Xiaonanshan Mine, China - Resource Expansion and Geologic Studies

Clyde and David Smith provided comprehensive geologic services to the Xiaonanshan iron mine in eastern China in 2009-10. Our program resulted in upgrading a historical 1970s-era resource estimate of 71 million tonnes to a JORC-compliant total resource of 208 million tonnes at 18.5% TFe-almost tripling the project's resource. Our geologic services included data review, geologic mapping of the entire deposit, geochemical sampling, petrography, ore characterization, drill program design and management, resource modeling management, reporting, and evaluation of other nearby acquisition targets. We also provided project management services, including joint-venture partner negotiations, support of fundraising, staffing, and consultant selection. We designed and managed all aspects of the six-rig core drilling program, supervising SRK Consultants and local drillers, and managed both SRK and Wardrop Engineering in performing a JORC-compliant resource calculation. The deposit is a complex, layered hydrothermal iron deposit consisting of magnetite-matrix breccia bodies and vein-hosted and disseminated magnetite in andesite and diorite host rocks. Xiaonanshan is one of the first fully foreign-owned iron ore mines in China, producing up to 360,000 tons per year magnetite concentrate and shipping directly to nearby steelmaking facilities.

El Capitan, New Mexico - Drilling and Resource Modeling Management

Clyde and David Smith provided complete geological consulting services on this gold-bearing magnetite skarn project in south-central New Mexico. We conducted a program of geologic mapping and bedrock sampling, a 37-hole drill program, core and drill-cutting logging, sample chain of custody, evaluation of assay and metallurgical procedures and results, and a resource calculation by a recognized independent consulting firm. The program resulted in a resource of 2.8 million ounces gold grading 0.02 opt Au. Our consulting recommendation was that the client seek independent third-party laboratory verifications of assay and metallurgical results.

Havasu, Arizona - Drill Sample Chain of Custody

David Smith provided onsite drilling observation and sample chain-of-custody services to the Australian exploration company Moreton Gold in 2009 on its Havasu project in west-central Arizona. Moreton was investigating the potential of apparent alluvial gold mineralization by performing a large-diameter (18-inch) auger drilling program to maximize sample volumes, with samples placed into and transported in 1.5-ton super sacks. David observed and reported on all onsite drilling and sampling, sealed and photographed sample sacks, observed sample transport, and verified intact sample chain of custody to the lab.


Jason, Yukon

Clyde Smith discovered the Jason deposit, a major lead-zinc-silver resource in the Yukon Territory, Canada containing more than 2 billion pounds lead, 1.8 billion pounds zinc, 33 million ounces silver, and potential for a larger resource. Clyde managed all phases of the Jason project from inception through discovery, claim staking, drilling, geochemical and geophysical surveys, resource calculations, and a feasibility study by Bechtel Corporation. Jason was the first discovery of a major stratiform lead-zinc-silver deposit made by a geologist using geological methods. In the 1950s, HudBay Minerals discovered and drilled the 18-million-ton Tom lead-zinc-silver deposit, located a few kilometers from Jason. A geologic evaluation of the Tom deposit by Clyde in the mid-1970s indicated that it was erroneously classified, and that it was in fact a stratiform deposit. Realizing that potential for additional deposits could exist in the Tom area, he developed a detailed genetic model for the stratiform class. Geologic mapping of the area surrounding the Tom deposit identified a geologic environment a few kilometers away that indicated potential for a separate stratiform deposit. A geochemical soil survey over this target environment showed anomalies in lead and zinc. Following drilling of a discovery hole, four subsequent drill campaigns blocked out the 14-million-ton Jason lead-zinc-silver deposit. Jason was purchased by HudBay Minerals.

