2012 06 30 rio pescado technical report

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1.0 TITLE PAGE

TECHNICAL REPORT ON THE

RIO PESCADO GOLD PROPERTY, REPUBLIC OF COLOMBIA

LOCATION

Centered Near 54°17’ N Latitude,” 61°50’W Longitude

UTM 1295000mN 930500mE (Bogotá National Grid-WGS84) Modern Exploration Camp @ Lat. 7°15’29.4”N; Long. 74°42’39.55”W (WGS-84)

Prepared for: TOUCHSTONE GOLD LIMITED

Suite 200, 83 Yonge Street Toronto, Ontario,

Prepared by:

Peter A. Christopher PhD., P.Eng PAC GEOLOGICAL CONSULTING INC.

3707 West 34th Avenue Vancouver, British Columbia

V6N 2K9

Date: June 30, 2012

TECHNICAL REPORT ON THE RIO PESCADOPESCADO PROPERTY, COLOMBIA

PAC GEOLOGICAL CONSULTING INC. June 2012

TABLE OF CONTENTS 1.0. EXECUTIVE SUMMARY AND RECOMMENDATIONS .................................................................. 5

1.1 INTRODUCTION AND PROPERTY DESCRIPTION ...................................................................... 5 1.2 LOCATION, INFRASTRUCTURE AND ACCESS ........................................................................... 5 1.3 OWNERSHIP AND TERMS OF AGREEMENT ............................................................................... 6

Table 1.1 Summary of the Touchstone Mining Permits ................................................................................... 6 1.4 GEOLOGY AND MINERALIZATION .............................................................................................. 6

Table 1.2 Writer’s Check Samples Pepas Zone, Rio Pescado Property (11/11/2011). ..................................... 8 1.5 DEPOSIT MODEL AND EXPLORATION CONCEPT ..................................................................... 8 1.6 STATUS OF EXPLORATION, DEVELOPMENT AND OPERATIONS.......................................... 8 1.7 CONCLUSIONS AND RECOMMENDATIONS ............................................................................... 9

2.0 INTRODUCTION AND TERMS OF REFERENCE .............................................................................11 2.1 INTRODUCTION ...............................................................................................................................11 2.2 BACKGROUND .................................................................................................................................11 2.3 TERMS OF REFERENCE AND PURPOSE ......................................................................................11 2.4 SOURCES OF INFORMATION ........................................................................................................12 2.5 FIELD INVOLVEMENT OF THE WRITER .....................................................................................12

3.0 RELIANCE ON OTHER EXPERTS ......................................................................................................12 4.0 PROPERTY DESCRIPTION AND LOCATION ...................................................................................13

4.1 PROPERTY AREA AND LOCATION (Figures 4.1, 4.2 & 4.3) .......................................................13 4.2 LAND TENURE, LEGAL AGREEMENTS AND OTHER ASSETS ...............................................13

Figure 4.1 Location Plan, Rio Pescado Property, Colombia (Touchstone Fig.). .............................................14 Figure 4.2 Property Claim Plan for RPGP (Fig. provided by Touchstone). ....................................................15 Table 4.1. Summary of Touchstone Concession Contracts (provided by Touchstone). ..................................16 Table 4.2 Summary of the Touchstone Mining Permits ..................................................................................16 Table 4.3 Details of Touchstone Property Ownwership and Payment Schedule .............................................17

4.3 COLOMBIAN MINING LAW ...........................................................................................................18 4.4 LEGAL SURVEY (Table 4.3) ............................................................................................................18

Table 4.4 Colombian Coordinates for RPGP Concessions (provided by Touchstone). ..................................19 4.5 LOCATION OF MINERALIZATION AND FACILITIES ................................................................19

Figure 4.3 RPGP Property Mineralized Occurrences, Showings and Prospects. ............................................20 4.6 ENVIRONMENTAL LIABILITIES ...................................................................................................21 4.7 PERMITS AND LAND USE AGREEMENTS ..................................................................................21

Table 4.5. Coordinated of Land Use Agreement Areas. ..................................................................................22 Figure 4.4 Boundaries of the Land Use Agreements Relative to Concessions. ...............................................23

5.0 ACCESSIBILITY, INFRASTRUCTURE, CLIMATE, LOCAL RESOURCES, AND

PHYSIOGRAPHY ........................................................................................................................................23 5.1 PHYSIOGRAPHY, TOPOGRAPHY, ELEVATION, CLIMATE AND VEGETATION ..................23 5.2 ACCESS AND PROXIMITY TO POPULATION CENTRES ......................................................24

Figure 5.1 Access Plan for the RPGP. .............................................................................................................25 5.3 SURFACE RIGHTS, POWER, WATER, PERSONNEL, TAILINGS SITES, PROCESSING

PLANT SITES ..........................................................................................................................................26 6.0 HISTORY ................................................................................................................................................26

6.1 HISTORIC EXPLORATION ..............................................................................................................26 6.2 PROPERTY HISTORY ......................................................................................................................27 6.3 PREVIOUS EXPLORATION .............................................................................................................27 6.4 HISTORICAL RESOURCE ESTIMATES .........................................................................................28 6.5 HISTORIC PRODUCTION ................................................................................................................28

Table 6.1 Touchstone’s Estimates of Material Mines from Underground Workings. .....................................28 7.0 GEOLOGICAL SETTING AND MINERALIZATION .........................................................................29

7.1 REGIONAL GEOLOGY AND TECTONICS ....................................................................................29 7.2 PROPERTY GEOLOGY (Figures 7.1& 7.2) ......................................................................................29 7.3 STRUCTURAL GEOLOGY ...............................................................................................................30

Figure 7.1 General Geology of the RPGP (Figure From Touchstone). ...........................................................31 Figure 7.2 ASTER Imagery of the Area Surrounding the Rio Pescado Property with Principal Lineament in

Red. .................................................................................................................................................................32 7.4 MINERALIZATION ...........................................................................................................................33

8.0 DEPOSIT TYPE ......................................................................................................................................34

TECHNICAL REPORT ON THE RIO PESCADO PROPERTY, COLOMBIA


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8.1 MESOTHERMAL GOLD VEINS (Figure 8.1) ..................................................................................34 8.2 RPGP EXPLORATION APPROACH ................................................................................................34 8.3 EXPLORATION TARGETS ..............................................................................................................34

Figure 8.1 Cordilleran Gold Deposit Models After Sillitoe (2009) with Modification for Mesothermal

Segovia Gold Belt Deposits and Rio Pescado Gold Project Occurrences. RPGP Veins are Associated with

Equigranular Intrusive Rocks but Have Characteristic Atypical of Other Segovia Gold Belt Occurrences with

RPGP type veins in red. ...................................................................................................................................35 9.0 EXPLORATION CONDUCTED BY TOUCHSTONE ..........................................................................36

9.0.1 2011 Exploration ..............................................................................................................................36 Figure 9.1. Location of 2011 Touchstone Geochemical and Geophysical Grid. ............................................37

9.1 Stream Sediment Sampling .................................................................................................................38 9.2 Soil Sampling ......................................................................................................................................38

Table 9.1: Au values of stream sediment samples from Las Pepas displayed in ppb. .....................................39 Table 9.2 Stream sediment Au anomaly percentile values. .............................................................................39 Figure 9.2 Stream Sediment Sampling of RPGP. ............................................................................................40 Figure 9.3 Gold in Soil Plan for RPGP ...........................................................................................................41 Table 9.3: Soil sample Au anomaly percentile values. ....................................................................................42

9.3 Geophysics ......................................................................................................................................42 9.4 Rock Sampling ....................................................................................................................................44

Table 9.4 Summary of Touchstone’s >31.1 g/t Au Underground Channel Samples RPGP. ...........................45 Figure 9.4 Preliminary IP Chargeability at 50m Depth (provide by GeoMinEx). ...........................................46 Figure 9.5 RPGP IP Resistivity at 50m Depth (Figure from GeoMinEx). ......................................................47 Figure 9.6 RPGP Magnetic Survey with Reading Reduced to Pole (provided by GeoMinEx). ......................48 Figure 9.7 RTP Filtered View of Ground Magnetic Survey Area (From Touchstone Dec. 2011). (see Index

Fig. 4.2 for Location of Concessions 5969 & 6055) .......................................................................................49 9.5 Trenching .............................................................................................................................................50

Table 9.5 Summary of Touchstone’s 2011 Trench Sampling on the RPGP. ...................................................50 9.7 PROSPECTING ..................................................................................................................................51 9.8 REMOTE SENSING ...........................................................................................................................51

Figure 9.8 Trenching Plan for Tagual Zone Geochemical Anomaly. ..............................................................52 Figure 9.9 Quartz Float as mapped by Touchstone in the Las Pepas, Las Pepas Norte and El Sapo Zones. ..53 Table 9.6 Gold in rock chip prospecting samples from Las Pepas. .................................................................54

10.0 DRILLING ......................................................................................................................................55 10.1 2009 RPGP DRILLING ....................................................................................................................55 10.2 2010 RPGP DRILLING ....................................................................................................................55

Table 10.1 Summary of 2009 RPGP Drill Hole Data (from Touchstone). ......................................................56 Table 10.2 Summary of Significant 2009 Drill Hole Intersections (from Touchstone). .................................56 Table 10.3 Summary of 2010 Drill Hole Data (from Touchstone). .................................................................57 Table 10.4 Significant Intersections from 2010 Drilling Campaign RPGP (from Touchstone). .....................58

10.3 2011-2012 Drilling (Figures 10.1, 10.2, & 10.3) ...........................................................................59 Table 10.5 Summary of 2011-2012 RPGP Drill Hole Data. ...........................................................................60 Table 10.6 Significant Results for the 2011-2012 Drilling at RPGP. .............................................................63

10.4 2011-2012 Core Logging Procedure..............................................................................................64 10.5 DRILLING AND SAMPLING METHOD FOR DIAMOND DRILL CORE ......................65

Figure 10.1 Plot of Touchstone Past and 2011-2012 Diamond Drill Holes. ...................................................66 Figure 10.2 Plot of Historic 2009-2011 Drill Holes. ......................................................................................67 Figure 10.3 Drill Hole Locations Las Pepas Zone with 2011 and 2012 Holes in Red. ...................................68

11.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY .........................................................70 Table 11.1 SGS Analytical Procedures for RPGP. ..........................................................................................71

12.0 DATA VERIFICATION .................................................................................................................72 Table 12.1 Writer’s Check Samples Las Pepas Zone, RPGP (11/11/2011). ...................................................73

12.2 Sample Preparation, Analysis and Security .......................................................................................73 12.3 INSPECTION BY THE WRITER ................................................................................................73 12.4 DATA VERIFICATION ...............................................................................................................74

Table 12.2 Standard Reference Material for Au. .............................................................................................75 13.0 MINERAL PROCESSING AND METALLURGICAL TESTING ...............................................76



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14.0 & 15.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES .........7616.0 to 22.0

SECTIONS OF THE FORM THAT APPLY TO RESOURCE PROJECTS (SEE ITEM 5 FOR

EXPLORATION PROPERTY INFORMATION) ........................................................................................76 23.0 ADJACENT PROPERTIES ..................................................................................................................76 24.0 OTHER RELEVANT DATA AND INFORMATION ...................................................................77 25.0 INTERPRETATION AND CONCLUSIONS ................................................................................77

Figure 23.1 Nearby Mineral Districts and Prospects Relative to the RPGP. ...................................................78 26.0 RECOMMENDATIONS AND BUDGET .....................................................................................79

Table 26.1 Estimated Budget Phase 1 Exploration Program ..........................................................................79 Table 26.2 Proposed Drill holes Phase 1 Exploration Program .......................................................................79

26.2 SUCCESS CONTINGENT PHASE 2 ...............................................................................................80 26.3 OPINION OF MERIT .......................................................................................................................80

Figure 25.1. Location of 2012 Proposed Phase 1 Drill Holes .........................................................................81 27.0 REFERENCES AND SOURCES OF INFORMATION ................................................................82 28.0 SIGNATURE, STAMP AND DATE ....................................................................................................84 29.0 CERTIFICATE......................................................................................................................................85



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1.0. EXECUTIVE SUMMARY AND RECOMMENDATIONS

1.1 INTRODUCTION AND PROPERTY DESCRIPTION

Touchstone Gold Limited. (“Touchstone”) holds approximately 39 km2 in four mining permits covering the Rio Pescado Gold Property (“RPGP”) at Central Pablado, Rio Pescado within the municipality of Segovia in the Department of Antioquia, northwest Colombia. The four mining permits cover informal alluvial and shallow underground workings with auriferous quartz veins being exploited by local miners and land owners. The RPGP covers a prospective area of the Segovia Gold Belt as indicated by the past alluvial and small underground gold mines and by exploration conducted by Touchstone since 2009. Past mining has occurred in creek sediments (alluvial deposits) and thin saprolite horizon that overlies auriferous quartz veins with mining of veins mainly restricted to areas of oxidized sulphides. Touchstone has applied modern geological modeling, geochemical and geophysical exploration techniques and drilling to exploration of known vein systems and to extend exploration into prospective covered areas.

Touchstone commissioned PAC Geological Consulting Inc. (“PAC”) to prepare an independent technical report reviewing and summarizing exploration data and mineral potential of the RPGP and recommend an appropriate program of further exploration. The report was prepared in compliance with National Instrument 43-101 and follows Form 43-101F1. The report is required by Touchstone for supporting documentation for filings required by the TSX Exchange. The writer (Christopher) is an independent Qualified Person as defined by National Instrument 43-101 and spent November 11th and 12th, 2011 on the property examining known mineral prospects, gathering background information and assessing the exploration potential. Securely stored core from recent Touchstone holes was examined and the Las Pepas workings visited with samples collected from split core and the Las Pepas workings to verify the presence of significant gold mineralized.

1.2 LOCATION, INFRASTRUCTURE AND ACCESS

The RPGP, covering an area of approximately 39 km2 situated in the Segovia Gold Belt, is located at Centro Pablado, Rio Pescado within the municipality of Segovia in the Department of Antioquia, northwest Colombia approximately 150km northeast of Medellin, the modern capital city of Antioquia. Greater Medellin has a population of approximately 3.9 million and an international airport with direct flights to Miami, New York, a number of major Latin American cities, and most of Colombia’s regional centres.

Access by road to the property from Medellin is via paved road to Vegachi

approximately 40 km south of Segovia with the highway between Segovia and Vegachi currently being upgraded and paved. Secondary roads generally not paved and of variable quality provide access to Laureles on the highway from La Cruzada to Zaragoza where a 15 km private track, constructed and maintained by Touchstone, provides access to the RPGP and main camp.



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The writer’s site examination was expedited by using one hour helicopter service obtained at the Medellín city airport (Olaya Herrerra). Helicopter support is often used by Touchstone to move senior personnel and backload samples during the rainy season when muddy roads are often unreliable.

The RPGP covers east-west creek valleys and intervening ridges with camp at

approximately 200m and relief in the order of 150m. The climate is typical of low latitudes and modest elevation. The RPGP has a modern camp with laundry facilities and some air-conditioned sleeping units. The air-conditioning allows night shift drilling crews to sleep comfortably during the hot (>30°C) daytime temperatures.

1.3 OWNERSHIP AND TERMS OF AGREEMENT

Touchstone acquired the RPGP in 2009 with all four Concession Contracts (CC) owned 100% by Touchstone through the Colombia branch of its Panamanian subsidiary (Table 1.1). All Concession Contracts were issued under the Colombian Ley de Minas (2001). The RPGP is covered by four registered contiguous mining permits totalling approximately 39 km2 (3900 ha). The RPGP mining permits are summarized in Table 1.1. Touchstone has land use agreements in areas of planned drilling on concessions 5969 and 6055. PAC is not aware of any other significant factors and risks besides those noted in the report that may affect access, title, or right or ability to perform work on the property.

Table 1.1 Summary of the Touchstone Mining Permits

Asset Holder Interest

(%) Status

Licence

expiry date

Licence

area Comments

5969 Touchstone

Colombia

100%* Exploration Jun 13, 2036 100 ha

(1 km2)

Agreement is currently in its fifth year of

the exploration phase.

Most exploration to date on this licence –

contains the Las Pepas prospect.

6055 Touchstone

Colombia

100%* Exploration Aug 23, 2035 100 ha

(1 km2)

Agreement is currently in its sixth year,

corresponding to the first of three years of

the set-up and construction phase.

A significant portion of exploration to date

is on this licence

7013 Touchstone

Colombia

100%* Exploration Sep 03, 2037 1800 ha

(18 km2)

The agreement is currently in its fourth

year, corresponding to the first of three

years of the set-up and construction phase.

Minor regional exploration completed.

7014 Touchstone

Colombia


(19km2)





Table supplied by Touchstone Gold Limited *subject to payments detailed in Table 4.3

1.4 GEOLOGY AND MINERALIZATION

Colombia is at the northern terminus of the Andes Mountains with the geology over the past 150 million years strongly influenced by subduction of Pacific oceanic crust below the South American and Caribbean. This has resulting in the interaction of the gold enriched Guiana shield with subduction generated granites and results in gold enriched structures in the Segovia Gold Belt at the northern end of the Andean Central Cordillera in northern Colombia. The RPGP is situated within the Segovia Gold belt and the presence of



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informal gold working in a highly prospective gold belt encouraged Touchstone to acquire and then start exploration work on the RPGP in 2009. The RPGP is hosted within diorite and granodiorite of the Jurassic Segovia Batholith. The host units range from coarse grained granodiorite and diorite to finer diorites and rare gabbros. The host rocks are cut by basaltic or diabasic dikes or sills.

