The Company holds an exploration license for an area of 338 square kilometres in the Southern Highlands province of PNG (the “Kili Teke Project”). The Kili Teke Project is located approximately 50 kilometres west of Barrick Gold Corporation’s Porgera gold mine and 150 kilometres east of the Ok Tedi copper-gold mine, along the same mineralized trend.

During fiscal year 2009, the Company completed an initial exploration program on the Kili Teke Project. Field work was carried out by an independent third party with extensive experience with copper-gold mineralization styles. Results indicated the presence of a large dioritic intrusive, including a minimum 2 square kilometre alteration zone containing a copper-gold system. The best rock samples contained up to 1.6 g/t gold and 1.9 % copper. Stream sediments showed significant gold-silver-copper and molybdenum values, which confirm the potential of the zone for high-sulphidation epithermal or porphyry mineralization.

During the fall of calendar 2010, the Company undertook a follow-up geological exploration program. After evaluating 76 rock samples and over 350 soil samples, it was determined that the MAG1 mineralized zone, an area of approximately 2.0 x 0.5 kilometres, hosts a copper-gold porphyry with an overlying skarn system. Over 40 of the samples grades averaged 0.3% copper, 0.39g/t gold and 3.8g/t silver or better and the two highest grade samples returned values of an average of 23% to 35% copper, 60g/t gold and 238g/t silver.