NGEX Resources Inc.

FIRST QUARTER HIGHLIGHTS

During the quarter ended March 31, 2013 exploration activity continued on the Company's projects in Chile and Argentina. Highlights from the quarter include:

• Completion on January 29, 2013 of a non-brokered, private placement of 10 million shares of the Company at a price of $3.40 per share for gross proceeds of $34 million;
• Completion of 30,000 metres of drilling on the Company's South American projects including Los Helados, Josemaria and Filo del Sol. A total of 44,306 metres of drilling was completed during the 2012-2013 field season. The 2012-2013 season at Los Helados and Filo del Sol ended during the quarter, and the Josemaria program ended on April 4th;
• Completion of an updated mineral resource estimate for the Josemaria copper-gold porphyry deposit which resulted in a significant increase in the resource. Preliminary metallurgical test work was also completed and yielded positive results. A step-out drill program targeting possible extensions of higher grade supergene enriched mineralization intersected last season was completed subsequent to the quarter end. Initial assay results from this drill program were received, and included 231 metres at 0.62% copper and 0.24 grams per tonne gold which extended the high grade zone by approximately 100 metres to the north of previous drilling.
• Receipt of initial assay results from the Los Helados drill program which included infill holes designed to convert inferred resources to the indicated category and holes designed to test possible extensions of the existing resource. Highlights include infill holes: LHDH50 with 1,175 metres of 0.65% CuEq (0.52% Cu and 0.19 gpt Au) and; LHDH55 with 886 metres of 0.68% CuEq (0.55% Cu, 0.19 g/t gold) including 304 metres of 1.06% CuEq (0.86% copper; 0.29 g/t gold).
• Completion of an initial drill program which included 3 diamond drill holes totaling 1,482 metres on the Colmillos Property. Colmillos is located in Region 4, Chile, approximately 275 kilometres south of Los Helados.

SOUTH AMERICAN PROJECTS

Field exploration programs were conducted on the Company's South American projects during the quarter as described in more detail below.

Vicuña Property (Los Helados and Filo del Sol Projects), Chile and Argentina

The Vicuña properties comprise a large land package of approximately 31,650 hectares that covers a number of porphyry copper and high sulphidation gold targets in Region III of Chile and immediately adjacent parts of San Juan Province, Argentina. Los Helados and Filo del Sol are individual exploration projects within the overall Vicuña Property. Nearby deposits held by other companies include Caserones-Regalito (Pan Pacific Copper Co., Ltd. ("PPC")) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuña Properties are adjacent to the Company's Josemaria copper-gold porphyry deposit and are subject to a Joint Exploration Agreement (the "Vicuña JEA") in which the Company holds a 60% interest and PPC holds a 40% interest. Each party funds its pro-rata share of exploration expenditures. PPC is a Japanese mining and smelting company that is owned by JX Nippon Mining and Metals (66%) and Mitsui Mining and Smelting (34%).

Los Helados Project, Chile

Los Helados is a large copper-gold porphyry system located in Region III of Chile. Los Helados has a current Mineral Resource, estimated at a base case 0.30% copper equivalent* cutoff, as follows:

• 1,114 million tonnes at a grade of 0.42% copper and 0.19 g/t gold for a copper equivalent grade of 0.55% (10.34 billion pounds of copper and 6.65 million ounces of gold) in the Indicated Resource category; and
• 1,015 million tonnes at a grade of 0.38% copper and 0.14 g/t gold for a copper equivalent grade of 0.47% (8.41 billion pounds of copper and 4.70 million ounces of gold) in the Inferred Resource category.

*CuEq - Copper Equivalent is calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries. Silver is not included in the CuEq. The formula used is CuEq% = Cu% + 0.6806*Au (g/t).

The Mineral Resource Estimate for the Los Helados Project, dated November 26, 2012, was prepared by Gino Zandonai, B.Sc., M.Sc. Mining, SME, MAusIMM, CRIRSCO, Senior Associate of Behre Dolbear International Ltd. in accordance with NI 43-101 and filed on SEDAR under the Company's profile. Mr. Zandonai is the Qualified Person for the estimate and is independent of the Company. It should be noted that the Mineral Resource estimate presented here is not a Mineral Reserve, and has not demonstrated economic viability. While the Company strongly believes that the Mineral Resource warrants additional study to determine the development potential, there can be no guarantee that any or all of the Mineral Resource will ultimately be determined to be economically viable.

A total of 19,550 metres was drilled at Los Helados during the quarter, bringing the total for the 2012/2013 program to 32,707 metres. The objectives of this season's drilling were to upgrade a portion of the resource from the inferred category to the indicated category and to test for possible extensions of the resource. Significant results received to date from this season's (2012/2013) program include:

• LHDH50 with 1,175 metres of 0.65% CuEq (052% Cu and 0.19 gpt Au), including 308 metres at 0.82% CuEq (0.70% Cu and 0.17 gpt Au); and
• LHDH22 with 1,168 metres of 0.53% CuEq (0.40% Cu and 0.20 gpt Au) including 376 metres at 0.63% CuEq (0.51% Cu and 0.16 gpt Au).
• LHDH21 (extension of previously reported hole) with 1,286 metres of 0.58% CuEq (0.46% copper, 0.18 g/t gold) including 304 metres of 0.77% CuEq (0.63 % copper, 0.20 g/t gold) and;
• LHDH55 with 886 metres of 0.68% CuEq (0.55% Cu, 0.19 g/t gold) including 304 metres of 1.06% CuEq (0.86% copper; 0.29 g/t gold).

The drill program was concluded on March 28, 2013 with work now focused on completing core logging and sampling. Additional metallurgical test work is also underway with results expected in the third quarter of 2013. The results of this year's drilling will be incorporated into an updated resource estimate that is expected to be completed later this year.

Filo del Sol Property, Argentina

The Vicuña Property covers several copper-gold targets in addition to Los Helados including Filo del Sol. A total of 804 metres was drilled at Filo del Sol during the quarter, bringing the total for the 2012/2013 program to 829 metres. The drill program was concluded on February 18, 2013. Assay results from Filo del Sol are pending.

Josemaria Project, Argentina

Josemaria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuña group of properties. The Josemaria deposit is located 11 kilometres southeast of Los Helados. The project is being explored under a Joint Exploration Agreement with Japan Oil, Gas and Metals National Corporation ("JOGMEC") and is owned 60% by the Company and 40% by JOGMEC. Each party funds its pro-rata share of expenditures.

The Company completed an updated Mineral Resource estimate for the Josemaria deposit during the quarter. The updated estimate resulted in a substantial increase over the previous resource estimate. It was completed by Gino Zandonai, senior associate of Behre Dolbear International Ltd. in accordance with NI 43-101 and filed on SEDAR under the Company's profile. The Report is dated February 22, 2013 and replaces and increases the previous resource estimate completed in 2007. The updated resource estimate is summarized below:

Sulphide Copper-Gold Mineralization (0.30% copper equivalent* cutoff)

• 656 million tonnes at a grade of 0.36% copper and 0.26 g/t gold for a copper equivalent grade of 0.54% (5.2 billion pounds of copper and 5.6 million ounces of gold) in the Indicated Resource category; and
• 326 million tonnes at a grade of 0.33% copper and 0.19 g/t gold for a copper equivalent grade of 0.46% (2.4 billion pounds of copper and 2.0 million ounces of gold) in the Inferred Resource category.

Oxide Cap (0.30% copper equivalent* cutoff)

• 44 million tonnes at a grade of 0.22% copper and 0.33 g/t gold for a copper equivalent grade of 0.45% (0.22 billion pounds of copper and 0.47 million ounces of gold) in the Indicated Resource category; and
• 6 million tonnes at a grade of 0.10% copper and 0.35 g/t gold for a copper equivalent grade of 0.34% (10 million pounds of copper and 70 thousand ounces of gold) in the Inferred Resource category.

*CuEq - Copper Equivalent is calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries. Silver is not included in the CuEq. The formula used is CuEq% = Cu% + 0.6806*Au (g/t).

It should be noted that the Mineral Resource estimate presented here is not a Mineral Reserve, and has not demonstrated economic viability. While the Company strongly believes that the Mineral Resource warrants additional study to determine the development potential, there can be no guarantee that all or any of the Mineral Resource will ultimately be determined to be economically viable.

A program of metallurgical test work completed during the quarter indicated that the Josemaria mineralization is amenable to standard flotation concentration. One locked-cycle test was completed, achieving copper recoveries of 85.1% and gold recoveries of 69.4%, with test concentrate grades of 25.1% copper and 16.8 g/t gold. The concentrate samples produced by this work were clean, with all deleterious elements below penalty levels and also had silver grades that would provide payment for part of the silver content under current general smelter contract terms. Additional metallurgical test work is underway with results expected later this year.

Drilling at Josemaria during the quarter totaled 7,708 metres and an additional 37 metres were drilled in April 2013. The final total for the 2012/2013 season was 8,242 metres with 18 drill holes completed. Significant intersections from the first three holes of this program included JMDH61 with 231 metres at 0.62% copper and 0.24 g/t gold. The results received to date have extended the higher grade zone discovered during the 2011/2012 drill campaignby about 100 metres to the north of previous drill holes. Once all assay results have been received the Company plans to produce an updated resource estimate for Josemaria.

Other Chilean Projects

Tamberias Property, Chile

The Tamberias property is located in Region III, Chile and is adjacent to the Filo del Sol Project which is discussed above and located just across the international border in Argentina. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. The Company has an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making option payments totaling US$20 million on or before September 30, 2020 of which US$2.8 million is payable on or before June 30, 2016, US$5 million on or before June 30, 2018 and US$10 million on or before June 30, 2020.

Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs. The Company has cumulatively paid US$800,000 as at March 31, 2013. During the quarter base line environmental work was completed. This work will be filed in support of an application for drilling permits for next season.

Colmillos Project, Chile

The Colmillos project consists of 100% owned exploration licenses covering approximately 3,400 hectares. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples.

Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. Three holes totalling 1,482 metres were drilled at Colmillos during the quarter, and the program is now complete. Assay results are expected to be received during the second quarter.

GJ Project, British Columbia, Canada

The GJ Project located in northern British Columbia covers an area of about 150 square kilometres and covers a number of significant mineral showings, including the Donnelly, GJ and North zones.

The project has a Measured and Indicated resource of 153.3 million tonnes grading 0.32% copper and 0.37 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

The Company has optioned the GJ Project to Teck Resources Limited ("Teck") whereby Teck can earn an initial 51% interest in the project by spending $12 million by December 31, 2014 and up to a 75% interest by making exploration expenditures totaling $44 million by December 31, 2020.

Teck has cumulatively spent $9.1 million to December 31, 2012. Teck has not yet advised the Company as to its exploration program for 2013.

2012 HIGHLIGHTS AND ACTIVITIES

During the year ended December 31, 2012 exploration activity continued on the Company's projects in Chile and Argentina as well as in Canada. Highlights from the year include:

• Completion of more than 45,000 metres of drilling on the Company's South American projects including Los Helados, Josemaria and Filo del Sol;
• Completion of an initial mineral resource estimate and preliminary metallurgical testing for the Los Helados copper-gold porphyry deposit;
• The purchase of the minority interest (40%) in the Los Helados - Filo del Sol Joint Venture by Pan Pacific Copper Co., Ltd. ("PPC") from Japan Oil, Gas and Metals National Corporation ("Jogmec");
• The sale of the Company's interest in the Hambok project, Eritrea, for an initial cash payment of US$5 million plus an additional payment of US$7.5 million upon the commencement of commercial production from the deposit;
• Completion of an exploration program funded by Teck Resources Ltd on the GJ property in British Columbia.

Exploration programs for the 2012/2013 field season were initiated at all three South America projects prior to the end of the year.

Additional highlights from the first part of 2013 included:

• Completion of an updated mineral resource estimate for the Josemaria copper-gold porphyry deposit which resulted in a significant increase in the resource. Preliminary metallurgical test work was also completed. Step-out drilling to follow-up high grade mineralization intersected last season is currently underway
• Completion on January 29, 2013 of a non-brokered, private placement of 10 million shares of the Company at a price of $3.40 per share for gross proceeds of $34 million.
• An initial drill program expected to total approximately 1,500 meters, began on the Colmillos Property in March, 2013

SOUTH AMERICAN PROJECTS

Field exploration programs including more than 45,000 metres of drilling were carried out on the Company's South American projects during the North American spring (end of 2011/2012 field season) and early winter (beginning of 2012/2013 field season). Other technical work was ongoing throughout the year, including mineral resource estimation and metallurgical test work.

Vicuña Property (Los Helados and Filo del Sol Projects), Chile and Argentina

The Vicuña properties comprise a large land package of approximately 31,650 hectares that covers a number of porphyry copper and high sulphidation gold targets in Region III of Chile and immediately adjacent parts of San Juan Province, Argentina. Los Helados and Filo del Sol are individual exploration projects within the overall Vicuña Property. Nearby deposits held by other companies include Caserones-Regalito (PPC) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuña Properties are adjacent to the Company's Josemaria copper-gold porphyry deposit and are subject to a Joint Exploration Agreement (the "Vicuña JEA"). On September 7, 2012 the Company's 40% partner Jogmec transferred its interest to PPC. PPC is a major integrated copper mining and smelting company that is jointly owned by JX Nippon Mining & Metals Corporation and Mitsui Mining & Smelting Company Ltd, both of Tokyo, Japan. PPC owns 75% of the Caserones Copper and Molybdenum Project which is located approximately 20 kilometres north of Los Helados.

Los Helados Project, Chile

Los Helados is a large copper-gold porphyry system located in Region III of Chile. During the 2011/2012 field season, 22,143 metres of diamond drilling in 26 holes were completed at Los Helados. This drilling was successful in extending the deposit to depth and laterally, and provided data for the initial mineral resource estimate. Significant results from this program include the longest mineralized intersection ever obtained from the deposit in hole LHDH17 (drilled to a depth of 750 metres in 2011 and deepened to 1,205 metres in 2012). This hole returned a 1,090 metres section, from 42 metres to 1,132 metres, which graded 0.51% copper and 0.26 g/t gold. On October 15, 2012, the Company announced both an initial Mineral Resource estimate and results from the initial metallurgical test work program at Los Helados.

The Mineral Resource Estimate for the Los Helados Project, dated November 26, 2012, was prepared by Gino Zandonai, B.Sc., M.Sc. Mining, SME, MAusIMM, CRIRSCO, Senior Associate of Behre Dolbear International Ltd. in accordance with NI 43-101 and filed on SEDAR under the Company's profile. Mr. Zandonai is the Qualified Person for the estimate and is independent of the Company.

The Mineral Resource was estimated at a base case 0.30% copper equivalent* cutoff as follows:

• 1,114 million tonnes at a grade of 0.42% copper and 0.19 g/t gold for a copper equivalent grade of 0.55% (10.34 billion pounds of copper and 6.65 million ounces of gold) in the Indicated Resource category; and
• 1,015 million tonnes at a grade of 0.38% copper and 0.14 g/t gold for a copper equivalent grade of 0.47% (8.41 billion pounds of copper and 4.70 million ounces of gold) in the Inferred Resource category.

*CuEq - Copper Equivalent is calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries. The formula used is CuEq% = Cu% + 0.6806*Au (g/t).

It should be noted that the Mineral Resource estimated presented here is not a Mineral Reserve, and has not demonstrated economic viability. While the Company strongly believes that the Mineral Resource warrants additional study to determine the development potential, there can be no guarantee that any or all of the Mineral Resource will ultimately be determined to be economically viable.

Metallurgical test work was completed by SGS Lakefield Research in Santiago, Chile. The test work indicates that the Los Helados mineralization is amenable to standard flotation concentration and two locked-cycle tests achieved copper recoveries of 84.2 and 90.2% and gold recoveries of 56.9 and 60.3%, with test concentrate grades of 22.9% copper and 12.2 g/t gold, and 28.5% copper and 15.5 g/t gold. The concentrate samples produced by this work were clean, with all deleterious elements well below penalty levels and also had silver grades that would provide payment for part of the silver content under current general smelter contract terms.

Drilling at Los Helados resumed in mid-October, 2012 and 13,157 metres were drilled by December 31, 2012. Approximately 28,000 metres of drilling is planned and drilling is expected to continue until early April, 2013. Additional metallurgical test work is underway. On January 31, 2013, the Company released assays results from the first ten holes of the current drill program. Highlights include: LHDH50 with 1,175 metres of 0.65% CuEq (052% Cu and 0.19 gpt Au), including 308 metres at 0.82% CuEq (0.70% Cu and 0.17 gpt Au); and LHDH22 with 1,168 metres of 0.53% CuEq (0.40% Cu and 0.20 gpt Au) including 376 metres at 0.63% CuEq (0.51% Cu and 0.16 gpt Au).

Filo del Sol Property, Argentina

The Vicuña Property covers several copper-gold targets in addition to Los Helados including Filo del Sol. Drilling during early 2012 was focused on testing this high-sulphidation epithermal style of mineralization near surface and also testing for porphyry style mineralization at depth. During the 2011/2012 field season 2,048 metres of diamond drilling in 6 holes were completed at Filo del Sol. This program used diamond core drilling in order to collect more detailed geological information to aid in the interpretation of the very large mineralized porphyry - epithermal system at Filo (most previous drilling was reverse circulation). The early 2012 drill program was successful in confirming the presence both of copper-gold porphyry mineralization (hole FSDH06 with 385 metres at 0.41% copper and 0.39 g/t gold) and high-grade epithermal mineralization (hole FSDH02 with 36 metres at 0.53% copper, 0.38 g/t gold and 394 g/t silver). During the year the Company announced drill results from the 2012 drilling campaign which lasted from early February to late April. Highlights from the copper-gold porphyry target included:

• FSDH06 with 384.9 metres of 0.68% CuEq (0.41% copper and 0.39 g/t gold), including 224 metres of 0.85% CuEq (0.50% copper and 0.52 g/t gold) and;
• FSDH07 with 42.5 metres 1.03% CuEq (0.98% Cu and 0.19 g/t Au);

Highlights from the epithermal target included:

• FSDH02 with 36 metres at 0.53% copper, 0.38 g/t gold and 394 g/t silver.

Two drills were mobilized to Filo del Sol in early December to begin the 2012/2013 drill program. Approximately 800 meters in 4 holes have been drilled. Results are expected to be received during the second quarter.

Josemaria Project, Argentina

Josemaria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuña group of properties. The Josemaria deposit is located 11 kilometres southeast of Los Helados. The project is being explored under a Joint Exploration Agreement with Jogmec and is owned 60% by the Company and 40% by Jogmec. Each party funds its pro-rata share of expenditures.

Work at Josemaria during the year consisted primarily of diamond drilling. During the 2011/2012 field season 19,220 metres of diamond drilling in 39 holes was completed at Josemaria. This program was a combination of infill drilling in order to provide sufficient data to increase the confidence in the Josemaria resource from inferred to indicated and step-out drilling to test for extensions of the deposit in directions where it was known to be open. The program achieved both objectives. Significant intersections from this program included JMDH30 with 520 metres at 0.54% copper and 0.42 g/t gold, JMDH25 with 552 metres at 0.45% copper and 0.43 g/t gold and JMDH45 with 452 metres at 0.51% copper and 0.46 g/t gold and JMDH49 with 172 metres of 1.33% copper and 0.36 grams/tonne gold. The deposit is open to the north of JMDH 49. Field work was followed by interpretation of drill results, a metallurgical testing program and geological modelling and data review leading to estimation of an updated Mineral Resource for the deposit. The updated estimate resulted in a substantial increase over the previous resource estimate. It was completed by Gino Zandonai, senior associate of Behre Dolbear International Ltd. in accordance with NI 43-101 and filed on SEDAR under the Company's profile. The Report is dated February 22, 2013 and replaces and increases the previous resource estimate completed in 2007. The updated resource estimate is summarized below:

Sulphide Copper-Gold Mineralization (0.30% copper equivalent* cutoff)

• 656 million tonnes at a grade of 0.36% copper and 0.26 g/t gold for a copper equivalent grade of 0.54% (5.2 billion pounds of copper and 5.6 million ounces of gold) in the Indicated Resource category; and
• 326 million tonnes at a grade of 0.33% copper and 0.19 g/t gold for a copper equivalent grade of 0.46% (2.4 billion pounds of copper and 2.0 million ounces of gold) in the Inferred Resource category.

