate the Agreement in the event Plata Real incurs in any form of noncompliance, particularly, should Plata Real violate any mining, environmental, labor, tax or other legal provisions either in the course of the exploration or exploitation of the Los Gatos lot; or also in the course of its ordinary business operations not related to the Los Gatos lot, should in the latter instance the violation of those legal provisions by Plata Real affect or put in jeopardy the Los Gatos lot.

In the event of termination of this agreement, PLATA REAL will return THE LOT to LA CUESTA in good standing and free and clear from any encumbrances and will provide LA CUESTA within sixty days after termination copies of all assays, maps geological and geophysical reports and data, drilling reports, logs, technical reports and all other data relating to THE LOT and its evaluation.

THIRD. Unilateral promise to transfer THE LOT. LA CUESTA hereby unilaterally commits to transfer to PLATA REAL 100% (One Hundred Percent) of the title to THE LOT, as soon as the respective mining concession title is issued to LA CUESTA by the Mining Direction, for a purchase price of $15,000 United States Dollars (fifteen thousand United States dollars), an amount that has already been paid by PLATA REAL to LA CUESTA. This promise shall be valid and enforceable during the entire term of this agreement.

In view of the unilateral nature of this promise, it will be compulsory for LA CUESTA and optional for PLATA REAL, who therefore will have the right to decide to acquire or not the above-mentioned rights during the term of this agreement.

Upon the title to THE LOT being issued, LA CUESTA will immediately notify PLATA REAL and, upon such notification, PLATA REAL will confirm in writing that it wishes to continue with this agreement. If PLATA REAL agrees to continue with this agreement, LA CUESTA will transfer the title to THE LOT to PLATA REAL. In this case, both parties agree to do all things necessary to complete such transfer, including appearing before a Notary Public. If PLATA REAL decides not to continue with this agreement, the agreement will terminate and have no further force or effect.

Page 2 of 11

LA CUESTA estimates but does not guarantee that the mining concession title over THE LOT will be issued between April and December 2006 and, meanwhile, inasmuch as it is not at this time required to pay surface taxes nor to invest a minimum amount in exploration works, all amounts received from PLATA REAL for those purposes up to the date of signature of this agreement will be used toward the payment of the surface taxes of THE LOT that will be required upon the date of issuance of title.

When the title to THE LOT is issued to LA CUESTA, LA CUESTA will, as soon as practicable, transfer title to PLATA REAL and all clauses contained herein regarding investments, royalties, payments and other obligations of the parties will be reproduced in a definitive Contract of Transfer.

FOURTH. Minimum annual investment in exploration and development. To maintain this Agreement valid and in effect, PLATA REAL will have to spend the following minimum work expenditures on THE LOT to keep THE LOT in good standing during the following years:

a)	Year 2006:	US $	40,000
b)	Year 2007:	US $	80,000
c)	Year 2008:	US $	100,000
d)	Each Year Thereafter
	Until the End Date (described below)	US $	100,000

The “End Date” will be the earlier of December 31, 2016 or the date a feasibility study is prepared on THE LOT. Any amount expended in excess of the above mentioned limits in any give year can be applied to the future year(s) work commitments.

The exploration to be carried out by the PLATA REAL, whether directly or by means of contractors who render their services to them, comprise, among others, the works that allow the location, identification and determination of mineral substances existing in THE LOT, consisting of but not limited to road construction, site preparation, assaying, geological and geophysical investigations and examinations, including geological explorations, surveying, metallurgical studies, drillings of any kind and mining works such as drifts, crosscuts, pits, shafts and the like considered convenient, additionally to one or more Feasibility Studies to evaluate the viability of this project considering the possibility of establishing a new mining unit, in the opinion of a financing entity contracted by PLATA REAL.

Likewise, applicable minimum work expenditures includes each and all such other activities excluding land acquisition costs related with the exploration for the direct benefit of THE LOT allowed by the applicable legal provisions in the area of mining and mineral exploration, particularly those indicated in articles 28 and 29 of the Mining Law, and which may be used, to prove the mining works to which PLATA REAL is obligated, as titleholder of THE LOT.

All work done on the property will be conducted under the applicable environmental laws and regulation, where required appropriate permits will be acquired before work begins.

FIFTH. Royalties. Upon the transfer of title to THE LOT, PLATA REAL grants LA CUESTA a 2% royalty (the “2% Royalty”) on net smelter returns from all minerals obtained and sold from THE LOT, as long as PLATA REAL is producing and selling any minerals from THE LOT. In addition, PLATA REAL agrees to grant LA CUESTA a 0.5% royalty on net smelter returns from all minerals obtained and sold from all properties owned by third parties that PLATA REAL acquires within the boundaries of THE LOT and the Area

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of Influence as described in the Seventeenth Clause below (collectively the 2% Royalty and the 0.5% royalty are referred to as the “Royalty”). The terms of the Royalty are set out in Schedule 2.

PLATA REAL shall pay the Royalty to LA CUESTA, in check or wire transfer, within 30 days after the end of each calendar quarter in which there has been production and sales of minerals. PLATA REAL shall appoint a competent auditor acceptable to LA CUESTA to verify the calculation of the amounts to be paid as royalties.

It is expressly understood that, should PLATA REAL initiate commercial production, and should the Royalty referred to herein above be determined and same be less than the amount of the minimum Advance Royalty Payments described in Clause Six, PLATA REAL shall continue paying to LA CUESTA every six months, the amount of $20,000 United States dollars (twenty thousand United States dollars).

PLATA REAL will be entitled to transfer the rights to exploit THE LOTS, or sell them to third parties, provided, however, that it shall be a condition of such transfer that the transferee first execute and deliver to LA CUESTA and PLATA REAL an instrument pursuant to which the transferee agrees to be bound by all the terms of this agreement and to be bound to all liabilities and obligations in relation to the Royalty and Advance Royalty Payments required of PLATA REAL as if the transferee was an original party of this Agreement.

Once PLATA REAL pays to LA CUESTA the total amount of $10,000,000 United States dollars (ten million United States dollars), , in combined Advance Royalty and Royalty payments, the production Royalty payable to LA CUESTA shall be reduced from 2% (two percent) to 0.5% (one half percent). Once PLATA REAL pays to LA CUESTA the total amount of $15,000,000 United States dollars (fifteen million United States dollars), it shall have no obligation to make any additional payment in favor of LA CUESTA.

SIXTH. Advance Royalty Payments. As long as PLATA REAL and/or its successors or assigns has an interest in and/or is exploring THE LOT or other mineral interest within the Area of Influence of the Seventeenth Clause, it will pay LA CUESTA the following Advance Royalty Payments plus applicable Value Added Tax:

On signing this Agreement (already paid to LA CUESTA)	US $	7,500
On or before April 27, 2006		7,500
On or before October 27, 2006		12,500
On or before April 27, 2007		12,500
On or before October 27, 2007		15,000
On or before April 27, 2008		15,000
On or before October 27, 2008		20,000
Each 6 months thereafter		20,000

LA CUESTA accepts and recognizes that on February 1, 2006 PLATA REAL already made the first Advance Royalty Payment in the amount of $7,500 United States dollars (Seven thousand five hundred United States dollars).

The above mentioned Advance Royalty Payments would apply as long as PLATA REAL maintains any rights to THE LOT or any portion thereof, or any other mineral interest within the Area of Influence of Clause Seventeen and until commercial production commences on THE LOT. In the case where commercial production has commenced on THE LOT, but the calculated Royalty is less than the minimum Advance Royalty Payments as described above, then the Advance Royalty Payment would apply.

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All Advance Royalty Payments paid by PLATA REAL to LA CUESTA prior to production would be credited against the Royalty that becomes due as provided in the Fifth Clause.

SEVENTH. Fees, Taxes and Expenses. All the fees, taxes and expenses incurred on the granting and execution of this agreement and of the respective purchase agreement will be paid by PLATA REAL, except for those taxes imposed on the income obtained by LA CUESTA, which will be paid by them.

To all payment made by PLATA REAL to LA CUESTA, a Value Added Tax at the rate of 15% will be added, indicating separately in the invoice to be issued the amount of said Tax.

All amounts paid by PLATA REAL to LA CUESTA will be in dollars, currency of the United States of America.

EIGHTH. Labor responsibility. Each party acknowledges and agrees that no labor relations exist between the workers and contractors of such party and the other party, and expressly agrees that, with respect to its employees and contractors, such party or its contractors (as to their employees), will assume all labor responsibilities and will hold the other party harmless against any reclamation, claim, accusation or complaint which may be filed against the first party by its workers or employees, contractors or by applicable labor or administrative authorities.

NINTH. Additional obligations of LA CUESTA. In addition to the obligations assumed by LA CUESTA in the preceding clauses, until THE LOT is transferred to PLATA REAL, it will have also the following obligations:

a) To follow up, carry out any action required and, in its case, file any document required, in order for the title of mining concession for THE LOT to be issued.

b) Inform PLATA REAL on the issuance of the titles of mining concession which shall cover THE LOT, delivering copies of such title to PLATA REAL, within 10 (ten) calendar days counted from the date on which LA CUESTA receives such titles.

c) To maintain valid and in force the rights derived from the existing mining concessions or from those that would be issued over THE LOT and, likewise, to maintain them free and clear from any lien, encumbrance or limitation of dominion, fulfilling all obligations imposed to them by the Mining Law, its Regulations and all applicable legal provisions;

d) Permit PLATA REAL to carry out all kind of exploration or evaluation works and metallurgical tests in THE LOT as it may consider necessary, as well as to provide it with all the information they may have on THE LOT; and

e) Indemnify and hold harmless PLATA REAL from and against any liability, claim or responsibility that may arise from any acts or omission of LA CUESTA with respects to THE LOT.

TENTH. Additional obligations of PLATA REAL. In addition to the obligations assumed by PLATA REAL in the preceding clauses, until THE LOT is transferred to PLATA REAL, it also will have the following obligations:

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a) To carry out the exploration at THE LOT in the best possible manner in accordance with the most appropriate and rational mining practices and in accordance with all legal regulations regarding executing enough exploration work required to fulfill with the provisions of the law;

b) To help LA CUESTA fulfill in a timely manner the obligations to prepare and file the exploration assessment work and to pay the duties on mining concessions;

c) To maintain THE LOT in good shape and exploration condition, free of any liens or encumbrances; and

d) To permit LA CUESTA or their agents to inspect THE LOT and the work that will be carried out in them at any moment, but without LA CUESTA interfering in the proper execution of the exploration work.

In addition, during the term of this agreement, PLATA REAL will have the following obligations:

e) To punctually pay to LA CUESTA all considerations provided herein in this agreement; and

f) If THE LOT has been transferred to PLATA REAL and it decides to abandon or otherwise dispose of THE LOT or any portion thereof, LA CUESTA will have the right to acquire THE LOT or the proposed abandoned portion thereof back from PLATA REAL, at no cost and free of any liens or encumbrances, with PLATA REAL bearing all of the cost of transfer. In the case where PLATA REAL abandons all of THE LOT and retains no mineral interests within the Area of Influence in Clause 17, the full rights on THE LOT shall revert to LA CUESTA free of all charges, and the obligations under this agreement will terminate and LA CUESTA releases PLATA REAL from all obligations and liabilities connected to THE LOT or this agreement, whether past, present, future or contingent.

g) Comply with all mining, environmental and other legal provisions in the course of the exploration and exploitation of the Los Gatos lot, as well as to fulfill all applicable provisions and requirements under the labor, tax and other applicable laws in the course of its ordinary business operations, to the extent required in order for its rights and title to the Los Gatos lot not be affected or put in jeopardy because of any violation of or non compliance with those applicable laws.

If at any time during the term of this agreement PLATA REAL does not fulfill or breaches any of its obligations under this agreement, and especially those provided in this Clause, LA CUESTA will have the right to terminate this agreement under the terms of the Eleventh Clause herein below, and consequently the transfer of the rights deriving from the mining concession on the LOT shall be revoked and shall remain with no legal effects, and PLATA REAL undertakes to take at its own expense all and any legal steps which may be required, in order for all rights deriving from the said mining concession on THE LOT to be transferred to LA CUESTA at no cost and free of any liens or encumbrances, without prejudice of LA CUESTA being also entitled to seek indemnification from PLATA REAL for the damages and losses suffered by LA CUESTA.

ELEVENTH. Noncompliance. The noncompliance of any of the parties with the obligations they assume in this agreement will grant the other party the right to ask the immediate fulfillment of the non-fulfilled obligations. For said purpose, it will be required to ask, in writing, the party in default to fulfill said obligations and, if after a thirty days period from the date of delivering said petition, the noncompliance still exists and no reasonable effort to remedy it has been made, then the affected party will have the right, at its option, to seek arbitration as outlined in Clause Fifteenth, to remedy of the unfulfilled obligations or to terminate this agreement, and shall be entitled to seek indemnification for damages.

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It is expressed understood that in case that, because of reasons of the exclusive responsibility of the LA CUESTA, the General Direction of Mines does not accept the applications and, therefore does not issue the title of mining exploration concession covering THE LOT, same shall be a cause of termination of this Contract, having LA CUESTA therefore, the obligation to reimburse to PLATA REAL all the amounts it had received from PLATA REAL.

TWELVETH. Force Majeure. The parties will not be considered in noncompliance with the agreement when such noncompliance is due to force majeure and they are unable to fulfill the obligations they assume under this agreement.

Force majeure is defined, including but not limited to: Acts of God, earthquakes, fires, floods, collapses, riots, rebellions, wars, strikes, revolutions, acts of authority and, in general, any other fact or act totally out of the will of the parties and of their control and which prevent them to fulfill, totally or partially, their obligations under this agreement.

Should any of the parties be affected by force majeure and therefore is unable to fulfill its obligations in accordance with this agreement, it shall notify the other party in writing, informing of the circumstances leading to the evoking of force majeure and regarding the estimated time said force majeure will prevent said party from fulfilling its obligations.

If after six months from the date in which such force majeure has occurred it continues and no reasonable efforts have been made to remedy the force majeure when such remedy is possible, then the other party will have the right to terminate this agreement.

THIRTEENTH. Total agreement of the parties. This agreement reflects the total agreement between the parties with respect to its purpose and, therefore, it cancels and renders without effects the Exploration, Exploitation and Unilateral Promise to Sell Agreement executed by the parties on April 13, 2006 and any other agreements, contracts or letters of intent, executed previously between them with respect to the same purpose.

This agreement will oblige under its terms and conditions to the heirs, assignees or beneficiaries of the parties.

The parties agree to ratify their signatures in this agreement before a Notary Public, and to register it with the Public Registry of Mining of Mexico in accordance with the provisions of the Mining Law and its Regulations of Mexico, should the mining concession title be issued and PLATA REAL notify in writing to LA CUESTA as provided in the third paragraph of Clause Third, PLATA REAL’s decision to continue with this agreement.

FOURTEENTH. Communications and notifications. All communications and notifications to be made among the parties pursuant to this Contract shall be in writing delivered at their domiciles; and, for such purpose, the parties designate the following addresses:

LA CUESTA	PLATA REAL
La Cuesta International, S. A. de C. V.	Minera Plata Real, S.A. de C.V.
Batopilas No. 250	San Francisco N° 656 - 601
Col. Cacho	Col. Del Valle, CP. 03100,
Tijuana, B.C., CP. 22320	Mexico, D.F.

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If LA CUESTA or PLATA REAL has any change in its above mentioned address, such change shall be notified in writing to the other party.

FIFTEENTH. Arbitration, Applicable Laws and Courts. In the event of a dispute, controversy or claim under this agreement that is not resolved within thirty calendar days following the delivery of written notice of the dispute, controversy or claim, the matter shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the said Rules. The law applicable to this agreement and to the merits of the case shall be the Mexican laws, while the place of arbitration shall be the city of New York, N.Y and the language of the arbitration shall be the English language.

SEVENTEENTH. Area of Influence. During the term of this agreement, if PLATA REAL or its affiliates, acquire any mineral rights located, wholly or in part within the area extending one kilometer from the outermost boundary of THE LOT (as it exists on the date of this agreement), then such interest will be deemed to form part of THE LOT.

Having read this document, the parties ratify same in its entirety and sign it in four copies, LA CUESTA on 4 day of May, 2006, in the City of Tijuana BCN; and, PLATA REAL on 4 day of May, 2006, in the City of Tijuana BCN.

LA CUESTA	PLATA REAL
LA CUESTA INTERNATIONAL, S.A. DE C. V.	MINERA PLATA REAL, S. A. DE C. V.
/s/ William Perry Durning
Mr. William Perry Durning	Mr. Victor García-Jiménez

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SCHEDULE 1

Property Description

THE LOT is described as the Los Gatos Lot, file number 16/33429, located in the Municipality of Satevo, state of Chihuahua.

The Los Gatos Lot was registered on October 20^th of 2005 at the Direction of Mines in Chihuahua City, Chihuahua, Mexico. The Trabajos Periciales [official lot survey document submitted by a register mineral surveyor] was submitted to the Direction of Mines in Chihuahua, December 21, 2005. The title is pending.

The Coordinates of the claim monument are as follows:

North (Y) = 3,050,465.7227 M

East (X) = 365,811.1408 M

The exterior boundaries of the claim starting at the claim monument (Punto de Partido) are as follows:

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DATOS RELATIVOS AL PERIMETRO DEL LOTE:

LINEAS AUXILIARIES:

P.P. - A ESTE	1,200.000 mts.
A.-1 NORTE	1,500.000 mts.

LADOS	RUMBOS	DISTANCIA	COOLINDANCIAS
01-02	ESTE	2000.000	TERRENO LIBRE
02-03	SUR	2000.000	TERRENO LIBRE
03-04	ESTE	3000.000	TERRENO LIBRE
04-05	SUR	9000.000	TERRENO LIBRE
05-06	OESTE	5000.000	TERRENO LIBRE
06-07	NORTE	2000.000	TERRENO LIBRE
07-08	OESTE	3000.000	TERRENO LIBRE
08-09	NORTE	2000.000	TERRENO LIBRE
09-10	OESTE	3000.000	TERRENO LIBRE
10-11	NORTE	3000.000	TERRENO LIBRE
11-12	OESTE	5000.000	TERRENO LIBRE
12-13	NORTE	5000.000	TERRENO LIBRE
13-14	OESTE	3000.000	TERRENO LIBRE
14-15	NORTE	3000.000	TERRENO LIBRE
15-16	OESTE	3000.000	TERRENO LIBRE
16-17	NORTE	5000.000	TERRENO LIBRE
17-18	ESTE	8000.000	TERRENO LIBRE
18-19	SUR	5000.000	TERRENO LIBRE
19-20	ESTE	5000.000	TERRENO LIBRE
20-21	SUR	2000.000	TERRENO LIBRE
21-22	ESTE	4000.000	TERRENO LIBRE
22-01	SUR	2000.000	TERRENO LIBRE

SUPERFICIE	20 200.0000 Has
SUPERFICIE INTERNA 1	111.7743 Has
SUPERFICIE INTERNA 2	44.1992 Has
SUPERFICIE INTERNA 3	10.0000 Has
SUPERFICIE INTERNA 4	130.0000 Has
SUPERFICIE TOTAL	19 904.0265 Has

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SCHEDULE 2

Net Smelter Return Royalty

NET SMELTER RETURN ROYALTY:

(a) Royalty: For the purposes of the agreement “Royalty” will mean the actual proceeds received from any independent custom smelter, mill, mint or other purchaser for the sale of all minerals, metals, dore or concentrates extracted and derived from the ore mined from THE LOT after deducting there from all charges and penalties for smelting and refining and the cost of transportation (to the mill or smelter and thereafter to the mint), insurance premiums, sampling and assaying charges incurred after the minerals, metals or concentrates have left THE LOT and all appropriate mint charges.

(b) Settlement: The Royalty is due and payable under the terms hereof upon the commercial production commencing on THE LOT. Settlement for the Royalty after commercial production, after having first applied and credited the payments shall be made on or before the last day of each calendar quarter, for all production for which payment has been received during the preceding three months, accompanied by a statement showing the factors used in determining the amount of the Royalty.

(c) Commercial production: Commercial production shall mean any period of time during which a mine within THE LOT is producing or selling minerals or ores, or intermediate products to one or more third party purchasers on a commercial basis or producing mineral product for PLATA REAL inventory.

(c) Access to Records, Audit and Inspection: Representatives of the LA CUESTA shall be afforded reasonable access once per calendar year to PLATA REAL’S accounts, records and supporting documents related to the Royalty payment calculations for audit and verification of costs and revenues for the determination of production payments hereunder by any certified public accountant; provided that LA CUESTA’S independent certified public accountant is well versed with accounting principals that are generally accepted in the mining industry. Said accountant shall at any and all reasonable times during the applicable calendar year be permitted to inspect Royalty books and settlement records relating to the sale of valuable minerals produced from THE LOT in order to determine whether or not the provisions of this agreement are being complied with and followed. In addition, from time to time, and with consent from the PLATA REAL (such consent will not be unreasonably withheld), LA CUESTA and its authorized agent(s) shall be allowed to enter upon THE LOT for the purpose of inspection at such reasonable times as not to interfere with the regular operation of THE LOT. All Royalty settlement statements presented to the LA CUESTA shall be conclusively presumed correct after the expiration of 60 (sixty) days from the date of such presentation, unless within that period LA CUESTA takes written exception thereto, specifying with particularity the items excepted and the grounds for such exception. Any exception or objection to the payments required above shall apply only to the methodology of calculation as presented to LA CUESTA and shall not preclude further examination of and challenges to the accuracy or adequacy of costs and receipts used in making the calculations. All inspections shall be conducted at the sole risk and expense of the LA CUESTA or its authorized agents. Audit adjustments will be remitted promptly (no later than 60 days) following notice to PLATA REAL, providing that PLATA REAL agrees with said adjustment.

(d) Binding Effect: The obligation to make Royalty payments shall be a permanent encumbrance of THE LOT, and shall be binding upon each and every successor in interest to PLATA REAL in THE LOT. This obligation of PLATA REAL to pay LA CUESTA the Royalty shall terminate upon LA CUESTA receiving consideration as provided in section 4 of the Fifth Clause.

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EX-10.9

Exhibit 10.9

[English Translation]

File Number 016/32549                             SECOND COPY

SEAL OF THE MEXICAN UNITED STATES

MINISTRY OF ECONOMY

GENERAL MINING COORDINATION

GENERAL DIRECTION OF MINES

MINING EXPLORATION CONCESSION

TITLE

NUMBER 223392

NAME OF LOT

PAULA ADORADA

AGENCY

CHIHUAHUA, CHIHUAHUA

TERM OF TITLE

FROM DECEMBER 9, 2004 TO DECEMBER 8, 2010

The Federal Executive, through the Ministry of Economy, under articles 27. Sixth paragraph, of the Political Constitution of the Mexican United States; 34, section XXIX, of the Organic Law of the Federal Public Administration; 7, section VI, 10 first paragraph, 15 and 19 of the Mining Law, and all the applicable under its Regulations, issues the following MINING CONCESSION TITLE, without prejudice to third parties.

MINING CONCESSION INFORMATION

TYPE OF CONCESSION:	EXPLORATION
TITLE NUMBER:	223392
TITLEHOLDER (S):	GRUPO MINERO FACTOR, S.A. DE C.V. (100%)
NAME OF LOT:	PAULA ADORADA
AREA:	40 HECTARES
MUNICIPALITY AND STATE:	SATEVO, CHIHUAHUA

LOCATION OF MINING LOT

STARTING POINT

The site of boundary stone or landmark according to regulation is located at:

THE SOUTHWEST SKIRTS OF THE MINES’ HILL, SAME SP AS THE LOT ZENDY E-016/32206.

Distance		Course	Name or community or topographic features
A A A	600 Mts AI 900 Mts. AI 1000 Mts. AI	N W SE	FROM RANCHO SAN AGUSTIN FROM CERRO DE LA CAL FROM CERRO LAS CARBONERAS

ORTHOGONAL COORDINATES: 3,051,858.280mN 362,702.526mE

	Course	Deg	Min	Sec	Mts.
TOPOGRAPHIC LINK FROM SP
TO CONTROL POINT NO. 1005:	SE	65º	52’	9.1”	3,406.247

Name of Lot or corner	Title Num./File/Corner	Course	Deg	Min	Sec	Mts
LA CALESA LA CONCEPCION	T-187433 T-188161	SE NW	31º 51º	59’ 59’	20.6” 28”	315.789 482.319

PERIMETER

Auxiliary Line	Cou.	Deg	Min	Sec	Mts		Cou.	Deg	Min	Sec	Mts
FROM SP TO A POINT	N	0º	0’	0”	11.49	FROM A TO POINT 1	E	0º	0’	0”	249.615

HORIZONTAL SIDES, COURSES AND DISTANCES:

SIDES	Cou.	Deg	Min	Sec	Mts
1-2 2-3 3-4 4-5 5-1	S W N E S	0º 0º 0º 0º 0º	0’ 0’ 0’ 0’ 0’	0” 0” 0” 0” 0”		200.000 400.000 1,000.000 400.000 800.000

THE INFORMATION OF PROPERTY BOUNDARIES COVERED BY THIS CONCESSION, ARE INCLUDED IN THE FILE OF THIS TITLE.

Issued in Mexico City, Federal District, on December 8, 2004, under article 33, section VI, of the Internal Regulations of the Ministry of Economy.

The General Director of Mines

Lic. Federico Francisco Carlos Kunz Bolaños

Registered under certificate number 252, page 126, volume 346 of the Book of Mining Concessions in the Public Registry of Mining, on Mexico City, Federal District on December 9, 2004.

