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Contents

Executive Summary. 4

2010 Program Summary. 5

2011 Projections. 5

2010 Drill Campaign. 6

Exploration History and Timeline. 7

43-101 Resource Estimate Challenges. 10

Regional and Local Geology. 17

Style of Mineralization. 20

Properties under Claim.. 21

Claim Map. 23

Soil Gas Hydrocarbon Geochemical Method. 24

Financial Summary. 27

Conclusions. 28

Larry Hoover is an analytical chemist, who spent much of his career applying that knowledge in the field of environmental monitoring, exposures, and the toxicology of contaminants.

For the past 15 years, Mr. Hoover has provided research and analytical support to major organizations on a contract basis. Over the last half decade, Mr. Hoover has focused primarily on consulting for junior mineral explorers, providing diverse services including research and analysis, report generation, investor relations, and fund-raising assistance.

Mr. Hoover is neither an accredited geologist, nor an investment advisor, and any thoughts or opinions contained within this document should be considered to be speculative in nature, and should not be construed as investment advice. Mr. Hoover is a significant shareholder in Golden Hope Mines Limited, and gratefully acknowledges the company’s hospitality during three site visits to the Bellechasse Project, totalling 11 days, during the research phase for this report.

Golden Hope Mines’ (GNH on the Venture Exchange; GOLHF on the Pink Sheets)

Bellechasse Project is an exciting new Canadian gold deposit presently the subject of an active exploration and drill program. Based on analysis of earlier exploration work, and preliminary interpretation of geological structures coming from the first 8000 metres of the current drill program, the head geologist and qualified person on this project, James Tilsley, P.Eng. , is now allowing himself to entertain the idea that the known gold mineralization might be part of a much larger mineralized belt stretching out on strike for more than 20 kilometres.

So where is this exciting new Canadian deposit?

It’s not in the far-flung nether regions of Nunavut, with its inhospitable climate and poor infrastructure. Nor is it thousands of metres up the side of a mountain, nor at a similar depth beneath the surface.

No, believe it or not, we can find this deposit in the most mining-friendly jurisdiction in the world, with full infrastructure close by, and the mineralization begins at or near the surface.

It lies in the Beauce region of Quebec, less than an hour and a half by car south of Quebec City (south of the St. Lawrence River), near the border with Maine, U.S.A.

2010 Program Summary

The 2010 exploration program to date has been focused on the Bellechasse Project, which represents approximately 20% of the total area under claim by GNH. Other prospective targets include base metal and precious metal indications on a series of claims within an 110 km by 20 km area of the Beauce.

Highlights of this year’s exploration activities and results include:

1. New Soil Gas Hydrocarbon (SGH) geochemical technique for drill targeting has resulted in a 100% hit rate for the NE-trending quartz structures in the 2010 Bellechasse diamond drill program. Quartz is historically the host rock for the gold mineralization on the Bellechasse property.

2. Drill core has returned visible gold (VG) in 25.6% of the holes (assays pending).

3. Potential for 20+ km gold mineralized belt, 90% under claim by GNH.

4. GNH is increasing staff and facilities in expectation of an expanded drill program.

5. 8,000 metres drilled, 5500 metres planned, including new targets within the 20km belt.

6. Short term target of 100 million tonnes of quart-hosted gold mineralization in the Timmins/Ascot/88 Zone (See image, page 6). At 2 g/tonne Au (historic average), that would represent 6.4 MM ounces of gold. Notably, this exploration area represents less than 1% of the Bellechasse claim block.

7. Extensive mapping has been completed, and SGH soil sampling programs are either completed or underway (various sites), in hopes of significantly expanding the known mineralized zones, and to discover new prospective gold targets within the Bellechasse claim block.

8. Geochemical, geophysical, and sampling programs have produced drill ready base metal and gold targets in the Beauce district, but outside of the Bellechasse Project. Drill permits are in hand, or expected this year, on a number of these targets, which may be included in later phases of this year’s drill program.

2011 Projections

The company has shown that its plans are constantly evolving, so it is difficult to do more than make some very broad predictions about what is in store for next year.

1. Continued drill program for 2011, probably expanding to 3 drills. Based on this year’s planned work (20,000 metres probable by year end), a program of up to 40,000 metres is not out of the question.

2. A new facility, combining the field exploration office and the coreshack, is expected to be ready for use early in the New Year. This new facility will significantly expand the operational capacity and efficiency of the exploration work.

3. In preparation for what is expected to be a brokered financing, the company is planning to file the required documents with the Exchange shortly. This will permit such a financing to occur either later this year (2010), or early in the coming year.

2010 Drill Campaign

The Bellechasse region of the Beauce was the site of Canada’s first gold rush, long before the Klondike discoveries. Variously reported as occurring beginning in the 1820s or the 1830s, alluvial (placer) gold deposits were discovered in the north-trending watersheds draining the Appalachian Mountains.

Individual nuggets were reported to weigh as much as 63 ounces. By the 1850’s, commercial mining of alluvial gravels was underway, but those sources were quickly depleted. In the early 1860’s, though, significant gold was found in ancient river channels buried in the banks of today’s rivers. A new gold rush ensued, but that too soon petered out. Although some bedrock-hosted gold was discovered in proximity to the alluvial deposits, no mother lode was ever found. Exploration activity declined, and little such work was done for decades. Interest and capital went elsewhere.

That all changed in 1949, with the discovery of nickel/copper sulphides in surface outcrop at what would come to be called the Eastern Metals deposit, some 12 km NE of the main discovery zone of the Bellechasse gold property.

Prospecting at Bellechasse soon turned up gold-bearing float, and the claims were quickly staked. Those claims were eventually optioned to N.A. Timmins (the son of Noah Timmins, the hardware merchant who capitalized on the gold found at Timmins, Ontario), whose name is still associated with the Bellechasse deposit, to the confusion of potential investors. Timmins diamond drilled 11 holes, but the surviving records of that drill program are incomplete. Despite reports of visible gold at surface and in the recovered core, the claims then changed hands a number of times without any significant work being done, until the claims finally expired in 1957.

