A TECHNICAL REVIEW

OF THE

ZINKGRUVAN MINE

IN SOUTH-CENTRAL SWEDEN

FOR

SILVER WHEATON CORP.

prepared by

John R. Sullivan, P.Geo.

Senior Geologist

and

G. Ross MacFarlane, P.Eng.

Senior Associate Metallurgical Engineer

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TABLE OF CONTENTS

Page

1.  SUMMARY

2.  INTRODUCTION AND TERMS OF REFERENCE

2.1

 INTRODUCTION

2.2

 TERMS OF REFERENCE

2.3

 SOURCES OF INFORMATION

2.4

 UNITS AND CURRENCY

2.5

 DISCLAIMERS

3.  PROPERTY DESCRIPTION AND LOCATION

3.1

 LOCATION

3.2

 PROPERTY DESCRIPTION

3.3

 SLW ZINKGRUVAN AGREEMENT

4.  ACCESSIBILITY, CLIMATE, LOCAL RESOURCES AND INFRASTRUCTURE AND PHYSIOGRAPHY

4.1

 ACCESS

4.2

 CLIMATE

4.3

 LOCAL RESOURCES AND INFRASTRUCTURE

4.4

 PHYSIOGRAPHY

5.  HISTORY

6.  GEOLOGICAL SETTING

6.1

 REGIONAL AND LOCAL GEOLOGY, METAMORPHISM AND

STRUCTURE

6.2

 GEOLOGY OF THE ZINKGRUVAN DEPOSIT

7.  DEPOSIT TYPES

8.  MINERALIZATION

8.1

 ZINC/LEAD/SILVER OREBODIES

8.2

 COPPER MINERALIZATION

9.  EXPLORATION

9.1

 MINE SITE (BROWNFIELDS)

9.2

 OFF MINE SITE (GREENFIELDS)

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TABLE OF CONTENTS

(continued)

Page

10.  DRILLING

10.1

 GENERAL

10.2

 CORE HANDLING AND LOGGING PROTOCOL

11.  SAMPLING METHOD AND APPROACH

12.  SAMPLE PREPARATION, ASSAYING AND SECURITY

12.1

 SAMPLE PREPARATION

12.2

 ASSAYING

12.3

 QAQC

12.4

 SECURITY

13.  DATA CORROBORATION

14.  ADJACENT PROPERTIES

15.  MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

15.1

 GENERAL

15.2

 MINERAL RESOURCE ESTIMATE SUMMARY

16.  MINING AND MINERAL PROCESSING OPERATIONS

16.1

 GENERAL

16.2

 UNDERGROUND OPERATIONS

16.3

 CONCENTRATOR OPERATIONS

16.4

 MINE WORKFORCE

16.5

 CAPITAL AND OPERATING COSTS

17.  OTHER RELEVANT DATA AND INFORMATION

17.1

 MARKETING AND COMMERCIAL MATTERS

17.2

 COPPER PROJECT

17.3

 ENVIRONMENTAL, SAFETY AND HEALTH MATTERS

17.4

 WGM ECONOMIC ANALYSIS

18.  CONCLUSIONS AND RECOMMENDATIONS

18.1

 CONCLUSIONS

18.2

 RECOMMENDATIONS

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TABLE OF CONTENTS

(continued)

Page

CERTIFICATES

REFERENCES

APPENDIX 1: WGM ECONOMIC ANALYSIS

LIST OF TABLES

1.

Zinkgruvan land holdings

2.

Zinkgruvan Mine production 1998 to 2003

3.

WGM sampling results, Zinkgruvan Mine

4.

Zinkgruvan Mine Proven and Probable "zinc/lead/silver" Mineral Reserves

5.

Zinkgruvan Mine Measured and Indicated "zinc/lead/silver" Mineral Resources

6.

Zinkgruvan Mine Inferred "zinc/lead/silver" Mineral Resource

7.

Zinkgruvan Mine Indicated and Inferred "copper" Mineral Resources

8.

Zinkgruvan Mine production equipment

9.

Concentrator operating results

10.

Capital cost estimate, 2004 to 2008 (US$ million)

11.