The Segovia Gold Belt has over 450 years of continuous product from an approximately 300km long and 15km wide, north-south trending belt centered near the historic mining towns of Segovia and Remedios. Auriferous mesothermal gold veins are hosted by the Segovia Batholith and related to the north-south Otu-Pericos Fault, a regional deep seated structure. Mineralization occurs in secondary extensional structures which are commonly at shallow angle or near vertical with north-south or east-west strikes. Gold commonly occurs over widths from stringers to several meters but generally zone widths average 1m to 2m with some lower grades in vein wallrock. The veins tend to be comprised of ribbon-banded white quartz with base-metal sulphides. Gold commonly occurs as free microscopic grains included in sulphides with occasional coarser aggregates on selvages within quartz. Gold grades are highly variable with informal miners often “gofer holing” high grade shoots.

The colluvial-alluvial and bedrocks gold deposits of the Segovia Gold Belt have been

worked by artisanal miners and by organized companies such as Frontino Gold Mines (FGM), in continuous production since 1852, and Choco Pacific Mining Company (related to Anglo American Gold Mines) and Patino Gold Mining Company (a subsidiary of Placer Development Inc.). Hardrock mines have shown strong persistence with the El Silencio mine having been worked by FGM along a 2km strike and 1,800m down dip. Gold production of approximately 5,000,000 ounces has been generated by FGM from the Segovia Gold Belt near the town of Segovia some 15-20km south of the RPGP.

RPGP Mineralization

RPGP gold mineralization is hosted in massive, generally fractured, lenticular zones 1-28m wide of milky quartz with gold associated with sulphide mineralization consisting of mainly pyrite with lesser chalcopyrite, sphalerite and galena and rare arsenopyrite. Local zones of brittle fracture are annealed by later quartz but veins lack significant post-mineral ductile deformation. Mineralogical studies conducted for Touchstone show sulphides to be mainly pyrite with lesser chalcopyrite, sphalerite, galena and rare arsenopyrite. Gold occurs with gold tellurides and rare gold sulphosalts with free gold as fine gold grains within sulphide masses and at grain boundaries. Vein mineralization is associated with a NNW-SSE main shear zone and NW-SE secondary shear with gold associated with nearly horizontal lenticular veins and nearly vertical veins. Stacking caused by sub-parallel zones or faulting is suggested by repeat mineralized zones of similar orientation within drill holes. Mylonitic, faulted vein contacts have also been found to contain gold values.



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The writer collected three rock samples from the Las Pepas zone underground workings on the RPGP and three splits of previously halved core from Touchstones 2011 drill program on the RPGP. The writer’s samples are summarized in Table 3.1. The examination of mineralization was limited to active underground workings which provide comparison with previous sample results and to Touchstone core which is securely stored at the RPGP exploration camp.

Table 1.2 Writer’s Check Samples Pepas Zone, Rio Pescado Property (11/11/2011).

Sample Location

UTM

Type Weight

Kg.

Width

Meters

Touchstone

Au g/t

Writer

ppm/

Au g/t

Comments

93451 532215E

801627N

Chip 1.74 0.5m 12.260/19.80 1.834 Las Pepas Workings @55922

0.35m

93452 532215E

801627N


0.60m

93453 532215E

801627N

Chip 1.34 0.6m 1.121/NA >10/11.6 Las Pepas Workings @55966

0.46m

93454 532215E

801627N

Core

68.30-

69.00m

0.85 0.7m 83.737 >10/102.6 Hole LPD 1131 @53129

93455 532215E

801627N

Core

19.00-

20.00m

2.52 1.0m 15.047 3.993 Hole LPD 1140@20507

93456 532215E

801627N

Core

31.30-

32.30m

1.94 1.0m 3.784 >10/14.8 Hole LPD 1141 @20530

1.5 DEPOSIT MODEL AND EXPLORATION CONCEPT

The exploration targets on the RPGP are mesothermal gold bearing quartz veins, and form a separate type of auriferous mesothermal gold mineralization related to the Segovia Gold Belt and Segovia Batholith. Mesothermal quartz veins of the Segovia Gold Belt are characterized by:

Show strong base-metal (galena-sphalerite) association, and

Show banding and wall parallel features to veins. The RPGP mesothermal quartz veins generally:

Show local base metal association but pyrite is the main sulphide and chalcopyrite is an indicator of higher grade,

Massive white quartz only locally show banding which is common in the Segovia Gold Belt,

Brittle fracture zones are common and often healed by later quartz.

1.6 STATUS OF EXPLORATION, DEVELOPMENT AND OPERATIONS

The original exploration and exploitation of the RPGP is believed to have started in pre-Colombia times with small scale informal gold production. The informal mining and processing is presently active as land owners have the right to process small tonnages of



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near surface alluvial and vein material in two small unsophisticated stamp and ball mills that process in the order of a tonne of hand sorted material from the Las Pepas area. The area was previously held by ColGold, a subsidiary of London-listed Cambridge Minerals plc, in 2007 but only minor silt and rock sampling valued at <US $5,000 was completed before the project was returned to the Colombian landowners.

Touchstone Exploration

Exploration at the RPGP has been conducted by Touchstone since 2009 with exploration and data collection under the supervision of senior geological personnel judged by PAC to have employed best practice exploration standards. Touchstone reported spending approximately US $2.9 million on the RPGP to the period ending December 31, 2010. Touchstone has completed the 2011 spring 2012 geological, geophysical, geochemical, trenching and drilling program which was estimated to cost of US$ 7.0 million.

The 2009 and 2010 programs consisted of prospecting, geological mapping, 61 line kilometres of magnetic surveying, road building and rock trenching which improved access and rock exposure, remote sensing programs consisting of ASTER, IKONOS, LANDSAT 5 TM and LANDSAT 7 ETM processed by the Centre for Advanced Satellite & Mineral Exploration in Johannesburg, South Africa, underground channel sampling and 100 shallow diamond drill holes totalling 5140.32m. The success of the 2009 and 2010 programs provided justification for the 2011 spring 2012 program which consisted of 118 stream geochemical samples, 2,239 soil samples along east-west grid lines covering the majority of licenses 6055 an 5969 and portions of 7013 and 7014, IP and magnetic surveys covering 64.8 line kilometres, trenching and rock sampling of the Tagual zone and 94 diamond drill holes totalling 9,998.6 meters m. The 2011 spring 2012 drilling program has resulted in some longer intersections with significant gold values in the Las Pepas and Filodehambre zones.

1.7 CONCLUSIONS AND RECOMMENDATIONS

The 2011 spring2012 drill holes at the Las Pepas and Filodehambre Zones were positioned to test quartz vein bearing structures along strike and down-dip based on previous positive 2009 and 2010 drilling results. Holes were oriented in an attempt to intersect the generally north-south striking structures in an orthogonal manner. The 2011 spring 2012 drilling continued to produce positive results which further defined the strike and down-dip extent of the previously known Las Pepas and Filodehambre Zones including 28.25m @ 8.75 g/t gold. In addition, drilling in the poorly explored area located between Las Pepas and Filodehambre, the “Gap” Zone, discovered significant new auriferous quartz vein mineralization with the best intersection being 3.4 meters @ 17.8 g/t gold including 0.7 meters @ 83.7 g/t gold. The success obtained during the 2011, spring 2012 drilling has extended the mineralized zone to over 1,000m. Further grid drilling is required in the Las Pepas and the Filodehambre zones before a meaningful resource estimate and preliminary economic assessment is justified.



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Trenches 39, 40 41 and 45 of seven 2011 trenches in the Tagual south target reached bedrock with sampling returning 6.80m averaging 3.31 g/t Au (Tr39), 6.80m averaging 3.01 g/t Au (Tr40), 2.70m averaging 2.60 g/t Au (Tr 41) and three intervals: 4.50m averaging 4.10 g/t Au, 1.50m averaging 4.50 g/t Au and 1.50m averaging 2.80 g/t Au (TR45). The Tagual south target is a soil geochemical anomaly measuring 1,000m by 400m with trenching only in a 600m interval with existing road access. PAC agrees with the Touchstone drilling plan for the Tagual south target (Figure 20.1). The Tagual north target has a similar gold in soil geochemical anomaly which should be tested by trenching, if allowed by access and/or drilling. The 2009, 2010 and 2011-2012 exploration programs have been successful in providing sufficient positive exploration results from both zone drilling at the Las Pepas and Filodehambre and grid soil geochemical results at the Tagual north and south zones to continue drilling to define resources. PAC recommends a fall 2012 drilling program of 1,500 m on the Las Pepas, Filodehambre and Tagual zones. Further grid soil geochemical sampling should be considered for areas of known quartz float and alluvial workings. A budget of US $900,000 is estimated for the fall 2012 program.



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2.0 INTRODUCTION AND TERMS OF REFERENCE

2.1 INTRODUCTION

Touchstone Gold Limited (“Touchstone”) has acquired the Rio Pescado Gold Project (“RPGP”) to explore for high-grade or bulk tonnage mesothermal gold vein deposits. The 39 km2 project area is situated 150km northeast of the modern city of Medellin in the Segovia Gold Belt. In order to obtain a listing for Touchstone on the TSX Venture Exchange, Touchstone requires a current NI 43-101 compliant technical report. Touchstone has retained PAC Geological Consulting Limited to update the company’s technical reporting. This report is a summary of :

the geological and mineralization of RPGP area,

the results of the exploration work carried out to date,

comments on exploration potential,

recommendations for further exploration on the RPGP and

updates a December 30, 2011 technical report by PAC (Christopher, 2011) with exploration information and title current to June 30, 2012.

2.2 BACKGROUND

Colombia is a participating democracy based on the political constitution of 1991. Article 332 of the Colombian Constitution establishes the state as the owner of the subsoil and non-renewable natural resources. The Mining Code, issued by Law 685 of 2001, the principle regulatory legislation governing mining activity in Colombia, was amended by Law 1382 of 2010 (“Law 1382”). Law 1382 was declared unconstitutional but remains in effect for two years to give congress time to draft and approve a replacement Law. Regulation of mining in Colombia is the responsibility of Ministry of Mines and Energy. The National Institute of Geology and Mining (INGEOMINAS) is responsible for royalties, promotion of mining, management of the mining cadastre and granting of concessions. Granting of concessions has been ceded to some regional governments. Under Colombian law, foreign individuals and corporations acting as mining concessionaries have the same rights as Colombian individuals and corporations. A foreign company needs to establish a corporate entity to be granted a concession.

2.3 TERMS OF REFERENCE AND PURPOSE

Touchstone commissioned PAC Geological Consulting Inc. (PAC) to prepare an independent technical report reviewing and summarizing exploration data and mineral potential of the RPGP and recommend, if deemed appropriate, a program of exploration work on the project. The report was prepared in compliance with National Instrument 43-101 and follows Form 43-101F1. The report is required by Touchstone for supporting documentation needed for submittal to the TSX Venture Exchange.



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2.4 SOURCES OF INFORMATION

This report on the RPGP is based on the following sources of information:

Technical publications of a regional and a district nature from those listed in the References and Sources of Information section of this report (Section 22.0).

Private technical documents written by previous workers on the property and listed in Section 22.0 of this report.

Public news releases by Touchstone,

Discussions with Touchstones technical and management personnel and other geologists with previous work experience in Colombia and on the property.

A field examination conducted by the writer on November 11th and 12th, 2011 and an examination of core securely stored at the field camp

Drill results obtained by Touchstone in 2012.

2.5 FIELD INVOLVEMENT OF THE WRITER

The writer made a site visit to the RPGP for Touchstone on November 11th and 12th, 2011 at which time he had the opportunity to have discussions with John A. Nicholson P.Geo., president of GeoMinEx Consultants Inc. and project geologists. The writer visited the exploration camp, core storage and sample handing facility, current drilling sites and the Las Pepas workings, and viewed others sites of the past exploration and mining at the RPGP from the helicopter. The writer had no previous experience in the area of the RPGP.

3.0 RELIANCE ON OTHER EXPERTS The writer, not an expert in legal matters, is required by NI 43-101 to

include a description of the property title, terms of legal agreements and related information in this report. The writer has relied on Touchstone and their legal counsel for description of property and ownership. Touchstone’s Colombian counsel, Hernando A. Escobar Isaza provided a mineral title status report dated June 28, 2012.

The writer has relied on work conducted for Touchstone geological,

geochemical and geophysical consultants and on a previous Micon technical report (Lewis and San Martin, 2011). In the writer’s opinion exploration work and reporting are to industry best practice standards. The writer’s six QA/QC samples verify the presence of significant gold mineralization but do not provide verification of all of past Touchstone work.



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4.0 PROPERTY DESCRIPTION AND LOCATION

4.1 PROPERTY AREA AND LOCATION (Figures 4.1, 4.2 & 4.3)

Touchstone is a gold exploration company and the 100% owner of the Rio Pescado Project in Colombia, subject to Touchstone making certain scheduled payments (Table 4.3) to the vendors of the Rio Pescado Project. These payments are to be paid out over a period of five years from the date the mining interest was registered on behalf of Touchstone. In the event that Touchstone does not make these required payments, the Rio Pescado Project could be ceded back to the vendors. To date, Touchstone is current with all payments on the Rio Pescado Project.

The RPGP, consisting of two Pepas and two Rio Pescado concessions

and covering an area of approximately 39 km2 (3,900 ha) situated in the Segovia Gold Belt, is located at Centro Pablado, Rio Pescado within the municipality of Segovia in the Department of Antioquia, northwest Colombia approximately 150km northeast of Medellín, the modern capital city of Antioquia (Figures 4.1, 4.2, and 4.3). Greater Medellín has a population of approximately 3.9 million and an international airport with direct flights to Miami, New York, a number of major Latin American cities, and most of Colombia’s regional centres.

The Touchstone property is approximately 20 Km north of the municipal centre at Segovia and centered near 54o17' N Latitude, 61o50' W Longitude at Universal Transverse Mercator coordinates 676000mE, 6016000mN (NAD 27-Zone 20). Access and infrastructure has been improved by Touchstone through the construction and improvement of a 15 km dirt track from the village of Laureles on the highway from La Cruzada to Zaragoza

4.2 LAND TENURE, LEGAL AGREEMENTS AND OTHER ASSETS

Touchstone acquired title on July 30, 2009 to the Pepas concessions and

obtained Land Use Agreements on April 6, 2010 which allows for camp construction and exploration by drilling or underground sampling. The Rio Pescado concessions were acquired on November 30, 2009 but exploration to date has not included physical work and a Land Use Agreement is not presently required (Table 4.1).

For concession agreements granted before February 9, 2010 the surface

fee is equivalent to one Colombian minimum daily wage (about US$11.10 for 2011) per hectare per year for areas up to 2000ha two minimum daily wages per hectare for areas of 2,000 to 5,000 hectares (McAllister Sampler and Warden-Fernandez, 2011). During the exploitation phase any production of gold and silver is subject to a Colombian government 4% gross royalty based on 80% of the afternoon price on the London Bullion Market for an effective royalty rate of 3.2%.



14

Dated December 2011

Figure 4.1: Location of the RPGP, Colombia (Fig. provided by Touchstone).

Figure 4.1 Location Plan, Rio Pescado Property, Colombia (Touchstone Fig.).



15

December 2011

Figure 4.2 Property Claim Plan for RPGP (Fig. provided by Touchstone).



16

Table 4.1. Summary of Touchstone Concession Contracts (provided by Touchstone).

Name Titles

Included1

Number Signing

Date

Land Use

Agreement Interest Legal Status

Pepas CC 5969 30-Jul-09 06-Apr-10 100% In good standing

CC 6055 30-Jul-09 06-Apr-10 100% In good standing

Rio Pescado CC 7013 30-Nov-09 Na 100% In good standing

CC 7014 30-Nov-09 Na 100% In good standing

Table 4.2 Summary of the Touchstone Mining Permits

Asset Holder Interest

(%) Status

Licence

expiry date

Licence

area Comments

5969 Touchstone

Colombia

100%* Exploration Jun 13, 2036 100 ha

(1 km2)

Agreement is currently in its fifth year of

the exploration phase.

Most exploration to date on this licence –

contains the Las Pepas prospect.

6055 Touchstone

Colombia

100%* Exploration Aug 23, 2035 100 ha

(1 km2)

Agreement is currently in its sixth year,

corresponding to the first of three years of

the set-up and construction phase.

