TECHNICAL OVERVIEW PACTOLUS EPITHERMAL GOLD-SILVER PROSPECT NYE COUNTY, NEVADA

SUMMARY

The Pactolus project is located in northern Nye county, west central Nevada, 9 miles ESE of the former FMC Gold Corp., Paradise Peak mine. It lies within the north-south trending Pactolus Hills, marginal to the Walker Lane structural zone an area well known for its abundant precious metal deposits (i.e. Tonopah, Comstock Lode, Goldfield, Bullfrog, Borealis, Bodie, and numerous others). The Pactolus property hosts a low sulphidation epithermal gold-silver bearing system with model characteristics similar to other well known Walker Lane deposits. Most notable is the nearby FMC Paradise Peak mine which produced 1.46 million ounces Au and 39 million ounces Ag ($663 million gross value). Gold and silver bearing veins and stockworks, exposed at Pactolus, represent the detached lateral and distal end member of a large, blind, feeder vein system that has been faulted-down to the west and covered by shallow later volcanic lava flows and valley gravel. The broad area of exposed alteration, with abundant veins and stockworks, and a grade of hydrothermal quartz of up to 0.43 oz. Au/ton and 60.25 oz. Ag/ton, indicates that the blind mineralized core is likely to have "bonanza" grades. The target model is presented as a chronological sequence of geologic events. The geological setting starts about 22 million years ago when an epithermal hot-spring system was developed in a fracture/fault system following eruption of the Tuff of Toiyabe from a large caldera lying to the east. Veins form with a central feeder zone which diminishes to the east and west (vein die-out areas). It is a classic system capped by a hot-spring sinter mound. Between 19 and 16 million years ago the hydrothermal system shut down, had its sinter mound eroded, and was covered by volcanic lava flows of porphyritic dacite composition. These flows are on the order of 400 feet thick. At 11 million years ago the epithermal system was buried by an additional 200 to 400 feet of basaltic lava flows. Between 8 and 7 million years ago the volcanic section was rotated and faulted, which detaches the main feeder vein zone from the eastern vein die-out area, moving it down and to the south. Between 7 million years ago and the present day, erosion stripped volcanic cover from the eastern vein die-out area exposing narrow veins in the Pactolus Hills, but preserving the heart of the epithermal system, which remains faulted down in Stewart Valley and covered by a thinned section of lava flows and valley gravel deposits (Fig. 1).

Prior work on the property has focused on the narrow vein exposures in moderately higher terrain of the Pactolus Hills and did not model the epithermal system and it's probable feeder-vein zone lying buried in the valley. To test the geologic model a, deep-detecting, Enzyme Leach™ soil geochemical survey was carried-out over the projected extension of the vein system. Well-defined anomalies were identified confirming the modeled extension of the Pactolus hydrothermal system. Based on the extent of alteration and the character of mineralized veins in the exposed horst block, it is likely that the preserved, mineralized core of the system will be high grade and large. There is excellent potential for discovery of 10 million tons grading 0.21 opt Au and 25 opt Ag (+5 million oz. Au equivalent with a gross value of +$1.8 billion) as an open pit and underground mine. The target area has heretofore not been recognized and is largely under-explored. Additional work is clearly warranted to test this attractive target. A $100,000 exploration program, encompassing additional geologic mapping, soil geochemical survey lines, and drilling is highly recommended.

Paul R. Mattinen Consulting Geologist

Detailed recommended budget for the Pactolus exploration program.

Phase I

Structural analysis - geologist:

4 field days + 2 office days x $300/day $1,800

Hotel/meals, 4 days x $80/day 320

Transportation, 450 miles x $0.45/mile 200

Misc. supplies (copies, binding, etc.) 100

_____ TOTAL $2,420

Soil geochemical survey:

2 orientation lines, 82 samples x $22/sample $1,804

8/4,000" survey lines at 200' separation,

100' stations on lines = 328 samples.

Line flagging and sample collection including daily

travel to and from the site,

50 samples/day x 8 days x $300/day 2,400
Hotel/meals in field. 8 days x $80/day 640
Transportation. 600 miles x $0.45/mile 270
Field supplies (bags, flagging, stakes, etc.) 200
Selective leach analysis. 328 samples x $28 9,184
Data analysis/target selection 2 days x $300/day 600
0 TOTAL $15,098

Phase I Total $17,518

Phase II

Drilling program:

Planning and BLM permit preparation/submission

1 day x $300/day $ 300

RC drilling. 6,000'x $9/foot 54,000

Drill rig mob-demob 2,500

Assays (no analyses 0-300') 400 samples x $20 9,840

(Au-Ag-ICP)

Field geologist (chip logging). 13 days x $300/day 3,900

Hotel/meals (geologist) 13 days x $80/day 1,040

Transportation. 800 miles x $0.45/mile 360

Field supplies (bags, chip trays, hole plugs, etc.) 600

Data plotting and reporting. 3 days x $300/day 900

Phase II Total $73,440

Contingency (9%) Phase I and Phase II programs $ 9,042

Total Program

$100,000