Operations

Railroad-Piñon

Summary

Our Railroad-Piñon property lies along the southern Carlin trend. This project spans more than 17,000 acres, with the northern portion situated near Newmont's Rain and Rain Extension deposit (4 million ozs; 0.45 opt gold). Various operators have spent more than $15 million exploring Railroad-Piñon. This work, including more than 600 drill holes, has identified several low-grade (0.02-0.10 opt) potentially bulk-mineable gold deposits and deeper, high grade underground gold-silver deposits. The Railroad area also hosts a significant copper-lead-zinc-gold-silver prospect currently under evaluation.

Near-Surface and Deeper "Carlin-Style" Potential

We are exploring for two types of deposits at Railroad-Piñon. One is oxidized, near-surface mineralization amenable to heap leach mining. The other is Carlin-style "feeder" systems which typically lie at deeper levels. The potential for both deposits is excellent.

South Bullion Resource

Our current exploration is focused on developing the Main and North Pod near-surface zones in the South Bullion resource area. South Bullion includes a large, gold-silver bearing system with measured, indicated and inferred resources of 30.6 million tons grading 0.026 opt (0.01 opt cut-off). We believe the potential is excellent for a deeper-lying feeder system beneath this low-grade surface mineralization. Plans include pursuing a mining permit on this property in 2007 for an open pit heap leach operation.

Railroad Area Expansion

On the northern portion of our claims, we're exploring the Railroad and Pod-East Jasperoid deposits. Both are near-surface, oxide deposits with considerable expansion potential that contain deeper underground gold-silver sulfide potential.

Polymetallic Prospect

In the Railroad area, we are also evaluating the copper-lead-zinc-gold-silver potential of a prospect located south of Newmont's Rain complex. This skarn prospect is centered on the Bullion intrusive. This target has experienced previous mining activity, known as the Railroad District. A possible northern extension of the skarn system was identified during a gold exploration program.

Geology

The geologic environment of the Piñon property is quite similar to the Rain extension deposits. Both deposits occur in graben faulted areas. The Rain Deposit occurs in the fault bounded margin of the graben; the Piñon occurs in siltstone beds within the graben. The Web Formation is mineralized above the Devils Gate limestone at both deposits. At Rain, the mineralization occurs in and closely associated with the Rain Fault. At Piñon, the known mineralization has not been connected to a strongly mineralized fault. However, high-grade economic mineralization has been encountered at very shallow depths. Mineralized oxide zones occur along a 1,300 feet strike length and occur less than 90 feet below the surface.