Zinkgruvan operating cost history  (per tonne milled, 1999 to 2003)

LIST OF FIGURES

1.

Property Location Map

2.

Land Holdings Map

3.

Simplified Regional Geology Map Bergslagen Greenstone Belt

4.

Generalized Property Geology Map

5.

650 Level Plan Nygruvan and Part of Burkland

6.

Schematic Cross-section Nygruvan

7.

800 Level Plan Burkland Zn/Pb and Cu Zones

8.

Schematic Cross-section Knalla

9.

Nygruvan Longitudinal Section Mineral Resource Blocks

10.

Knalla Longitudinal Section Mineral Resource Blocks

11.

Zinkgruvan General Site Plan

12.

Schematic of the Panel Stoping Method

13.

Schematic of the Bench Stoping Method

14.

Schematic of the Concentrator Flowsheet

15.

Schematic of the Paste Fill Plant Flowsheet

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1.  SUMMARY

Silver Wheaton Corp. ("SLW") retained Watts, Griffis and McOuat Limited ("WGM") to carry out an independent technical review of the operating Zinkgruvan zinc, lead, silver mine, located in south-central Sweden.  The mine and associated assets are held within the Swedish company Zinkgruvan Mining AB ("ZMAB"), which is a wholly owned subsidiary of TSX-listed Lundin Mining Corporation (Lundin).  

This report is intended to support the agreement announced November 14, 2004, whereby ZMAB will sell and SLW will purchase 100% of the silver production from the Zinkgruvan Mine for the life of the mine.  (A minimum of 40 million troy ounces over 25 years.)

The WGM review included a site visit, a review of the Mineral Resource estimates, a review of the procedures employed to convert Mineral Resources into Mineral Reserves and into mineable reserves, a review of the life of mine plan, a review of the underground operation, equipment and procedures, a review of the concentrator, its equipment and operation, a review of the tailings disposal area and capital and operating costs.  We also reviewed ongoing exploration activities and the potential to find additional Mineral Resources.  WGM carried out a similar review of the property when Lundin (then South Atlantic Ventures Ltd. (South Atlantic)) acquired Zinkgruvan earlier in 2004.

The review and report were carried out and prepared in compliance with the standards of National Instrument 43-101 ("NI 43-101") in terms of structure and content.  

During its review for South Atlantic, WGM audited the Zinkgruvan Mineral Resource estimates as of December 31, 2003.  WGM reclassified these resources according to the guidelines of the Council of the Canadian Institute of Mining, Metallurgy and Petroleum ("the CIM Standards").  The overall Mineral Resource estimates are shown below.

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Zinkgruvan Mine Proven and Probable "Zinc/Lead/Silver" Mineral Reserves

Prepared by Zinkgruvan Staff Reclassified by WGM (March 2004)

Zinc/Lead/Silver Mineral Resources are reported in addition to Mineral Reserves and for Zinkgruvans strategic planning purposes a large portion is incorporated into the life of mine plan once subjected to dilution, recovery and grade-correction factors.  None of these factors has been applied to the Measured, Indicated or Inferred Resources as reported below.  The life of mine plan as of January 1, 2004, projected production through 2022, from the Zinc/Lead/Silver Mineral Reserves and Mineral Resources as estimated at December 31, 2003.

Zinkgruvan Mine Measured and Indicated "Zinc/Lead/Silver" Mineral Resources

Prepared by Zinkgruvan Staff Reclassified by WGM (March 2004)

Zinkgruvan Mine Inferred "Zinc/Lead/Silver" Mineral Resource

Prepared by Zinkgruvan Staff Reclassified by WGM (March 2004)

For the six years from 1998 through 2003, production at Zinkgruvan averaged 739,000 tonnes per annum and silver production (as recovered in lead concentrates) averaged 1,517,000 troy ounces per annum.  Nine-month production to September 30, 2004 was 503,000 tonnes grading 9.3% Zn, 4.6% Pb, and 97 g Ag/t for 1,173,000 troy ounces of silver, 43,000 tonnes of zinc and 20,000 tonnes of lead, all in concentrate.  WGM projects that full year production will be 710,000 to 720,000 tonnes and that silver production will be 1,600,000 to 1,700,000 troy ounces.  In late 2004, new five-year and life of mine plans were in preparation and WGM

