Mexico

Aura Silver is exploring the Taviche Project located in Oaxaca State, Mexico as a joint venture with Intrepid Mines Limited. The project area is located about 10km south of the City of Ocotlan where the Company has its field office.

The Taviche District is no stranger to mining; the San Jose Mining District has been active intermittently since Spanish colonial times and was Mexico's first historical silver-mining area containing more than 60 recorded underground mines. As is widely known, Mexico ranks as the second largest silver producer in the world.

The Project currently consists of three concessions (East Taviche, West Taviche and Alma Delia) which are held by the joint venture under option from Plata Panamericana S.A. de C.V. ("Plata"), a wholly owned subsidiary of Pan American Silver Corp. The Joint Venture partners can jointly earn a 70% interest in all these project areas. Presently Aura Silver holds a 60.4% interest in the Joint Venture while Intrepid Mines has been diluted to a 39.6% interest. This implies that Aura Silver presently holds an overall interest in the Taviche Project of 42.3% (including Plata's 30% interest).

Major exploration initiatives are planned through next spring 2011 where the Company is exploring several silver-gold prospects and investigating a large area thought to hold potential for porphyry copper deposits. One major target within the East Concession will be along the Higo Blanco mineralized corridor where epithermal-style gold stockwork mineralization was discovered that flanks and caps silver-bearing silicified limestone breccias. Deeper drilling to test for higher grade gold in the Mezcal vein structure will continue where grades to date appear to be increasing with depth. In addition, further testing of the extension of the silver mineralization is planned with deeper holes to locate the source.

The Company will continue its exploration on the West Taviche Concession, especially in relation to Fortuna Silver Mines' San Jose Mine. The Company's West Taviche Concession adjoins and surrounds Fortuna's property land locking the San Jose mine. Fortuna's San Jose Mine is now under pre-production development. The Company believes San Jose's Trinidad deposit may extend onto the northern portion of our West Taviche Concession and also believes that the San Jose's Bonanza Vein may extend onto West Taviche to the south. Bordering Fortuna's mine property to the west is the LaNoria vein system which will be explored at deeper levels.

Also within the West Concession, Aura Silver will investigate the potential to discover a large porphyry system. The base metal enrichment in this area, with no related gold or silver enrichment, is indicative of the potential for a different style of deposit. The base metal content, alteration style, abundance of large hydrothermal breccia bodies as host to the mineralization, abundance of radiating felsic dykes, apparent spatial relation to felsic intrusions, strong hematization, abundance of fluorite, lack of arsenic and antimony anomalies, and much higher overall sulfide content of the region all may indicate the presence of a buried porphyry copper system in this region.

For 2011 a vibrant and exciting drill program is planned at Taviche that we hope will enhance shareholder value.

Exploring for High Grade Silver-Gold, Taviche, Mexico