A significant portion of exploration to date

is on this licence

7013 Touchstone

Colombia


(18 km2)





7014 Touchstone

Colombia


(19km2)





Table supplied by Touchstone Gold Limited *subject to payments detailed in the Table 4.3



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Table 4.3 Details of Touchstone Property Ownership and Payment Schedule

Asset Concession

Owner Holder

Interest

(%)

Licence

area

Payment

Status

Payment Date

Property payments

5969 Gustavo Salazar,

Jhon Jairo Torres and Leonardo

Rincón

Touchstone

Colombia

100% 100 ha

(1 km2)

Current $12,500 upon Contract signing (paid)

$12,500 upon registration of property with National Mining Recorder (NMR)

(paid)

$25,000 upon 1st year of registration with NMR (paid)

$25,000 upon 2nd year of registration with NMR (paid)

$50,000 upon 3rd year of registration with NMR (25,000 paid/remaining due

December 1, 2012)

$125,000 upon 4th year of Registration with NMR (Due June 10th , 2013)

$750,000 upon 5th year of Registration with NMR (Due June 10th, 2014)

6055 Gustavo Salazar,

Jhon Jairo Torres

and Leonardo Rincón

Touchstone

Colombia

100% 100 ha

(1 km2)

Current 12,500 upon Contract signing (paid)

$12,500 upon registration of property with National Mining Recorder (NMR) (paid)

$25,000 upon 1st year of registration with NMR (paid)

$25,000 upon 2nd year of registration with NMR (paid)

$50,000 upon 3rd year of registration with NMR (25,000 paid/remaining due

December 1, 2012

$125,000 upon 4th year of Registration with NMR (Due June 10th , 2013)

$750,000 upon 5th year of Registration with NMR (Due June 10th, 2014)

7013 Colin Andrew and

Irene Mejia

Touchstone

Colombia

100% 1800 ha

(18 km2)

Current $3,750 Upon Contract signing (paid)

$7,500 upon registration of property with National Mining Recorder (NMR) (paid)

$$7,500 upon 1st year of registration with the NMR (paid)

$7,500 upon 2nd year of registration with the NMR (paid)

$12,500 upon the 3rd year of registration with the NMR (Due June 15th, 2013)

$12,500 upon the 4th year of registration with the NMR (Due June 15th , 2014)

$250,000 upon the 5th year of registration with the NMR (Due June 15th, 2015)

7014 Colin Andrew and

Irene Mejia

Touchstone

Colombia

100% 1900 ha

(19km2)

Current 3,750 Upon Contract signing (paid)

$7,500 upon registration of property with National Mining Recorder (NMR)

(paid)

$$7,500 upon 1st year of registration with the NMR (paid)

$7,500 upon 2nd year of registration with the NMR (paid)

$12,500 upon the 3rd year of registration with the NMR (Due June 15th, 2013)

$12,500 upon the 4th year of registration with the NMR (Due June 15th , 2014)

$250,000 upon the 5th year of registration with the NMR (Due June 15th, 2015)



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4.3 COLOMBIAN MINING LAW

The Colombian mining code (Law 685) was re-drafted and replaced in 2001 having the

principal of first in line and first in right with one mining title covering exploitation through to exploitation. The code is regulated by the Ministry of Mines and Energy and administered by the Colombian Institute of Geology and Mining (INGEOMINAS).

4.4 LEGAL SURVEY (Table 4.3)

The RPGP boundaries have not been legally surveyed. Its legal boundaries are dictated by geographical coordinates and Table 4.3 provides the Colombian coordinates for and establishes the legal location of the 4 concessions.



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Table 4.4. Colombian Coordinates for RPGP Concessions (provided by Touchstone).

Contract Concession

Number Point Easting Northing

5969

1 930000 1293000

2 931000 1293000

3 931000 1294000

4 930000 1294000

6055

1 930000 1295000

2 931000 1295000

3 931000 1294000

4 930000 1294000

7013

1 932000 1293000

2 931000 1293000

3 931000 1297000

4 934000 1297000

5 934000 1290000

6 932000 1290000

7014

1 932000 1300000

2 932000 1299000

3 934000 1299000

4 934000 1297000

5 931000 1297000

6 931000 1296000

7 928000 1296000

8 928000 1298000

9 927000 1298000

4.5 LOCATION OF MINERALIZATION AND FACILITIES

The location of main zones of known showings, occurrences and named prospects are shown on Figures 4.3. There are presently small, informal active mines in the Pepas and Filodehambre and zones on the property. The Aguila, El Sapo and Tagual zones were defined by geophysical surveys and geochemical sampling with drilling presently being used to define mineralized zones at these targets.



20

December 2011: See Index Fig. 4.2 for Claim Locations

Figure 4.3 RPGP Property Mineralized Occurrences, Showings and Prospects.



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4.6 ENVIRONMENTAL LIABILITIES

The initial due diligence work by Touchstone indicates that the property area is subject only to normal environmental regulations and liabilities as stipulated under the laws of the Republic of Colombia. The sufficiency of rights for exploration and mining operations on the property is subject only to normal procedures and permits under the laws of Colombia. The writer is aware of mercury use by informal local miners on the property that may cause environmental concerns. Future mining operations anywhere on the Touchstone property will be required to meet best practice, environmental and operating standards and the use of mercury amalgamation will not be allowed.

4.7 PERMITS AND LAND USE AGREEMENTS

Touchstone holds permits for the recommended Phase 1 exploration of the RPGP. The property is situated within the Segovia gold belt which is one of the main gold mining zones in Colombia which helps to maintain mining use status for the land. Touchstone is employing a significant number of local people in their exploration program and has worked with local land owners to improve both local access and access to the land for agricultural projects and grazing of livestock. The camp purchases much of its required food locally. The involvement of the local population should help Touchstone in obtaining a social contract to move the project forward.

At the point of definition of a mining operation, it becomes necessary in Colombia to apply for a full environmental license that is subject to the approval and monitoring by the Colombian regional environmental authority CORANTIOQUIA. Touchstone has an environmental monitoring and reclamation program in place and has begun the process of applying for environmental licenses necessary for future production from concessions 5969 and 6055.



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Table 4.5. Coordinates of Land Use Agreement Areas.

Contract Concession

Number Point Easting Northing

Tagual 1

1 930419.30 1294645.57

2 930365.83 1294339.94

3 930290.39 1294348.66

4 930220.40 1294145.39

5 930189.15 1293970.25

6 930204.50 1293593.76

7 929614.59 1293621.32

8 929512.93 1294030.82

9 929518.01 1294081.67

10 929612.92 1294495.72

11 929907.90 1294789.22

12 930059.19 1294766.81

Tagual 2

1 930419.30 1294645.57

2 930365.83 1294339.94

3 930290.39 1294348.66

4 930220.40 1294145.39

5 930189.15 1293970.25

6 930441.02 1293978.39

7 931039.66 1293857.81

8 931768.23 1293716.73

9 932003.71 1294027.94

10 932023.80 1294100.87

11 931879.21 1294402.97

12 931463.68 1294587.70

13 931190.34 1294819.38

14 930827.25 1294860.13

15 930621.13 1294757.43

Bella Suiza

1 930,189.5 1,293,973.9

2 930,435.3 1,294,005.6

3 931,454.9 1,293,878.7

4 931,644.6 1,293,767.9

5 931,641.9 1,293,641.1

6 931,542.9 1,293,431.3

7 931,380.3 1,293,219.5

8 930,753.7 1,292,878.5

9 930,556.1 1,292,864.1

10 930,303.8 1,292,898.4

11 930,270.8 1,292,935.4

12 930,170.2 1,293,605.1

Table supplied by Touchstone Gold Limited.



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TAGUAL 1

TAGUAL 2

BELLA SUIZA

0 200 400

meters

Fig. from Touchstone December 2011

Figure 4.4 Boundaries of the Land Use Agreements Relative to Concessions.

5.0 ACCESSIBILITY, INFRASTRUCTURE, CLIMATE, LOCAL RESOURCES, AND PHYSIOGRAPHY

5.1 PHYSIOGRAPHY, TOPOGRAPHY, ELEVATION, CLIMATE AND VEGETATION

The physiography of the RPGP is dominated by north-westerly trending creek valleys

between rolling ridges. Water flow in the valleys varies significantly during the rainy season with heavy rains causing strong flow and difficult crossing conditions. Relief on the RPGP is 350m with elevation varying from below 200m to over 500m. The relief is moderate but some creeks have steep banks.



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The climate at lower elevations is subtropical which results from the location of the working area at low elevations with a 3 to 4 month dry season during December to March. In the town of Segovia the average annual nightly temperature is 20 to 21°C and the daytime temperature averages 28 to 30°C. The RPGP is approximately 300m lower than Segovia and temperatures are typically 5°C hotter. December, January and February are the driest months with rainfall up to 196.5mm per month with precipitation increasing up to 518.7 mm during March and April and remaining relatively steady till September before increasing up to 677.1mm in October and November. Exploration and mining activity can be conducted year-round but may be slowed at times by heavy rain. Relative humidity ranges from 82 to 85% with an average of 85% between October and December with 82% occurring during February and July. The project area is dissected by a network of small streams that feed in to the Rio Pescado and flow in northerly, north-westerly and north-easterly directions. Drainages have created a dissected plateau with small hills generally less than 500m above sea level (asl), cut by valleys between 200 and 250m asl. The RPGP is covered by typical species of a tropical rain forest that have been replaced by grass for cattle grazing and fields used for sugar cane, cacao and vegetable gardens. An area identified by Touchstone for a possible mill site and tailings area contains only a few trees. The RPGP does not contain national parks or other protected areas with traditional land use mainly mining, cattle grazing and agriculture.

5.2 ACCESS AND PROXIMITY TO POPULATION CENTRES

The RPGP is situated approximately 20 km north of the town of Segovia with a

population of over 8,000 people and 11 km east-north east of the village of Laureles in the municipality of Segovia, Department of Antioquia in north-western Colombia. The project is located 150 km northeast of the Medellín, the modern capital city of Antioquia with an area population of approximately 3.9 million people.

Access by road to the property from Medellín is via paved road to Vegachi

approximately 40 km south of Segovia with the highway between Segovia and Vegachi currently being upgraded and paved. Secondary roads generally not paved and of variable quality provide access to Laureles on the highway from La Cruzada to Zaragoza where a 15 km private track, reconstructed and maintained by Touchstone, provides access to the RPGP and main camp.

The writer’s site examination was expedited by using one hour helicopter service

obtained at the Medellín city airport (Olaya Herrerra). Helicopter support is often used by Touchstone to move senior personnel and backload samples during the rainy season when muddy roads are often unreliable.



25

0 25 50

km

Fig. provided by Touchstone December 2011

Figure 5.1 Access Plan for the RPGP.



26

5.3 SURFACE RIGHTS, POWER, WATER, PERSONNEL, TAILINGS SITES, PROCESSING PLANT SITES

The Touchstone Concession Contracts (CC) are covered by four registered contiguous mining permits totalling approximately 39 km2 (3.900 ha). Touchstone has secured land agreements with the property owners in the area of planned exploration on tenements 5969 and 6055. During the exploration and evaluation stages, concessions are subject to an annual fee of “cannon”. Touchstone has informed PAC that all fees and agreements are current and in good standing. Power at the camp is supplied by diesel generators with sufficient power for lighting, satellite television, computer use, laundry and air conditioned sleeping quarters. A formal mining operation will require significant additional power and access to the electricity which services local communities. A number of creeks on the property have water flow through out the year with local opportunities for developing run of river power. Colombia has a well developed electrical grid with no shortage of power. The grid runs approximately north south in the vicinity of the Municipality of Segovia and a 400 kV and 11 kV lines runs along the Rio Pocune valley pass within 6 km of the RPGP. The cost of a six kilometre spur line to the RPGP has been estimated by Touchstone to be approximately US $250,000. At the RPGP Touchstone has erected an antenna which allows reception of telephone, satellite television and internet signals. Most provisions and equipment is available in Segovia and Medellín. Diesel fuel and gasoline are available from a depot at Laureles. Possible tailings, processing, and alluvial mining sites were observed while flying over the project area and surface rights are generally not expensive and could purchased for development and storage purposes.

6.0 HISTORY

6.1 HISTORIC EXPLORATION

The RPGP is situated in the Segovia Gold Belt, a 60km long and 10km wide, north-south auriferous belt centered near the historic mining towns of Segovia and Remedios. Colluvial and alluvial occurrences in the gold belt are considered to be of great importance in Colombian gold mining. Production was probably started by indigenous people in pre-Colombian times but recorded production commenced in the Remedios mining district from alluvial placer deposits in 1560. Lode gold mining became significant at Remedios after April 12, 1852 when the English company New Granada Mines was incorporated. New Granada was later known as Frontina Gold Mines (FGM), Bolivia South American Gold Mining Company Ltd. (BSA) and/or Marmajito Gold Mines Ltd. (MGM). FGM was owned by American



27

investors from 1910 till 1976 when they left Colombia and gave FGM to working and retired miners. FMC has worked approximately 13 mines and currently has three operating mines. Since 1852 FMC operated El Silencio which has been developed on 44 levels to a depth of 800m with 1,800m developed along the dip of the vein. The Providencia mine is currently contributing the majority of the FMC production and the Sandra K is under development. FMC’s historic recorded production is over 5.5 million ounces but additional illegal and non-recoded production could increase total production to nearly 9 million ounces. The FMC production is outside the area of the RPGP and is presented to show the significance of the Segovia Gold Belt.

6.2 PROPERTY HISTORY

The Las Pepas (the nuggets) and Las Pepas North (CC# 5969 & 6055, respectively) have numerous examples of artisanal mining with over 30 small tunnels and workings located by Touchstone. The oldest workings could date to the early Spanish explorers but the largest workings are reported by currently active local miners to have commenced in the 1950’s. Artisan mining has mainly relied on manual methods with the orientation of workings controlled as much by structural weakness as by grade of the quartz veins. Processing has been by hand cobbing and then crushing by vertical two or three stamp mills or small jaws driven by diesel or gas fuelled motors. The crushing produces coarse quartz sand which is run over an inclined concreted surface covered with burlap sacking to trap coarser free gold. The remaining coarse sands are placed in small grinding mills, locally called cocos and ground fine for panning and then amalgamation with mercury. Mercury “bullets” containing 40-60% gold is roasted leaving a gold-silver alloy containing about 75% gold. The miners use the presence of iron oxides for selectively mining and cobbing material called “Congo”. At Las Pepas, three artisanal plants presently exist and are sporadically operated. The plants, consisting of three stamps or small jaw crushers and banks of cocos, are located as follows (Figure 4.3):

930290E; 1293720N – Las Pepas zone worked by Gustavo Salazar and others.

930310E; 1293630N – Filodehambre zone worked by Marthz Rua.

930300E, 1294250N – Las Pepas North zone worked by Gustavo Salazar.

6.3 PREVIOUS EXPLORATION

The property has previously been held by informal miners and the current landholders. The property area was optioned to ColGold, a subsidiary of London-listed Cambridge Minerals plc, in 2007. Colgold completed minor rock chip sampling and collected approximately 35 stream sediment samples with analysis by 12 element ICP plus gold by ALS in Lima, Peru. A total of less than $5,000 USD was spent before Colgold returned the property to the owners on December 3, 2008. No evidence of previous drilling or geophysical surveys has been found by Touchstone.



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6.4 HISTORICAL RESOURCE ESTIMATES

There are no historical resource estimates for mineral occurrence within the RPGP. Touchstone has modelled exploration targets to prioritize targets identified during the initial exploration and to evaluate where holes are needed to provide adequate sample spacing for an initial NI43-101 compliant resource estimate.

6.5 HISTORIC PRODUCTION

Artisan miners have not kept accurate records of gold production and the only way to estimate their production is to measure the amount of auriferous quartz vein that has been mined and then estimate a grade for this material. Touchstone has located historic workings and measured the volumes mined as shown in Table 6.1 and workings identified on Figure 4.3. Touchstone estimated a total of 14,650 tonnes mined from 25 workings with mapping suggesting 12,200 tonnes consisting of quartz material. Touchstone used the miners suggested recovery of 26 g Au/t to infer historic gold production of approximately 10,000 ounces. Since milled material is hand sorted for up-grading, not all of the 12,200 tonnes of quartz material mined was processed which may reduce the total gold ounces in the estimate of historic production.

Table 6.1 Touchstone’s Estimates of Material Mines from Underground Workings.

Working/Mine* Total Volume Total Tonnes Volume of Quartz Tonnes of Quartz

LPM-0901 3,711.30 10,577.20 3,340.17 9,519.48

LPM-0902 493.45 1,406.32 394.76 1,125.05

LPM-0903 19.54 55.70 0.00 0.00

LPM-0904 16.74 47.72 16.74 47.72

LPM-0905 10.13 28.86 10.13 28.86

LPM-0906 58.62 167.08 58.62 167.08

LPM-0907 116.80 332.89 116.80 332.89

LPM-0910 15.93 45.41 0.00 0.00

LPM-0911 46.09 131.36 0.00 0.00

LPM-0912 45.13 128.61 24.89 70.95

LPM-0913 54.11 154.22 37.08 105.69

LPM-0914 149.89 427.19 96.10 273.87

LPM-0916 31.31 89.24 16.72 47.64

LPM-0917 56.24 160.29 41.72 118.90

LPM-0918 13.92 39.68 8.19 23.35

LPM-0919 68.16 194.26 55.14 157.14

LPM-0921 26.88 76.61 10.39 29.60

LPM-0922 34.20 97.46 5.99 17.06

LPM-0923 29.42 83.85 0.00 0.00

LPM-0924 81.96 233.60 0.00 0.00

LPM-0925 46.21 131.69 32.22 91.82

Total 5,126.05 14,609.25 4,265.65 12,157.11

*Note: Tunnels LPM-0908, 0909, 0915 and 0920 are outside Las Pepas Zone.



29

7.0 GEOLOGICAL SETTING AND MINERALIZATION

7.1 REGIONAL GEOLOGY AND TECTONICS

Colombia is at the northern terminus of the Andes Mountains with the geology over the past 150 million years strongly influenced by subduction of Pacific oceanic crust below the South American and Caribbean plates. This has resulted in the interaction of the gold enriched Guiana shield with subduction generated granites and results in gold enriched structures in the Segovia Gold Belt of northwest Colombia. The RPGP is situated within the Segovia Gold belt and the presence of informal gold working in a highly prospective gold belt encouraged Touchstone to acquire and then start exploration work on the RPGP in 2009.

The Central Cordillera of Colombia is underlain by basement rocks composed mainly of amphibolite-grade Proterozoic and greenschist-grade Palaeozoic metamorphic rocks at the western edge of the Guiana Shield. During Mesozoic and Cenozoic times subduction of the Pacific plate resulted in the formation of island arc environments and arc related intrusive activity in Jurassic, mid-late Cretaceous and Miocene to recent times.