These claims were then re-staked by the prospector who had discovered the Eastern Metals deposit, and they were subsequently sold to Blackhawk Mining, which initiated some significant exploration activity. Extensive stripping of overburden revealed quartz veins in diorite, said to contain “free gold in considerable quantity”. This vein was dubbed Blackhawk 1. Further stripping revealed another parallel vein system, with significant sulphide mineralization, which they called Blackhawk 2. (Both are part of what we now know as Timmins 1.)

Bulk sampling was undertaken. Records indicate that they collected a total of 39 tonnes of material, and all of it was taken along strike, within the vein systems. There were 6 lots in total which went out for processing, and the grades reported were: 18.95, 21.59, 29.04, 11.14, 4.39, and 28.48 grams/tonne Au. The weighted average bulk sample grade reported then was 17.92 g/tonne. James Tilsley (head geologist of the Golden Hope team, and their Qualified Person) had discovered some errors in the historic grade calculations, and he has restated the assayed grades as: 18.95, 15.71, 15.12, 5.28, 2.26, and 9.19 g/tonne Au (respectively), with a weighted average grade at 11.09 g/tonne.)

Blackhawk also drilled a short hole into a third vein, which reportedly returned 18.7 g/tonne Au over 8 metres. Despite these promising grades, the exploration program ended in 1961, perhaps because the gold had already been discovered to be erratically deposited within the quartz/diorite host rock. With gold then fixed at $35/oz., the uncertain distribution of the gold particles would have been too great a concern to commit to the capital costs of production.

Over the next 19 years, 5 different companies held the claims or had optioned rights on the Timmins Zone discoveries, with 6 different companies similarly associated with the adjacent Ascot Zone.

In 1968, grab samples from the Blackhawk 1 vein were reported to have assayed at better than 90 ounces/ton Au (somewhat above 3080 g/tonne Au), with a bulk sample of 434 lbs. (197 kg) grading at 3.39 opt (about 116 g/tonne), but once again, no further work was done on the claims.

Beginning with an option in 1980, Golden Hope Mines has been working these properties ever since. Through a variety of earn-in agreements, purchases, and further staking, Golden Hope now has 100% interest in not only the Timmins/Ascot Zones, but also prospective targets to the SW and the NE, which collectively make up the proposed Bellechasse mineralized belt, or the Bellechasse Project.

Between 1980 and 1984 Golden Hope conducted detailed mapping, soil sampling, and geophysical work in the Timmins/Ascot Zones, along with an 11-hole drill program peripheral to the Timmins Zone, completed in 1987. The soil programs indicated a gold anomaly a few hundred metres to the south of Timmins, and stripping of overburden revealed a new vein system which was called “the 88 Zone” after the year of its discovery.

In 1990, a JV was entered into with Ste-Genevieve Resources, which led to further trenching, stripping and drilling, but that agreement was terminated in 1992. Limited stripping and trenching occurred the following year, and very little work was done in the years 1994 through 2002.

After a limited five hole drill program in 2003 conducted by Golden Hope, a joint venture was entered into with Osisko Exploration, which permitted Osisko an earn-in of up to 60% on the Bellechasse claims, then comprising 80 contiguous claims of 1969 hectares (4866 acres). However, the connection of Osisko to the Bellechasse property actually began many years before.

In 1993, a graduate student at Queen's University submitted his Master's Thesis on the Bellechasse gold deposits; he'd been doing work on the project since 1988. That man, John Burzynski, is now Vice-President of Corporate Development at Osisko. Earlier, in 2003, he became VP Exploration for Osisko, just after Osisko and Golden Hope entered into the previously mentioned JV agreement. In June 2003, Osisko published a 43-101 compliant Technical Report on the Bellechasse deposit, and proceeded with a staged drill program beginning in July of that same year.

Phase 1 of that program was done with HQ core (63.5 mm = 2.50 in.), larger than the more typical NQ core (47.6 mm = 1.87 in.), to obtain a larger sample of the mineralized rock. They already knew about the nugget gold problem, and understood that larger samples would give them more reliable gold grades; the larger core would provide nearly twice the sample mass of rock per metre.

Early results were quite promising, with intervals from what is now Timmins 1 returning grades of up to 2.39 ounces/ton (81.8 g/tonne) over 1 ft. (0.3 metres).

The Phase 2 drill program (all using the smaller NQ core) began in February 2004, but those results were never (to the author’s knowledge) publicly released. In July in 2004, Golden Hope reported that the JV had been dissolved, and all claims had fully reverted back to Golden Hope. The termination resulted from the failure of Osisko to fulfill both its financial and technical obligations under the terms of the Agreement of May 21, 2003. It was later in 2004 that Osisko got their opportunity to explore and then develop their Malartic project, and it's kept them rather busy in the meantime.

43-101 Resource Estimate Challenges

The big question everyone would like an answer to is – “When can we expect a 43-101 compliant resource estimate? “

To answer that question is more of a challenge than one would expect. A resource is simply tonnage times grade. The masses of a cubic metre of pure diorite or pure quartz are easily found, and an estimate of the mass of a mixture of them is a relatively straight forward calculation. However, arriving at a true and accurate grade estimate is by far the biggest challenge facing the GNH geological team, primarily due to what is commonly called “the nugget effect”. In practical terms, the diamond drill core brings samples to the surface which are too small to provide an accurate grade estimate.

In the Bellechasse mineralized zones, the quartz veins are chaotically distributed within the diorite, and the gold particles are chaotically distributed within the quartz. Unless a large enough sample is collected, the sample is unlikely to contain a large enough number of the gold particles to demonstrate an accurate (correct) and precise (reproducible) gold assay grade.

Because of the inadequate sampling provided by the diamond drilling, the gold grades obtained by assay are in reality significantly understating the true gold content of the mineralized zones.

How is that possible?

Perhaps an analogy will provide some insight into how an inadequate sample size leads to an underestimation of the grade.

Let’s suppose that we wanted to find out how many letter e’s there are in an English language book, without counting them one by one. We decide to take small samples of each page, count the e’s in each sample, and then extrapolate from those counts to estimate the number in the entire book.

