Pinnacle has an option to acquire a 70% interest in the La Calavera precious metal-copper skarn project in central Oaxaca State, Mexico from Chesapeake Gold Corp. (TSX:CKG).

The project is located 70 kilometers east of Oaxaca City and is road accessible. The La Calavera project comprises two mineral concessions, Cerro Calavera and La Zalamera, totaling over 72 square kilometers.

The La Calavera project covers the major portion of a recently discovered poly-metallic skarn. The two concessions are centered over a large, oval shaped, northeast trending intrusion complex, approximately 1.5 kilometers by 4 kilometers in size. This intrusion event caused widespread alteration around its margins and introduced poly-metallic copper-silver-gold mineralization in the form of skarn replacement and locally well-developed porphyry-style mesothermal to epithermal quartz veining.

The most intense zones of skarn-hosted copper-silver-gold mineralization found to date at La Calavera occur within a moderately thick package of carbonaceous sediments, near the southeastern margin of the intrusive complex. This particular area represents the intersection of the northeast trending intrusive stock complex and a prominent east-west structural trend that links La Calavera with Linear Gold Corp.'s Cobre Grande prospect located just a few kilometers to the west. Linear Gold Corp. has reported drill results including 132 meters of 1.0% copper, 20.7 g/t silver, and 156 meters of 0.9% copper, 21.3 g/t silver.

To date, detailed mapping and sampling has identified three zones of copper-silver-gold mineralization, Manguito, Portillo and Cerro Calavera. The mineralization style varies from precious metal-copper skarn to epithermal. At Manguito and Portillo, near the southeastern margin of the intrusive stock, high grade mineralization was found within a broad lens of exoskarn alteration some 1,000 meters north-south by 300 meters east-west. The mineralization is directly associated with strong, retrograde exoskarn alteration and occurs within a set of discrete veinlets and fractures that appear to be leakage conduits of a larger magmatic-hydrothermal system at depth. Preliminary sampling carried out by Chesapeake, returned anomalous grades varying from 0.1 to 1.4 g/t gold, 15 to 400 g/t silver and 0.3% to 14% copper. At the southwestern tip of the intrusive complex, the porphyry-style epithermal mineralization of the Cerro Calavera zone is hosted within a strongly sheeted, intrusive hosted quartz veining system.

The regional geological setting, the type and age of hostrocks, the style of mineralization and the precious metal grades encountered at La Calavera suggest that this project could host a multi-million ounce, poly-metallic deposit in the same class and size as Fortitude and Crown Jewel (in the USA) or the Bermejal-Nukay-Los Filos-El Limon District (in Guerro State, Mexico).

A detailed program of mapping, soil geochemistry and channel sampling is planned at La Calavera. Ground geophysics consisting of IP/Resistivity and magnetic surveys will also be undertaken to advance La Calavera to the drill ready stage.