7.2 PROPERTY GEOLOGY (Figures 7.1& 7.2)

The general geology of the RPGP area is shown in Figure 7.1 as prepared by Touchstone. The main exploration area on permits 5969 and 6055 is underlain by various phases of the Jurassic Segovia Batholith. Permit 7013 is shown to be approximately a third underlain by Cretaceous Segovia volcanic with the remainder underlain by phases of the Segovia Batholith. The southern third of Permit 7014 is shown to be underlain by phases of the Segovia Batholith and the northern two thirds to be underlain by roof pendants or structurally emplaced blocks of lower Paleozoic metamorphic basement rocks or by areas of Cretaceous Eastern Segovia sedimentary rocks.

Quartz Feldspar Gneiss (Lower Paleozoic) The gneissic unit represents a remnant of the Guiana Shield rocks that are dominated by dark-grey graphitic quartz-sericite schists. The unit shows wide variation in composition but generally N-S strike and easterly dip. Evidence of absorption by batholithic phases suggests that the unit is at least in part a roof pendent with some structural modification. To the west of the RPGP, black carbonaceous pelitic rocks compose part of this unit.

Segovia Batholith (Jurassic)

The Segovia Batholith was first defined by mapping in 1972 with a present known extend of 270km in a N-S direction and up to 50km widths in its central portion. The batholith is mainly medium grained biotite +/- hornblende diorite to quartz diorite with local variation to hornblende gabbro and textural variation from massive to laminated or



30

gneissic near fault or shear zones. The mineralogy generally consists of 50-60% plagioclase feldspar, 2-32% quartz, 0-20% orthoclase feldspar, and 0-10% chloritized biotite and 0-30% hornblende with stronger hornblende content in gabbroic varieties. The intrusive rocks are commonly cut by N-S trending basaltic/andesitic diabase dikes or sills. Although post-mineral, dikes are spatially related to mineralization and appear to have been emplaced along similar structural zones.

Eastern Segovia Sediments (Cretaceous)

The Eastern Segovia Sediments is an informal name used for sediments associated with the Segovia Volcanics and situated east of the regional Otu-Pericos Fault. The sedimentary rocks are dominated by carbonaceous, black lutites interbedded with limonitic iron deposits, sandstones, conglomerated and minor green basaltic volcanic rocks.

Segovia Volcanics (Cretaceous)

The Segovia volcanics are associated with basaltic rocks that form N-S trending bodies between the Nus and El Barge Faults, to the east of the town of Segovia. The rocks form a volcano-sedimentary belt extending for 90 km with an average width of 6 km, although width increases at the northern end of the belt.

7.3 STRUCTURAL GEOLOGY

The understanding of the structural geology of the RPGP is evolving as exploration progresses and covered areas are explored by road cuts, underground workings and drilling. An ASTER image (Figure 7.2) obtained by Touchstone shows main fault lines and directions that have been mapped by Touchstone (Figure 7.1). The main structural trends which act as controls for quartz veining and precious metal mineralization are orientated NW, WNW and near N-S. Six zones of quartz veining with precious metal mineralization have been identified in NNW-SSE orientated shears that feather from a stronger and more continuous N-S shear zone. The N-S structural direction also controls basaltic or diabase dikes that are post-mineral feeders to the Segovia volcanic rocks. The N-S basaltic dikes mainly have dips from 30°W to 90°. Touchstone (Lewis and San Martin, 2011) has found that at the Las Pepas zone, the quartz body is bounded on the east by a normal fault dipping 60-80°W. Another exposure at the Las Pepas zone has mylonitic quartz at a near flat footwall contact which suggests to the writer that low angle faults influence distribution of the quartz bodies. Further north, drill intersections, in holes LPD-1009, -1010, -1011, -1011a and -1024 show a steep fault bounded contact on the west margin of the mineralized zone. Better understanding of the influence of faulting on the distribution of mineralization is necessary for geological modeling for resource estimation.



31

531870E

Dated January 2011

Figure 7.1 General Geology of the RPGP (Figure From Touchstone).

Recent Alluvium Cretaceous sub-volcanic intrusives Andesites and andesitic basalts Fault (Mapped & Inferred) Cretaceous extrusive volcanics, basaltic flows Cretaceous volcaniclastics and secdiments Lower Palaeozoic Metamorphics

Jurassic Granodiorites and Diorites Rio Pescada Permits Jurassic Gabbroic intrusives

802865NN



32

Figure provided by Touchstone December 2011

Figure 7.2 ASTER Imagery of the Area Surrounding the Rio Pescado Property with Principal Lineament in Red.

2.5 50

km

802865N

531870E



33

7.4 MINERALIZATION

The known mineralization on Rio Pescado Property occurs in the Segovia Batholith with massive quartz, often intensely fractured, brecciated and annealed by later quartz. Sub-horizontal, fault gauge bearing shear zones occur within the quartz masses. Two quartz phases have been recognized by Touchstone: early white milky quartz with low sulphide content and late cross-cutting translucent to pale citron with brassy crystalline pyrite and minor blebs of chalcopyrite. The quartz masses locally show ribbon-banding and wall sub-parallel features which are common in most of the Segovia Gold Belt. The gangue mineralogy consists of approximately 97% quartz with minor ferroan carbonates and rare chlorite, sericite and kaolin. Wallrock alteration consists of proximal pyrite, carbonization and seritization in a broad epidote-chlorite, propylitic halo in host intrusive rocks. The presence of porphyry type potassic alteration is suggested by long low grade gold intervals associated with K-feldspar and magnetite. The mineralogy of the gold and silver mineralization found at the RPGP has been studied by GeoMinEx (2011a) to better understand the association of stream sediment geochemical anomalies with gold-silver bearing quartz veins. A sample was selected from a depth of 17.8m in hole LPD 10-28 from the interval 17.40 to 19.30m which returned 39.38 ppm Au and 18 ppm Ag. The precious metal-bearing minerals were found by GeoMinEx to be mainly represented by the fine grained tellurides calaverite [AuTe2] and sylvanite [[(Au, Ag)2Te4] with traces of electrum (>20 wt% Ag) and a telluride to electrum ratio estimated at 99:1. The opaque mineralogy was found to be dominated by pyrite with minor chalcopyrite and a trace of sphalerite. The tellurides occur as inclusions in pyrite, as inclusions in chalcopyrite filled fractures and inclusions in chalcopyrite interstitial to pyrite. Chalcopyrite in the near surface environment is variably replaced by secondary covellite. Tellurium, Ag and gold are considered by GeoMinEx to be the best indicators for silt and soil geochemical sampling. Ore mineralogy of Las Pepas vein material was studied by Eurotest Control AD (Eurotest) based in Sofia, Bulgaria. Eurotest conclude that ore mineralogy comprised mainly pyrite with subordinate and local marcasite, and minor sphalerite and chalcopyrite. Free gold and gold sulphasalts and tellurides occur with approximately 50% of the gold as fine to very fine free gold or electrum within sulphide masses. The ore mineralogy results in a geochemical association of gold with silver, barium, zinc, lead, copper and tellurium. Arsenopyrite is reported to occur as euhedral crystals with some replacement and fracture filling with chalcopyrite, sphalerite and native silver. For those interested, in details of rock units and mineralization further detail and numerous photos and photomicrographs can be found in Micon’s 2011 technical report.



34

8.0 DEPOSIT TYPE

8.1 MESOTHERMAL GOLD VEINS (Figure 8.1)

The exploration targets on the RPGP are mesothermal quartz veins related to

dioritic or tonolitic intrusive rocks or associated volcanic rocks (Figure 8.1). Sillitoe (2009) noted that the Segovia Gold Belt is related to the Jurassic Segovia Batholith with oxidized equigranular calc-alkaline, generally hornblende diorite and tonalite plutons, intruded into an extensional environment. The RPGP gold veins are considered mesothermal since they do not show boiling features or trace element chemistry typical of high level, epithermal veins. The RPGP veins do not appear to be typical intrusive related reduced and low sulphide gold mineralization because tungsten and bismuth are absent and arsenic content is low (Lewis and San Martin, 2011). On the RPGP, gold mineralization is associated with pyrite and better values with chalcopyrite.

8.2 RPGP EXPLORATION APPROACH

Systematic exploration for gold on the RPGP was started by Touchstone in 2009. Touchstone has used modern geophysical, geochemical and geological methods to assess exploration of a previously informal gold mining area to select and prioritize targets for drill testing. Prior to Touchstone, prospecting had used informal methods with alluvial material panned and quartz material crushed and panned to determine if sufficient gold occurred to justify mining and processing.

Touchstone exploration started with prospect evaluation and then entered the

prospecting and general geology stage with silt sampling and soil sampling, recording of geological and prospecting observations in a GIS database before some scout drilling. After some initial success, remote sensing, ground magnetic surveying and detailed sampling of located working was undertaken. The property has been advanced to where drilling is being conducted on two main mineralized trends with the Los Pepas trend being grid and infill drilled and the scout drilling of the El Sapo-El Tagual trend.

8.3 EXPLORATION TARGETS

Exploration targets on the RPGP are quartz veins and lenses which are related

to NNW-SSE and NW-SE shear zones. The Las Pepas is the best know and 2011 drilling in the Gap Zone suggests that the Las Pepas and Filodehambre zones connect but are offset by faulting. A soil sampling and trenching program in the El Tagual zone has produced some significant trench result which are summarized on Figure 9.8 with further drill testing required to determine the extent and grade of the mineralized zone.



35

Figure provided by Touchstone December 2011

Figure 8.1 Cordilleran Gold Deposit Models After Sillitoe (2009) with Modification for Mesothermal Segovia Gold Belt Deposits and Rio Pescado Gold Project Occurrences. RPGP Veins are Associated with Equigranular Intrusive Rocks but Have Characteristic Atypical of Other Segovia Gold Belt Occurrences with RPGP type veins in red.



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9.0 EXPLORATION CONDUCTED BY TOUCHSTONE

Since acquisition of the RPGP by Touchstone in 2009, exploration has been conducted by Touchstone’s geological and technical personnel under the supervision of experienced professional geologists who are judged to have used modern geological, geochemical and geophysical methods and industry best practice standards. Exploration has included general geological mapping on key portions of the RPGP including all of concessions 6055 and 5969. Outcrop, trench and float observation are entered into Map Info for production of geological maps and deposit models once adequate data is acquired. Touchstone is reported (Lewis and San Martin, 2011) to have spent approximately US $2.9 million from 2009 to December 31, 2010. The success obtained during 2009 and 2010 resulted in a proposed budget of US $7.0 million for 2011-2012 which included drilling an additional 9,998 m in 94 holes. In 2011-2012 Touchstone Gold embarked on an extensive exploration program including stream and soil geochemical sampling, ground IP and magnetic surveys, rock chip sampling, excavator trenching and drilling on the RPGP. The drilling programs conducted in 2009, 2010, and 2011-2012 are summarized under drilling in section 10 of this report.

9.0.1 2011 Exploration

From February to June, 2011 a comprehensive stream sediment sampling program was conducted in order to locate possible new mineral occurrences. A large, grid-based soil geochemical sampling program was initiated in March to help define the known mineralized zones and aid in the discovery of new mineralized zones indicated from stream sediment gold anomalies. A grid controlled (Figure 9.1) induced polarization and magnetic survey was completed in June and July covering the known mineralized trend and a portion of the soil grid. Based on the gold soil geochemical anomalies discovered, subsequent prospecting, rock sampling and excavator trenching programs were initiated. Exploration work was in part conducted and entirely supervised by Geominex Consultants Inc. of Vancouver, B.C., Canada.

Gold is the principal focus of exploration at Rio Pescado; however, tellurium, mercury and silver have proven to be useful pathfinder elements as the gold mineralization on the property tends to form as gold-silver tellurides.



37

Figure 9.1. Location of 2011 Touchstone Geochemical and Geophysical Grid.



38

9.1 Stream Sediment Sampling

A stream sediment sampling program was conducted during the period March to

June 2011. The sampling program focused on streams and rivers, along with major drainage zones in and surrounding the Las Pepas area (Figure 9.2). In total, 118 stream sediment samples were collected and sent for analyses.

Samples were collected moving down streams at an average of 200 meter intervals on continuous river beds. At tributaries, a stream sediment sample was taken immediately before the tributary and immediately after. Sample sites were chosen at quiescent stream beds with significant sand and silt accumulation. A minimum 100 g sample was taken at each sample location by a Geominex geologist using a small shovel, with the sample screened in the field using 80 μm and 20 μm sieves. Sieves and tools were thoroughly cleaned between samples at the sample site using river water and a brush. The sieved samples were then placed in individual Kraft paper sample bags and placed within larger individual plastic sample bags. Once returned to camp, the samples were air dried. The dried samples were then placed into large rice bags and sealed with a secure tag for shipment to Medellin to undergo preparation by ACME labs. Once prepared at the ACME lab facilities in Medellin, Colombia, the splits were shipped for analysis to ACME Lab in Vancouver, Canada.

Significant gold results are displayed in Table 9.1 and percentile values presented in Table 9.2. Sample locations and gold anomaly distribution can be seen in Figure 9.2. Upstream from the Pepas area is one of the locations of active artisan mining. Downstream from the mining site are several >95 percentile Au anomalies that may be related to the mining operation, and reflect the known gold occurrences at Pepas and Filodehambre. A number of other strongly anomalous samples were obtained from streams draining areas to the east of the known mineralization at Pepas and Filodehambre.

9.2 Soil Sampling

A soil sampling program was completed in several phases from March to December

2011; initially to test if the known gold occurrences would respond favorably to soil geochemistry and then subsequently over a much larger area in order to aid in the search for new mineralized zones. A total of 2,239 soil samples were collected during the 2011 sampling program. Initially, the sampling program followed the geophysical survey grid which was comprised of 35 east-west grid lines, 1,800 m in length, spaced 100 m apart, following a north-south base line. Based on the success of the sampling program, the grid was extended to eventually comprise 50 east-west lines, spaced 100 m apart, with the majority of the lines 2,300m in length (Figure 9.3). The grid encompasses the majority of licenses 6055 and 5969, and portions of 7013 and 7014 (Figure 9.1).



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Table 9.1: Au values of stream sediment samples from Las Pepas displayed in ppb.

Sample

Number

Coordinates Au ppb

Easting Northing Elevatio

n

Ssj001 532211 801554 213 1012.2

Ssj014 532164 801476 241 884.3

Ssj017 532134 801673 227 2032.8

Ssj018 532128 801746 224 1674.6

Ssj019 532225 801816 217 2067.5

Ssj020 532172 801970 208 1262.9

Ssj021 532124 802228 199 2833.9

Ssj022 531953 802434 186 1222.6

Ssj023 531863 802630 193 1496.9

SSA24 532249 801935 209 393.1

SSA25 532363 801901 214 439.2

SSJ028 531621 804509 157 754.3

SSJ040 531803 802589 171 859.6

SSJ042 531645 802922 164 537.9

SSJ043 531466 803161 173 389.7

SSJ098 532492 805455 158 700.8

Table 9.2 Stream sediment Au anomaly percentile values.

Au percentiles Au values ppb Sample totals

80 ≤ 288.7 102

85-90 390.9 5

90-95 749.0 6

95-99 1368.2 4

99 ≥ 2749.6 1



40

Figure 9.2 Stream Sediment Sampling of RPGP.



41

Figure 9.3 Gold in Soil Plan for RPGP.



42

Samples, consisting of saprolite material, were collected at 50m intervals along all of the lines. Samples were collected at a consistent depth of 50cm utilizing a hand auger, described in a notebook, and then placed in individual Kraft paper sample bags under the supervision of a Geominex geologist. Samples were then returned to camp and air dried. Once dried, the sample bags were placed by Geominex geologists into large rice bags, sealed and secured with separate secure tag numbers before being shipped via helicopter to the Acme prep lab in Medellín, Colombia. The sample pulps were then shipped via air freight to ACME labs in Vancouver, B.C, Canada for ICP analyses.

Two dominant gold anomaly trends were revealed by the 2011 soil sampling program (Figure 9.3). The known gold occurrences at Pepas and Filodehambre are located within an approximately 1,000 meter long linear north-south anomaly defined by gold >95 percentile. This anomaly illustrates the linear pattern of the known gold occurrences and potentially extends the area of interest along strike to the north and south. A second strong north-south linear anomaly defined by gold >95 percentile (Table 9.3) was discovered approximately 600 m to the east of Pepas. The newly discovered area, termed the Tagual anomaly, is about 1,000m in length with a similar north-south orientation as the Pepas and Filodehambre trend. Subsequent programs of prospecting, rock chip sampling and trenching have been carried out on Tagual area with the discovery of gold-bearing quartz veins.

Table 9.3: Soil sample Au anomaly percentile values.

Au percentiles Au values ppb Sample totals

80 ≤ 8.2 1792

85-90 11.4 112

90-95 17.9 112

95-99 40.5 112

99 ≥ 203.9 111

9.3 Geophysics

In June and July 2011, grid controlled induced polarization (IP) and ground magnetic

surveys were conducted on the RPGP. The purpose of these surveys was to help map lithology, structure and geological contacts and help define structural and geological controls on mineralization and provide additional targets for future exploration. 9.3.1 Induced Polarization Survey

The IP survey was conducted by ARCE Geofisicos of Lima, Peru during the period May 26 to July 11, 2011. A total of 64.8 line kilometers of IP data over 36 east-west lines was collected from a grid area covering some 3.5 x 1.8 km (Figure 9.1). Data was collected



43

from cut grid lines spaced at 100 meter intervals, with readings recorded at 50 meter intervals from the lines. The array chosen was pole-pole with an electrode spacing (“a” spacing) of 50 meters read to seven separations. Figure 9.4 and Figure 9.5 are preliminary plots of contoured chargeability and resistivity results for the survey area. This study is considered preliminary as it is based on preliminary location data. Once the location database is finalized with detailed GPS locations, 3D inversions and interpretation will be completed. 9.3.2 Ground Magnetometer Survey

After drill core surveying in 2010 with a magnetic susceptibility meter at 1m core intervals suggested that phases of the Segovia Batholith and secondary magnetite alteration could be mapped using a ground magnetic survey, a geophysical crew from Bulgaria was contacted to complete 61km of ground surveying using a Scintrex ENVI proton precession magnetometer. The instrument operates in the range between 23,000 to 1000,000 nT (gammas) with accuracy to +/- 1nT. A base station magnetometer was placed near the Touchstone camp and monitored diurnal variation during the survey. Two field crews averaged 1.5-2.0 line km per day. The survey consisted of 41 line-km of east-west lines spaced at 50m over concessions 5969 and 6055 with stations and measurements every 10m. A total of 12 line-km in seven lines were used to reduce line spacing to 25m in areas of known mineralization. Four north-south tie-lines totalling 8 line-km were completed along lines 930100E, 930300E 930600E and 930950E with a total of 61 line-km surveys and approximately 6,100 station readings. Survey values were corrected for diurnal variation and cultural interference before magnetic values were computer contoured. The magnetic data was reprocessed using a combination of Geosoft, profile analyst, MapInfo and UBCGIF mag3D inversion software by E. Trent Pezzot of SJ Geophysics, Vancouver. Application of “reduction to the pole” filter (RTP) modified the data to appear as if gathered at the north-pole with a vertical primary field. The RTP filtered results are shown in Figure 9.7.

