Airborne Geophysics

On October 12, 2006, Fugro Airborne Surveys, Ottawa, Ontario was contracted by APEX Geoscience Ltd. to conduct the airborne magnetic and electromagnetic surveys. The survey lines were flown at a 45° bearing (NE-SW), spaced at 150 metres and tie lines were flown at 315° (NW-SE), and were spaced at 1500 metres. A total of 99.4 line kilometres were flown and the final data sets and grids have all been received. Due to the lack of outcrop it is difficult to interpret the geophysics however it is likely that the resistivity lows and/or ‘conductive’ areas could represent near surface argillite. As well, the total field magnetics demonstrate that a number of northwest trending structures exist throughout the Property with Cedar Creek itself being the most prominent. Where gold in soil and/or gold in rock anomalies exist in conjunction with magnetic or electromagnetic anomalies, this should be considered high priority for follow-up exploration.

Soil samples

Soil Samples were collected at 100 metre intervals along 500 metre spaced, north-south trending lines. In total 233 samples were collected from the Property during the period from October 20 to October 30. Of the 233 soil samples, 46 samples contain 20 to 30 ppb Au and are possibly anomalous. Of the 233 soil samples, 28 samples contain greater than 30 ppb Au and are anomalous. Six of the 28 samples which contain greater than 30 ppb Au also contain greater than 100 ppb Au (sample 06RMS032 contains 150 ppb Au). In places, the gold in soil anomalies are associated with resistivity lows (conductors) which may indicate a gold in soil anomaly associated with the near surface expression of the argillaceous rocks.

Rock Grab Samples

Rock grab samples which were collected during the 2006 exploration were either outcrop, subcrop or boulders. Outcrops are scarce throughout the Property.

Of the 58 rock grab samples that were collected within the Property, a number of these were taken from previously discovered showings in order to verify prior gold values. As well, the samples are all considered to be grab samples and therefore do not represent a ‘grade across width’ but do represent the presence of gold mineralization within the Property.

More specifically: seven rock grab samples were collected from the historic Joy Showing. Three rock grab samples were collected from the Cedar Dam Showing. The samples (06DBP600, 601 and 602) were described as rusty thinly bedded argillite interbedded in wacke but are not considered anomalous. These samples were collected near An-Kobra rock grab sample 64453, which also is not considered anomalous. Samples 06DBP608 and 06DBP609 were collected along Cedar Creek near An-Kobra samples SM-03-21 and 22. Rock grab sample 06DBP608 was described as completely altered to limonite and 06DBP609 as rusty wacke with veining. The samples are not considered anomalous; Four rock grab samples were collected near An-Kobras SM-03-27 and 06KRP306 was near An-Kobras SM-03-28. Only one sample (06KRP305) is considered anomalous (1940 ppb Au) and is similar to SM-03-27 (1775 ppb Au); Two newly discovered mineralized showings were discovered by APEX during 2006 exploration (named KRP304 and KRP314). Rock grab samples 06KRP304 and 06KRP314 returned assay values of 120 ppb Au and 4710 ppb Au, respectively and are considered anomalous. The remainder of the rock grab samples were collected while soil sampling to test for mineralization in boulders and sub-crop, none of which are anomalous.

2007 - 2008 Exploration

Phase 1:

(a) a field based program with the collection of 50 metre spaced infill soil samples at 100 metre line spacing over the entire property, to further delineate the 2006 geochemical anomalies and to cover the newly acquired Moorehead claim. In total, approximately 5000 samples should be collected. As well, as part of a standard quality control/quality assurance program, ten percent (10%) of all samples should be collected in duplicate (ie. An additional 500 samples; 5500 samples total)(approximately $60/ sample all-up = $330,000);

(b) Groundproofing of geophysical anomalies returned from the 2006 airborne surveys and the acquisition of a ground based Time Domain Electromagnetic Orientation Survey over selected targets. In total, the cost to complete three grids with 100 metre spaced lines (approximately 56 line kilometres at $2000/kilometre) is approximately $112,000.

Phase 2; Contingent on the results of Phase 1

Reverse circulation drill program to test historic targets and newly developed geochemical and geophysical targets from the 2006 exploration after being better delineated during the 2007 exploration (approximately twenty holes totaling 50 metre depth each, approximately $200/ metre = $200,000).

The total cost to complete the recommended exploration is $642,000.