By mid 2008, an aggressive exploration program was underway. An airborne helicopter magnetic and electromagnetic geophysical survey was completed over most of the joint venture’s claims. Ground geophysical studies over anomalies identified on the airborne survey have been conducted and 21 electromagnetic anomalies with a sympathetic magnetic response have been identified, as well as 19 with just electromagnetic anomalies.

Drilling commenced on the targets that have been refined by ground geophysics in mid-May 2008. Anomaly number 5.01 was the first tested and several holes have intersected significant widths of sulphide mineralization.

The best intercept to date is in hole number six which intersected 95 meters of semi-to-near-massive sulphides from 72.7 meters. Visible copper, zinc, lead and iron sulphide mineralization is typical of the deposit.

Analysis of the mineralized core at ALS Chemex confirmed the significant mineralization seen visually. Significant intersections include:

· DDH5.01-06 intersected near-massive to massive sulphides from 65-167m downhole for a length of 102m averaging 6.5% Zn, 0.44% Cu, 0.19% Pb, and 3 g/t Ag. Included within this section, from 99.7-125.7m, for a length of 26m, the zone averaged 13.8% Zn, 0.50% Cu, 0.05%Pb, and 2 g/t Ag.

· DDH5.01-14 intersected similar near-massive to massive sulphides from 83.0-120.0m downhole for a length of 37.0m, averaging 6.0% Zn, 0.34% Cu, 0.05% Pb and 6 g/t Ag. Included in this section, from 103.0-111.0m, for a length of 8m, the zone averaged 17.4% Zn, 0.24% Cu, 0.04% Pb and 5 g/t Ag.

· DDH5.01-15 intersected similar near-massive to massive sulphides from 158.8-184.2m downhole, for a length of 25.4m, averaging 7.6% Zn, 0.35% Cu, 0.36% Pb, and 8 g/t Ag.

A second phase of drilling comprising 17 holes totaling 5,095.5m has been completed. To date 42 holes totaling 10,785.9 meters have been drilled on the 5.01 project. 719 samples from the second phase of drilling have been sent for analysis and the results are awaited.

Mineralization, alteration and the geological environment at the 5.01 anomaly appears to be typical of a Noranda-Mattabi-style VMS (Volcanogenic Massive Sulphide) deposit. The mineralized zone appears to subcrop beneath approximately 15 meters of glacial till. The massive sulphide occurrence is still open up and down dip in areas, as drilling has failed to close off the upper or lower plunge of the deposit. The strike length has been extended to almost 200 meters, with a vertical depth extension of 275 meters from a near surface depth of 10 meters. The width of the zone varies from 3 to 22 meters with an approximate average of 12 to 15 meters.

Additional ground and airborne geophysical studies are planned over the 5.01 project area. The results of these surveys, in conjunction with the results of the completed drilling will guide future work.

Hg