The Mining Public Registrar

Lic. Maria Olga Gallardo Montoya

EX-10.10

Exhibit 10.10

SUNSHINE SILVER MINES CORPORATION

LONG TERM INCENTIVE PLAN

1. Purpose. The purpose of the Sunshine Silver Mines Corporation Long Term Incentive Plan (the “Plan”) is to recognize the contributions made by Employees (as defined below), consultants and Directors (as defined below) of Sunshine Silver Mines Corporation (the “Company”) or a Subsidiary and to provide such persons with an additional incentive to use maximum efforts for the future success of the Company and any Subsidiary and to enhance the ability of the Company or a Subsidiary to attract, retain and motivate individuals upon whom the Company’s sustained growth and financial success depend by providing such persons with an opportunity to acquire or increase their proprietary interest in the Company through receipt of rights to acquire Awards (as defined below).

2. Definitions. As used in the Plan, the following definitions shall apply to the capitalized terms indicated below:

“Authorized Officer” means the Chairman of the Board, the Chief Executive Officer of the Company or the senior human resources officer of the Company (or any other senior officer of the Company to whom any of such individuals shall delegate the authority to execute any Award Agreement).

“Award” means the grant of any Option, Stock Appreciation Right, Stock Award, or Cash Award, any of which may be structured as a Performance Award, whether granted singly, in combination or in tandem, to a Participant pursuant to such applicable terms, conditions, and limitations as the Committee may establish in accordance with the objectives of the Plan.

“Award Agreement” means the document (in written or electronic form) communicating the terms, conditions and limitations applicable to an Award. The Committee may, in its discretion, require that the Participant execute such Award Agreement, or may provide for procedures through which Award Agreements are made available but not executed. Any Participant who is granted an Award and who does not affirmatively reject the applicable Award Agreement shall be deemed to have accepted the terms of Award as embodied in the Award Agreement.

“Board” or “Board of Directors” means the Board of Directors of the Company duly elected by the shareholders of the Company.

“Cash Award” means an Award denominated in cash.

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“Change of Control” means (i) any merger or consolidation of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than a controlling interest in the surviving entity immediately after such consolidation, merger or reorganization; (ii) any transaction or series of related transactions in which control of the Company is acquired by a person or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act or any successor provisions thereto; or (iii) a sale or other disposition of all or substantially all of the assets of the Company; provided that in no event will a Change of Control include any of the following transactions: (A) any consolidation, merger or similar transaction effected exclusively to change the domicile of the Company; (B) any transaction or series of transactions in which voting securities of the Company are issued principally for bona fide financing purposes or any successor or indebtedness or equity securities of the Company are cancelled or converted or a combination thereof, including, without limitation, an initial public offering or other offering of the Company’s capital stock; (C) any acquisition of such voting power by an individual or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company; or (D) any transaction where control of the Company, the surviving parent entity or the entity to which all or substantially all of the Company’s assets are transferred in the transaction or series of transactions is controlled directly or indirectly by one or more Kaplan Parties.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Board of Directors, or a committee of the Board of Directors appointed in accordance with Section 3 of the Plan, when acting in connection with the administration of the Plan.

“Common Stock” means the common stock, par value $.001 per share, of the Company.

“Company” means Sunshine Silver Mines Corporation, a Delaware corporation.

“Continuous Service” means that the Participant’s service with the Company or a Subsidiary, whether as an Employee, consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or a Subsidiary as an Employee or Director or a transfers between locations of the Company or between the Company, its, Subsidiaries, or their respective successors, provided that there is no interruption or termination of the Participant’s service. For example, a change in status from an Employee of the Company to a Director will not constitute an interruption of Continuous Service. Notwithstanding the foregoing, a Participant’s Continuous Service shall be deemed to have terminated with respect to all Incentive Stock Options granted to such Participant on such date as such Participant’s Continuous Service as an Employee terminates. To the extent permitted by law and any leave of absence policy of the Company, the Committee in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any

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leave of absence approved by that party, including sick leave, military leave or any other personal leave; provided, however, a Participant’s Continuous Service shall not be deemed to have been terminated because of an approved leave of absence from active service with the Company or a Subsidiary on account of temporary illness, authorized vacation, or granted for reasons of professional advancement, education, health, or government service, or during military leave for any period that is required by the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (“USERRA”) (if the Participant returns to active service with the Company or a Subsidiary within the period required by USERRA after termination of military leave), or during any period required to be treated as a leave of absence by virtue of any applicable and binding statute (such as the Family and Medical Leave Act of 1993, as amended), personnel policy, or employment agreement. Whether an authorized leave of absence constitutes termination of Continuous Service hereunder shall be determined by the Committee. The Committee shall determine whether any corporate transaction, such as a sale or spin-off of a division or business unit, or a joint venture, shall be deemed to result in a termination of Continuous Service.

“Control” (including its correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the beneficial ownership of voting securities, by contract or otherwise.

“Covered Employee” means any Employee who is or may be a “covered employee,” as defined in Code Section 162(m).

“Director” means each member of the Board of Directors of the Company.

“Disability” means (i) in the case of a Participant who receives an Award and whose employment arrangement with the Company or a Subsidiary is subject to the terms of an employment agreement between such Participant and the Company or Subsidiary, which employment agreement includes a definition of “Disability,” the meaning set forth in such agreement for “Disability” during the period that agreement remains in effect; and (ii) in all other cases, the term “Disability” as used in the Plan or any Award Agreement shall have the meaning set forth in Section 22(e)(3) of the Code; provided, however, that as to any award under the Plan that consists of deferred compensation subject to Section 409A of the Code, the definition of “Disability” shall be deemed modified to the extent necessary to comply with Section 409A of the Code.

“Dividend Equivalents” means, in the case of Restricted Stock Units, an amount equal to all dividends and other distributions (or the economic equivalent thereof) that are payable to shareholders of record during the vesting period, as applicable, on a like number of Shares.

“Effective Date” means May 10, 2011.

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“Employee” means any person, including officers, employed by the Company or a Subsidiary. However, service solely as a Director, or payment of a fee for such service, shall not cause a Director to be considered an “Employee” for purposes of the Plan.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exercise Price” means the price at which a Participant may exercise his right to receive cash or Common Stock, as applicable, under the terms of an Award.

“Fair Market Value” means, as of a particular date, the value of the Common Stock determined as follows: (i) if the Common Stock is traded in a public market, then the Fair Market Value per share shall be, (A) if the Common Stock is listed on a national securities exchange, the last reported sale price thereof on the relevant date (or if no Shares of Common Stock were traded on such date, the next preceding date on which the Common Stock was traded), or (B) if the Common Stock is not so listed or included, the average of the last reported “bid” and “asked” prices thereof on the relevant date (or if no Shares of Common Stock were traded on such date, the next preceding date on which the Common Stock was traded) as reported on the OTC Bulletin Board, or the Fair Market Value per share as determined by any other method adopted by the Committee from time to time as the Committee may deem appropriate or as may be required in order to comply with applicable laws and regulations; and (ii) at any time at which the Common Stock is not traded in a public market, then the Fair Market Value per share shall be determined by the Board, acting in good faith using a reasonable application of a reasonable method taking into consideration the provisions of the Treasury Regulations promulgated under Section 409A of the Code, and such determination shall be final and binding for all purposes of the Plan.

“Grant Date” means the date an Award is granted to a Participant pursuant to the Plan.

“Incentive Stock Option” or “ISO” means an Option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

“Kaplan Party” means (A) Thomas S. Kaplan or Dafna Recanati Kaplan; (B) any spouse, parent, sibling or descendant (including by adoption) of either of the persons referred to in clause (A) above; (C) any trust created for the benefit of any of the persons described in clauses (A) or (B) above or any trust for the benefit of such trust; or (D) any person controlled by one or more of the persons referred to in clauses (a), (B) or (C) above.

“Non-Employee Director” means a Director who either (i) is not a current Employee or officer of the Company or a Subsidiary and does not receive compensation directly or indirectly from the Company or a Subsidiary for services rendered as a consultant or in any capacity other than as a Director, or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3 promulgated under the Exchange Act.

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“Nonqualified Stock Option” means an Option that is not intended to qualify, or otherwise does not qualify, as an “incentive stock option” within the meaning of Section 422 of the Code.

“Option” means either an ISO or a Nonqualified Stock Option granted under the Plan.

“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.

“Performance Award” means an Award made pursuant to the Plan to a Participant which is subject to the attainment of one or more Performance Goals.

“Performance Goal” means one or more standards established by the Committee to determine in whole or in part whether a Performance Award shall be earned.

“Qualified Performance Awards” means awards described in Section 7E(b).

“Restricted Stock” means a share of Common Stock that is restricted or subject to forfeiture provisions.

“Restricted Stock Award” means an Award in the form of Restricted Stock.

“Restricted Stock Unit” means a unit evidencing the right to receive in specified circumstances one share of Common Stock or equivalent value in cash that is restricted or subject to forfeiture provisions.

“Restricted Stock Unit Award” means an Award in the form of Restricted Stock Units.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means the shares of Common Stock of the Company that are the subject of Awards.

“Stock Appreciation Right” or “SAR” means a right to receive a payment, in cash or Common Stock, equal to the excess of the Fair Market Value of a specified number of shares of Common Stock on the date the right is exercised over a specified Exercise Price.

“Stock Award” means an Award in the form of shares of Common Stock, including a Restricted Stock Award and a Restricted Stock Unit Award that may be settled in shares of Common Stock, and excluding Options and SARs.

“Subsidiary” means a corporation that is a subsidiary corporation with respect to the Company within the meaning of Section 424(f) of the Code.

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“Ten Percent Shareholder” means an Employee who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of a Subsidiary.

3. Administration of the Plan. The Plan shall be administered by the Board; however, the Board may designate a committee composed of two or more Non-Employee Directors to administer the Plan in its stead. Any such committee so designated by the Board to administer the Plan shall be constituted as necessary to comply with the legal requirements, if any, relating to the administration of the types of Awards granted under the Plan imposed by applicable corporate and securities laws, the Code and any stock exchange or national market system upon which the Common Stock is then listed or traded. Notwithstanding anything to the contrary contained in this Section 3, the Board shall constitute the Committee and administer the Plan with respect to Awards granted to Non-Employee Directors.

(a) Meetings. The Committee may hold meetings at such times and places as it may determine. Acts approved at a meeting by a majority of the members of the Committee or acts approved in writing by the unanimous consent of the members of the Committee shall be the valid acts of the Committee.

(b) Powers of Committee. The Committee shall have the power, subject to the express provisions of the Plan:

(i) To determine from time to time which of the eligible persons under the Plan shall be granted Awards; when and how each Award shall be granted; what type or combinations of types of Awards shall be granted; the provisions of each Award granted, which need not be identical.

(ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

(iii) Generally, to exercise such other powers and perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or any Awards.

(c) Exculpation. No member of the Committee shall be personally liable for monetary damages for any action taken or any failure to take any action in connection with the administration of the Plan or the granting of Awards under the Plan, provided that this Subsection 3(c) shall not apply to: (i) any breach of such member’s duty of loyalty to the Company or its shareholders; (ii) acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law; and (iii) any transaction from which the member derived an improper personal benefit.

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(d) Indemnification. Service on the Committee shall constitute service as a member of the Board of the Company. Each member of the Committee shall be entitled without further action on such person’s part to indemnity from the Company to the fullest extent provided by applicable law and the Company’s Certificate of Incorporation and/or Bylaws in connection with or arising out of any action, suit or proceeding with respect to the administration of the Plan or the granting of Awards thereunder in which such person may be involved by reason of such person’s being or having been a member of the Committee, whether or not such person continues to be a member of the Committee at the time of the action, suit or proceeding.

(e) Effect of Committee Action. The Committee’s determinations under the Plan (including, without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Award Agreements evidencing same) shall be made in its discretion and need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. All determinations and interpretations made by the Committee shall be final, binding and conclusive on all persons, including without limitation, all Participants and persons claiming rights from or through a Participant.

(f) Delegation. The Committee may delegate any of its authority to grant Awards to Employees who are not subject to Section 16(b) of the Exchange Act, subject to Section 3(b) above, to the Board or to any other committee of the Board, provided such delegation is made in writing and specifically sets forth such delegated authority. The Committee may also delegate to an Authorized Officer authority to execute on behalf of the Company any Award Agreement. The Committee and the Board, as applicable, may (i) delegate the authority to officers or employees of the Company or a Subsidiary or (ii) engage or authorize the engagement of a third party administrator to carry out administrative functions under the Plan. Any such delegation hereunder shall only be made to the extent permitted by applicable law.

4. Shares Subject to Plan. Subject to adjustment as provided in Section 9, the number of Shares that may be issued pursuant to Awards shall not exceed, in the aggregate, 2,000,000 Shares; provided that the number of shares that may be issued pursuant to Stock Awards shall not exceed, in the aggregate, 2,000,000 Shares and the number of shares that may be issued pursuant to awards of Incentive Stock Options shall not exceed, in the aggregate, 2,000,000 Shares. The Shares shall be issued from authorized and unissued or reacquired Common Stock, including Shares repurchased by the Company. If an Option or SAR shall for any reason expire or otherwise terminate without having been exercised in full for any reason, or if all or any portion of the Shares subject to a Stock Award shall be forfeited for any reason, the Shares for which the Option or SAR was not exercised or the Shares so forfeited shall revert to, and may again become available for the grant of one or more Awards under the Plan.

(a) The Board and the appropriate officers of the Company shall from time to time take whatever actions are necessary to file any required documents with

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governmental authorities, stock exchanges and transaction reporting systems to ensure that shares of Common Stock are available for issuance pursuant to Awards.

(b) Notwithstanding anything to the contrary contained in the Plan, the following limitations shall apply to any Awards made hereunder, following the time at which the Company is subject to the deduction limitations of Section 162(m) of the Code with respect to amounts payable pursuant to this Plan:

(i) No Employee may be granted during any calendar year Awards consisting of Options or SARs that are exercisable for more than 200,000 shares of Common Stock;

(ii) No Employee may be granted during any calendar year Stock Awards covering or relating to more than 200,000 shares of Common Stock (the limitation set forth in this clause (ii), together with the limitation set forth in clause (i) above, being hereinafter collectively referred to as the “Stock-Based Award Limitations”); and

(iii) No Employee may be granted during any calendar year (1) Cash Awards or (2) Restricted Stock Unit Awards that may be settled solely in cash having a value determined on the Grant Date in excess of $5,000,000.

No Awards shall be granted under the Plan following the tenth anniversary of the Effective Date; provided, however, that all Awards granted under the Plan prior to such date shall remain in effect until: (i) in the case of Options or SARs, such Options or SARs have been exercised or terminated in accordance with the Plan and the terms of such Awards, (ii) in the case of Stock Awards, the Shares subject to such Award are no longer subject to any restrictions (including, without limitation, any risk of forfeiture) or have been returned to the Company in accordance with the Plan and the terms of the applicable Award Agreement; or (iii) in the cash of Cash Awards, the amounts subject to such Award have been paid or the Cash Award has been forfeited or terminated, as applicable.

5. Eligibility for Employees.

(a) Eligibility for Grant of Awards. Employees shall be eligible to receive Awards at the sole discretion of the Committee.

(b) Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted an ISO unless the exercise price of such Option is at least 110% of the Fair Market Value of the Common Stock on the date of grant, and the Option is not exercisable after the expiration of five (5) years from the date of grant.

6. Consultants and Non-Employee Director Grants under the Plan. Notwithstanding any provision of the Plan to the contrary, each Non-Employee Director of the Company and consultants shall be eligible to be granted Awards under the Plan, other than ISOs, at the discretion of the Board.

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7. Award Agreements and Terms. The Committee shall determine the type or types of Awards to be made under the Plan and shall designate from time to time the Participants who are to be the recipients of such Awards. Each Award shall be embodied in an Award Agreement, which shall contain such terms, conditions and limitations as shall be determined by the Committee, in its sole discretion, and, if required by the Committee, shall be signed by the Participant to whom the Award is granted and by an Authorized Officer for and on behalf of the Company. Awards may be granted singly, in combination or in tandem. Awards may also be made in combination or in tandem with, in replacement of, or as alternatives to, grants or rights under the Plan or any other plan of the Company or any of its Subsidiaries, including the plan of any acquired entity; provided, however, that, except as contemplated in Section 9 hereof, no Option or SAR may be issued in exchange for the cancellation of an Option or SAR with a higher Exercise Price nor may the Exercise Price of any Option or SAR be reduced. All or part of an Award may be subject to conditions established by the Committee. Upon the termination of service by a Participant, any unexercised, unvested or unpaid Awards shall be treated as set forth in the applicable Award Agreement or in any other written agreement the Company has entered into with the Participant.

A. Options. Each Option granted under the Plan shall be a Nonqualified Stock Option, unless the Option specifically shall be designated at the time of grant to be an ISO. If any Option designated as an ISO is determined for any reason not to qualify as an incentive stock option within the meaning of Section 422 of the Code, such Option shall be treated as a Nonqualified Stock Option for all purposes under the provisions of the Plan. Each Option granted pursuant to the Plan shall be evidenced by an Award Agreement in such form as the Committee shall from time to time approve, which Award Agreement shall comply with and be subject to the following terms and conditions and such other terms and conditions as the Committee shall from time to time require that are not inconsistent with the terms of the Plan. The exercise period for an Option shall extend no more than 10 years after the Grant Date, except that the exercise period for an ISO that is granted to a Ten Percent Shareholder shall be five years. Options may not include provisions that “reload” the Option upon exercise.

(a) Exercise Price. Each Award Agreement shall state the Exercise Price applicable to the Option granted therein. Subject to the provisions of Section 5(b) with respect to a Ten Percent Shareholder granted an ISO, the Exercise Price of any Option, whether a Nonqualified Stock Option or an ISO, shall in no event ever be less than 100% of the Fair Market Value of the Shares subject to the Option on the Grant Date as determined by the Committee in accordance with this Section 7A(a). Notwithstanding the foregoing, an Option may be granted with an Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

(b) Exercise. No Option shall be deemed to have been exercised prior to the receipt by the Company of written notice of such exercise and of payment in full of the Exercise Price for the Shares to be purchased. Each such notice shall specify the number of Shares to be purchased.

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(c) Method of Payment. The purchase price of Common Stock acquired pursuant to the exercise of an Option shall be paid, to the extent permitted by applicable law and as determined by the Committee in its sole discretion, by one or more of the following methods. The Committee shall have authority to grant Options that do not entitle the Participant to use all methods or that require prior written consent of the Company to use certain of the methods. The methods of payment of the Exercise Price are:

(i) cash or check payable in clearinghouse funds to the order of the Company;

(ii) by delivery to the Company of other Shares of Common Stock which, unless otherwise determined by the Committee, have been held for more than six (6) months;

(iii) by a “net exercise” arrangement pursuant to which the Company will reduce the number of Shares issued upon exercise by the largest whole number of the Shares with a Fair Market Value that does not exceed the Exercise Price; provided, however, that the Company shall accept cash or other payment from the Participant to the extent of any remaining balance of the aggregate Exercise Price not so satisfied, provided further that the Shares will no longer be outstanding under an Option and will not be exercisable thereafter to the extent so applied or withheld to satisfy tax withholding obligations pursuant to Section 16 below; or

(iv) any other form of legal consideration that may be acceptable to the Committee.

(d) Limitation on ISO Grants. To the extent that the aggregate Fair Market Value of the Shares of Common Stock (determined at the time the ISO is granted) with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under all incentive stock option plans of the Company or its Subsidiaries in which such Participant has been granted ISOs exceeds $100,000, the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonqualified Stock Options, notwithstanding any contrary provision of the applicable Award Agreement.

B. Stock Appreciation Rights. An Award may be in the form of an SAR. The Exercise Price for an SAR shall not be less than the Fair Market Value of the Common Stock on the Grant Date. The holder of a tandem SAR may elect to exercise either the Option or the SAR, but not both. The exercise period for an SAR shall extend no more than 10 years after the Grant Date. SARs may not include provisions that “reload” the SAR upon exercise. Subject to the foregoing provisions, the terms, conditions, and limitations applicable to any SAR, including, but not limited to, the term of any SAR and the date or dates upon which the SAR becomes vested and exercisable, shall be determined by the Committee.

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C. Stock Awards. An Award may be in the form of a Stock Award. The terms, conditions and limitations applicable to any Stock Award, including, but not limited to, vesting or other restrictions, shall be determined by the Committee, and subject to the applicable requirements described herein.

D. Cash Awards. An Award may be in the form of a Cash Award. The terms, conditions and limitations applicable to a Cash Award, including, but not limited to, vesting or other restrictions, shall be determined by the Committee.

E. Performance Awards. Without limiting the type or number of Awards that may be made under the other provisions of the Plan, an Award may be in the form of a Performance Award. The terms, conditions and limitations applicable to an Award that is a Performance Award shall be determined by the Committee. The Committee shall set Performance Goals in its discretion which, depending on the extent to which they are met, will determine the value and/or amount of Performance Awards that will be paid out to the Participant and/or the portion of an Award that may be exercised.

(a) Nonqualified Performance Awards. Performance Awards that are not intended to qualify as qualified performance-based compensation under Code Section 162(m) shall be based on achievement of such Performance Goals and be subject to such terms, conditions and restrictions as the Committee or its delegate shall determine.

(b) Qualified Performance Awards. Performance Awards that are intended to qualify as qualified performance-based compensation under Code Section 162(m) shall be paid, vested or otherwise deliverable solely on account of the attainment of one or more pre-established, objective Performance Goals established by the Committee prior to the earlier to occur of (1) 90 days after the commencement of the period of service to which the Performance Goal relates and (2) the lapse of 25% of the period of service (as scheduled in good faith at the time the goal is established), and in any event while the outcome is substantially uncertain. A Performance Goal is objective if a third party having knowledge of the relevant facts could determine whether the goal is met. One or more of such goals may apply to the Participant, one or more business units, divisions or sectors of the Company, or the Company as a whole, and if so desired by the Committee, by comparison with a peer group of companies. A Performance Goal shall include one or more of the following:

• revenue and income measures (which include various revenue, gross margin, income from operations, net income, net sales, earnings per share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), earnings before interest and taxes (“EBIT”) and economic value added (“EVA”) measures;

• expense measures (which include various costs of goods sold, selling, finding and development costs, operating and maintenance expenses, general and administrative expenses and overhead costs measures);

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• operating measures (which include various productivity, total costs, operating income, funds from operations, cash from operations, after-tax operating income, market share, margin, sales volumes, availability, commercial capacity factor and total margin capture factor measures);

• cash flow measures (which include various net cash flow from operating activities and working capital, adjusted cash flow and free cash flow measures);

• liquidity measures (which include various earnings before or after the effect of certain items such as interest, taxes, depreciation and amortization measures);

• leverage measures (which include various debt-to-equity ratio, gross debt and net debt measures);

• market measures (which include various market share, stock price, growth measure, total shareholder return and market capitalization measures);

• return measures (which include various return on equity, return on assets and return on invested capital measures);

• corporate value measures (which include various compliance, safety, environmental and personnel measures); and

• other measures such as those relating to acquisitions, dispositions or customer satisfaction.

Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). In interpreting Plan provisions applicable to Qualified Performance Awards, it is the intent of the Plan to conform with the standards of Code Section 162(m) and Treasury Regulation § 1.162-27(e)(2)(i), as to grants to Covered Employees and the Committee in establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the payment of any compensation based on the achievement of Performance Goals applicable to Qualified Performance Awards, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied. For this purpose, approved minutes of the Committee meeting in which the certification is made shall be treated as such written certification. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Qualified Performance Awards made pursuant to the Plan shall be determined by the Committee. The Committee may provide in any such Performance Award that any evaluation of performance may include or exclude any of the following events that occurs during a performance period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations

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appearing in the Company’s annual report to shareholders for the applicable year, (f) acquisitions or divestitures, (g) foreign exchange gains and losses and (h) settlement of hedging activities.

(c) Adjustment of Performance Awards. Awards that are intended to qualify as Qualified Performance Awards may not be adjusted upward. The Committee may retain the discretion to adjust such Qualified Performance Awards downward, either on a formula or discretionary basis or any combination, as the Committee determines.

8. Change of Control.

(a) Options and SARs. Unless otherwise provided in an applicable Award Agreement, upon the consummation of a Change of Control where Options or SARs are not continued, assumed (or substituted) by the Company (or surviving corporation or ultimate parent corporation in a Change of Control transaction), the Committee may, in its sole discretion, (i) provide for full or partial vesting of any outstanding Option or SAR, (ii) determine that any or all outstanding Options or SARs granted under the Plan, whether or not exercisable, will be canceled and terminated and that in connection with such cancellation and termination the holder of such Option or SAR may receive for each share of Common Stock subject to such Option or SAR cash payment (or the delivery of shares of stock, other securities or a combination of cash, stock and securities equivalent to such cash payment) equal to the difference, if any, between the consideration received by shareholders of the Company in respect of a share of Common Stock in connection with such transaction and the Exercise Price multiplied by the number of shares of Common Stock subject to such Award; provided that if such product is zero or less or to the extent that the Option or SAR is not then exercisable, the Option or SAR will be canceled and terminated without payment therefor.

(b) Stock Awards. The Committee shall have the discretion to provide in each Award Agreement relating to Stock Awards the terms and conditions that relate to the lapse of any restrictions on the Shares subject thereto, including without limitation any risk of forfeiture, in the event of a Change of Control, which terms and conditions may vary in each such Award Agreement. The Committee may provide for lapse of restrictions on any Shares subject to a Stock Award prior to a Change of Control in the applicable Award Agreement or by unilateral amendment to any such Award Agreement after the grant of any such award.

9. Adjustments.

(a) The existence of outstanding Awards shall not affect in any manner the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital stock of the Company or its business or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock (whether or not such issue is prior to, on a parity with or junior to the Common Stock) or the dissolution or liquidation of

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the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding of any kind, whether or not of a character similar to that of the acts or proceedings enumerated above.