Santa Fe, Nevada

Clyde Smith is credited with finding the Santa Fe deposit, the first discovery of a significant sediment-hosted Carlin-type gold deposit in western Nevada, which produced more than 400,000 ounces gold. Clyde examined the property for Ventures West Minerals in 1980. Based on surface geology and recognizing that the host rock for anomalous gold values in a single drill hole was favorable for a potential deposit, Ventures West acquired the property. Clyde then directed all aspects of a comprehensive exploration program including detailed geologic mapping, geochemical and geophysical surveys, drilling, and metallurgical test work which resulted in discovery of a 10-million-ton deposit grading above 0.04 opt Au. Following a feasibility study, the Santa Fe deposit was sold to Corona Corp., which initiated heap-leach production of 65,000 ounces of gold per year in 1988.

North Lake, Saskatchewan

Clyde Smith was responsible for Radcliffe Resources' discovery of the North Lake gold deposit in north-central Saskatchewan, which contains a minimum resource of 180,000 ounces gold grading 0.069 opt Au. Clyde's review of the geology of the La Ronge Gold Belt identified an apparently unexplored portion of the belt underlain by host rocks with potential for gold mineralization. Field examinations and prospecting of this area in 1986 discovered four parallel gold-quartz veins of potential ore grade over minimum widths of 3 meters. Clyde then managed a program of geologic mapping and sampling, trenching, geophysics, drilling, metallurgical test work, and feasibility. All zones are open on strike and at depth below drill hole intercepts, and potential for an increased resource is excellent.

Solidaridad, Mexico

Clyde and David Smith discovered the Solidaridad deposit in Mexico, which has potential to be one of the principal new ore deposits in Mexico with a minimum estimated contained potential of 750,000 ounces gold, 2.3 million ounces silver, and 44 million pounds copper. Clyde and Dave managed an exploration program in western Mexico in 1994-97 funded by Mount Isa Mines that included examination and evaluation of hundreds of prospects. Clyde recognized that a small gold-mineralized outcrop indicated potential for a large mesothermal vein-stockwork system, and acquired the Solidaridad property in 1996. Subsequent geologic mapping, trenching, road cuts, channel sampling, geochemical and geophysical surveys, and drilling resulted in discovery of eight zones 4-20 meters in width that have a weighted average of 0.17 opt Au equivalent (including silver and copper) within a mineralized corridor 3 km long. All aspects of the Solidaridad program were managed by Clyde and David Smith. The project is now under development by U.S. Precious Metals, Inc.


Sangdong, South Korea

In 2006, Steve Flechner led Oriental Minerals to acquire the Sangdong tungsten-molybdenum project in South Korea, which was one of the world's largest tungsten and molybdenum mines from 1947 to 1992 with production of 600,000 tonnes per year. The project was closed in 1992 due to low metal prices, presenting an opportunity for Steve to negotiate an agreement to acquire 100% of the project for a combination of cash, stock, and work commitments. He then assisted in raising the first $5M for confirmation drilling of Sangdong's historic drill holes, which led to verification of the historical tungsten-molybdenum resource, expansion of the resource, successful scoping and pre-feasibility studies, and receipt of a mining license. The Sangdong deposit, currently owned by Woulfe Mining, has a total resource of 81 million tonnes at a grade of 0.29% WO3 and 0.05% MoS2, and is undergoing a full feasibility study. During his time at Oriental Minerals, Steve also negotiated acquisitions of the Gasado and Muguk gold mines, the Chongyang molybdenum-tungsten mine, and numerous other projects. Muguk was South Korea's largest historically producing gold mine.

Rex, Arizona

David Smith identified the Rex gold prospect in west-central Arizona as a significant acquisition opportunity as the result of a client's gold project evaluation program he conducted in 2008-2010. This led to the client signing an option agreement for the Rex property in 2010. The project is a detachment fault-related gold target which was drilled in the 1980s by a major gold-producing company. Drill results show potential ore-grade gold values in sulfide-bearing sedimentary host rocks below a detachment fault in all holes drilled within a 1500- by 4000-foot area. These results indicate a large hydrothermal gold system with potential for a major bulk-mineable gold deposit.