Oxide Cap (0.30% copper equivalent* cutoff)

• 44 million tonnes at a grade of 0.22% copper and 0.33 g/t gold for a copper equivalent grade of 0.45% (0.22 billion pounds of copper and 0.47 million ounces of gold) in the Indicated Resource category; and
• 6 million tonnes at a grade of 0.10% copper and 0.35 g/t gold for a copper equivalent grade of 0.34% (10 million pounds of copper and 70 thousand ounces of gold) in the Inferred Resource category.

*CuEq - Copper Equivalent is calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries. The formula used is CuEq% = Cu% + 0.6806*Au (g/t).

It should be noted that the Mineral Resource estimate presented here is not a Mineral Reserve, and has not demonstrated economic viability. While the Company strongly believes that the Mineral Resource warrants additional study to determine the development potential, there can be no guarantee that any or all of the Mineral Resource will ultimately be determined to be economically viable.

A program of metallurgical test work carried out during the year indicated that the Josemaria mineralization is amenable to standard flotation concentration. One locked-cycle test was completed, achieving copper recoveries of 85.1% and gold recoveries of 69.4%, with test concentrate grades of 25.1% copper and 16.8 g/t gold. The concentrate samples produced by this work were clean, with all deleterious elements below penalty levels and also had silver grades that would provide payment for part of the silver content under current general smelter contract terms.

Drilling resumed at Josemaria in mid-December, 2012 and is expected to continue until early April, 2013. This season's drilling is focused on possible extensions to the north of the high grade mineralization intersected in JMDH49 as well as possible extensions of mineralization to the south of the current resource.

Tamberias Property, Chile

The Company has an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making option payments totaling US$ 20 million on or before September 30, 2020 of which US$2.8 million is payable on or before June 30, 2016, US$5 million on or before June 30, 2018 and US$10 million on or before June 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs. The Company has spent US$800,000 to December 31, 2012. The Tamberias property is located in Region III, Chile and is adjacent to the Filo del Sol Project which is discussed above and located just across the international border in Argentina. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. No work was done at Tamberias during 2012 due to the focus on the adjacent Filo del Sol property.

Other Chilean Projects (Colmillos)

The Colmillos project consists of 100% owned exploration licenses covering approximately 3,400 hectares. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. Activities at Colmillos during the 2012 were concentrated on permitting and community relations. Drilling was deferred due to the focus on Los Helados and Filo del Sol. An initial drill program of up to 1,500 metres is currently underway.

NORTH AMERICAN PROJECTS

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37 and 20 kilometres west of the Red Chris deposit, owned by Imperial Metals, which occurs in a similar geological setting.

The Company has a 100% interest subject to an earn-in option with Teck Resources Limited ("Teck") whereby Teck can earn an initial 51% interest in the project by spending $12 million by December 31, 2014 and up to a 75% interest by making exploration expenditures totaling $44 million by December 31, 2020. Teck has cumulatively spent $9.1 million to December 31, 2012.

The GJ/Kinaskan claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a Measured and Indicated resource of 153.3 million tonnes grading 0.32% copper and 0.37 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

During the year Teck advised the Company that it had completed its 2012 exploration program at the Company's GJ copper-gold project in BC. The 2012 exploration program on the GJ property was carried out between June 23rd and September 27th and work was primarily focused on the Wolf, Seestor, QC, and Donnelly Plateau target areas. Teck's exploration program included:

• 730 line kilometres of ZTEM airborne geophysical survey covering the north half of the property.
• Collection of 1,300 AH soil samples.
• Geologic mapping programs at QC, Wolf, Seestor and GJ and the collection of 247 rock samples.
• 10.4 line kilometres of IP and mag geophysical surveys northeast of Seestor.
• 4,000 metres of diamond drilling in eight holes testing geological, geochemical and geophysical targets at Wolf (5), Seestor (1) and on the plateau near camp (2).
• Historic core re-logging and re-interpretation from GJ, Donnelly and North Donnelly.

The program was 100% funded by Teck as part of it's earn-in under the option agreement.

AFRICAN PROJECTS

Mogoraib (Hambok) Eritrea

On October 10, 2012 the Company completed the Agreement to sell the Mogoraib Exploration License which covers the Hambok copper-zinc deposit to Bisha Mining Share Company for consideration of US$5 million. Additional consideration of US$7.5 million will be payable within 10 business days of the commencement of commercial production from the Mogoraib Exploration License.

2012 THIRD QUARTER HIGHLIGHTS

During the three months ended September 30, 2012 there was no active exploration on the Company's projects in Chile and Argentina due to the South American winter, however, the remaining drill results from the Josemaria and Filo del Sol Projects were received and announced. The Company completed the sale of its previously announced sale of the Hambok project in Eritrea. The 2011/2012 exploration program which was completed in the second quarter included more than 45,000 metres of drilling and was the largest in the Company's history. The drilling successfully extended known mineralization at Los Helados, Josemaria and Filo del Sol. The results of this year's drilling at Los Helados have been incorporated into an initial resource estimate which was released subsequent to the quarter end and is described below. The Company is currently working on an updated resource for Josemaria which is expected to be released during the fourth quarter 2012. Exploration drilling at Los Helados resumed in mid-October, 2012 and drilling is expected to resume at Josemaria and Filo del Sol in the first quarter of 2013. The Company plans to start working on a Preliminary Economic Assessment of the Los Helados Deposit early in 2013.

On September 10, 2012 the Company announced that Japan Oil, Gas and Metals National Corporation ("JOGMEC")'s 40% interest in the Los Helados and Filo del Sol projects had been transferred to Pan Pacific Copper Co., Ltd. ("PPC").

SOUTH AMERICAN PROJECTS

Field exploration programs on the Company's South American projects were dormant during the third quarter of 2012 due to winter conditions at the sites. Work was focused on data compilation and interpretation, including Mineral Resource estimation and metallurgical test work.

Josemaria Project, Argentina

Josemaria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuña group of properties described below. The project is being explored under a joint venture agreement with JOGMEC and is owned 60% by the Company and 40% by JOGMEC. Each party funds its pro-rata share of expenditures. Josemaria contains an Inferred resource of 460 million tonnes at 0.39% copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The resource estimate was prepared to NI 43-101 standards by Qualified Person Mr. John Nilsson P.Eng. and is filed on SEDAR under the Company's profile.

Work at Josemaria during the third quarter was focused on interpretation of drill results, a metallurgical testing program and geological modelling and data review in support of the updated Mineral Resource estimate which is expected to be completed during the fourth quarter. The Josemaria deposit is open to the north where drilling during the first half of 2012 intersected a previously unknown zone of supergene enriched mineralization including 172 metres of 1.33% copper and 0.36 grams/tonne gold. Drilling at Josemaria is expected to resume in the first quarter of 2013.

Vicuña Property (Los Helados and Filo del Sol Projects), Argentina and Chile

The Vicuña properties comprise a large land package of approximately 31,650 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. Los Helados and Filo del Sol are individual exploration projects within the overall Vicuña Property. Nearby deposits held by other companies include Caserones--Regalito (PPC) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuña Properties are adjacent to Josemaria and are subject to a Joint Exploration Agreement (the "Vicuña JEA"). During the quarter ended September 30, 2012 the Company's 40% partner Jogmec transferred its interest to Pan Pacific Copper Co. Ltd. ("PPC"). PPC is a major integrated copper mining and smelting company that is jointly owned by JX Nippon Mining & Metals Corporation and Mitsui Mining & Smelting Company Ltd, both of Tokyo, Japan. PPC owns 75% of the Caserones Copper and Molybdenum Project which is located approximately 20 kilometres north of Los Helados.

Los Helados Project, Chile

Los Helados is a large copper-gold porphyry system located in Region 3, Chile. On October 15, 2012, the Company announced both an initial Mineral Resource estimate and results from the initial metallurgical test work program at Los Helados.

The Mineral Resource estimate for Los Helados was prepared by Gino Zandonai, B.Sc., M.Sc. Mining, SME, MAusIMM, CRIRSCO, Senior Associate of Behre Dolbear International Ltd. in accordance with NI 43-101. Mr. Zandonai is the Qualified Person for the estimate and is independent of the Company.

The Mineral Resource was estimated at a base case 0.30% copper equivalent* cutoff as follows:

• 1,114 million tonnes at a grade of 0.42% copper and 0.19 g/t gold for a copper equivalent grade of 0.55% (10.34 billion pounds of copper and 6.65 million ounces of gold) in the Indicated Resource category; and,
• 1,015 million tonnes at a grade of 0.38% copper and 0.14 g/t gold for a copper equivalent grade of 0.47% (8.41 billion pounds of copper and 4.70 million ounces of gold) in the Inferred Resource category.

Metallurgical test work was completed by SGS Lakefield Research in Santiago, Chile. The test work indicates that the Los Helados mineralization is amenable to standard flotation concentration and two locked-cycle tests achieved copper recoveries of 84.2 and 90.2% and gold recoveries of 56.9 and 60.3%, with test concentrate grades of 22.9% copper and 12.2 g/t gold, and 28.5% copper and 15.5 g/t gold. The concentrate samples produced by this work were very clean, with all deleterious elements well below penalty levels and also had silver grades that would provide payment for part of the silver content under current general smelter contract terms.

RESOURCE ESTIMATE

The Mineral Resource estimate as of the effective date of October 15, 2012 is shown in the tables below:

LOS HELADOS INDICATED MINERAL RESOURCE
		Resource Grade								Contained Metal
Cutoff (CuEq*)	Million Tonnes	Cu (%	)	Au (g/t	)	Ag (g/t	)	CuEq* (%	)	Cu (billion lbs	)	Au (million oz	)	Ag (million oz	)
0.50	571	0.53		0.24		1.77		0.69		6.66		4.37		32.44
0.45	690	0.50		0.22		1.69		0.65		7.62		4.95		37.57
0.40	833	0.47		0.21		1.61		0.61		8.68		5.58		43.07
0.35	973	0.45		0.20		1.53		0.58		9.56		6.14		48.00
0.30	1,114	0.42		0.19		1.46		0.55		10.34		6.65		52.40
0.25	1,230	0.40		0.18		1.40		0.52		10.87		7.05		55.53
0.20	1,320	0.38		0.17		1.36		0.50		11.18		7.33		57.71

LOS HELADOS INFERRED MINERAL RESOURCE
		Resource Grade								Contained Metal
Cutoff (CuEq*)	Million Tonnes	Cu (%	)	Au (g/t	)	Ag (g/t	)	CuEq* (%	)	Cu (billion lbs	)	Au (million oz	)	Ag (million oz	)
0.50	319	0.51		0.21		1.72		0.66		3.61		2.18		17.72
0.45	469	0.47		0.18		1.60		0.60		4.88		2.78		24.18
0.40	624	0.44		0.17		1.50		0.56		6.04		3.38		30.17
0.35	793	0.41		0.16		1.41		0.52		7.15		4.00		35.95
0.30	1,015	0.38		0.14		1.30		0.47		8.41		4.70		42.45
0.25	1,222	0.35		0.13		1.21		0.44		9.41		5.25		47.73
0.20	1,398	0.33		0.13		1.14		0.41		10.09		5.68		51.43

*CuEq - Copper Equivalent is calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries. Silver is not included in the CuEq. The formula used is CuEq% = Cu% + 0.6806*Au (g/t). Small discrepancies may exist due to rounding errors.

It should be noted that the Mineral Resource estimate presented here is not a Mineral Reserve, and does not have demonstrated economic viability. While the Company strongly believes that the Mineral Resource warrants additional study to determine the development potential, there can be no guarantee that any or all of the Mineral Resource will ultimately be determined to be economically viable.

This resource remains open to expansion laterally and at depth and a drill program designed to expand the resource and begin to convert the Inferred resource to the Indicated category resumed in late mid-October. Approximately 28,000 meters of drilling is planned for Los Helados.


METALLURGICAL TESTWORK

The results of the two locked cycle tests are shown in the table below:

Test	Cu Head Grade (%	)	Cu Recovery (%	)	Cu Concentrate Grade (%	)	Au Head Grade (gpt	)	Au Recovery (%	)	Au Concentrate Grade (gpt	)
LCT 1	0.39		90.2		22.9		0.32		60.3		12.2
LCT 2	0.36		84.2		28.5		0.29		56.9		15.5

Flotation test work was carried out by SGS Lakefield Research at its facilities in Santiago, Chile on a composite sample constructed from 6 individual samples of drill core representing 600 metres of mineralization (totaling 1,200kg) from three different depths in two drill holes. SGS Lakefield completed a comprehensive initial test work program consisting of sample preparation, grind time estimation, grinding test work, rougher flotation kinetics, cleaner flotation tests and locked cycle flotation tests.

Grinding test work was done on three composite samples, each representing a different depth interval from three holes. Testing included Bond Ball Work Index (BWI), Bond Abrasion Index and Bond Rod Work Index (RWI) and results are shown below:

Sample	BWI (kWh/mt	)	Abrasion Index		RWI (kWh/mt	)
MC-1	14.8		0.182		Na
MC-2	15.5		0.209		17.5
MC-3	15.8		0.210		17.2

Rougher and cleaner flotation tests were done in order to establish the optimum grind size, pH and reagent use to produce a commercial grade concentrate. All flotation tests were done on a composite sample comprised of MC-2 and MC-3.
Locked cycle flotation tests were then carried out using the following parametres:

Grind Size (p80) 160 microns Regrind Size (p80) 35 microns Rougher pH 9.5 Cleaner pH 12.2 Collector 20 g/t AP 3477 Flotation Time Rougher 8 minutes Flotation Times cleaner 5,5,4,3 minutes (1st,Scav,2nd and 3rd)

160 microns 35 microns 9.5 12.2 20 g/t AP 3477 8 minutes 5,5,4,3 minutes (1st,Scav,2nd and 3rd)

Results from the locked cycle tests are shown in the table above. As expected, reducing the flotation times in the cleaner stages resulted in higher concentrate grade at lower recovery. Additional test work will be performed on a much larger suite of samples to obtain more extensive metallurgical response data across the mineralization. This work will focus on further optimizing the balance between recovery and concentrate grade and continuing to refine the optimum flotation conditions for the Los Helados mineralization.

Filo del Sol Property, Argentina

The Vicuña Property covers several copper-gold targets in addition to Los Helados including Filo del Sol where previous drilling has identified near-surface copper oxides and gold. Drilling during early 2012 was focused on testing this high-sulphidation epithermal style of mineralization near surface and also testing for porphyry style mineralization at depth. During the third quarter the Company announced the final batch of results from drilling completed earlier in the year at Filo del Sol. Highlights from the results reported during the third quarter include: FSDH06 with 384.9m of 0.68% CuEq (0.41% copper and 0.39 g/t gold), including 224 metres of 0.85% CuEq (0.50% copper and 0.52 g/t gold) and FSDH07 with 42.5 metres 1.03% CuEq (0.98% Cu and 0.19 g/t Au) including 18 metres of 1.94% CuEq (1.78% Cu and 0.23 g/t Au). Drilling is expected to resume at Filo del Sol in early 2013.

Tamberias Property, Chile

On March 25, 2011 the Company entered into an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making option payments totalling US$ 20,000,000 on or before September 30, 2020 of which US$2.8 million is payable on or before June 30, 2016, US$5 million on or before June 30, 2018 and US$10 million on or before June 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs.

The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project which is discussed above and located just across the international border in Argentina. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. No work was done at Tamberias during 2012 due to the focus on the adjacent Filo del Sol property.

Other Chilean Projects (Colmillos and Andrea)

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems.

Activities at Colmillos during the 2012 were concentrated on permitting and community relations. Drilling was deferred due to the focus on Los Helados and Filo del Sol.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600 metre long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration.

The results of geochemical sampling and alteration mapping completed during 2010 indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper - up to 0.6% in rock chips. No work was done during 2012.


NORTH AMERICAN PROJECTS

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37 and 20 kilometres west of the Red Chris deposit, owned by Imperial Metals, which occurs in a similar geological setting.

The Company has a 100% interest subject to an earn-in option with Teck Resources Limited ("Teck") whereby Teck can earn up to a 75% interest by making exploration expenditures totalling $44 million by December 31, 2020.

The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a Measured and Indicated resource of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

During the quarter Teck advised the Company that it had completed its 2012 exploration program at the Company's GJ copper-gold project in BC. Teck's exploration program included:

• 730 line km of ZTEM airborne geophysical survey covering the north half of the property
• Collection of 1300 AH soil samples
• Geologic mapping programs at QC, Wolf, Seestor and GJ and the collection of 247 rock samples.
• 10.4 line km of IP and mag geophysical surveys northeast of Seestor
• 4000 m of diamond drilling in eight holes testing geological, geochemical and geophysical targets at Wolf (5), Seestor (1) and on the plateau near camp (2).
• Historic core re-logging and re-interpretation from GJ, Donnelly and North Donnelly.

The program was 100% funded by Teck as part of it's earn-in under the option agreement.

AFRICAN PROJECTS

Mogoraib (Hambok) Eritrea

Subsequent to the quarter ended September 30, 2012, the Company completed the previously announced Agreement to sell the Mogoraib Exploration License which covers the Hambok copper-zinc deposit to Bisha Mining Share Company for consideration of US$5 million. Additional consideration of US$7.5 million will be payable within 10 business days of the commencement of commercial production from the Mogoraib Exploration License.

2012 SECOND QUARTER HIGHLIGHTS

During the three months ended June 30, 2012 there was active exploration on the Company's projects in Chile and Argentina including significant drill programs at Los Helados in Chile; as well as at Josemaria and Filo del Sol in Argentina. The South American drill programs are now complete and exploration is currently suspended for the South American winter. This season's exploration program included more than 45,000 metres of drilling and was the largest in the Company's history. The drilling successfully extended known mineralization at all three projects and the results are expected to lead to an initial resource estimate at Los Helados and updated resource at Josemaria later this year. Exploration is expected to resume in the fourth quarter of 2012. During the current quarter:

• The Company released further results from the drill program at its 60% owned Los Helados copper-gold project located in Chile. The drill program which was completed during the quarter comprised of 22,143 metres in 26 holes. The objective of this year's drill program was to extend the previously known mineralization laterally and to depth in order to better quantify the size and grade of the deposit and to permit calculation of an initial resource later this year. Highlights from results released this quarter include: LHDH17A with 1,090m of 0.51% Cu and 0.26 gpt Au (0.69% CuEq*); LHDH27 with 1,013m of 0.47% Cu and 0.16 gpt Au (0.58% CuEq*) including 268m of 0.60% Cu and 0.16 gpt Au (0.71% CuEq*). Subsequent to the quarter end, on July 26, 2012 the Company released the final batch of results from Los Helados. The highlight from this release was LHDH19A with 1,014 metres of 0.43% Cu and 0.17 gpt Au (0.55% CuEq*), including 256 metres of 0.64% Cu and 0.15 gpt Au (0.74% CuEq*). This year's drilling was successful in extending the mineralized zone laterally and to depth. The Company expects to complete an initial resource estimate in the fourth quarter of 2012.
• The Company released further results from the infill drill program at its 60% owned Josemaria copper-gold project located in San Juan Province, Argentina. The drill program which was completed in the first quarter of 2012 comprised 19,220 metres of diamond drilling in 30 holes. The objective of the infill drill program was to collect sufficient data to allow for an updated resource estimate to be completed, which is expected to convert some of the current Inferred resource to the Indicated category. Highlights from results released during the current quarter include: JMDH49 with 172 metres of 1.33% Cu and 0.36 g/t Au (1.57 CuEq*); and JMDH50 with 182 metres of 1.06% Cu, and 0.31 g/t Au (1.27% CuEq*). These highlighted holes are from a newly identified zone of supergene enriched mineralization located at the northeastern edge of the current drill pattern and open the resource area for possible extension in this direction. The Company expects to complete an updated resource estimate in the fourth quarter of 2012.
• The Company released results from the first 4 of 6 diamond drill holes completed this year at its 60% owned Filo del Sol project located in San Juan Province, Argentina. The drill program which was completed during the current quarter totaled 1,846 metres in 6 holes. Most previous drilling at Filo del Sol was Reverse Circulation (RC) drilling. The objective of the 2012 drill program was to improve the Company's understanding of this large, complex mineralized system with the additional geological information provided by drill core instead of RC chips. The diamond drill holes successfully confirmed the results of the historic RC drilling, and extended previously-known mineralization to depth. Highlights from results released during the current quarter include: FSDH02 with 222.5m of 0.46% Cu, 0.50 g/t Au, and 73.7 g/t Ag; including 36.0m of 0.53% Cu, 0.38 g/t Au, and 393.7 g/t Ag; FSDH03D with 97.6m of 1.45% Cu, 0.27 g/t Au, and 16.3 g/t Ag; including 24m of 3.41% Cu, 0.29 g/t Au, and 9.3 g/t Ag.
• The Company reached an agreement with Goldgroup Mining Inc. whereby the Company agreed to terminate and extinguish the 1.5% Net Smelter Return Royalty that the Company held with respect to 70% of production from the Caballo Blanco Project in Mexico for consideration of $1 million cash and 2,200,000 common shares of Goldgroup. The transaction closed on April 11, 2012.
• The Company announced that it and Namibian Copper had mutually agreed to terminate the Share Purchase Agreement (the "Agreement") signed January 17, 2012 with respect to Namibian's acquisition of the Company's Eritrean Projects. The Termination and Mutual Release Agreement was dated June 29, 2012. The Company paid Namibian $400,000 to cover the costs incurred by Namibian in connection with the Agreement.
• Subsequent to the quarter end, the Company entered into an Agreement to sell the Mogoraib Exploration License which covers the Hambok copper-zinc deposit to Bisha Mining Share Company for consideration of US$5 million. Additional consideration of US$7.5 million will be payable within 10 business days of the commencement of commercial production from the Mogoraib Exploration License. The Agreement is subject to closing conditions including the approval of the transaction by the Eritrean Ministry of Energy and Mines. It is expected to close in the fourth quarter of 2012.

