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SHAREHOLDER UPDATE
February 21, 2007
Dear Shareholders:
During the past 2 years or so, the Company has been working closely with several key mining companies who have demonstrated a serious interest in participating with the Company to develop its early discoveries at the Alto de Lipangue property just north of Santiago, Chile. Sr. Juan Jose Quijano Fernandez has met with many groups during this time period and has shared the geological, geophysical and diamond drilling information that the Company assembled during its previous exploration and development of the property. Management has always believed that the Alto de Lipangue has the potential to be an enormous discovery of great significance to the Company, its Shareholders and Chile. Extra diligence, therefore, was taken to ensure that potential partners share the same view.
During the most recent 12 months, the current potential Joint Venture Partners have worked closely with Juan Jose Quijano Fernandez and Company personnel developing areas of interest that prior work highlighted. Exploring new zones to test the boundaries of the Lipangue deposit, building roads for access to newly discovered mineralized zones, conducting all manner of geological and geophysical programs, have uncovered a vastly expanded area for the projects' potential. Adding many more claim groups to cover and protect these extensive new areas of interest was required. By utilizing the latest scientific technologies to enhance, amalgamate and relate all data, both new and old, an extraordinary picture of the Alto de Lipangue has emerged.
The following claims and claim groups have been added to the original Alto de Lipangue holdings: Fortune 61-120, Colihues 1-40, Antonio 1-20 and Columbo. With the addition of these new claims, Cerro's holdings, related to property size, has been increased by approximately five times over the original mapped area, and the expansion is continuing.
Extensive road building, surface exploration, IP surveys, aerial electro magnetic surveys, trenching and geological/geochemical sampling have uncovered vast areas of mineralization previously undiscovered, but related to the Lipangue breccia and the suspected causative porphyry intrusive.
All of this information adds credence to the typical porphyry model scenario outlined to Shareholders at the September 2006 Annual General Meeting.
In addition, indications were growing of the probability of a secondary porphyry to the immediate south of the Alto de Lipangue mesa. Assay work, although backlogged due to various constraints at the Chilean labs, has confirmed both the relationship and potential of a secondary intrusive discovery.
With all of this groundwork in place for reference, an in-depth satellite survey, using the latest high-tech equipment, was undertaken. Management is now in receipt of a complete and detailed report of its findings. This report summarizes all of the work done to date and concludes the following: (a) Spanish version and; (b) translated website English version below:
"CONCLUSIONES
1- En este sector de estudio se nan emplazado; un yacimiento que puede ser clasificado como del tipo PORFIDO DE COBRE-ORO (en la zona de la planicie de los Altos de Lipangue) y, ademas, un PORFIDO DE MOLIBDENO-COBRE en el area inmediatamente contigua ubicada al sur de la anterior.
4- El volumen de Recursos Minerales identificados a la fecha, alcanza ya a varios cientos de millones de toneladas, principalmente asignados a los porfidos y skarn sumados en conjunto.
7- Todo lo antedicho muestra claramente que estamos aqui frente a un antiguo y famoso Distrito Minero que hoy presenta un potencial de Recursos, con el que puede sin duda clasificarse como de Clase Mundial."
CONCLUSIONS
1- "In this sector of study they are located; a deposit that can be classified like of type PORPHYRY OF COPPER-GOLD (in the zone of the plain of the Alto de Lipangue) and, in addition, a PORPHYRY OF MOLYBDENUM-COPPER in the contiguous area immediately located to the south of the previous one."
4- "The volume of identified mineral resources to date, reaches already to several hundreds of millions of tons, mainly assigned to the added porphyries and skarn together."
7- "All the aforesaid samples clearly show that we are, as opposed to an old and famous mining district here, that today presents/displays a potential of resources, with which can without a doubt be classified World Class."
Clemente Sepulveda Perez
Analista en Sonsores Remotos
Febrero 2007
Satellite surveys are a valuable exploration tool and assist in determining the areas of interest that require extensive diamond drilling to confirm the possible presence of porphyry deposits.
All work on the properties has been done under the direct supervision and approval of Sr. Juan Jose Quijano Fernandez in the most professional manner by the qualified geological staff of the potential Joint Venture Partners. The main purpose of the work, aside from defining the resource, is to provide all parties with the knowledge of the potential size and value of the deposit in order to finalize a Joint Venture Agreement.
Cerro Dorado, Inc.
Note: This News Release may contain certain "forward-looking statements" within the meaning of the United States Securities Exchange act of 1934, as amended. All statements, other than statements of historical fact, included in this release, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of Cerro Dorado, Inc., are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future could differ materially form those anticipated in such statements. Important fators that could cause actual results to differ materially from the Company's expectation are disclosed under the heading "Risk Factors" and elsewhere in documents filed from time to time with the United States Securities and Exchange Commission and other regulatory authorities.
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