During 2003-2004, a major drilling program was conducted on the Company’s

Bellechasse Gold Deposit located in the Bellechasse Mineral Belt south of Quebec City,

Quebec. 2,803.3 meters of HQ core and 2,041.0 meters of NQ core were drilled as 31

holes. The work was performed under the terms of a partnership agreement which has

since been terminated by Golden Hope.

Golden Hope’s drilling objectives were twofold. The first was to verify the character of

the deposit, particularly with respect to the spatial distribution and configuration of the

gold mineralization as known from surface exposures and to confirm the presumed

dimensions of the deposit as evidenced by its surface expression.

The drilled dimensions of the Timmins Zone, the principal occurrence, are similar to its

surface indications. A near vertical mineralized gabbro mass was confirmed extending

140 meters northeasterly with confirmed widths of 90 meters at the westerly end and 40

meters at the easterly end. The deepest intersection is 308 meters vertical. There are no

noticeable changes in the geological character of the intrusive system, which appears to

continue uninterrupted to depth. The same quartz stockwork systems, well exposed at

surface, are continuous both laterally and vertically. Likewise, there exists a high, for the

most part random, incidence of coarse gold throughout the system, wall to wall and

vertically to 308 meters. Fine gold has a broader distribution. Several narrow zones of

high-grade values show good continuity not previously recognized. Further details of

gold distribution patterns as revealed by the drilling are forthcoming. For example, as

initial sampling results continue to be turned over to Golden Hope, reassessment is

revealing the presence of numerous substantial, previously unreported, intervals. These

encouraging results will be reported shortly as the data review proceeds.

The second drilling objective, most importantly, was to test the reliability of drill core as

a representative sample for a class of a deposit where gold is commonly coarse and

“nuggety” in character and irregularly dispersed in a more uniform field of finer gold.

Industry experience has shown that nonhomogeneous coarse gold does not accurately

respond to sampling by routine drilling methods, the fundamental cause being insufficient

sample size. Inadequate analytical procedures also contribute to the problem. Although

the drilling confirms a significant gold content in the Bellechasse Deposit, it is suspected

the true content is understated. Typical of the “nugget effect”, the first clue was the

recognition of major disparity between occurrences of visible gold and corresponding

weak to nil gold values in assays for a high percentage of the visible gold occurrences.

Whereas the sampling results arguably may be representative of the fine gold content of

the core, an equally accurate accounting of coarse gold content is essential to the overall

grade composition of the deposit.

Further evidence of the “nugget problem” and the adequacy of core as a representative

sample are being documented as part of ongoing research.

The next phase of the investigation will involve further processing of sample rejects and

core by total extraction of gold by gravimetric technology. A treatment facility has been

established under contract and work is in progress employing a team of experts in the

field of coarse gold sampling.