A down-faulted zone, the “Gap”, is located midway between the Escondida and El Victor resource areas. Placer Dome conducted limited exploration during 1998, completing only a few wide spaced holes to demonstrate mineralization continuity between the two resource areas at either end. The zone is a down-faulted covered block in the main mineralized trend between El Salto and San Carlos. The Gap area has similar geologic characteristics to the high-grade Escondida zone and is a large, blind area of concealed silica alteration that hosts both localized high-grade and thick lower-grade gold intercepts. Surface drilling completed in 2006 and 2007 has delineated a mineralized zone approximately 500 metres long by 150 metres wide, and up to 110 metres thick. Mineralization at the Gap area is now known to be continuous with El Victor, outlining a 1,250-metre strike length extension of mineralized intercepts. An additional 150 metres of strike length remains to be explored until the Escondida deposit is encountered.

Exploration drilling in 2006 and 2007 resulted in the extension of mineralization 500 metres from El Victor into the Gap area. In addition, drilling at the Gap resulted in the discovery of high-grade ore intercepts, some in excess of 30 g/t Au, increasing the likelihood of outlining an economic deposit at Gap, or possibly another high-grade zone that would be suitable for milling.

Surface drilling completed to the end of 2008 consisted of 38 RC holes on roughly 50-metre centre (8,540 metres), stepping out to the west from previous El Victor/Gap intercepts. In 2009, core drilling on 50-metre sections was completed, and infill and step-out drilling on 25-metre spacings is ongoing.  This drilling is expected to confirm the continuity between the Mulatos and El Victor Pits and to be included in the Company's 2009 Reserve and Resource Statement.

Drilling has resulted in the identification of several additional high-grade gold intercepts, including 4.58 metres of 24.73 g/t Au, 7.62 metres of 29.92 g/t Au and 3.04 metres of 24.86 g/t Au. These drill results are in addition to previously reported results including 33.5 metres of 4.09 g/t Au and 25.9 metres of 3.85 g/t Au.