We know that the letter e is the most common letter in the English language, so we should have no trouble with that, right? Let's do this sampling as a thought experiment.

We'll pierce the book with a hair-thin "drill", taking a core sample from each page, from cover to cover. What are the chances that we might even hit an e on any specific page, with a hair thin core drill? With all those other letters in the alphabet, and all the white space, the odds are pretty low that we might hit an e on any individual page. In fact, we might have sampled every page in the whole book, without hitting a single one.

Would it be reasonable to conclude that this English-language book does not contain any e’s, anywhere? No it would not, not from the tiny samples collected. And almost certainly, if we did manage to hit an e or two, any estimate of the number of e’s in the book would fall significantly below the true number. Because of the inadequacy of our sample size, we have introduced a significant sampling error. We have created sampling zeroes (i.e. there were numerous samples with no e’s in them), despite the fact that we know the letter e is the most common letter in English text.

Now let's do a second sampling, however, this time let's imagine that we are taking a core sample 1" (2.5 cm) in diameter, right through the book. I'm going to suggest to you that this might be an adequate sample upon which to estimate the number of e’s on each page. (Look at this text, as an example.) And then when we collate all of the page data, and do some statistics, we can calculate a pretty reasonable estimate of the number of e’s contained in the entire book.

There is a minimum sample size that will provide a true estimate of the frequency of randomly spaced letters in English language text. What if the letter whose frequency we were seeking to estimate was rather uncommon in the English language? An x, say, or a w? How large a sample would we need to take, in order to estimate the true number of each of those letters in that book?

It's conceivable that we might need to take a larger sample than even that 1" diameter core, to get an accurate estimate. Each letter would have a specific sample size requirement. And the same is true for the sampling of particles of gold in a nuggetty deposit. These differing sample size requirements would be analogous to those required by different quartz proportions/gold particle distributions in mineralized rock.

Gold is a rather special case in the world of metal mining. It’s a rather rare metal, but it is that same rarity that makes it very difficult to obtain an accurate grade estimate for the nuggetty gold deposits. How difficult? Let’s look at some hypothetical examples.

Let’s imagine that our gold particles are all 100 mg in size, and that they are perfect cubes. Each cube would be rather small, being 1.73 mm on a side, or almost exactly 1/16”. And let’s assume that the host rock is similar to that at Bellechasse, with a cubic metre weighing 2.8 metric tonnes (2800 kg). And let’s assume that the gold is randomly distributed in the host rock. At different grades, what are the probabilities that a drill sample would even contain a gold particle? And what are the chances that the assay sample prepared from the core sample might contain gold?

At 1 gram/tonne, there would be 28 particles of gold (28 times 100 mg = 2800 mg = 2.8 g) in 2.8 tonnes of rock. Drilling with NQ core would give us about 5 kg/metre, so our perfect metre cube of host rock would give us a sample containing 5kg/2800kg X 100% = .18% of the whole. However, with 28 particles, there is 28 X .18% = 5% chance that our core even contained any gold. Half of the core goes to the assay lab, so there’s a 5%/2 = 2.5% chance that any gold goes to the lab. Or, in other words, a 97.5% chance that the lab sample is barren.

Of the 2.5 kg (2500 g) sample that goes to the lab, a pulped sub-sample no larger than 50 g is actually assayed, or at a maximum, 2% of the lab sample. Assuming no other sampling variables come into play, there is a 2.5% X 2% = 0.05% chance that the assayed sample contains any gold (and thus, a 99.95% chance that it grades zero). However, if it does happen to contain one of those rather rare 100 mg particles of gold, the assay would return a value of 100 mg/50 g = 2000 g/tonne = 58.34 opt.

That is another aspect of the nugget effect, rare but extraordinarily high grades. To limit those extreme assays, pulped core is routinely passed through a screen (to capture gold nuggets, which are not crushed in the pulping process), or alternatively, the assay grades are “cut” (reduced to some arbitrary, however more reasonable, grade). But just as with the sampling zeroes that come from assaying too small a sample, having to cut the grade is further evidence that the method is inadequate to provide an accurate grade estimate.

In summary, a drill core sample with a 5% chance of containing any gold yields a 99.95% chance of returning a zero assay value, because the gold is not uniformly distributed within the volume of rock. We’re far more likely to miss the gold altogether, than we are to hit it with the drill, subsample it and assay positively for its presence, even when we know that it’s there.

The zero assays are an artefact of the sampling process; the procedure used is inadequate to provide an accurate gold grade because the samples are too small.

We can do similar mathematical exercises with different grades and particle sizes. Using the same overall grade assumption of 1 g/tonne, however, with the gold particles now 10 mg each, there would be 280 particles of gold present per cubic metre of host rock. We would stand a 50% chance that our core sample included one gold particle. However, after splitting the core, and obtaining a 50 gram sample to be assayed, there is only a 0.5% chance that we would find evidence of gold in the host.

If the overall grade was 10 g/tonne, but with the larger gold particles seen in the first example, we would again have only a 0.5% chance of having a positive assay for gold. Once again, these samples are too small to provide an accurate gold grade.

Clearly these hypothetical examples are very simplistic, as they do not account for the possibility that more than one gold particle might have been sampled by the drill core, which would obviously increase the likelihood that one or more of the particles might end up in the assay sample. I hope, however, that they do serve to illustrate that a nuggetty gold deposit presents a particular challenge with respect to the accurate determination of the gold grade.

Now, let’s turn our attention back to the diamond drilling at Bellechasse. Because the quartz is erratically deposited in the diorite, and the gold is erratically distributed in the quartz (as discrete particles), we're far more likely to miss the gold particles than to hit them, even if there are lots of particles present in the local zone we're sampling.

Each metre of NQ core returns about 5 kg of rock. Jim Tilsley has estimated that, to get an accurate grade estimate of the gold contained in a specific metre interval of rock at Bellechasse, he'd need a sample of between roughly 450 kg to almost 7000 kg, depending on how much quartz was present in the specific sample.

To get a diamond drill sample of 450 kg/metre, it would be necessary to be drill sampling with roughly 20" (50 cm) diameter core.

