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SHAREHOLDER UPDATE
Lobo Solitario, Chile
March 30, 2007
Dear Shareholders:
The Cerro Dorado property in Chile is approximately 8 km to the west of the small town of Lampa and 30 km northwest of Santiago. Access to the property is via the gravel road between the towns of Lampa and Til‑til, through the Hacienda Mercedes at Chicauma. The original claims known as Lonco Millarepu 1‑60, are rectangular and extend 3 km north‑south and 900 meters east‑west for Cerro Dorado, Inc. and the land tenure group of Medinah Minerals, Inc. to the west and south. In 2006 and 2007 the land base has been expanded by over 300% and the mapping and sampling program in late January 2007 accessed the new land packages and new occurrences.
The Lonco Millarepu 1‑60 mining claims (Mensura) were purchased by Cerro Dorado, Inc. in April 1999 with the vendor retaining a 20% interest in the properties. The Columbo, Fortuna 61-120, Colihues 1-40 and Antonio 1-20 were added to the East in 2006 to make a claim group that significantly increases the original acreages.
The main point of geological interest for Cerro Dorado, Inc. was the new 2006 breccia exploration target; second, to plan the detailed exploration and trenching program of the bowl-shaped depression near the airstrip that is mineralized and straddles both properties. This was of significant potential in the 1999 A.C.A. Howe Report.
The bowl-shaped depression (Howe 99) at the airfield that straddles both company's ground was mapped and sampled in detail. Plans were laid out for an extensive geophysical and trenching program to determine the presence of a new breccia beneath the surface and, if warranted, a drill program to confirm structure and grade.
The 2006 Cerro Dorado Breccia North discovery was extensively sampled underground at 1m spacing (continuous chip method) from the entrance of the adit to the back of the adit, 40 meters in length. Two 30 kG. composite samples were prepared and assays demonstrate consistent grade over the entire length. Assays returned 1.221% cu and 1.174% cu over the 40 meters. The end of the adit is still within the breccia structure The width of the breccia is unknown.
To determine the extents, plunge and ultimate grade: the breccia should be diamond drilled on 50m elevation spacing on at least three sites for determination of the geometry of the body to be confirmed.
On the middle of the new Columbo claim directly east of the La Fortuna workings, a large and extensive structure was mapped and sampled that appears to be a wide stockwork system (Utm 317824 and 6314839 @1850m). This was determined by large amounts of quartz float on surface (and used in an ancient stone fence) defined by many old open trenches and pits from early last century. The structure in total width was measured at 75-85 meters on surface. After careful mapping and sampling, it appeared to be one continuous structure of quartz and oxide material trending NE/SW and was traced into the canyon on strike (utm 317479 and 6314555 at 1,800m) Samples were taken from many of the pits and copper oxides and malachite were abundant.
A road was designed from the Fortuna road and access is relatively flat and easy access for excavator trenching of the entire structure near surface across true widths. Ground geophysics and, if warranted, diamond drilling are necessary to confirm the system and grade to depth.
Significant evidence seems to indicate that an underlying porphyry was the progenitor for the Dos Marias skarn, the Gordon Breccia pipe, the new Breccia occurrence at Lobo, the epithermal veins at the Fortuna Mine and the molybdenum deposit at Concordia and Corizon.
When studied together, all the occurrences are almost a textbook version of the Sillitoe model. The zones of alteration that drilling and sampling encountered (propylitic, phyllic, sericitic, hydrothermal, …) were all found in the correct sequence, demonstrating corresponding geochemical elevational control within the system. The arsenopyrites present in the epithermal veins on surface at the Fortuna Mine’s highest level (2,000 meters) as well as the copper, gold, and molybdenum in the breccia and Dos Maria skarn values observed at lower elevations, also tend to fit the model.
The sericitic alteration at the bottom of deeper holes 15 and 18 on the Gordon Breccia was so intense as to hint at a possible close proximity of a heat source. This might suggest that a porphyry system may be at an economically feasible distance or depth from the known breccias.
The bowl-shaped depression straddling both properties near the airstrip might be indicative of another breccia pipe, or proximity to a system with similar heat and fluid sources that caused alteration. Several geologists have noted the geochemical similarities to the Gordon Breccia. There is plenty of limonitic quartz float alteration. Geochemical sampling by Hopley found an interesting correlation, but more follow-up trenching is required.
The mining infrastructure is excellent with the proximity to Lampa and Santiago. Chile is one of the most mining-friendly countries in the world.
Negotiations continue with several potential Joint Venture partners presenting proposals to continue aggressive exploration and development programs on our expanded land acreages.
The Board of Directors
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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