Confidential Project, Nevada - Due Diligence

Highlands principals provided due-diligence services to evaluate an opportunity to acquire an advanced gold project in west-central Nevada. The project was a sediment-hosted Carlin-type gold deposit mined in the 1980s, with current owners seeking capital to re-open production. Our due diligence included investigating the geology and mineralization, mineral resource and resource estimates, land and title, exploration potential, metallurgy and recovery, permitting, operations, management, financial modeling, and valuation. Project complexities involved multiple owners of the resource, several different permitting scenarios, numerous financial scenarios to accommodate concurrent land negotiations, marginal ore grade, and difficulties with gold recovery. We recommended against the project, preventing the client from making a poor investment.


Mesquite, California

As Vice President of Gold Fields Mining, Steve Flechner and his staff led the company into world- class gold production at the Mesquite Mine in southeastern California. He was responsible for consolidating a highly fractured land position by leading the company's acquisition of multiple conflicting mining claim groups, followed by highly economic royalty buyouts and successful title defense in Federal administrative and judicial proceedings. Working closely with Gold Fields' mining engineers, California regulators, and environmental consultants, Steve accomplished environmental permitting of the largest cyanide open pit-cyanide heap leach mine in California by helping to craft practices that ensured environmental protections. To maintain compliance, Steve initiated/co- administered proactive environmental compliance self-monitoring and third-party environmental auditing programs. Steve worked on a bankable feasibility study with Bechtel, facilitated relocation of a state highway to allow the mine's expansion, and achieved a $70M favorable gold loan and mobile equipment lease with Chase, Citibank, Mellon, and Mase Westpac. Mesquite was later acquired by Newmont Mining, and produced 3 million ounces gold between 1985 and 2007. The project is currently being re-opened, with an additional total resource of 5.24 million ounces gold.

Chimney Creek, Nevada

Steve Flechner and his staff, working closely with Gold Fields' geologists, were responsible for Gold Fields' 1984 claim-staking program at what would become the Chimney Creek gold mine in Nevada. Following discovery of the Chimney Creek gold deposit, Steve led the company in permitting the open-pit heap-leach operation in less than three years from the first discovery drill hole. As at Mesquite, he facilitated a bankable feasibility study, achieved another $70M favorable gold loan and mobile equipment lease with Chase, Citibank, Mellon and Mase Westpac, and implemented and co- administered proactive environmental compliance self monitoring and third-party environmental auditing programs. The deposit was initially estimated to contain 1.9 million ounces gold. Chimney Creek was bought by Newmont, who combined it with the nearby Rabbit Creek project to form the Twin Creeks Mine project.

Ortiz, New Mexico

Beginning in late 1978 at Gold Fields Mining's Ortiz Mine in New Mexico, Steve Flechner was responsible for achieving surface rights acquisition and water and environmental permitting for an open-pit gold mine in a challenging situation. Located near Santa Fe, New Mexico, the project met with opposition from local groups and especially ranchers mainly concerned with water quality and supply. Steve was able to mitigate the opposition through hydrologic studies and careful individual negotiations. Gold Fields Mining began production in early 1980 at Ortiz after Steve crafted a low- cost contract mining agreement that included mobile mining equipment and allowed mine startup with minimal capital expenditure. Steve later sold the surface ownership with the leased mineral rights to a LAC-Pegasus joint venture. Gold Fields profitably mined 250,000 ounces gold from 1980 to 1986, including 100% return on capital investment in 1.5 years of production.


Confidential Project, Nevada - Carbon-Neutral Mining

David Smith and associates conducted a conceptual study on the feasibility of carbon-neutral gold mining on a proposed open-pit operation in Nevada. The client's goal was to understand what would be necessary to develop a mine with no net carbon emissions. Our work included evaluations of wind energy, biofuels, carbon credits, purchased carbon offsets, electricity transmission, tax credits, costs, and risk and reward. The study's conclusion was that operating the mine as carbon-neutral would provide significant cost savings, a potential price premium for sustainably produced gold, lower risk, smoother permitting, and an industry-leading position in sustainability.