Even if there was such a rig in existence, I don't know how you'd even manage to lift the core out of the ground, without yet considering the logistics of sub-sampling a sample of that size, to then accurately obtain a grade for each metre of such a large drill core. It's just beyond the scope of economic reality to even consider trying to do that.

At present, it's reasonable to assume a significant under-estimate of grade from core sampling at Bellechasse, using diamond drilling of NQ diameter (about 2").

If the diamond drill core grades continue to come in at about 2 grams/tonne, the true grade might really lie between 3 g/tonne (as found in the surface bulk sample program in the Timmins Zone) to 5 g/tonne, or perhaps more. However, if a resource estimate is determined using 43-101 guidelines, then the 2 g/tonne grade becomes a permanent attribute of the deposit, because it can only be based upon the assays obtained from the lab. The diamond drilling sampling method that is the industry standard method is simply inadequate to accurately determine the gold grade in this deposit.

A 43-101 technical report based on diamond drilling will label the resource permanently with an inferior grade.

There is an alternative method involving statistical analysis of the gold particle size distribution, however, that is a very tedious and time consuming process.

There is a 2nd alternative that is not compliant with NI 43-101, which involves a conceptual model of the resource, however it cannot be used for financial projections related to the deposit.

A 3rd alternative is to process a bulk sample of the mineralized rock, a strategy which was implemented by the company in 2009 on the Timmins 1 Zone.

The bulk sample program consisted of 7 trenches of variable length, oriented perpendicular to the general strike of the diorite intrusive. Trenching was accomplished by blasting, with charge depth and size designed to fracture a block of rock roughly 2 metres length by width, and approximately 1 metre in depth. Blasting mats were used to retain the fractured rock within the confines of the trench thus created, which also had the effect of retaining the original spatial orientation of the fragments themselves. Mixing of the shattered rock from adjacent blasts was believed to be slight.

A total of 48 discrete bulk samples were thus obtained, each crudely averaging 10 tonnes, by weight. A further 24 bulk samples were obtained from a trench (07R) blasted in November 2007, which had lain undisturbed since that time.

After each bulk sample was mechanically removed, and sequestered individually, a within-trench sample was taken of the finely broken rock remaining at each sample location. Bulk samples were individually fed through a portable rock crusher, until able to pass a 2” screen. Each was then transported to a storage area onsite.

The within-trench samples (described as preliminary samples in the company literature) amounted to between 70 and 90 kg of rock, collected by hand, using a spade. Five ~20 kg grab samples were also collected from each of the crushed bulk samples, by sampling the face of the pile seven times over with the tip of a spade (one grab sample each from the four cardinal compass directions, and one from the top of each pile). Each blast thus provided six sub-samples for assay.

Each sample was then prepared for assay by first crushing each to 6mm size using equipment at the company’s coreshack facility in St-Magloire. Using a Jones riffle splitter, the sample was reduced in size until two samples each weighing 1-2 kg were obtained. Each was separately labeled, and submitted for total pulp metallic assay procedures on the entire sample, at Actlabs in Ancaster, Ontario. Rejects were labeled and stored in the coreshack facility.

At the Actlabs facility, the assay samples were milled in a puck and ring pulverizer until 97% of the pulp passed through an 80 mesh screen, which has openings .178 mm across. The oversize material, presumed to contain any nugget gold, was submitted for fire assay in its entirety.

Of the material passing through the screen, two ~30 gram samples were submitted for fire assay. Thus an individual within-trench sample yielded six assays (two sub-samples, each with one oversize and two undersize assays), while each bulk sample yielded thirty assays (five grab samples, each with two sub-samples, with one oversize and two undersize assays). A weighted average grade was then calculated for each trench and bulk sample.

The two main trenches across the heart of the T1 Zone were those labeled 09A and 07R. The range of grades obtained from the 09A trench was 0.680-7.620 grams/tonne from the trench debris, and 0.446-10.560 g/tonne for the bulk samples. Those from 07R ranged from -.345-13.170 g/tonne from the trench debris, and 0.556-5.258 g/tonne from the bulk samples. Smaller peripheral trenches designed to determine the 0.50 g/tonne cut-off for the mineralized envelope tended to return lesser average grades.

The average grade within the mineralized envelope was determined to be 2.99 g/tonne, with a cut-off grade of 0.50 g/tonne.

Direct comparison of these grades to those obtained by diamond drilling indicate that the bulk sample grade estimate is about 50% higher than that obtained from core sampling. However, even this bulk sampling method may still underestimate the true gold grade of this deposit, due to the magnitude of the nugget effect at Bellechasse. Further work would be required to determine a more robust grade correction factor, to adjust for the inadequate sample size provided by diamond drill core sampling.

Even if the nugget effect/grade underestimation problem cannot be easily overcome, the second variable in the resource estimation equation, tonnage, is much more easily determined.

Golden Hope is presently proving up tonnage at a massive rate, with this year's drill program. The company has recently declared a short-term target of 100 million tonnes of gold mineralization, hopefully to be achieved by the end of 2010.

Historical work on the Timmins, Ascot, and 88 Zones has provided sufficient information to begin to estimate the tonnes of mineralization present in each Zone.

Using a specific gravity for the quartz/diorite of 2.8, the Timmins 1 zone is estimated to contain about 11,000 tonnes per vertical metre (tpvm)(based on an irregular surface polygon roughly 100 X 50 metres (4045 sq. m), with a cut-off grade of 0.5 g/tonne).

Similarly, Timmins 2 A+B give 8,000 tpvm; Ascot yields 5600 tpvm, and 88 Zone gives 2600 tpvm. Drill core recovered to 300 metres indicates that the tenor of the quartz and the brecciation style are remarkably consistent with that seen at surface, and at all intervals in between.

Company geologists feel confident in projecting similar mineralization to depths of 1000 metres, and beyond. To a depth of 1000 metres, the company feels confident in estimating 25 million tonnes of mineralized rock, based on this historical work, all within a surface area of about 150 metres by 450 metres.

