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.

EXPLORATION REVIEW

During the quarter ended September 30, 2009 the Company drilled the Zymo copper-gold project in BC with positive results. In Eritrea, the Company was granted two new licenses covering recently discovered outcropping mineralization. Toward the end of the quarter geophysical surveys commenced on several newly identified massive sulfide targets near the company's Hambok Deposit also in Eritrea. Initial results from the survey are encouraging and suggest potential for additional mineralization on strike from Hambok. The quarter was relatively quiet for the Company's Latin American exploration teams as they took advantage of winter and rainy seasons in South America and Mexico respectively to focus on data interpretation, target development, and preparations for the next field season. During the quarter the Company continued to prioritize its projects and to consider transactions including sales and joint ventures with the potential to stretch its exploration budget and to maximize the value of its portfolio.

Caballo Blanco Project, Mexico

Caballo Blanco is a large high sulphidation epithermal gold system located approximately 70 kilometres north of the port city of Veracruz in Veracruz State, Mexico. The Caballo Blanco property includes approximately 20,500 hectares of mineral tenure which covers three main target areas; the Northern Zone gold target, the Highway Zone gold target, and the Central Zone copper target. The Company has an option to earn a 70% interest in the Caballo Blanco Property from Almaden Minerals Ltd. The primary target at Caballo Blanco is gold mineralization in the Northern Zone. The Company has completed two phases of diamond drilling focused on Cerro La Paila a strongly silicified ridge which is one of the targets in the Northern Zone. The second phase of drilling consisting of 14 holes (3,606 metres) was completed on March 7, 2009. Drilling and surface sampling on Cerro La Paila to date have traced gold mineralization over approximately 800 metres by 450 metres and to depths of up to 250 metres. In addition to Cerro La Paila there are five additional silificied zones forming high ridges in the Northern Zone which have received much less exploration. During the quarter the Company focused on detailed mapping and sampling of these areas to define targets for future drilling. Mapping, trenching, and geochemical sampling during the quarter defined a significant copper-gold target called the Red Valley Zone located along the main access road to the Northern Zone. The results of this work will be evaluated in the coming months.

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% tonnes 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 will spend US$2,000,000 during the coming 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 current quarter all the existing geophysical data on the project was re-processed and reinterpreted.

This work has defined a significant induced polarization (IP) chargeability anomaly extending approximately 500 metres to the northeast and 750 metres to the southwest of the existing resource. The area to the northeast is coincident with strongly anomalous copper, molybdenum, and gold in soils. The area to the southwest is coincident with outcrops of hydrothermal breccia. These and other targets will be followed up in a Jogmec funded drill program totaling approximately 2,000 metres in 5 to 6 holes expected to start in early November 2009. The objective of the drill program is to test possible extensions of the current resource that have the potential to add significant additional resources.

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 overlying diatreme hosted gold target and a deeper porphyry copper targes. 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 last quarter 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. Follow-up drilling of approximately 3,500 metres to test this target is planned for December, 2009, immediately following completion of the drill program at Jose Maria.

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 quarters 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.

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. 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 Company has a 100% working interest in the property. 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. No further work is planned on the GJ/Kinaskan Project and the Company is actively seeking to divest it.

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.

During the quarter the Company completed a 5 hole drill program totaling 1,964 metres. Four holes were drilled in the Hobbes target and one hole tested a showing in the FM Zone. All holes intersected mineralization.

Of the four holes drilled in the Hobbes target, three (ZY-09-13, 15, 16) were each 100 m step-outs to the west of previous drilling. Each of these holes intersected mineralization and the Hobbes zone has now been traced over 600 metres in an east-west direction. The most westerly hole, ZY-09-16, intersected the longest interval of mineralization to date indicating good potential for further extension of the mineralized zone to the west and south. Hole ZY-09-14 is a vertical hole drilled at the site of previously released holes ZY-08-09 (72.0 metres of 0.72% copper; 0.54 g/t gold) and ZY-08-10 (57.0 metres of 0.43% copper; 0.32 g/t gold). This hole intersected 273 metres of 0.23% copper and 0.15 g/t gold and confirms that mineralization persists to greater depth. Hole ZY-09-17 was drilled in the FM zone.