In June and July 2011, SJ Geophysics Ltd. of Delta, B.C., Canada undertook a

ground magnetometer survey on the RPGP. Ground magnetic data was collected from the same grid lines as the IP. A total of 64.8 line kilometers of magnetic data over 36 east-west lines was collected from cut grid lines spaced at 100 meter intervals, with readings recorded at 12.5 meter intervals.

Figure 9.6 is a preliminary plot of contoured Reduced to Pole (RTP) Magnetic

Intensity for the survey area. This study and the IP survey are considered preliminary as they are based on preliminary location data. Following detailed GPS location of stations, 3D inversions and interpretation will be completed to allow comparison with the previous magnetic survey.



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9.4 Rock Sampling

An underground sampling program has been carried out on a systematic basis with

the complete tabulation of location and results from 312 rock channel samples presented in the Micon technical report (Lewis and San Martin, 2011) in Touchstone’s website. The writer has tabulated 27 Touchstone underground channel samples (Table 9.4 which contained >1 ounce gold per tonne (31.1 g/t or 31.1 ppm). The underground sampling shows a wide variation with 84 of 312 samples containing >10 g/t Au which includes the 27 samples with >31.1 g/t Au. A total of 60 of the 312 underground samples contained <0.50 g/t Au. The underground rock sampling results suggest an irregular gold distribution which is often referred to as “nugget effect” and the source of the name Los Pepas (the nuggets).

Sampling Approach

Underground sampling has been regularly carried out in existing workings. The

sampling procedure consists of a geologist marking sampling sites and labourers cutting channels by hammer and maul. The broken rock is gathered on a plastic mat laid out below the channel. A minimum sample size of 5 kg was used for underground channel samples. Underground sampling is supervised by a project geologist.

Surface sampling has been conducted for both outcrops and float with larger

outcrops and several tonne quartz boulders sampled by cutting channels using a gas powered rock saw to obtain uniform channels and a minimum 5 kg sample size. Grab, select, select and some chip samples have been used during the prospecting and boulder mapping program.

In July 2011, a rock chip sampling program was initiated in the Tagual gold geochemical anomaly area (Table 9.6; Figure 9.8) discovered during the soil sampling program. A total of 27 samples were collected by Geominex geologists along one meter intervals from quartz and rock boulders, outcrop and sub crop locations. The samples were placed by the geologist in individual plastic bags, sealed and returned to camp. The sample bags were then all placed within in a larger rice bag with a secure tag seal, and sent via helicopter to Medellín for preparation at ACME Labs. Splits of prepared samples were sent to the Vancouver ACME Labs for full analysis. See section 9.5 for a review of the 2011 trench sampling.



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Table 9.4 Summary of Touchstone’s >31.1 g/t Au Underground Channel Samples RPGP.

Sample Number

Coordinates Sample Length (m)

Au g/t Easting Northing Elevation

40131 930297.90 1293533.61 231.00m 1.50 35.20

40132 930337.42 1293783.40 228.10m 1.00 66.20 40140 930343.90 1293748.50 229.50m 1.00 40.90 40528 930295.24 1293535.74 231.00m 1.00 108.51 40530 930296.14 1293528.68 231.00m 1.00 114.31 43542 930296.14 1293528.68 244.50m 1.15 32.91 43544 930340.53 1293497.40 246.00m 1.00 129.40 43546 930369.83 1293471.54 251.50m 1.00 155.52 43547 930307.80 1293559.30 232.60m 1.10 36.62 43549 932207.41 1293531.03 233.70m 0.60 49.85 45214 930304.22 1293531.82 232.60m 0.80 73.94 45244 930375.91 1293483.18 247.29m 0.55 36.54 45257 930366.43 1293478.55 244.80m 0.36 37.34 45298 930338.39 1293782.47 228.50m 1.60 81.05 55828 930400.00 1293533.00 238.50m 1.00 37.62 55841 930317.19 1293795.55 226.80m 0.60 80.36 55842 930310.00 1293886.00 214.80m 0.75 81.35 55843 930354.31 1293504.60 245.32m 0.60 32.99 55848 930346.00 1294254.00 200.00m 0.50 132.00 55856 930298.70 1293902.70 217.50m 1.50 36.71 55963 930357.92 1293738.79 230.50m 0.45 139.12 55967 930354.98 1293737.92 231.03m 0.57 43.02 55978 930358.06 1293738.94 230.24m 0.36 48.43 55980 930356.40 1293730.36 226.60m 0.35 66.16 56004 930362.71 1293499.62 245.31m 0.98 74.77 56032 930356.20 1293504.60 245.84m 1.00 98.41 56061 930305.63 1293533.08 232.50m 1.12 73.45

A complete listing of Touchstone’s 312 underground channel samples is contained in Touchstone’s 2011

Micon technical report (Lewis and San Martin, 2011).



46

Figure 9.4 Preliminary IP Chargeability at 50m Depth (provide by GeoMinEx).



47

Figure 9.5 RPGP IP Resistivity at 50m Depth (Figure from GeoMinEx).



48

Figure 9.6 RPGP Magnetic Survey with Reading Reduced to Pole (provided by GeoMinEx).



49

FIGURE 9.7 RTP Filtered View of Ground Magnetic Survey Area (From Touchstone Dec. 2011). (see Index Fig. 4.2 for Location of Concessions 5969 & 6055)

802865N

531870E



50

9.5 Trenching

Limited trenching was previously conducted to increase exposure of bedrock and

provide information in areas of anomalous geochemical and geophysical results. Road building has also exposed some new rock outcroppings but road have mainly been located to facilitate access.

In July 2011 a trenching program was conducted on the El Sapo-El Tagual zone

with results summarized in Figure 9.8 and Table 9.5. The excavator trenching program was initiated to determine the source of anomalous geochemical gold discovered during the 2011 soil sampling program, and to locate the source of gold-bearing quartz boulders discovered by prospecting. Seven exploration trenches, totaling 340 m in length, were excavated in the Tagual area (Figure 9.8). The trenches were dug to depths of one to three meters depending on overburden and topography. The trenches intersect four quartz veins which were sampled with 27 rock chip samples. Three trenches were entirely in saprolite and were not sampled. Rock chip samples were taken by Geominex geologists over one meter intervals within the trenches but poor rock exposure did not allow for proper measurement of quartz vein orientation and therefore, the samples are not representative of true widths. The sample results indicate the presence of well mineralized quartz veins, and support the effectiveness of soil geochemistry as an exploration tool. The rock samples were individually packaged in plastic sample bags and all placed within a rice bag with a secure tag. The samples were then sent to Medellín via helicopter for preparation at ACME Labs. Splits of prepared samples were sent to the Vancouver ACME Labs for full analysis.

Trench sample results are shown in Table 9.5. Trench locations with respect to geochemical Au anomalies are shown in Figures 9.8.

Table 9.5 Summary of Touchstone’s 2011 Trench Sampling on the RPGP.

Trench 39

Sample Number Coordinates

Au (ppb) Easting Northing Elevation (m)

53084 931026 1293953 309 4744.6

53085 931027 1293953 309 29.8

53086 931029 1293953 309 124.6

53087 931030 1293953 309 44.3

53088 931031 1293953 309 155.9

53089 931032 1293953 309 248.6

53090 931034 1293953 309 5187.7

53091 931039 1293953 309 8091.0

53092 931040 1293953 309 1415.2

53093 931044 1293953 309 1623.3

53094 931047 1293953 309 184.4

53095 931036 1293953 309 70.2



51

Trench 40

53076 931027 1294114 316 626.2

53077 931034 1294008 316 486.1

53078 931029 1294008 316 958.5

53079 931032 1294008 316 6843.9

53080 931030 1294008 316 4062.0

53081 931048 1294008 316 5313.5

Trench 41

53073 930973 1294114 344 7281.2

53074 930975 1294114 344 305.5

53075 930976 1294114 316 127.9

Trench 45

53096 931051 1293944 296 9707.8

53097 931058 1293998 296 665.2

53098 931016 1294122 296 681.1

53099 930982 1294208 296 5548.8

53100 931056 1294272 296 8576.1

53011 931062 1294320 296 339.7

53012 931066 1294357 296 2815.0

9.7 PROSPECTING

Prospecting previously concentrated on concessions 5969 and 6055 while in 2011 it

focused mainly on concessions 7013 an 7014. Prospecting has identified a quartz boulder and block field extending for over 1,000 m from the Las Pepas Norte zone in a south-easterly direction along the El Sapo zone toward and beyond a mineralized zone at El Tagual (Figure 9.9). Some quartz blocks were estimated by Touchstone to be up to 250 tonnes. A number of blocks are mineralized with grab sample 5548 reported to assay 132 g/t Au and 186 g/t Ag. Alluvial workings occur at Bernardo, north of Touchstone’s camp and on concession 7014 and Touchstone believes that the alluvial deposits have undiscovered bedrock sources. Table 9.6 summarizes the result of 34 prospecting samples collected while prospecting for quartz boulders and float (Figure 9.9).

9.8 REMOTE SENSING

A rectangular area for remote sensing of approximately 102 km2 and 9 km east-west by 11.3 km north-south was selected to encompass all four concessions that form the RPGP. The area studied is defined by longitude and latitude with the northwest corner at 7.3148°N and 74.7516°E and the southeast corner defined by 7.2127°N and 74.6697°E. ASTER, IKONOS, LANDSAT 5 TM, and LANDSAT 7 ETM imagery were acquired and processed for Touchstone by the Centre for Advanced Satellite & Mineral Exploration, Johannesburg, South Africa. Figure 7.2 is an example of the ASTER imagery of the RPGP.

Trench 45: Three distinct quartz ve/



52

Dated December 2011

Figure 9.8 Trenching Plan for Tagual Zone Geochemical Anomaly.



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Figure supplied by Touchstone January 2012; See Index Fig. 4.2 for claim location relative to UTM

Figure 9.9 Quartz Float as mapped by Touchstone in the Las Pepas, Las Pepas Norte and El Sapo Zones.

Projected known extent of quartz-sulphide bodies

Float blocks of quartz-sulphide

Pepas & Pepas North

El Sapo

El Tagual

Bernardo

Aguila



54

Table 9.6 Gold in rock chip prospecting samples from Las Pepas.

Sample Number Coordinates

Au (ppb) Sample Description

Easting Northing Elevation (m)

53001 532969 802270 331 2.1 Rock chip

53002 532937 801953 323 7.1 Boulder rock chip

53003 532943 801956 304 2.5 Subcrop rock chip

53004 532977 801948 285 29.6 Quartz outcrop w sulphide

53005 532977 801945 284 0.5 Country rock outcrop w sulphides

53006 532977 801951 283 64.3 n/a

53007 532975 801923 284 2.4 Quartz outcrop with sulphide

53008 533030 801482 289 3002.0 Oxidized quartz outcrop

53009 533046 801493 293 67.5 Oxidized quartz outcrop

53010 533056 801544 310 26.8 Small oxidized quartz boulder

53051 532676 801897 262 1.0 Large quartz boulder with Fe oxide (2m)

53052 532862 801937 330 4.0 Small quartz boulder with Fe oxide

53053 532799 801974 332 0.5 Small quartz boulder (<50cm)


53055 532715 801977 324 83.7 Large oxidized quartz boulder (2m)

53056 532906 801897 321 15.8 Small Fe oxidized outcrop (<50cm)

53057 532819 801880 n/a 1.4 Small quartz boulder (<50cm)

53058 532909 801858 316 8.3 Quartz boulder (<1m)

53059 532921 801823 317 426.7 Semi-buried large quartz boulder (2m)

53060 532900 801780 302 380.2 Large Fe oxidized quartz boulder (3-4m)

53061 532963 801752 268 36.6 Quartz boulder (<1m)

53062 532986 801780 278 611.6 Small boulders with intense Fe oxide staining

and trace pyrite

53063 532999 801821 276 5.1 Quartz boulder (1m)

53064 533051 801781 277 1848.3 Fractured quartz boulder (1m)

53065 533023 801789 278 7.3 Diorite shear zone outcrop with quartz

53066 532944 802261 315 5.7 Quartz boulder (1m)

53067 532855 801930 329 2.3 Quartz subcrop (<1m)


53069 532988 802215 340 2.9 Small Fe oxide stained boulder (<30cm)

53070 532860 802020 344 1.3 Quartz outcrop/subcrop (<1m)

53071 532885 801864 319 52.7 Quartz outcrop with Fe oxide (<1m)

53072 532955 801983 307 0.6 Quartz boulder (1m)

53082 532900 801982 262 55.9 Quartz boulder (1m)

53083 532941 801689 281 88.4 Quartz boulder with minor Fe oxide (1m)



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10.0 DRILLING

Diamond drilling of the RPGP was initiated by Touchstone in August 2009 using contract drillers and was conducted with man-portable hydraulic rigs drilling NTW (56.23mm) and NQ3 (47.6mm) core diameters. Core recoveries were generally good except in a few holes when friable, faulted quartz caused rods to jam. By the end of March 2012 three drilling campaigns have been completed on the RPGP with 15,355.6 mm drilled in 193 holes. Most of the closer spaced drilling has been completed in the Las Pepas zone with scout drilling in the El Sapo-El Tagual zone and along the projected trend. The drilling program has been supervised by senior Touchstone geologists and consultants with John Nicholson P.Geo. and Geominex Consultants of Vancouver, British Colombia responsible for overall supervision and management.

10.1 2009 RPGP DRILLING

The 2009 drilling program, contracted to Kluane Drilling Ltd., consisted of 21 holes totalling 1,516.5m. The drilling program was started on the assumption that the quartz body dipped to the west and resulted in the first 8 holes (LPD-0901 to 0908) and last 3 LPD-0922 to 0924 being collared in footwall rocks and not intersecting the main mineralized zone. Re-mapping showed the quartz lens to be nearly horizontal and holes LPD-0909-0917, LPD0919 and LPD0920 tested the main Las Pepas mineralization. Holes LPD-0922 to 0924 were intentionally drilled in footwall rocks to test a silica horizon. Table 10.1 summarizes 2009 RPGP drill-hole data and Table 10.2 summarizes significant intersections from 8 of the 2009 diamond drill holes. The drill-hole intersections represent near true widths as the holes were drilled nearly orthogonal (90°) to the plane of the quartz lens.

10.2 2010 RPGP DRILLING

The 2010 drilling program, contracted to G & D Enterprises, started on August 10, 2010 with 78 holes totalling 3623.82m completed by year end. The drilling activity was mainly focused on the Las Pepas, Las Pepas Norte and Filodehambre with 9 holes in the sequence ESD 1001 to ESD 1013 drilled in the western portion of the El Sapo zone. Table 10.3 summarizes data from the RPGP 2010 drill hole with significant intersections obtained from 2010 RPGP drill holes summarized in Table 10.4. The 2010 holes were drilled nearly orthogonal to the quartz lens and resulted in some wide, nearly true width mineralized intervals (Table 10.4). A second, lower grade vein cut in some of the Filodehambre holes returned 1.1 to 1.65m at nearly 1 g/t gold which suggest the possibility of stacked mineralized quartz lenses. Holes LPD-1027 and LPD 1029 contained auriferous footwall mineralization.



56

Table 10.1 Summary of 2009 RPGP Drill Hole Data (from Touchstone).

Drill Hole

Number

Coordinates Elevation

(m)

Azimuth

(°) Dip (°)

Depth

(m) Easting Northing

LPD-0901 930208.60 1293777.70 229.00 045 -62.00 150.87

LPD-0902 930208.60 1293777.70 229.00 225 -72.00 81.68

LPD-0903 930291.80 1293774.30 226.50 045 -62.00 100.40

LPD-0904 930286.10 1293732.40 225.24 045 -60.00 80.56

LPD-0905 930303.90 1293444.90 255.00 045 -63.00 94.04

LPD-0906 930267.40 1293851.50 226.50 100 -50.00 118.11

LPD-0908 930267.40 1293851.50 226.50 100 -65.00 150.68

LPD-0909 930316.90 1293820.10 243.50 280 -65.00 76.28

LPD-0910 930316.95 1293820.10 243.50 100 -50.00 49.50

LPD-0911 930375.60 1293764.14 246.40 280 -65.00 50.16

LPD-0912 930375.60 1293764.14 246.40 100 -50.00 42.56

LPD-0913 930381.93 1293800.95 247.27 280 -65.00 50.16

LPD-0914 930383.93 1293800.95 247.27 100 -50.00 50.16

LPD-0915 930352.26 1293787.42 244.64 280 -65.00 50.16

LPD-0916 930352.26 1293787.42 244.64 100 -50.00 50.16

LPD-0917 930389.09 1293832.77 234.10 280 -50.00 50.16

LPD-0919 930374.10 1293740.00 241.50 280 -50.00 45.60

LPD-0920 930374.10 1293740.00 241.50 100 -50.00 41.34

LPD-0922 930258.70 1293907.41 231.86 100 -50.00 50.16

LPD-0923 930062.00 1294383.00 196.00 080 -50.00 63.84

LPD-0924 930062.00 1294383.00 196.00 140 -60.00 69.92

Total 1,516.50

Table 10.2 Summary of Significant 2009 Drill Hole Intersections (from Touchstone).

