Beiya Project (including Beiya and Ma Touwan Properties)

QUICK FACTS

Location:	Yunnan province of southwestern China Excellent infrastructure
Metals:	Gold
Partnerships/Holdings:	72% interest in joint venture with Yunnan Non-Ferrous Geology and Mineral Resources Company Limited 70% interest in joint venture with Yunnan Geology and Mineral Resource Co. Limited 100% owned in recently granted exploration rights (236 km²)
Project size:	586 km² in western Yunnan 23 exploration licences
Notable:	Two major mineralization zones with 20+ gold occurrences, up to 34 g/t at surface 17,400-metre drilling program underway to further test various styles of mineralization and to define economic resources - Gold-bearing magnetite replacement bodies - Skarn-type copper-gold deposits - Carlin-type gold deposits - Porphyry copper-gold deposits Soil sampling and ground magnetic survey completed over 586 km² of exploration rights,low potential area relinquished. Earned 72% in CJV at Ma Touwan, and earning 70-88% in CJV at Beiya Highway, railway, power grid and water supply

OVERVIEW

The Beiya Project in western Yunnan Province is the largest of our projects initially covering 586 sq. km. Soil sampling and ground magnetic surveys have been carried out over the whole area of exploration rights, followed by extensive trenching/pitting programs to test the surface mineralization. Within this area we have identified several different styles of gold mineralization and have defined four separate working areas: Beiya North, Beiya Far North, Beiya Northeast and Beiya West.

Beiya North is adjacent to the producing Beiya Gold Mine, an operating, open-pit gold mine with annual capacity of up to 100,000 ounces per year. This mine is the largest gold mine in Yunnan Province, currently being expanded to double production. It is currently mining gold-bearing magnetite at the contact between limestone and felsic intrusions. Exploration started over 30 years ago, but only recently a thick sulfide zone with high copper and gold grades was found adjacent to our joint venture exploration rights.

Our target here is intrusion-related gold deposits similar to the adjacent mine. Drill targets have been identified from a large soil anomaly with gold values up to 1.7 g/t, measuring 13 km by 2 km. Roughly one-third of the anomaly covers the operating mine's two pits, and two-thirds lies in our joint venture exploration rights. A number of ground magnetic anomalies have been outlined within this gold zone. In particular, the magnetic low where the high-grade copper-gold zone was found in the Beiya Gold Mine continues west into our joint venture exploration rights.

Chip/channeling samples from surface outcrops, trenches and pits gave gold grades up to 34 g/t. An initial 10,000-metre, widely spaced (80 to 160 meters) drill program started in late 2006 has tested the mineralization zone within ground magnetic highs adjacent to the Beiya Gold Mine. The assay results indicated up to 270 meter drill intercept of gold-silver mineralization extending continuously for at least 780 meters, with some results highlighted as follows:

› Hole BYN-ZK2342: intersected a 270 meter mineralized zone including 78.5 meters grading 0.65 g/t gold, 30 g/t silver, 0.26% copper; 13.5 meters at 1.49 g/t gold and 0.71% lead; 3.4 meters at 1.08 g/t gold, 94.7 g/t silver and 1.86% copper; 3 meters at 0.66 g/t gold, 102 g/t silver and 1.62% copper; and 7.3 meters at 2.35 g/t gold, 51.5 g/t silver and 0.48% copper.

› Hole BYN-ZK2333 intersected: 20.6 meters grading 1.48 g/t gold, 69.2 g/t silver and 5.2% combined lead and zinc; 4.1 meters at 0.79 g/t gold, 31.6 g/t silver and 6.5% combined lead and zinc; 1.5 meters at 10.3 g/t gold, 220 g/t silver and 15.5% combined lead and zinc.

› Hole BYN-ZK354 intersected 7.6 meters grading 4.75 g/t gold, 56.2 g/t silver; 2.1 meters at 1.22 g/t gold, 58.8 g/t silver and 6.3% combined lead and zinc; 0.48 meters at 11.0 g/t gold, 234 g/t silver and 25.5% combined lead and zinc.

› Hole BYN-ZK1152 intersected 4.6 meters grading 1.55 g/t gold, 218.3 g/t silver, 9.5% combined lead and zinc; 1.5 meters at 2.20 g/t gold, 413 g/t silver and 14.3% combined lead and zinc

› Hole BYN-ZK257 intersected 1.5 meters grading 0.46 g/t gold, 155 g/t silver and 17.4% combined lead and zinc.

› Hole BYN-ZK1056 intersected 4.2 meters grading 1.72 g/t gold, 37.5 g/t silver and 6.4% combined lead and zinc.

› Hole BYN-ZK3 intersected 130 meters of mineralization including 52 meters grading 1.1 g/t gold, 27.4 g/t silver, 0.11% copper and 1.1% combined lead and zinc; 2.6 meters grading 2.36 g/t gold, 107 g/t silver, 0.19% copper, 9.6% combined lead and zinc; 3.9 meters grading 6.48 g/t gold, 47 g/t silver and 0.57% copper; 0.92 meters grading 23.5 g/t gold, 54 g/t silver and 1.02% copper; 16.3 meters grading 0.53 g/t gold, 20 g/t silver, 0.10%copper and 3.4% combined lead and zinc

› Hole BYN-ZK2338 intersected 9.6 meters grading 2.0 g/t gold, 34.7 g/t silver and 6.7% lead

› Hole BYN-ZK348 intersected: 17.8 meters grading 2.2 g/t gold, 27 g/t silver

› Hole BYN-ZK252 intersected: 6.6 meters grading 2.8 g/t gold, 31 g/t silver and 0.75% copper; 16.9 meters at 0.55 g/t gold, 56.7 g/t silver including 3.06 meters at 0.55 g/t gold, 125 g/t silver and 7.1% combined lead and zinc

› Hole BYN-ZK1 intersected: 18.2 meters grading 1.12 g/t gold and 28 g/t silver; 1.1 meters grading 5.76 g/t gold and 16 g/t silver; 1.3 meters grading 4.15 g/t gold and 29 g/t silver

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At Beiya Far North, where possible Carlin-style gold deposits are the target, a large anomaly extending over nine square kilometres was discovered with values up to 1.9 g/t gold in soil samples. Detailed geological mapping has been carried out, and an extensive trenching program was started in order to expose bedrock and provide reliable assays to determine the location and grade of the mineralization. The early trenches exposed zones of anomalous bedrock up to 100 metres wide, including zones with near-economic grades (e.g., 9.3 metres grading 1.4 g/t gold in trench TC2). Four holes were drilled, but intersected no significant mineralization. Data are being compiled and we will further examine the potential of this area.

A 17,400-metre drill program has been planned to define economic resources at Beiya North, and to test the mineralization zones at Beiya Northeast and Beiya West, focusing on possible extensions to the high-grade copper-gold zone located in the adjacent Beiya Gold Mine; potential Carlin style gold mineralization will also be investigated.

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