This year’s drill program has extended the mineralized zone to about 900 metres by 600 metres (irregular), with additional drilling inside of the earlier historic zone revealing mineralization not previously identified (e.g. Snow White, between 88 and Timmins 2).

To date, no less than 11 parallel quartz/diorite zones have been detected across the 600 metres strike, with strike extensions reaching to nearly one kilometre, trending NE from Timmins 1, through the Road Zone, and on to Ascot and beyond. Pending assay confirmation of gold mineralization, the current drilling (as at August 2010) has likely increased the total tonnage to about 40 million tonnes.

If we assume that historic diamond drill assays are consistent with those of the current program, at about 2 g/tonne, 40 million tonnes of ore would contain about 2.5 million ounces of gold.

If we assume that the bulk sample grade of 3 g/tonne holds for the mineralized envelope, then the contained gold would exceed 3.8 million ounces.

Phase 1 of this year’s drill program began on April 13, and ran through April 30, with 14 holes totaling 2044 metres. The results of this first phase were so encouraging, that a second round of drilling immediately followed, from May 11 through May 25. A total of 11 holes were drilled, for 1842.5 metres.

A third phase of drilling began as soon as the drillers had finished their rest period, and ran from June 8 through June 19. 3 holes were completed, for 1013 metres at the Timmins Zone, and 3 additional holes (633 metres) were drilled at the Beland showing, some 6.2 km SW of Timmins.

A fourth phase of drilling then put 9 more holes into the Timmins area, for a total of 2378.1 metres.

As at August 30, the fifth phase of drilling is well underway, and is now on the fourth hole, which is intended to reach up to 800 metres (about 650 metres below surface, at 55 degrees inclination).

Assays remain outstanding on the entire drill program, due to delays at the laboratory. However, it is extremely encouraging to note the high frequency of holes logging visible gold in the diamond drill core. As this year’s drill program has progressed, the instance of VG has increased from 14%, to 18% and 20%, and now stands at 25.6% (11 of 43 holes, including one instance at Beland, and a handful of holes with multiple instances of VG). Further statistical analysis will be conducted to see if there is a correlation of VG with depth, or with the individual geological structure being drilled.

Paul Nicholls, who logs all core for Golden Hope (Paul has recently trained two junior geologists in his logging procedures, which will allow for greater staffing efficiencies and task flexibility), updates geological mapping software every day with the structural data gleaned from the core: the rock type, grain size, quartz content, depth from surface of contacts, and so on.

The intention is to create a 3-dimensional map of the diorite intrusive(s), analogous to a topographic map, but instead, a subsurface model. This will not only yield more precise volumetric measurements (and thus, tonnage), but which will hopefully also reveal structural details that will guide further exploration activity. In time, assay grades will also be entered into the database, in hopes of further refining the modeling of the gold deposit.

Regional and Local Geology

The Bellechasse gold district is situated on the northern flank of the Appalachian Mountains, which were formed over 400 million years ago in a series of continental tectonic collisions. The large landmass called Gondwana (including present-day Africa) collided with Laurasia (which included North America), as the ancient ocean Iapetus closed, creating the super-continent known as Pangaea. The northwest face of Africa struck North America, pushing up the Appalachian Mountains, and left behind a complex series of banded structures, ribbons of continental margin, oceanic crust, and material from sedimentary basins, in the collision zone.

These large-scale geological zones trend on a line parallel to the St. Lawrence River, or on what is roughly a line from the southwest to the northeast.

The Bellechasse mineralized belt lies within the Dunnage Zone, an assemblage of island arcs and oceanic crust scraped up onto the continental margin, which is bounded to the northwest by the thrust fault known as the Baie Vert-Brompton Line, and to the southeast by another thrust fault, the Guadeloupe Fault.

The Dunnage Zone is further divided into a serpentinite zone, a sedimentary basin deposit, and a volcanic zone. The sedimentary basin deposits, locally called the Magog Group, are further subdivided, such that the Bellechasse mineralized belt lies within finely bedded sediments, called the Etchemin formation.

At Bellechasse, the sediments (actually volcanoclastic tuffs, composed of volcanic dust and fragments that fell into a calm basin) were intruded by sills of gabbro/diorite (the Mafic Igneous Complex, or MIC), which host the gold-bearing quartz-carbonate veins.

Until very recently, the dioritic sills of the MIC were believed to have been emplaced within the bedded sediments (historically described as mudstones and siltstones) prior to being folded and sheared during the mountain-building events that followed. Subsequent hydrothermal activity was then thought to have emplaced the gold-bearing quartz within a classic shear-hosted system. However, close examination of drill core obtained during the current drill program has led to a re-examination of the earlier work, because evidence for a shear-hosted system is not present at Bellechasse.

Although there are shear zones within the core samples, they are very few, and they are not spatially related to the hydrothermal deposits. In fact, the diorite appears to be quite competent, save for the obvious brecciation associated with the quartz veining. An entirely new generational concept for the formation of the Bellechasse mineralization has been proposed, involving hydraulic fracturing of the diorite by hydrothermal fluids under intense pressure.

In personal communications, Jim Tilsley has proposed the following sequence of events:

1. Over a significant period of time, recurrent local volcanic activity produced a large volume of very fine particulates, which settled in shallow, still water to produce bedded tuffs. Occasionally seen within the tuff layers are larger ejacta (more commonly lapilli, marble-sized projectiles, but also bombs, fist-sized magma balls), which have been flattened within the tuff beds. Organic material seen in the sediments is attributed to biological activity occurring between eruptive events. So, rather than being a classic clay shale, he believes the sediments to be of volcanic origin.

2. After the bedded tuff had lithified, it was folded or overturned, such that the bedding plane was near-vertical (parallel to the regional faults, and perhaps 10 degrees beyond vertical, to the northeast).

3. A large pluton of diorite intruded from below, and at its upper reaches, it was partitioned into relatively planar sill-like structures with finger-like edges, along the weaker cleavage plane of the bedded tuff layers.

4. After the diorite intrusive had fully hardened, very high-pressure hydrothermal fluids fractured their way through the competent diorite “cap”, depositing quartz and other solutes in rapid pulses of crystallization.