(b) In the event of any subdivision or consolidation of outstanding shares of Common Stock, declaration of a dividend payable in shares of Common Stock or other stock split, then (i) the number of shares of Common Stock reserved under the Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Section 4, (ii) the number of shares of Common Stock covered by outstanding Awards, (iii) the Exercise Price or other price in respect of such Awards, (iv) the appropriate Fair Market Value and other price determinations for such Awards, (v) the Stock-Based Award Limitations and (vi) any other limitations contained within the Plan shall each be proportionately adjusted by the Committee as appropriate to reflect such transaction. In the event of any other recapitalization or capital reorganization of the Company, any consolidation or merger of the Company with another corporation or entity, the adoption by the Company of any plan of exchange affecting the Common Stock or any distribution to holders of Common Stock of securities or property (other than normal cash dividends or dividends payable in Common Stock), the Committee shall make appropriate adjustments to (1) the number of shares of Common Stock reserved under the Plan and the number of shares of Common Stock available for issuance pursuant to specific types of Awards as described in Section 4, (2) the number of shares of Common Stock covered by outstanding Awards, (3) the Exercise Price or other price in respect of such Awards, (4) the appropriate Fair Market Value and other price determinations for such Awards, (5) the Stock-Based Award Limitations and (6) any other limitations contained within the Plan; provided that such adjustments shall only be such as are necessary to maintain the proportionate interest of the holders of the Awards and preserve, without exceeding, the value of such Awards.

(c) In the event of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the Committee may make such adjustments to Awards or other provisions for the disposition of Awards as it deems equitable, and shall be authorized, in its discretion, to (i) provide for the substitution of a new Award or other arrangement (which, if applicable, may be exercisable for such property or stock as the Committee determines) for an Award or the assumption of the Award (and for awards not granted under the Plan), regardless of whether in a transaction to which Code Section 424(a) applies, (ii) provide, prior to the transaction, for the acceleration of the vesting and exercisability of, or lapse of restrictions with respect to, the Award and, if the transaction is a cash merger, provide for the termination of any portion of the Award that remains unexercised at the time of such transaction, (iii) provide for the acceleration of the vesting and exercisability of an Award and the cancellation thereof in exchange for such payment as the Committee, in its sole discretion, determines is a reasonable approximation of the value thereof, (iv) cancel any Awards and direct the Company to deliver to the Participants who are the holders of such Awards cash in an amount that the Committee shall determine in its sole discretion is equal to the Fair Market Value of such Awards as of the date of such event, which, in the case of any Option, shall be the amount equal to the excess of the Fair Market Value of a share as of such date over the Exercise Price for such Option or SAR (for the avoidance

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of doubt, if such exercise price is less than such Fair Market Value, the Option or SAR may be canceled for no consideration), or (v) cancel Awards that are Options or SARs and give the Participants who are the holders of such Awards notice and opportunity to exercise prior to such cancellation.

(d) No adjustment authorized by this Section 9 shall be made in such manner that would result in the Plan or any amounts or benefits payable hereunder to fail to comply with or be exempt from Section 409A, and any such adjustment that may reasonably be expected to result in such failure shall be of no force or effect.

10. Clawback for Misconduct or Restatement. In the event of misconduct by a Participant which results in material harm to the Company, if any of the Company’s financial statements are restated as a result of errors, omissions, or fraud, the Board may (in its sole discretion, but acting in good faith) direct that the Company recover all or a portion of any such Award made to any, all or any class of Participant with respect to any fiscal year of the Company the financial results of which are negatively affected by such restatement. The amount to be recovered from any Participant shall be (i) the amount by which the affected Award or payment exceeded the amount that would have been payable to such Participant had the financial statements been initially filed as restated, (ii) shares purchased pursuant to exercise of an option that is subject to clawback hereunder or (iii) any greater or lesser amount (including, but not limited to, the entire Award) that the Board shall determine. The Board may determine to recover different amounts from different Participants or different classes of Participants on such basis as it shall deem appropriate. In no event shall the amount to be recovered by the Company from a Participant be less than the amount required to be repaid or recovered as a matter of law. The Board shall determine whether the Company shall effect any such recovery (i) by seeking repayment from the Participant, (ii) by reducing (subject to applicable law and the terms and conditions of the applicable plan, program or arrangement) the amount that would otherwise be payable to the Participant under any compensatory plan, program or arrangement maintained by the Company or a Subsidiary, (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Company’s otherwise applicable compensation practices, or (iv) by any combination of the foregoing or otherwise.

11. Award Payment; Dividends and Dividend Equivalents.

(a) General. Payment of Awards may be made in the form of cash or Common Stock, or a combination thereof, and may include such restrictions as the Committee shall determine, including, but not limited to, in the case of Common Stock, restrictions on transfer and forfeiture provisions. For a Restricted Stock Award, the certificates evidencing the Shares (to the extent that such Shares are so evidenced) shall contain appropriate legends and restrictions that describe the terms and conditions of the restrictions applicable thereto. For a Restricted Stock Unit Award that may be settled in shares of Common Stock, the shares of Common Stock that may be issued at the end of

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the vesting period shall be evidenced by book entry registration or in such other manner as the Committee may determine.

(b) Dividends and Dividend Equivalents. Rights to (1) dividends will be extended to and made part of any Restricted Stock Award and (2) Dividend Equivalents may be extended to and made part of any Restricted Stock Unit Award, subject in each case to such terms, conditions and restrictions as the Committee may establish; provided, however, that no such dividends or Dividend Equivalents shall be paid with respect to unvested Stock Awards, including Stock Awards subject to Performance Goals. Dividends and/or Dividend Equivalents shall not be made part of any Options or SARs.

12. Amendment. Subject to the provisions of the Plan, the Committee shall have the right to amend Award Agreements issued to a Participant, subject to the Participant’s consent if such amendment is not favorable to the Participant, except that the consent of the Participant shall not be required for any amendment made pursuant to Sections 8 and 9 of the Plan, as applicable.

13. Assignability. Unless otherwise determined by the Committee and expressly provided for in an Award Agreement, no Award or any other benefit under the Plan shall be assignable or otherwise transferable except (1) by will or the laws of descent and distribution or (2) pursuant to a domestic relations order issued by a court of competent jurisdiction that is not contrary to the terms and conditions of the Plan or applicable Award and in a form acceptable to the Committee. The Committee may prescribe and include in applicable Award Agreements other restrictions on transfer. Any attempted assignment of an Award or any other benefit under the Plan in violation of this Section 13 shall be null and void. Notwithstanding the foregoing, no Award may be transferred for value or consideration.

14. No Commitment to Retain. The grant of an Award pursuant to the Plan shall not be construed to imply or to constitute evidence of any agreement, express or implied, on the part of the Company or any Subsidiary to retain the Participant in the employ or service of the Company or a Subsidiary and/or as a member of the Board or in any other capacity, or interfere in any way with the right of the Company or a Subsidiary to terminate the services of a Participant.

15. Securities Law Restrictions. Unless the Shares received pursuant to an Award are covered by a then current registration statement or a notification under Regulation A under the Securities Act, each Award Agreement shall contain the Participant’s acknowledgment in form and substance satisfactory to the Company that: (i) such Shares are being purchased for investment and not for distribution or resale (other than a distribution or resale which, in the opinion of counsel satisfactory to the Company, may be made without violating the registration provisions of the Securities Act); (ii) the Participant has been advised and understands that (A) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the

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Securities Act and are subject to restrictions on transfer, and (B) the Company is under no obligation to register the Shares under the Securities Act or to take any action which would make available to the Participant any exemption from such registration; (iii) such Shares may not be transferred without compliance with all applicable federal and state securities laws and any other restrictions contained in the Plan and the applicable Award Agreement; and (iv) an appropriate legend referring to the foregoing restrictions on transfer and any other restrictions imposed under the Award Agreement may be endorsed on the certificates. Notwithstanding the foregoing, if the Company determines that issuance of Shares should be delayed pending (1) registration under federal or state securities laws, (2) the receipt of an opinion of counsel satisfactory to the Company that an appropriate exemption from such registration is available, (3) the listing or inclusion of the Shares on any securities exchange or an automated quotation system, or (4) the consent or approval of any governmental regulatory body whose consent or approval is necessary in connection with the issuance of such Shares, the Company may defer issuance of any Shares under an Award Agreement granted hereunder until any of the events described in this sentence has occurred.

16. Withholding of Taxes. The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery or vesting of cash or shares of Common Stock under the Plan, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of required withholding taxes or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes; provided, however, that the number of shares of Common Stock withheld for payment of required withholding taxes must equal no more than the required minimum withholding taxes. The Committee may also permit withholding to be satisfied by the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Award with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made.

17. Shareholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to any Shares subject to an Award unless and until such Participant has satisfied all requirements applicable to such Award, in accordance with the terms of the Plan and the applicable Award Agreement.

18. Interpretation. The Plan is intended to enable transactions under the Plan with respect to directors and officers (within the meaning of Section 16(a) under the Exchange Act) to satisfy the conditions of said Rule 16b-3 under the Exchange Act or its successors; to the extent that any provision of the Plan would cause a conflict with such conditions or would cause the administration of the Plan as provided in Section 3 to fail to satisfy the conditions of said Rule 16b-3, such provision shall be deemed null and void to the extent permitted by applicable law. This Section shall not be

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applicable if no class of the Company’s equity securities is then registered pursuant to Section 12 of the Exchange Act.

19. Code Section 409A.

(a) Awards made under the Plan are intended to comply with or be exempt from Code Section 409A, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. No payment, benefit or consideration shall be substituted for an Award if such action would result in the imposition of taxes under Code Section 409A. Notwithstanding anything in the Plan to the contrary, if any Plan provision or Award under the Plan would result in the imposition of an additional tax under Code Section 409A, that Plan provision or Award shall be reformed, to the extent permissible under Code Section 409A, to avoid imposition of the additional tax, and no such action shall be deemed to adversely affect the Participant’s rights to an Award.

(b) Unless the Committee provides otherwise in an Award Agreement, each Restricted Stock Unit Award or Cash Award (or portion thereof if the Award is subject to a vesting schedule) shall be settled no later than the 15th day of the third month after the end of the first calendar year in which the Award (or such portion thereof) is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A. If the Committee determines that a Restricted Stock Unit Award or a Cash Award is intended to be subject to Code Section 409A, the applicable Award Agreement shall include terms that are designed to satisfy the requirements of Code Section 409A.

(c) If the Participant is identified by the Company as a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) on the date on which the Participant has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any Award payable or settled on account of a separation from service that is deferred compensation subject to Code Section 409A shall be paid or settled on the earliest of (1) the first business day following the expiration of six months from the Participant’s separation from service, (2) the date of the Participant’s death, or (3) such earlier date as complies with the requirements of Code Section 409A.

20. Amendment or Termination of the Plan. The Board may amend, suspend or terminate the Plan, but no such amendment or termination shall be made which would adversely affect any outstanding Awards without the written consent of the affected Participants. In addition, to the extent necessary to comply with Section 422 of the Code, Section 16b-3 under the Exchange Act or any other applicable law or regulation, including the requirements of any stock exchange or national market system upon which the Common Stock is then listed, the Company shall obtain shareholder approval of any Plan amendment or termination.

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21. Effective Date. The Plan is effective as of the Effective Date. The grant of Incentive Stock Options under the Plan is conditioned on the approval of the shareholders of the Company within twelve (12) months after the date the Plan was so adopted by the Board.

22. Choice of Law. The Plan and the Awards granted under the Plan shall be governed by and construed in accordance with the Laws of the State of New York (including Section 5-1401 of the General Obligations Law of the State of New York but otherwise without regard to conflicts of Laws principles).

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EX-10.11

Exhibit 10.11

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of February 28, 2011, is between SUNSHINE SILVER MINES CORPORATION (the “Company”) and ROGER P. JOHNSON (the “Executive” and together with the Company, the “Parties”).

W I T N E S S E T H:

WHEREAS:

The Parties wish to enter into the arrangements set forth herein with respect to the terms and conditions of the Executive’s employment with the Company.

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Parties agree as follows:

AGREEMENT

1. Employment and Term. The Company agrees to, and does hereby, employ the Executive, and the Executive agrees to, and does hereby accept, such employment, upon the terms and subject to the conditions set forth in this Agreement. The Executive’s employment will begin on March 9, 2011 (the “Start Date”) and continue at will, which means that the Executive or the Company may terminate the Executive’s employment at any time for any reason, or for no reason, with or without cause (the “Term”). If the Company terminates this Agreement and the Executive’s employment, the Company shall provide the Executive with notice and reason for the termination within ten (10) calendar days of the effective date of such termination.

2. Position and Duties.

(a) During the Term, the Company shall employ the Executive as Chief Financial Officer. The Executive shall perform the duties and have the responsibilities customarily associated with the position of Chief Financial Officer, which shall include, without limitation, overseeing the financial operations of the Company and its subsidiaries, and shall render such other services, and assume such other responsibilities, as may be directed to the Executive by the Chief Executive Officer or such other person as may be designated by the Board of Directors of the Company.

(b) The Executive shall devote his best efforts and his full business time and attention to the business and affairs of the Company.

(c) The Executive acknowledges and agrees that (i) the Executive owes the Company a duty of loyalty as a fiduciary of the Company, and (ii) the obligations described in this Agreement are in addition to, and not in lieu of, the obligations the Executive owes the Company under the common law.

3. Base Salary, Bonus, Equity/Options, and Benefits.

(a) Base Salary. During the Term, the Executive’s base salary shall be $330,000.00 per annum (“Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. The Base Salary will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Company’s Compensation Committee.

(b) Payment for Forfeited Stock Options. As compensation for forgone stock options from the Executive’s prior employer, the Company shall pay the Executive a bonus of $600,000 within thirty (30) days of the Start Date (the “Incentive Bonus”). In the event that the Company terminates the Executive’s employment for Cause (as defined in Section 4(g) below) or the Executive terminates his employment without Good Reason (as defined in Section 4(g) below) prior to the first anniversary of the Start Date, the Executive shall promptly repay the Incentive Bonus to the Company. In the event that the Company terminates the Executive’s employment for Cause or the Executive terminates his employment without Good Reason after the first anniversary of the Start Date but prior to the second anniversary of the Start Date, the Executive shall promptly repay a prorated portion of the Incentive Bonus to the Company, with such prorated portion determined by multiplying the Incentive Bonus by a fraction, the numerator of which is the number of days that elapsed between the first anniversary of the Start Date and the date of the Executive’s termination of employment, and the denominator of which is 365.

(c) Annual Bonus. During the Term, provided that the Executive is employed by the Company on December 31^st of the applicable year, the Executive will be eligible to participate in a bonus plan pursuant to which he will be entitled to receive an annual target bonus in the amount of Sixty-seven percent (67%) of his Base Salary for the applicable year, pro-rated for any partial year (the “Target Bonus”), upon achievement by the Executive and the Company of certain targets as determined solely in the discretion of the Company’s Compensation Committee (the “Annual Bonus”). The Target Bonus, may be up to 50% lower (33%) or up to 50% higher (100%) of the Executive’s Base Salary in any given year as determined by the Company’s Compensation Committee, and the Annual Bonus actually paid, if any, will depend on the actual performance of the Company and the Executive as determined by the Compensation Committee. In all events the Annual Bonus, if earned, will be paid no later than March 15th following the applicable year for which it is earned.

(d) Options. Effective as of the Start Date, the Company shall grant to the Executive an option to purchase 35,000 shares of the Company’s common stock at its per share value as of the Start Date, which is $13.825 per share (the “Initial Options”). In addition, effective as of the Start Date and as of February 1, 2012 and February 1, 2013 (provided that the Executive is still employed by the Company as of the applicable date), the Company shall grant to the Executive an option to purchase 3,600 shares of the Company’s common stock (subject to the adjustment provisions set forth in the Company’s Long-Term Incentive Plan) at a purchase price equal to the then current fair market value of the Company’s common stock (which, at the Start Date, is $13.825 per

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share as determined by the February 2011 sale of a portion of the Company and the outstanding shares of the Company; see Appendix I, and shall be adjusted for subsequent changes in the share capital of the Company as provided in the adjustment provisions of the Company’s Long-Term Incentive Plan) (the “Subsequent Options”). The Initial Options shall vest in two equal annual installments on the first and second anniversaries of the Start Date, and the Subsequent Options shall vest in three equal annual installments on the first, second and third anniversaries of the applicable grant date (each, a “Vesting Date”), provided in each case that the Executive is employed by the Company on the applicable Vesting Date. The Initial Options and the Subsequent Options (collectively, the “Stock Options”) shall have a ten-year term (subject to earlier termination upon termination of employment as described herein and in the applicable option agreement) and shall be subject to the terms and conditions of the Company’s Long-Term Incentive Plan and option agreements, all of which shall be consistent with the Executive’s rights set forth in this Section 3(d). The Executive may receive additional stock option or other equity compensation grants in the future in the sole discretion of the Company’s Compensation Committee.

(e) Employee Benefits. During the Term, the Executive shall be entitled to participate in the Company’s various employee benefit plans that are, from time to time, made generally available to the Company’s employees, as such plans are established and pursuant to the terms and conditions of such plans. The Executive acknowledges that the Company currently has no benefit plans and that the Executive’s initial responsibilities will include researching and overseeing the implementation of such plans, including the following: group health, vision and dental plan; short-term and long-term disability plan; life insurance plan; and 401(k) plan.

(f) Vacation. The Executive shall be entitled to four (4) weeks paid vacation time per calendar year, pro-rated for any partial year of employment, in accordance with the Company’s vacation time policy.

(g) Expense Reimbursement. The Executive shall receive reimbursement for direct and reasonable out-of-pocket expenses, including those related to maintenance of a license as a Certified Public Accountant, continuing professional education and membership in National and State Professional Associations, incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company. All requests for reimbursement of business-related expenses shall be subject to the Company’s travel policy and requirements with respect to reporting and documentation of expenses.

4. Compensation Upon Termination. Resignation. Disability or Death.

(a) Termination without Cause. If the Executive’s employment is terminated by the Company without Cause, the Company shall pay the Executive any Base Salary and Annual Bonus from the preceding calendar year to the extent accrued but unpaid as of the effective date of the Executive’s termination; accrued but unused vacation in accordance with Company policy; and all business expenses that were incurred and not reimbursed but eligible for reimbursement (collectively, the “Accrued Obligations”). In addition,

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the Executive will be entitled to a prorated amount of the current calendar year Annual Bonus, with such prorated portion determined by multiplying the Annual Bonus that would otherwise have been earned by a fraction, the numerator of which is the number of days that elapsed between the January 1 of the current year and the date of the Executive’s termination of employment, and the denominator of which is 365, with payment of such prorated Annual Bonus to be made at the same time as annual bonuses are made to other executives of the Company in the ordinary course (but in no event later than March 15th of the calendar year following the calendar year in which the termination occurs (the “Pro Rata Bonus”). In addition, subject to Section 19, the Company will pay the Executive an amount equal to twenty (20) months of the Executive’s Base Salary at the rate in effect on the date of termination, payable in a lump sum within sixty (60) calendar days of the date of termination. Provided the Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination, during the twelve (12) month period following the date of termination, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement. Upon termination under this Section 4(a), (i) the Initial Options, to the extent unvested, shall immediately vest, (ii) the Subsequent Options shall cease vesting and (iii) all vested Stock Options shall remain exercisable until the earlier of (x) the date one hundred eighty (180) calendar days following termination of employment or (y) the expiration of the original option term.

(b) Resignation for Good Reason. If the Executive resigns for Good Reason, the Company shall pay the Executive the same sums and in the same manner, and his rights to the Stock Options shall be the same, as to which the Executive would be entitled if he had been terminated by the Company without Cause, as set forth in subsection (a) above. The Executive shall provide 30 days’ prior written notice to the Company of his decision to resign for Good Reason.

(c) Termination for Cause. If the Executive’s employment is terminated by the Company for Cause, the Company shall pay the Executive the Accrued Obligations. Upon termination under this Section 4(c), any outstanding Stock Options shall cease to be exercisable and will be forfeited.

(d) Resignation without Good Reason. If the Executive resigns without Good Reason, the Company shall pay the Executive the Accrued Obligations. The Executive

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shall provide 60 days’ prior written notice to the Company of his decision to resign without Good Reason. The Stock Options, to the extent exercisable at the Executive’s termination of employment, shall remain exercisable until the earlier of (i) the date thirty (30) calendar days following termination of employment under this Section 4(d) or (ii) the expiration of the original option term.

(e) Disability. Subject to any state or federal law or regulation governing employees with disabilities, the Company may terminate the Executive’s employment upon the Disability of the Executive. In the event the Executive is terminated under this Section 4(e), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company shall cause Executive to fully vest in all Stock Options referred to in Section 3(d) of this Agreement, and the Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(e) or (ii) the expiration of the original option term.

(f) Death. If the Executive’s employment is terminated due to the Executive’s death, the Company shall pay the Executive’s estate the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company, shall cause Executive’s estate to fully vest in all Stock Options referred to in Section 3(d) of this Agreement, and the Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(f) or (ii) the expiration of the original option term.

(g) For purposes of this Agreement:

(i) “Cause” means the Executive’s (a) conviction of, guilty plea to or confession of guilt of, or plea of nolo contendere to a felony, or an act involving moral turpitude which could have a material adverse effect on the Company; (b) willful dishonesty, fraud or conduct that constitutes a felony or an act involving moral turpitude or a breach of fiduciary duty or any material misrepresentation in connection with the Executive’s employment; (c) action that exposes the Company to a material risk of legal liability or public disgrace or disrepute including, without limitation, violation of any law, rule or regulation that could expose the Company to a material legal or monetary fine or penalty; (d) neglect of his duties or substantial failure to perform duties as reasonably directed by the Chief Executive Officer and/or Board of Directors; (e) gross negligence or willful misconduct with respect to Company affairs or the Executive’s obligations hereunder; or (f) any other material breach of this or any other agreement with the Company or any material Company policy, which breach is not cured within at least fifteen (15) calendar days after receipt by the Executive of written notice from the Company of such breach, but only if such breach is able to be cured during such fifteen (15) calendar day period.

(ii) “Good Reason” means: (a) a material diminution in the Executive’s Base Salary, except where such reduction occurs as part of an across-the-board reduction in salary affecting all senior executives of the Company; (b) a material change in the geographic location of the Executive’s principal business office; in order for a change to be material hereunder, the Executive’s principal business office must be moved to a

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location more than fifty (50) miles from the Company’s office as of the Start Date, except for required travel on Company business; or (c) any other action or inaction by the Company that constitutes a material breach of this Agreement. The foregoing shall constitute Good Reason only if (i) the Executive provides written notice to the Company of any event(s) alleged to constitute Good Reason within ninety (90) calendar days of the initial occurrence of the event, with such notice providing a detailed description of the circumstances constituting Good Reason (a “Good Reason Notice”), (ii) any such reduction, change, or breach is not remedied or cured within fifteen (15) calendar days after the Company’s receipt of a written Good Reason Notice from the Executive (the “Cure Period”) and (iii) the Executive actually terminates employment within thirty (30) calendar days following the expiration of the Cure Period.

(iii) “Disability” shall mean that the Executive is disabled within the meaning of the Company’s group long-term disability insurance policy. If no long term disability insurance is in place, then Disability shall mean that the Executive, due to illness, accident, or other physical or mental incapacity, has been substantially unable to perform his duties under this Agreement for a period of at least six (6) consecutive months during the Term as established by the written opinion of a licensed independent physician selected by the Company.

(h) Deemed Resignation. Unless otherwise agreed to in writing by the Company and the Executive prior to the termination of the Executive’s employment, any termination of the Executive’s employment shall constitute an automatic resignation of the Executive as an officer of the Company and each affiliate of the Company, and an automatic resignation of the Executive from the board of directors or similar governing body of the Company or any affiliate of the Company and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body the Executive serves as the Company’s or such affiliate’s designee or other representative.

(i) Clawback. The Executive agrees and acknowledges that any and all compensation the Executive receives pursuant to this Agreement shall be subject to clawback by the Company in the event of a financial restatement or in such other circumstances as may be required by applicable law or as may be provided in any clawback policy that is adopted by the Company and is generally applicable to senior executives of the Company.

5. Confidentiality and Non-Solicitation.

(a) For purposes of this Agreement, “Confidential Information” means (i) communications, data, formulae and related concepts, business plans (both current and under development), profit and loss statements, spreadsheets, contact or distribution lists, non-public personnel lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, trading, investments, sales activities, promotions, credit and financial data, financing methods, research, plans or the business and affairs of the

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Company; (ii) any other information which is to be treated as confidential or non-public because of any duty of confidentiality owed by the Company to a third party; and (iii) any other information which the Company shall, in the ordinary course, use and not release externally, except subject to restrictions on use and disclosure. Notwithstanding the foregoing, Confidential Information does not include information that (A) is or becomes generally publicly available other than as a result, directly or indirectly, of the Executive’s disclosure or (B) is or becomes available to the Executive on a non-confidential basis from a source other than through the Company or its representatives, provided that such source is not bound by a confidentiality agreement with the Company or otherwise prohibited from transmitting the information to the Executive by a contractual or legal obligation.

(b) The Executive acknowledges the trade secret status of the Confidential Information and that the Confidential Information constitutes a protectable business interest of the Company. The Executive agrees (i) not to use or allow or help another to use or access (whether for compensation or not) any Confidential Information for himself or others (other than the Company); and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from the Company’s offices at any time during or after the Executive’s employment by the Company, except as required in the execution of the Executive’s duties to the Company and then conditioned upon the prompt return of all originals and reproductions thereof (in whatever form).

