Kilong-Olao Copper-Gold Porphyry Project

The Kilong-Olao Project is located in the Cordilleran porphyry belt in northern Luzon. It consists of three contiguous EPA's totaling 24,587 hectares (246 sq. km) which cover 2 known porphyry copper systems and several small scale gold mining areas.

The area was previously explored by Marcopper and Carpentaria Mining Companies in the early 1970's.

The Kilong-Olao Porphyry was explored by Marcopper who drilled 5,951 meters and established an initial resource of approximately 50 million Mt grading about 0.4% copper1. The drilled area sits within a large (3km x 1.5km) soil anomaly grading greater than 500 ppm copper. Initial exploration was disrupted by a local insurgency and no work has been done in the area for over 30 years.

The Bayosen Porphyry, located some 8 kilometers to the south of Kilong-Olao, was explored by Carpentaria Resources at the same time and a grid soil sampling program was conducted over the area. Multiphase intrusions underlie the area which shows a 3km x 1.5km copper in soil anomaly grading in excess of 500 ppm copper, with several large areas grading in excess of 2000 ppm copper. The anomaly remains untested by drilling and exploration was suspended for the same reasons, due to a local insurgency. Again, no work has been done in the area for over 30 years.

The area between Kilong-Olao and Bayosen has never been explored.

Small scale gold mining by local residents has been carried out for decades in the area east of Kilong-Olao and gold mineralization is associated with a large east-west striking fault system. Stockwork quartz veining hosts the gold mineralization and recent samples from the local gold miner's dumps graded between 35 and 120 g Au/T. These targets remain virtually unexplored and they have never been drill tested. No flood of small scale miners into this area was ever permitted by the local tribal natives.

The Kilong-Olao Project is a very large, relatively unexplored area with several known occurrences of potentially economic mineralization. The main porphyry targets are drill ready and there is enough information on the gold areas to also warrant an initial drill program to test the continuity of the high grade gold deposits.

Permitting of the EPA's is now in process, and the company is currently negotiating a memorandum of agreement with the local tribes. This process takes several months but the company sees no major difficulties in securing the consent, as the local people are very keen to see jobs and development in their area.

The company has hired Mailed Molina to negotiate the memorandum with the local tribes. Mailed was mayor in the area for 20 years and most of the tribal elders are his relatives. Mailed maintains a company base in Bangued, Abra where he handles all local issues related to obtaining the free and prior informed consent of the ancestral people.

1 These tonnage and grade calculations are not NI 43-101 compliant and therefore should not be relied upon.