Hydraulic fracturing not only explains the presence of quartz veins within competent diorite, it also explains another readily observed phenomenon at Bellechasse, one that had no other obvious explanation. Whether observed at a centimetre scale, metre scale, or decametre scale, the quartz veins are chaotically distributed within the diorite.

In one boulder I personally viewed, three initially parallel veins had widely divergent paths. The left-most vein followed a perfectly curved trajectory, perhaps due to mechanical spalling or even cavitation; the middle one was straight, but it terminated sharply and bluntly; and, the right-most underwent a 90-degree turn away from the others, before developing complex bifurcation. In walking the site, it became quite clear to me that the quartz was deposited chaotically, in all three dimensions, unlike any veins I have ever seen before.

The mechanism of hydraulic fracturing is well understood, as it is the basis for the liberation of natural gas from shale beds, as an example.

Basically, you need three things to be true, for a natural hydraulic fracturing system to develop. You need a significant source/reservoir for hydrothermal fluids; you need significant pressure (probably into the thousands of atmospheres of pressure, kbars); and you need competent rock (strong, unbroken) to contain the pressure over time.

I'm going to lean into conjecture for a moment, but I think that for all of these to be true, the system has to be very large or wide-scale for it to form a natural hydraulic fracturing system of any significance. At the risk of having created a circular argument, I'll simplify that to say that they're big or they don't happen, according to my present understanding of the phenomenon.

At Bellechasse, we seem to have had all three conditions met. We had a significant source of hydrothermal fluid (with substantial silica/quartz dissolved in it, and gold and other metals), we must have had significant pressures (probably at a depth of a couple of kilometres beneath the surface, and driven by regional volcanic activity related to subduction of the Iapetus Ocean crust), and we had a competent diorite cap sealing the whole thing in.

At the surface interface between the super-heated and -pressurized hydrothermal fluid and the diorite that trapped it, weak spots in the diorite would give way, as the pressure of the hydrothermal fluids could be brought to bear over extremely small surface areas. A crack would form, and propagate very rapidly, like cracks in a shattering window. The hydrothermal fluid would have locally increased the volume of the fractures in the rock, but that would drop the pressure. If the pressure dropped below that which is required to split the rock apart, the fracturing would halt. However, the drop in pressure would also favour the precipitation of quartz and metals out of solution, partially filling the fractures with solid material.

The pressure would soon rise once more (our assumption is that it's a hydraulic system, with a large fluid reservoir) until further fracturing occurred, but because the quartz is weaker than the diorite, those quartz-filled areas would tend to open further, and the veins would lengthen at their tips because cracks focus the cleaving forces there (think about a stone chip in the windshield of a car, spreading from the tips of the cracks).

The whole process would occur extremely rapidly in geological terms, but it would happen in these pulses of expansion/deposition and repressurization. The process would continue until the system’s pressure fell below that required to fracture the diorite, which likely occurred when the fluids developed pathways out of the stronger diorite, and into the structurally weaker volcanic sediments surrounding the diorite.

Style of Mineralization

The gold is found in two discrete styles of mineralization, although both are randomly distributed as particles within the quartz host. Most of the gold appears to be associated with sulphide mineralization (including pyrite, pyrrhotite, arsenopyrite, sphalerite, galena, and chalcopyrite, in descending order of occurrence overall), with the strongest associations between native gold and sulphides occurring with arsenopyrite, galena, and sphalerite.

Overall sulphide content has been estimated at 1-2% of the deposit mass. Native gold is also seen as fine to locally very coarse grained particles in quartz veins in the absence of sulphides. Sericite is strongly associated with this latter style of mineralization.

Mr. Tilsley has determined that there are three distinct expressions of the auriferous quartz veins, which he has defined in terms of the local zones where they were first revealed by stripping and/or diamond drilling.

The first, the Timmins 1 (T1) type, is characterized by auriferous quartz filling brecciated diorite in plug-like protrusions from the intrusive (i.e. finger-like protrusions, whose length and width are of similar dimensions).

The second, the Timmins 2 (T2) type, is characterized by auriferious quartz filling elongated breccias zones in the body of the intrusive, or in ridge-like apotheoses (crowning bands) on the back of the diorites (in this case sill-like planar structures, whose length greatly exceeds the width).

The third type is the Ascot-type, which is characterized by auriferous quartz in disorganized to massive quartz veins in the bedded volcanic rocks that were intruded by the diorites. These quartz structures are probably located above T2-type zones in the underlying intrusive structure. There appears to be no correlation between the type of host for the quartz veining, and the presence or absence of sulphide mineralization, although the presence of sulphides, particularly galena, is seen to be associated with higher gold concentrations.

Core interpretation from the recent drilling program has determined the Road Zone to be the T2- type roots of the adjacent Ascot Zone. The Beland showing, which yielded visible gold in the diamond drill core, is an Ascot-type deposit. Deeper drilling will be required to demonstrate if this new Ascot-type deposit is indeed underlain by T2-type structures. The 88 Zone, as well as the Snow White Zone lying between it and Timmins 2, appear to be of the T2 type of elongated quartz-in-diorite structure.

Properties under Claim

GNH holds a total number of 472 claim units, with a total area of 26,574 hectares (65,666 acres) in the Beauce region. Of that total, 139 claims (5,339 hectares/13,193 acres) are part of the Bellechasse Mineral Belt, which includes the Champagne deposit, and North-Zone showing.

The original exploration zone in the Bellechasse Belt, the Timmins/Ascot/88 Zones collectively, was about 3.77 hectares (9.32 acres), but it has since expanded to 32.31 hectares (79.8 acres) through exploration activities, including SGH soil sampling, and on-strike and across-strike diamond drilling. In its expanded state, this exploration zone represents about 0.6% of the area of the Bellechasse Mineral Belt.

Extensive mapping, field sampling, and soil geochemical surveys are underway, to significantly expand the company’s knowledge base and predict new drill targets within the Bellechasse claim blocks.