(c) During the Term and for a period of one (1) year thereafter, the Executive shall not, directly or indirectly, on behalf of himself or any other person or entity, without the prior written consent of the Company solicit or induce any employee of or consultant or service provider to the Company (each, a “Service Provider”) to leave the employ of or cease performing services for the Company, or engage in any plan or coordinate with any Service Provider to leave the employ of or cease performing services for the Company, or hire, participate with or attempt to participate with in any venture for any purpose any Service Provider or any Service Provider who has left the employment of or ceased to perform services for the Company within one year of the termination of such Service Provider’s services for the Company.

(d) The Executive acknowledges that any breach of his obligations under this Section 5 cannot be adequately compensated by damages in an action at law and may cause the Company great and irreparable injury and damage. Accordingly, in the event that the Executive breaches or threatens to breach any provisions of this Section 5, then in addition to any other rights which the Company may have, the Company shall be entitled, without the necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate or (iii) posting any bond or other security with respect thereto, to the remedies of injunction, specific performance and other equitable relief to redress any breach, and no proof of special damages shall be necessary for the enforcement of or for any action for breach of the Executive’s obligations. In the event that a proceeding is brought in equity to enforce the provisions of this Section 5, the Executive shall not urge as a defense that there is an adequate remedy at law nor shall the Company be prevented

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from seeking any other remedies which may be available. Nothing contained in this Section 5(d) shall be construed as a waiver by the Company of any other rights, including, without limitation, rights to damages or profits.

(e) The Executive agrees that the period during which the covenants contained in this Section 5 shall be effective shall be computed by excluding from such computation any time during which the Executive is in violation of any provision of this Section 5.

(f) The Company and the Executive agree that it was their intent to enter into a valid and enforceable agreement. The Executive and the Company thereby acknowledge the reasonableness of the restrictions set forth in this Section 5, including the reasonableness of the duration as to time and the scope of activity restrained. The Executive agrees that if any covenant contained in Section 5 of this Agreement is found by a court of competent jurisdiction to contain limitations as to time or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of the Company, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of the Company and to enforce the covenants as reformed.

(g) If the Executive’s employment with the Company is terminated for any reason, the Executive agrees to advise the Company of the name of the Executive’s new employer. The Executive further agrees that the Company may notify any person or entity employing the Executive or evidencing an intention of employing the Executive of the existence and provisions of this Agreement.

6. The Executive’s Representations. The Executive represents to the Company that:

(a) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound;

(b) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable against him in accordance with its terms;

(c) as of the Start Date, the Executive will not be a party to any agreement with any person, other than an agreement with the Company, restricting the use of another person’s confidential information or restricting the Executive from providing future employment, consulting or other service;

(d) no prior or pending litigation, arbitration, investigation or other proceeding of any kind will prevent or hinder the Executive from performing his duties under this Agreement; and

(e) the Executive has consulted with independent legal counsel regarding his

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rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

7. Change in Control.

(a) Definitions.

(i) For purposes of this Section 7, “Change in Control” means (I) any merger or consolidation of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than a controlling interest in the surviving entity immediately after such consolidation, merger or reorganization; (II) any transaction or series of related transactions in which control of the Company is acquired by a person or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended or any successor provisions thereto; or (III) a sale or other disposition of all or substantially all of the assets of the Company; provided that in no event will a Change in Control include any of the following transactions: (A) any consolidation, merger or similar transaction effected exclusively to change the domicile of the Company; (B) any transaction or series of transactions in which voting securities of the Company are issued principally for bona fide financing purposes or any successor or indebtedness or equity securities of the Company are cancelled or converted or a combination thereof, including, without limitation, an initial public offering or other offering of the Company’s capital stock; (C) any acquisition of such voting power by an individual or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company; or (D) any transaction where control of the Company, the surviving parent entity or the entity to which all or substantially all of the Company’s assets are transferred in the transaction or series of transactions is controlled directly or indirectly by one or more Kaplan Parties.

(ii) “Kaplan Party” means (a) Thomas S. Kaplan or Dafna Recanati Kaplan; (b) any spouse, parent, sibling or descendant (including by adoption) of either of the persons referred to in clause (a) above; (c) any trust created for the benefit of any of the persons described in clauses (a) or (b) above or any trust for the benefit of such trust; or (d) any person controlled by one or more of the persons referred to in clauses (a), (b) or (c) above.

(iii) “Control” (including its correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the beneficial ownership of voting securities, by contract or otherwise.

(b) Change in Control Severance Benefits. If there is a Change in Control, and within one (1) year of such Change in Control, the Executive’s employment is terminated under the circumstances described in Sections 4(a) through 4(f) above, the Executive shall be entitled to the following: (I) if such termination is a termination by the Company

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without Cause pursuant to Section 4(a) or the Executive resigns for Good Reason pursuant to Section 4(b), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus and, in addition, subject to the provisions of Section 19, (A) an amount equal to twenty-four (24) months of the Executive’s Base Salary at the rate in effect on the date of termination or resignation, payable in a lump sum within sixty (60) calendar days of the date of termination or resignation; and (B) provided the Executive timely elects continuation coverage under COBRA, the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination or resignation, during the eighteen (18) month period following the date of termination or resignation, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination or resignation. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination or resignation. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement; and (II) if such termination is a termination or resignation under the circumstances described in Sections 4(c), 4(d), 4(e) or 4(f), the Executive shall be entitled to the compensation and benefits for which the Executive is eligible under such sections.

(c) Termination Preceding Change in Control. Notwithstanding the provisions of the above subsection 7(b), if the Executive’s employment with the Company is terminated by the Company without Cause within three (3) months preceding the occurrence of a Change in Control and such termination without Cause occurred in anticipation of a Change in Control at the request of the acquirer, the Executive shall be entitled to the payments and benefits described in the above subsection 7(b)(I).

8. Taxes. The Company shall be entitled to withhold from any payment or benefit provided under this Agreement an amount sufficient to satisfy all federal, state and local income and employment tax withholding requirements.

9. Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

Notices to the Executive:

Roger P. Johnson

2422 Glenarm Place

Denver, Colorado 80205

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Notices to the Company:

Sunshine Silver Mines Corporation

c/o Tigris Financial Group Ltd.

535 Madison Avenue, 11th Floor

New York, New York 10022

Attention: Andrew M. Shapiro, Esq.

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.

10. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any action in any other jurisdiction, but this Agreement shall be reformed construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

11. Complete Agreement. This Agreement, together with the agreements referred to herein in Section 3(d), contains the entire agreement of the Parties hereto with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement supersedes any and all prior agreements and understandings, whether written or oral, between the Parties with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement may not be changed or modified except by an instrument in writing, signed by the Executive and a duly authorized officer of the Company.

12. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

13. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, the Company and their respective heirs, personal representatives, executors and administrators, successors and assigns, except that the Executive may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company.

14. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York and the federal laws of the United States of America, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any jurisdiction other than the State of New York and the federal laws of the United States of America.

15. Dispute Resolution and Arbitration. Subject to Section 5(d), the Parties shall attempt

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in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within thirty (30) calendar days of a Party’s request for negotiation, either Party may initiate proceedings or arbitration only as provided herein. Subject to Section 5(d), if any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must have an expertise in the matter(s) in dispute. Each party shall bear his/its own fees and costs; the fees, costs and all administrative expenses of arbitration shall be borne equally by the Company and the Executive. The Parties understand and agree that the arbitration is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any award rendered hereunder may include an award of attorneys’ fees and costs but shall not include punitive damages. The statute of limitations of the state of New York applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration.

16. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and the Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

17. Survival. In the event of the Executive’s termination of, or resignation from, employment, Sections 4, 5, 8, 9, 10, 13, 14, 15 and 16 shall survive and continue in full force to the extent necessary to enforce their terms.

18. Jobs Act Compliance.

(a) This Agreement is intended to provide payments that are exempt from or compliant with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and related regulations and Treasury pronouncements (“Section 409A”), and the Agreement shall be interpreted accordingly. Each payment under this Agreement is intended to be excepted from Section 409A, including, but not limited to, by compliance with the short-term deferral exception as specified in Treasury Regulation § 1.409A-l(b)(4), and the provisions of this Agreement will be administered, interpreted and construed accordingly (or disregarded to the extent such provision cannot be so administered, interpreted, or construed).

(b) All reimbursements or provision of in-kind benefits pursuant to this Agreement shall be made in accordance with Treasury Regulation § 1.409A-3(i)(l)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event. Specifically, the amount reimbursed or in-kind benefits provided under this Agreement during the Executive’s

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taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

(c) For all purposes of this Agreement, the Executive shall be considered to have terminated employment with the Company when the Executive incurs a “separation from service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i).

(d) Notwithstanding any provision of this Agreement to the contrary, the parties agree that any benefit or benefits under this Agreement that the Company determines are subject to the suspension period under Code Section 409A(a)(2)(B) shall not be paid or commence until the first business day next following the earlier of (i) the date that is six months and one day following the date of the Executive’s termination of employment, (ii) the date of the Executive’s death or (iii) such earlier date as complies with the requirements of Section 409A.

19. Release. Any and all amounts payable and benefits or additional rights provided pursuant to Sections 4 and 7, other than (i) compensation accrued but unpaid as of the effective date of the Executive’s termination; (ii) accrued but unused vacation in accordance with Company policy; and (iii) all business expenses that were incurred but not reimbursed, shall only be payable if the Executive executes and delivers to the Company, within 60 days after termination of employment, in the Company’s standard form, a general release of all claims of the Executive up to the date of such release.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

SUNSHINE SILVER MINES CORPORATION
By:	/s/ MICHAEL H. WILLIAMS
Name:	MICHAEL H. WILLIAMS
Title:	PRESIDENT

/s/ ROGER P. JOHNSON

ROGER P. JOHNSON – the Executive

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Appendix I

Based on the transaction:

Valuation:
a)      Financing /Cash infusion (for~15%):	$	115,000,000
b)      SSM valuation	$	766,500,000
Price per share: a/b=c
a)      SSM Value based on contemplated merger	$	766,500,000
b)      Post merger Shares and options Outstanding		55,443,038
c)      Share Price	$	13.825

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EX-10.12

Exhibit 10.12

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of May 3, 2011, is between SUNSHINE SILVER MINES CORPORATION (the “Company”) and STEPHEN ORR (the “Executive” and together with the Company, the “Parties”).

W I T N E S S E T H:

WHEREAS:

The Parties wish to enter into the arrangements set forth herein with respect to the terms and conditions of the Executive’s employment with the Company.

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Parties agree as follows:

AGREEMENT

1. Employment and Term. The Company agrees to, and does hereby, employ the Executive, and the Executive agrees to, and does hereby accept, such employment, upon the terms and subject to the conditions set forth in this Agreement. The Executive’s employment will begin on May 4, 2011 (the “Start Date”) and continue at will, which means that the Executive or the Company may terminate the Executive’s employment at any time for any reason, or for no reason, with or without cause (the “Term”). If the Company terminates this Agreement and the Executive’s employment, the Company shall provide the Executive with notice and reason for the termination within ten (10) calendar days of the effective date of such termination.

2. Position and Duties.

(a) During the Term, the Company shall employ the Executive as Executive Chairman. The Executive shall perform the duties and have the responsibilities customarily associated with the position of Executive Chairman, which shall include, without limitation, overseeing meetings of the Board of Directors of the Company, working closely with the Company’s Chief Executive Officer and having ultimate responsibility for the performance by the Company’s management of their duties and responsibilities, leading the Company by applying his business acumen and strategic vision to improve its competitive standing, and rendering such other services, and assuming such other responsibilities, as may be directed to the Executive by the Board of Directors of the Company.

(b) The Executive shall devote his best efforts and his full business time and attention to the business and affairs of the Company. Notwithstanding the foregoing, the Executive may continue to serve as a director of GoldQuest Mining Corp. provided that his obligations in such capacity do not interfere with his obligations to the Company.

(c) The Executive acknowledges and agrees that (i) the Executive owes the

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Company a duty of loyalty as a fiduciary of the Company, and (ii) the obligations described in this Agreement are in addition to, and not in lieu of, the obligations the Executive owes the Company under the common law.

3. Base Salary, Purchase of Shares, Equity/Options, and Benefits.

(a) Base Salary. During the Term, the Executive’s base salary shall be $500,000.00 per annum (“Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. The Base Salary will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Company’s Compensation Committee.

(b) Purchase of Shares. As of the date hereof, Ozorrus Investments Limited, a corporation under the laws of New Zealand (the “Purchaser”) and co-trustee of SOS HK ORS, an exempted Occupational Retirement Schemes Ordinance constituted under the laws of Hong Kong and the Company shall enter into the Subscription Agreement in the form attached hereto as Exhibit A (the “Subscription Agreement”). In addition, as of the Start Date, the Company, the Purchaser and certain stockholders of the Company shall enter into a Letter Agreement in the form attached hereto as Exhibit B.

(c) Options.

(i) Effective as of the Start Date, the Company shall grant to the Executive an option to purchase 125,000 shares of the Company’s common stock at $27.65 per share, and as of the earlier of May 1, 2012 and the initial public offering of the Company’s common stock (provided that the Executive is still employed by the Company as of the applicable date), the Company shall grant to the Executive an option to purchase an additional 125,000 shares of the Company’s common stock at a purchase price equal to the then current fair market value of the Company’s common stock or the initial public offering price (the “Stock Options”). The Stock Options will be subject to the adjustment provisions set forth in the Company’s Long-Term Incentive Plan (the “Plan”). The Executive may, with the consent of the Company, such consent not to be unreasonably withheld, assign the Stock Options for bona fide planning purposes to members of his immediate family, or to a trustee or trustees of a trust whose vested beneficiaries then include the Executive and/or any of the Executive’s immediate family, if (A) the persons who would control the Stock Options and the proposed arrangements for the control of the Stock Options are reasonably satisfactory to the Company, including, without limitation, that any Stock Options will remain subject to all of the forfeiture and transfer restrictions and conditions set forth in the applicable Stock Option Award Agreement and in the Plan, (B) the requirements of the Securities Act of 1933, as amended (the “Securities Act”) and any applicable state securities, blue sky or other laws are met, and (C) the Executive and the transferee acknowledge that (x) the Executive remains responsible for any tax liabilities associated with the exercise of the Stock Options and (y) the Company will not take on any role or liability whatsoever with respect to any transferee other than the obligation to deliver shares of the Company’s common stock under the applicable Stock Option Award Agreement as if the Stock Options were still held by the Executive.

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(ii) The Stock Options shall vest in three equal annual installments on the first, second and third anniversaries of the applicable grant date (each, a “Vesting Date”), provided in each case that the Executive is employed by the Company on the applicable Vesting Date. The Stock Options shall have a ten-year term (subject to earlier termination upon termination of employment as described herein and in the applicable option agreement) and shall be subject to the terms and conditions of the Company’s Long-Term Incentive Plan and option agreements, all of which shall be consistent with the Executive’s rights set forth in this Section 3(c). The Executive may receive additional stock option or other equity compensation grants in the future in the sole discretion of the Company’s Compensation Committee.

(d) Employee Benefits. During the Term, the Executive shall be entitled to participate in the Company’s various employee benefit plans that are, from time to time, made generally available to the Company’s employees, as such plans are established and pursuant to the terms and conditions of such plans. The Executive acknowledges that the Company is in the process of implementing employee benefit plans and that such plans, including the following, are expected to be available during May 2011 or shortly thereafter: group health, vision and dental plan; short-term and long-term disability plan; life insurance plan; and 401(k) plan.

(e) Vacation. The Executive shall be entitled to four (4) weeks paid vacation time per calendar year, pro-rated for any partial year of employment, in accordance with the Company’s vacation time policy.

(f) Expense Reimbursement. The Executive shall receive reimbursement for direct and reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company. All requests for reimbursement of business-related expenses shall be subject to the Company’s travel policy and requirements with respect to reporting and documentation of expenses.

4. Compensation Upon Termination, Resignation, Disability or Death.

(a) Termination without Cause. If the Executive’s employment is terminated by the Company without Cause, the Company shall pay the Executive any Base Salary from the preceding calendar year to the extent accrued but unpaid as of the effective date of the Executive’s termination; accrued but unused vacation in accordance with Company policy; and all business expenses that were incurred and not reimbursed but eligible for reimbursement (collectively, the “Accrued Obligations”). In addition, subject to Section 19, the Company will pay the Executive an amount equal to twelve (12) months of the Executive’s Base Salary at the rate in effect on the date of termination, payable in a lump sum within sixty (60) calendar days of the date of termination. Provided the Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination, during the twelve (12) month period

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following the date of termination, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement. Upon termination under this Section 4(a), (i) the Stock Options shall cease vesting and (ii) all vested Stock Options shall remain exercisable until the earlier of (x) the date one hundred eighty (180) calendar days following termination of employment or (y) the expiration of the original option term.

(b) Resignation for Good Reason. If the Executive resigns for Good Reason, the Company shall pay the Executive the same sums and in the same manner, and his rights to the Stock Options shall be the same, as to which the Executive would be entitled if he had been terminated by the Company without Cause, as set forth in subsection (a) above. The Executive shall provide 30 days’ prior written notice to the Company of his decision to resign for Good Reason.

(c) Termination for Cause. If the Executive’s employment is terminated by the Company for Cause, the Company shall pay the Executive the Accrued Obligations. Upon termination under this Section 4(c), any outstanding Stock Options shall cease to be exercisable and will be forfeited.

(d) Resignation without Good Reason. If the Executive resigns without Good Reason, the Company shall pay the Executive the Accrued Obligations. The Executive shall provide 60 days’ prior written notice to the Company of his decision to resign without Good Reason. The Stock Options, to the extent exercisable at the Executive’s termination of employment, shall remain exercisable until the earlier of (i) the date thirty (30) calendar days following termination of employment under this Section 4(d) or (ii) the expiration of the original option term.

(e) Disability. Subject to any state or federal law or regulation governing employees with disabilities, the Company may terminate the Executive’s employment upon the Disability of the Executive. In the event the Executive is terminated under this Section 4(e), the Company shall pay the Executive the Accrued Obligations. In addition, in such event, the Company shall cause Executive to fully vest in all Stock Options referred to in Section 3(c) of this Agreement, and such Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(e) or (ii) the expiration of the original option term.

(f) Death. If the Executive’s employment is terminated due to the Executive’s death, the Company shall pay the Executive’s estate the Accrued Obligations. In addition, in such event, the Company shall cause Executive’s estate to fully vest in all

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Stock Options referred to in Section 3(c) of this Agreement, and such Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(f) or (ii) the expiration of the original option term.

(g) For purposes of this Agreement:

(i) “Cause” means the Executive’s (a) conviction of, guilty plea to or confession of guilt of, or plea of nolo contendere to a felony, or an act involving moral turpitude which could have a material adverse effect on the Company; (b) willful dishonesty, fraud or conduct that constitutes a felony or an act involving moral turpitude or a breach of fiduciary duty or any material misrepresentation in connection with the Executive’s employment; (c) action that exposes the Company to a material risk of legal liability or public disgrace or disrepute including, without limitation, violation of any law, rule or regulation that could expose the Company to a material legal or monetary fine or penalty; (d) neglect of his duties or substantial failure to perform duties as reasonably directed by the Board of Directors; (e) gross negligence or willful misconduct with respect to Company affairs or the Executive’s obligations hereunder; or (f) any other material breach of this or any other agreement with the Company or any material Company policy, which breach is not cured within at least fifteen (15) calendar days after receipt by the Executive of written notice from the Company of such breach, but only if such breach is able to be cured during such fifteen (15) calendar day period.

(ii) “Good Reason” means: (a) a material diminution in the Executive’s Base Salary, except where such reduction occurs as part of an across-the-board reduction in salary affecting all senior executives of the Company; or (b) any other action or inaction by the Company that constitutes a material breach of this Agreement. The foregoing shall constitute Good Reason only if (i) the Executive provides written notice to the Company of any event(s) alleged to constitute Good Reason within ninety (90) calendar days of the initial occurrence of the event, with such notice providing a detailed description of the circumstances constituting Good Reason (a “Good Reason Notice”), (ii) any such breach is not remedied or cured within fifteen (15) calendar days after the Company’s receipt of a written Good Reason Notice from the Executive (the “Cure Period”) and (iii) the Executive actually terminates employment within thirty (30) calendar days following the expiration of the Cure Period.

(iii) “Disability” shall mean that the Executive is disabled within the meaning of the Company’s group long-term disability insurance policy. If no long term disability insurance is in place, then Disability shall mean that the Executive, due to illness, accident, or other physical or mental incapacity, has been substantially unable to perform his duties under this Agreement for a period of at least six (6) consecutive months during the Term as established by the written opinion of a licensed independent physician selected by the Company.

(h) Deemed Resignation. Unless otherwise agreed to in writing by the Company and the Executive prior to the termination of the Executive’s employment, any termination of the Executive’s employment shall constitute an automatic resignation of the Executive as an officer of the Company and each affiliate of the Company, and an

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automatic resignation of the Executive from the board of directors or similar governing body of the Company or any affiliate of the Company and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body the Executive serves as the Company’s or such affiliate’s designee or other representative.

(i) Clawback. The Executive agrees and acknowledges that any and all compensation the Executive receives pursuant to this Agreement shall be subject to clawback by the Company in the event of a financial restatement or in such other circumstances as may be required by applicable law or as may be provided in any clawback policy that is adopted by the Company and is generally applicable to senior executives of the Company.

5. Confidentiality and Non-Solicitation.

(a) For purposes of this Agreement, “Confidential Information” means (i) communications, data, formulae and related concepts, business plans (both current and under development), profit and loss statements, spreadsheets, contact or distribution lists, non-public personnel lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, trading, investments, sales activities, promotions, credit and financial data, financing methods, research, plans or the business and affairs of the Company; (ii) any other information which is to be treated as confidential or non-public because of any duty of confidentiality owed by the Company to a third party; and (iii) any other information which the Company shall, in the ordinary course, use and not release externally, except subject to restrictions on use and disclosure. Notwithstanding the foregoing, Confidential Information does not include information that (A) is or becomes generally publicly available other than as a result, directly or indirectly, of the Executive’s disclosure or (B) is or becomes available to the Executive on a non- confidential basis from a source other than through the Company or its representatives, provided that such source is not bound by a confidentiality agreement with the Company or otherwise prohibited from transmitting the information to the Executive by a contractual or legal obligation.

(b) The Executive acknowledges the trade secret status of the Confidential Information and that the Confidential Information constitutes a protectable business interest of the Company. The Executive agrees (i) not to use or allow or help another to use or access (whether for compensation or not) any Confidential Information for himself or others (other than the Company); and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from the Company’s offices at any time during or after the Executive’s employment by the Company, except as required in the execution of the Executive’s duties to the Company and then conditioned upon the prompt return of all originals and reproductions thereof (in whatever form).

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(c) During the Term and for a period of one (1) year thereafter, the Executive shall not, directly or indirectly, on behalf of himself or any other person or entity, without the prior written consent of the Company solicit or induce any employee of or consultant or service provider to the Company (each, a “Service Provider”) to leave the employ of or cease performing services for the Company, or engage in any plan or coordinate with any Service Provider to leave the employ of or cease performing services for the Company, or hire, participate with or attempt to participate with in any venture for any purpose any Service Provider or any Service Provider who has left the employment of or ceased to perform services for the Company within one year of the termination of such Service Provider’s services for the Company.

(d) The Executive acknowledges that any breach of his obligations under this Section 5 cannot be adequately compensated by damages in an action at law and may cause the Company great and irreparable injury and damage. Accordingly, in the event that the Executive breaches or threatens to breach any provisions of this Section 5, then in addition to any other rights which the Company may have, the Company shall be entitled, without the necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate or (iii) posting any bond or other security with respect thereto, to the remedies of injunction, specific performance and other equitable relief to redress any breach, and no proof of special damages shall be necessary for the enforcement of or for any action for breach of the Executive’s obligations. In the event that a proceeding is brought in equity to enforce the provisions of this Section 5, the Executive shall not urge as a defense that there is an adequate remedy at law nor shall the Company be prevented from seeking any other remedies which may be available. Nothing contained in this Section 5(d) shall be construed as a waiver by the Company of any other rights, including, without limitation, rights to damages or profits.

(e) The Executive agrees that the period during which the covenants contained in this Section 5 shall be effective shall be computed by excluding from such computation any time during which the Executive is in violation of any provision of this Section 5.

(f) The Company and the Executive agree that it was their intent to enter into a valid and enforceable agreement. The Executive and the Company thereby acknowledge the reasonableness of the restrictions set forth in this Section 5, including the reasonableness of the duration as to tune and the scope of activity restrained. The Executive agrees that if any covenant contained in Section 5 of this Agreement is found by a court of competent jurisdiction to contain limitations as to time or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of the Company, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of the Company and to enforce the covenants as reformed.

6. The Executive’s Representations. The Executive represents to the Company that:

(a) the execution, delivery and performance of this Agreement by the Executive

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do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound;

(b) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable against him in accordance with its terms;

(c) except for a Confidentiality Agreement between the Executive and GoldQuest Mining Corp., as of the Start Date, the Executive will not be a party to any agreement with any person, other than an agreement with the Company, restricting the use of another person’s confidential information or restricting the Executive from providing future employment, consulting or other service;

(d) no prior or pending litigation, arbitration, investigation or other proceeding of any kind will prevent or hinder the Executive from performing his duties under this Agreement; and

(e) the Executive has consulted with independent legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

7. Change in Control.

(a) Definitions.