*Drillholes were composited based on a 0.3% CuEq cutoff. CuEq - Copper Equivalent calculated using US$3.00/lb copper and US$ 1,400/oz gold, with no provision for metallurgical recoveries.

SOUTH AMERICAN PROJECTS

Exploration on the Company's South American projects resumed during the fourth quarter of 2011. Significant drill programs were underway during the first quarter of 2012 at Josemaria, Los Helados and Filo del Sol.

Josemaria Project, Argentina

Josemaria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuña group of properties described below. The project is being explored under a joint venture agreement with Japan Oil, Gas and Metals National Corporation ("JOGMEC") and is owned 60% by the Company and 40% by JOGMEC. Each party funds its pro-rata share of expenditures. Josemaria contains an Inferred resource of 460 million tonnes at 0.39% copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The resource estimate was prepared to NI 43-101 standards by Qualified Person Mr. John Nilsson P.Eng. and is filed on SEDAR under the Company's profile.

An infill drilling program was completed on March 8, 2012 with a total of 30 holes totaling 19,220 metres. Initial assay results were released during the first quarter of 2012 with additional results released during the current quarter. This program of infill drilling was planned in order to collect sufficient data to allow for an updated resource estimate to be completed, which is expected to convert some of the current Inferred resource to the Indicated category. Results released during the current quarter include JMDH49 with 172 metres of 1.33% Cu and 0.36 g/t Au (1.57 CuEq*); and JMDH50 with 182 metres of 1.06% Cu, and 0.31 g/t Au (1.27% CuEq*). These highlighted holes are from a newly identified zone of supergene enriched mineralization located at the northeastern edge of the current drill pattern and open the resource area for possible extension in this direction. The Company expects to complete an updated resource estimate in the fourth quarter of 2012. Preliminary metallurgical test work is also underway and results are expected to be available in the fourth quarter.

Vicuña Property (Los Helados, Filo del Sol), Argentina and Chile

The Vicuña properties comprise a large land package of approximately 31,650 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. Los Helados and Filo del Sol are individual exploration projects within the overall Vicuña Property. Nearby deposits held by other companies include Caserones--Regalito (Pan Pacific Copper) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuña Properties are adjacent to Josemaria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuña JEA") with JOGMEC in which the Company holds a 60% participating interest and JOGMEC holds a 40% participating interest. Each party funds its pro-rata share of expenditures. The Company released further results from Los Helados and Filo del Sol during the current quarter.

At Los Helados, a drill program which included both infill and step-out drill holes was completed during the quarter with a total of 26 holes totaling 22,143 metres. The objective of this year's drill program was to extend the previously known mineralization laterally and to depth in order to better quantify the size and grade of the deposit and to permit calculation of an initial resource later this year. Highlights from results released this quarter include: LHDH17A with 1,090m of 0.51% Cu and 0.26 gpt Au (0.69% CuEq*); LHDH27 with 1,013m of 0.47% Cu and 0.16 gpt Au (0.58% CuEq*) including 268m of 0.60% Cu and 0.16 gpt Au (0.71% CuEq*). On July 26, 2012 the company released the final batch of results from Los Helados. The highlight from this release was LHDH19A with 1,014 metres of 0.43% Cu and 0.17 gpt Au (0.55% CuEq*), including 256 metres of 0.64% Cu and 0.15 gpt Au (0.74% CuEq*). This year's drilling was successful in extending the mineralized zone laterally and to depth. Copper-gold mineralization has now been intersected over an area of approximately 1000m east-west by 750 metres north-south and over a vertical interval of approximately 1000 metres. The Company expects to complete an initial resource estimate in the fourth quarter of 2012. Preliminary metallurgical test work is also underway and results are expected to be available in the fourth quarter.

The Vicuña Property covers several copper-gold targets in addition to Los Helados including Filo del Sol where previous drilling has indentified near-surface copper oxides and gold within a diatreme, the same type of geological structure that hosts the Veladero Deposit owned by Barrick Gold. Drilling during the first half of 2012 was focused on testing this high-sulphidation epithermal style of mineralization near surface and also testing for porphyry style mineralization at depth.

The drill program which was completed during the current quarter totaled 1,846 metres in 6 diamond drill holes. Most previous drilling at Filo del Sol was Reverse Circulation (RC) drilling. The objective of the 2012 drill program was to improve the Company's understanding of this large, complex mineralized system with the additional geological information provided by drill core instead of RC chips. The drill holes tested a 1.2 kilometres north-south section along the centre of the extensive alteration zone, and were completed to depths of between 120 and 500 metres. The diamond drill holes successfully confirmed the results of the historic RC drilling, and extended previously-known mineralization to depth. Highlights from results released during the current quarter include: FSDH02 with 222.5m of 0.46% Cu, 0.50 g/t Au, and 73.7 g/t Ag; including 36.0m of 0.53% Cu, 0.38 g/t Au, and 393.7 g/t Ag; FSDH03D with 97.6m of 1.45% Cu, 0.27 g/t Au, and 16.3 g/t Ag; including 24m of 3.41% Cu, 0.29 g/t Au, and 9.3 g/t Ag.

Tamberias Property, Chile

On March 25, 2011 the Company entered into an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making option payments totalling US$ 20,000,000 on or before September 30, 2020 of which US$2.8 million is payable on or before June 30, 2016, US$5 million on or before June 30, 2018 and US$10 million on or before June 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs.

The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project discussed above. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. No work was done at Tamberias during the quarter of 2012 due to the focus on the adjacent Filo del Sol property.

Other Chilean Projects (Colmillos and Andrea)

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems.

Activities at Colmillos during the current quarter were concentrated on permitting and community relations. Drilling was deferred due to the focus on Los Helados and Filo del Sol.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600 metre long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration. The results of geochemical sampling and alteration mapping completed during 2010 indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper - up to 0.6% in rock chips. No work was done during the current quarter and follow-up work has been deferred while Company geologists focus on other projects.

NORTH AMERICAN PROJECTS

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37 and 20 kilometres west of the Red Chris deposit, owned by Imperial Metals, which occurs in a similar geological setting.

The Company has a 100% interest subject to an earn-in option with Teck Resources Limited ("Teck") whereby Teck can earn up to a 75% interest by making exploration expenditures totalling $44 million by December 31, 2020.

The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a Measured and Indicated resource of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

No field work was done during the current quarter due to the regular winter shutdown of exploration, however the Company was notified by Teck that it is planning a significant work program for the 2012 field season which started in July. Teck has notified the Company that its budget for GJ is $ 4.7 million and that the planned exploration program will include 3000-4000 m of drilling focused on the Wolf target with some drilling on GJ/Donnelly and/or the Seestor target depending on results of ground work this year. In addition a ZTEM airborne geophysical survey is being flown over the property area. The program will be 100% funded by Teck as part of it's earn in under the option agreement.

AFRICAN PROJECTS

Mogoraib (Hambok), Kerkebet, Shukula and Lelit, Eritrea

The Company holds one exploration license, Mogoraib, which covers the strike extension of the rocks hosting Nevsun Resources' ("Nevsun") Bisha copper-zinc-gold deposit. The most advanced project is the Hambok deposit located in the Mogoraib License which has an Indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional Inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

On January 17, 2012 the Company announced an Agreement with Namibian Copper whereby Namibian Copper would acquire Sanu, a wholly owned subsidiary of the Company which holds its Eritrean Projects, for 50,000,000 shares of Namibian Copper and reimbursement of certain exploration expenditures including an infill drilling program completed at Hambok by the Company during late 2011/early 2012. Further to a Termination and Mutual Release Agreement signed June 29, 2012 the Company and Namibian mutually agreed to terminate the Agreement and to release each other from any and all claims regarding the Agreement. The Company paid Namibian $400,000 to cover the costs incurred by Namibian in connection with the Agreement.

Subsequent to the termination of the agreement between the Company and Namibian, the Company wrote down the value of the Hambok mineral property to its net recoverable amount based on its fair value less costs to sell of approximately US$5 million. Accordingly, the Company has recorded a $2.8 million impairment loss on the Hambok mineral property as at June 30, 2012.

Subsequent to the quarter end, the Company entered into an Agreement to sell the Mogoraib Exploration License which covers the Hambok copper-zinc deposit to Bisha Mining Share Company for consideration of US$5 million. Additional consideration of US$7.5 million will be payable within 10 business days of the commencement of commercial production from the Mogoraib Exploration License. The Agreement is subject to closing conditions including the approval of the transaction by the Eritrean Ministry of Energy and Mines. It is expected to close in the fourth quarter of 2012.

2012 FIRST QUARTER HIGHLIGHTS

During the quarter ended March 31, 2012 there was exploration on the Company's projects in Chile, Argentina and Eritrea. During the quarter:

• The Company began a drill program on its 60% owned Los Helados copper-gold project located in Chile. Eleven diamond drills are currently active on the project. The drilling is focused on expanding the known mineralization laterally and to depth in order to better quantify the size and grade of the deposit and to permit calculation of an initial resource later this year. Results from the first 7 drill holes completed to-date were released on April 27, 2012. Highlights include: LHDH17A with 1,090 metres of 0.51% Cu and 0.26 gpt Au; LHDH23A with 937 metres of 0.47% Cu and 0.27 gpt Au; and LHDH28 with 746.6 metres of 0.54% Cu and 0.19 gpt Au. Drilling is expected to continue as long as weather conditions permit and the Company is hoping to complete up to 25,000 metres of drilling by the end of May.
• The Company also completed an infill drill program comprising 19,220 metres of diamond drilling in 30 holes at its 60% owned Josemaria copper-gold project located in Argentina. This program of infill drilling was carried out in order to collect sufficient data to allow for an updated resource estimate to be completed, which is expected to convert some of the current Inferred resource to the Indicated category. Initial results published on March 28, 2012 included 520 metres of 0.54% copper and 0.42 g/t gold in hole JMDH30, 449 metres of 0.47% copper and 0.44 g/t gold in hole JMDH31 and 452 metres at 0.50% copper and 0.38 g/t gold in hole JMDH32.
• Drilling started at the Company's 60% owned Filo del Sol in early February 2012. Drilling rates were hampered by poor rock conditions but by the end of the quarter 1,963 metres had been drilled in 5 holes. Drilling continued into the second quarter but stopped in mid April due to the onset of winter conditions. Core logging and geological interpretation is ongoing. Initial assay results are expected during the second quarter.
• An infill drill program at the Hambok copper-zinc project in Eritrea continued in the first quarter of 2012. A total of 26 short Reverse Circulation (RC) holes were completed to test the gold potential in the near surface oxidized zone above the Hambok sulfide body. In addition to this, 23 infill diamond drill holes were completed on the main Hambok deposit. Twelve diamond drill holes were also completed on the nearby Kerkebet license. This work was part of exploration program required under the Company's license agreement with the Eritrean government.
• On January 17, 2012 the Company announced an Agreement with Namibian Copper NL ("Namibian Copper") whereby Namibian Copper would acquire Sanu Resources Inc. ("Sanu") a wholly owned subsidiary of the Company which holds its Eritrean Projects for 50,000,000 shares of Namibian Copper and reimbursement of certain exploration expenditures including the infill drilling at Hambok described above. A contingent payment of $7,500,000 is due upon commencement of commercial production from any of the licenses held by Sanu. The Transaction is subject to certain conditions precedent.
• Subsequent to March 31, 2012, the Company entered into an agreement whereby the Company and Candymin S.A. De C.V., a wholly owned subsidiary of Goldgroup Mining Inc. ("Goldgroup"), agreed to terminate and extinguish the 1.5% Net Smelter Return Royalty that the Company held with respect to 70% of production from the Caballo Blanco Project in Mexico for consideration of $1 million cash and 2,200,000 common shares of Goldgroup. The transaction closed on April 11, 2012.

SOUTH AMERICAN PROJECTS

Exploration on the Company's South American projects resumed during the fourth quarter of 2011. Significant drill programs were underway during the first quarter of 2012 at Josemaria, Los Helados and Filo del Sol.

Josemaria Project, Argentina

Josemaria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. The project is being explored under a joint venture agreement with Japan Oil, Gas and Metals National Corporation ("Jogmec") and is owned 60% by the Company and 40% by Jogmec. Each party funds its pro-rata share of expenditures. Josemaria contains an Inferred resource of 460 million tonnes at 0.39% copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The resource estimate was prepared to NI 43-101 standards by Qualified Person Mr. John Nilsson P.Eng. and is filed on SEDAR under the Company's profile.

An infill drilling program was completed on March 8, 2012 with a total of 30 holes totaling 19,220 metres. Initial assay results were released on March 28, 2012. This program of infill drilling was planned in order to collect sufficient data to allow for an updated resource estimate to be completed, which is expected to convert some of the current Inferred resource to the Indicated category. Initial results published on March 28, 2012, included 520 metres of 0.54% copper and 0.42 g/t gold in hole JMDH30, 449 metres of 0.47% copper and 0.44 g/t gold in hole JMDH31 and 452 metres at 0.50% copper and 0.38 g/t gold in hole JMDH32.

Vicuña Property (Los Helados, Filo del Sol), Argentina and Chile

The Vicuña properties comprise a large land package of approximately 31,650 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. Los Helados and Filo del Sol are individual exploration projects within the overall Vicuna Property. Nearby deposits held by other companies include Caserones--Regalito (Pan Pacific Copper) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuña Properties are adjacent to Josemaria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuña JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro-rata share of expenditures.

Eleven drills are currently on site at Los Helados. The drilling is focused on expanding the known mineralization laterally and to depth in order to better quantify the size and grade of the deposit. Initial drill results were released on April 27, 2012. Highlights include: LHDH17A with 1,090 metres of 0.69% CuEq (0.51% Cu and 0.26 gpt Au); LHDH23A with 937 metres of 0.66% CuEq (0.47% Cu and 0.27 gpt Au); and LHDH28 with 746.6m of 0.66% CuEq (0.54% Cu and 0.19 gpt Au). Drilling is expected to continue as long as weather conditions permit and the Company is hoping to complete up to 30,000 metres of drilling by the end of May.

The Vicuña Property includes several copper-gold targets in addition to Los Helados including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme, the same type of geological structure that hosts the Veladero Deposit owned by Barrick Gold. Drilling during the first quarter of 2012 was focused on testing this high-sulphidation epithermal style of mineralization near surface and also testing for porphyry style mineralization at depth.

A total of 5 diamond drill holes were completed for a total of 1,963 metres. The five holes tested a 1.2 kilometres north-south section along the centre of the extensive alteration zone, and were completed to depths of between 120 and 500 metres. Initial results are expected during the second quarter.

Tamberias Property, Chile

On March 25, 2011 the Company entered into an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making optional payments totalling US$ 20,000,000 on or before September 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs.

The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project discussed above. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. No work was done at Tamberias during the first quarter of 2012 due to the focus on the adjacent Filo del Sol property.

Other Chilean Projects (Colmillos and Andrea)

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems.

Activities at Colmillos during the first quarter 2012 were concentrated on permitting and community relations. Drilling has been deferred due to the focus on Los Helados and Filo del Sol.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600 metres long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration. The results of geochemical sampling and alteration mapping completed during 2010 indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper - up to 0.6% in rock chips. No work was done during the quarter and follow-up work has been deferred while Company geologists focus on other projects.

NORTH AMERICAN PROJECTS

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% interest subject to an earn-in option with Teck Resources Limited ("Teck") whereby Teck can earn up to 75% interest by making exploration expenditures totalling $44 million by December 31, 2020. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a Measured and Indicated resource of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

No field work was done during the first quarter due to the regular winter shutdown of exploration, however the Company was notified by Teck that it is planning a significant work program for the 2012 field season which is expected to start in July. The program will be 100% funded by Teck as part of its earn in under the option agreement.

AFRICAN PROJECTS

Mogoraib (Hambok), Kerkebet, Shukula and Lelit, Eritrea

The Company holds two exploration licenses, Mogoraib and Kerkebet, which cover the strike extension of the rocks hosting Nevsun Resources ("Nevsun")'s Bisha copper-zinc-gold deposit.

On January 17, 2012 the Company announced an Agreement with Namibian Copper whereby Namibian Copper would acquire Sanu a wholly owned subsidiary of the Company which holds its Eritrean Projects for 50,000,000 shares of Namibian Copper and reimbursement of certain exploration expenditures including the infill drilling at Hambok described above. A contingent payment of $7,500,000 is due upon commencement of commercial production from any of the licenses held by Sanu. The Transaction is subject to certain conditions precedent.

The most advanced project is the Hambok deposit located in the Mogoraib License which has an Indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional Inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

During the first quarter of 2012 the Company completed 23 infill diamond drill holes at Hambok at locations that will allow the Inferred resource to be converted to Indicated. Also during the first quarter, the Company completed 26 short Reverse Circulation (RC) holes designed to test the gold potential in the near surface oxidized zone (gossan) above the Hambok sulfide body.

This drilling confirmed that the Hambok gossan contains anomalous concentrations of gold, however additional work is required to evaluate the economic potential of this mineralization. The work completed was part of the work commitment associated with the license agreement with the Eritrean government.

2011 HIGHLIGHTS

During the year ended December 31, 2011 there was exploration on the Company's projects in Chile and Argentina as well as in Canada and Eritrea.

• The Company completed 9,643 metres of diamond drilling in 14 holes on its 60% owned Los Helados copper-gold project located in Chile. This program was designed to test for the presence of a suspected high-grade core to the deposit, and was successful in confirming this interpretation, with the best results coming from hole LH-16 (737 metres @ 0.64% Cu and 0.30 gpt Au) and LH-24 (900 metres @ 0.48% Cu and 0.23 gpt Au). All holes ended in mineralization, and the high-grade zone remains open in several directions, including at depth. A drill program expected to total between 30,000 and 40,000 metres is planned to begin in the first quarter of 2012. The objective of this drill program is to test for possible extensions of the higher grade mineralization intersected in previous drilling.


• The Company also completed 2,173 metres of diamond drilling in 6 holes at its 60% owned Josemaria copper-gold project located in Argentina. The 2010-2011 drill program tested possible extensions of the Josemaria system to the north where there is a strong chargeability anomaly and to the east where the system disappears under younger cover rocks. The drill holes intersected porphyry style alteration, but only sporadic weakly anomalous copper and gold values. An 18,000 metre infill drill program for Josemaria began in November, 2011 and is ongoing. The objective of this program is to upgrade the current Inferred resource to an Indicated resource.


• Teck Resources Limited ("Teck") completed an exploration program on the Company's GJ/Kinaskan copper-gold project in northern British Columbia. The program which was funded 100% by Teck as part of the option agreement signed in August 2010, included 10 holes totalling 4,307 metres of diamond drilling as well as 77 line kilometres of Induced Polarization (IP), 50 line kilometres of ground magnetics, as well as mapping and 1185 soil samples. Teck also refurbished the 40 man exploration camp and conducted baseline environmental and archaeological surveys. On December 13, 2011, the Company announced the results received from Teck on its 2011 exploration program at GJ/Kinaskan.