Already identified are targets at Beland, some 6.2 km SW of Timmins/Ascot, which was sampled with three diamond drill holes in May 2010 (returning VG in the core), and the Sugar Bush and Laval’s Mountain targets, 5.35 km and 9.25 km NE of Timmins (respectively), which will be drilled in September or October 2010.

Golden Hope also has numerous other claim blocks in the Beauce, with both gold and base metal targets, which together represent about four times the area of the Bellechasse Belt itself. Those claims include:

a) Talon St. Lucie (37 Claims/1686 Ha/4166 acres). This is a base metal (copper/nickel) target, with possible platinum in an ultramafic environment. Artisanal mining took place on the property from the early to mid 1900s. Ground geophysics was done in some areas of the property in the winter 2009 season. The property is now being mapped and field sampled. Selected areas have been soil sampled for analysis by the SGH geochemical method.

b) St. Luc (70 Claims/2687 Ha/6640 acres). This is a gold and base metal target, also in an ultramafic environment. SGH geochem sampling was performed last fall (2009), which indicated a well defined base metal target for drilling. The surface was mapped, and ground geophysics completed early this summer (2010). Drill permits have recently (August 2010) been issued for this target, and a drill plan is expected shortly.

c) FSG/Coucou (31 Claims/1418 Ha/3504 acres). This claim group has gold and base metal targets in a volcanic environment. SGH geochem was performed in 2009, defining gold and base metal targets. Mapping was completed in early summer 2010, and some drilling is planned on the SGH anomalies, probably after freeze-up at the end of the year.

d) Lafayette (See Moose Cliff claim group). Lafayette was an artisanal copper mine around 1910 to 1920 then became an operational asbestos mine in the 1940’s to 50’s. Field samples from the copper boudinage (a shear zone structure) reported values of up to 49.97% copper, 372.4 g/t Silver, 4.32% zinc. Detailed mapping will be performed in the area shortly.

e) Riviere des Plantes (14 Claims/826 Ha/2041 acres). This block has potential for precious metals (gold/platinum) in an ultramafic environment, although no work is planned at the present time for the area.

f) Chute du Bras/Riviere du Cinq and LG occurrence (96 Claims/3544 Ha/8757 acres). Chute du Bras provided field samples assaying at up to 20 g/tonne gold, in 2008. In 2009, regional mapping uncovered values around 2 g/tonne at the LG occurrence, about 4km NE of the Chute du Bras showing. Detailed mapping is underway, and further work will be planned when the mapping is completed.

g) Moose Cliff (36 Claims/2124 Ha/5249 acres). Geophysics was completed during the winter 2009 field season. This is another gold and base metal target, in and ultramafic intrusive environment. SGH geochem was recently completed over the geophysical anomaly, and surface mapping will be undertaken shortly.

h) St-Benjamin (29 Claims/1711 Ha/4228 acres). This block could host the lode source of some of the Beauce region’s placer gold. Mapping is underway, and further work will be planned in accordance with the results of the field explorations.

Claim Map

Soil Gas Hydrocarbon Geochemical Method

SGH is an innovative exploration method developed by Actlabs (Ancaster, Ontario) used for identifying mineral or petroleum deposits by analyzing soil samples for both the type and relative concentrations of a suite of organic (carbon-based) molecules. Golden Hope has worked closely with Actlabs in putting this novel method to use at Bellechasse. SGH has proven to be an extremely cost-effective method for targeting prospective gold targets, as drill collars and orientations can be directly determined from the results provided by Actlabs.

Effectively the SGH geochemical method “smells” the aroma of deep mineral deposits by “sniffing” soil sampled at the surface. In all, 162 different organic molecules, in 19 chemical classes, are identified and determined to the part per trillion thresholds, via sample desorption (aroma release), then submission to gas chromatography/mass spectrometry (identifying the aroma).

The organic molecules from a grid of soil samples will thereby reveal patterns of concentration and types of organics, which are then compared to the signature patterns seen from soils overlying known mineral deposits. Signatures are presently available for gold, nickel, copper, uranium, REE (rare earth elements), diamonds (kimberlite signature), VMS (volcanogenic massive sulphides), and SEDEX (sedimentary exhalative), as well as coal, gas, or petroleum deposits.

A false colour surface plan is then generated from the concentration/location data, with the probability that the soil overlies a specific type of deposit represented by the various colours used. SGH is thus a dual-purpose method, providing both the position of the deposit, and also the identity of the target, based on the specific pattern of hydrocarbons detected.

The obvious question is how hydrocarbon molecules can be used to infer the presence of mineral deposits. It is believed that microbial activity (primarily bacterial) is strongly controlled by the presence or absence of metals in the bedrock and soils lying above it.

Some bacterial populations are either quite tolerant of, or even stimulated by, the presence of specific metals. In contrast, the same metals might suppress or even eliminate colonization by other bacterial communities, by literally poisoning them. So, for example, a gold deposit would be colonized by aurophiles (gold-loving bacteria), and have no colonies of aurophobes (gold-hating bacteria). When those aurophiles respire, and especially when they die, they give off the organic compounds associated with their metabolism and their cellular structures. It is those organic compounds which are believed to be the source of the 162 organic molecules analyzed by SGH.

Anecdotally, it has been noted that there is a unique aroma in the shafts of gold mines, and one of the signature classes of compounds used to identify gold deposits is the aromatic class of hydrocarbons.

One of the distinct advantages of SGH is that it depends on volatile organic chemicals. Other soil metallic analytical methods such as MMI (mobile metal ion) are subject to interference by lateral groundwater movements, which can make locating a mineral source somewhat problematic, if not impossible.

Once they are released by the bacteria, the volatile organic compounds slowly diffuse through the overburden. Although the molecules are too heavy to remain long in the vapour phase, they do evaporate, and then condense, evaporate and condense, as they migrate outwards from the source. Because the movement of the organics is a primarily a diffusive process, the highest concentrations are always in closest proximity to the source. We are familiar with this sort of diffusion process in our daily lives. Air fresheners are often based on a solid organic block, which gradually evaporates, scenting the air. The scent is strongest the closer we are to the source. In the soil/overburden, the various organic compounds migrate outwards at differing rates, defined by their chemical characteristics, but always with lower concentrations towards the edges of the migration limits, and higher towards the centre, above the source. When a group of these organic compounds have similar concentric concentration patterns, and they also are part of a signature pattern for a specific mineral, then the computer will generate a probability curve for the mineral in question, based on the concentrations of between 15 and 25 selected organic compounds. The higher is the concordance to the hydrocarbon signature of the deposit type, the greater the probability assigned by the computer.

