CAPITAL RESOURCES AND LIQUIDITY

As at September 30, 2008 the Company had working capital of $336,182 and cash of $568,545. These resources are sufficient to satisfy its immediate financial needs and commitments and to complete its planned exploration program for the Thor Property, however additional financing will be required to sustain its current level of exploration activity beyond 2008 .

On May 6, 2008 the Company completed a private placement of 1,630,432 units at a price of $0.46 per unit, for gross proceeds of $750,000. Each unit consisted of one flow-through share and one-half of a share purchase warrant, with each whole warrant entitling the holder to purchase one common share at a price of $0.75 until May 6, 2009, and thereafter at a price of $1.00 until May 6, 2010. In addition, the Company issued finders options entitling the holders to purchase up to 114,130 units at a price of $0.46 each until May 6, 2010. Each unit will consist of one common share and one-half of a share purchase warrant, with each whole warrant to entitle the holder to purchase one common share at a price of $0.75 until May 6, 2009, and thereafter at a price of $1.00 until May 6, 2010.

On June 25, 2008 the Company completed a private placement of 1,630,435 units at a price of $0.46 per unit, for gross proceeds of $750,000. Each unit consisted of one flow-through share and one-half of a share purchase warrant, with each whole warrant entitling the holder to purchase one common share at a price of $0.75 until June 25, 2009, and thereafter at a price of $1.00 until June 25, 2010. In addition, the Company issued finders options entitling the holders to purchase up to 78,141 units at a price of $0.46 each until June 25, 2010. Each unit will consist of one common share and one-half of a share purchase warrant, with each whole warrant to entitle the holder to purchase one common share at a price of $0.75 until June 25, 2009, and thereafter at a price of $1.00 until June 25, 2010.

On August 6, 2008 the Company completed a private placement of 100,000 flow-though units for gross proceeds of $46,000. Each unit consisted of one flow-through common share and one-half of a share purchase warrant, with each whole warrant entitling the holder to purchase one common share at a price of $0.75 until August 6, 2009 and thereafter at a price of $1.00 until August 6, 2010. In addition, the Company issued finders options entitling the holder to purchase up to 7,000 units at a price of $0.46 each until August 6, 2010. Each unit will consist of one common share and one-half of a share purchase warrant, with each whole warrant to entitle the holder to purchase one common share at a price of $0.75 until august 6, 2009, and thereafter at a price of $1.00 until August 6, 2010.

Midway East Property, Nye County, Nevada

In January of 2008 the Company completed a drilling program at Midway East. After reviewing the results of the program it was decided that the property did not merit further work. The acquisition and deferred exploration costs related to this property ($70,003) were written off as at December 31, 2007 and the costs on the 2008 drilling program ($122,279) were expensed during the first quarter.

Tybo West Property, Nye County, Nevada

There has been no exploration activity on the Tybo West property in 2008.

Thor Property, British Columbia, Canada

The Company’s Thor property, which is located in Revelstoke Mining District of British Columbia, includes 27 Crown Granted Mineral Claims and 4 staked claims covering approximately 1,300 hectares.

The property, first discovered in the late 1800’s, hosted bonanza-grade precious/base metal mineralization and was mined intermittently until about 1944. Five past ore-bearing structures, the True Fissure, St. Elmo, Great Northern, Broadview and the Blue Bell, are known and have been the focus of mining activity. In some cases the lodes were traced up to 800 m along strike and were drifted on for unknown distances. Although no infrastructure currently exists on the property, at least two 100 ton per day mills were on site in 1930, and again in 1971, the former which produced for a short time while the latter collapsed in 1972, leaving broken material underground which apparently remains un-processed to date. Management believes that the ground holds considerable potential for additional undiscovered mineralization as attested to in reports by P. Eng’s Christian von Hessert (1984) and Kenneth C. Rose (1972). Mr. von Hessert noted the presence of 94,000 tons of “ore” (all categories, this is a non-National Instrument 43-101 compliant historical report) in the True Fissure and Blue Bell Mines grading approximately 9.0 opt Ag, 6.0% Zn and 6.5% Pb, which the Company believes is still in-situ. Both stratiform and vein-type mineralization occur, making the Thor property a very attractive exploration target to expand on the known areas of mineralization.

Exploration Activities for 2008

On September 30, 2008, the Company completed 8,696.67 metres of NQ-size diamond drilling on the project which targeted the Great Northern, Blue Bell and Broadview Zones. Results of the diamond drilling program are still being received by the Company, and analytical data continues to be collated.

Blue Bell Zone

Geologic Overview of the Blue Bell Zone

The area between St. Elmo/Blue Bell and the True Fissure Zone forms a steep cliff face that is not able to be tested with conventional diamond drills owing to topographic considerations. This area is referred to as the “Scab” since it forms a large gossanous outcrop of quartz-sulphide breccia mineralization measuring at least 250 m in strike length and 100 m in dip length that has numerous occurrences of precious/base metal mineralization where the Company has conducted surface grab sampling. This sampling included 0.41 g/t Au, 0.14% Cu, 5.63% Pb, 9.42% Zn and 197.79 g/t Ag (average of 6 samples) in the Back-Breaker Zone and 4.60 g/t Au, 0.27% Cu, 8.92% Pb, 4.38 % Zn and 535.20 g/t Ag (average of 7 samples) in the Water Box Zone.

