River Hills Resource

Honduras Project

        El Transito

Location, Access and Infrastructure

The general area of 423 hectares is characterized by low, rolling hills of volcanic origin. Alluvial flats extend from the vicinity to the sea. The area is located within a definite gold and silver zone extending from El Salvador into adjoining Nicaragua. El Transito is one of the sixth operative mining under the new regulations in Honduras.

The El Transito mine is located in south Honduras, close to the Pan American highway, and within 25 Km west northwest distance from the San Lorenzo deep sea port.

Access to the property is by national highway approximately 115 Km from the capital, Tegusigalpa. The last two Km are all gravel road to the current mine site.

Electric power to the mine site is supplied from the national grid and water supply is currently pumped from a sump in the main cross cut. There appears to be sufficient water to service mining operations and the town site.

Geology

The El Transito gold property qualifies as one of the most important gold projects currently exists in Honduras.

The Property is underlain by the Middle Tertiary Matagalpa geological formation consisting of andesitic flows, pyroclastics and consanguineous porphyries. The dominant structure traversing the property is the El Transito Fault Zone (ETFZ), which hosts almost all of the blocked out resource known to date. This fault is on average 30 m wide and is recognizable for several kilometers. It strikes N70W and dips at 30 to 40 degrees to the North. It is defined by strong brecciation, silicification and concomitant argillic alteration.

The ETFZ correspond a regional shear zone where a series of quartz gold veins have been emplaced with proven reserves of over 144,000 ounces.  It has been sampled and professionally blocked by its prior owners who spent several million dollars to develop the mine.

Economic Geology

The economic mineral is gold which is present as free gold in the quartz veins and gold and silver as electrum in the pyrite. Other present minerals in minor amounts are chalcopyrite, galena and sphalerite.


Mine Property History

Compania Minera Cerros del Sur, S.A.  purchased the concession in 2003 but did not pursue the mining opportunities because of some opposition from a small group of local residents.  Since then the rights to the mine have been transferred to a new local mining company, Cerros del Rio, S.A.  With the change in economic circumstances of 2008, the local opposition is less and it is expected that future development will be supported by the majority of the locals.  Cerros del Rio has now been sold to River Hills Resources, Inc. which will provide the future funding and planning for the site.  During the transition phase, the local management of the project will be contracted with a local mining group.

Most of the mine workings are in very good condition.  Several levels of existing tunnels are connected by one main shaft.  A pump and pipes are designed to bring water up that shaft from the lower levels to the surface.  The tunnels and shaft are accessible, the water extraction pipe and system are in good condition and with a new pump water should be available from the lower levels. Power is already run to the site and with the replacement of one transformer and paying the hook-up fee, the site will have power.