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. Fill-in soil geochemical sampling was carried out on the URC target which lies 1.5 kilometres west of the Hobbes Zone and confirmed a 1.5 kilometres long coincident copper-gold anomaly. This target is beyond the end of the geophysical grid and prospecting found no outcrops, however, a sample of mineralized float returned 0.33% copper and 0.22 g/t gold. This target further expands the discovery potential of the 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.

Chilean Properties

Regional exploration and prospecting is underway on a number of early stage copper-gold projects in Chile. Reconnaissance mapping and geochemical sampling was carried out on three porphyry copper prospects Farol, Andrea and Cardamo all located in central Chile.

Other Argentine, Colombian and Peruvian Properties

Limited prospecting and geochemical sampling were carried out on other properties in Argentina, Colombia and Peru during the quarter. The Company is in discussion with third parties to potentially option its properties in Colombia and to joint venture or divest of non-core properties in Argentina.

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.

Field work on the Company's Eritrean licenses restarted in early October 2009 after the end of the rainy season. A gradient IP survey is underway along the structural trend north and south of Hambok. It has so far identified a chargeability anomaly that surrounds the known massive sulfide body and extends for several hundred metres north and south of the current limits of drilling. This suggests the possibility of additional mineralization on strike. The anomalies are still open as of the date of this document and work continues. After the work in the Hambok area is completed the geophysical crew will move to the Koken target. Drilling of both the Hambok extensions and Koken is planned for later this year.

During the quarter, the Company was granted two new prospecting licenses which cover a new discovery of volcanic-hosted massive sulfide (VHMS) occurrences in northern Eritrea. The massive sulfide prospects were discovered during regional exploration and are on a new and virtually unexplored VHMS trend in northern Eritrea.

The Shukula prospect consists of outcropping gossan 100 metres in length on which the best grab and chip-channel samples returned up to 2.8, 5.4, and 5.6 ppm gold, 0.5% copper, 1841 ppm Zinc and 1164 lead. The altered rock package hosting the gossan extends for an additional 3 kilometres and contains discontinuous narrower lenses of gossan as well as oxidized veinlet stockwork zones. Work in the coming months will aim to define drill targets.

The Lelit license covers 4 kilometres of prospective strike on the southwestern extension of the Shukula gossan horizon. Rock chip samples from gossan and altered metavolcanic rocks on the license area returned results as high as 2.2 and 3.7 ppm gold, 2361 ppm copper as welll as being strongly anomalous in zinc and lead.

Burkina Faso

The Company holds or has rights to 5 exploration licenses subject to yearly renewal covering significant greenstone gold targets that are geologically similar to those hosting the major gold deposits in neighboring Ghana and Mali.

The company is actively seeking partners for its Burkina Faso projects. Interested parties are currently reviewing data on the projects.

Congo-Brazzaville

The Company has several prospecting licenses and is continuing to wait for final approval from the Council of Ministers of the Republic of Congo of its application to covert these exploration licenses located northwest of Brazzaville.

EXPLORATION REVIEW

The first quarter ended June 30, 2009 was relatively quiet for the Company's exploration team as exploration programs in South America and Mexico wound down for the winter and rainy seasons respectively. During the quarter, deep penetrating geophysical surveys were completed on the Company's copper-gold projects in Argentina and Chile; target development work continued at Caballo Blanco in Mexico and a planned drill program on the Zymo project in Canada waited for snow to melt. Recent activity on the Company's principal projects is summarized below.

Caballo Blanco Project, Mexico

Caballo Blanco is a large high sulphidation epithermal gold system located roughly 70 kilometres north of the port city of Veracruz in Veracruz State, Mexico. The Caballo Blanco property includes approximately 20,500 hectares of mineral tenure which covers three main target areas; the Northern Zone gold target, the Highway Zone gold target, and the Central Zone copper target. The Company has an option to earn a 70% interest in the Caballo Blanco Property from Almaden Minerals Ltd.