(i) For purposes of this Section 7, “Change in Control” means (I) any merger or consolidation of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than a controlling interest in the surviving entity immediately after such consolidation, merger or reorganization; (II) any transaction or series of related transactions in which control of the Company is acquired by a person or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended or any successor provisions thereto; or (III) a sale or other disposition of all or substantially all of the assets of the Company; provided that in no event will a Change in Control include any of the following transactions: (A) any consolidation, merger or similar transaction effected exclusively to change the domicile of the Company; (B) any transaction or series of transactions in which voting securities of the Company are issued principally for bona fide financing purposes or any successor or indebtedness or equity securities of the Company are cancelled or converted or a combination thereof, including, without limitation, an initial public offering or other offering of the Company’s capital stock; (C) any acquisition of such voting power by an individual or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company; or (D) any transaction where control of the Company, the surviving parent entity or the entity to which all or substantially all of the Company’s assets are transferred in the transaction or series of transactions is controlled

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directly or indirectly by one or more Kaplan Parties.

(ii) “Kaplan Party” means (a) Thomas S. Kaplan or Dafna Recanati Kaplan; (b) any spouse, parent, sibling or descendant (including by adoption) of either of the persons referred to in clause (a) above; (c) any trust created for the benefit of any of the persons described in clauses (a) or (b) above or any trust for the benefit of such trust; or (d) any person controlled by one or more of the persons referred to in clauses (a), (b) or (c) above.

(iii) “Control” (including its correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the beneficial ownership of voting securities, by contract or otherwise.

(b) Change in Control Severance Benefits. If there is a Change in Control, and within one (1) year of such Change in Control, the Executive’s employment is terminated under the circumstances described in Sections 4(a) through 4(f) above, the Executive shall be entitled to the following: (I) if such termination is a termination by the Company without Cause pursuant to Section 4(a) or the Executive resigns for Good Reason pursuant to Section 4(b), the Company shall pay the Executive the Accrued Obligations and, in addition, subject to the provisions of Section 19, (A) an amount equal to twenty- four (24) months of the Executive’s Base Salary at the rate in effect on the date of termination or resignation, payable in a lump sum within sixty (60) calendar days of the date of termination or resignation; and (B) provided the Executive timely elects continuation coverage under COBRA, the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination or resignation, during the eighteen (18) month period following the date of termination or resignation, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination or resignation. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination or resignation. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement; and (II) if such termination is a termination or resignation under the circumstances described in Sections 4(c), 4(d), 4(e) or 4(f), the Executive shall be entitled to the compensation and benefits for which the Executive is eligible under such sections.

(c) Termination Preceding Change in Control. Notwithstanding the provisions of the above subsection 7(b), if the Executive’s employment with the Company is terminated by the Company without Cause within three (3) months preceding the

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occurrence of a Change in Control and such termination without Cause occurred in anticipation of a Change in Control at the request of the acquirer, the Executive shall be entitled to the payments and benefits described in the above subsection 7(b)(I).

8. Taxes. The Company shall be entitled to withhold from any payment or benefit provided under this Agreement an amount sufficient to satisfy all federal, state and local income and employment tax withholding requirements.

9. Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

Notices to the Executive:

Stephen Orr

4903,1128 West Georgia Street

Vancouver BC V6EOA8

Canada

Notices to the Company:

Sunshine Silver Mines Corporation

c/o Tigris Financial Group Ltd.

535 Madison Avenue, 11th Floor

New York, New York 10022

USA

Attention: Andrew M. Shapiro, Esq.

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.

10. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any action in any other jurisdiction, but this Agreement shall be reformed construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

11. Complete Agreement. This Agreement, together with the agreements referred to herein in Sections 3(b) and 3(c), contains the entire agreement of the Parties hereto with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement supersedes any and all prior agreements and understandings, whether written or oral, between the Parties with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement may not be changed or modified except by an instrument in writing, signed by the Executive and a duly authorized officer of the

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Company.

12. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

13. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, the Company and their respective heirs, personal representatives, executors and administrators, successors and assigns, except that the Executive may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company.

14. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York and the federal laws of the United States of America, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any jurisdiction other than the State of New York and the federal laws of the United States of America.

15. Dispute Resolution and Arbitration. Subject to Section 5(d), the Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within thirty (30) calendar days of a Party’s request for negotiation, either Party may initiate proceedings or arbitration only as provided herein. Subject to Section 5(d), if any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must have an expertise in the matter(s) in dispute. Each party shall bear his/its own fees and costs; the fees, costs and all administrative expenses of arbitration shall be borne equally by the Company and the Executive. The Parties understand and agree that the arbitration is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any award rendered hereunder may include an award of attorneys’ fees and costs but shall not include punitive damages. The statute of limitations of the state of New York applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration.

16. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and the Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

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17. Survival. In the event of the Executive’s termination of, or resignation from, employment, Sections 4, 5, 8, 9, 10, 13, 14, 15 and 16 shall survive and continue in full force to the extent necessary to enforce their terms.

18. Jobs Act Compliance.

(a) This Agreement is intended to provide payments that are exempt from or compliant with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and related regulations and Treasury pronouncements (“Section 409A”), and the Agreement shall be interpreted accordingly. Each payment under this Agreement is intended to be excepted from Section 409A, including, but not limited to, by compliance with the short-term deferral exception as specified in Treasury Regulation § 1.409A-l(b)(4), and the provisions of this Agreement will be administered, interpreted and construed accordingly (or disregarded to the extent such provision cannot be so administered, interpreted, or construed).

(b) All reimbursements or provision of in-kind benefits pursuant to this Agreement shall be made in accordance with Treasury Regulation § 1.409A-3(i)(l)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event. Specifically, the amount reimbursed or in-kind benefits provided under this Agreement during the Executive’s taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

(c) For all purposes of this Agreement, the Executive shall be considered to have terminated employment with the Company when the Executive incurs a “separation from service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i).

(d) Notwithstanding any provision of this Agreement to the contrary, the parties agree that any benefit or benefits under this Agreement that the Company determines are subject to the suspension period under Code Section 409A(a)(2)(B) shall not be paid or commence until the first business day next following the earlier of (i) the date that is six months and one day following the date of the Executive’s termination of employment, (ii) the date of the Executive’s death or (iii) such earlier date as complies with the requirements of Section 409A.

19. Release. Any and all amounts payable and benefits or additional rights provided pursuant to Sections 4 and 7, other than (i) compensation accrued but unpaid as of the effective date of the Executive’s termination; (ii) accrued but unused vacation in accordance with Company policy; and (iii) all business expenses that were incurred but not reimbursed, shall only be payable if the Executive executes and delivers to the Company, within 60 days after termination of employment, in the Company’s standard form, a general release of all claims of the Executive up to the date of such release.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

SUNSHINE SILVER MINES CORPORATION
By:	/s/ Michael Williams
Name:	Michael Williams
Title:	President

/s/ STEPHEN ORR

STEPHEN ORR – the Executive

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EX-10.13

Exhibit 10.13

FINAL

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of June 1, 2011, is between SUNSHINE SILVER MINES CORPORATION (the “Company”) and Philip Pyle (the “Executive” and together with the Company, the “Parties”).

W I T N E S S E T H:

WHEREAS:

The Parties wish to enter into the arrangements set forth herein with respect to the terms and conditions of the Executive’s employment with the Company.

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Parties agree as follows:

AGREEMENT

1. Employment and Term. The Company agrees to, and does hereby, employ the Executive, and the Executive agrees to, and does hereby accept, such employment, upon the terms and subject to the conditions set forth in this Agreement. The Executive’s employment will begin on June 1, 2011 (the “Start Date”) and continue at will, which means that the Executive or the Company may terminate the Executive’s employment at any time for any reason, or for no reason, with or without cause (the “Term”). If the Company terminates this Agreement and the Executive’s employment, the Company shall provide the Executive with notice and reason for the termination within ten (10) calendar days of the effective date of such termination.

2. Position and Duties.

(a) During the Term, the Company shall employ the Executive as Vice President Exploration. The Executive shall perform the duties and have the responsibilities customarily associated with the position of Vice President Exploration, which shall include, without limitation, overseeing all exploration activities by the Company, working closely with the Company’s Chief Executive Officer and having ultimate responsibility for the strategic design, implementation and management of an effective exploration function.

(b) The Executive will be based in Houston Texas but required to work, as needed, at the various Company exploration projects and in the Company’s corporate office in Denver Colorado.

(c) The Executive shall devote his best efforts and his full business time and attention to the business and affairs of the Company.

(d) The Executive acknowledges and agrees that (i) the Executive owes the Company a duty of loyalty as a fiduciary of the Company, and (ii) the obligations

described in this Agreement are in addition to, and not in lieu of, the obligations the Executive owes the Company under the common law.

3. Base Salary, Bonus, Equity/Options, and Benefits.

(a) Base Salary. During the Term, the Executive’s base salary shall be $200,000.00 per annum (“Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. The Base Salary will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Company’s Compensation Committee.

(b) Annual Bonus. During the Term, provided that the Executive is employed by the Company on December 31^st of the applicable year, the Executive will be eligible to participate in a bonus plan pursuant to which (i) at the end of 2011, he will be entitled to receive an annual target bonus in the amount of fifty percent (50%) of his Base Salary and up to one-hundred percent (100%) of Base Salary upon achievement by the Executive and the Company of certain targets as determined solely in the discretion of the Company’s Compensation Committee, (the “Annual Bonus”). The Annual Bonus actually paid, if any, will depend on the actual performance of the Company and the Executive as determined by the Compensation Committee. In all events the Annual Bonus, if earned, will be paid no later than March 15th following the applicable year for which it is earned.

(c) Options.

(i) Stock Option grants shall vest in three equal annual installments on the first, second and third anniversaries of the applicable grant date (each, a “Vesting Date”), provided in each case that the Executive is employed by the Company on the applicable Vesting Date. The Stock Options shall have a ten-year term (subject to earlier termination upon termination of employment as described herein and in the applicable option agreement) and shall be subject to the terms and conditions of the Company’s Long-Term Incentive Plan and option agreements, all of which shall be consistent with the Executive’s rights set forth in this Section 3(c). The Executive may receive additional stock option or other equity compensation grants in the future in the sole discretion of the Company’s Compensation Committee.

(d) Employee Benefits. During the Term, the Executive shall be entitled to participate in the Company’s various employee benefit plans that are, from time to time, made generally available to the Company’s employees, as such plans are established and pursuant to the terms and conditions of such plans. The Executive acknowledges that the Company is in the process of implementing employee benefit plans and that such plans, including the following, are expected to be available during May 2011 or shortly thereafter: group health, vision and dental plan; short-term and long-term disability plan; life insurance plan; and 401(k) plan.

(e) Vacation. The Executive shall be entitled to four (4) weeks paid vacation time per calendar year, pro-rated for any partial year of employment. Recognizing that during

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2011 the Executive has been working in a similar function as a consultant, the Company will convey the entire four (4) week entitlement in accordance with the Company’s vacation time policy.

(f) Expense Reimbursement. The Executive shall receive reimbursement for direct and reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company. All requests for reimbursement of business-related expenses shall be subject to the Company’s travel policy and requirements with respect to reporting and documentation of expenses.

4. Compensation Upon Termination, Resignation, Disability or Death.

(a) Termination without Cause. If the Executive’s employment is terminated by the Company without Cause, the Company shall pay the Executive any Base Salary and Annual Bonus from the preceding calendar year to the extent accrued but unpaid as of the effective date of the Executive’s termination; accrued but unused vacation in accordance with Company policy; and all business expenses that were incurred and not reimbursed but eligible for reimbursement (collectively, the “Accrued Obligations”). In addition, the Executive will be entitled to a prorated amount of the current calendar year Annual Bonus, with payment of such prorated Annual Bonus to be made at the same time as annual bonuses are made to other executives of the Company in the ordinary course (but in no event later than March 15th of the calendar year following the calendar year in which the termination occurs (the “Pro Rata Bonus”). In addition, subject to Section 19, the Company will pay the Executive an amount equal to twelve (12) months of the Executive’s Base Salary at the rate in effect on the date of termination, payable in a lump sum within sixty (60) calendar days of the date of termination. Provided the Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination, during the twelve (12) month period following the date of termination, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement. Upon termination under this Section 4(a), (i) the Stock Options shall cease vesting and (ii) all vested Stock Options shall remain exercisable until the earlier of (x) the date one hundred eighty (180) calendar days following termination of employment or (y) the expiration of the original option term.

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(b) Resignation for Good Reason. If the Executive resigns for Good Reason, the Company shall pay the Executive the same sums and in the same manner, and his rights to the Stock Options shall be the same, as to which the Executive would be entitled if he had been terminated by the Company without Cause, as set forth in subsection (a) above. The Executive shall provide 30 days’ prior written notice to the Company of his decision to resign for Good Reason.

(c) Termination for Cause. If the Executive’s employment is terminated by the Company for Cause, the Company shall pay the Executive the Accrued Obligations. Upon termination under this Section 4(c), any outstanding Stock Options shall cease to be exercisable and will be forfeited.

(d) Resignation without Good Reason. If the Executive resigns without Good Reason, the Company shall pay the Executive the Accrued Obligations. The Executive shall provide 60 days’ prior written notice to the Company of his decision to resign without Good Reason. The Stock Options, to the extent exercisable at the Executive’s termination of employment, shall remain exercisable until the earlier of (i) the date thirty (30) calendar days following termination of employment under this Section 4(d) or (ii) the expiration of the original option term.

(e) Disability. Subject to any state or federal law or regulation governing employees with disabilities, the Company may terminate the Executive’s employment upon the Disability of the Executive. In the event the Executive is terminated under this Section 4(e), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company shall cause Executive to fully vest in all Stock Options referred to in Section 3(c) of this Agreement, and such Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(e) or (ii) the expiration of the original option term.

(f) Death. If the Executive’s employment is terminated due to the Executive’s death, the Company shall pay the Executive’s estate the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company shall cause Executive’s estate to fully vest in all Stock Options referred to in Section 3(c) of this Agreement, and such Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(f) or (ii) the expiration of the original option term.

(g) For purposes of this Agreement:

(i) “Cause” means the Executive’s (a) conviction of, guilty plea to or confession of guilt of, or plea of nolo contendere to a felony, or an act involving moral turpitude which could have a material adverse effect on the Company; (b) willful dishonesty, fraud or conduct that constitutes a felony or an act involving moral turpitude or a breach of fiduciary duty or any material misrepresentation in connection with the Executive’s employment; (c) action that exposes the Company to a material risk of legal liability or public disgrace or disrepute including, without limitation, violation of any law, rule or regulation that could expose the Company to a material legal or monetary fine or

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penalty; (d) neglect of his duties or substantial failure to perform duties as reasonably directed by the Board of Directors; (e) gross negligence or willful misconduct with respect to Company affairs or the Executive’s obligations hereunder; or (f) any other material breach of this or any other agreement with the Company or any material Company policy, which breach is not cured within at least fifteen (15) calendar days after receipt by the Executive of written notice from the Company of such breach, but only if such breach is able to be cured during such fifteen (15) calendar day period.

(ii) “Good Reason” means: (a) a material diminution in the Executive’s Base Salary, except where such reduction occurs as part of an across-the-board reduction in salary affecting all senior executives of the Company; or (b) any other action or inaction by the Company that constitutes a material breach of this Agreement. The foregoing shall constitute Good Reason only if (i) the Executive provides written notice to the Company of any event(s) alleged to constitute Good Reason within ninety (90) calendar days of the initial occurrence of the event, with such notice providing a detailed description of the circumstances constituting Good Reason (a “Good Reason Notice”), (ii) any such breach is not remedied or cured within fifteen (15) calendar days after the Company’s receipt of a written Good Reason Notice from the Executive (the “Cure Period”) and (iii) the Executive actually terminates employment within thirty (30) calendar days following the expiration of the Cure Period.

(iii) “Disability” shall mean that the Executive is disabled within the meaning of the Company’s group long-term disability insurance policy. If no long term disability insurance is in place, then Disability shall mean that the Executive, due to illness, accident, or other physical or mental incapacity, has been substantially unable to perform his duties under this Agreement for a period of at least six (6) consecutive months during the Term as established by the written opinion of a licensed independent physician selected by the Company.

(h) Deemed Resignation. Unless otherwise agreed to in writing by the Company and the Executive prior to the termination of the Executive’s employment, any termination of the Executive’s employment shall constitute an automatic resignation of the Executive as an officer of the Company and each affiliate of the Company, and an automatic resignation of the Executive from the board of directors or similar governing body of the Company or any affiliate of the Company and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body the Executive serves as the Company’s or such affiliate’s designee or other representative.

(i) Clawback. The Executive agrees and acknowledges that any and all compensation the Executive receives pursuant to this Agreement shall be subject to clawback by the Company in the event of a financial restatement or in such other circumstances as may be required by applicable law or as may be provided in any clawback policy that is adopted by the Company and is generally applicable to senior executives of the Company.

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5. Confidentiality and Non-Solicitation.

(a) For purposes of this Agreement, “Confidential Information” means (i) communications, data, formulae and related concepts, business plans (both current and under development), profit and loss statements, spreadsheets, contact or distribution lists, non-public personnel lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, trading, investments, sales activities, promotions, credit and financial data, financing methods, research, plans or the business and affairs of the Company; (ii) any other information which is to be treated as confidential or non-public because of any duty of confidentiality owed by the Company to a third party; and (iii) any other information which the Company shall, in the ordinary course, use and not release externally, except subject to restrictions on use and disclosure. Notwithstanding the foregoing, Confidential Information does not include information that (A) is or becomes generally publicly available other than as a result, directly or indirectly, of the Executive’s disclosure or (B) is or becomes available to the Executive on a non- confidential basis from a source other than through the Company or its representatives, provided that such source is not bound by a confidentiality agreement with the Company or otherwise prohibited from transmitting the information to the Executive by a contractual or legal obligation.

(b) The Executive acknowledges the trade secret status of the Confidential Information and that the Confidential Information constitutes a protectable business interest of the Company. The Executive agrees (i) not to use or allow or help another to use or access (whether for compensation or not) any Confidential Information for himself or others (other than the Company); and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from the Company’s offices at any time during or after the Executive’s employment by the Company, except as required in the execution of the Executive’s duties to the Company and then conditioned upon the prompt return of all originals and reproductions thereof (in whatever form).

(c) During the Term and for a period of one (1) year thereafter, the Executive shall not, directly or indirectly, on behalf of himself or any other person or entity, without the prior written consent of the Company solicit or induce any employee of or consultant or service provider to the Company (each, a “Service Provider”) to leave the employ of or cease performing services for the Company, or engage in any plan or coordinate with any Service Provider to leave the employ of or cease performing services for the Company, or hire, participate with or attempt to participate with in any venture for any purpose any Service Provider or any Service Provider who has left the employment of or ceased to perform services for the Company within one year of the termination of such Service Provider’s services for the Company.

(d) The Executive acknowledges that any breach of his obligations under this Section 5 cannot be adequately compensated by damages in an action at law and may cause the Company great and irreparable injury and damage. Accordingly, in the event

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that the Executive breaches or threatens to breach any provisions of this Section 5, then in addition to any other rights which the Company may have, the Company shall be entitled, without the necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate or (iii) posting any bond or other security with respect thereto, to the remedies of injunction, specific performance and other equitable relief to redress any breach, and no proof of special damages shall be necessary for the enforcement of or for any action for breach of the Executive’s obligations. In the event that a proceeding is brought in equity to enforce the provisions of this Section 5, the Executive shall not urge as a defense that there is an adequate remedy at law nor shall the Company be prevented from seeking any other remedies which may be available. Nothing contained in this Section 5(d) shall be construed as a waiver by the Company of any other rights, including, without limitation, rights to damages or profits.

(e) The Executive agrees that the period during which the covenants contained in this Section 5 shall be effective shall be computed by excluding from such computation any time during which the Executive is in violation of any provision of this Section 5.

(f) The Company and the Executive agree that it was their intent to enter into a valid and enforceable agreement. The Executive and the Company thereby acknowledge the reasonableness of the restrictions set forth in this Section 5, including the reasonableness of the duration as to time and the scope of activity restrained. The Executive agrees that if any covenant contained in Section 5 of this Agreement is found by a court of competent jurisdiction to contain limitations as to time or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of the Company, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of the Company and to enforce the covenants as reformed.

(g) If the Executive’s employment with the Company is terminated for any reason, the Executive agrees to advise the Company of the name of the Executive’s new employer. The Executive further agrees that the Company may notify any person or entity employing the Executive or evidencing an intention of employing the Executive of the existence and provisions of this Agreement.

6. The Executive’s Representations. The Executive represents to the Company that:

(a) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound;

(b) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable against him in accordance with its terms;

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(c) as of the Start Date, the Executive will not be a party to any agreement with any person, other than an agreement with the Company, restricting the use of another person’s confidential information or restricting the Executive from providing future employment, consulting or other service;

(d) no prior or pending litigation, arbitration, investigation or other proceeding of any kind will prevent or hinder the Executive from performing his duties under this Agreement; and

(e) the Executive has consulted with independent legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

7. Change in Control.

(a) Definitions.

(i) For purposes of this Section 7, “Change in Control” means (I) any merger or consolidation of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than a controlling interest in the surviving entity immediately after such consolidation, merger or reorganization; (II) any transaction or series of related transactions in which control of the Company is acquired by a person or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended or any successor provisions thereto; or (III) a sale or other disposition of all or substantially all of the assets of the Company; provided that in no event will a Change in Control include any of the following transactions: (A) any consolidation, merger or similar transaction effected exclusively to change the domicile of the Company; (B) any transaction or series of transactions in which voting securities of the Company are issued principally for bona fide financing purposes or any successor or indebtedness or equity securities of the Company are cancelled or converted or a combination thereof, including, without limitation, an initial public offering or other offering of the Company’s capital stock; (C) any acquisition of such voting power by an individual or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company; or (D) any transaction where control of the Company, the surviving parent entity or the entity to which all or substantially all of the Company’s assets are transferred in the transaction or series of transactions is controlled directly or indirectly by one or more Kaplan Parties.

(ii) “Kaplan Party” means (a) Thomas S. Kaplan or Dafna Recanati Kaplan; (b) any spouse, parent, sibling or descendant (including by adoption) of either of the persons referred to in clause (a) above; (c) any trust created for the benefit of any of the persons described in clauses (a) or (b) above or any trust for the benefit of such trust; or (d) any person controlled by one or more of the persons referred to in clauses (a), (b) or (c) above.

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(iii) “Control” (including its correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the beneficial ownership of voting securities, by contract or otherwise.

(b) Change in Control Severance Benefits. If there is a Change in Control, and within one (1) year of such Change in Control, the Executive’s employment is terminated under the circumstances described in Sections 4(a) through 4(f) above, the Executive shall be entitled to the following: (I) if such termination is a termination by the Company without Cause pursuant to Section 4(a) or the Executive resigns for Good Reason pursuant to Section 4(b), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus and, in addition, subject to the provisions of Section 19, (A) an amount equal to twenty-four (24) months of the Executive’s Base Salary at the rate in effect on the date of termination or resignation, payable in a lump sum within sixty (60) calendar days of the date of termination or resignation; and (B) provided the Executive timely elects continuation coverage under COBRA, the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination or resignation, during the eighteen (18) month period following the date of termination or resignation, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination or resignation. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination or resignation. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement; and (II) if such termination is a termination or resignation under the circumstances described in Sections 4(c), 4(d), 4(e) or 4(f), the Executive shall be entitled to the compensation and benefits for which the Executive is eligible under such sections.

(c) Termination Preceding Change in Control. Notwithstanding the provisions of the above subsection 7(b), if the Executive’s employment with the Company is terminated by the Company without Cause within three (3) months preceding the occurrence of a Change in Control and such termination without Cause occurred in anticipation of a Change in Control at the request of the acquirer, the Executive shall be entitled to the payments and benefits described in the above subsection 7(b)(I).

8. Taxes. The Company shall be entitled to withhold from any payment or benefit provided under this Agreement an amount sufficient to satisfy all federal, state and local income and employment tax withholding requirements.

9. Notices. Any notice provided for in this Agreement shall be in writing and shall be

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either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

Notices to the Executive:

Philip Pyle

14631 Carolcrest

Houston, TX 77079

USA

Notices to the Company:

Sunshine Silver Mines Corporation

370 17^th Street, Suite 3800

Denver, CO 80202

USA

Attention: Roger Johnson

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.

10. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any action in any other jurisdiction, but this Agreement shall be reformed construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

11. Complete Agreement. This Agreement, together with the agreements referred to herein in Section 3(c), contains the entire agreement of the Parties hereto with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement supersedes any and all prior agreements and understandings, whether written or oral, between the Parties with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement may not be changed or modified except by an instrument in writing, signed by the Executive and a duly authorized officer of the Company.

12. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

13. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, the Company and their respective heirs, personal representatives, executors and administrators, successors and assigns, except that the Executive may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company.

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14. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York and the federal laws of the United States of America, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any jurisdiction other than the State of New York and the federal laws of the United States of America.

15. Dispute Resolution and Arbitration. Subject to Section 5(d), the Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within thirty (30) calendar days of a Parry’s request for negotiation, either Party may initiate proceedings or arbitration only as provided herein. Subject to Section 5(d), if any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must have an expertise in the matter(s) in dispute. Each party shall bear his/its own fees and costs; the fees, costs and all administrative expenses of arbitration shall be borne equally by the Company and the Executive. The Parties understand and agree that the arbitration is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any award rendered hereunder may include an award of attorneys’ fees and costs but shall not include punitive damages. The statute of limitations of the state of New York applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration.

16. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and the Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

17. Survival. In the event of the Executive’s termination of, or resignation from, employment, Sections 4, 5, 8, 9, 10, 13, 14, 15 and 16 shall survive and continue in full force to the extent necessary to enforce their terms.