Zone Drill Hole

Number

Intersection (m) Assay

(g/t Gold) Comments

From To Interval

Las Pepas

LPD-0909 7.60 15.85 8.25 7.34

LPD-0910 18.24 21.28 3.04 1.27

LPD-0911 3.04 12.85 9.81 1.00 Excluding workings


LPD-0915 9.50 31.1 21.6 1.82 Including footwall

mineralization.

Including 9.50 18.20 8.70 3.73

including 15.10 18.20 3.10 9.08

LPD-0916 4.00 8.60 4.60 7.62

LPD-0919 15.20 24.34 9.12 2.21

Filodehambre LPD-0905 25.28 36.45 11.17 0.95 Footwall disseminated

mineralization



57

Table 10.3 Summary of 2010 Drill Hole Data (from Touchstone).

Drill Hole

Number


(m)

Azimuth

(°) Dip (°)

Depth


LPD-1001 930337.20 1293767.70 237.20 100 -65.00 34.95

LPD-1002 930374.20 1293808.08 243.50 280 -65.00 25.95

LPD-1003 930343.60 1293827.09 237.70 000 -90.00 26.25

LPD-1004 930261.30 1293946.00 240.00 280 -55.00 29.65

LPD-1005 930262.31 1293946.10 240.00 100 -55.00 37.60

LPD-1006 930351.27 1293697.30 233.29 100 -55.00 33.00

LPD-1007 930351.27 1293697.30 233.29 280 -65.00 34.50

LPD-1008 930268.60 1293969.60 241.31 000 -90.00 50.90

LPD-1009 930271.80 1293923.60 236.31 100 -60.00 24.80

LPD-1010 930280.30 1293893.81 233.49 150 -75.00 53.80

LPD-1011 930279.90 1293895.60 233.49 100 -55.00 23.50

LPD-1011a 930280.10 1293895.60 233.49 100 -65.00 25.45

LPD-1012 930299.60 1293531.80 248.00 280 -65.00 50.00

LPD-1013 930364.90 1293513.90 253.50 100 -65.00 49.10

LPD-1014 930364.69 1293513.90 253.50 280 -65.00 14.20

LPD-1015 930290.50 1293624.40 245.00 100 -65.00 73.60

LPD-1016 930360.54 1293487.74 255.00 100 -65.00 11.80

LPD-1016a 930360.54 1293487.74 255.00 100 -55.00 34.57

LPD-1017 930360.54 1293487.74 255.00 280 -65.00 20.80

LPD-1018 930358.00 1293447.89 261.15 100 -65.00 50.85

LPD-1019 930358.30 1293447.89 261.15 280 -65.00 52.35

LPD-1020 930337.56 1293539.00 239.68 100 -65.00 49.10

LPD-1021 930341.36 1293596.80 236.23 280 -65.00 50.00

LPD-1022 930341.36 1293596.80 236.23 100 -65.00 28.60

LPD-1023 930337.20 1293767.70 237.20 280 -65.00 34.50

LPD-1024 930271.63 1293922.20 236.31 100 -80.00 25.40

LPD-1025 930358.10 1293721.00 238.50 100 -65.00 30.10

LPD-1026 930358.10 1293721.00 238.50 280 -65.00 35.10

LPD-1027 930299.60 1293531.80 248.00 190 -65.00 51.20

LPD-1028 930299.60 1293531.80 248.00 100 -65.00 49.30

LPD-1029 930299.60 1293531.80 248.00 010 -75.00 46.70

LPD-1030 930339.70 1293488.50 251.00 000 -90.00 49.10

LPD-1031 930339.70 1293488.50 251.00 280 -65.00 51.60

LPD-1032 930230.70 1293496.30 264.50 010 -65.00 66.00

LPD-1033 930230.70 1293496.30 264.50 100 -65.00 75.00

LPD-1034 930230.70 1293496.00 264.50 190 -65.00 51.00

LPD-1035 930400.00 1293964.00 222.00 100 -60.00 40.00

LPD-1036 930332.60 1293798.50 238.90 100 -65.00 30.00

LPD-1037 930332.60 1293798.50 238.90 280 -65.00 30.00

LPD-1038 930312.80 1293840.60 233.00 100 -65.00 9.00

LPD-1039 930298.40 1293845.00 233.00 280 -65.00 27.10

LPD-1040 930298.40 1293845.00 233.00 340 -60.00 39.75

LPD-1041 930305.80 1293915.20 215.00 240 -60.00 19.60

LPD-1042 930294.80 1293940.40 222.00 280 -65.00 39.00

LPD-1043 930373.90 1293658.30 226.00 100 -60.00 25.50

LPD-1044 930400.00 1293964.00 222.00 280 -60.00 40.00



58

Drill Hole

Number


(m)

Azimuth

(°) Dip (°)

Depth


LPD-1045 930252.70 1293588.52 254.50 100 -65.00 40.70

LPD-1046 930342.00 1293570.00 236.00 100 -65.00 50.00

LPD-1047 930279.60 1293497.20 244.00 100 -65.00 51.10

LPD-1048 930342.00 1293570.00 236.00 280 -65.00 50.00

LPD-1049 930279.60 1293497.20 244.00 010 -65.00 39.10

LPD-1050 930280.00 1293575.00 240.00 190 -65.00 65.40

LPD-1051 930280.00 1293575.00 240.00 100 -65.00 50.00

LPD-1052 930280.00 1293575.00 240.00 280 -65.00 40.90

LPD-1053 930280.00 1293575.00 240.00 010 -65.00 60.10

LPD-1054 930282.00 1293614.00 237.00 280 -65.00 50.00

LPD-1055 930260.00 1294222.00 229.00 045 -65.00 78.20

LPD-1056 930260.00 1294222.00 229.00 315 -65.00 90.10

LPD-1057 930260.00 1294222.00 229.00 135 -65.00 75.00

LPD-1058 930364.00 1293977.00 209.00 280 -65.00 50.00

LPD-1059 930347.00 1293470.00 257.00 100 -65.00 40.00

LPD-1060 930347.00 1293470.00 257.00 280 -65.00 48.50

LPD-1061 930271.00 1293358.00 266.00 010 -60.00 40.00

LPD-1062 930271.00 1293358.00 266.00 100 -60.00 40.00

LPD-1063 930266.00 1293470.00 248.00 010 -60.00 46.90

LPD-1064 930266.00 1293470.00 248.00 100 -60.00 40.00

LPD-1065 930266.00 1293470.00 248.00 280 -60.00 40.00

LPD-1066 930333.00 1293507.00 245.00 100 -65.00 35.00

LPD-1067 930333.00 1293507.00 245.00 280 -65.00 35.00

ESD-1001 930737.21 1294032.38 261.00 020 -60.00 52.70

ESD-1003 930735.93 1294031.78 261.00 200 -60.00 52.70

ESD-1005 930790.14 1294056.97 283.00 200 -60.00 52.70

ESD-1007 930840.16 1294024.89 285.00 200 -60.00 52.70

ESD-1008 930841.36 1294025.29 285.00 360 -89.00 52.70

ESD-1010 930879.16 1294050.07 301.00 020 -60.00 52.70

ESD-1011 930880.95 1294048.08 301.00 110 -60.00 52.70

ESD-1012 930878.98 1294047.52 301.00 200 -60.00 52.70

ESD-1013 930622.76 1293993.98 230.00 200 -65.00 52.70

Table 10.4 Significant Intersections from 2010 Drilling Campaign RPGP (from Touchstone).

Zone Drill Hole

Number


(g/t gold) Comments

From To Interval

Las Pepas

North

LPD-1001 6.45 7.95 1.50 5.56

LPD-1005 18.73 28.60 9.87 1.48

LPD-1009 2.80 19.00 16.20 1.50

LPD-1010 0.00 8.80 8.80 1.92

Las Pepas

LPD-1006 3.50 14.00 11.50 2.21

LPD-1007 6.00 29.90 23.90 1.13

LPD-1010 0.00 8.88 8.88 1.92

LPD-1011 0.35 10.55 10.20 2.33

Filodehambre

LPD-1014 0.10 11.90 11.80 9.51

LPD-1016 8.10 11.50 3.40 7.28

LPD-1017 13.30 20.70 7.50 4.58



LPD-1027 13.70 25.70 12.00 5.03



59


mineralization.

including 13.70 21.20 6.5 6.69

LPD-1028 14.80 19.30 4.50 24.08


mineralization

LPD-1030 1.60 3.10 1.50 5.39




LPD-1040 1.50 7.50 6.00 9.05


mineralization

including 14.70 19.60 4.90 3.33

LPD-1055 62.85 64.70 1.85 2.21

LPD-1060 30.25 33.10 1.85 26.15

LPD-1066 4.80 9.25 4.45 5.47

LPD-1067 9.10 12.10 3.00 5.94

10.3 2011-2012 Drilling (Figures 10.1, 10.2, & 10.3)

The 2011 and 2012 drilling campaign, comprising of 94 holes for a total of 4,874 m of HQ, HTW, and NTW sized drill core, was conducted on the Rio Pescado property from January 10, 2011 to March 19, 2012 The purpose of the 2011-2012 drilling was to expand upon previous results in the Las Pepas and Filodehambre zones, and explore for new gold occurrences.

Surface drilling was carried out under contract by both G&D Enterprises of Medellín, Colombia, and Energold Drilling Corp. of Vancouver, B.C. G&D Enterprises worked from January 10th until July 17th, 2011 utilizing two man-portable Hydracore Gopher drill rigs. On July 26, Energold Drilling Corp. initiated their contract using a single man-portable, all–hydraulic drilling unit, and added a second similar unit in November, and a third unit in December 2011.

A purpose-built core logging facility is located at the exploration camp close to the drilling area where core is measured, geologically examined, logged and marked for sampling. Core samples are selected and bagged; the half core that remains after sampling is cross-stacked by hole in a covered area within the camp compound. Core logging and sampling supervision was conducted by Geominex Consultants Inc. of Vancouver, B.C. and assaying was performed by SGS of Lima, Peru and Acme Analytical Laboratories of Vancouver, B.C. The laboratories both hold ISO 9000 certification and the writer is unaware of any association that would interfere with the independence of either analytical facility.

Core from the core barrel (1.5 m) was carefully transferred into galvanized steel core trays. Lids were attached for transport to the core logging facility located near the drilling area via small off-road side-by-side vehicles. Here it was washed using fresh water prior to being photographed, geologically logged, rock quality designated (RQD) and core recovery estimated. Intervals to be assayed were photographed after orientation of core.



60

A Reflex EZ-Shot AQ survey tool was used at 30 metre intervals to test in-hole

survey data. Drill locations were determined relative to existing collars using a nylon chain. Precise locations of holes were made using a Topcon GPT-3200NW Non-Prism total station. Most of the 2011 and 2012 drilling focused on the Las Pepas Zone, Filodehambre Zone and intervening “Gap Zone”. Some 2,104.6 meters of core was recovered from 24 holes in Las Pepas, 5,568.95 meters in 49 holes in Filodehambre, and 1,247.5 meters in 13 holes in the Gap Zone. Additionally, three deeper exploration holes (LPD-1132, LPD-1133 and LPD-1134) were drilled to investigate preliminary targets generated from previous ground magnetic surveys. Two holes (ESD-1101 and ESD-1102) were drilled in the El Sapo Zone to investigate the source of gold bearing quartz float and three shallow exploratory holes were drilled in the Tagual area to investigate quartz vein material uncovered by excavator trenching. All three shallow holes at Tagual remained in saprolized granodiorite, and no bedrock quartz veining was encountered. No significant results were obtained from these eight holes. The locations and drill hole data for holes completed from January 10, 2011-March 19, 2012are contained in Table 10.5. Locations of the 2011-2012 drill holes are shown on Figures 10.1, 10.2 and 10.3. Significant 2011-2012 RPGP drill results are summarized in Table 10.6.

Table 10.5 Summary of 2011-2012 RPGP Drill Hole Data.

DDH ID Easting (WGS84

UTM)

Northing (WGS84

UTM)

Elevation (m)

Depth (m)

Azimuth

(°) Dip (°) Zone

ESD-1101 532569 801818 241 49.7 200 -60 El Sapo

ESD-1102 532685 801786 256 50 200 -60 El Sapo

LPD-1104 532295 801487 254 79.7 190 -60 Filodehambre

LPD-1107 532463 801443 256 110 100 -60 Filodehambre


LPD-1108a 532461 801443 256 100 250 -65 Filodehambre

LPD-1109 532130 801967 213 60 280 -60 Las Pepas

LPD-1111 532121 802027 215 60.2 280 -60 Las Pepas Norte

LPD-1112 532135 801937 229 80.1 280 -60 Las Pepas

LPD-1113 532143 801885 231 51.8 280 -60 Las Pepas


LPD-1115a 532072 802106 226 100 45 -65 Las Pepas Norte


LPD-1116 532096 801677 227 102.2 100 -50 Las Pepas

LPD-1117 532096 801677 227 129.2 100 -85 Las Pepas

LPD-1118 532146 801632 225 120.1 100 -50 Las Pepas


LPD-1121 531993 802159 202 153 45 -50 Las Pepas

LPD-1122 531909 802214 197 166.5 45 -50 Las Pepas



61

LPD 1123 532204 801367 241 57.4 100 -60 Filodehambre




LPD 1127 532153 801698 225 51.9 100 -60 Las Pepas

LPD 1128 532125 801698 214 77.2 100 -60 Las Pepas

LPD 1129 532210 801665 232 53.9 100 -60 Las Pepas

LPD 1130 532181 801673 230 50.4 100 -60 Las Pepas

LPD 1131 532195 801539 219 100.6 100 -60 Gap Area

LPD 1132 532129 801849 231 250.1 100 -76.5 Mag Target

LPD 1133 532056 801661 227 320 100 -76.5 Mag Target

LPD 1134 532017 801455 270 269.2 100 -76.5 Mag Target

LPD 1135 532195 801565 220 99.3 100 -60 Gap Area

LPD 1136 532209 801518 221 94.5 100 -75 Gap Area

LPD 1137 532126 801670 214 83.4 100 -60 Las Pepas

LPD 1138 532172 801641 216 77.7 100 -60 Las Pepas

LPD 1139 532171 801565 219 89.9 100 -60 Gap Area

LPD 1140 532159 801410 246 76.1 100 -60 Las Pepas


LPD 1142 532178 801538 220 116.5 100 -60 Gap Area


LPD 1144 532199 801639 226 105.3 100 -60 Las Pepas

LPD 1145 532147 801645 216 105.3 100 -60 Las Pepas

LPD 1146 532219 801561 222 125.1 100 -60 Gap Area

LPD 1147 532230 801533 217 96.5 100 -60 Gap Area

LPD 1148 532245 801556 222 75.6 100 -60 Gap Area

LPD 1149 532161 801568 218 76.3 100 -60 Gap Area

LPD 1150 532260 801536 218 83.9 100 -60 Gap Area

LPD 1151 532209 801518 221 96.1 100 -45 Gap Area

LPD 1152 532181 801600 217 98 100 -60 Gap Area

LPD-1153 532189 801524 219 95.2 100 -60 Gap Area







LPD-1159A 532163 801277 255 53.5 45 -60 Filodehambre







LPD-1166 532883 801826 301 57.95 100 -50 Tagual

LPD-1167 532883 801826 301 54.4 100 -75 Tagual

LPD-1168 532894 801878 306 25.9 100 -50 Tagual LPD-1269 532174 801262 256 104.8 100 -60 Filodehambre








62























*Sequential DDH numbering was initiated commencing with LPD-1111. Holes that were drilled previously were

assigned numbers irregularly. No 2011 drill holes are absent from this table.

Drill holes at the Las Pepas and Filodehambre Zones were positioned to test quartz vein bearing structures along strike and down-dip based on previous 2009 and 2010 drilling results. Holes were oriented predominantly at azimuth 100 degrees (ranging from 045-280 degrees) in an attempt to intersect the generally north-south striking structures in an orthogonal manner. In most cases, drill hole dips were -60 degrees to the horizontal (ranging from -45 to -80) in order to intersect the shallow west dipping quartz veins as orthogonal as possible thereby resulting in drill intercepts that are close to true widths. The 2011 and 2012 drilling has further defined the strike and down-dip extent of the previously known Las Pepas and Filodehambre Zones and indicated significant southernly extensions to the Filodehambre Zone. Drilling in the poorly explored area located between Las Pepas and Filodehambre, the “Gap” Zone, discovered significant new auriferous quartz vein mineralization with the best intersection being 3.4 meters @ 17.8 g/t gold including 0.7 meters @ 83.7 g/t gold. A summary of the weighted averages of significant intersections for gold over the reported intersection length of the drill core are tabled below.



63

Table 10.6 Significant Results for the 2011-2012 Drilling at RPGP.