• During 2011 the Company completed 6 widely spaced drill holes for a total of 575 metres on its Bada Potash project in Eritrea. The objective of the drilling was to try to intersect near surface potash mineralization beneath what was believed to be shallow gravel cover. None of the drill holes intersected salt or potash beds and the license was relinquished in December, 2011.


• During the 4th quarter of 2011 the Company began an infill drill program at its Hambok copper-zinc project in Eritrea. Included in this program were a series of short Reverse Circulation (RC) holes designed to test the gold potential in the near surface oxidized zone above the Hambok sulfide body. The program comprised 978 metres in 16 RC holes averaging 60 metres per hole. The drilling was part of the exploration program required under the Company's license agreement.


• On January 17, 2012 the Company announced an Agreement with Namibian Copper NL ("Namibian Copper") whereby Namibian Copper would acquire Sanu Resources Inc. ("Sanu") a wholly owned subsidiary of the Company which holds its Eritrean Projects for 50,000,000 shares of Namibian Copper and reimbursement of certain exploration expenditures including the infill drilling at Hambok described above. A contingent payment of $7,500,000 is due upon commencement of commercial production from any of the licenses held by Sanu. The Transaction is subject to certain conditions precedent.


• On October 28, 2011 the Company completed a non-brokered, private placement of 9 million shares of the Company at a price of $3.00 per share for gross proceeds of $27 million.

SOUTH AMERICAN PROJECTS

Exploration on the Company's South American projects resumed during the fourth quarter of 2011. Significant drill programs are planned at Josemaria, Los Helados and Filo del Sol. Drilling started in November, 2011 at Josemaria. Drilling at Los Helados and Filo del Sol is expected to start in the first quarter of 2012

Josemaria Project, Argentina

Josemaria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Josemaria contains an Inferred resource of 460 million tonnes at 0.39% copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The resource estimate was prepared to NI 43-101 standards by Qualified Person Mr. John Nilsson P.Eng. and is filed on SEDAR under the Company's profile.

The 2010-2011 drill program which finished in April 2011 tested possible extensions of the Josemaria system to the north where there is a strong chargeability anomaly and to the east under younger cover rocks. These two targets were tested with 2,173 metres of drilling in 6 holes. The drill holes intersected porphyry style alteration, but only sporadic weakly anomalous copper and gold values.

The 2011-2012 drill program began in November 2011 and finished in March 2012. A total of 39 diamond drill holes for 19,227 metres was drilled during this period. The objective of this program is to upgrade the current Inferred resource. The Company expects this drilling to provide information to enable it to complete an updated resource calculation by the third quarter of 2012.

The previously 100% owned Josemaria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Josemaria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). Under the Josemaria JEA Jogmec had the option to acquire 40% of the Company's interest in these properties. In consideration, Jogmec paid US$1 million upon signing of the Josemaria JEA and was required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. JOGMEC completed its earn in during the fourth quarter of 2011 and now holds a 40% interest in Josemaria. JOGMEC and NGEX will fund ongoing expenditures pro-rata to their ownership interest.

Vicuña Project (Los Helados, Filo del Sol), Argentina and Chile

The Vicuña properties comprise a large land package of approximately 31,650 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. Nearby deposits held by other companies include Caserones--Regalito (Pan Pacific Copper) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuña Properties are adjacent to Josemaria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuña JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro-rata share of expenditures.

The Company completed 9,643 metres of diamond drilling in 14 holes during the 2010-2011 field season. This program was designed to test for the presence of a suspected high-grade core to the deposit, and was successful in confirming this interpretation, with the best results coming from hole LH-16 (737 metres @ 0.64% Cu and 0.30 gpt Au) and LH-24 (900 metres @ 0.48% Cu and 0.23 gpt Au). All holes ended in mineralization, and the high-grade zone remains open in several directions, including at depth.

The Los Helados results announced in 2011 are considered to be encouraging and indicative of a significant copper-gold system at Los Helados. An extensive infill and step out drill program expected to total between 30,000 and 40,000 metres is planned to begin upon receipt of drilling permits expected in early 2012. The objective of this drill program is to test for possible extensions of the higher grade mineralization intersected in previous drilling.

The Vicuña project includes several copper-gold targets that have been explored in the past including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme, the same type of geological structure that hosts the Veladero Deposit owned by Barrick Gold. Most of the drilling to date has focused on a shallow copper oxide resource and a deeper sulfide copper target in the southern part of the project area. However, a recent review of project data identified several compelling near surface gold targets in the northern part of the project area. No drilling was done at Filo del Sol during the 2010-2011 field season because the Company decided to focus on drilling as much as possible at Los Helados. However, a drill program to better define both the copper oxide and the possible gold targets is planned to begin in early 2012.

Tamberias Property, Chile

On March 25, 2011 the Company entered into an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making optional payments totalling US$ 20,000,000 on or before September 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs.

The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project discussed above. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. An exploration program comprising geophysics and drilling is tentatively planned for the first quarter of 2012.

Other Chilean Projects (Colmillos and Andrea)

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. Construction of an access road began in December 2010 and was completed in early 2011. An IP (Induced Polarization) geophysical survey was completed over the alteration zone during the first half of 2011. A previously planned 2,000 metre drill program was deferred until 2012 as the Company concentrated on completing the drill program at Los Helados. Drilling is now tentatively scheduled for the first half of 2012.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600 metres long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration. The results of geochemical sampling and alteration mapping completed during 2010 indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper - up to 0.6% in rock chips. The planned program is similar to that for Colmillos. Negotiations with the owners of surface rights along the right of way for the planned access road are ongoing. A geophysical survey supported by helicopter and mules was completed during the quarter ended March 31 2011. Follow-up work has been deferred while Company geologists focus on other projects.

NORTH AMERICAN PROJECT

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% interest subject to an earn-in option with Teck as described below. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a Measured and Indicated resource of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

Teck's Earn-In Option - In August 2010, the Company entered into an earn-in option agreement with Teck whereby Teck can earn up to a 75% interest in the GJ and Kinaskan properties by paying the Company $100,000 (paid) on signing of the Agreement and exercising the following options:

First Option: Teck will have the option to earn an initial 51% interest by making cumulative expenditures of $12 million on or before December 31, 2014 of which a minimum of $2.5 million in expenditures, including a firm commitment of 1,500 metres of drilling, must be spent on or before December 31, 2011.

Second Option: Upon exercise of the First option, Teck will have a one-time option to elect to earn an additional 9% interest for a total of 60% interest by sole funding another $12 million in expenditures prior to December 31, 2017 with minimum annual expenditure of $2 million per year.

Third Option: Upon exercising the second option Teck will have a one-time option to elect to earn an additional 15% interest for a total of 75% interest by sole funding another $20 million in expenditures prior to December 31, 2020.

After the formation of a joint venture at any of the earn-in periods, expenditures are to be funded by the Company and Teck in pro-rata to the interest held. If any ownership interest falls below 10% it will convert to a 2% Net Smelter Return after payback of all project expenditures.

During the third quarter of 2011, Teck completed an exploration program at GJ/Kinaskan that included 10 diamond drill holes totalling 4,307 metres, 77 line kilometres of IP, 50 line kilometres of ground magnetics as well as mapping and 1185 soil samples. Teck also refurbished the 40 man exploration camp and conducted baseline environmental and archaeological surveys. The Company released results from GJ during the fourth quarter of 2011. The exploration program was 100% funded by Teck.

AFRICAN PROJECTS

Mogoraib (Hambok), Kerkebet, Shukula and Lelit, Eritrea

The Company holds two exploration licenses, Mogoraib and Kerkebet, which cover the strike extension of the rocks hosting Nevsun Resources ("Nevsun')'s Bisha copper-zinc-gold deposit. Two other licenses, Shukula and Lelit, were relinquished in 2011.

On January 17, 2012 the Company announced an Agreement with Namibian Copper whereby Namibian Copper would acquire Sanu a wholly owned subsidiary of the Company which holds its Eritrean Projects for 50,000,000 shares of Namibian Copper and reimbursement of certain exploration expenditures including the infill drilling at Hambok described above. A contingent payment of $7,500,000 is due upon commencement of commercial production from any of the licenses held by Sanu. The Transaction is subject to certain conditions precedent.

The most advanced project is the Hambok deposit located in the Mogoraib License which has an Indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional Inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

During the second quarter of 2011 the Company completed four infill diamond drill holes at Hambok at locations that were recommended in the NI 43-101 resource report. During the 4th quarter of 2011 the Company restarted an infill drill program at Hambok. Included in this program were a series of short Reverse Circulation (RC) holes designed to test the gold potential in the near surface oxidized zone above the Hambok sulfide body.

The program comprised 978 metres in 16 Reverse Circulation holes averaging 60m per hole. The drilling was part of the exploration program required under the Company's license agreement.

Bada Potash License, Eritrea

In December, 2010 the Company was granted the Bada Potash Exploration License (the "Bada License"), located in the Danakil Depression in Eritrea. The Bada license encompasses 431 square kilometres and is located 30 kilometres inland from the Red sea port of Mersa Fatma and 150 kilometres southeast of the capital city of Asmara.

During 2011 the Company completed 6 widely spaced drill holes for a total of 575 metres. The objective of the drilling was to try to intersect potash mineralization beneath what was believed to be shallow gravel cover. None of the drill holes intersected salt or potash beds and the license was relinquished in December, 2011.

Congo-Brazzaville

On September 29, 2011 the Company sold the wholly owned subsidiary holding its Congo-Brazzaville projects to Africa Holdings (BVI) Ltd a private company focused on African exploration projects for $59,000 and 40% of the proceeds of any subsequent direct or indirect sale of the projects if such sale occurs prior to the first anniversary of the sale to Africa Holdings (BVI) Ltd.

THIRD QUARTER HIGHLIGHTS

During the third quarter ended September 30, 2011 there was exploration on the Company's GJ Project in Canada and on the Bada potash project in Eritrea. Exploration on the Company's South American projects was suspended for the Southern Hemisphere winter. During the third quarter:

• The Company's South American team made significant progress in upgrading camp and logistical infrastructure, hiring of personnel, and planning for the upcoming summer exploration season which will be very busy with up to 60,000 metres of drilling planned on four copper-gold projects in the Andes of Chile and Argentina. The proposed drilling listed below is the Company's best current estimate of the number of metres required to test targets and define resources. The actual number of metres drilled will vary depending on results and actual drilling rates. Los Helados, Josemaria, and Filo del Sol are all part of a joint venture in which the Company holds 60% and JOGMEC (Japan, Oil, Gas, and Metals National Corporation) holds 40%. Each party funds its pro-rata share of expenditures.
  
  
• The largest program comprising up to 40,000 metres will be at Los Helados in Chile, where previous drilling has identified a large copper-gold porphyry system. The upcoming drill program will focus on further expanding a higher grade zone within the larger system which is open in several directions and at depth. Highlights from drilling earlier this year include 701 metres of 0.67% copper and 0.3 grams/tonne gold. Many current drill holes bottomed in mineralization and the deepest hole drilled to date was still in mineralization at 900 metres depth.
  
  Drilling at Los Helados is expected to start in late December, 2011 and will use drills with the capability of drilling to 1 kilometre depth. The exact start date will depend in part on the timing of receipt of government drilling permits. We are targeting an initial resource calculation for late in the third quarter of 2012.
  
  
• At Josemaria approximately 15,000 metres will be drilled to convert the existing inferred resource to measured and indicated. Drilling at Josemaria is expected to start in mid November, 2010.
  
  
• Teck Resources Limited ("Teck") completed an exploration program on the Company's GJ copper-gold project in northern British Columbia. The program which was funded 100% by Teck as part of the option agreement signed in August 2010, included 10 holes totalling 4,307 meters of diamond drilling as well as 77 line kilometres of Induced Polarization (IP), 50 line kilometres of ground magnetics, as well as mapping and geochemical sampling. The Company expects to receive drill results from Teck during the fourth quarter of 2011.
  
  
• The Company completed four drill holes totaling 200 meters on its Bada potash project in Eritrea. Drilling was slowed by extremely hot weather and deeper than anticipated overburden. The first four holes were not able to get through the overburden. After a break in September to upgrade the drill rig's capacity to drill overburden and to wait for slightly cooler temperatures drilling resumed in October and is ongoing.
  
  
• On October 28, 2011 the Company completed a non-brokered, private placement of 9 million shares of the Company at a price of $3.00 per share for gross proceeds of $27 million.

SOUTH AMERICAN PROJECTS

No exploration was done on the Company's South American projects during the third quarter. The exploration season in South America is during the southern hemisphere summer and the Company's drill programs typically run from November to May. Interpretation of last season's results, as well as logistical planning and expansion of camp and drill core handling facilities were the principal activities on the South American Projects. Exploration will resume during the fourth quarter of 2011.

Jose Maria Project, Argentina

Jose Maria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Jose Maria contains a NI 43-101 compliant inferred resource of 460 million tonnes at 0.39% tonnes copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. John Nilsson P.Eng. and is filed on SEDAR under the Company's profile.

The 2010-2011 drill program which finished in April 2011 tested possible extensions of the Jose Maria system to the north where there is a strong chargeability anomaly and to the east under younger cover rocks. These two targets were tested with 2,173 metres of drilling in 6 holes. The drill holes intersected porphyry style alteration, but only sporadic weakly anomalous copper and gold values.

The 100% owned Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Maria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Maria JEA provides Jogmec the option to acquire 40% of the Company's interest in these properties. In consideration, Jogmec paid US$1 million upon signing of the Jose Maria JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest.

Once Jogmec has earned its interest, the partners will fund ongoing expenditures pro-rata to their ownership interest. It is anticipated that Jogmec will earn its 40% interest in November 2011. Both parties have agreed to fund the 2011-2012 exploration program pro-rata to their ownership interest. The 2011-2102 program is intended to upgrade the existing inferred resource to the measured and indicated category.

Vicuna Project (Los Helados, Filo del Sol), Argentina and Chile

The Vicuna properties comprise a large land package of approximately 18,300 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. Nearby deposits held by other companies include Caserones--Regalito (Pan Pacific Copper) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuna Properties are adjacent to Jose Maria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro rata share of expenditures.

The Company completed the 2010-2011 drill program at Los Helados in May, 2011. The holes completed during this field season confirm the presence of a large mineralized porphyry copper system at Los Helados and successfully confirmed and extended the higher grade zone which was also intercepted in holes reported in the first quarter of 2011 including LH-12 with 711 metres of 0.54% copper and 0.26 grams/tonne gold; and LH-13 with 562 metres of 0.54% copper and 0.25 grams/tonne gold. Results from the remaining 10 holes drilled this season were announced during the second quarter 2011 and included LH-16 with 701 metres of 0.67% copper and 0.30 grams/tonne gold and LH-17 with 700 metres of 0.58% copper and 0.33 grams/tonne gold, LH 20 with 312 meters of 0.73% copper and 0.35 grams/tonne gold, LH 23 with 216.7 metres of 0.70% copper and 0.44 grams/tonne gold and LH 24 with 728 meters of 0.55% copper and 0.24 grams/tonne gold.

The length and grade of the intercepts announced this season are considered to be encouraging and indicative of a significant copper-gold system at Los Helados. An extensive infill and step out drill program for 2011-2012 has been agreed with JOGMEC and is expected to begin upon receipt of drilling permits expected in late 2011. The objective of the program is to do enough drilling to permit the calculation of an initial resource for Los Helados. Both parties have agreed to fund next year (2011-2012) exploration program pro-rata to their ownership interest.

The Vicuna project includes several copper gold targets that have been explored in the past including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme, the same type of geological structure that hosts the Veladero Deposit owned by Barrick Gold. Most of the drilling to date has focused on a shallow copper oxide resource and a deeper sulfide copper target in the southern part of the project area. However, a recent review of project data identified several compelling near surface gold targets in the northern part of the project area. No drilling was done at Filo del Sol during the 2010-2011 field season because the Company decided to focus on drilling as much as possible at Los Helados. However, a drill program to better define both the copper oxide and the possible gold targets is planned to begin in late 2011.

Tamberias Property, Chile

On March 25, 2011 the Company entered into an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making optional payments totalling US$ 20,000,000 on or before September 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs. The initial payment of US$200,000 was made upon signature of the Agreement.

The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project discussed above. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. An exploration program expected to include geophysics and drilling is planned to begin in the fourth quarter of 2011.

Other Chilean Projects (Colmillos and Andrea)

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. Construction of an access road began in December 2010 and was completed in early 2011. An IP (Induced Polarization) geophysical survey was completed over the alteration zone during the quarter. A previously planned 2,000 metre drill program was deferred until 2012 as the Company concentrated on completing the drill program at Los Helados. Drilling is now tentatively scheduled for March, 2012.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600 meters long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration. The results of geochemical sampling and alteration mapping completed during 2010 indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper- up to 0.6% in rock chips. The planned program is similar to that for Colmillos. Negotiations with the owners of surface rights along the right of way for the planned access road are ongoing. A geophysical survey supported by helicopter and mules was completed during the quarter ended March 31 2011. Follow-up work has been deferred while Company geologists focus on other projects.

NORTH AMERICAN PROJECT

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% working interest subject to an earn-in option with Teck as described below. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a measured and indicated resource of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

Teck's Earn-In Option - In August 2010, the Company entered into an earn-in option agreement with Teck whereby Teck can earn up to a 75% interest in the GJ and Kinaskan properties by paying the Company $100,000 (paid) on signing of the Agreement and exercising the following options:

First Option: Teck will have the option to earn an initial 51% interest by making cumulative expenditures of $12 million on or before December 31, 2014 of which a minimum of $2.5 million in expenditures, including a firm commitment of 1,500 metres of drilling, must be spent on or before December 31, 2011.

Second Option: Upon exercise of the First option, Teck will have a one-time option to elect to earn an additional 9% interest for a total of 60% interest by sole funding another $12 million in expenditures prior to December 31, 2017 with minimum annual expenditure of $2 million per year.

Third Option: Upon exercising the second option Teck will have a one-time option to elect to earn an additional 15% interest for a total of 75% interest by sole funding another $20 million in expenditures prior to December 31, 2020.

After the formation of a joint venture at any of the earn-in periods, expenditures are to be funded by the Company and Teck in pro rata to the interest held. If any ownership interest falls below 10% it will convert to a 2% Net Smelter Return after payback of all project expenditures.

During the third quarter of 2011, Teck completed an exploration program at GJ/Kinaskan that included 10 diamond drill holes totalling 4,307 metres, 77 line kilometres of IP, 50 line kilometres of ground magnetics as well as mapping and 1185 soil samples. Teck also refurbished the 40 man exploration camp and conducted baseline environmental and archaeological surveys. The Company expects to receive drill results from Teck during the fourth quarter of 2011. The exploration program was 100% funded by Teck.

AFRICAN PROJECTS

Mogoraib, Kerkebet, Shukula and Lelit, Eritrea

The Company holds four exploration licenses, Mogoraib, Kerkebet, Shukula and Lelit, which cover the strike extension of the rocks hosting Nevsun Resources ("Nevsun') 's Bisha copper-zinc-gold deposit.

The Company's most advanced project is the Hambok deposit located in the Mogoraib License which has a NI 43-101 compliant indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

This report is filed under the Company's profile on SEDAR. During the second quarter of 2011 the Company completed four infill diamond drill holes at Hambok at locations that were recommended in the NI 43-101 resource report. The objective of the holes was to confirm the grade and thickness of mineralization in the northern part of the deposit where existing drill spacing is wide. Infill drilling on the Hambok deposit will restart in November, 2011 and is part of work required to keep the exploration license in good standing.