18. Jobs Act Compliance.

(a) This Agreement is intended to provide payments that are exempt from or compliant with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and related regulations and Treasury pronouncements (“Section 409A”), and the Agreement shall be interpreted accordingly. Each payment under this Agreement is intended to be excepted from Section 409A, including, but not limited to, by compliance with the short-term deferral exception as specified in Treasury Regulation

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§ 1.409A-l(b)(4), and the provisions of this Agreement will be administered, interpreted and construed accordingly (or disregarded to the extent such provision cannot be so administered, interpreted, or construed).

(b) All reimbursements or provision of in-kind benefits pursuant to this Agreement shall be made in accordance with Treasury Regulation § 1.409A-3(i)(l)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event. Specifically, the amount reimbursed or in-kind benefits provided under this Agreement during the Executive’s taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

(c) For all purposes of this Agreement, the Executive shall be considered to have terminated employment with the Company when the Executive incurs a “separation from service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i).

(d) Notwithstanding any provision of this Agreement to the contrary, the parties agree that any benefit or benefits under this Agreement that the Company determines are subject to the suspension period under Code Section 409A(a)(2)(B) shall not be paid or commence until the first business day next following the earlier of (i) the date that is six months and one day following the date of the Executive’s termination of employment, (ii) the date of the Executive’s death or (iii) such earlier date as complies with the requirements of Section 409A.

19. Release. Any and all amounts payable and benefits or additional rights provided pursuant to Sections 4 and 7, other than (i) compensation accrued but unpaid as of the effective date of the Executive’s termination; (ii) accrued but unused vacation in accordance with Company policy; and (iii) all business expenses that were incurred but not reimbursed, shall only be payable if the Executive executes and delivers to the Company, within 60 days after termination of employment, in the Company’s standard form, a general release of all claims of the Executive up to the date of such release.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

SUNSHINE SILVER MINES CORPORATION
By:	/s/ STEPHEN A. ORR
Name:	STEPHEN A. ORR
Title:	EXECUTIVE CHAIRMAN

/s/ PHILIP PYLE

PHILIP PYLE – the Executive

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EX-10.14

Exhibit 10.14

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of June 20, 2011, is between SUNSHINE SILVER MINES CORPORATION (the “Company”) and Jeffrey Reeser (the “Executive” and together with the Company, the “Parties”).

W I T N E S S E T H:

WHEREAS:

The Parties wish to enter into the arrangements set forth herein with respect to the terms and conditions of the Executive’s employment with the Company.

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Parties agree as follows:

AGREEMENT

1. Employment and Term. The Company agrees to, and does hereby, employ the Executive, and the Executive agrees to, and does hereby accept, such employment, upon the terms and subject to the conditions set forth in this Agreement. The Executive’s employment will begin on July 18, 2011 (the “Start Date”) and continue at will, which means that the Executive or the Company may terminate the Executive’s employment at any time for any reason, or for no reason, with or without cause (the “Term”). If the Company terminates this Agreement and the Executive’s employment, the Company shall provide the Executive with notice and reason for the termination within ten (10) calendar days of the effective date of such termination.

2. Position and Duties.

(a) During the Term, the Company shall employ the Executive as General Counsel. The Executive shall perform the duties and have the responsibilities customarily associated with the position of General Counsel, which shall include, without limitation, overseeing all legal activities by the Company. The Executive will work closely with the Company’s Chairman and Chief Executive Officer to execute corporate strategies while ensuring the Company’s legal compliance, corporate governance and ethics achieve the highest standard.

(b) The Executive’s work will be based in Denver, Colorado. However, the Executive may be required to work, as needed, at the various Company projects and offices.

(c) The Executive shall devote his best efforts and his full business time and attention to the business and affairs of the Company.

(d) The Executive acknowledges and agrees that (i) the Executive owes the Company a duty of loyalty as a fiduciary of the Company, and (ii) the obligations

described in this Agreement are in addition to, and not in lieu of, the obligations the Executive owes the Company under the common law.

3. Base Salary, Bonus, Equity/Options, and Benefits.

(a) Base Salary. During the Term, the Executive’s base salary shall be $300,000.00 per annum (“Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. The Base Salary will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Company’s Compensation Committee.

(b) Annual Bonus. During the Term, provided that the Executive is employed by the Company on December 31^st of the applicable year, the Executive will be eligible to participate in a bonus plan pursuant to which (i) at the end of 2011, he will be entitled to receive an annual target bonus in the amount of fifty percent (50%) of his Base Salary and up to one-hundred percent (100%) of Base Salary upon achievement by the Executive and the Company of certain targets as determined solely in the discretion of the Company’s Compensation Committee (the “Annual Bonus”). The Annual Bonus actually paid, if any, will depend on the actual performance of the Company and the Executive as determined by the Compensation Committee. In all events the Annual Bonus, if earned, will be paid no later than March 15th following the applicable year for which it is earned.

(c) Options.

(i) The Company shall grant to the Executive an option to purchase 100,000 shares of the Company’s common stock at an exercise price of $27.65 per share. The Stock Options will be subject to the adjustment provisions set forth in the Company’s Long-Term Incentive Plan.

(ii) The Stock Options shall vest in three equal annual installments on the first, second and third anniversaries of the applicable grant date (each, a “Vesting Date”), provided in each case that the Executive is employed by the Company on the applicable Vesting Date. The Stock Options shall have a ten-year term (subject to earlier termination upon termination of employment as described herein and in the applicable option agreement) and shall be subject to the terms and conditions of the Company’s Long-Term Incentive Plan and option agreements, all of which shall be consistent with the Executive’s rights set forth in this Section 3(c). The Executive may receive additional stock option or other equity compensation grants in the future in the sole discretion of the Company’s Compensation Committee.

(d) Employee Benefits. During the Term, the Executive shall be entitled to participate in the Company’s various employee benefit plans that are, from time to time, made generally available to the Company’s employees, as such plans are established and pursuant to the terms and conditions of such plans. These plans include group health, vision and dental plan; short-term and long-term disability plan; life insurance plan; and 401 (k) plan.

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(e) Vacation. The Executive shall be entitled to four (4) weeks paid vacation time per calendar year, pro-rated for any partial year of employment, subject to the terms of the Company’s vacation time policy.

(f) Expense Reimbursement. The Executive shall receive reimbursement for direct and reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company. All requests for reimbursement of business-related expenses shall be subject to the Company’s travel policy and requirements with respect to reporting and documentation of expenses.

4. Compensation Upon Termination, Resignation, Disability or Death.

(a) Termination without Cause. If the Executive’s employment is terminated by the Company without Cause, the Company shall pay the Executive any Base Salary and Annual Bonus from the preceding calendar year to the extent accrued but unpaid as of the effective date of the Executive’s termination; accrued but unused vacation in accordance with Company policy; and all business expenses that were incurred and not reimbursed but eligible for reimbursement (collectively, the “Accrued Obligations”). In addition, the Executive will be entitled to a prorated amount of the current calendar year Annual Bonus, with payment of such prorated Annual Bonus to be made at the same time as annual bonuses are made to other executives of the Company in the ordinary course (but in no event later than March 15th of the calendar year following the calendar year in which the termination occurs (the “Pro Rata Bonus”). In addition, subject to Section 19, the Company will pay the Executive an amount equal to twelve (12) months of the Executive’s Base Salary at the rate in effect on the date of termination, payable in a lump sum within sixty (60) calendar days of the date of termination. Provided the Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination, during the twelve (12) month period following the date of termination, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement. Upon termination under this Section 4(a), (i) the Stock Options shall cease vesting and (ii) all vested Stock Options shall remain exercisable until the earlier of (x) the date one hundred eighty (180) calendar days following termination of employment or (y) the expiration of the original option term.

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(b) Resignation for Good Reason. If the Executive resigns for Good Reason, the Company shall pay the Executive the same sums and in the same manner, and his rights to the Stock Options shall be the same, as to which the Executive would be entitled if he had been terminated by the Company without Cause, as set forth in subsection (a) above. The Executive shall provide 30 days’ prior written notice to the Company of his decision to resign for Good Reason.

(c) Termination for Cause. If the Executive’s employment is terminated by the Company for Cause, the Company shall pay the Executive the Accrued Obligations. Upon termination under this Section 4(c), any outstanding Stock Options shall cease to be exercisable and will be forfeited.

(d) Resignation without Good Reason. If the Executive resigns without Good Reason, the Company shall pay the Executive the Accrued Obligations, The Executive shall provide 60 days’ prior written notice to the Company of his decision to resign without Good Reason. The Stock Options, to the extent exercisable at the Executive’s termination of employment, shall remain exercisable until the earlier of (i) the date thirty (30) calendar days following termination of employment under this Section 4(d) or (ii) the expiration of the original option term.

(e) Disability. Subject to any state or federal law or regulation governing employees with disabilities, the Company may terminate the Executive’s employment upon the Disability of the Executive. In the event the Executive is terminated under this Section 4(e), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company shall cause Executive to fully vest in the Stock Options, and the Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(e) or (ii) the expiration of the original option term.

(f) Death. If the Executive’s employment is terminated due to the Executive’s death, the Company shall pay the Executive’s estate the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company shall cause Executive’s estate to fully vest in all Stock Options referred to in Section 3(c) of this Agreement, and such Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(f) or (ii) the expiration of the original option term.

(g) For purposes of this Agreement:

(i) “Cause” means the Executive’s (a) conviction of, guilty plea to or confession of guilt of, or plea of nolo contendere to a felony, or an act involving moral turpitude which could have a material adverse effect on the Company; (b) willful dishonesty, fraud or conduct that constitutes a felony or an act involving moral turpitude or a breach of fiduciary duty or any material misrepresentation in connection with the Executive’s employment; (c) action that exposes the Company to a material risk of legal liability or public disgrace or disrepute including, without limitation, violation of any law, rule or regulation that could expose the Company to a material legal or monetary fine or

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penalty; (d) neglect of his duties or substantial failure to perform duties as reasonably directed by the Board of Directors; (e) gross negligence or willful misconduct with respect to Company affairs or the Executive’s obligations hereunder; or (f) any other material breach of this or any other agreement with the Company or any material Company policy, which breach is not cured within at least fifteen (15) calendar days after receipt by the Executive of written notice from the Company of such breach, but only if such breach is able to be cured during such fifteen (15) calendar day period.

(ii) “Good Reason” means: (a) a reduction in the Executive’s Base Salary, except where such reduction occurs as part of an across-the-board reduction in salary affecting all senior executives of the Company; (b) a material and adverse change or diminution in Executive’s title, role or responsibilities as General Counsel of the Company; (c) requirement that the Executive report to a principal work location that is greater than fifty (50) miles from the Company’s principal office in Denver, Colorado; or (d) any other action or inaction by the Company that constitutes a material breach of this Agreement. The foregoing shall constitute Good Reason only if (i) the Executive provides written notice to the Company of any event(s) alleged to constitute Good Reason within ninety (90) calendar days of the initial occurrence of the event, with such notice providing a detailed description of the circumstances constituting Good Reason (a “Good Reason Notice”), (ii) any such breach is not remedied or cured within fifteen (15) calendar days after the Company’s receipt of a written Good Reason Notice from the Executive (the “Cure Period”) and (iii) the Executive actually terminates employment within thirty (30) calendar days following the expiration of the Cure Period.

(iii) “Disability” means that the Executive is disabled within the meaning of the Company’s group long-term disability insurance policy. If no long term disability insurance is in place, then Disability shall mean that the Executive, due to illness, accident, or other physical or mental incapacity, has been substantially unable to perform his duties under this Agreement for a period of at least six (6) consecutive months during the Term as established by the written opinion of a licensed independent physician selected by the Company.

(h) Deemed Resignation. Unless otherwise agreed to in writing by the Company and the Executive prior to the termination of the Executive’s employment, any termination of the Executive’s employment shall constitute an automatic resignation of the Executive as an officer of the Company and each affiliate of the Company, and an automatic resignation of the Executive from the board of directors or similar governing body of the Company or any affiliate of the Company and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body the Executive serves as the Company’s or such affiliate’s designee or other representative.

(i) Clawback. The Executive agrees and acknowledges that any and all compensation the Executive receives pursuant to this Agreement shall be subject to clawback by the Company in the event of a financial restatement or in such other circumstances as may be required by applicable law or as may be provided in any

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clawback policy that is adopted by the Company and is generally applicable to senior executives of the Company.

5. Confidentiality and Non-Solicitation.

(a) For purposes of this Agreement, “Confidential Information” means (i) communications, data, formulae and related concepts, business plans (both current and under development), profit and loss statements, spreadsheets, contact or distribution lists, non-public personnel lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, trading, investments, sales activities, promotions, credit and financial data, financing methods, research, plans or the business and affairs of the Company; (ii) any other information which is to be treated as confidential or non-public because of any duty of confidentiality owed by the Company to a third party; and (iii) any other information which the Company shall, in the ordinary course, use and not release externally, except subject to restrictions on use and disclosure. Notwithstanding the foregoing, Confidential Information does not include information that (A) is or becomes generally publicly available other than as a result, directly or indirectly, of the Executive’s disclosure or (B) is or becomes available to the Executive on a non-confidential basis from a source other than through the Company or its representatives, provided that such source is not bound by a confidentiality agreement with the Company or otherwise prohibited from transmitting the information to the Executive by a contractual or legal obligation.

(b) The Executive acknowledges the trade secret status of the Confidential Information and that the Confidential Information constitutes a protectable business interest of the Company. The Executive agrees (i) not to use or allow or help another to use or access (whether for compensation or not) any Confidential Information for himself or others (other than the Company); and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from the Company’s offices at any time during or after the Executive’s employment by the Company, except as required in the execution of the Executive’s duties to the Company and then conditioned upon the prompt return of all originals and reproductions thereof (in whatever form).

(c) During the Term and for a period of one (1) year thereafter, the Executive shall not, directly or indirectly, on behalf of himself or any other person or entity, without the prior written consent of the Company solicit or induce any employee of or consultant or service provider to the Company (each, a “Service Provider”) to leave the employ of or cease performing services for the Company, or engage in any plan or coordinate with any Service Provider to leave the employ of or cease performing services for the Company, or hire, participate with or attempt to participate with in any venture for any purpose any Service Provider or any Service Provider who has left the employment of or ceased to perform services for the Company within one year of the termination of such Service Provider’s services for the Company.

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(d) The Executive acknowledges that any breach of his obligations under this Section 5 cannot be adequately compensated by damages in an action at law and may cause the Company great and irreparable injury and damage. Accordingly, in the event that the Executive breaches or threatens to breach any provisions of this Section 5, then in addition to any other rights which the Company may have, the Company shall be entitled, without the necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate or (iii) posting any bond or other security with respect thereto, to the remedies of injunction, specific performance and other equitable relief to redress any breach, and no proof of special damages shall be necessary for the enforcement of or for any action for breach of the Executive’s obligations. In the event that a proceeding is brought in equity to enforce the provisions of this Section 5, the Executive shall not urge as a defense that there is an adequate remedy at law nor shall the Company be prevented from seeking any other remedies which may be available. Nothing contained in this Section 5(d) shall be construed as a waiver by the Company of any other rights, including, without limitation, rights to damages or profits.

(e) The Executive agrees that the period during which the covenants contained in this Section 5 shall be effective shall be computed by excluding from such computation any time during which the Executive is in violation of any provision of this Section 5.

(f) The Company and the Executive agree that it was their intent to enter into a valid and enforceable agreement. The Executive and the Company thereby acknowledge the reasonableness of the restrictions set forth in this Section 5, including the reasonableness of the duration as to time and the scope of activity restrained. The Executive agrees that if any covenant contained in Section 5 of this Agreement is found by a court of competent jurisdiction to contain limitations as to time or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of the Company, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of the Company and to enforce the covenants as reformed.

(g) If the Executive’s employment with the Company is terminated for any reason, the Executive agrees to advise the Company of the name of the Executive’s new employer. The Executive further agrees that the Company may notify any person or entity employing the Executive or evidencing an intention of employing the Executive of the existence and provisions of this Agreement.

6. The Executive’s Representations. The Executive represents to the Company that:

(a) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound;

(b) upon the execution and delivery of this Agreement by the Company, this

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Agreement shall be the valid and binding obligation of the Executive, enforceable against him in accordance with its terms;

(c) as of the Start Date, the Executive will not be a party to any agreement with any person, other than an agreement with the Company, restricting the use of another person’s confidential information or restricting the Executive from providing future employment, consulting or other service;

(d) no prior or pending litigation, arbitration, investigation or other proceeding of any kind will prevent or hinder the Executive from performing his duties under this Agreement; and

(e) the Executive has consulted with independent legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

7. Change in Control.

(a) Definitions.

(i) For purposes of this Section 7, “Change in Control” means (I) any merger or consolidation of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than a controlling interest in the surviving entity immediately after such consolidation, merger or reorganization; (II) any transaction or series of related transactions in which control of the Company is acquired by a person or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended or any successor provisions thereto; or (III) a sale or other disposition of all or substantially all of the assets of the Company; provided that in no event will a Change in Control include any of the following transactions: (A) any consolidation, merger or similar transaction effected exclusively to change the domicile of the Company; (B) any transaction or series of transactions in which voting securities of the Company are issued principally for bona fide financing purposes or any successor or indebtedness or equity securities of the Company are cancelled or converted or a combination thereof, including, without limitation, an initial public offering or other offering of the Company’s capital stock; (C) any acquisition of such voting power by an individual or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company; or (D) any transaction where control of the Company, the surviving parent entity or the entity to which all or substantially all of the Company’s assets are transferred in the transaction or series of transactions is controlled directly or indirectly by one or more Kaplan Parties.

(ii) “Kaplan Party” means (a) Thomas S. Kaplan or Dafna Recanati Kaplan; (b) any spouse, parent, sibling or descendant (including by adoption) of either of the persons referred to in clause (a) above; (c) any trust created for the benefit of any of the persons described in clauses (a) or (b) above or any trust for the benefit of such trust;

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or (d) any person controlled by one or more of the persons referred to in clauses (a), (b) or (c) above.

(iii) “Control” (including its correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the beneficial ownership of voting securities, by contract or otherwise.

(b) Change in Control Severance Benefits. If there is a Change in Control, and within one (1) year of such Change in Control, the Executive’s employment is terminated under the circumstances described in Sections 4(a) through 4(f) above, the Executive shall be entitled to the following: (I) if such termination is a termination by the Company without Cause pursuant to Section 4(a) or the Executive resigns for Good Reason pursuant to Section 4(b), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus and, in addition, subject to the provisions of Section 19, (A) an amount equal to twenty-four (24) months of the Executive’s Base Salary at the rate in effect on the date of termination or resignation, payable in a lump sum within sixty (60) calendar days of the date of termination or resignation; and (B) provided the Executive timely elects continuation coverage under COBRA, the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination or resignation, during the eighteen (18) month period following the date of termination or resignation, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination or resignation. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination or resignation. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement; and (II) if such termination is a termination or resignation under the circumstances described in Sections 4(c), 4(d), 4(e) or 4(f), the Executive shall be entitled to the compensation and benefits for which the Executive is eligible under such sections.

(c) Termination Preceding Change in Control. Notwithstanding the provisions of the above subsection 7(b), if the Executive’s employment with the Company is terminated by the Company without Cause within three (3) months preceding the occurrence of a Change in Control and such termination without Cause occurred in anticipation of a Change in Control at the request of the acquirer, the Executive shall be entitled to the payments and benefits described in the above subsection 7(b)(I).

8. Taxes. The Company shall be entitled to withhold from any payment or benefit provided under this Agreement an amount sufficient to satisfy all federal, state and local

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income and employment tax withholding requirements.

9. Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

Notices to the Executive:

Jeffrey Reeser

225 Berthoud Trail

Broomfield, CO 80020

USA

Notices to the Company:

Sunshine Silver Mines Corporation

370 17^th Street, Suite 3800

Denver, CO 80202

USA

Attention: Roger Johnson

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.

10. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any action in any other jurisdiction, but this Agreement shall be reformed construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

11. Complete Agreement. This Agreement, together with the agreements referred to herein in Section 3(c), contains the entire agreement of the Parties hereto with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement supersedes any and all prior agreements and understandings, whether written or oral, between the Parties with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement may not be changed or modified except by an instrument in writing, signed by the Executive and a duly authorized officer of the Company.

12. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

13. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, the Company and their respective heirs, personal

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representatives, executors and administrators, successors and assigns, except that the Executive may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company.

14. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York and the federal laws of the United States of America, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any jurisdiction other than the State of New York and the federal laws of the United States of America.

15. Dispute Resolution and Arbitration. Subject to Section 5(d), the Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within thirty (30) calendar days of a Party’s request for negotiation, either Party may initiate proceedings or arbitration only as provided herein. Subject to Section 5(d), if any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must have an expertise in the matter(s) in dispute. Each party shall bear his/its own fees and costs; the fees, costs and all administrative expenses of arbitration shall be borne equally by the Company and the Executive. The Parties understand and agree that the arbitration is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any award rendered hereunder may include an award of attorneys’ fees and costs but shall not include punitive damages. The statute of limitations of the state of New York applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration.

16. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and the Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

17. Survival. In the event of the Executive’s termination of, or resignation from, employment, Sections 4, 5, 8, 9, 10, 13, 14, 15 and 16 shall survive and continue in full force to the extent necessary to enforce their terms.

18. Jobs Act Compliance.

(a) This Agreement is intended to provide payments that are exempt from or compliant with the provisions of Section 409A of the Internal Revenue Code of 1986, as

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amended (the “Code”) and related regulations and Treasury pronouncements (“Section 409A”), and the Agreement shall be interpreted accordingly. Each payment under this Agreement is intended to be excepted from Section 409A, including, but not limited to, by compliance with the short-term deferral exception as specified in Treasury Regulation § 1.409A-l(b)(4), and the provisions of this Agreement will be administered, interpreted and construed accordingly (or disregarded to the extent such provision cannot be so administered, interpreted, or construed).

(b) All reimbursements or provision of in-kind benefits pursuant to this Agreement shall be made in accordance with Treasury Regulation § 1.409A-3(i)(l)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event. Specifically, the amount reimbursed or in-kind benefits provided under this Agreement during the Executive’s taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

(c) For all purposes of this Agreement, the Executive shall be considered to have terminated employment with the Company when the Executive incurs a “separation from service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i).

(d) Notwithstanding any provision of this Agreement to the contrary, the parties agree that any benefit or benefits under this Agreement that the Company determines are subject to the suspension period under Code Section 409A(a)(2)(B) shall not be paid or commence until the first business day next following the earlier of (i) the date that is six months and one day following the date of the Executive’s termination of employment, (ii) the date of the Executive’s death or (iii) such earlier date as complies with the requirements of Section 409A.

19. Release. Any and all amounts payable and benefits or additional rights provided pursuant to Sections 4 and 7, other than (i) compensation accrued but unpaid as of the effective date of the Executive’s termination; (ii) accrued but unused vacation in accordance with Company policy; and (iii) all business expenses that were incurred but not reimbursed, shall only be payable if the Executive executes and delivers to the Company, within 60 days after termination of employment, in the Company’s standard form, a general release of all claims of the Executive up to the date of such release.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

SUNSHINE SILVER MINES CORPORATION

By:	/s/ Stephen A. Orr
Name:	Stephen A. Orr
Title:	Executive Chairman

/s/ Jeffrey Reeser

JEFFREY REESER – the Executive

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EX-10.15

Exhibit 10.15

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of July 7, 2011, is between SUNSHINE SILVER MINES CORPORATION (the “Company”) and John Galassini (the “Executive” and together with the Company, the “Parties”).

W I T N E S S E T H:

WHEREAS:

The Parties wish to enter into the arrangements set forth herein with respect to the terms and conditions of the Executive’s employment with the Company.

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Parties agree as follows:

AGREEMENT

1. Employment and Term. The Company agrees to, and does hereby, employ the Executive, and the Executive agrees to, and does hereby accept, such employment, upon the terms and subject to the conditions set forth in this Agreement. The Executive’s employment will begin on August 8, 2011 (the “Start Date”) and continue at will, which means that the Executive or the Company may terminate the Executive’s employment at any time for any reason, or for no reason, with or without cause (the “Term”). If the Company terminates this Agreement and the Executive’s employment, the Company shall provide the Executive with notice and reason for the termination within ten (10) calendar days of the effective date of such termination.

2. Position and Duties.

(a) During the Term, the Company shall employ the Executive as Chief Operating Officer. The Executive shall perform the duties and have the responsibilities customarily associated with the position of Chief Operating Officer, which shall include, without limitation, overseeing all operating, development, technical, environmental, and health and safety activities by the Company. The Executive will work closely with the Company’s Chairman and Chief Executive Officer to execute corporate strategies while ensuring the Company achieves its performance targets.

(b) The Executive’s work will be based in Denver, Colorado. However, the Executive may be required to work, as needed, at the various Company projects and offices.

(c) The Executive shall devote his best efforts and his full business time and attention to the business and affairs of the Company.

(d) The Executive acknowledges and agrees that (i) the Executive owes the Company a duty of loyalty as a fiduciary of the Company, and (ii) the obligations

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described in this Agreement are in addition to, and not in lieu of, the obligations the Executive owes the Company under the common law.

3. Base Salary, Bonus. Equity/Options, and Benefits.

(a) Base Salary. During the Term, the Executive’s base salary shall be $350,000.00 per annum (“Base Salary”), which salary shall be payable in regular installments in accordance with the Company’s general payroll practices. The Base Salary will be subject to review on an annual basis and may be adjusted in accordance with the procedures set forth by the Company’s Compensation Committee.