The primary target at Caballo Blanco is gold mineralization in the Northern Zone. The Company has completed two phases of diamond drilling focused on Cerro La Paila a strongly silicified ridge which is one of the targets in the Northern Zone. The second phase of drilling consisting of 14 holes (3,606 metres) was completed on March 7, 2009. Drilling and surface sampling to date have traced gold mineralization over approximately 800 meters by 450 meters and to depths of up to 250m. This work suggests that higher grade gold is associated structurally controlled silicified breccia bodies as is common in many high sulfidation gold systems.

During the last quarter the Company re-processed previously collected geophysical data and was able to highlight apparent high angle structures which may represent potential feeder structures.

In addition to Cerro La Paila there are five additional silificied zones forming high ridges in the Northern Zone which have received much less exploration. During the first quarter the Company focused on detailed mapping and sampling of these areas to define targets for future drilling. The results of this work will be evaluated in the coming months and will guide decisions on future exploration.

The Caballo Blanco project area like much of Mexico was home to pre-Columbian civilizations and therefore the Company checks areas where road building or other disturbance is planned for archaeological sites. This work is contracted to INAH ("Instituto Nacional de Antropologia e Historia") the Mexican government entity responsible for archeaology. During the first quarter INAH completed an archeaological survey covering areas where the Company plans to drill. Their final report is pending.

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 at a 0.3% TCu cut off of 460 million tonnes at 0.39% TCu and 0.30 g/t Au. The Josemaria resource is open in several directions. The Company acquired Josemaria through its acquisition of Suramina Resources completed this quarter.

The Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Marie JEA") with Japan Oil, Gas and Metals National Corporation ("Jogmec"). The Jose Marie 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 Marie JEA and is required to make US$6.13 million in exploration expenditures over three years in order to acquire the 40% interest. Jogmec will spend US$2,000,000 during the coming 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 current quarter the Company carried out a deep penetrating MIMDAS geophysical survey designed to test for the presence of additional mineralization at depth. The results are currently being interpreted and targets will be followed up in a Jogmec funded drill program expected to start in November 2009.

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 Josemaria 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/gold oxides overlying deeper porphyry copper and diatreme hosted gold targets.

Two more recently defined targets on the Vicuna Properties, Cerro Blanco and Los Helados were drilled earlier in 2009. Two drill holes at Cerro Blanco during early 2009 encountered low grade copper and gold within a large alteration system. In early 2009, the copper-gold porphyry system previously identified at Los Helados (Chile) was tested with two additional deep drill holes totaling approximately 1,529 metres. Highlights include drill hole LH 04 which intercepted 762m of 0.43% copper and 0.22 rams/tonne gold with the final 43m grading 0.74% copper and 0.23 grams/tonne gold.

During this quarter, a deep penetrating MIMDAS geophysical survey was completed to better define the mineralization at depth and to the north and west. Follow-up drilling is planned for the 2009/2010 field season scheduled to begin in November 2009.

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 quarters 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.

GJ/Kinaskan Project, Canada

The GJ/Kinaskan Property is located in northwest British Columbia, Canada, about 10 kilometres west of Highway 37. 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 Company has a 100% working interest in the property. 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. No further work is planned on the GJ/Kinaskan Project and the Company is actively seeking to divest it.

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. The initial exploration program on the Hobbes target included a 6-hole 1,550-metre diamond drill program, 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.

The Company plans a diamond drill program of 1,200-1,500 metres in the summer of 2009. Three or four holes will test the new Hobbes Zone laterally and at depth and two holes will be drilled to explore the large FM Zone further.

Chilean Properties

Regional exploration and prospecting was carried out on a number of early stage Chilean properties before the onset of South American winter. Copper mineralization was discovered on the Juanuchos property in Chile's Region 6. Reconnaissance mapping and geochemical sampling was carried out on three porphyry copper prospects Farol, Andrea and Cardamo all located in central Chile.

The results of this season's work are currently being compiled. Initial results are encouraging and followup work is planned for the next field season starting at the end of 2009.

Other Argentine, Colombian and Peruvian Properties

Limited prospecting and geochemical sampling were carried out on other properties in Argentina, Colombia and Peru during the quarter. The Company is in discussion with third parties to potentially option its properties in Colombia and to joint venture or divest of non-core properties in Argentina.