The Company's Kerkebet license hosts additional volcanogenic massive sulphide prospects the most significant of which is the Aradaib prospect discovered in 2010. Highlights from drilling at Aradaib, completed in 2010 include: ARD-10-001, which tested a gossan outcrop highly anomalous in gold, copper, zinc, silver and lead returning a 17 metre interval of massive and semi-massive sulphides including: 10 metres @ 1.22% Zn, 1.89% Cu, 0.92 g/t Au, 21 g/t Ag and a consecutive zinc rich interval of 7m 15.15% Zn, 0.99% Cu, 0.32 g/t Au, 33 g/t Ag. Two holes (ARD-10-03 and 04) confirmed the projected down plunge and down dip extensions of the massive sulfides intersected in ARD-10-01. ARD-10-03 tested 30 metres down plunge from the mineralization in ARD-10-01 and returned 13.0 metres grading 5.59% Zn, 3.31% Cu, 1.85g/t Au and 46g/t Ag from a 24.4 metre intersection of massive sulfide and stringer mineralization. ARD-10-04 drilled on the same section as ARD-10-01 but intersecting the zone 25 metres deeper, returned 4.0 metres grading 0.31% Zn, 3.49% Cu, 0.68 g/t Au and 38 g/t Ag from massive sulfides at 108 metres and 7.0 metres at 1.70% Zn, 2.70% Cu, 0.82 g/t Au and 26 g/t Ag from 118 metres.

A high resolution helicopter-borne electromagnetic, magnetic, and radiometric (VTEM) survey covering 700 square kilometres was completed in December 2010. The survey covered the Company's exploration licenses in Western Eritrea. The survey done by Geotech Airborne Surveys, South Africa and was designed to identify buried massive sulfide mineralization. Targets on the Kerkebet license will be tested once infill drilling on Hambok is complete.

Bada Potash License, Eritrea

The Company owns 100% of the Bada Potash Exploration License located in the Danakil Depression in Eritrea. This large license, encompassing over 431 square kilometres, is located 30 kilometres inland from the Red sea port of Mersa Fatma and 150 kilometres southeast of the capital city of Asmara.

The Bada license is situated within the northern portion of an evaporite basin extending southward into Ethiopia, where exploration in the 1960's resulted in the discovery of the large Crescent and Musley potash and sylvite deposits.

The Danakil Depression is known to continue northeast from Colluli and is believed to have potential for potash-bearing beds on the Bada license. However, only very limited historical exploration work has been done in the license area to date. Initial reconnaissance at Bada by NGEx found extensive shallow alluvium cover, young volcanic rocks or recent marine evaporites, with potential for potash-bearing rocks under much of the license area.

During the quarter the Company completed four drill holes totalling 200 meters on the Bada license. Drilling was slowed by extremely hot weather and deeper than anticipated overburden. The first four holes were not able to get through the overburden. After a break in September to upgrade the drill rig's capacity to drill overburden and to wait for slightly cooler temperatures drilling resumed in October and is ongoing. The objective of this initial phase of drilling is to test the shallower portions of the basin for potash mineralization.

Congo-Brazzaville

On September 29, 2011 the Company sold the wholly owned subsidiary holding its Congo-Brazzaville projects to Africa Holdings (BVI) Ltd a private company focused on African exploration projects for $59,000 and 40% of the proceeds of any subsequent direct or indirect sale of the projects if such sale occurs prior to the first anniversary of the sale to Africa Holdings (BVI) Ltd.

OUTLOOK

The Company's exploration budget is focused on large scale copper, gold, and potash targets that demonstrate the potential for world class discoveries. The Company's 2010-2011 exploration program was very successful, and resulted in a potentially significant copper-gold discovery at Los Helados. Exploration in South America was suspended for the third quarter due to the onset of the southern hemisphere winter and will resume in the fourth quarter of 2011.

In Eritrea drilling on the potash projects is ongoing, with any significant results to be released as they become available. A $4.5 million exploration program funded by Teck was completed during the third quarter on the Company's GJ/Kinaskan project in northern BC. Final results are expected to be received during the fourth quarter 2011.

Preparations are underway for an extensive infill and step out drilling program at Los Helados and Jose Maria as well as exploration drilling at Filo del Sol. These drill programs are expected to start in the fourth quarter of 2011 and are expected to total up to 60,000 metres of drilling-note that this is the Company's current best estimate of the number of metres required to test targets and define resources. The actual number of metres drilled will vary depending on results and actual drilling rates. If all the planned drilling is completed the Company's share of the budget for the 2011-2012 exploration program is expected to be in the order of $30,000,000. With the completion of the $27 million private placement in October, 2011 the Company's planned exploration program is fully financed.

2011 HIGHLIGHTS

During the quarter ended June 30, 2011 the Company conducted exploration programs in South America and Africa in the course of which it:

• Completed the final 7 holes of a 9,638 metre, 13-hole drill program at Los Helados, Chile, inmid-May. Highlights for the quarter include drill Hole LH 16 with 701 metres of 0.67% copper and 0.30 g/t gold; LH-17 with 700 metres of 0.58% copper and 0.33 grams/tonne gold ; LH 20 with 312 metres of 0.73% copper and 0.35 grams/tonne gold including 108 metres of 0.86% copper and 0.33 grams/tonne gold; LH 23 with 216.7 meters of 0.70% copper and 0.44 grams/tonne gold; LH 24 with 728 metres of 0.55% copper, 0.24 grams/tonne gold.
• Completed four infill holes at the Hambok project in Eritrea.

Subsequent to the quarter end, exploration began at the Company's 100% owned GJ project in B.C. Teck Resources Limited is funding a $4,500,000 exploration program at GJ under an option agreement signed last year.

SOUTH AMERICAN PROJECTS

During the quarter ended June 30, 2011, the Company completed an exploration drill program on its Los Helados copper-gold project in Chile. The exploration season in South America is during the southern hemisphere summer and the Company's drill programs typically run from November to May.

Work on the South American projects is currently suspended for the southern hemisphere winter and will resume during the fourth quarter of 2011. This report focuses on work done during the second quarter of 2011 but will mention work started earlier in the same field season in late 2010 and early 2011.

Jose Maria Project, Argentina

Jose Maria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Jose Maria contains a NI 43-101 compliant inferred resource of 460 million tonnes at 0.39% tonnes copper and 0.30 grams/tonne gold at a 0.3% copper cut off.

The 2010-2011 drill program which finished in April 2011 tested possible extensions of the Jose Maria system to the north where there is a strong chargeability anomaly and to the east under younger cover rocks. These two targets were tested with 2,173 metres of drilling in 6 holes. Drilling began in late December, 2010. The drill holes intersected porphyry style alteration, but only sporadic weakly anomalous copper and gold values.

The 100% owned Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Maria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Maria JEA provides Jogmec the option to acquire 40% of the Company's interest in these properties. In consideration, Jogmec paid US$1 million upon signing of the Jose Maria JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. Jogmec has met its second year work commitment as of March 31, 2011. Once Jogmec has earned its interest, the partners will fund ongoing expenditures pro-rata to their ownership interest. Both parties have agreed to fund next year (2011-2012) exploration program pro-rata to their ownership interest.

Vicuna Project (Los Helados, Filo del Sol), Argentina and Chile

The Vicuna properties comprise a large land package of approximately 18,300 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. Nearby deposits held by other companies include Caserones--Regalito(Pan Pacific Copper) and El Morro-La Fortuna (Goldcorp/New Gold). The Vicuna Properties are adjacent to Jose Maria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro rata share of expenditures.

During the quarter ended June 30, 2011 the Company completed the drill program at Los Helados that was begun during the last quarter of 2010. The holes completed during the current quarter confirm the presence of a large mineralized porphyry copper system at Los Helados and successfully confirmed and extended the higher grade zone which was also intercepted in holes reported in the first quarter of 2011 including LH-12 with 711 metres of 0.54% copper and 0.26 grams/tonne gold; and LH-13 with 562 metres of 0.54% copper and 0.25 grams/tonne gold. Results from the remaining 10 holes drilled this season were announced during the current quarter and included LH-16 with 701 metres of 0.67% copper and 0.30 grams/tonne gold and LH-17 with 700 metres of 0.58% copper and 0.33 grams/tonne gold, LH 20 with 312 meters of 0.73% copper and 0.35 grams/tonne gold, LH 23 with 216.7 metres of 0.70% copper and 0.44 grams/tonne gold and LH 24 with 728 meters of 0.55% copper and 0.24 grams/tonne gold.

The length and grade of the intercepts announced this quarter are considered to be encouraging and indicative of a significant copper-gold system at Los Helados. An extensive infill and step out drill program is currently being discussed with Jogmec. Both parties have agreed to fund next year (2011-2012) exploration program pro-rata to their ownership interest.

The Vicuna project includes several copper gold targets that have been explored in the past including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme, the same type of geological structure that hosts the Veladero Deposit owned by Barrick Gold. Most of the drilling to date has focused on a shallow copper oxide resource and a deeper sulfide copper target in the southern part of the project area. However, a recent review of project data identified several compelling near surface gold targets in the northern part of the project area. No drilling was done at Filo del Sol during the current quarter because the company decided to focus on drilling as much as possible at Los Helados.

Tamberias Property, Chile

On March 25, 2011 the Company entered into an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making optional payments totalling US$ 20,000,000 on or before June 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs. The initial payment of US$200,000 was made upon signature of the Agreement. The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project discussed above. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. An exploration program expected to include geophysics and drilling is planned to begin in the fourth quarter of 2011.

Other Chilean Projects (Colmillos and Andrea)

Regional exploration and prospecting continued on a number of early stage copper-gold projects in Chile where mapping and sampling programs have defined targets with porphyry copper-style mineralization in poorly explored regions of the productive Miocene-Pliocene and Eocene-Oligocene Belts. Colmillos and Andrea projects are new grass roots porphyry copper discoveries made by NGEx geologists while exploring alteration and structural targets identified through a combination of in-house satellite image processing and compilation of regional geology.

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. The licenses were acquired by staking. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. Construction of an access road began in December 2010 and was completed in early 2011. An IP (Induced Polarization) geophysical survey is was completed over the alteration zone during the quarter. A planned 2,000 metre drill program was deferred as the Company concentrated on completing the drill program at Los Helados.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600m long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration.

The results of geochemical sampling and alteration mapping completed during 2010 indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper- up to 0.6% in rock chips. The planned program is similar to that for Colmillos. Negotiations with the owners of surface rights along the right of way for the planned access road are ongoing. A geophysical survey supported by
helicopter and mules was completed during the quarter ended March 31 2011.

NORTH AMERICAN PROJECT

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% working interest subject to an earn-in option with Teck Resources Limited ("Teck") as described below. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a measured and indicated resource of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

Teck's Earn-In Option - In August 2010, the Company entered into an earn-in option agreement with Teck whereby Teck can earn up to a 75% interest in the GJ and Kinaskan properties by paying the Company $100,000 (paid) on signing of the Agreement and exercising the following options:

First Option: Teck will have the option to earn an initial 51% interest by making cumulative expenditures of $12 million on or before December 31, 2014 of which a minimum of $2.5 million in expenditures, including a firm commitment of 1,500 metres of drilling, must be spent on or before December 31, 2011.

Second Option: Upon exercise of the First option, Teck will have a one-time option to elect to earn an additional 9% interest for a total of 60% interest by sole funding another $12 million in expenditures prior to December 31, 2017 with minimum annual expenditure of $2 million per year.

Third Option: Upon exercising the second option Teck will have a one-time option to elect to earn an additional 15% interest for a total of 75% interest by sole funding another $20 million in expenditures prior to December 31, 2020.

After the formation of a joint venture at any of the earn-in periods, expenditures are to be funded by the Company and Teck in pro rata to the interest held. If any ownership interest falls below 10% it will convert to a 2% Net Smelter Return after payback of all project expenditures.

Subsequent to the quarter end, Teck began a $4.5 million exploration program at GJ/Kinaskan that will include ground geophysical surveys and between 4,000 and 5,000 metres of drilling. The Teck funded exploration program began in early July, 2011 and is expected to continue until September, 2011.

AFRICAN PROJECTS

Mogoraib, Kerkebet, Shukula and Lelit, Eritrea

The Company holds four exploration licenses, Mogoraib, Kerkebet, Shukula and Lelit, which cover the strike extension of the rocks hosting Nevsun Resources ("Nevsun') 's Bisha copper-zinc-gold deposit.

The Company's most advanced project is the Hambok deposit located in the Mogoraib License which has a NI 43-101 compliant indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The wide spaced drilling to date suggests the presence of a higher grade core to the Hambok Deposit although more drilling is required to better define this zone.

This report is filed under the Company's profile on SEDAR. During the current quarter the Company completed four infill diamond drill holes at Hambok at locations that were recommended in the NI 43-101 resource report. The objective of the holes was to confirm the grade and thickness of mineralization in the northern part of the deposit where existing drill spacing is wide.

The Company's Kerkebet license hosts additional volcanogenic massive sulphide prospects the most significant of which is the Aradaib prospect discovered in 2010. Highlights from drilling at Aradaib, completed in 2010 include: ARD-10-001, which tested a gossan outcrop highly anomalous in gold, copper, zinc, silver and lead returning a 17 metre interval of massive and semi-massive sulphides including: 10 metres @ 1.22% Zn, 1.89% Cu, 0.92 g/t Au, 21 g/t Ag and a consecutive zinc rich interval of 7m 15.15% Zn, 0.99% Cu, 0.32 g/t Au, 33 g/t Ag. Two holes (ARD-10-03 and 04) confirmed the projected down plunge and down dip extensions of the massive sulfides intersected in ARD-10-01. ARD-10-03 tested 30 metres down plunge from the mineralization in ARD-10-01 and returned 13.0 metres grading 5.59% Zn, 3.31% Cu, 1.85g/t Au and 46g/t Ag from a 24.4 metre intersection of massive sulfide and stringer mineralization. ARD-10-04 drilled on the same section as ARD-10-01 but intersecting the zone 25 metres deeper, returned 4.0 metres grading 0.31% Zn, 3.49% Cu, 0.68 g/t Au and 38 g/t Ag from massive sulfides at 108 metres and 7.0 metres at 1.70% Zn, 2.70% Cu, 0.82 g/t Au and 26 g/t Ag from 118 metres.

A high resolution helicopter-borne electromagnetic, magnetic, and radiometric (VTEM) survey covering 700 square kilometres was completed in December 2010. The survey covered the Company's exploration licenses in Western Eritrea. The survey done by Geotech Airborne Surveys, South Africa and was designed to identify buried massive sulfide mineralization. Several prospective targets were identified which will be investigated in detail using gravity (where needed), trenching, shallow RAB overburden drilling, and diamond drilling beginning in the third quarter of 2011.

Bada Potash License, Eritrea

The Company owns 100% of the Bada Potash Exploration License located in the Danakil Depression in Eritrea. This large license, encompassing over 431 square kilometres, is located 30 kilometres inland from the Red sea port of Mersa Fatma and 150 kilometres southeast of the capital city of Asmara.

The Bada license is situated within the northern portion of an evaporite basin extending southward into Ethiopia, where exploration in the 1960's resulted in the discovery of the large Crescent and Musley potash and sylvite deposits.

The Danakil Depression is known to continue northeast from Colluli and is believed to have potential for potash-bearing beds on the Bada license. However, only very limited historical exploration work has been done in the license area to date. Initial reconnaissance at Bada by NGEx found extensive shallow alluvium cover, young volcanic rocks or recent marine evaporites, with potential for potash-bearing rocks under much of the license area.

Exploration of the license started in January, 2011. The initial phase will be to confirm the evaporite sequence and then to drill test the shallower portions of the basin for potash mineralization. To that end gravity and ground magnetic surveys were completed during the first half of the year. A camp to support drilling has been constructed however, drilling has been delayed due to unseasonally wet weather and flooding in the project area. The initial scout drilling program is planned to begin during the third quarter of 2011.

Congo-Brazzaville

The Company has two exploration licenses in Congo-Brazzaville. The licenses cover 1,579 square kilometres of ground in the Boko Songo-Mindouli trend where mining during French colonial times exploited high grade copper and zinc ore bodies hosted in carbonate rocks. Some historic mines are presently being rehabilitated by Chinese and other foreign companies. The Company's exploration is targeting similar high-grade carbonate-hosted copper and zinc mineralization.

The project area is located approximately 70 kilometres west of the capital city of Brazzaville. Most of the project area is accessible by road and the rail line connecting Brazzaville with the port city of Point Noire passes between 5 and 30 kilometres south of the major prospects identified to date. Recent mapping and sampling completed on the Company's licenses has identified examples of all four styles of mineralization that has historically produced in the District.

• Copper-dominant karst-fill mineralization (3-5% copper),
• High-grade (>10% copper) chalcocite mineralization replacing specific carbonate horizons,
• Fracture controlled moderate grade copper mineralization (1-2% copper), and
• Lead-zinc veins and carbonate replacement bodies (5-15% lead and zinc).

The Company acquired the exploration licenses in late 2009 and began field work consisting of soil sampling, mapping and prospecting shortly thereafter. This work has extended known occurrences and historic prospects and identified several new prospects and trends. Rock chip sampling and mapping continues to help define these prospects. Induced polarization (IP) surveys over the most prospective areas were completed in December 2010. No work was done on the project during the current quarter due to the rainy season. The Company is looking for different options to fund the next phase of work.

OUTLOOK

The Company's exploration budget is focused on large scale copper, gold, and potash targets that demonstrate the potential for world class discoveries. The Company's 2011 exploration program has been very successful with a significant discovery at Los Helados. Exploration in South America has now finished for the season due to the onset of the southern hemisphere winter and will resume in the fourth quarter of 2011.

In Eritrea drilling on the potash projects is expected to start in August 2011, with results released as they become available. A $4.5 million exploration program funded by Teck Resources Limited is underway on the Company's GJ/Kinaskan project in northern BC. Teck expects to complete between 4,000 to 5,000
metres of drilling.

The remaining 2011 exploration program is fully covered by the Company's current cash balance with extra money available to fund further drilling required to follow-up on positive results. We have begun planning for an extensive infill and step out drilling programs at Los Helados and Jose Maria which are expected to restart in November 2011. It is expected that the 2011-2012 exploration program will be substantially higher than the 2010-2011 exploration program.

EXPLORATION HIGHLIGHTS UPDATE

During the quarter ended March 31, 2011 the Company conducted exploration programs in South America and Africa in the course of which it:

• Received results from the first seven drill holes completed during the quarter at its Los Helados copper gold project. Highlights included hole LH-16 with 701 metres of 0.67% copper and 0.30 grams/tonne gold and LH-12 with 711 metres of 0.54% copper and 0.26 grams/tonne gold.

• Completed 6 diamond drill holes totaling 2,173 metres of drilling at its Josemaria project in Argentina.

• Completed a geophysical survey at Colmillos, an early stage copper project in Chile.

• Completed ground magnetic and gravity surveys on its Bada Potash project in Eritrea.

SOUTH AMERICAN PROJECTS

During the quarter ended March 31, 2011, the Company conducted exploration programs on four copper gold projects in Chile and Argentina. The exploration season in South America is during the southern hemisphere summer and our drill programs typically run from November to April and therefore overlap the calendar years. This report focuses on work done during the first quarter of 2011 but will mention work started earlier in the same field season in late 2010. During the current quarter of 2011 the Company continued drill programs at the more advanced Los Helados and Josemaria projects as well as geophysical surveys and sampling programs at two earlier stage projects in Chile - Colmillos and Andrea.

Jose Maria Project, (Batidero) Argentina

Jose Maria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Jose Maria contains a NI 43-101 compliant inferred resource of 460 million tonnes at 0.39% tonnes copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The Jose Maria resource is open in several directions.

The 2010-2011 drill program which finished in April 2011 tested possible extensions of the Jose Maria system to the north where there is a strong chargeability anomaly and to the east under younger cover rocks. These two targets were tested with 2,173 metres of drilling in 6 holes. Drilling began in late December, 2010. Final results are pending.

The 100% owned Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Maria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Maria JEA provides Jogmec the option to acquire 40% of the Company's interest in these properties. In consideration, Jogmec paid US$1 million upon signing of the Jose Maria JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. Jogmec has met its first year work commitment as of March 31, 2010 and is sole funding the current approximately US$2 million drill program. Once Jogmec has earned its interest, the partners will fund ongoing expenditures pro-rata to their ownership interest.

Vicuna Project (Los Helados, Filo del Sol), Argentina and Chile

The Vicuna properties comprise a large land package of approximately 18,300 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. Nearby deposits held by other companies include Caserones--Regalito(Pan Pacific Copper) and El Morro-La Fortuna (New Gold/Xstrata). The Vicuna Properties are adjacent to Jose Maria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro rata share of expenditures.

During the quarter the Company continued the drill program begun last quarter of 2010 that is intended to better define a higher grade zone of porphyry copper-gold mineralization at Los Helados. The holes completed in the current drill program were all significant step outs from LH-04 completed in 2008 to 2009, which intersected 762 metres of 0.43% copper and 0.22 grams/tonne gold including 345 metres of 0.57% copper and 0.21 grams/tonne gold.

