The Mantaro Phosphate Property is located approximately 250 km east of Lima, Peru in the Andean altiplano near the city of Huancayo, Junin District. The Mantaro Phosphate Property encompasses 12,800 hectare trending in a northwesterly direction approximately 30 km from approximately 3 km south of the town of Aco in the southeast to 6 km southeast of the town of Jauja along the Mancaspico syncline. The map below shows the location:



The major asset associated with the Project, is a mineralized zone of phosphatic rock currently defined by surface outcrops, trenches and drilling extending over a strike length of more than 30 km and a width of more than 5 km on the west side of the Mantaro River. The total area covered by the concessions comprising the Property is 12,800 ha. This area is known as the Mantaro Phosphate deposit. Mineralization is exposed as three roughly parallel exposures (mantos) trending in a NW-SE direction noted as the West, East and Far East zones in this report.

Estimated mineral resources contained in the West zone of the Property (4% P₂O₅ cut-off) as of February 21, 2010, are:

Measured	5.548 MM tonnes¹ @ 10.8% P2O5
Indicated	33.975 MM tonnes¹ @ 9.9% P2O5
Measured + Indicated	39.523 MM tonnes¹ @ 10.0 % P2O5
Inferred²	376.265 MM tonnes¹ @ 9.0% P2O5

1. Tonnes rounded to the nearest 1,000 and grade to 1 decimal place.
2. Inferred material reported with no cut-off and an assumed grade.

There is considerable potential to expand the resource base. The East and Far East zones of the deposit have been geologically mapped and exhibit surface mineralization widths similar to the West zone. Given that the deposit is of marine sedimentary origin, there is every reason to believe that comparable grades and depth of mineralization are present within the East and Far East zones. Based on this assumption, the potential mineral deposits within the East and Far East zones are estimated to be approximately:

East zone	425-435 MM tonnes @ 9% P2O5
Far East zone	280-290 MM tonnes @ 9 % P2O5

These potential quantities and grade are conceptual in nature, there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in these targets being delineated as a mineral resource. However, should such conceptual resources be confirmed by trenching and drilling, the Mantaro Phosphate Property would rank as one of the most significant phosphate deposits in the world.


The Mantaro Phosphate Property varies in width from approximately 5 km to approximately 1 km. The portion of the Mantaro Phosphate Property where the Inferred Resource, is situated is characterized by a wide and elongated valley oriented from northwest to southeast. The valley is a remnant of a synclinal fold structure and higher structures on either side have formed by the weathering of the adjacent anticlinal structures.


The Mantaro Phosphate Property lies at the southern end of a highly productive and historically important Cu-Pb-Zn-Ag mining belt in the Central Peruvian altiplano. The Cerro de Pasco mine is located approximately 150 km to the northwest of the Mantaro Phosphate Property. Phosphate mineralization on the Mantaro Phosphate Property and immediately adjacent area is observed in surface outcrops and a series of trenches stretching over a distance of approximately 12 km. The phosphate mineralization is of marine sedimentary syngenetic origin and ranges from highly oxidized phosphatic sandstone to phosphatic limestones and mudstones. The phosphatic zone trends northwest-southeast and dips at 39º - 55º (typically 45º - 48º) to the northeast. Surface exposures average approximately 21 m true width.


Recent Developments

In December of 2010, Stonegate commenced additional exploration drilling under a limited Category 1 exploration permit in order to define and expand the mineral resource estimate for the property. This was completed during the second quarter of 2011. As part of its plan to conduct feasibility studies, the Company is in the process of applying for more extensive Category 2 exploration permits that will allow approximately 26,000 metres of diamond drilling from 138 drill platforms and trenching in 27 locations on all three zones. After the permits are obtained, drilling is expected to be conducted using four diamond drill rigs over a period of approximately nine months.


Infrastructure

A paved highway and railway connects Huancayo with Lima. Access to the Mantaro Phosphate Property is primarily from the town of Sincos via gravel roads to the village of Aramachay and then via rough tracks to a number of small villages. Regional infrastructure is generally excellent. High tension and local electrical distribution lines cross the Mantaro Phosphate Property. The Doe Run smelter at La Oroya, approximately 60 km to the northwest, is a potential source of sulphuric acid for fertilizer manufacture. Huancayo is a major regional centre with a population of approximately 460,000 people and offers excellent services. Huancayo is connected to Lima and the port of Callao by a major national highway and a railway.