Section 405m North

Drill holes Thor-128 and Thor-131 were completed in an area between the St. Elmo Zone that identified 1.80 m of 0.17 g/t Au, 0.26% Cu, 4.18% Pb, 4.32% Zn and 421.55 g/t Ag and the Blue Bell Zone that identified 3.70 m of 3.03 g/t Au, 0.12% Cu, 1.52% Pb, 5.80% Zn and 129.12 g/t Ag. Access to the current discovery area was difficult due to topographic considerations and necessitated multiple drill holes to be completed from one setup. The current drill results establish continuity between the St. Elmo and Blue Bell Zones for at least 205 m down-dip and 240 m along strike, that until now were regarded as two separate zones. The St. Elmo/Blue Bell area remains open at depth and along strike.

Drill Hole Thor-128 (-55 degrees) was directed to the West-Southwest and intersected a zone of massive sulphide at a depth of 12.22 m down-hole. In this area, the CMU has a relatively flat dip, and is geologically unique in that the zone is dominated by volcaniclastic sediments and is devoid of quartz-sulphide breccia. Two over-limit (>300 g/t Ag) drill core samples have been cut to 300 g/t Ag.

Drill Hole Thor-131 (-60 degrees) was directed to the East-Northeast and intersected the zone at a depth of 15.36 m down-hole. Two over-limit (>300 g/t Ag) drill core samples have been cut to 300 g/t Ag.

Great Northern Zone

Geologic Overview of Great Northern Zone

Drilling has demonstrated that the CMU is prone to tectonic thickening along a prominent structural lineation plunging shallowly northward. The 2007 exploration program at Thor suggested that the True Fissure Zone located several hundred metres north of the Great Northern Zone (“GNZ”) was a faulted-off portion of the much larger GNZ, and this interpretation has been supported by the 2008 drilling program.

Drill Hole Thor-64 (-50 degrees) intersected massive sulphide in the CMU.

Drill Hole Thor-68 (-90 degrees) was completed down-dip of drill hole Thor-71 which intersected 0.73% Cu, 13.74% Pb, 14.55% Zn, 3.51 g/t Au and 696.6 g/t Ag / 2.43 m. Precious and base metal mineralization has now been followed down-dip on Section 250 m South for a dip length of over 250 m.

Drill Hole Thor-66 (-90 degrees) was drilled up-dip from hole Thor-68, and intersected two narrow zones of high-grade massive sulphide mineralization. Thor-71 intersected the CMU approximately 40 m down-dip from Thor-68.

Drill Hole Thor-61 (-90 degrees) extended the CMU 85 m down-dip below surface and intersected a wide zone of massive sulphide mineralization.

Drill Hole Thor-62 (-70 degrees), drilled from the same setup as Thor-61 intersected two narrow zones of massive sulphide.

Drill Hole Thor-63 (-50 degrees), from the same setup intersected a high-grade zone of massive sulphide.

Drill Hole Thor-75 (-75 degrees) was drilled from the same setup as Thor-73 and intersected a narrow intercept of massive sulphide.

Drill Hole Thor-70 (-45 degrees, 47.85 m total depth) had only insignificant values. It was drilled on the up-dip portion of the GNZ in a small ravine, and ‘overshot’ the up-dip portion of the GNZ owing to a very thick succession of alluvium above the target (9.14 m).

Drill hole Thor-72 previously reported drilled immediately below this hole was successful in identifying the GNZ (0.14% Cu, 4.11% Pb, 4.80% Zn, 4.84 g/t Au, 310.9 g/t Ag / 1.10 m plus 0.55% Cu, 4.73% Pb, 13.83% Zn, 1.81 g/t Au and 780.8 g/t Ag / 1.22 m).

Section 500m South (Exploration Hole)

Drill Hole Thor-74 (-45 degrees, 348.39 m total depth) tested the extension of the CMU approximately 300 m down-dip of the deepest sulphide intercept known on this section, and targeted a low-amplitude magnetic anomaly delineated in 2007. This hole intersected a wide section of volcaniclastic sediments before entering a zone of quartz-ankerite veining at the down-dip projection of the CMU. This fault zone is probably the Camborne Fault Zone (“CFZ”) that extends for upward of 9 km north of the Thor Property to the historic Spider Mine, and can also be seen in the Broadview Mine area at the south end of the Thor property.

The lack of any sulphide, precious/base metal mineralization or any intrusive rock found in Thor-74 is evidence that the highly enriched gold and base metals found at Thor are not genetically related to the CFZ, which is probably a late-stage post mineralization thrust fault.

OUTSTANDING SHARE DATA

Authorized

Unlimited common shares without par value

Unlimited class A preferred shares with a par value of $1

Issued and outstanding as at September 30, 2008

18,207,875 shares issued and outstanding

21,839,216 shares on a fully-diluted basis

As at September 30, 2008 the following incentive stock options and share purchase warrants were outstanding:

On October 15, 2008 the Company granted incentive stock options to its directors and officers under its incentive stock option plan, entitling them to purchase up to 700,000 shares of its common stock at a price of $0.20 per share for a period of five years.

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