CABALLO BLANCO PROJECT

Caballo Blanco is a large, high-sulphidation epithermal gold system located on the Gulf of Mexico roughly 70 kilometres north of the port city of Veracruz. Infrastructure is excellent and the prospective areas are all located within 10 kilometres of the Pan-American highway and a power plant. The primary target at Caballo Blanco is the Northern Zone, a high-sulphidation gold system. The Northern Zone alteration system extends over 20-25 square kilometres.

A second phase of diamond drilling on the Company's Caballo Blanco Project in Mexico commenced in November 2008 Two track-mounted core rigs were mobilized to the property for a planned 5,000-metre drill program.. The planned program was subsequently reduced to 14 holes (3,606 metres) in order to conserve cash and was completed on March 07, 2009. The Company has an option to earn a 70% interest in the Caballo Blanco Project from Almaden Minerals Ltd.

The focus of the drill program on the Northern Zone was the Cerro la Paila target, a zone of very high resistivity defined by detailed I.P. The resistivity anomaly extends over a N-S distance of 800-900 metres with widths up to 450 metres and substantial, but as yet undetermined, depth extent. Where the resistivity high extends to surface, iron-rich silica breccias are exposed and gold soil and rock geochemical anomalies are extensive. The gold-bearing silica breccias have now been traced by surface sampling and diamond drilling over an area roughly coincident with the resistivity anomaly. The goldbearing breccias are up to 250 metres thick; however, on many sections the drill holes were abandoned due to technical problems in mineralized silica breccia and the true thicknesses are not known.

This drill program was a follow up to the initial 18 core holes (3,355 metres) drilled on the Cerro La Paila high-sulphidation gold target from late 2007 to mid 2008. That campaign generated very encouraging results with a number of broad intervals that grade over one gram per metric ton gold ("g/t Au"), including drill hole 08CBN-004, which intersected 94.5 meters grading 2.09 g/t Au. This second-phase program of 14 holes filled in parts of Cerro la Paila on 50-meter sections. In general, gold grades reported from the follow-up drilling were lower compared to the first drill program and it appears that higher gold grades correspond to structurally controlled silicified breccia bodies as is common in many high sulfidation gold systems. Future drilling will target these potential feeder structures.

In addition to the drilling on Cerro La Paila four scout holes were drilled on two outlying gold targets in the Northern Zone -- Cerro la Cruz and Cerro Bandera -- south and southwest of Cerro La Pailla, respectively. The drill holes on Cerro la Cruz and Cerro Bandera intersected long intervals of silicification with significant levels of pathfinder elements but only weakly anomalous gold. Both targets are similar in size to Cerro La Paila and are considered to still be open in all directions.

One hole was drilled on the Pedrero porphyry copper prospect, to follow up 08CBCN-19, which intersected 41.15 metres grading 0.27% copper and 0.42g/t gold before being lost in well-mineralized monzodiorite at 187.45 metres. Hole09CBCN-042, was drilled about 250 metres east of CBCN-019. It intersected 137.16 metres grading 0.11% Cu and 0-10 g/t Au in well-developed quartz stockwork in altered monzodiorite.

A second high-sulphidation gold system, referred to as the Highway Zone, occurs four kilometres south of the Northern Zone. It is also defined by extensive vuggy and massive silica/alunite/clay alteration. A geochemical survey outlined strong gold soil anomalies (up to 350 ppb Au) over an N-S distance of three kilometres. Some of these anomalies remain open and require additional sampling prior to drilling.

Geological data are verified by qualified person Jan Christoffersen, P. Eng., former Vice President of the Company.

GJ/KINASKAN PROJECT

The Company announced the completion of an updated independent resource estimate on the Donnelly and North Donnelly zones at its GJ/Kinaskan porphyry copper/gold deposit in northwest British Columbia in October 2008.

The measured and indicated resource, at a cut-off grade of 0.20% copper, is 153.3 million metric tons grading 0.321% copper and 0.369 g/t gold and contains 1.09 billion pounds of copper and 1.82 million ounces of gold.