Zone Drill Hole Number


From To Interval (g/t gold)

Filodehambre

LPD-1124 10.60 19.00 8.40 14.07

Including 11.50 14.50 3.00 35.40

LPD-1125 4.75 11.40 6.65 1.90

Including 8.40 9.40 1.00 5.20

LPD-1126 6.65 7.65 1.00 1.60

LPD-1141 24.70 44.95 20.25 1.56

Including 26.75 28.75 2.00 2.00

Including 31.30 33.30 3.00 4.16

Including 41.30 44.10 2.80 3.24

LPD-1144 7.40 10.70 3.30 5.87

Including 7.40 9.15 1.75 10.41

LPD-1157 0.00 23.20 23.20 4.83

Including 0.00 13.20 13.20 5.98

Including 15.20 18.20 3.00 3.39

LPD-1159 45.25 68.50 22.25 5.84

Including 45.25 49.25 4.00 2.20

Including 52.25 57.25 5.00 4.83

Including 62.20 67.00 4.80 20.28

LPD1162 48.35 56.70 8.35 9.13

Including 48.35 55.65 7.30 17.32

Including 50.20 55.65 5.45 24.92

LPD-1165 42.40 57.05 14.65 4.24

Including 42.40 54.30 11.90 4.96

Including 45.40 48.40 3.00 13.01

LPD-1273 30.50 39.90 9.40 9.04

Including 35.55 36.70 1.15 62.30

Including 38.20 39.90 1.70 5.03

LPD-1279 56.45 84.70 28.25 8.75

Including 60.45 84.70 24.25 9.88

Including 60.45 69.50 9.05 6.41

Including 70.35 76.05 5.70 20.90

Including 77.00 84.70 7.70 7.98

LPD-1281 21.30 39.20 17.90 4.29

Including 22.50 25.10 2.60 22.18

Including 26.75 31.00 4.25 1.74

Including 32.80 35.05 2.25 2.80

Including 37.30 38.30 1.00 3.34

LDP-1286 6.10 22.90 16.80 8.70



64

Including 12.25 20.40 8.15 17.56

Including 15.25 19.75 4.50 27.60

Including 17.00 19.75 2.75 39.50

Gap Area

LPD-1131 67.60 70.00 2.40 17.58

Including 68.30 69.00 0.70 83.7

LPD-1135 60.75 63.20 2.45 1.25

Including 61.20 62.20 1.00 2.50

LPD-1139 72.10 73.55 1.45 1.10

LPD-1142 80.00 81.00 1.00 0.734

LPD-1146 68.55 69.55 1.00 1.23

LPD-1152 67.00 67.65 0.65 1.09

Las Pepas

LPD-1129 1.20 10.30 9.10 1.90

Including 4.20 5.20 1.00 3.50

Including 8.55 10.30 1.75 5.20

LPD-1130 7.85 11.95 4.10 0.78

LPD-1138 56.15 59.60 3.45 1.49

Including 56.60 58.60 2.00 2.41

Including 56.60 57.60 1.00 3.58

LPD-1140 17.00 21.20 4.20 7.28

Including 19.00 21.20 2.20 13.24

Including 19.00 20.60 1.60 17.48

Note: Reported intercepts are intercept lengths and not true widths. Holes without significant intervals are not shown.

10.4 2011-2012 Core Logging Procedure

Diamond drilling, core logging and sampling at the Rio Pescado property has been supervised by John Nicholson, P.Geo., Brian Game, P.Geo. and Dr. Allan Miller, P.Geo. of Geominex Consultants Inc., all Qualified Persons in accordance with National Instrument 43-101. Core logging included lithological logging of recovered core for description of mineralogy, geological features, RQD calculations, and core recovery. The information is initially recorded onto paper sheets, and then input into the digital database. Logging of each hole was carried out in two phases. In phase one, core recoveries and Rock Quality Designation (RQD), were determined. Core recoveries from the HQ, HTW, and NTW core were excellent, with recoveries generally greater than 90% in bedrock. Variable amounts of core losses occurred in the saprolitized upper portions of the drill holes as well as in faulted zones where the rock was crushed. Fragments may have ground together in the core tube with minor losses occurring. These losses were mitigated by capable drillers paying careful attention to ground conditions. At the Rio Pescado project, drill recoveries of the gold bearing quartz veins are generally good. RQD calculations were performed using D.U. Deere’s method where all pieces longer than 10 cm in length of intact and competent core in a run were identified and summed. The



65

summed length of >10cm pieces was then divided by the length of run and multiplied by 100 to calculate percent. In the second phase, the lithological description of recovered core was recorded, which primarily included rock type, color, texture, sulphide content, alteration and description of major geological features such as intrusive dikes, faults, quartz veining density and foliation relative to un-oriented core axis. The core was photographed and marked for sampling. Core sample intervals in bedrock were generally maintained at 1.0 m to ensure sufficient sample material for good assay practice with some shorter and longer samples taken to reflect suspected higher grade mineralized intervals or specific lithologies. The shortest bedrock sample taken was 0.4 m and the longest bedrock sample was 1.5m.

10.5 DRILLING AND SAMPLING METHOD FOR DIAMOND DRILL CORE

Diamond drilling was initiated by Touchstone in August, 2009 using various contractors and was completed with man-portable diesel hydraulic rigs drilling NTW and NQ3 core with sizes of 56.23mm and 47.6mm, respectively. Core recoveries were good to excellent except when friable, faulted quartz caused drill rods to jam. The 2011 and 2012 drilling program was being conducted with two man-portable hydraulic rigs provided by Energold with a third rig added at the end of 2011. Between January 2011 and March 2012, Touchstone completed 9,998.6 meters of diamond drilling in 94 drill holes on the RPGP with the majority of the drilling in the 5969 permit area.

Locally sourced water is used for drilling with biodegradable drilling polymer and/or

bentonite added as required. Drill bits vary but are normally #10’s with an abrasive matrix.



66

Figure 10.1 Plot of Touchstone Past and 2011-2012 Diamond Drill Holes.



67

Figure 10.2 Plot of Historic 2009-2011 Drill Holes.



68

Figure 10.3 Drill Hole Locations Las Pepas Zone with 2011 and 2012 Holes in Red.



69

Core is transferred from a 1.5m core barrel into galvanized steel core trays holding

3.0m of NTW core. Lids are placed on core trays before transport to the core logging facility. The core is washed using fresh water and then digitally photographed before being logged for lithology, alteration, mineralization, rock quality and core recovery. Intervals to be assayed are selected by a project geologist and photographed after core fragments have been orientated. Core sample intervals are generally between 1.0m and 1.5m to ensure sufficient assay and reference material. Prior to construction of a secure core handing facility, core was transported by company vehicle to the University of Antioquia, where it was cut by diamond saw. Core from the 2011 was being logged and split by diamond saw at the secure storage facility at the RPGP camp. Friable core is wrapped in plastic prior to splitting. All core is placed in the core box and a centre line drawn for splitting. Half the sawn core is returned to the core box and the remainder broken to an appropriate size and secured in clean plastic bags. Each sample interval is marked with a laboratory assay book sample tag and samples identified with a numbered waterproof sample tag from the assay book with the location and sample data recorded in the sample book and a duplicate record placed in the geologist’s notebook. A butter soft metal tag displaying sample number and interval was placed in the metal core box at the start of each sample interval. Sampling of half core provides approximately 2.3kg per linear metre at a specific gravity of about 2.85. Core recovery was close to 100% in surficial material, weathered quartz and granodiorite or diabase host rock. Minor core loss occurred in thin (~15cm) mylonitic zones on quartz vein margins. No recovery is obtained when mine workings are encountered.

Individual samples were combined in a large rice bag up to a weight of

approximately 20kg and the top of the rice bag sealed with a secure strap, duct tape and a numbered security tag. The range of sample numbers for contained samples is shown on the rice bag.

Suites of certified reference material (standards) or blanks were added into the core

sample sequence every ten samples, alternating between standards and blanks. The standard material was alternated between several certified reference material samples obtained from RockLabs Ltd. Laboratories and included Si42, SK43, SN38, 0xH52, and 0xK69. The Blank material was crushed marble flooring material.



70

11.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY

A core logging and secure storage facility is located at the exploration camp close to the drilling area where core is measured, geologically examined, logged and marked for sampling. Core samples are selected and bagged; the half core that remains after sampling is cross-stacked by hole in a covered area within the camp compound. Core logging and sampling supervision was conducted by Geominex Consultants Inc. of Vancouver, B.C. and assaying was performed by ISO 9000 certified laboratories SGS of Lima, Peru and Acme Analytical Laboratories of Vancouver, B.C. Samples were received and prepared by SGS and ACME at their preparation facilities in Medellin, Colombia. PAC is not aware of any association between Touchstone and either SGS or ACME and believe the laboratories both act as independent testing facilities.

Core from the core barrel (1.5 m) was carefully transferred into galvanized steel core trays. Lids were attached for transport to the core logging facility located near the drilling area via small off-road side-by-side vehicles. Here it was washed using fresh water, prior to being digitally photographed and geologically logged, and rock quality designation (RQD) and core recovery were determined. Intervals to be assayed were photographed after all core fragments had been orientated.

After geotechnical and geological logging, drill core sample intervals were marked on the core with lumber crayons. Each sample interval is marked with a paper sample tag from the laboratory, which is also included in the sampling bag for analyses, and a butter soft metal tag displaying the sample number and the sample interval (From-To) was placed in the metal core box at the start of the sample interval.

Once the sampling intervals have been selected by the geologist, they are moved to the cutting area where each length of core is cut in half lengths using an electric diamond blade saw under the supervision of a Geominex geologist. Each half core sample was then placed into a plastic sample bag, the paper sample tag placed in the bag and the sample ID written on the outside of the bag. Each sample bag is secured with a “zap” strap to prevent any material entering or exiting the bag. Individual samples were combined in a large rice bag up to a weight of approximately 20 kg and the top of the rice bag sealed with the “zap” strap, duct tape and a numbered security tag. The rice bags list the range of samples contained within.

Suites of certified reference material (standards) and blanks were added into the core sample sequence every ten samples, alternating between standards and blanks. The certified reference material was alternated between several 100 g samples obtained from RockLabs Ltd. Laboratories, including Si42, SK43, SN38, OxH52 and OxK69, and the blank material used was crushed marble flooring material.

From the Rio Pescado camp, the samples were transported directly by employees of Touchstone Gold to SGS Mineral Services or Acme Labs in Medellin, Colombia via helicopter and ground transportation for sample preparation and then by air freight to SGS in Lima, Peru or Acme Labs in Vancouver, Canada for analytical assay. Acme Laboratories



71

and SGS and ACME have achieved an accreditation of at least ISO 9001:2000. Acme presently holds accreditation to ISO 9001:2008 in both Medellín and Vancouver and SGS reports increasing accreditation to ISO 9002 at their laboratory in Lima. The author is not aware of any relationship between SGS or Acme Analytical Laboratories and Touchstone Gold.

On the receipt of the samples at SGS or Acme Labs in Medellín, the lab confirmed the security numbers of the sacks, the individual sample numbers and the integrity of each sample. No breaks in the chain of custody for the samples have been recorded. The SGS analytical procedures used are summarized in Table 11.1.

Table 11.1 SGS Analytical Procedures for RPGP.

SGS Assay Code Assay Methodology

FAG 505 Gold, by fire assay, AAS finish 50g. Used for gold in the range 0.01 to 100 ppm

ME-ICP12b

Multi-acid digestion in a combination of HCl (hydrochloric acid), HNO3 (nitric acid),

HF (hydrofluoric acid) and HClO4 (perchloric acid). ICP-AES analysis for Ag, Al, As,

Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, Ga, K, La, Mg, Mn, Mo, Na, Nb, Ni, P, Pb, S, Sb,

Sc, Sn, Sr, Ti, Tl, V, W, Y, Zn, Zr, Hg, Se, and Te Table supplied by Touchstone Gold Limited.

Stream sediment samples were collected moving down stream at an average of 200

m intervals on continuous river beds. At tributaries, a stream sediment sample was taken immediately before the tributary and immediately after. Sample sites were chosen at quiescent stream beds with significant sand and silt accumulation. A minimum 100 g sample was taken at each sample location by a Geominex geologist using a small shovel, with the sample screened in the field using 80 μm and 20 μm sieves. Sieves and tools were thoroughly cleaned between samples at the sample site using river water and a brush. The sieved samples were then placed in individual Kraft paper sample bags and placed within larger individual plastic sample bags. Once returned to camp, the samples were air dried then placed in large rice bags following the same shipment and security protocol observed for the drill core samples.

Soil samples, consisting of saprolite material, were collected at 50 m intervals along

all of the lines. Samples were collected at a consistent depth of 50 cm utilizing hand auger, described and then placed in individual Kraft paper sample bags under the supervision of a Geominex geologist. Samples were then returned to camp and air dried then placed in large rice bags following the same shipment and security protocol observed for the drill core samples.

Rock chip samples were taken by Geominex geologists across one meter intervals

from quartz and rock boulders, outcrop and subcrop locations using a rock hammer. The samples were placed by the geologist in individual plastic bags, sealed and returned to camp then placed in large rice bags following the same shipment and security protocol used for drill core samples.

Prior to drill hole LPD-1115, all drill core samples were analyzed by SGS Mineral

Services. Upon receipt by SGS, drill core sample were prepped using method PRP95



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where samples are dried, crushed to 95 % passing 10 mesh and pulverized until 95 % passes 140 mesh. The samples were then analyzed using method FA515 for Au, in which a 30 g sample is fire assayed and method AAS42 for Ag in which a 2 g sample is assayed via 3-acid digestion.

Post drill-hole LPD-1115, all drill core samples were analyzed by Acme Laboratories.

In addition, all 2011 stream sediment, soil and rock samples were analyzed by Acme. Upon receipt by Acme Laboratories, core, rock chip, and stream sediment samples are prepared using method R200-250; they are dried, crushed to 80% passing 10 mesh and pulverized until 85% passes 200 mesh. Soil samples were prepared by using method SS80 in which the soil samples are oven dried to 60°C, and then screened to -80 mesh with the oversize material discarded. All samples then undergo analyses by method 1Dx2 where a 15 g split is leached in hot Aqua Regia and then analyzed by ICP-MS for 36 elements including Au. The larger 15 g split of the samples was chosen in order to give a more representative analysis of elements subject to nugget effect (e.g. Au). Method G601, 30 g lead collection fire assay, was performed on analyzed drill core samples with greater than 500 ppb Au from the ICP analyses. An automatic over limit analysis (G6Gr), 30 g lead collection fire assay with gravimetric finish, was performed on assayed drill core with greater than 10 ppm from the 30 g fire assay.

Touchstone inserted standards and blanks for all drill core sampling, but it was not

applied during all the stream sediment, soil and rock chip sampling programs. A suite of blanks, reference materials and duplicate samples were inserted by the lab into the sample stream. The results reported from the lab control samples were within the limits of instrumental and analytical accuracy. No corrective actions were taken by the lab. Control samples submitted by Touchstone are reported in the Data Verification section of this report.

PAC is of the opinion that sampling methods, analytical procedures and security

protocols employed by Touchstone Gold are accepted industry practice and should produce samples of appropriate quality and reliability.

12.0 DATA VERIFICATION

Data verification has previously been carried out on the property by both Touchstone and Micon (Lewis, and San Martin, 2011) with six additional check samples collected by the writer and fire assayed for gold by Acme in Vancouver. The core from recent drilling was examined and three sections of quartered core selected for comparison. PAC is of the opinion that the previous 2011 Micon sampling (Lewis and San Martin, 2011), production by local miners, Touchstone’s consultants sampling and results from the writer’s check samples provide sufficient verification and checks to insure that the RPGP contains significant gold values and occurrences but further work is required to indicate the size of mineralized bodies before a resource estimate is warranted.



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Table 12.1 Writer’s Check Samples Las Pepas Zone, RPGP (11/11/2011).

Sample Location

UTM

Type Weight

Kg.

Width

Meters

Touchstone

Au g/t

Writer

ppm/

Au g/t

Comments

93451 532215E

801627N


0.35m

93452 532215E

801627N


0.60m

93453 532215E

801627N

Chip 1.34 0.6m 1.121/NA >10/11.6 Las Pepas Workings @55966

0.46m

93454 532215E

801627N

Core

68.30-

69.00m

0.85 0.7m 83.737 >10/102.6 Hole LPD 1131 @53129

93455 532215E

801627N

Core

19.00-

20.00m

2.52 1.0m 15.047 3.993 Hole LPD 1140@20507

93456 532215E

801627N

Core

31.30-

32.30m

1.94 1.0m 3.784 >10/14.8 Hole LPD 1141 @20530

Note. Writers samples used Acme method G601 for Fire Assay Start-AAS Finish for testing 30g. charge. Over limit

(>10ppm) uued Acme method G6Gr fire assay 30g fusion-grav. Finish.

12.2 Sample Preparation, Analysis and Security

The samples described in Table 12.1 were collected by the writer and personally

transported from the RPGP to Vancouver, Canada where they were submitted to Acme Analytical Laboratories of Vancouver, an ISO9001:2000 certified laboratory. All samples were fine crushed with 250 g pulverized to 200 mesh (Code R200-250) and analyzed for gold using G601 (Lead Collection Fire-Assay Fusion-AAS Finish) with 3 over-limit (>10ppm) samples analyzed by G6Gr (Lead collection fire assay 30g fusion-gravimetric finish). Three of the writer’s samples were collected from previously sampled sites in the Las Pepas underground workings to allow comparison. Previous sample sites were marked with a painted sample number that was shown on an underground plan. The writer was confident that samples were collected from near previous locations.

In the author’s opinion the sample preparation and analytical procedures used by Acme Analytical Laboratories are done to international standards. The writer’s verification samples were transported from the field to the laboratory by the writer who is responsible for their security.