The results of the current drill program confirm the presence of a large mineralized porphyry copper system. The system is open to the south, west and east. The current drill program is focused on better defining the area of higher grade mineralization first detected in LH-04. The results from the first three holes completed this season were announced on 22 February, 2011 included: LH-12 with 711 metres of 0.54% copper and 0.26 grams/tonne gold; and LH-13 with 562 metres of 0.54% copper and 0.25 grams/tonne gold. Results from a further four holes were announced on April 1, 2011 and included LH-16 with 701 metres of 0.67% copper and 0.30 grams/tonne gold and LH-17 with 700 metres of 0.58% copper and 0.33 grams/tonne gold. The length and grade of the intercepts announced this quarter are considered to be encouraging and indicative of a significant copper-gold system at Los Helados.

The Vicuna project includes several copper gold targets that have been explored in the past including: Filodel Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme, thesame type of geological structure that hosts the Veladero Deposit owned by Barrick Gold. Most of the drilling to date has focused on a shallow copper oxide resource and a deeper sulfide copper target in the southern part of the project area. However, a recent review of project data identified several compelling near surface gold targets in the northern part of the project area. No drilling was done at Filo del Sol during the current quarter because the company decided to focus on drilling as much as possible at Los Helados.

Tamberias Property, Chile

On March 25, 2011 the Company entered into an option agreement (the "Agreement") with Compania Minera Tamberias SCM ("Tamberias SCM") whereby the Company can earn a 100% interest in the Tamberias property by making optional payments totalling US$ 20,000,000 on or before June 30, 2020. Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Company has recovered all of its exploration and development costs. The initial payment of US$200,000 was made upon signature of the Agreement. The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project discussed above. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. An exploration program expected to include geophysics and drilling is planned for the fourth quarter of 2011.

Other Chilean Projects (Colmillos and Andrea)

Regional exploration and prospecting continued on a number of early stage copper-gold projects in Chile where mapping and sampling programs have defined targets with porphyry copper-style mineralization in poorly explored regions of the productive Miocene-Pliocene and Eocene-Oligocene Belts. Colmillos and Andrea projects are new grass roots porphyry copper discoveries made by NGEx geologists while exploring alteration and structural targets identified through a combination of in-house satellite image processing and compilation of regional geology.

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. The licenses were acquired by staking. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. Construction of an access road began in December 2010 and was completed in early 2011. An IP (Induced Polarization) geophysical survey is currently underway over the alteration zone. Up to 2,000 metres of drilling will be done starting late in the second quarter of 2011.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600m long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration with abundant iron oxides (goethite > jarosite > hematite).

The results of geochemical sampling and alteration mapping completed during 2010 indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper- up to 0.6% in rock chips. The planned program is similar to that for Colmillos. Negotiations with the owners of surface rights along the right of way for the planned access road are ongoing. A geophysical survey supported by helicopter and mules was completed during the quarter ended March 31 2011. The results are being evaluated.


NORTH AMERICAN PROJECT

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% working interest subject to an earn-in option with Teck Resources Limited ("Teck") as described below. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a measured and indicated resource of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

Teck's Earn-In Option - In August 2010, the Company entered into an earn-in option agreement with Teck whereby Teck can earn up to a 75% interest in the GJ and Kinaskan properties by paying the Company $100,000 (paid) on signing of the Agreement and exercising the following options:

First Option: Teck will have the option to earn an initial 51% interest by making cumulative expenditures of $12 million on or before December 31, 2014 of which a minimum of $2.5 million in expenditures, including a firm commitment of 1,500 metres of drilling, must be spent on or before December 31, 2011.

Second Option: Upon exercise of the First option, Teck will have a one-time option to elect to earn an additional 9% interest for a total of 60% interest by sole funding another $12 million in expenditures prior to December 31, 2017 with minimum annual expenditure of $2 million per year.

Third Option: Upon exercising the second option Teck will have a one-time option to elect to earn an additional 15% interest for a total of 75% interest by sole funding another $20 million in expenditures prior to December 31, 2020.

After the formation of a joint venture at any of the earn-in periods, expenditures are to be funded by the Company and Teck in pro rata to the interest held. If any ownership interest falls below 10% it will convert to a 2% Net Smelter Return after payback of all project expenditures.

Teck has advised the Company that it plans to conduct a $4.5 million exploration program at GJ/Kinaskan including ground geophysical surveys and up to 5,000 metres of drilling. The Teck exploration program is scheduled to begin in late June, 2011.


AFRICAN PROJECTS

Mogoraib, Kerkebet, Shukula and Lelit, Eritrea

The Company holds four exploration licenses, Mogoraib, Kerkebet, Shukula and Lelit, which cover the strike extension of the rocks hosting Nevsun Resources ("Nevsun') 's Bisha copper-zinc-gold deposit.

The Company's most advanced project is the Hambok deposit located in the Mogoraib License which has a NI 43-101 compliant indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The wide spaced drilling to date suggests the presence of a higher grade core to the Hambok Deposit although more drilling is required to better define this zone. This report is filed under the Company's profile on SEDAR.

In 2010 the Company completed a 1,545 metre drill program that targeted volcanogenic massive sulphide targets on its licenses. The most significant results were obtained from the Aradaib prospect, located in the Kerkebet License.

The first hole at Aradaib, ARD-10-001, tested a gossan outcrop highly anomalous in gold, copper, zinc, silver and lead returning a 17 metre interval of massive and semi-massive sulphides including: 10 metres @ 1.22% Zn, 1.89% Cu, 0.92 g/t Au, 21 g/t Ag and a consecutive zinc rich interval of 7m 15.15% Zn, 0.99% Cu, 0.32 g/t Au, 33 g/t Ag. A second hole, ARD-10-002, drilled 230 metres to the northeast, intersected altered host volcanic rocks with pervasive disseminated and stringer sulphides, returning a 3 metre interval of 1.30% Zn from 60.0 metres depth. The remainder of the hole was strongly anomalous in copper and zinc.

The results from four follow-up holes were received during the quarter ended September 30, 2010. Two holes (ARD-10-03 and 04) confirmed the projected down plunge and down dip extensions of the massive sulfides intersected in ARD-10-01. ARD-10-03 tested 30 metres down plunge from the mineralization in ARD-10-01 and returned 13.0 metres grading 5.59% Zn, 3.31% Cu, 1.85g/t Au and 46g/t Ag from a 24.4 metre intersection of massive sulfide and stringer mineralization.

Hole ARD-10-04 drilled on the same section as ARD-10-01 but intersecting the zone 25 metres deeper, returned 4.0 metres grading 0.31% Zn, 3.49% Cu, 0.68 g/t Au and 38 g/t Ag from massive sulfides at 108 metres and 7.0 metres at 1.70% Zn, 2.70% Cu, 0.82 g/t Au and 26 g/t Ag from 118 metres. The third hole in this program, ARD-10-05, was drilled under gossan outcrops approximately 300 metres north of the other two holes, and intersected a thick interval of altered and oxidized volcanic rock with disseminated and stringer mineralization but no significant values.

The style of mineralization that was intercepted is interpreted as proximal to a massive sulfide body but it is possible that these drill holes over- or under-cut massive sulphide mineralization.

A high resolution helicopter-borne electromagnetic, magnetic, and radiometric (VTEM) survey covering 700 square kilometres was completed in December 2010. The survey covered the Company's exploration licenses in Western Eritrea. The survey done by Geotech Airborne Surveys, South Africa and was designed to identify buried massive sulfide mineralization. Initial screening of the survey results has been done, looking for high conductivity, high gravity, and low magnetism features. This has highlighted in 18 anomalies to be geophysically modeled for 'typical' VMS sulfide bodies. Prospective targets from the modeling will be investigated in detail using gravity (where needed), trenching, shallow RAB overburden drilling, and diamond drilling beginning in the second quarter of 2011.

The recent commissioning of Nevsun's Bisha mine has generated increased interest in the Company's adjacent land position including the Hambok Deposit which lies approximately 15 kilometres from the Bisha mine.

Bada Potash License, Eritrea

The Company owns 100% of the Bada Potash Exploration License located in the Danakil Depression in Eritrea. This large license, encompassing over 431 square kilometres, is located 30 kilometres inland from the Red sea port of Mersa Fatma and 150 kilometres southeast of the capital city of Asmara.

The Bada license is situated within the northern portion of an evaporite basin extending southward into Ethiopia, where exploration in the 1960's resulted in the discovery of the large Crescent and Musley potash and sylvite deposits.

The Danakil Depression is known to continue northeast from Colluli and is believed to have potential for potash-bearing beds on the Bada license. However, only very limited historical exploration work has been done in the license area to date. Initial reconnaissance at Bada by NGEx found extensive shallow alluvium cover, young volcanic rocks or recent marine evaporites, with potential for potash-bearing rocks under much of the license area.

Exploration of the license started in January, 2011. The initial phase will be to confirm the evaporite sequence and then to drill test the shallower portions of the basin for potash mineralization. To that end gravity and ground magnetic surveys were completed during the current quarter. An initial scout drilling program is planned to begin late in the second quarter of 2011.

Congo-Brazzaville

The Company has two exploration licenses in Congo-Brazzaville. The licenses cover 1,579 square kilometres of ground in the Boko Songo-Mindouli trend where mining during French colonial times exploited high grade copper and zinc ore bodies hosted in carbonate rocks. Some historic mines are presently being rehabilitated by Chinese and other foreign companies. The Company's exploration is targeting similar high-grade carbonate-hosted copper and zinc mineralization.

The project area is located approximately 70 kilometres west of the capital city of Brazzaville. Most of the project area is accessible by road and the rail line connecting Brazzaville with the port city of Point Noire passes between 5 and 30 kilometres south of the major prospects identified to date. Recent mapping and sampling completed on the Company's licenses has identified examples of all four styles of mineralization that has historically produced in the District.

• Copper-dominant karst-fill mineralization (3-5% copper),
• High-grade (>10% copper) chalcocite mineralization replacing specific carbonate horizons,
• Fracture controlled moderate grade copper mineralization (1-2% copper), and
• Lead-zinc veins and carbonate replacement bodies (5-15% lead and zinc).

The Company acquired the exploration licenses in late 2009 and began field work consisting of soil sampling, mapping and prospecting shortly thereafter. This work has extended known occurrences and historic prospects and identified several new prospects and trends. Rock chip sampling and mapping continues to help define these prospects. Induced polarization (IP) surveys over the most prospective areas were completed in December 2010. The results are being reviewed to decide whether follow-up drilling is warranted. Work on the project is on hold for the rainy season which lasts until late June.

EXPLORATION HIGHLIGHTS UPDATE

South America

Los Helados Porphyry Copper/Gold Project, Chile

A drill program completed in mid-2010 successfully extended the porphyry copper mineralization through a series of step outs from a key hole, LH-04, drilled in late 2009. LH-04 had intersected 762m of 0.43% copper and 0.22 grams/tonne gold including 345m of 0.57% copper and 0.21 grams/tonne gold. The results of the step out program confirmed the presence of a large mineralized porphyry copper system that extends approximately 1,000 metres north-south and 700 metres east-west. The system is open to the west and south. The drilling as well as surface mapping and sampling completed during the program also confirmed the potential for high sulfidation gold mineralization in the upper (eastern) portions of the Los Helados system.

The current drill program which began in December, 2010 resulted in the best holes drilled to date at this project. Hole LH-12 returned 711 M of 0.54% copper and 0.26 g/t gold and Hole LH-13 returned 562.3 M of 0.54% copper and 0.25 g/t gold. Of particular interest is the fact that in both of these holes significant copper grade extends from the first contact with bedrock to the bottom and there are significant intervals of >0.8% copper in both LH-13 and LH-14. Accessory gold is present from top to bottom. The ongoing program will include at least another 7 to 8 holes and drilling is expected to continue until the end of the summer exploration season in mid-April. Weather and time permitting, the Company hopes to complete sufficient drilling in this zone to permit calculation of an initial resource estimate by the end of 2011.

LH-12:	From	To	Length	Cu (%)	Au (g/t)
Total hole	40	751	711	0.54	0.26
incl.	172	236	64	0.59	0.46
& incl.	306	332	26	0.68	0.30
& incl.	348	392	44	0.79	0.31
& incl.	516	630	114	0.67	0.19
& incl.	636	720	84	0.69	0.19
LH-13:	From	To	Length	Cu (%)	Au (g/t)
Upper section	18	180	162	0.20	0.18
Lower section	180	742.3	562.3	0.54	0.25
incl.	434	646	212	0.68	0.30
& incl.	658	710	52	0.82	0.26
LH-14:	From	To	Length	Cu (%)	Au (g/t)
Total hole	60	715	655	0.26	0.09
incl.	536	582	46	0.42	0.10
& incl.	588	622	34	0.41	0.11
& incl.	658	704	46	0.56	0.18
or incl.	694	704	10	0.83	0.22

Intervals are core lengths.

The higher grade mineralization reported above is hosted within a magmatic-hydrothermal breccia body that, based on mapping and drilling to date, has an estimated area of approximately 500 metres by 600 metres and extends to depths of more than 700 metres although further drilling is required to confirm these dimensions. Preliminary interpretation suggests that LH-12 and LH13 were drilled largely within the breccia body. LH-14 appears to have been collared to the east of the breccia and only intersected it at depth. It is noteworthy that hole LH-14 contains good grade mineralization where it interested the breccia body at depth. Based on drilling to date the breccia body appears to be open to the west of holes LH-12 and LH-13.

The higher grade mineralization is associated with potassic alteration which is represented by strong biotite alteration. In the upper part of the system the potassic alteration is overprinted by a chlorite-sericite assemblage that resulted in the introduction of pyrite and alteration of magnetite to hematite and apparently a slight reduction in copper grade. Copper mineralization occurs primarily as chalcopyrite in both veinlets and breccia matrix. There is a close association of chalcopyrite with magnetite. Minor bornite has been identified in the deepest portions of several holes. Bornite typically occurs in the deeper parts of porphyry systems and comprises the high grade core in many systems. Several recent high grade discoveries in Chile, including Los Sulfatos, which is part of the Los Bronces mining complex owned by Anglo American, involved deep drilling that intersected a bornite-rich core to the system. Based on the bornite observed towards the bottom of several holes and mineral zoning seen in systems like Los Sulfatos, there is a possibility that bornite may increase at depths of >750 m at Los Helados, potentially giving rise to higher copper and gold contents. The Company is considering drilling a deep hole later this season to test this idea.

Los Helados is one of several large porphyry copper-gold systems including the Company's Josemaria and Filo del Sol projects all located with the large block of contiguous claims that the company controls in Region 3 Chile and adjacent San Juan Province, Argentina. Nearby deposits held by other companies include Caserones-Regalito (Pan Pacific Copper) and El Morro (Goldcorp/New Gold). The Company holds a 60% interest in the Los Helados project. Japan, Oil, Gas, and Metals National Corporation ("JOGMEC") holds the remaining 40% interest in the project. Both parties contribute their pro-rata share of exploration expenditures.

Josemaria Porphyry Copper/Gold Project, Argentina

Drilling is also underway at the Josemaria project, located approximately 15 kilometers east of Los Helados in northern San Juan Province, Argentina. Josemaria has a previously announced NI 43-101 inferred resource of 460Mt @ 0.4% Cu and 0.3 g/t Au. This year's drilling at Josemaria is focused on discovering extensions of the known deposit under post-mineralization cover and testing a strong chargeability anomaly north of the current resource. The current 2,500 meter drill program is funded by JOGMEC who are earning a 40% interest in the project. Approximately 1000 meters have been completed to date.

Filo del Sol Porphyry Copper/Gold Project, Argentina

Previous drilling at Filo del Sol has identified near surface copper oxides and gold within a large diatreme breccia. Most of the drilling to date has focused on shallow copper sulfate mineralization and deeper copper sulfide in the southern part of the project area. The main copper sulfate mineral, chalcanthite, is water soluble and potentially amenable to low cost heap leaching. Chalcanthite was an important component of copper production from Chuquicamata in the early part of the last century.

A recent review of drill data from Filo del Sol identified several compelling gold targets in the northern part of the project area. A planned 2,000 meter drill program has been deferred until next season to allow the Company to focus on completing sufficient drilling at Los Helados to permit calculation of an initial resource. Drilling is now planned for the fourth quarter of 2011 and will follow up some of the better gold results from previous drilling and as well as better define the extent of the near surface copper sulfate mineralization.

Colmillos, Chile

Colmillos is an exciting early stage porphyry copper project located east of Ovalle, Chile. Mapping and sampling at Colmillos have defined a 4.3 kilometer trend of tourmaline breccia bodies, local visible copper oxide mineralization and anomalous copper and molybdenum geochemistry. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. An access road has recently been completed and an IP survey is underway. An initial drill program of up to 2,000 meters in 6 to 8 holes is planned for this season.

Tamberias, Chile

On March 25, 2011 the Corporation entered into an option agreement with Compania Minera Tamberias SCM whereby the Corporation can earn a 100% interest in the Tamberias property by making optional payments totaling US$ 20,000,000 on or before June 30, 2020. Compania Minera Tamberias SCM will retain a 1.5% NSR royalty that will be paid only after the Corporation has recovered all of its exploration and development costs. The initial payment of US$200,000 was made upon signature of the Agreement. The Tamberias property is located in Region 3, Chile and is adjacent to the Filo del Sol Project discussed above. Work on the Tamberias property by previous operators has defined potential for both porphyry copper and high-sulfidation gold mineralization. An exploration program expected to include geophysics and drilling is planned for the fourth quarter of 2011.

Africa

Bada Potash Project, Eritrea

Initial mapping and geophysical surveying is underway on the Company's recently awarded Bada potash license located approximately 35 kilometers from the Red Sea coast of Eritrea. NGEx's license covers the northern portion of the Dallol evaporite basin which in Ethiopia hosts the historic potash deposits of Musley held by Sainik Coal Company, India and Dallol, held by Allana Resources, Canada. The Eritrean portion of the basin hosts the Colluli potash deposit which is currently being explored by South Boulder Mines of Australia. All three areas are being actively explored with resource estimates recently issued for all three projects. Recent results released by South Boulder Mines highlight the potential for shallow potash mineralization on the Eritrean side of the border. NGEx's license lies approximately 20 kilometers northwest of South Boulder's license and covers the northwest extension of the same basin. Any discovery of potash on the Eritrean side of the border will have significant logistical advantages over deposits on the Ethiopian side because they have much closer access to the Red Sea coast.

NGEx has contracted experienced potash consultants and has begun an initial program of gravity and magnetic surveying to define the basin depth and geometry, to be followed by a reconnaissance diamond drilling program of approximately 1000 meters in three holes. Subject to availability of appropriate drill rigs, the initial drilling should be completed by the end of the second quarter and is expected to provide important information to guide a more extensive exploration program to commence in the second quarter.

VMS Project, Eritrea

The Company holds approximately 650 square kilometers covering prospective stratigraphy near Nevsun Resources' recently commissioned Bisha Mine. The successful development of the Bisha Mine has significantly increased investor confidence in Eritrea. The Company's land position hosts the Hambok Deposit for which an initial NI 43-101 resource estimate was announced in 2009 as well as the high grade Aradaib discovery announced in 2010. Previously released drill results from Aradaib include 13 meters of 3.3% Cu, 5.6% Zn, 1.8 g/t Au, and 46 g/t Ag.

In late 2010 the Company completed a high resolution helicopter- borne electromagnetic, magnetic, and radiometric (VTEM) survey covering the Company's entire land position. The survey was designed to identify volcanic-hosted massive sulfide (VMS) mineralization beneath recent cover. Initial screening of the survey results has highlighted 18 anomalies to be geophysically modeled for massive sulfide bodies. A drill program to test targets generated by the VTEM survey and to follow-up on the positive results from Aradaib is planned for the second quarter of 2011. The size of the drill program will be determined once initial follow-up is completed.