Another benefit of the SGH method is that it does not literally require soil as the field sample to be collected. Although the more typical “B” horizon soil sample (commonly used in other methods) remains the preferred sample type, lake sediment, humus, peat, even snow have each been successfully analyzed by this method. Grid surveys which included a variety of sample substrates have yielded good data, so difficult field conditions should not limit this method, unlike other soil sampling methodologies.

Moreover, the samples (other than snow) do not have to be freshly gathered. Samples stored for years have yielded good data, so soils collected for other analyses can be resubmitted for SGH, provided that they have been stored under appropriate conditions.

Golden Hope Mines has used the SGH probability maps to assign drill collar locations in their 2010 drill program, with great success. At the time of this writing, quartz has been hit in 100% of the diamond drill holes collared using SGH.

Positive assay results will be required, of course, to fully validate the method. If it proves its utility, SGH will have been shown to be an extremely cost-effective exploration tool.

It should also be noted, however, that the recently discovered Snow White occurrence, which lies between Timmins 2 and the 88 Zone, was not identified by the SGH survey in that area, although it is coincident with a large magnetic anomaly. The surface there is heavily disturbed, which may have limited the SGH method’s success, as may have the depth of the strike (visible gold hit at about 200 metres).

In other environments, SGH has proven useful to 600-700 metres, however. There is also the possibility that underground structures such as faults, or even the bedding plane of the sediments seen at Bellechasse, might lead to a lateral shift in the surface signature.

There is insufficient evidence yet to know for sure, however the soil anomaly at the Beland target appears to have been shifted by as much as 100 metres, relative to the quartz/visible gold returned by diamond drill core at 160 metres depth (Jim Tilsley, personal communication).

The high apparent success rate and the low cost have led Golden Hope to commit to a huge expansion of the SGH program.

Significant strike extensions are being sought both to the SW of the Timmins Zone, and along a significant magnetic feature striking to the NE of the Ascot/Road Zones, where a large gold-probability anomaly was discovered during the past winter. If indicated by drilling about to commence (August 2010), extended sampling programs will occur in the vicinity of the Sugar Bush and Laval’s Mountain SGH gold anomalies. In addition, a significant sampling program is underway near the Beland occurrence.

The Beland target recently drilled was actually sampled in error, as the historical Beland gold showing (reported from the 1950s) lies about 1 km SW of the SGH anomaly that later returned visible gold in the diamond drill core in May 2010.

Quebec uses a different geographical grid coordinate system (the MTM-based SCOPQ) than is the more commonly employed UTM grid system, and the Beland soil sampling grid was established in the vicinity of quartz outcrop about 1 km distant from the intended sampling zone due to confusion between the two systems.

Despite this error, the Beland SGH survey returned the highest ever gold probability of any of the surveys yet conducted.

Although highly speculative to consider, it does raise the possibility that the Beland historical showing, and the drilled area one kilometre distant, are each part of a single large system. Further SGH work, and drilling, will be needed to reveal the truth.

As at August 30, 2010, the company had 103,458,716 shares issued and outstanding, 133, 943,109 fully diluted.

The company had cash holdings of $1,950,000 (all valuations in $CDN), net of all payables, sufficient to fund exploration activities at the current burn rate for 6 to 8 months.

Company insiders own 2, 983, 009 shares of the company, not including options. Close relatives of Frank Candido, the company President and CEO, also own approximately an additional 6,000,000 million shares. The single largest shareholder is Senvest Capital Inc. (TSX:SEC), which holds more than 5%, but less than 10%, of the capital stock.

On September 17, 2010, the share price achieved, and closed at, the 52-week high of $0.81/share, representing a market cap in excess of $84MM.

Golden Hope Mines appears to be on the cusp of revealing to the world one of the most exciting gold discoveries in Canadian history. Drilling in the vicinity of the Timmins/Ascot/88 Zones has the potential to define 100 million tonnes of gold mineralization before the year ends. At the historical average grade of 2 g/tonne, that would represent 6.4 million ounces of gold in the ground, beginning at surface. And, if that wasn’t exciting enough, the blue sky potential beyond that appears to be immense. The Timmins/Ascot/88 Zones, and the expanded exploration zone surrounding them, amount to about 0.6% of the area of potential mineralization within the Bellechasse Project claims. Within that limited area, each mineralized gold zone is open in all directions.

Similar quartz in diorite showings and geochemical responses are known from other sites along the potential gold belt, notably Laval's Mountain 9.25km to the NE of Timmins, Sugar Bush 5.35km to the NE, and Béland 7.2km to the SW. GNH holds contiguous claims covering at least 90% of the area between these sites, and beyond. If the highly speculative possibility that these showings are all outcropping from one very large geological structure, a hydrothermal fracture zone of significant dimensions, then it is almost inconceivable just how much gold might be present in the Bellechasse Project area. Visible gold was returned in core from one of three holes drilled at Béland earlier this summer. Surely, that is not a negative result.

Drilling currently underway includes deep drilling in the Timmins Zone (to about 800 metres), which will be followed by strike extension testing immediately to the NE of the Ascot Zone. Laval’s Mountain will thereafter be tested with the diamond drill.

Once assay reporting begins by news release (expected imminently), a steady stream of news is expected for the remainder of the year, as the exploration program has been near-continuous since April, and will be ongoing for the foreseeable future.

And if that wasn’t enough, one should not forget that the Bellechasse Project is only 20% of the company’s holdings in the Beauce. Exploration activities are ongoing at multiple other sites, and drilling may soon begin to test these other prospective targets. I cannot think of any other company with so much blue sky potential as has this one, Golden Hope Mines.