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reviewed the five-year plan during its November 2004 site visit.  While neither plan was official at the time of writing this report, WGM is of the opinion that the five-year plan forms a realistic basis to view mine production going forward and has used these figures in its economic model.  The 2005 through 2009 plan calls for production averaging 833,000 tonnes per annum grading 8.8% Zn, 4.6% Pb, 107 g Ag/t, nearly all of which is from Proven and Probable Mineral Reserves.  The projected December 31, 2004 Zinc/Lead/Silver Proven and Probable Mineral Reserves are sufficient to support production at current and planned rates for 10 years, that is through the end of 2014.  The projected December 31, 2004 Measured and Indicated Mineral Resources are sufficient to support production for an additional 2.7 years, that is through August 2017.

In addition to the Zinc/Lead/Silver Mineral Resource, the mine hosts an undeveloped copper zone.  It sits on the structural hanging wall of the Burkland Zn, Pb deposit and has been partially defined by a limited number of drillholes.  A Mineral Resource estimate has been prepared for it as shown below.  The life of mine plan does not incorporate production from the zone but internal studies have show that development and production are feasible.  Zinkgruvan staff renewed their study of the copper zone during 2004 and subject to finalization, the mines environmental permit has been modified to allow for the processing of 500,000 tonnes per annum from the zone in parallel with and in addition to continued production from the zinc, lead, silver zones.  Production from the copper zone would result in increased silver production.  

Zinkgruvan Mine Indicated and Inferred "Copper" Mineral Resources (2% Cu cutoff)

Prepared by Zinkgruvan Staff Reclassified by WGM (March 2004)

WGM is satisfied that the mine-staff estimates of Mineral Reserves and Mineral Resources are valid and accepts the results.  

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Silver production is projected to average 2,089,000 ounces annually from 2005 through 2009 and 1,807,000 ounces annually from 2010 through 2017.  The amount of silver purchased by SLW will be roughly 95% of these figures once smelter deductions are taken into account.

Historically, Zinkgruvan has been very successful at converting Inferred Resources into Indicated and Measured Resources and subsequently into Mineral Reserves.  Between 1982 and 2003 total Proven and Probable Mineral Reserves remained almost constant despite a gradual increase in throughput over that period.  The planned exploration and development cycle at the mine saw little or no conversion of Mineral Resources to Mineral Reserves during 2004, therefore the December 31, 2004 Proven and Probable Reserve total will be reduced by the amount of 2004 production.  Mine staff report that this situation will continue through 2005.  WGMs opinion is that the historical success in replacing Mineral Reserves will resume in 2006 and the life of mine plan projecting production through to 2022 is a viable one.  It should be noted that this life of mine plan as prepared by mine staff incorporates a portion of the Inferred Resources whereas WGMs economic analysis does not.    

WGM has completed an economic analysis of the operation starting January 1, 2005 and continuing through 2017.  Production ceases in 2017 and reclamation activities are undertaken for the remainder of 2017.  Although it is likely that these activities will continue for some time thereafter, their total estimated cost is incorporated in 2017.  The WGM analysis does not incorporate Inferred Mineral Resources.    

The analysis shows that the operation will have an accumulated after tax Net Cash Flow of US$187,372,000.  

WGM is of the opinion that using reasonable economic and operational assumptions the Zinkgruvan operation starting from January 1, 2005 will be financially viable and will be able to deliver the minimum required 40 million ounces of silver over the first 25 years of the

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Zinkgruvan-SLW agreement.  It will remain robust under a variety of metal price, operating cost and exchange rate conditions.  

WGM believes that the Zinkgruvan operation will continue to be a silver, zinc and lead producer in the lower cost quartile of the industry for its remaining mine life, currently projected by Zinkgruvan to be 18 years.  Due to depressed metal prices, the mine has not been fully capitalized and the exploration effort has been reduced in recent years.  Both brownfields and greenfields exploration potential are regarded by WGM as very good.    Notwithstanding certain underground production problems early in 2004, the mine is poised to increase production moderately at a time of increased metal prices and the new owners have begun to address undercapitalization issues and a more aggressive exploration program is beginning.  