Reneville and Kingouala Copper/Lead/Zinc projects, Congo Brazzaville

Mapping, surveying and sampling carried out during 2010 at the 100%-owned Reneville and Kingouala exploration licenses in the Republic of Congo (Congo-Brazzaville) have defined targets with potential for high-grade carbonate-hosted copper-lead-zinc mineralization in Upper Proterozoic rocks in the historic Boko Songo-Mindouli district. There was significant high grade production from the district in French colonial times and some historic mines are presently being rehabilitated by Chinese and other foreign companies. The project area is located approximately 70 kilometres west of the capital city of Brazzaville. Most of the project area is accessible by road and the rail line connecting Brazzaville with the port city of Point Noire passes between 5 and 30 kilometres south of the major prospects identified to date. The Company acquired the exploration licenses in late 2009 and began field work consisting of soil sampling, mapping, and prospecting shortly thereafter. This work has extended known occurrences and historic prospects and identified several new prospects and trends. Rock chip sampling and mapping continues to help define these prospects.

Burkina Faso

The Company completed the sale of its Burkina Faso subsidiary to Indigo Exploration Inc. in consideration for $65,000 in cash and 3,000,000 shares of Indigo. The Indigo shares were sold in late 2010.

Canada

GJ Project, BC

GJ is a copper-gold project, located in northern British Columbia. The Company has optioned the project to Teck which has the right to earn an initial 51% by spending $12,000,000 by December 31, 2014 and up to a 75% interest by spending an aggregate of $44,000,000 by December 31, 2020. Teck has received internal approval for a $4.5 million exploration program consisting of ground geophysics and up to 5,000 meters of drilling. The objective of the program is to add to the previously reported NI 43-101 compliant resource and to test the potential for high grade copper-gold zones similar to those discovered at Imperial Metals' nearby Red Chris project. Exploration is expected to begin in late June, 2011 and continue through to September.

Outlook

The Company has a strong portfolio including several potential "company maker" projects which we believe are not yet fully valued relative to comparable projects in their respective regions. Expected news catalysts for 2011 offer excellent upside for our investors which we expect to be driven by positive exploration results and resource updates. We look forward to an exciting year ahead as we receive the results from our $20 million exploration program.

EXPLORATION HIGHLIGHTS UPDATE

During the quarter ended September 30, 2010 the Company:

• Received positive drill results from follow up holes at its Aradaib VMS prospect in Western Eritrea.
• Started a geophysical program on its base metal projects in Congo.
• Completed planning for a very active field season in South America that will include drilling on five projects. Drilling is expected to start in November, 2010 and continue through to May, 2011.
• Completed planning for an airborne geophysical survey covering its license in western Eritrea. The survey is expected to start in early November.
• Signed a farm out agreement with Teck Resources Ltd for its GJ copper-gold project in B.C.

SOUTH AMERICAN PROJECTS

During the quarter ended September 30, 2010, the Company focused on planning for the upcoming summer field season. Our South American projects will account for 60% of our expenditures next year. We plan to drill a total of approximately 15,000 metres on 5 copper-gold projects in the Andes.

Jose Maria Project, Argentina

Jose Maria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Jose Maria contains a NI 43-101 compliant inferred resource of 460 million tonnes at 0.39% tonnes copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The Jose Maria resource is open in several directions.

The 100% owned Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Maria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Maria JEA provides Jogmec the option to acquire 40% of the Company's interest in these properties. In consideration, Jogmec paid US$1 million upon signing of the Jose Maria JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. Jogmec has met its first year work commitment as of March 31, 2010. Once Jogmec has earned its interest, the partners will fund ongoing expenditures pro-rata to their ownership interest.

The Josemaria deposit is open to the north where geophysics done at the end of the last season has identified a large area of high chargeability. The system is also open to the east where it disappears under younger cover rocks. We plan approximately 2,500 metres of drilling to test these two targets. This exploration program is 100% funded by Jogmec. Drilling is scheduled to begin in mid November, 2010.

Vicuna Project, Argentina and Chile

The Vicuna properties comprise a large land package of approximately 18,300 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. The Vicuna Properties are adjacent to Jose Maria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro rata share of expenditures.

The most important current target is Los Helados located in Region 3 Chile approximately 10 kilometres northwest of Jose Maria. Past drilling included LH-04 with 762 metres of 0.43% copper and 0.22 g/t gold. A deep penetrating MIMDAS geophysical survey was completed in April 2009 to better define the mineralization at depth and to the north and west of LH 04.

Drilling last season defined a copper mineralized zone at Los Helados measuring about 1,000 metres by 600 metres wide by 450 metres thick. The best grades including 345 metres @ 0.6 Cu, 0.2 g/t Au are in the southern part of the zone. Drilling this field season will focus on better defining this higher grade core of the system. Approximately 7,500 metres of drilling is planned beginning late in the fourth quarter of 2010.

The Vicuna project includes several copper gold targets that have been explored in the past including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme, the same type of geological structure that hosts the Veladero Deposit. Most of the drilling to date has focused on a shallow copper oxide resource and a deeper sulfide copper target in the southern part of the project area. However, a recent review of project data identified several compelling near surface gold targets in the northern part of the project area. Approximately 2,000 metres of drilling will be directed toward following up some of the better gold results from previous drilling and testing the gold potential of the diatreme. Drilling is expected to begin early in the first quarter of 2011.

Other Chilean Projects (Colmillos and Andrea)

Regional exploration and prospecting continued on a number of early stage copper-gold projects in Chile where mapping and sampling programs have defined targets with porphyry copper-style mineralization in poorly explored regions of the productive Miocene-Pliocene and Eocene-Oligocene Belts. Colmillos and Andrea projects are new grass roots porphyry copper discoveries made by NGEx geologists while exploring alteration and structural targets identified through a combination of in-house satellite image processing and compilation of regional geology.

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. The licenses were acquired by staking. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Copper mineralized tourmaline breccias are a common feature of many major porphyry copper systems. We will build an access road, do geophysics over the alteration zone during the fourth quarter 2010 and then drill up to 2,000 metres starting in the first quarter of 2011.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600m long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration with abundant iron oxides (goethite > jarosite > hematite).

The results of geochemical sampling and alteration mapping to date indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration which has strongly anomalous copper- up to 0.6% in rock chips. The planned program is similar to that for Colmillos. We will build an access road and do geophysics during the fourth quarter 2010, and drill approximately 2,000 metres in the first quarter of 2011.


NORTH AMERICAN PROJECT

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% working interest subject to an earn-in option with Teck Resources Limited ("Teck") as described below. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a measured and indicated resource, of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

Teck's Earn-In Option - In August 2010, the Company entered into an earn-in option agreement with Teck whereby Teck can earn up to a 75% interest in the GJ and Kinaskan properties by paying the Company $100,000 (paid) on signing of the Agreement and exercising the following options:

First Option: Teck will have the option to earn an initial 51% interest by making cumulative expenditures of $12 million on or before December 31, 2014 of which a minimum of $2.5 million in expenditures, including a firm commitment of 1,500 meters of drilling, must be spent on or before December 31, 2011.

Second Option: Upon exercise of the First option, Teck will have a one-time option to elect to earn an additional 9% interest for a total of 60% interest by sole funding another $12 million in expenditures prior to December 31, 2017 with minimum annual expenditure of $2 million per year.

Third Option: Upon exercising the second option Teck will have a one-time option to elect to earn an additional 15% interest for a total of 75% interest by sole funding another $20 million in expenditures prior to December 31, 2020.

After the formation of a joint venture at any of the earn-in periods, expenditures are to be funded by the Company and Teck in pro rata to the interest held. If any ownership interest falls below 10% it will convert to a 2% Net Smelter Return after payback of all project expenditures.

AFRICAN PROJECTS

Eritrea

The Company holds two exploration licenses which cover the strike extension of the rocks hosting Nevsun Resources's Bisha copper-zinc-gold deposit. The Company's most advanced project is the Hambok deposit which has a NI 43-101 compliant indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The wide spaced drilling to date suggests the presence of a higher grade core to the Hambok Deposit although more drilling is required to better define this zone. This report is filed under the Company's profile on SEDAR.

In the first half of the year the Company completed an approximately 2,000 metre drill program that targeted volcanogenic massive sulphide targets on its licenses. The most significant results were obtained from Aradaib prospect.

The first hole at Aradaib, ARD-10-001, tested a gossan outcrop highly anomalous in gold, copper, zinc, silver and lead returning a 17 metre interval of massive and semi-massive sulphides including: 10 metres @ 1.22% Zn, 1.89% Cu, 0.92 g/t Au, 21 g/t Ag and a consecutive zinc rich interval of 7m 15.15% Zn, 0.99% Cu, 0.32 g/t Au, 33 g/t Ag. A second hole, ARD-10-002, drilled 230 metres to the northeast, intersected altered host volcanic rocks with pervasive disseminated and stringer sulphides, returning a 3 metre interval of 1.30% Zn from 60.0 metres depth. The remainder of the hole was strongly anomalous in copper and zinc.

The results from four follow-up holes were received during the quarter ended September 30, 2010. Two holes (ARD-10-03 and 04) confirmed the projected down plunge and down dip extensions of the massive sulfides intersected in ARD-10-01. ARD-10-03 tested 30 metres down plunge from the mineralization in ARD-10-01 and returned 13.0 metres grading 5.59% Zn, 3.31% Cu, 1.85g/t Au and 46g/t Ag from a 24.4 metre intersection of massive sulfide and stringer mineralization. Hole ARD-10-04 drilled on the same section as ARD-10-01 but intersecting the zone 25m deeper, returned 4.0m grading 0.31% Zn, 3.49% Cu, 0.68 g/t Au and 38g/t Ag from massive sulfides at 108 metres and 7.0 metres at 1.70% Zn, 2.70% Cu, 0.82g/t Au and 26g/t Ag from 118 metres. The third hole in this program, ARD-10-05, was drilled under gossan outcrops approximately 300 metres north of the other two holes, and intersected a thick interval of altered and oxidized volcanic rock with disseminated and stringer mineralization but no significant values. The style of mineralization that was intercepted is interpreted as proximal to a massive sulfide body but it is possible that these drill holes over- or under-cut massive sulphide mineralization.

A helicopter-borne Mag and EM (Magnetics and Electro-magnetics) survey is expected to begin in November, 2010. The survey will cover all of the Company's current licenses in Western Eritrea and is expected to generate numerous new targets in the extensive areas of shallow cover that have not been amenable to surface prospecting. It is also expected to help to define the strike extent and geometry of poorly exposed targets like Aradaib and Hambok. Drilling of any targets identified by the geophysical survey is planned for the first quarter of 2011.

Congo-Brazzaville

The Company has two exploration licenses in Congo-Brazzaville. The licenses cover 1,579 square kilometres of ground in the Boko Songo-Mindouli trend where mining during French colonial times exploited high grade copper and zinc ore bodies hosted in carbonate rocks. Some historic mines are presently being rehabilitated by Chinese and other foreign companies. The Company's exploration is targeting similar high-grade carbonate-hosted copper and zinc mineralization.

The project area is located approximately 70 kilometres west of the capital city of Brazzaville. Most of the project area is accessible by road and the rail line connecting Brazzaville with the port city of Point Noire passes between 5 and 30 kilometres south of the major prospects identified to date. Recent mapping and sampling completed on the Company's licenses has identified examples of all four styles of mineralization that has historically produced in the District.

• Copper-dominant karst-fill mineralization (3-5% copper),
• High-grade (>10% copper) chalcocite mineralization replacing specific carbonate horizons,
• Fracture controlled moderate grade copper mineralization (1-2% copper), and
• Lead-zinc veins and carbonate replacement bodies (5-15% lead and zinc).

The Company acquired the exploration licenses in late 2009 and began field work consisting of soil sampling, mapping and prospecting shortly thereafter. This work has extended known occurrences and historic prospects and identified several new prospects and trends. Rock chip sampling and mapping continues to help define these prospects. Induced polarization (IP) surveys over the most prospective areas are underway with follow-up drilling planned for later in the year.

EXPLORATION HIGHLIGHTS

During the quarter ended June 30, 2010 the Company:

• Received drill results from its Los Helados project in Chile.
• Completed geophysical surveys at both Los Helados, Chile and Josemaria, Argentina.
• Drilled follow up holes at its Aradaib VMS prospect in Western Eritrea.
• Received initial results from regional mapping and sampling on its base metal projects in Congo.
• Received encouraging results from two early stage copper projects in Chile.
• Closed the sale of the wholly owned subsidiary holding the Company's Burkina Faso gold projects to Indigo Exploration Ltd.

SOUTH AMERICAN PROJECTS

During the quarter the Company received results from the drill program at its Los Helados copper-gold project in Chile and as well as results from geophysical surveys at both Los Helados and the Josemaria project in Argentina. Results were also received from initial mapping and sampling at Andrea and Colmillos, two earlier stage copper projects in Chile. Field work the South American projects have now finished due to the onset of the southern hemisphere winter but will resume in the fourth quarter of 2010.

Jose Maria Project, Argentina

Jose Maria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Jose Maria contains a NI 43-101 compliant inferred resource of 460 million tonnes at 0.39% tonnes copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The Jose Maria resource is open in several directions.

The 100% owned Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Maria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Maria JEA provides Jogmec the option to acquire 40% of the Company's interest in these properties. In consideration, Jogmec paid Suramina US$1 million upon signing of the Jose Maria JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. Jogmec has met its first year work commitment as of March 31, 2010. Once Jogmec has earned its interest, the partners will fund ongoing expenditures pro-rata to their ownership interest.

The Company completed a seven hole, 2,253 metre drill program in December, 2009. The results of the drilling were released during the previous quarter. In the current quarter the Company completed a 27 line kilometre IP/Resistivity survey that filled in gaps in the geophysical coverage to the north and west of the known resource. The survey confirmed the extension of the chargeability anomaly associated with mineralization for another 1,000 metres to the north of current drilling. The results confirm that the already large Jose Maria deposit lies within a much larger mineralized porphyry system. The next drill program planned to start in November, 2010 will focus on finding higher grade zones within the newly identified extensions.

Vicuna Project, Argentina and Chile

The Vicuna properties comprise a large land package of approximately 18,300 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. The Vicuna Properties are adjacent to Jose Maria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro rata share of expenditures.

The Vicuna project includes several copper gold targets that have been explored in the past including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme hosted gold target and a deeper porphyry copper target.

The most important current target is Los Helados located located in Region 3 Chile approximately 10 kilometres northwest of Jose Maria. Past drilling included LH-04 with 762 metres of 0.43% copper and 0.22 g/t gold. A deep penetrating MIMDAS geophysical survey was completed in April 2009 to better define the mineralization at depth and to the north and west of LH 04.

During the first half of 2010, the Company completed a 4,407 metre drill program consisting of 7 diamond drill holes at Los Helados. The holes were all significant step outs from LH-04 and the results confirm the presence of a large mineralized porphyry copper system that extends approximately 1,000 metres north-south and 700 metres east-west. The system is open to the north, south, and east.

Highlights from this year's drilling include LH-05 which intersected 465 metres of 0.39% copper, 0.1 grams/tonne gold including 70 metres of 0.53% copper, 0.13 grams/tonnes gold; LH-06 430 metres of 0.46% copper, 0.15 grams/tonnes gold; and LH-07 with 18 metres of 0.51% copper, 0.15 grams/tonne gold within a continuous 744 metre interval of lower grade material. The drilling as well as surface mapping and sampling completed during the field season also confirm the potential for high sulfidation gold mineralization in the upper (eastern) portions of the Los Helados system. Planning is underway for a follow-up drill program scheduled to start in the fourth quarter of 2010.

Other Chilean Properties

Regional exploration and prospecting continued on a number of early stage copper-gold projects in Chile where mapping and sampling programs have defined targets with porphyry copper-style mineralization in poorly explored regions of the productive Miocene-Pliocene and Eocene-Oligocene Belts. Colmillos and Andrea projects are new grass roots porphyry copper discoveries made by NGEx geologists while exploring alteration and structural targets identified through a combination of in-house satellite image processing and compilation of regional geology.

The Colmillos project consists of 100% owned exploration licenses covering 3,400 hectares. The licenses were acquired by staking. Mapping and sampling to date have defined a 4.3 by 0.7 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. To date, 258 samples of talus fines, 76 rock chip samples and 6 float samples have been collected. In the southern part of the property, an east-west, 1.2 kilometres long line of talus samples taken over strongly oxidized and leached intrusives and breccias returned an average 292 ppm copper and 45 ppm molybdenum. The 41 rock samples collected from this area returned an average of 232 ppm copper and 35 ppm molybdenum with maximums of 3,936 ppm copper and 388 ppm molybdenum. All samples are from strongly oxidized and leached rock and therefore these values are considered strongly anomalous. The copper and molybdenum values as well as the observed surface alteration features are typical of the leached caps of porphyry copper systems. Results to date are encouraging and planning is underway to construct a road to access the area and to conduct a geophysical survey over the breccia trend.

The Andrea Project consists of 100% owned exploration licenses covering 1,300 hectares. The alteration zone extends over an area of 3 by 2 kilometres and grades outward from a 600m long central core of potassic alteration with disseminated secondary biotite and stockwork pyrite, magnetite and chalcopyrite, to a large area of sericitic alteration with abundant iron oxides (goethite > jarosite > hematite).

Exploration work to date consists of 149 talus fines and 80 rock samples, and 1:10,000-scale outcrop mapping. In detail, 31 talus samples that cover the area of potassic alteration average 1,770 ppm copper and 45 ppm molybdenum (and 36 ppb gold); rock samples from this area average 1,746 ppm copper and 31 ppm molybdenum and assayed up to a maximum of 6,016 ppm copper and 253 ppm molybdenum with a nucleus of 600 metres by 200 metres that averaged 2,400 ppm copper. These results are considered to be very encouraging for this early stage of exploration.

The results of geochemical sampling and alteration mapping to date indicate that a significant copper-molybdenum porphyry system has been identified at Andrea. The best results to date correspond to the zone of potassic alteration. Planning is underway to construct a road into the Andrea area to allow access for geophysical surveying and drilling. It is expected that this work will begin in the fourth quarter of 2010.

NORTH AMERICAN PROJECTS

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% working interest in the property. The BC and Federal Governments recently announced plans to build a new power line along the Highway 37 corridor. When completed the proximity of grid power would have a positive effect on the economics of the GJ project. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a measured and indicated resource, of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

The positive news from the Government with regards to infrastructure improvements as well as positive drill results from the Red Chris Deposit have raised the profile of the GJ project and the Company has received several expression of interest in the project. The Company will continue to consider all options to realize value from its investment in GJ.

AFRICAN PROPERTIES

Eritrea

The Company holds two exploration licenses which cover extension of the rocks hosting Nevsun Reources's Bisha copper-zinc-gold deposit. The Company's Mogoraib License hosts the Hambok deposit which has a NI 43-101 compliant indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The wide spaced drilling to date suggests the presence of a higher grade core to the Hambok Deposit although more drilling is required to better define this zone. This report is filed under the Company's profile on SEDAR.

In the first half of the year the Company completed an approximately 2,000 metre drill program that targeted volcanogenic massive sulphide targets on its Mogoraib and Kerkebeit licenses. The most significant results were obtained from Aradaib prospect.

The first hole at Aradaib, ARD-10-001, tested a gossan outcrop highly anomalous in gold, copper, zinc, silver and lead returning a 17 metre interval of massive and semi-massive sulphides including: 10 metres @ 1.22% Zn, 1.89% Cu, 0.92 g/t Au, 21 g/t Ag and a consecutive zinc rich interval of 7m 15.15% Zn, 0.99% Cu, 0.32 g/t Au, 33 g/t Ag. A second hole, ARD-10-002, drilled 230 metres to the northeast, intersected altered host volcanic rocks with pervasive disseminated and stringer sulphides, returning a 3 metre interval of 1.30% Zn from 60.0 metres depth. The remainder of the hole was strongly anomalous in copper and zinc. Four follow-up holes were drilled during the current quarter. The objective of the holes was to determine the geometry of the Aradaib mineralization. Two of the holes hit visually identified massive sulfide. One hole hit a zone of strongly oxidized rock but no massive sulfide and may have overshot plunging mineralization. The fourth hole was drilled to test a massive barite occurrence located on strike approximately 1,500 metres south of the Aradaib gossan. Barite in the area is often associated with gold mineralization. This hole intersects 15 metres of strongly oxidized barite rich material. Results from all holes are pending.

Field work is now on hold due to the onset of the rainy season but is expected to resume in September. Planning is underway for a helicopter-borne Mag and EM (Magnetics and Electro-magnetics) survey that is expected to begin in late September 2010. The survey will cover all of the Company's current licenses in Western Eritrea and is expected to generate numerous new targets in the extensive areas of shallow cover that have not been amenable to prospecting. It is also expected to help to define the strike extent and geometry of poorly exposed targets like Aradaib and Hambok.

