San Luis has a rich history of mining in the area dating back to the 19th century. The historical high-grade gold and silver mineralization in these mines is related to quartz veins within andesite dikes in volcanic clastics and granodiorite host rocks. Also, and importantly, the gold and silver vein structures occur over a vertical zonation greater than 500 metres project wide, indicating potential favourable vertical continuity of mineralization.
From 1993 to 1997 TVX Minería Ltda. ("TVX") carried out prospecting programs in the area of the Property. The exploration programs were designed to evaluate the potential of gold within what is now the Property and to evaluate old mines in the area including San Jorge, Los Azules, La Castellaña, La Ilusión, La Turbina, Merceditas and La Cuncia.
TVX recognized that economic gold grades can occur between 1,400 m above sea level and 2,200 m elsewhere in the area, indicating that the depth of vein mineralization may exceed 400 metres.
In 1997 Hernandez and Carvajal carried out geophysical surveys over the auriferous vein deposits of the area. The work comprised magnetometer, resistivity and induced potential in the area of La Estrellita, El Conejo and El Oso to model the continuity of the veins and to identify areas with sulphide enrichment.
In 2000 INGEOMINAS contracted GeoMinera S.A. to carry out a prospecting program in the San Luis region. The primary aim of the program was the evaluation of the potential existence of metallic and non-metallic mineral occurrences within the boundaries of the study area which comprised a group of areas defined as anomalous by INGEOMINAS. One of the defined anomalous areas is called the "351 Anomaly - Chiquilá River), located adjacent to and within the confines of the Property. From this work INGEOMINAS concluded that the area of anomaly 351 conforms to an irregular polygon, contains an 11 km2 zone and is considered to have a major potential for the discovery of gold and silver deposits of quartz adularia type. The mineralization is characterized as vein type, with gold and silverbearing quartz veins containing pyrite, galena, sphalerite and chalcopyrite, developed in rocks with phyllic and argillic hydrothermal alteration.
In the 2000 field program, 507 samples were collected for geochemical analysis comprising 117 soils, 30 stream sediment concentrates, 138 rock chip samples and 222 rock grab samples.
Between 2004 and 2009 a joint venture between Anglogold Ashanti ("AGA") and B2 Gold ("B2") carried out an exploration program in the area. Between July and September 2004, Kedahda S. A. ("Kedahda"), a subsidiary of AGA, began exploration on the Property, in the areas of La Julia, Las Merceditas and El Conejo. During this work, Kedahda identified several areas in the vicinity of La Julia and El Tambo where the potential for open pit mining existed. During this program 151 samples were collected for geochemical purposes and 40 hand samples were collected for geochemical, petrographic and metallogenic analysis and PIMA studies.
During the first three months of 2007, AGA identified approximately 33 gold anomalies that are related to the Chusma Fault System and which correspond to epithermal veins of intermediate sulphidation, extending from Pacarni in the south to San Luis in the north over a distance of approximately 50 km.
In October of 2008 and extending into 2009, B2Gold initiated detailed exploration on the San Luis block in the areas with well-known mineralization and at the sites where AGA had completed sampling. Between December 2008 and February 2009, B2Gold submitted 770 rock samples and 121 stream sediment samples for analysis. During this period B2Gold defined numerous veins of quartz-pyrite-galena±chalcopyrite-calcite-iron oxide and manganese oxide with thicknesses between 5 and 60 cm and a northwest trend, in addition to the regional northeast trending veins. Documentation available from AGA records that US$916,834 were expended during this period.
According to B2Gold, Las Merceditas and Los Azules areas appear to contain isolated veins whereas the vicinity of La Julia appears to have a greater concentration of veins, each 30 to 50 metres in length. During this period B2Gold identified a fine-grained intrusive diorite with biotitic-potassic alteration with disseminated and veinlet-hosted pyrite between the intrusive granodiorite of San Luis and the volcanic rocks of the Saldaña Formation. In the vicinity of La Julia and Los Azules hydrothermal breccias containing fragments of silicified dacites were observed, which according to B2Gold have not been previously explored.