The Donnelly Zone has been drilled to an average depth of about 300 metres on about 50-metre centres. It is 1600 metres in (strike) length and up to 340 metres wide. This resource estimate includes substantial near-surface, higher-grade material that would be immediately accessible for mining.



The Donnelly and North Donnelly Zone resource estimate was prepared by qualified person Mr. Gary Giroux. P.Eng. using a computer-generated block model based on approximately 42,000 metres of diamond drilling in 169 drill holes. A total of 9,883 assayed samples were used to define the resource.

The GJ/Kinaskan Property is located in northwest British Columbia about 10 kilometres west of Highway 37. 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 Company has a 100% working interest in the property.

Due to the depressed market conditions and in order to conserve cash, the Company does not plan further exploration work on the GJ/Kinaskan property in 2009.

ZYMO PROJECT

In October 2008, the Company completed its initial exploration program on the Zymo copper-gold project, which the Company is earning a 60% interest from Eastfield Resources Ltd. The Zymo property is located 40 kilometres west of Smithers in central British Columbia. The initial exploration program on the Hobbes target included a 6-hole 1,550-metre diamond drill program, 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.

The 2008 exploration program, which started in late June 2008, included geochemical sampling, IP geophysical surveying and geological mapping in preparation for the drill program, which was focused on the newly discovered Hobbes target located 4.5 kilometres northwest of the original discovery area (FM grid). The Hobbes target consists of copper-gold mineralization associated with magnetite and quartz stockwork. Mineralized outcrops have been observed along the length of a strongly altered intrusion for approximately 800 metres. Copper and gold grades from outcrop samples range from background levels to 0.86% Cu and 1.1 g/t Au.

The IP geophysical survey demonstrated that mineralization is associated with a very large sulphide system, which is continuous between the FM and Hobbes grids, covering an area at least six kilometres long and approximately 2.5 kilometres wide.

The Company plans a diamond drill program of 1,200-1,500 metres in the summer of 2009. Three or four holes will test the new Hobbes Zone laterally and at depth and two holes will be drilled to explore the large FM Zone further.

MANSON CREEK/QCM PROJECT

During the year ended March 31, 2009, the Company assessed the results of the exploration to date on this project and determined that further exploration would not be undertaken. Accordingly, the Company wrote off capitalized expenditures totaling $57,775 on the Manson Creek /QCM properties to operations.

SURAMINA'S PROPERTIES ACQUIRED

Pursuant to the Arrangement, the Company acquired the following properties:

Jose Maria and Batidero properties, Argentina

Jose Maria is a large copper/gold porphyry project located east of the Chilean border in San Juan Province, Argentina near the Vicuna group of properties. Jose Maria contain a NI 43-101 compliant inferred resource at a 0.3% TCu cutoff of 460 million tonnes at 0.39% TCu and0.30 g/t Au.

The Jose Maria and the adjacent 75% owned Batidero properties are subject to a joint exploration agreement ("Jose Marie JEA") with Japan oil, Gas and Metals National Corporation ("Jogmec"). The Jose Marie 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 Marie JEA and spent US$130,000 in exploration expenditures to earn a 40% interest in the Company's interest in the Batidero project and is required to spend a total of US$6 million in exploration expenditures over a period of three years in order to meet the terms of the option agreement. Jogmec will spend US$2,000,000 during the coming field season beginning in October, 2009. Once Jogmec has earned its interest, the partners will fund ongoing expenditure pro-rata to their ownership interest.

Vicuna Properties, Argentina and Chile

The Vicuna properties include the Los Helados, Cerro Blanco and Filo de Sol properties. These properties are subject to a Joint Venture Exploration Agreement (the "Vicuna JEA") with Jogmec whereby the Company and Jogmec are funding expenditures on a pro rata basis as to 60% and 40% respectively.

Los Helados Property, Chile

Additional drilling comprising of two deep drill holes totaling approximately 1,529 metres to test the copper/gold porphyry system at depth was completed in the first quarter 2009. Highlights include drill hole LH 04 which intercepted 762m of 0.43% copper and 0.22 grams/tonne gold with the final 43m grading 0.74% copper and 0.23 grams/tonne gold. The target at Los Helados is open to the north and west and follow-up drilling is planned for the 2009/2010 field season scheduled to begin in about November, 2009.