Burkina Faso

During the second quarter of 2010 the Company sold its Burkina Faso subsidiary to Indigo Exploration Inc ("Indigo"). The consideration for the transaction was $65,000 in cash and 3,000,000 shares of Indigo at a deemed price of $0.15 per share.

Congo-Brazzaville

The Company has two exploration licenses in Congo-Brazzaville. The licenses cover 1,579 square kilometres of ground in the Boko Songo-Mindouli trend where mining during French colonial times exploited high grade copper and zinc ore bodies hosted in carbonate rocks. Some historic mines are presently being rehabilitated by Chinese and other foreign companies. The Company's exploration is targeting similar high-grade carbonate-hosted copper and zinc mineralization.

The project area is located approximately 70 kilometres west of the capital city of Brazzaville. Most of the project area is accessible by road and the rail line connecting Brazzaville with the port city of Point Noire passes between 5 and 30 kilometres south of the major prospects identified to date. Recent mapping and sampling completed on the Company's licenses has identified examples of all four styles of mineralization that has historically produced in the District.

• Copper-dominant karst-fill mineralization (3-5% copper),
• High-grade (>10% copper) chalcocite mineralization replacing specific carbonate horizons,
• Fracture controlled moderate grade copper mineralization (1-2% copper), and
• Lead-zinc veins and carbonate replacement bodies (5-15% lead and zinc).

The Company acquired the exploration licenses in late 2009 and began field work consisting of soil sampling, mapping and prospecting shortly thereafter. This work has extended known occurrences and historic prospects and identified several new prospects and trends. Rock chip sampling and mapping continues to help define these prospects. The Company plans to conduct induced polarization (IP) surveys over the most prospective areas in September 2010 with follow-up drilling planned for later in the year.

EXPLORATION HIGHLIGHTS

During the three months ended March 31, 2010 the Company:

• Completed a 4,407 metre drill program at the Los Helados copper-gold Project in Chile. Results are expected by the second quarter of 2010
• Completed a 1,545 metre drill program to test a zone of higher grade mineralization at its Hambok copper-zinc deposit and to test new targets elsewhere on its licenses in Eritrea. Encouraging results were obtained from the Aradaib prospect where a scout drill hole returned 10 metres of 1.9% copper, 1.2% zinc, 0.9 grams/tonne gold, 21 grams/tonne silver followed by 7 metres 0.99% copper, 15.1% zinc, 0.4 grams/tonne gold, 33 grams/tonne silver.
• Completed initial mapping and soil sampling on its newly granted exploration licenses in the Republic of Congo.

SOUTH AMERICAN PROJECTS

The Company's efforts in South America focused on a drill program at its Los Helados copper-gold project in Chile as well as mapping and sampling on two earlier stage copper projects in Chile. Final results were received from the drill program at the Josemaria project in Argentina which was completed during the previous quarter.

Jose Maria Project, Argentina

Jose Maria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Jose Maria contains a NI 43-101 compliant inferred resource of 460 million tonnes at 0.39% tonnes copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The Jose Maria resource is open in several directions.

The Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Maria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Maria JEA provides Jogmec the option to acquire a 40% interest in these properties. In consideration, Jogmec paid Suramina US$1 million upon signing of the Jose Maria JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. Jogmec has met its first year work commitment as of March 31, 2010. Once Jogmec has earned its interest, the partners will fund ongoing expenditures pro-rata to their ownership interest.

During the quarter the Company received results from a seven hole, 2,253 metre drill program completed in December, 2009. The objective of the drilling was to test the potential for a significant expansion of the existing resource. All holes were drilled outside the 0.3% copper shell of the current resource. The drilling targeted coincident moderate chargeability and strongly anomalous copper and gold in soils located on the periphery of the known resource. Six of the seven holes drilled intersected thick sections of porphyry style alteration and sulfide mineralization outside the current resource envelope. Highlights include DDH-08 with 290m @ 0.3% Cu, 0.18 g/t Au; DDH-10 with 88m @ 0.27% Cu, 0.2 g/t Au including 18m@ 0.49% Cu, 0.26 g/t Au. The results confirm that the already large Josemaria Deposit lies within a much larger mineralized porphyry system. Future exploration will focus on finding higher grade zones within the newly identified extensions

Vicuna Project, Argentina and Chile

The Vicuna properties comprise a large land package of approximately 18,300 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. The Vicuna Properties are adjacent to Jose Maria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro rata share of expenditures.

The Vicuna project includes several copper gold targets that have been explored in the past including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme hosted gold target and a deeper porphyry copper target.

The most important current target is Los Helados located located in Region 3 Chile approximately 10km northwest of Josemaria. Past drilling included LH-04 with 762 m of 0.43% copper and 0.22 g/t gold. A deep penetrating MIMDAS geophysical survey was completed in April 2009 to better define the mineralization at depth and to the north and west of LH 04. During the quarter the Company completed a 4,407 metre drill program consisting of 7 diamond drill holes at Los Helados. This quarters drilling tested the MIMDAS anomaly as well as other targets. Results are expected in the second quarter of 2010.

Chilean Properties

Regional exploration and prospecting continued on a number of early stage copper-gold projects in Chile. Reconnaissance mapping and geochemical sampling was carried out on two porphyry copper prospects Colmillos and Andrea both located in central Chile.

At Colmillos mapping has defined a 2 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Planning is underway to construct a road to access the area and to conduct a geophysical survey over the breccia trend. It is expected that this work will begin in the third quarter of 2010. At Andrea mapping has defined a 1000 metre by 500 metre zone of potassic alteration with stockwork veining. Strongly anomalous copper values were obtained from sampling of talus fines over this zone. Further work is planned at Andrea. The objective of work at Andrea and Colmillos is to develop drill targets by the end of 2010.

Other South American Properties

There was no exploration activity on the Company's other properties in Argentina, Colombia and Peru during the first quarter ended March 31, 2010. The Company continues efforts to joint venture or divest of its non-core properties.


NORTH AMERICAN PROJECTS

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% working interest in the property. The BC and Federal Governments recently announced plans to build a new power line along the Highway 37 corridor. When completed the proximity of grid power would have a positive effect on the economics of the GJ project. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a measured and indicated resource, of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

The positive news from the Government with regards to infrastructure improvements as well as positive drill results from the Red Chris Deposit have raised the profile of the GJ project and the Company has received several expression of interest in the project. The Company will continue to consider all options to realize value from its investment in GJ.

Zymo Project, Canada

The Zymo copper gold property is located 40 kilometres west of Smithers in central British Columbia, Canada. The Company had an option to earn up to a 75% interest in the Zymo property from Eastfield Resources Ltd ("Eastfield"), which was relinquished subsequent to March 31, 2010. The Company therefore has no further interest in the property.


AFRICAN PROPERTIES

Eritrea

The Company holds two exploration licenses which cover extension of the rocks hosting Nevsun Reources's Bisha copper-zinc-gold deposit. The Company's Mogoraib License hosts the Hambok deposit which has a NI 43-101 compliant indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The wide spaced drilling to date suggests the presence of a higher grade core to the Hambok Deposit although more drilling is required to better define this zone. This report is filed under the Company's profile on SEDAR.

Work continued on an approximately 2,000 metre drill program that is targeting volcanogenic massive sulphide targets on its Mogoraib and Kerkebeit licenses. The most significant results were obtained from Aradaib prospect.

The first hole at Aradaib, ARD-10-001, tested a gossan outcrop highly anomalous in gold, copper, zinc, silver and lead returning a 17 meter interval of massive and semi-massive sulphides including: 10 meters @ 1.22% Zn, 1.89% Cu, 0.92 g/t Au, 21 g/t Ag and a consecutive zinc rich interval of 7m 15.15% Zn, 0.99% Cu, 0.32 g/t Au, 33 g/t Ag. A second hole, ARD-10-002, drilled 230 meters to the northeast, intersected altered host volcanic rocks with pervasive disseminated and stringer sulphides, returning a 3 meter interval of 1.30% Zn from 60.0 meters depth. The remainder of the hole was strongly anomalous in copper and zinc.

Drilling also tested possible extensions to the Hambok deposit identified by a gradient IP survey conducted last year as well as additional holes to better define the higher grade core of the Hambok Deposit. Results are pending.

Mapping, geochemical sampling, and a gravity survey were carried out during the quarter to try to define the size and extent of these gossan occurrences at Shukula and Lelit. The Shukula license covers a 400 metre long gossan outcrop with strongly anomalous gold and base metal values in surface sampling. The Lelit license covers the extension of the Shukula stratigraphy to the south.

Burkina Faso

On April 7, 2010 the Company signed a non-binding Letter of Intent to sell its Burkina Faso subsidiary to Indigo Exploration Inc ("Indigo"). The consideration for the transaction is $65,000 in cash and 3,000,000 shares of Indigo. The number of shares to be issued will be adjusted upward if the value upon closing is less than $450,000. The transaction is subject to completion of due diligence by Indigo and the parties completing a definitive agreement. The transaction is expected to close in the second quarter 2010.

Congo-Brazzaville

In late December, 2009 the Company received final approval of two exploration licenses in Congo- Brazzaville. The licenses cover 1579 square kilometres of ground in the Boko Songo-Mindouli trend where mining during French colonial times exploited high grade copper and zinc ore bodies hosted in carbonate rocks. Exploration is targeting similar high-grade carbonate-hosted Cu, Pb, and Zn mineralization.


The work to date has indentified seven targets with potential for carbonate hosted mineralization. During the quarter the Company collected 1846 soil and rock chip samples; assays are pending. Field work will resume in June after the current rainy season and will include additional mapping, rock chip sampling, trenching, and IP geophysical surveys in an effort to define drill targets by late 2010.

EXPLORATION HIGHLIGHTS

During the nine months ended December 31, 2009 the Company:

• Completed a 2,253 metre drill program at its Josemaria copper-gold project in Argentina. Drill results are expected in late March, 2010. A 3,700 metre drill program at the Los Helados Project in Chile began in early January, 2010.
• Started a 2,000 metre drill program to test targets on its licenses in Eritrea. The program will test new targets discovered in earlier regional reconnaissance programs, drill a possible extension of the Hambok Deposit, and try to better define an apparent higher grade core to the Hambok deposit. This program will continue into the first quarter of calendar 2010.
• Received approval for its exploration license applications in Congo-Brazzaville.
• Divested its option to earn a 70% interest in the Caballo Blanco gold project in Mexico to Goldgroup Resources in exchange for staged payments of $6 million, 9 million shares of Goldgroup, and a 1.5% net smelter return royalty.
• Divested its option to earn a 100% interest in the Nyieme gold project in Burkina Faso to Goldplat Plc in exchange for cash payments, a work commitment, and a 2% net smelter return royalty.

SOUTH AMERICAN PROJECTS

With the onset of the Southern Hemisphere summer in October, 2009 the Company's exploration programs in the Andes began in earnest with drilling on two advanced projects (Jose Maria and Los Helados) and target development work on earlier stage projects in Chile.

Jose Maria Project, Argentina

Jose Maria is a large copper/gold porphyry project located in San Juan Province, Argentina near the Vicuna group of properties described below. Jose Maria contains a NI 43-101 compliant inferred resource of 460 million tonnes at 0.39% tonnes copper and 0.30 grams/tonne gold at a 0.3% copper cut off. The Jose Maria resource is open in several directions. The Company acquired Jose Maria through its acquisition of Suramina completed in April 2009.

The Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Maria JEA") dated March 16, 2009 with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Maria JEA provides Jogmec the option to acquire a 40% interest in these properties. In consideration, Jogmec paid Suramina US$1 million upon signing of the Jose Maria JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. Jogmec plans to spend US$2 million (US$1.7 million spent to December 31, 2009) during the field season beginning in October 2009. Once Jogmec has earned its interest, the partners will fund ongoing expenditure pro-rata to their ownership interest.

During the December 2009 quarter the Company completed a seven hole, 2,253 metre drill program. The objective of the drilling was to test the potential for a significant expansion of the existing resource. All holes were drilled outside the 0.3% copper shell of the current resource. Complete assays are expected by the end of March, 2010.

Vicuna Project, Argentina and Chile

The Vicuna properties comprise a large land package of approximately 18,300 hectares that covers a number of porphyry copper and high sulfidation gold targets in San Juan Province, Argentina and immediately adjacent parts of Chile. The Vicuna Properties are adjacent to Jose Maria and are subject to a separate Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec in which the Company holds a 60% participating interest and Jogmec holds a 40% participating interest. Each party funds its pro rata share of expenditures.

The Vicuna project includes several copper gold targets that have been explored in the past including: Filo del Sol where previous drilling has indentified near surface copper oxides and gold within a diatreme hosted gold target and a deeper porphyry copper target. Another significant copper-gold system has been identified at Los Helados on the Chilean portion of the Vicuna Property. Drilling completed in the first half of 2009 included drill hole LH 04 which intercepted 762 metres of 0.43% copper and 0.22 grams/tonne gold with the final 43 metres grading 0.74% copper and 0.23 grams/tonne gold.

A deep penetrating MIMDAS geophysical survey was completed in the quarter ended June 2009 to better define the mineralization at depth and to the north and west of LH 04. This survey defined a chargeability anomaly measuring approximately 1,000 metres by 750 metres located just to the north of drill hole LH 04. Drilling to test this target began in early January, 2010 and is expected to continue through to the end of March, 2010. Approximately 3700 metres of diamond drilling is planned with the potential to expand the program if results are encouraging.

Cerro Cuadrado Property, Argentina

The 100% owned Cerro Cuadrado is a high grade silver/zinc project located in Santa Cruz Argentina. There was no work done on this project during the current quarter. Work in prior years identified multiple veins containing zinc, lead and silver. Highlights include CC-25, which returned 17.7 metres grading 106 g/t silver, 8.27% zinc, 3.96% lead. The vein system remains open along strike to the north. The company is actively seeking partners to do further exploration on the project.

Chilean Properties

Regional exploration and prospecting continued on a number of early stage copper-gold projects in Chile. Reconnaissance mapping and geochemical sampling was carried out on two porphyry copper prospects Colmillos and Andrea both located in central Chile. At Colmillos mapping has defined a 2 kilometre long trend of tourmaline breccia bodies with occasional copper oxides and strongly anomalous molybdenum analyses in rock chip samples. Planning is underway to construct a road to access the area and to conduct a geophysical survey over the breccia trend. At Andrea mapping has defined a 1000 metre by 500 metre zone of potassic alteration with stockwork veining. Strongly anomalous copper values were obtained from sampling of talus fines over this zone. Further work is planned at Andrea. The objective of work at Andrea and Colmillos is to develop drill targets by the end of the year.

Other South American Properties

There was no exploration activity on the Companies other properties in Argentina, Colombia and Peru during the nine months ended December 31, 2009. The Company continues efforts to joint venture or divest of non-core properties in Argentina.

NORTH AMERICAN PROJECTS

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. The Company has a 100% working interest in the property. The BC and Federal Governments recently announced plans to build a new power line along the Highway 37 corridor. When completed the proximity of grid power would have a positive effect on the economics of the GJ project. The claims cover an area of about 150 square kilometres and cover a number of significant mineral showings, including the Donnelly, GJ and North zones. The GJ project has a measured and indicated resource, of 153.3 million tonnes grading 0.321% copper and 0.369 g/t gold, at a cut off grade of 0.20% copper which contains 1.09 billion pounds of copper and 1.82 million ounces of gold. The resource estimate was prepared to NI 43-101 standards by qualified person Mr. Gary Giroux P.Eng. and is filed on SEDAR under the Company's profile.

During the quarter the Company announced plans to review the potential of its GJ copper-gold project to host high grade copper-gold mineralization similar to that reported from Imperial Metals Corporation's Red Chris project located approximately 25 kilometres to the east of GJ. Mineralization at GJ and Red Chris is geologically similar and both deposits are believed to be associated with similar Jurassic age intrusions. Drilling to date at GJ has focused on the southwest margins of the Jurassic Groat Stock. The rest of the stock which extends for approximately 10 kilometres to the northwest and is believed to be associated with the mineralization has seen limited drilling. The Company plans to review its extensive geological, geochemical, and geophysical database on the property to try to identify areas with potential for high grade zones similar to those at Red Chris.

The positive news from the Government with regards to infrastructure improvements as well as positive drill results from the Red Chris Deposit has raised the profile of the GJ project and the Company has received several expression of interest in the project. The Company will continue to consider all options to realize value from its investment in GJ.

Zymo Project, Canada

The Zymo property is located 40 kilometres west of Smithers in central British Columbia, Canada. The Company has an option to earn up to a 75% interest in the Zymo property from Eastfield Resources Ltd ("Eastfield"). The initial exploration program on the Hobbes target included a 6-hole 1,550-metre diamond drill program in 2008, the highlight of which was an intersection of 72.0 metres in ZY08-09, which graded 0.72% copper and 0.54 g/t gold from 15.0 to 87.0 metres. A drill program completed in July, 2009 traced the Hobbes zone over 600 metres in an east-west direction. Work on the Zymo property to date has confirmed the presence of a sulphide mineralized copper-gold system that is over 8 kilometres long and 2 kilometres wide and hosts several mineralized targets including the Hobbes and FM. The Company is reviewing the possibility of doing further work on this property.

The Company has the option to earn a 60% interest in the property by completing exploration expenditures of $4 million over five years. The Company may earn an additional 10% interest by completing a feasibility study and an additional 5% by arranging mine financing for Eastfield.

AFRICAN PROPERTIES

Eritrea

The Company holds two exploration licenses which cover extension of the rocks hosting Nevsun Reources's Bisha copper-zinc-gold deposit. The Company's Mogoraib License hosts the Hambok deposit which has a NI 43-101 compliant indicated resource (at a 0.75% zinc cutoff) of 10.7 million tonnes grading 0.98% copper, 2.25% zinc, 6.84 g/t silver, 0.20 g/t gold and an additional inferred resource (at a 0.75% zinc cutoff) of 17.0 million tonnes of 0.85% copper, 1.74% zinc, 5.89 g/t silver, 0.19 g/t gold. The wide spaced drilling to date suggests the presence of a higher grade core to the Hambok Deposit although more drilling is required to better define this zone. This report is filed under the Company's profile on SEDAR.

In December, 2009 the Company started an approximately 2,000 metre drill program that is targeting volcanogenic massive sulphide targets on its Mogoraib and Kerkebeit licenses. Drilling will test additional targets at the Koken Prospect where initial drilling in 2008 intersected encouraging results and a new mineralized gossan known as the Aradaib prospect that was identified by prospecting. Initial mapping identified 350 metre of discontinuous strike exposure of the gossan. Of twelve rock chip samples taken, ten returned anomalous gold values (100 to 350ppb) with two assaying 4.1 and 8.9gpt, five had Cu values >1,000ppm, and two had Pb >1,000ppm. Zn is moderately anomalous in all of them. Drilling will also test possible extensions to the Hambok deposit identified by a gradient IP survey conducted in November, 2009 as well as trying to better define the higher grade core of the Hambok Deposit.

In September 2009 the Company was granted two new prospecting licenses in Northern Eritrea. The Shukula license covers a 400 metre long gossan outcrop with strongly anomalous gold and base metal values in surface sampling. The Lelit license covers the extension of the Shukula stratigraphy to the south. A gravity survey is planned in mid 2010 to try to define the size and extent of these gossan occurrences.

Burkina Faso

On December 21st, 2009 the Company signed an agreement to sell its option to earn an interest in the Nyeime Project to Goldplat Plc for cash payments of $50,000, $500,000 in exploration expenditures and a 2% Net Smelter Return royalty. The Company is continuing efforts to divest its remaining 4 exploration licenses in Burkina Faso.

Congo-Brazzaville

In late December, 2009 the Company received final approval of two exploration licenses in Congo-Brazzaville. The licenses cover 1579 square kilometres of ground in the Boko Songo-Mindouli trend where mining during French colonial times exploited high grade copper and zinc ore bodies hosted in carbonate rocks. A Chinese group is currently reopening some of the historic mines. The Company is planning mapping, sampling, and geophysics in order to define targets for possible drill testing later this year.

Sudan

For political and security reasons, the Company decided not to pursue its right to acquire an exploration concession in Sudan and as a result sold this right for consideration of US$100,000 subsequent to year end.