Although Zinkgruvan has a long operating history, the mine has no significant environmental liabilities due to the non-acid generating nature of the tailings and modern containment practices in place.  Both the mine and concentrator have opportunities to increase production and decrease operating costs.  A partially defined copper resource adjacent to the Burkland deposit provides an opportunity to further increase the economic value of the operation.      

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2.  INTRODUCTION AND TERMS OF REFERENCE

2.1

INTRODUCTION

Silver Wheaton Corp. ("SLW") was incorporated under the Business Corporations Act of Alberta as Chap Mercantile Inc.  The company name was changed in December 2004.  It is a public company listed on the TSX Exchange under the trading symbol SLW and its head office is located in Vancouver, Canada.  SLWs controlling shareholder is Wheaton River Minerals Ltd., an important Canadian-based international Au, Ag and Cu producer.  SLW is a pure silver mining company, which has already entered into an agreement to purchase 100% of the silver production of Wheaton River subsidiary company Minas Luismin S.A. de C.V., which produces some 8 million troy ounces of Ag annually from mines in Mexico.       

2.2

TERMS OF REFERENCE

Watts, Griffis and McOuat Limited ("WGM") was retained by SLW to carry out an independent technical review of the Zinkgruvan Mine ("Zinkgruvan"), its Mineral Resources and associated assets and the exploration potential of the mine and immediate surrounding area.

WGMs assignment consisted of:

-

A site visit, as technical advisors to SLW, to Zinkgruvan along with a representative of SLW and a representative of Macquarie North America Ltd., from November 4 to 6, 2004;

-

A review of the Mineral Resource estimates as of December 31, 2003 as prepared by Zinkgruvan staff and audited and reclassified by WGM in March 2004;

-

A review of the most recent although unofficial Zinkgruvan life of mine plan, the surface and underground facilities and methods of operation and the ongoing process of permitting expansion of the tailings disposal area and a possible increased production rate; and

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-

The preparation of a simplified economic analysis to demonstrate the viability of the mining operation.

The review and report were carried out and prepared in compliance with the standards of National Instrument 43-101 ("NI 43-101") in terms of structure and content.  

2.3

SOURCES OF INFORMATION

In conducting this study, and with Lundin Mining Corporation (Lundin) permission, WGM relied on a similar report prepared for South Atlantic Ventures Inc. (South Atlantic and predecessor to Lundin) in March 2004.  This report was prepared as part of South Atlantics due diligence process when it purchased Zinkgruvan from its then beneficial owner Rio Tinto Limited.  In addition, WGM acquired new data from Zinkgruvan staff during the November 2004 site visit and SLW provided additional material.  Large portions of the descriptive material used in this report for SLW have been taken from all of the above.  A site visit was carried out by John Sullivan, WGM Senior Geologist, from November 4 to 6, 2004.  Mr. Sullivan had previously visited the site from January 21 to 23, 2004.  Discussions were held with Zinkgruvan management and technical personnel on site and with Lundin management personnel on site and in Stockholm on November 7, 2004.  Telephone discussions and e-mail exchanges were held with SLW and Zinkgruvan staff subsequent to the site visit.  

Representative samples of mineralization were taken during underground visits in both January and November.  These samples were carried back to Canada where two were analyzed.

Documents used in the preparation of this report and that of March, are listed under "References".

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2.4

UNITS AND CURRENCY

Both Metric and Imperial units are used in this report.  Grams (g) are converted to troy ounces (ounces or oz) using a factor of 31.104 g = 1 ounce and 34.29 g/tonne (t) = 1 oz/T (ton).  Currency is United States dollars ("US$"), Canadian dollars (C$) and Swedish kronor or crowns ("SEK").  In mid-December 2004, the currency exchange rate was approximately 6.74 SEK and C$1.22 per US$.    

2.5

DISCLAIMERS

WGM has not verified title to the Zinkgruvan property but has relied on information provided by Zinkgruvan staff.