Cerro Blanco Property, La Rioja Province (Argentina) and Chile

The Cerro Blanco property straddles the Chilean and Argentine border. As of the first quarter 2009 a first phase drilling program comprising three holes totaling 1,050 meters was completed. Subsequent programs are dependent on the results of this first phase drilling program.

Filo del Sol Project, San Juan Province (Argentina)

The Filo del Sol Project was last drilled during the first quarter of 2008. Exploration to date has defined near surface copper/gold oxides overlying deeper porphyry copper and diatreme hosted gold targets. Further drilling on Filo del Sol is postponed until market conditions improve.

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 quarters identified multiple veins. 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 was carried out on a number of early stage Chilean properties before the onset of South American winter. Copper mineralization was discovered on the Juanuchos property in Chile's Region 6. Reconnaissance mapping and geochemical sampling was carried out on three porphyry copper prospects Farol, Andrea, and Cardamo all located in central Chile.

Initial results are encouraging and follow-up work is planned for the next field season starting at the end of 2009.

Other Argentine, Colombian and Peruvian Properties

Limited prospecting and geochemical sampling were carried out on other properties in Argentina, Colombia and Peru during the quarter. The Company is in discussion with third parties to potentially option its properties in Colombia and to joint venture or divest of non-core properties in Argentina.

CABALLO BLANCO PROJECT

The second phase of diamond drilling commenced during the quarter ended December 31, 2008 on the Company's Caballo Blanco Project in Mexico. Two track-mounted core rigs were mobilized to the property to initiate a 5,000 metres drill program in mid November 2008.

This program is a follow up to the initial 18 core holes (3,355 metres) drilled on the Cerro La Paila highsulphidation gold target from late 2007 to mid 2008. That campaign generated very encouraging results with a number of broad intervals that grade over one gram per tonne gold ("g/t Au"), including drill hole 08CBN-004, which intersected 94.5 meters grading 2.09 g/t Au. This second-phase program of 24 holes (5,000 metres) will infill Cerro la Paila on 50-meter sections and test two other high-sulphidation gold targets in the Northern Zone -- Cerro la Cruz and Cerro Bandera. As of January 31, 2009, the Company had completed 2,350 metres of the drill program.

Caballo Blanco is a large, high-sulphidation epithermal gold system located on the Gulf of Mexico roughly 70 kilometres north of the port city of Veracruz. Infrastructure is excellent as the prospective areas are all located within 10 kilometres of the Panamerican highway and a power plant. The primary target at Caballo Blanco is the Northern Zone, a high-sulphidation gold system. The Northern Zone alteration system comprises strong vuggy silica, quartz-alunite and various clay minerals, extending over 20 square kilometres.

The focus of the drill program on the Northern Zone is the Cerro la Paila target, a zone of very high resistivity defined by detailed I.P. The resistivity anomaly extends over a N-S distance of 800 metres with widths up to 450 metres and substantial, but as yet undetermined, depth extent. In places, the resistivity anomaly is buried below low-resistivity volcanic rocks. Where the resistivity high extends to surface, iron-rich silica breccias are exposed and gold soil and rock geochemical anomalies are extensive. The gold-bearing silica breccias have now been traced by surface sampling and diamond drilling over an area roughly coincident with the resistivity anomaly. The gold-bearing breccias are up to 150 metres thick; however on many sections the drill holes were abandoned due to technical problems in mineralized silica breccia and the true thicknesses are not known.

A second high-sulphidation gold system, referred to as the Highway Zone, occurs four kilometres south of the Northern Zone. It is also defined by extensive vuggy silica/alunite/clay alteration. A geochemical survey outlined strong gold soil anomalies (up to 350 ppb Au) over an N-S distance of three kilometres. Some of these anomalies remain open and require additional sampling prior to drilling.