(b) Annual Bonus. During the Term, provided that the Executive is employed by the Company on December 31^st of the applicable year, the Executive will be eligible to participate in a bonus plan pursuant to which (i) at the end of 2011, he will be entitled to receive an annual target bonus in the amount of fifty percent (50%) of his Base Salary and up to one-hundred percent (100%) of Base Salary upon achievement by the Executive and the Company of certain targets as determined solely in the discretion of the Company’s Compensation Committee (the “Annual Bonus”). The Annual Bonus actually paid, if any, will depend on the actual performance of the Company and the Executive as determined by the Compensation Committee. In all events the Annual Bonus, if earned, will be paid no later than March 15th following the applicable year for which it is earned.

(c) Options.

(i) Effective as of the start date, the Company shall grant to the Executive an option to purchase 150,000 shares of the Company’s common stock at an exercise price of $27.65 per share. The Stock Options will be subject to the adjustment provisions set forth in the Company’s Long-Term Incentive Plan.

(ii) The Stock Options shall vest in three equal annual installments on the first, second and third anniversaries of the applicable grant date (each, a “Vesting Date”), provided in each case that the Executive is employed by the Company on the applicable Vesting Date. The Stock Options shall have a ten-year term (subject to earlier termination upon termination of employment as described herein and in the applicable option agreement) and shall be subject to the terms and conditions of the Company’s Long-Term Incentive Plan and option agreements, all of which shall be consistent with the Executive’s rights set forth in this Section 3(c). The Executive may receive additional stock option or other equity compensation grants in the future in the sole discretion of the Company’s Compensation Committee.

(d) Employee Benefits. During the Term, the Executive shall be entitled to participate in the Company’s various employee benefit plans that are, from time to time, made generally available to the Company’s employees, as such plans are established and pursuant to the terms and conditions of such plans. These plans include group health, vision and dental plan; short-term and long-term disability plan; life insurance plan; and 401(k)plan.

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(e) Vacation. The Executive shall be entitled to four (4) weeks paid vacation time per calendar year, pro-rated for any partial year of employment, subject to the terms of the Company’s vacation time policy.

(f) Expense Reimbursement. The Executive shall receive reimbursement for direct and reasonable out-of-pocket expenses incurred by him in connection with the performance of his duties hereunder, according to the policies of the Company. All requests for reimbursement of business-related expenses shall be subject to the Company’s travel policy and requirements with respect to reporting and documentation of expenses.

(g) Relocation. The Company will reimburse the employee for reasonable costs of relocation from Reno Nevada to Denver Colorado. The relocation reimbursement shall include the lessor of (3) months of temporary living expense in Denver or a period until the employee secures full-time living accommodation. The employee is responsible for selling his house in Reno Nevada. The Company will guarantee the employee receives the average appraised value for his home based on the average of (3) appraisals by licensed appraisers. The Company will reimburse costs of relocation of the employee’s personal goods from Reno Nevada to Denver Colorado based upon the intermediate of (3) bids from professional moving specialists. The Company will provide the employee with the equivalent of (1) month of base salary as an allowance for expenses to establish residence in Denver Colorado.

4. Compensation Upon Termination, Resignation, Disability or Death.

(a) Termination without Cause. If the Executive’s employment is terminated by the Company without Cause, the Company shall pay the Executive any Base Salary and Annual Bonus from the preceding calendar year to the extent accrued but unpaid as of the effective date of the Executive’s termination; accrued but unused vacation in accordance with Company policy; and all business expenses that were incurred and not reimbursed but eligible for reimbursement (collectively, the “Accrued Obligations”). In addition, the Executive will be entitled to a prorated amount of the current calendar year Annual Bonus, with payment of such prorated Annual Bonus to be made at the same time as annual bonuses are made to other executives of the Company in the ordinary course (but in no event later than March 15th of the calendar year following the calendar year in which the termination occurs (the “Pro Rata Bonus”). In addition, subject to Section 19, the Company will pay the Executive an amount equal to twelve (12) months of the Executive’s Base Salary at the rate in effect on the date of termination, payable in a lump sum within sixty (60) calendar days of the date of termination. Provided the Executive timely elects continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination, during the twelve (12) month period following the date of termination, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of

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termination. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement. Upon termination under this Section 4(a), (i) the Stock Options shall cease vesting and (ii) all vested Stock Options shall remain exercisable until the earlier of (x) the date one hundred eighty (180) calendar days following termination of employment or (y) the expiration of the original option term.

(b) Resignation for Good Reason. If the Executive resigns for Good Reason, the Company shall pay the Executive the same sums and in the same manner, and his rights to the Stock Options shall be the same, as to which the Executive would be entitled if he had been terminated by the Company without Cause, as set forth in subsection (a) above. The Executive shall provide 30 days’ prior written notice to the Company of his decision to resign for Good Reason.

(c) Termination for Cause. If the Executive’s employment is terminated by the Company for Cause, the Company shall pay the Executive the Accrued Obligations. Upon termination under this Section 4(c), any outstanding Stock Options shall cease to be exercisable and will be forfeited.

(d) Resignation without Good Reason. If the Executive resigns without Good Reason, the Company shall pay the Executive the Accrued Obligations. The Executive shall provide 60 days’ prior written notice to the Company of his decision to resign without Good Reason. The Stock Options, to the extent exercisable at the Executive’s termination of employment, shall remain exercisable until the earlier of (i) the date thirty (30) calendar days following termination of employment under this Section 4(d) or (ii) the expiration of the original option term.

(e) Disability. Subject to any state or federal law or regulation governing employees with disabilities, the Company may terminate the Executive’s employment upon the Disability of the Executive. In the event the Executive is terminated under this Section 4(e), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company shall cause Executive to fully vest in the Stock Options, and the Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(e) or (ii) the expiration of the original option term.

(f) Death. If the Executive’s employment is terminated due to the Executive’s death, the Company shall pay the Executive’s estate the Accrued Obligations and the Pro Rata Bonus. In addition, in such event, the Company shall cause Executive’s estate to fully vest in all Stock Options referred to in Section 3(c) of this Agreement, and such Stock Options shall remain exercisable until the earlier of (i) the date one (1) year following termination of employment under this Section 4(f) or (ii) the expiration of the

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original option term.

(g) For purposes of this Agreement:

(i) “Cause” means the Executive’s (a) conviction of, guilty plea to or confession of guilt of, or plea of nolo contendere to a felony, or an act involving moral turpitude which could have a material adverse effect on the Company; (b) willful dishonesty, fraud or conduct that constitutes a felony or an act involving moral turpitude or a breach of fiduciary duty or any material misrepresentation in connection with the Executive’s employment; (c) action that exposes the Company to a material risk of legal liability or public disgrace or disrepute including, without limitation, violation of any law, rule or regulation that could expose the Company to a material legal or monetary fine or penalty; (d) neglect of his duties or substantial failure to perform duties as reasonably directed by the Board of Directors; (e) gross negligence or willful misconduct with respect to Company affairs or the Executive’s obligations hereunder; or (f) any other material breach of this or any other agreement with the Company or any material Company policy, which breach is not cured within at least fifteen (15) calendar days after receipt by the Executive of written notice from the Company of such breach, but only if such breach is able to be cured during such fifteen (15) calendar day period.

(ii) “Good Reason” means: (a) a material diminution in the Executive’s Base Salary, except where such reduction occurs as part of an across-the-board reduction in salary affecting all senior executives of the Company; or (b) any other action or inaction by the Company that constitutes a material breach of this Agreement. The foregoing shall constitute Good Reason only if (i) the Executive provides written notice to the Company of any event(s) alleged to constitute Good Reason within ninety (90) calendar days of the initial occurrence of the event, with such notice providing a detailed description of the circumstances constituting Good Reason (a “Good Reason Notice”), (ii) any such breach is not remedied or cured within fifteen (15) calendar days after the Company’s receipt of a written Good Reason Notice from the Executive (the “Cure Period”) and (iii) the Executive actually terminates employment within thirty (30) calendar days following the expiration of the Cure Period.

(iii) “Disability” means that the Executive is disabled within the meaning of the Company’s group long-term disability insurance policy. If no long term disability insurance is in place, then Disability shall mean that the Executive, due to illness, accident, or other physical or mental incapacity, has been substantially unable to perform his duties under this Agreement for a period of at least six (6) consecutive months during the Term as established by the written opinion of a licensed independent physician selected by the Company.

(h) Deemed Resignation. Unless otherwise agreed to in writing by the Company and the Executive prior to the termination of the Executive’s employment, any termination of the Executive’s employment shall constitute an automatic resignation of the Executive as an officer of the Company and each affiliate of the Company, and an automatic resignation of the Executive from the board of directors or similar governing body of the Company or any affiliate of the Company and from the board of directors or

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similar governing body of any corporation, limited liability company or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body the Executive serves as the Company’s or such affiliate’s designee or other representative.

(i) Clawback. The Executive agrees and acknowledges that any and all compensation the Executive receives pursuant to this Agreement shall be subject to clawback by the Company in the event of a financial restatement or in such other circumstances as may be required by applicable law or as may be provided in any clawback policy that is adopted by the Company and is generally applicable to senior executives of the Company.

5. Confidentiality and Non-Solicitation.

(a) For purposes of this Agreement, “Confidential Information” means (i) communications, data, formulae and related concepts, business plans (both current and under development), profit and loss statements, spreadsheets, contact or distribution lists, non-public personnel lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, trading, investments, sales activities, promotions, credit and financial data, financing methods, research, plans or the business and affairs of the Company; (ii) any other information which is to be treated as confidential or non-public because of any duty of confidentiality owed by the Company to a third party; and (iii) any other information which the Company shall, in the ordinary course, use and not release externally, except subject to restrictions on use and disclosure. Notwithstanding the foregoing, Confidential Information does not include information that (A) is or becomes generally publicly available other than as a result, directly or indirectly, of the Executive’s disclosure or (B) is or becomes available to the Executive on a non-confidential basis from a source other than through the Company or its representatives, provided that such source is not bound by a confidentiality agreement with the Company or otherwise prohibited from transmitting the information to the Executive by a contractual or legal obligation.

(b) The Executive acknowledges the trade secret status of the Confidential Information and that the Confidential Information constitutes a protectable business interest of the Company. The Executive agrees (i) not to use or allow or help another to use or access (whether for compensation or not) any Confidential Information for himself or others (other than the Company); and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from the Company’s offices at any time during or after the Executive’s employment by the Company, except as required in the execution of the Executive’s duties to the Company and then conditioned upon the prompt return of all originals and reproductions thereof (in whatever form).

(c) During the Term and for a period of one (1) year thereafter, the Executive shall not, directly or indirectly, on behalf of himself or any other person or entity, without

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the prior written consent of the Company solicit or induce any employee of or consultant or service provider to the Company (each, a “Service Provider”) to leave the employ of or cease performing services for the Company, or engage in any plan or coordinate with any Service Provider to leave the employ of or cease performing services for the Company, or hire, participate with or attempt to participate with in any venture for any purpose any Service Provider or any Service Provider who has left the employment of or ceased to perform services for the Company within one year of the termination of such Service Provider’s services for the Company.

(d) The Executive acknowledges that any breach of his obligations under this Section 5 cannot be adequately compensated by damages in an action at law and may cause the Company great and irreparable injury and damage. Accordingly, in the event that the Executive breaches or threatens to breach any provisions of this Section 5, then in addition to any other rights which the Company may have, the Company shall be entitled, without the necessity of (i) proving irreparable harm, (ii) establishing that monetary damages are inadequate or (iii) posting any bond or other security with respect thereto, to the remedies of injunction, specific performance and other equitable relief to redress any breach, and no proof of special damages shall be necessary for the enforcement of or for any action for breach of the Executive’s obligations. In the event that a proceeding is brought in equity to enforce the provisions of this Section 5, the Executive shall not urge as a defense that there is an adequate remedy at law nor shall the Company be prevented from seeking any other remedies which may be available. Nothing contained in this Section 5(d) shall be construed as a waiver by the Company of any other rights, including, without limitation, rights to damages or profits.

(e) The Executive agrees that the period during which the covenants contained in this Section 5 shall be effective shall be computed by excluding from such computation any time during which the Executive is in violation of any provision of this Section 5.

(f) The Company and the Executive agree that it was their intent to enter into a valid and enforceable agreement. The Executive and the Company thereby acknowledge the reasonableness of the restrictions set forth in this Section 5, including the reasonableness of the duration as to time and the scope of activity restrained. The Executive agrees that if any covenant contained in Section 5 of this Agreement is found by a court of competent jurisdiction to contain limitations as to time or scope of activity that are not reasonable and impose a greater restraint than is necessary to protect the goodwill or other business interests of the Company, then the court shall reform the covenant to the extent necessary to cause the limitations contained in the covenant as to time and scope of activity to be restrained to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill and other business interests of the Company and to enforce the covenants as reformed.

(g) If the Executive’s employment with the Company is terminated for any reason, the Executive agrees to advise the Company of the name of the Executive’s new employer. The Executive further agrees that the Company may notify any person or entity employing the Executive or evidencing an intention of employing the Executive of the existence and provisions of this Agreement.

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6. The Executive’s Representations. The Executive represents to the Company that:

(a) the execution, delivery and performance of this Agreement by the Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound;

(b) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of the Executive, enforceable against him in accordance with its terms;

(c) as of the Start Date, the Executive will not be a party to any agreement with any person, other than an agreement with the Company, restricting the use of another person’s confidential information or restricting the Executive from providing future employment, consulting or other service;

(d) no prior or pending litigation, arbitration, investigation or other proceeding of any kind will prevent or hinder the Executive from performing his duties under this Agreement; and

(e) the Executive has consulted with independent legal counsel regarding his rights and obligations under this Agreement and that he fully understands the terms and conditions contained herein.

7. Change in Control.

(a) Definitions.

(i) For purposes of this Section 7, “Change in Control” means (I) any merger or consolidation of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than a controlling interest in the surviving entity immediately after such consolidation, merger or reorganization; (II) any transaction or series of related transactions in which control of the Company is acquired by a person or group of persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended or any successor provisions thereto; or (III) a sale or other disposition of all or substantially all of the assets of the Company; provided that in no event will a Change in Control include any of the following transactions: (A) any consolidation, merger or similar transaction effected exclusively to change the domicile of the Company; (B) any transaction or series of transactions in which voting securities of the Company are issued principally for bona fide financing purposes or any successor or indebtedness or equity securities of the Company are cancelled or converted or a combination thereof, including, without limitation, an initial public offering or other offering of the Company’s capital stock; (C) any acquisition of such voting power by an individual or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the Company; or (D) any transaction where control of the Company, the surviving parent entity or the entity to which all or substantially all of the

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Company’s assets are transferred in the transaction or series of transactions is controlled directly or indirectly by one or more Kaplan Parties.

(ii) “Kaplan Party” means (a) Thomas S. Kaplan or Dafna Recanati Kaplan; (b) any spouse, parent, sibling or descendant (including by adoption) of either of the persons referred to in clause (a) above; (c) any trust created for the benefit of any of the persons described in clauses (a) or (b) above or any trust for the benefit of such trust; or (d) any person controlled by one or more of the persons referred to in clauses (a), (b) or (c) above.

(iii) “Control” (including its correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means, with respect to any person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the beneficial ownership of voting securities, by contract or otherwise.

(b) Change in Control Severance Benefits. If there is a Change in Control, and within one (1) year of such Change in Control, the Executive’s employment is terminated under the circumstances described in Sections 4(a) through 4(f) above, the Executive shall be entitled to the following: (I) if such termination is a termination by the Company without Cause pursuant to Section 4(a) or the Executive resigns for Good Reason pursuant to Section 4(b), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus and, in addition, subject to the provisions of Section 19, (A) an amount equal to twenty-four (24) months of the Executive’s Base Salary at the rate in effect on the date of termination or resignation, payable in a lump sum within sixty (60) calendar days of the date of termination or resignation; and (B) provided the Executive timely elects continuation coverage under COBRA, the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination or resignation, during the eighteen (18) month period following the date of termination or resignation, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination or resignation. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination or resignation. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement; and (II) if such termination is a termination or resignation under the circumstances described in Sections 4(c), 4(d), 4(e) or 4(f), the Executive shall be entitled to the compensation and benefits for which the Executive is eligible under such sections.

(c) Termination Preceding Change in Control. Notwithstanding the provisions of the above subsection 7(b), if the Executive’s employment with the Company is

9

terminated by the Company without Cause within three (3) months preceding the occurrence of a Change in Control and such termination without Cause occurred in anticipation of a Change in Control at the request of the acquirer, the Executive shall be entitled to the payments and benefits described in the above subsection 7(b)(I).

8. Taxes. The Company shall be entitled to withhold from any payment or benefit provided under this Agreement an amount sufficient to satisfy all federal, state and local income and employment tax withholding requirements.

9. Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

Notices to the Executive:

John Galassini

1500 Taos Lane

Reno, NV 89511

United States

Notices to the Company:

Sunshine Silver Mines Corporation

370 17^th Street, Suite 3800

Denver, CO 80202

USA

Attention: Roger Johnson

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.

10. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any action in any other jurisdiction, but this Agreement shall be reformed construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

11. Complete Agreement. This Agreement, together with the agreements referred to herein in Section 3(c), contains the entire agreement of the Parties hereto with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement supersedes any and all prior agreements and understandings, whether written or oral, between the Parties with respect to the terms and conditions of the Executive’s employment with the Company and activities following termination. This Agreement may not be changed or modified except by an instrument in writing, signed by the Executive and a duly authorized officer of the Company.

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12. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

13. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive, the Company and their respective heirs, personal representatives, executors and administrators, successors and assigns, except that the Executive may not assign his rights or delegate his duties or obligations hereunder without the prior written consent of the Company.

14. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of New York and the federal laws of the United States of America, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any jurisdiction other than the State of New York and the federal laws of the United States of America.

15. Dispute Resolution and Arbitration. Subject to Section 5(d), the Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within thirty (30) calendar days of a Party’s request for negotiation, either Party may initiate proceedings or arbitration only as provided herein. Subject to Section 5(d), if any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must have an expertise in the matter(s) in dispute. Each party shall bear his/its own fees and costs; the fees, costs and all administrative expenses of arbitration shall be borne equally by the Company and the Executive. The Parties understand and agree that the arbitration is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any award rendered hereunder may include an award of attorneys’ fees and costs but shall not include punitive damages. The statute of limitations of the state of New York applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration.

16. Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and the Executive, and no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

17. Survival. In the event of the Executive’s termination of, or resignation from, employment, Sections 4, 5, 8, 9, 10, 13, 14, 15 and 16 shall survive and continue in full

11

force to the extent necessary to enforce their terms.

18. Jobs Act Compliance.

(a) This Agreement is intended to provide payments that are exempt from or compliant with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and related regulations and Treasury pronouncements (“Section 409A”), and the Agreement shall be interpreted accordingly. Each payment under this Agreement is intended to be excepted from Section 409A, including, but not limited to, by compliance with the short-term deferral exception as specified in Treasury Regulation § 1.409A-l(b)(4), and the provisions of this Agreement will be administered, interpreted and construed accordingly (or disregarded to the extent such provision cannot be so administered, interpreted, or construed).

(b) All reimbursements or provision of in-kind benefits pursuant to this Agreement shall be made in accordance with Treasury Regulation § 1.409A-3(i)(l)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event. Specifically, the amount reimbursed or in-kind benefits provided under this Agreement during the Executive’s taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

(c) For all purposes of this Agreement, the Executive shall be considered to have terminated employment with the Company when the Executive incurs a “separation from service” with the Company within the meaning of Code Section 409A(a)(2)(A)(i).

(d) Notwithstanding any provision of this Agreement to the contrary, the parties agree that any benefit or benefits under this Agreement that the Company determines are subject to the suspension period under Code Section 409A(a)(2)(B) shall not be paid or commence until the first business day next following the earlier of (i) the date that is six months and one day following the date of the Executive’s termination of employment, (ii) the date of the Executive’s death or (iii) such earlier date as complies with the requirements of Section 409A.

19. Release. Any and all amounts payable and benefits or additional rights provided pursuant to Sections 4 and 7, other than (i) compensation accrued but unpaid as of the effective date of the Executive’s termination; (ii) accrued but unused vacation in accordance with Company policy; and (iii) all business expenses that were incurred but not reimbursed, shall only be payable if the Executive executes and delivers to the Company, within 60 days after termination of employment, in the Company’s standard form, a general release of all claims of the Executive up to the date of such release.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

SUNSHINE SILVER MINES CORPORATION
By:	/s/ STEPHEN A. ORR
Name:	STEPHEN A. ORR
Title:	EXECUTIVE CHAIRMAN
/s/ JOHN GALASSINI
JOHN GALASSINI – the Executive

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EX-10.16

Exhibit 10.16

NONQUALIFIED STOCK OPTION AGREEMENT

AGREEMENT by and between SUNSHINE SILVER MINES CORPORATION, a Delaware corporation (the “Company”), and                          (the “Optionee”).

Pursuant to the Sunshine Silver Mines Corporation Long Term Incentive Plan (as it may be further amended from time to time, the “Plan”), and as required by the Employment Agreement between the Company and the Optionee dated                      (the “Employment Agreement”), the Company desires to grant to the Optionee, and the Optionee desires to accept from the Company, an option to purchase shares of the common stock of the Company, par value $.001 per share (the “Common Stock”), upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, the Company and the Optionee agree as follows:

1. Grant of Initial Options and Regular Options; Option Price. Effective                      (the “Grant Date”), the Company hereby grants to the Optionee options to purchase                          shares of Common Stock (the “Initial Options”) and options to purchase                          shares of Common Stock (the “Regular Options”; the Initial Options and the Regular Options, collectively, the “Options”). The Options are intended to be treated as options that are not incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

There are potential tax consequences associated with the grant, vesting and exercise of the Options. It is the responsibility of the Optionee to seek independent tax advice with regard to the tax treatment of the Options, the exercise thereof, the disposition of any Common Stock acquired upon exercise of the Options and any other related matters.

2. Option Price. The purchase price for each Option is $            , and upon exercise each Option entitles the holder to acquire one share of Common Stock. The purchase price per Option is not less than the fair market value of a share of Common Stock on the Grant Date.

3. Entitlement to Exercise Option; Term of Option.

(a) Subject to the terms of this Agreement and the Plan, the Options shall only become exercisable in accordance with the following vesting schedule, provided that the Optionee has been in Continuous Service following                          (the “Vesting Start Date”):

Vesting Date	Percent of Initial Options Vested	Percent of Regular Options Vested
First Anniversary of Vesting Start Date
Second Anniversary of Vesting Start Date

Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

Third Anniversary of Vesting Start Date

Except as provided in paragraphs (b) and (c) below, options shall become exerciseable on the vesting date shown in the table above.

Unless sooner terminated pursuant to the terms of this Agreement, the Options will expire if and to the extent not exercised on or before the tenth anniversary of the Grant Date.

(b) Notwithstanding the foregoing, if the Optionee’s Continuous Service terminates by death or Disability (as defined in the Employment Agreement) prior to any Option vesting, then all Options whether or not then exerciseable shall then immediately vest and become exercisable.

(c) Notwithstanding the foregoing, if the Company terminates the Optionee’s Continuous Service without Cause (as defined in the Employment Agreement) or the Optionee terminates his employment for Good Reason (as defined in the Employment Agreement), any Initial Options which remain unvested shall immediately vest and become exerciseable, but any Regular Options which remain unvested shall cease vesting.

4. Exercise of Option; Method of Payment. (a) Subject to the requirements of Section 2, vested Options may be exercised at any time or from time to time prior to their expiry date. To exercise the Option, the Optionee shall deliver to the Chief Executive Officer of the Company: (i) a written notice specifying the number of Options to be exercised, and (ii) payment in full of the exercise price, together with the amount, if any, deemed necessary by the Company to enable it to satisfy any income tax withholding obligations with respect to the exercise of the Options or the sale of the shares of Common Stock covered thereby.

(b) The method of payment for exercising Options may be one or a combination of the following: (i) cash or check payable in clearinghouse funds to the order of the Company; (ii) by delivery to the Company of other shares of Common Stock which, unless otherwise determined by the Committee, have been held for more than six (6) months; (iii) if permitted by the Company, by a “net exercise” arrangement (as described in the Plan); or (iv) any other form of legal consideration that may be acceptable to the Committee. If the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise of an Option or the sale of the shares of Common Stock covered thereby, then before the issuance of shares to the Optionee upon exercise of an Option the Company shall have the right to require such payments from the Optionee or withhold such amounts from other payments due to the Company by the Optionee.

(c) The Optionee shall deliver the signed agreement, in the form provided in Exhibit A, as a condition of exercise of any Options.

5. Rights as a Stockholder. No shares of Common Stock will be issued or delivered pursuant to an exercise of an Option until full payment for such shares has been made and arrangements to satisfy tax withholding requirements have been made to the satisfaction of the Company pursuant to Section 16 of the Plan. The Optionee shall not be deemed to be, or have

2

Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

any rights as, a stockholder with respect to any shares covered by the Options until a stock certificate for such shares has been issued to the Optionee. Except as otherwise provided herein, no adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date of issuance of such stock certificate.

6. Nontransferability of Option. The Options are not assignable or transferable except by will or by the applicable laws of descent and distribution. The Options are exercisable during the Optionee’s lifetime only by the Optionee or in the case of Disability, by the Optionee’s legal guardian.

