Dear Shareholder:

Exploration activities for the Company in the first quarter ended October 31, 2007 have resulted in a significant discovery of gold, silver and lead-zinc mineralization in Northern Zacatecas State, Mexico. This new property is named Camino Rojo after the colour of mineralization recognized in road fill by our alert exploration team of Bud Hillemeyer and Perry Durning. The discovery zone, known as the Represa Zone, is located in the quarry that was the source of the road fill, with assays from initial sampling typically 0.5 grams per tonne gold and anomalous silver, lead and zinc. Following the discovery, an initial exploration license of 100,000 hectares was staked, which was subsequently expanded to approximately 150,000 hectares (580 square miles). In September, a sampling grid was established over the Represa Zone and pits and trenches dug at 50 meter intervals over an extensive area. Trenching was difficult due to the caliche cemented overburden; however, an area 600 meters by 450 meters was sampled and assays averaged 0.65 grams per tonne gold with a core area 275 meters by 175 meters averaging 1.0 grams per tonne gold with 11.3 grams per tonne silver and 0.52% lead-zinc. Reverse circulation drilling started in October with results announced for the first six holes by early December. The drill results have confirmed the values from the surface sampling with some outstanding intercepts. Hole CR-06 intersected 183 meters of 1.61 grams per tonne gold with 12.84 grams per tonne silver and 0.7% lead-zinc, including a higher grade interval of 72 meters of 2.59 grams per tonne gold, 18.03 grams per tonne silver and 1.09% lead-zinc. Holes 1, 3, 4 and 6 bottomed in strong mineralization, and hole 4 encountered sulphide mineralization in the last 10 meters. In addition to drilling, Canplats has carried out a preliminary induced polization geophysical survey, which disclosed a distinct anomaly over the Represa Zone that will be a useful guide to locating additional targets. A further anomaly was indicated over what is now named the Don Julio Zone, 1500 meters southwest of the Represa Zone. A wildcat hole drilled at Don Julio yielded a 10 meter intersection of 2.7 grams per tonne gold. An accelerated program is planned for the New Year, which includes two diamond drills to test the Represa Zone to depth in the sulphide portion of the system, a reverse circulation drill to define a resource in the oxide zone, an expanded induced polarization survey and a regional program to identify additional targets in this 150,000 hectare (580 square mile) property. Although the Company has a number of new targets identified in northeastern Chihuahua State, the Camino Rojo project is of the highest priority, and we look forward to continuing success.

On behalf of the Board,

“R.E. Gordon Davis”

R.E. Gordon Davis President

December 17, 2007