The Central Grid Zone, a porphyry copper-gold target located some 10 kilometres SW of the Northern Zone, encompasses a broad area of 16 square kilometres exhibiting extensive, strong Cu-Au-Mo soil, magnetic and IP anomalies. The Central Grid Zone hosts at least two porphyry copper-gold systems, El Porvenir and Pedrero, separated by almost three kilometres. Both target areas are underlain by altered monzodioritic stocks of unknown dimensions intrusive into basalts and/or quartz-eye dacite tuffs and carrying variable amounts of pyrite, chalcopyrite, minor bornite and associated gold.

Drilling in the Central Grid Zone in August 2008 consisted of four holes drilled at Pedrero, the first holes to test this Cu-Au porphyry target, and five holes drilled to further evaluate the El Porvenir porphyry Cu-Au system. Low-grade copper and gold at El Porvenir persist to considerable (400 metres) depth within a restricted surface area. The best hole of the Central Grid program was 08CBCN-19 at Pedrero, which intersected 41.15 metres grading 0.27% copper and 0.42g/t gold before being lost in well-mineralized monzodiorite at 187.45 metres. There are insufficient drill holes at Pedrero to evaluate its potential at this stage but more drilling is required. The host monzodiorites at both sites are identical and, hence, are assumed to belong to the same mineralizing episode.

Geological data are verified by qualified person Jan Christoffersen, P. Eng., Vice President of the Company.

GJ/KINASKAN PROJECT

The Company announced the completion of an updated independent resource estimate on the Donnelly and North Donnelly zones at its GJ/Kinaskan gold-rich porphyry copper deposit in northwest British Columbia in October 2008.

The measured and indicated resource, at a cut-off of 0.20% copper, is 153.3 million metric tons grading 0.321% copper and 0.369 g/t gold and contains 1.09 billion pounds of copper and 1.82 million ounces of gold.

The Donnelly Zone has been drilled to an average depth of about 300 metres on about 50-metre centres. It is 1600 metres in (strike) length and up to 340 metres wide. This resource estimate includes substantial near-surface, higher-grade material that would be immediately accessible for mining.

The Main and North Donnelly Zone resource estimate was prepared by qualified person Mr. Gary Giroux. P.Eng. using a computer-generated block model based on approximately 42,000 metres of diamond drilling in 169 drill holes. A total of 9,883 assayed samples were used to define the resource.

The GJ/Kinaskan Property is located in northwest British Columbia about 10 kilometres west of Highway 37. 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 Company has a 100% working interest in the property.

Due to the depressed market conditions and in order to conserve cash, the Company does not plan further exploration work on the GJ/Kinaskan property in 2009 but will be undertaking an informal economic study of the project.

ZYMO PROJECT

In October 2008, the Company completed its initial exploration program on the Zymo copper-gold project located 40 kilometres west of Smithers in central British Columbia. The program included a 6-hole 1,550- metre diamond drill program, the highlight of which was the upper 72.0 metres of ZY08-09, which graded 0.72% copper and 0.54 g/t gold from 15.0 to 87.0 metres.

The exploration program, which started in late June 2008, included geochemical sampling, IP geophysical surveying and geological mapping in preparation for the drill program, which was focused on the newly discovered Hobbes target located 4.5 kilometres northwest of the original discovery area (FM grid). The Hobbes target consists of copper-gold mineralization associated with magnetite and quartz stockwork. Mineralized outcrops have been observed along the length of a strongly altered intrusion for approximately 800 metres. Copper and gold grades from outcrop samples range from background levels to 0.86% Cu and 1.1 g/t Au.

The IP geophysical survey demonstrated that mineralization is associated with a very large sulphide system, which is continuous between the FM and Hobbes grids, covering an area at least 5 kilometres long and approximately 2.5 kilometres wide.

The Company can earn an initial 60% interest in the property from Eastfield Resources Ltd. by making cash payments totaling $350,000 over five years ($20,000 paid), completing exploration expenditures of $4 million over five years and issuing 50,000 shares (issued). A further 10% interest may be earned by completing a feasibility study and a further 5% by arranging mine financing for Eastfield. A minimum exploration expenditure of $800,000 (incurred) must be completed in calendar 2008. The 10,250 hectare property is accessed by good quality logging roads from Smithers.

The Company plans a modest diamond drill program in 2009 to meet its expenditure obligations and flow-through funding obligations.