7. Period to Exercise After Termination of Employment. If the Optionee’s Continuous Service with the Company or any Subsidiary terminates by reason of the Optionee’s termination without Cause or termination by Optionee for Good Reason, then, unless sooner terminated under the terms hereof or pursuant to the Plan, the Options will terminate on the 180^th day after the date of the Optionee’s termination of Continuous Service. If the Optionee’s Continuous Service with the Company or any Subsidiary terminates by reason of the Optionee’s death or Disability, then, unless sooner terminated under the terms hereof or pursuant to the Plan, the Options will continue to be exercisable for a period of twelve (12) months from the date of the Optionee’s death or Disability. If the Optionee’s Continuous Service terminates by reason of the Optionee’s resignation without Good Reason, the Options will terminate on the 30^th day after such termination of the Optionee’s Continuous Service. Notwithstanding any other provision of this Agreement, if the Optionee’s Continuous Service terminates by reason of the Optionee’s termination for Cause, the Options will cease to be exercisable and will be forfeited. During any period following the termination of the Optionee’s Continuous Service in which the Options remain exercisable and during which the shares of Common Stock are not publicly traded, the Company may, in its sole discretion cancel such Option by paying the Optionee the difference between (i) the Fair Market Value of the shares of Common Stock subject to the Options and (ii) the purchase price of the Options. For this purpose, Fair Market Value will be determined in accordance with Section 3(c)(ii) of the attached Exercise Notice and Restricted Stock Purchase Agreement.

8. Plan Provisions Control. This Agreement is subject to the terms and conditions of the Plan, which are incorporated herein by reference. Notwithstanding anything to the contrary contained herein, the provisions of the Plan shall govern if and to the extent that there are inconsistencies between the provisions of the Plan and the provisions of this Agreement. The Optionee acknowledges that the Optionee has received a copy of the Plan prior to the execution of this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings set forth in the Plan for such terms.

9. No Rights Conferred. Nothing in this Agreement shall give the Optionee any right to continue in the employ or service of the Company or any Subsidiary and/or as a member of the Company’s Board of Directors or in any other capacity, or interfere in any way with the right of the Company or any Subsidiary to terminate the employment or services of the Optionee.

10. Change of Control; Adjustments. The provisions of Section 8 of the Plan shall govern upon the consummation of a Change of Control. All references to the number and class of shares covered by this Agreement, the exercise price per share of each Option, and other terms in this

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

Agreement may be appropriately adjusted, in the discretion of the Committee, in the event of certain changes in capitalization, as set forth in Section 9 of the Plan.

11. Securities Law and Other Requirements. Exercise of an Option is subject to compliance with applicable securities and other laws, rules and regulations, including without limitation as set forth in Section 15 of the Plan, and the Company may defer exercise of an Option to ensure compliance with such laws, rules and regulations.

12. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns. This Agreement may not be assigned or transferred in whole or in part except as provided in the Plan.

13. Interpretation of this Agreement. All determinations and interpretations made by the Committee with regard to any questions arising under the Plan or this Agreement shall be final, binding and conclusive as to all persons, including without limitation the Optionee and any person claiming rights from or through the Optionee.

14. Dispute Resolution and Arbitration. The Company and the Optionee shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within thirty (30) calendar days of a party’s request for negotiation, either party may initiate proceedings or arbitration only as provided herein. If any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must have an expertise in the matter(s) in dispute. Each party shall bear his/its own fees and costs; the fees, costs and all administrative expenses of arbitration shall be borne equally by the Company and the Optionee. The parties understand and agree that the arbitration is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any award rendered hereunder may include an award of attorneys’ fees and costs but shall not include punitive damages. The statute of limitations of the state of New York applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration.

15. Governing Law; Entire Agreement. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York (including Section 5-1401 of the General Obligations Law of the State of New York but otherwise without regard to conflicts of laws principles). The Plan and this Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. This Agreement may be amended by the Committee, subject to the Optionee’s consent if such amendment is not favorable to the Optionee, except that the consent of the Optionee shall not be required for any amendment made pursuant to Section 8 or Section 9 of the Plan.

4

Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

SUNSHINE SILVER MINES CORPORATION

By:

Name:

Title:

Optionee:

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

EXHIBIT A

SUNSHINE SILVER MINES CORPORATION

STOCK OPTION AND LONG TERM INCENTIVE PLAN

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“Agreement”) is made as of                     , by and between Sunshine Silver Mines Corporation, a Delaware corporation (the “Company”), and «Optionee» (“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Company’s Stock Option and Long Term Incentive Plan (the “Plan”).

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby elects to exercise options to purchase                      shares of the Common Stock (the “Shares”) of the Company under and pursuant to the Plan and the Stock Option Agreement granted on                              ,          (the “Option Agreement”). The purchase price for the Shares shall be $             per Share for a total purchase price of $            . The term “Shares” refers to the purchased Shares and all securities received in replacement of the Shares or as stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of Section 4 of the Option Agreement. On such date, the Company will deliver to Purchaser a certificate representing the Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement.

3. Limitations on Transfer. In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares except in compliance with the provisions below and applicable securities laws.

(a) Private Company. Purchaser acknowledges that the Company shall have the right, but not the obligation, at any time following the termination of Purchaser’s Continuous Service for any reason or after exercise of an Option if the Option is exercised after termination of Purchaser’s Continuous Service for any reason, to repurchase all or part of the Shares (the “Repurchase Right”). The repurchase price shall be the Fair Market Value of those Shares as of the date the Repurchase Right is exercised. The Fair Market Value per Share will be determined as set forth in Section 3(c)(ii) of this Agreement.

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

(i) Procedure. The Repurchase Right shall be exercised by the Company or its assigns by giving Purchaser written notice of the Company’s intention to exercise the Repurchase Right. Upon such notification, Purchaser shall promptly surrender to the Company, free and clear of any liens or encumbrances, any certificates representing the Shares being purchased, together with a duly executed stock power for the transfer of such Shares to the Company or the Company’s assignee or assignees. Upon the Company’s or its assignee’s receipt of the certificates from Purchaser, the Company or its assignee or assignees shall, as soon as practicable following the determination of the Fair Market Value of the shares of Common Stock being purchased, (1) deliver to Purchaser a check in the amount of the aggregate Repurchase Price, (2) cancel an amount of Purchaser’s indebtedness to the Company, if any, equal to the Repurchase Price, or (3) by a combination of (1) and (2) so that the combined payment, cancellation of indebtedness and face value of the promissory note equals the Repurchase Price. Upon delivery of such notice and the payment of the Repurchase Price (by one of the methods specified in the previous sentence), the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Shares being repurchased by the Company.

(ii) Assignment of Repurchase Right. Whenever the Company shall have the right to repurchase shares of Common Stock hereunder, the Company may designate and assign one or more employees, officers, directors or shareholders of the Company or other persons or organizations to exercise all or a part of the Company’s Repurchase Right and purchase all or a part of such Shares.

(b) No Other Transfer Permitted.

(i) General Rule. Except as otherwise permitted by the Company in writing or pursuant to Section 3(b)(ii), no Shares held by Purchaser or any transferee of Purchaser may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.

(ii) Estate Planning Transfers. Notwithstanding any other provisions of the Plan and this Agreement to the contrary, Purchaser may, with the consent of the Company, such consent not to be unreasonably withheld, assign the Shares for bona fide estate planning purposes by Purchaser to his issue, or to a trustee or trustees of a trust whose vested beneficiaries then include any such of Purchaser’s kindred, if (i) the persons who would control the Shares and the proposed arrangements for the control of the Shares are reasonably satisfactory to the Company, including, without limitation, that any Shares will remain subject to all of the forfeiture and transfer restrictions and conditions set forth herein and in the Plan and (ii) the requirements of the Securities Act of 1933, as amended (the “Securities Act”) and any applicable state securities or blue sky laws are met.

(c) Involuntary Transfer.

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

(i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time after the date of this Agreement, of any transfer by operation of law or other involuntary transfer (including death or divorce) of all or a portion of the Shares by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the greater of the purchase price paid by Purchaser for the Shares pursuant to this Agreement (as adjusted for any stock splits, stock dividends and the like) or the Fair Market Value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of thirty (30) days following receipt by the Company of written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer. With respect to any stock to be transferred pursuant to Sections 3(a) or 3(c)(i), the Fair Market Value per Share shall be a price set by the Board of Directors of the Company (the “Board”) in good faith using a reasonable valuation method in a reasonable manner in accordance with Section 409A of the Code. The Company shall notify Purchaser or his or her executor of the price so determined within thirty (30) days after receipt by it of written notice of the transfer or proposed transfer of Shares. The determination of the Fair Market Value per Share by the Board shall be final and binding on all parties.

(d) Drag Along Right.

(i) If the Required Holder (as defined below) approves the sale of the Company, whether by merger, consolidation, sale of outstanding capital stock, sale of all or substantially all of its assets or otherwise (any of the foregoing, an “Approved Sale”), (1) Purchaser shall consent to, vote for and raise no objections against, and waive dissenters and appraisal rights (if any) with respect to, the Approved Sale, (2) if the Approved Sale is structured as a sale of stock, Purchaser shall agree to sell and shall be permitted to sell all of Purchaser’s Shares on the terms and conditions approved by the Required Holder, and (3) if the Approved Sale includes the sale, exchange, redemption, cancellation or other disposition of securities convertible into or exchangeable for capital stock of the Company, or options, warrants or other rights to purchase such capital stock or securities, Purchaser shall sell, exchange, redeem, agree to cancel or otherwise dispose of such securities or options, warrants or other rights on the terms and conditions approved by the Required Holder. In order to effect the covenant set forth in clause (1) of the immediately preceding sentence, Purchaser shall be deemed to have granted to the Company with respect to all of Purchaser’s Shares an irrevocable proxy (which is deemed to be coupled with an interest) with respect to any stockholder vote or action by written consent solely to effect such Approved Sale in compliance with this Section 3(d). Purchaser shall take all necessary and desirable actions in connection with the consummation of an Approved Sale. As used herein, the term “Required Holder” means, as of any date, any one or more of the Kaplan Parties.

(ii) The obligations of Purchaser with respect to an Approved Sale are subject to the satisfaction of the conditions that: (1) upon the consummation of the Approved Sale, all of the holders of Common Stock shall receive the same form and

8

Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

amount of consideration per share of Common Stock, or if any holder of Common Stock is given an option as to the form and amount of consideration to be received in respect of Common Stock, all holders of Common Stock shall be given the same option; and (2) in the case of a holder of any securities referred to in clause (3) of paragraph (i) above, (I) in the event such securities are vested, the holder shall receive in such Approved Sale, unless otherwise provided in the terms of any agreement or instrument governing or evidencing such security, either (x) the same securities or other property that such holder would have received if such holder had converted, exchanged or exercised such security immediately prior to such Approved Sale (after taking into account the conversion, exchange or exercise price applying to such security and any applicable tax obligations of the holder in connection with such conversion, exchange or exercise) or (y) a security convertible or exchangeable for, or option, warrant or right to purchase, capital stock or other securities of a successor entity having substantially equivalent value, or (II) in the case where such securities are not vested, unless otherwise provided in the terms of any agreement or instrument governing or evidencing such security, such securities shall be cancelled.

(iii) Purchaser shall be required to make substantially the same representations and warranties (but only to the extent that such representations and warranties relate to Purchaser’s ownership of Shares and his authority to execute such documents), customary covenants and other agreements, to the extent reasonably related to the Approved Sale, as the Required Holder has agreed to make in connection with the proposed Approved Sale. Purchaser acknowledges that his pro rata share (based upon the number of Shares owned by such holder) of the aggregate proceeds of an Approved Sale may be reduced by transaction expenses related to such Approved Sale. Purchaser shall be obligated to join on a pro rata basis in any indemnification or other obligations that the Required Holder agrees to provide in connection with such Approved Sale; provided, however, that Purchaser shall not be obligated in connection with such Approved Sale to agree to indemnify or hold harmless any person with respect to (1) the representations and warranties of any other holder of Common Stock regarding its ownership of Common Stock or (2) an amount in excess of the net proceeds received by Purchaser in connection with such Approved Sale.

(e) Clawback of Shares on Termination For Cause. Purchaser acknowledges that in the event of termination of Purchaser’s Continuous Service status for Cause, the Committee shall have authority to effect such procedures and take such actions as are necessary to carry out the legal intent of Section 10 of the Plan, including such procedures and actions as are required to cause Purchaser to return to the Company Shares purchased under the Option that have been purchased or that vested within six months of the events giving rise to the for-Cause termination of Purchaser’s Continuous Service status and, if such Shares have been transferred by Purchaser, to remit to the Company the value of such transferred Shares, also as set forth in Section 10 of the Plan.

(f) Assignment. The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any stockholder or stockholders of the Company or other persons or organizations.

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

(g) Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are satisfied.

(h) Termination of Rights Following Initial Public Offering. The right of repurchase granted by the Company in Section 3(a) above, the restrictions on transfer provided in Section 3(b) above, the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(c) above and the drag-along right provided in Section 3(d) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act. Upon termination of the rights to repurchase and the right of first refusal described in Sections 3(a), 3(b), 3(c) and 3(d) above, a new certificate or certificates representing the Shares not repurchased shall be issued, on request, without the legend referred to in Section 6(a)(ii) herein and delivered to Purchaser.

4. Taxation Representations. In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

(b) Purchaser understands that the per share “Exercise Price” for the Options is intended to be at least equal to the fair market value of the Company’s Common Stock at the date of grant and that the Company has attempted in good faith to make the fair market value determination in compliance with applicable tax law although there can be no certainty that the IRS will agree. Purchaser understands that if the IRS does not agree and asserts that the fair market value at the time of grant is higher than the Exercise Price, the IRS could seek to impose greater taxes on Purchaser, including, without limitation, interest and penalties under Internal Revenue Code Section 409A.

5. Regulation D Representations.¹ Purchaser hereby makes the following representations and warranties to the Company as of the date hereof:

(a) Experience; Status.

¹  For Rule 701 awards, replace (a) and (b) of Section 5 with the following:

5. Rule 701 Representations. (a) Purchaser represents that he is an employee, director, general partner, officer, consultant or advisor of the Company or its Subsidiaries. Additionally, if Purchaser is a consultant or advisor described in the preceding sentence, Purchaser represents that (i) he is a natural person; (ii) he provides bona fide services to the Company or its Subsidiaries; and (iii) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities.

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

(i) Purchaser has experience in analyzing and investing in companies like the Company and is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. To the extent necessary, Purchaser has retained, at its own expense, and relied upon, appropriate professional advice regarding the investment, tax and legal merits and consequences of the Shares, it being understood that the Company has not retained legal or financial advisors on behalf of Purchaser.

(ii) Purchaser is an Accredited Investor (as such term is used in Rule 501 under the Securities Act), is able to bear the economic risk of its investment in the Company and has sufficient net worth to sustain a loss of its entire investment in the Company without economic hardship if such loss should occur. The Questionnaire attached hereto as Annex 1 and completed by Purchaser is true and correct and incorporated herein by reference.

(b) Access to Company Information.

(i) Purchaser has had an opportunity to discuss the Company’s business, management and financial affairs with the members of the Company’s management and has had the opportunity to review the Company’s facilities. Purchaser has also had an opportunity to ask questions of the officers of the Company, which questions were answered to its satisfaction. Purchaser acknowledges that it is familiar with all aspects of the Company’s business.

(ii) Purchaser has received no representations or warranties from the Company, or its employees, affiliates, attorneys, accountants or agents.

(iii) Purchaser understands that an investment in the Company involves numerous risks.

(c) Investment Purposes; Rule 144.

(i) Purchaser is acquiring the Shares solely for investment for Purchaser’s own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. Purchaser understands that the Shares have not been registered under the Securities Act or applicable state and other securities laws by reason of a specific exemption from the registration provisions of the Securities Act and applicable state and other securities laws, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Purchaser’s representations as expressed herein. Purchaser understands that the Company is relying, in part, upon the representations and warranties contained in this agreement for the purpose of determining whether this transaction meets the requirements for such exemptions.

(ii) Purchaser acknowledges and understands that Purchaser must bear the economic risk of Purchaser’s investment in the Shares for an indefinite period of time because the Shares are not transferable except in very limited circumstances and must be held indefinitely unless subsequently registered under the Securities Act and applicable

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

state and other securities laws or unless an exemption from such registration is available. Purchaser understands that the Company has not agreed to and does not plan to file a registration statement to register the resale of the Shares and any securities to be received in respect thereof under the Securities Act.

(iii) Purchaser is aware of the current provisions of Rule 144 promulgated under the Securities Act which permit resale of securities purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the availability of certain current public information about the issuer of the securities and the resale occurring not less than one year after a party has purchased from an issuer or its affiliate and paid the full purchase price for the securities to be sold. Purchaser understands that if the Company otherwise agrees to a transfer of the Shares, the Company will not transfer and any transfer agent of the Company will be issued stop-transfer instructions with respect to such Shares unless such transfer is subsequently registered under the Securities Act and applicable state and other securities laws or unless an exemption from such registration is available.

6. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR UNDER ANOTHER EXEMPTION AVAILABLE UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

7. No Employment Rights. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without Cause.

8. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Purchaser agrees not to lend, offer, pledge, contract to sell, sell any option or contract to transfer, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer, directly or indirectly, any securities of the Company owned immediately before the effective date of the registration statement for such offering (other than a sale of any securities of the Company to an underwriter pursuant to an underwriting agreement if all officers, directors and stockholders of more than five percent of the Company’s outstanding equity securities are subject to the same restrictions) without the prior written consent of the Company or such underwriters for such period of time (not to exceed 180 days, which period may be extended upon the request of the managing underwriter for an additional period of up to 15 days if the Company issues or proposes to issue an earnings or other public release within 15 days of the expiration of the 180 day lock-up period) from the effective date of such registration and to execute an agreement as may be reasonably requested by the Company or the underwriters in connection with such registration and to use its commercially reasonable efforts to provide, within five business days of a request, such information as may be required by the Company or the underwriters in connection with the completion of the initial public offering of the Company’s securities.

9. Tax Consequences. Purchaser should obtain advice from an appropriate independent professional adviser with respect to the taxation implications of the grant, issuance, purchase, retention, assignment, release, cancellation, sale or any other disposal of the Shares (each, a “Trigger Event”). Purchaser should also take advice in respect of the taxation indemnity provisions under Section 10 below.

10. Purchaser’s Taxation Indemnity.

(a) To the extent permitted by law, Purchaser hereby agrees to indemnify and keep indemnified the Company and the Company as trustee for and on behalf of any affiliate entity, in respect of any liability or obligation of the Company and/or any affiliate entity to account for income tax or any other taxation provisions under the laws of Purchaser’s country of citizenship and/or residence to the extent arising from a Trigger Event.

(b) The Company shall not be obliged to allot and issue any of the Shares or any interest in the Shares unless and until Purchaser has paid to the Company such sum as is, in the opinion of the Company, sufficient to indemnify the Company in full against any liability the Company has for any amount of, or representing, income tax or any other tax arising from a Trigger Event (the “Shares Tax Liability”), or Purchaser has made such other arrangement as in

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

the opinion of the Company will ensure that the full amount of any Shares Tax Liability will be recovered from Purchaser within such period as the Company may then determine.

11. Data Protection.

(a) To facilitate the administration of the Plan and this Agreement, it will be necessary for the Company (or its payroll administrators) to collect, hold and process certain personal information about Purchaser and to transfer this data to certain third parties such as brokers with whom Purchaser may elect to deposit any share capital under the Plan. Purchaser consents to the Company (or its payroll administrators) collecting, holding and processing Purchaser’s personal data and transferring this data to the Company or any other third parties insofar as is reasonably necessary to implement, administer and manage the Plan.

(b) Purchaser understands that Purchaser may, at any time, view Purchaser’s personal data, require any necessary corrections to it or withdraw the consents herein in writing by contacting the Company, but acknowledges that without the use of such data it may not be practicable for the Company to administer Purchaser’s involvement in the Plan in a timely fashion or at all and this may be detrimental to Purchaser.

12. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the Laws of the State of New York (including Section 5-1401 of the General Obligations Law of the State of New York but otherwise without regard to conflicts of Laws principles).

(b) Dispute Resolution and Arbitration. The Company and Purchaser shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation. If the matter has not been resolved within thirty (30) calendar days of a party’s request for negotiation, either party may initiate proceedings or arbitration only as provided herein. If any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof has not been resolved by negotiation, such dispute shall be settled by binding arbitration in accordance with the then current rules of JAMS by a single independent and impartial arbitrator who is located in Denver, Colorado. The arbitrator selected must have an expertise in the matter(s) in dispute. Each party shall bear his/its own fees and costs; the fees, costs and all administrative expenses of arbitration shall be borne equally by the Company and Purchaser. The parties understand and agree that the arbitration is subject to the rules of JAMS; that the arbitrator’s decision and award shall be final and binding as to all claims that were, or could have been, raised in arbitration; and that judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. Any award rendered hereunder may include an award of attorneys’ fees and costs but shall not include punitive damages. The statute of limitations of the state of New York applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration.

(c) Entire Agreement; Enforcement of Rights. This Agreement, the Option Agreement and the Plan set forth the entire agreement and understanding of the parties relating

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(d) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(e) Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(f) Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

Notices to Purchaser:

Roger P. Johnson

2422 Glenarm Place

Denver, Colorado 80205

Notices to the Company:

Sunshine Silver Mines Corporation

c/o Tigris Financial Group Ltd.

535 Madison Avenue, 11th Floor

New York, New York 10022

Attention:   Andrew M. Shapiro, Esq.

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed.

(g) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(h) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

[Signature Page Follows]

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of the date first set forth above.

SUNSHINE SILVER MINES CORPORATION

By:

Name:

Title:

PURCHASER:

(Signature)

(Printed Name)

Address:

I,                         , spouse of «Optionee», have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further agree that any community property or other such interest shall hereby be similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

Spouse of «Optionee»

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

Annex 1

QUESTIONNAIRE²

The undersigned represents and warrants that it comes within each category marked below, and that for any category marked, it has truthfully set forth the factual basis or reason the undersigned comes within that category. The undersigned agrees to furnish any additional information which Sunshine Silver Mines Corporation (the “Company”) deems necessary in order to verify the answers set forth below.

¨	(a)	The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with its spouse, presently exceeds $1,000,000.
		Explanation. In calculating net worth you may include equity in personal property and real estate (other than your primary residence) cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property. You must exclude from the calculation the value of your primary residence, and the related amount of indebtedness up to the fair market value of the residence may also be excluded. Indebtedness secured by the residence in excess of its fair market value must be deducted from your net worth.
¨	(b)	The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with their spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and loses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.
¨	(c)	The undersigned is a director or executive officer of the Company, which is issuing the Shares.
¨	(d)	The undersigned is not within any of the categories above and is therefore a nonaccredited investor.

THE UNDERSIGNED IS INFORMED OF THE SIGNIFICANCE TO THE COMPANY OF THE FOREGOING REPRESENTATIONS, AND THEY ARE MADE WITH THE INTENTION THAT THE COMPANY WILL RELY ON THEM.

IN WITNESS WHEREOF, the undersigned has executed the Questionnaire on                     ,             .

²  Include only for Regulation D awards.

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Sunshine Silver Mines Corporation Long Term Incentive Plan NQSO Agreement

(Signature)

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EX-21

Exhibit 21

List of Subsidiaries

Subsidiary	Jurisdiction of Incorporation
Silver Opportunity Partners LLC	Delaware
Los Gatos Luxembourg S.àr.l.	Luxembourg
Minera Plata Real, S. de. R.L. de C.V.	Mexico
Alynn Enterprises LLC	Delaware
L. Roayl LLC	Delaware
Minera Adularia S. de R.L. de C.V.	Honduras

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Sunshine Silver Mines Corporation:

We consent to the use of our report dated July 07, 2011 with respect to the consolidated balance sheet of Sunshine Silver Mines Corporation as of December 31, 2010, and the related consolidated statement of loss and comprehensive loss, changes in shareholders’ equity (deficit) and cash flows for the year ended December 31, 2010 and the information included in the cumulative from inception presentation for the period January 1, 2010 to December 31, 2010 (not separately presented herein), included herein.

We consent to the reference to our firm under the heading “Experts” in the prospectus.

/s/    KPMG LLP

New York, New York

August 9, 2011

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this Registration Statement of Sunshine Silver Mines Corporation on Form S-1 of our report dated June 29, 2011, relating to the consolidated financial statements of Sunshine Silver Mines Corporation (formerly Los Gatos Ltd.), as of December 31, 2009 and for each of the years in the two-year period ended December 31, 2009 and the period from April 24, 2006 (Inception) to December 31, 2009 (not presented separately herein).

We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ WithumSmith+Brown, PC

Morristown, New Jersey

August 9, 2011

EX-23.3

Exhibit 23.3

CONSENT OF BEHRE DOLBEAR & COMPANY

Behre Dolbear & Company (USA), Inc. (Behre Dolbear) hereby consents to the use by Sunshine Silver Mines Corporation in connection with its Registration Statement on Form S-1 and related prospectus dated August 9, 2011 (the “Registration Statement”), of the Behre Dolbear reports concerning the Sunshine Mine and the Los Gatos Project and all information derived from its reports.

Behre Dolbear also consent to all references to itself in the prospectus contained in such Registration Statement, including under the heading “Experts.”

	/s/ Behre Dolbear & Company (USA) Inc.
Date: August 9, 2011	BEHRE DOLBEAR & COMPANY (USA), INC.

EX-23.5

Exhibit 23.5

Consent of Philip Pyle

In connection with Sunshine Silver Mines Corporation’s (the “Corporation”) registration statement on Form S-1, dated August 9, 2011, and any amendment thereto, and any registration statements filed pursuant to Rule 462(b) under the U.S. Securities Act of 1933, as amended (the “Registration Statement”), I do hereby consent to reference my involvement in the information relating to the Corporation’s mineral properties set forth in “Prospectus Summary—Recent Developments” and “Business—Recent Developments” in the prospectus which is part of the Registration Statement. I do also hereby consent to the reference to my name under the heading “Experts” in the prospectus, which is part of the Registration Statement.

Dated this 9th day of August, 2011.	/s/ Philip Pyle
	Philip Pyle