Emerging Gold Producer

PETER ZIHLMANN, P.Zihlmann Investment (10/08/2008)
"Pediment Exploration, through wholly-owned subsidiary Minera Pitalla S.A. de C.V., has acquired nine separate projects in northwest Mexico targeting gold, silver and copper. Property investigation and acquisition is still ongoing. Significantly, Pediment holds all its projects 100% and there are no underlying option payments, work commitments or royalties.

Although Mexico has one of the world's richest mineral endowments, it was largely ignored by international mining companies until the 1990's due to restrictions on foreign ownership.

Mexico updated its mining codes in the early and mid 1990's, eventually allowing for 100% ownership of mineral concessions by foreign companies. This led to a massive staking rush and growth in exploration expenditures. Though this exploration was successful in finding a number of new mines the "blanket staking" shut out many potential investors who were not in on the early rush. This changed in the late 1990's and early this decade as low commodity prices led major producers to scale back exploration everywhere and relinquish all but the most advanced projects. This created opportunities for companies that had been accumulating regional information, applying criteria from the most current geological models and generating new target areas.

Past exploration efforts in Mexico centered on sampling small past mineral producers during times of elevated commodity prices. Exploration of new areas of interest was limited without the use of modern geophysical and geochemical methods. Pediment considers the current situation in northwest Mexico to be similar to the now famous and prolific Carlin trend in Nevada some thirty years ago. Nevada's
major gold trends were overlooked due to limited surface rock exposure. Application of modern exploration techniques in Nevada and testing of subsurface "blind" targets helped change the State from an area of minor gold production to the home of a number of the world's richest and most profitable gold mines. Pediment has focused on acquiring projects in areas containing known mineralization, with nearby pediment covered areas overlying geology and structures that are permissive to hosting large gold, silver or copper deposits.

The discovery of a gold deposit by Penoles and Newmont named La Heradura within the Mega Shear trend of Northern Sonora has confirmed the presence of Carlin Style gold deposits in the belt. Pediment has acquired 100% of four projects within the Mega Shear belt with historic results that provide strong evidence for the presence of larger mineral systems."

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