12.3 INSPECTION BY THE WRITER

The writer visited the RPGP area on November 11th and 12th, 2011 and personally collected three verification samples from the Las Pepas underground workings and three samples of core from recently drilled holes with positive verification results summarized in Table 12.1. The writer reviewed the core and rock sampling procedures and sample



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security procedures used by Touchstone’s project geologist which the writer judges to be to industry best practice standards recommended by the CIM.

12.4 DATA VERIFICATION

The writer’s samples confirm the presence of significant gold within the Las Pepas

zone on the RPGP. The limited results obtained by the writer show strong variation in gold distribution which is often referred to as “nugget effect”. Check core sample 93454 contained 102.6 g/t Au and checked Touchstone’s sample 53129 reported to contain 83.74 g/t Au. Check core sample 93455 contained 3.993 g/t Au and checked Touchstone sample 20507 reported to contain 15.05 g/t Au. Check core sample 93456 contained 14.8 g/t Au and checked Touchstone sample 20530 reported to contained 3.78 g/t Au. The sample results vary from 18% to 392% with sampling and analytical methods to account for the erratic distribution. In order to deal with irregular distribution of high grade values the writer recommends that:

Large charges be used for fire assay with 50g fire assay charge used by Acme or SGS recommended.

Metallic assaying be used to check high grade values and in oxidized areas of the vein system or if native gold is suspected during sample description or core logging.

If ICP analysis methods are used for soil and prospecting samples Acme procedures 1DX2 15g digestion or 1DX3 30g digestion should be employed.

Drill Holes from 2011-2012

In support of the 2011-2012 core sample analysis program; blank samples and certified reference materials (standards) were included in the samples submitted to SGS Mineral Services and Acme Analytical Laboratories. Analytical Blanks

Blank material was sourced from marble flooring material and inserted by the geologist into the sample sequence to ensure that the laboratory equipment was properly cleaned between samples and to detect any contamination during preparation. Initially, analytical blank samples were inserted randomly into the sample stream by a Touchstone Gold geologist. However, after drill hole LPD-1122, blank samples were inserted into the sample stream every 20 samples by a Geominex geologist.

In total, 193 blank samples were assayed; with 40 assayed by SGS and 153 by Acme Labs, representing approximately ~5 % of the drill core assay database. 165 samples were below the detection limit of 2.5 ppb, with the average value of the 28 samples above detection limit being 10.8 ppb. The blank samples analyzed are considered within acceptable limits and there does not appear to be any evidence of laboratory contamination.



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Standards

Five analytical standards were purchased from RockLabs Ltd. Laboratories of New Zealand, including, Si42, SK43, SN38, OxH52 and OxK69. The selected standards provide a good reflection of the average gold grade encountered at the RPGP.

Initially, the standards were inserted randomly into the sample stream by a Touchstone Gold geologist. However post drill hole LPD-1122, standard samples were inserted into the sample stream every 20 samples by a Geominex geologist, randomly choosing one of the five different standards.

In total, 192 analyses of standards have been conducted, with 34 samples assayed

at SGS and 158 at Acme Labs, representing ~ 5 % of the samples analyzed. The acceptable criterion for the standards is the mean value +/- <2 standard deviation. Table 12.2 presents the mean grade and accepted standard deviation range for the standard used.

Table 12.2 Standard Reference Material for Au.

Standard Au g/t 1sd 2sd 2sd low limit

2sd high limit

Si42 1.716 0.039 0.078 1.638 1.794 SK43 4.086 0.020 0.040 4.046 4.126 SN38 8.573 0.045 0.090 8.483 8.663 OxH52 1.291 0.036 0.072 1.219 1.363 OxK69 3.583 0.017 0.034 3.549 3.617

The results from the standard analyses were within acceptable deviations of the

known values. PAC is of the opinion that program of Quality Assurance/Quality Control (AQ/QC) employed by Touchstone is conducted to accepted industry best practice and would provide analytical data of appropriate quality and reliability for current exploration project.

Data verification has previously been carried out on the property by both Touchstone and Micon (Lewis, and San Martin, 2011) with six additional check samples collected by the writer and fire assayed for gold by Acme in Vancouver. The core from recent drilling was examined and three sections of quartered core selected for comparison. PAC is of the opinion that the previous 2011 Micon technical report (Lewis and San Martin, 2011), production by local miners, Touchstone’s consultants sampling and results from the writer’s check samples provide sufficient verification and checks to insure that the RPGP contains significant gold values and occurrences. The QA/QC procedures employed by Touchstone are to industry best practice standards for resource definition. Further exploration work is required to indicate the size of mineralized bodies before a resource estimate is warranted.



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13.0 MINERAL PROCESSING AND METALLURGICAL TESTING Mineralogical testing has not been conducted by Touchstone or reported by previous operators. The mineralogy of the RPGP gold prospects is similar to deposits being exploited in Segovia Gold Belt and if a significant current resource is established, a review and evaluation of mineral processing of similar deposits should be undertaken and a metallurgical testing program initiated. Local miners are presently hand sorting “ore” before it is crushed in stamp or jaw crushers and then passed over a burlap lined slide to recover free gold before entering a settling area. Material from the settling pond is placed in ball mills for further grinding and then mercury amalgamation. Mercury is reported to recover additional gold. The use of mercury will not be allowed in a current, formally run gold mine and the tonnage requirements would not allow for hand sorting. The small local miner operations run because significant near surface gold values occur in partly oxidized quartz veins, but processing methods are only suitable for informal operations.

14.0 & 15.0 MINERAL RESOURCE AND MINERAL RESERVE

ESTIMATES The RPGP has no current NI43-101 compliant mineral resource or reserve estimates by Touchstone or others. Historical information on the RPGP is discussed under history and past production estimated by Touchstone was based on an estimate of tonnages mined and discussions with local miners. Information provided by local miners must be verified before it can be relied upon.

16.0 to 22.0 SECTIONS OF THE FORM THAT APPLY TO RESOURCE PROJECTS (SEE ITEM 5 FOR EXPLORATION PROPERTY INFORMATION)

23.0 ADJACENT PROPERTIES

The RPGP occurs within the Segovia Gold Belt, reviewed in the History section, of northern Colombia. Nearby mineral districts and properties in the area around the RPGP are shown on Figure 23.1. Adjacent concessions are held by various mining companies and individuals. Adjacent properties do not have published resources or mineralized zones that are known to trend onto the RPGP. Yamana’s El Cinco Property, located immediately to the south and west of the RPGP, contains mesothermal gold veins cutting Segovia batholith granodiorites with veins report by Yamana to attain widths of 1 to 3m. The Author cannot verify the information on the adjacent properties. The information on adjacent properties is not necessarily indicative of the mineralization that is on the RPGP.



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24.0 OTHER RELEVANT DATA AND INFORMATION The writer is not aware of any material information that is not summarized in this report or that would influence the conclusions and recommendations resulting from his site examination and project review.

25.0 INTERPRETATION AND CONCLUSIONS Drill holes at the Las Pepas and Filodehambre Zones were positioned to test quartz vein gold bearing structures along strike and down-dip based on previous 2009 and 2010 drilling results. Holes were oriented predominantly at azimuth 100 degrees (ranging from 045-280 degrees) in an attempt to intersect the generally north-south striking structures in an orthogonal manner. In most cases, drill hole dips were -60 degrees to the horizontal (ranging from -45 to -80) in order to intersect the shallow west dipping quartz veins as orthogonal as possible thereby resulting in drill intercepts that are close to true widths. The 2011, spring 2012 drilling has further defined the strike and down-dip extent of the previously known Las Pepas and Filodehambre Zones with the best intersection being 28.25m @ 8.75g/t gold. In addition, drilling in the poorly explored area located between Las Pepas and Filodehambre, the “Gap” Zone, discovered significant new auriferous quartz vein mineralization with the best intersection being 3.4 meters @ 17.8 g/t gold including 0.7 meters @ 83.7 g/t gold. The success obtained during 2011-2012 extended the mineralized zone to over 1,000m. Further grid drill is required in the Las Pepas zone before a meaningful resources estimate and preliminary economic assessment is justified. Trenches 39, 40 41 and 45 of seven trenches in the Tagual south target reached bedrock with sampling returning 6.80m averaging 3.31 g/t Au (Tr39), 6.80m averaging 3.01 g/t Au (Tr40), 2.70m averaging 2.60 g/t Au (Tr 41) and three interval: 4.50m averaging 4.10 g/t Au, 1.50m averaging 4.50 g/t Au and 1.50m averaging 2.80 g/t Au (TR45). The Tagual south target is a soil geochemical anomaly measuring 1,000m by 400m with trenching in only a 600m interval with existing road access. PAC agrees with the Touchstone drilling plan for the Tagual south target (Figure 25.1). The Tagual north target has a similar gold in soil geochemical anomaly which should be tested by trenching, if allowed by access and/or drilling.

In the opinion of the author, the 2009, 2010 and 2011 spring 2012 exploration programs have been successful in providing sufficient positive exploration results from both zone drilling at the Las Pepas and grid soil geochemical results at the Tagual north and south zones to continue drilling to define resources.



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Note: Figure Provided by Touchstone, not to scale. Dated January 2012

Figure 23.1 Nearby Mineral Districts and Prospects Relative to the RPGP.

802865N

531870E



79

26.0 RECOMMENDATIONS AND BUDGET PAC recommends an additional 2012 drilling program of 1,500m on the Las Pepas, Tagual and Filodehambre zones. Further grid soil geochemical sampling should be considered for areas of known quartz float and alluvial workings. A budget of US $900,000 is estimated for the Phase 1 program (Table 26.1).

Table 26.1 Estimated Budget Phase 1 Exploration Program

Exploration and Development

Colombian Administration 100,000

Analytical costs (4,000 samples @ $50/sample) 50,000

Contract Geological Support 100,000

Air Support (helicopter & fixed wing) 50,000

Transportation 50,000

Diamond drill holes (~1,500m @ $300/m all in drilling est. 15 holes) 450,000

Equipment, Supplies, Shipping & Capital 25,000

Reporting, Environmental Studies & Permitting 75,000

Sub total 900,000

PHASE 1 TOTAL 900,000

Table 26.2 Proposed Drill holes Phase 1 Exploration Program

DDH ID Easting (WGS84

UTM)

Northing (WGS84

UTM)

Depth (m)

Azimuth

(°) Dip (°)

LPD-1297 532228 801310 100 45 -60 Same platform as LPD-1014

LPD-1298 532127 801358 100 45 -60 25m SW step out of LPD-1281





LPD-12103 532196 801182 100 45 -60 25m S step out of LPD-1283




LPD-12107 532182 801150 100 45 -60 50m S step put of LPD-1288




LPD12111 532138 801145 100 100 -60 50m S step out of LPD-1294



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26.2 SUCCESS CONTINGENT PHASE 2

A follow-up Phase 2 or 2013 program is suggested assuming that there is sufficient corporate and geological incentive to continue exploration and development at RPGP. A budget of up to $10,000,000 million may be required and would consist of infill diamond drilling and also complementary studies needed to support a current resource estimate and preliminary economic assessment. Budget details should be defined on the basis of Phase 1 results and experience.

26.3 OPINION OF MERIT

It is the opinion of the writer that the RPGP is of sufficient merit that the recommended Phase 1 budget, as outlined above, represents a worthwhile exploration program and expenditure for Touchstone.



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Figure 25.1. Location of 2012 Proposed Phase 1 Drill Holes



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27.0 REFERENCES AND SOURCES OF INFORMATION

Andrew, C. J., 2010a. Touchstone Gold Holdings S.A. Draft NI43-101, internal

Touchstone draft report, un-paginated.

Andrew, C.J., 2010b. Las Pepas Project, Segovia District, Antioquia, Colombia.

Technical Report for Touchstone Gold Holdings Ltd. dated April 2010.

Andrew, C. J., 2009a. Preliminary Resources Study on the Las Pepas Project, Touchstone

Gold Holdings SA internal report, 49 pp.

Andrew, C. J., 2009b. Las Pepas Project, Ore Reserves and Resources Study, Touchstone

Colombia Ltda. internal report, 49 pp.

Aspden, J.A., McCourt, W. J. and Brook, M., 1987. Geometrical Control of Subduction-

related Magmatism: the Mesozoic and Cenozoic plutonic history of Western

Colombia, Journal of the Geological Society v. 144, p. 893 to 905.

Christopher, P.A., 2011. Technical Report on the Rio Pescado Gold Property, Republic of

Columbia. Prepared for Touchstone Gold, dated December 2011.

GeoMinEx Consultnts Inc. report, 2011a. Reconciling Stream Sediment Geochemical

Anomalies with the Precious Metal Mineralogy in Gold-Silver Bearing Quartz

Veins Pepas Lode Gold Resource Antiquia, Colombia. For Touchstone Gold

Holdings Ltd. dated April 30, 2011.

GeoMinEx Consultnts Inc. report, 2011b. A working Model That Integrates Lode Gold

Quartz Vein Complexes with Geology and Magnetics in Parts of Licenses #5969

and 6055 Rio Pescado Property Antioquia, Colombia. For Touchstone Gold

Holdings Ltd. dated May 21, 2011.

Gonzalez I., Humberto, 2001. Map Geologico del Departmento de Antioquia. Ministero

de Minas y Energia, Colombia.

INGEOMINAS, 1999. Inventario Minero Nacional, Department de Antioquia, for

Republica de Colombia Ministerio de Minas y Energia, dated May 1999.

Lazano, Leticia, (2010), Crazy for Colombia, Mining Journal, 15 to 17 p.

Lewis, W.J., 2010. Las Pepas site visit notes.

Lewis, W.J., and San Martin, A. J., 2011. Technical Report for the Rio Pescado Project

Department of Antioquia, Republic of Colombia. Micon International report by

Micon for Touchstone Gold Limited and Collins Stewart Europe Limited, dated

May 13, 2011.



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Miller, Benjamin L., and Singewald, Joseph T., 1919. The Mineral Deposits of South

America, Chapter VI Colombia, 348 to 399 p.

McAllister Sampler, A. and Warden-Fernandez, J., 2011. The basic principles of mining

law. Mining Journal Special Publication-Colombia, August 2011, pp. 7, 9, & 11.

McCourt, W. J., (1984). A Palaeozoic paired metamorphic belt in the Central Cordillera

of Colombia, British Geological Survey Report Series, 16/1, 22-7.

McCourt, W.J., Aspden, J.A. and Brook, M., (1984), New Geological and

Geochronological Data from the Colombian Andes: Continental Growth by

Multiple Accretion, Journal of the Geological Society, London, v. 141, pp. 831 to

845.

Redwood, S.D., 2010. NI43-101 Technical Report, Fortina Gold Mines Ltd. Prepared for

Mendoro Gold Mines Lt., Gran Colombia Gold, S.A. and Tapestry Resources

Corp., dated June 9, 2010.

Rodriguez, C. and Warden, A.J., (1993), Overview of some Colombian Gold Deposits

and their Development Potential, Mineralium Deposita v 28, pp. 47 to 53.

Shaw, R.P., (undated), Gold Mineralisation in the Northern Andes: magmatic setting vs.

metallogeny, 16 p.

Sillitoe, R., (2008), Major Gold Deposits and Belts of the North and South American

Cordillera: Distribution, Tectonomagmatic Settings, and Metallogenic

Considerations. Economic Geology, v. 103, pp. 663 to 687.



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28.0 SIGNATURE, STAMP AND DATE Orignal report signed and stamped at Vancouver, B.C., on the 30

th day of June

2012.

“Peter A. Christopher”

Peter A. Christopher, PhD, P.Eng.



85

29.0 CERTIFICATE I, Peter A. Christopher, with business address at 3707 West 34th Avenue, Vancouver, British Columbia, do hereby certify that: 1. I am a Consulting Geological Engineer registered (#10,474) with the Association of Professional Engineers and Geoscientists of British Columbia since 1976. 2. I am a past Fellow of the Geological Association of Canada. 3. I hold a B.Sc. (1966) from the State University of New York at Fredonia, a M.A. (1968) from Dartmouth College and a Ph.D. (1973) from the University of British Columbia. 4. I have been practicing my profession as a Geologist for over 35 years and as a Consulting Geological Engineer since June 1981. I have authored over 300 qualifying engineering and exploration reports, and over 20 professional publications. I have work experience in most areas of the United States, Canada, Papua New Guinea, Madagascar, Philippines, Mexico and several other Latin American countries. I have worked on gold deposits in Canada, United States, Chile, Philippines, Mexico, Spain, Portugal, Egypt, Mozambique, Kenya, Madagascar, and Burundi. As a result of my experience and qualifications, I am a qualified person as defined in National Instrument 43-101. 5. I have no direct or indirect, nor do I expect to receive any interest directly or indirectly in the properties or securities of Touchstone Gold Limited (“Touchstone”). I am independent of Touchstone in accordance with the application of Section 1.5 of National Instrument 43-101. 6. I am responsible for preparation of all sections of this report entitled “Technical Report on the Rio Pescado Gold Property, Republic of Colombia” dated June 30, 2012. I have based this Technical Report on previous gold exploration experience, review of references listed in Section 22.0 and a site examination on November 11th and 12th, 2011 but have no prior experience on the property. As of the date of this certificate and to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical report not misleading. 7. I have read National Instrument 43-101, Form 43-101F1 and have prepared this Technical Report in compliance with National Instrument 43-101. 8. I consent to the filing of the “Technical Report on the Rio Pescado Gold Property, Republic of Colombia” dated June 30, 2012 by Touchstone with any stock exchange and other regulatory authority for compliance purposes.

Dated at Vancouver, British Columbia, the 30th day of June 2012.

Original Signed and Sealed

_”Peter A. Christopher”__________________________ Peter A. Christopher Ph.D., P.Eng.

2012 06 30 rio pescado technical report

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