This report or portions of this report are not to be reproduced or used for any purpose other than to support SLWs agreement to purchase the silver production from the Zinkgruvan Mine, without WGMs prior written permission in each specific instance.  WGM does not assume any responsibility or liability for losses occasioned by any party as a result of the circulation, publication or reproduction or use of this report contrary to the provisions of this paragraph.  

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3.  PROPERTY DESCRIPTION AND LOCATION

3.1

LOCATION

The Zinkgruvan mine is located in south-central Sweden in Narke County at approximately 5849N latitude, 1512E longitude.  As shown in Figure 1, it lies 175 km in a straight line west-southwest of Stockholm and 210 km northeast of Goteborg.  While there is a small village called Zinkgruvan surrounding the mine installations, the nearest significant communities are Ammeberg and Askersund, respectively 10 km and 15 km NW of the mine.  They house most of the mine employees.

3.2

PROPERTY DESCRIPTION

Zinkgruvan has held a variety of mineral rights covering the deposit and immediate area for many years and as recently as 2002 consolidated certain small mining/exploitation concessions into one larger one.  

The Swedish Minerals Act was modernized in 1992 and has been amended as recently as 1999.  It now encourages foreign participation in the industry.  There are no mining taxes or royalties other than the normal Swedish corporate tax, presently 28%.  An exploration permit is the basic form of mineral tenure.  It is valid for an initial period of three years and can be renewed subject to mining inspectorate approval for a further three years.  Additional renewals are possible but increasingly difficult to obtain except in exceptional circumstances such that the maximum duration of a permit is theoretically 15 years.  The size is limited to an area no larger than may be assumed can be explored in an appropriate manner.  An application fee of SEK 500/2,000 ha applies and the applicant must supply a list of private land owners within the area applied for.  The mining inspectorate informs all these owners, who then have the right to object to the granting of the permit.  The mining

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Figure 1.   Property Location Map

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law is, however, quite strong and objections have only the remotest chance of succeeding.  Nonetheless the procedure is long and it may be some months before a permit is granted.  A general work plan must also be submitted with the permit application.  Holding costs are onerous for metallic minerals, at SEK 15/ha for the first three-year period paid in advance.  This increases to SEK 21 for the second three-year period and rises further for additional periods.  There is partial reimbursement of these fees if the permit area is reduced during the period in question.  The mining inspectorate and private land owners (if any) must be informed by registered letter prior to the commencement of work and land owners may object.  If necessary the mining inspectorate will intervene.  Terms and a deposit for compensation for damage are determined in advance of work commencing.  When a permit is terminated without the granting of an exploitation concession a report of work must be submitted.

An exploitation or mining concession is granted if it can be demonstrated that an economically viable deposit has been defined.  A SEK 6,000 application fee is required and it must be accompanied by a technical and financial report including an environmental impact assessment, covering the deposit.  The area is decided based on the extent of the deposit and lands required for the entire operation.  Surface rights are included, some of which may be outside of the concession area, for instance a tailings impoundment area.  There is provision for expropriation if necessary.  The initial duration of a concession is 25 years and this is extended automatically for 10 year periods provided the concession is being regularly exploited when the period of validity expires.

Permits and concessions may be held by foreigners or foreign companies but work must be conducted through a registered Swedish branch office.  Either tenement may be transferred with mining inspectorate approval.   

The area covered by the SLW Zinkgruvan agreement is the immediate Zinkgruvan Mine area property consisting of four contiguous blocks totalling 679.38 ha in area and a fifth block (Marketorp) some 35 km to the east.  Two of the mine area blocks are exploitation or mining concessions, valid until 2025 and 2027 and the other two are exploration permits with a

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duration of three years, valid until September 2004 and July 2006.  Marketorp covers historic zinc, lead showings.  Zinkgruvan holds four additional exploration permits contiguous or nearly contiguous with mine area blocks and a fifth exploration concession, contiguous with Marketorp.  All Zinkgruvan holdings are more fully described in Table 1 and are shown on Figure 2.  

TABLE 1
ZINKGRUVAN LAND HOLDINGS