Canada

In 2006, Aura Silver staked a high grade silver and base metal property at Greyhound Lake in the central Churchill region of Nunavut, Canada. The Greyhound project is located 38 km north of the community of Baker Lake, Nunavut and about 32 km south of Agnico-Eagle's developing Meadowbank Gold Mine. An all-weather road to the Meadowbank Mine from Baker Lake crosses the Greyhound property. The property is also situated less than 40km north of tide water and encompasses roughly 25,000 hectares.



The claims lie within underexplored Archean supracrustal rocks of the Woodburn Lake group which is known for having a high potential for economic gold deposits. However, due to the perceived remoteness of the area, past exploration for gold and base-metals has been relatively minor, particularly if compared to other greenstone belts such as the Abitibi Region. The prospective trend occurs along a 25 kilometer long, variably mineralized sulphide and iron oxide and carbonate iron formation where historic sampling of bedded, sulphide-mineralization returned silver values of 47 and 99 ounces per ton, along with significant base-metal content.

Since staking, progress has continued at a rapid pace with numerous completed airborne and ground geophysical surveys and ground prospecting. Prospecting has uncovered numerous mineral showings containing both precious and base-metal content with spectacular assay values up to 8.2% lead, 18.5% zinc, 9.2% copper, 5,380 g/t silver and 28.2 g/t gold. With a focus on VMS (volcanic massive sulphide) deposits the Company carried out a drilling campaign in 2010 testing airborne VTEM conductors, all of which proved to be due to the presence of graphite. The source of the high-grade base metal prospects to the north of Aura Lake therefore, remain unexplained but numerous conductive bodies underlying water have yet to be drill tested.

In 2010, additional prospecting and soil sampling uncovered a potential four kilometer long corridor extending south from the original gold showing on the east shore of Aura Lake. Together, the gold enriched rock samples averaged 14.8 g/t Au and the silver rich samples averaged 1,472 g/t Ag. Over 80% of the soil samples are above background values. In the late fall an induced polarization survey was carried out over a portion of this corridor. While preliminary, results indicate several high chargeabilty anomalies co-incident with the soils and the high-grade rocks. Drill targets are well defined now over cross structures and the first concerted effort of drilling for precious metals will begin in early 2011.

In addition to this defined corridor, broad zones of extensively carbonatized ultramafic rocks ("green carbonate") containing disseminated sulphides, including traces of arsenopyrite and chalcopyrite were intersected in drill core to the north of Aura Lake. This alteration is strongly reminiscent of Kirkland Lake style mineralization and further drilling is warranted, likely following a further I.P. survey. In all, the potential for a gold and silver zone appears to be pervasive over an area of several square kilometers.

Aura Silver management is excited about the current phase of work at Greyhound. The newly discovered gold and silver corridor will be our primary focus. The Company believes that we have barely scratched the surface in understanding the gold and silver potential.

While it is easy to think of the Greyhound Project as being in the far north, access to the claims is excellent via a private road from Baker Lake. Drilling will resume in the spring of 2011.

Nunavut is currently one of Canada's hottest exploration areas for miners of almost every persuasion as its gold, uranium, iron ore, diamond and base metals all have active projects. The Government of Nunavut sees mining as an important part of the Territory's future developments and as the cornerstone of their economy.

Nunavut is one of the last large unexplored regions in Canada where high-grade mineralization can still be found by prospecting.

Over $1.3 billion was spent on mineral exploration and development in Nunavut from 2005 to 2009 as land claims are settled and the permitting process is now well defined.

Exploring for High Grade Silver and Gold at Greyhound, Nunavut



Please click on the below photos for a larger version: