Coringa - Advanced Gold Projects - Gold Deposits in Brazil

An option agreement was originally signed by Chapleau Resources on the Coringa gold project in July 2006. Coringa is comprised of 19,093ha and is located in the state of Para, immediately south of the Mato Velho project. Access is via a 36 km gravel road from the main BR 163 highway and the project is located 75km south of the town of Novo Progresso.

The area has been worked by local miners since the late 1970's. Alluvial workings in the streams draining the steep ridges, and evidence of surface and underground operations on the many quartz veins cutting the felsic host rock can be seen throughout the area. There are no official records of gold production from Coringa. However, local sources estimate that approximately 10 tons of gold was taken out of this area.

Extensive strike lengths (up to 6.65km) can be seen on the structures. Individual veins have generally only been worked to a depth of 20 to 30m with the depth of the artisanal workings limited to the zone of weathering and saprolite development. Deeper workings extending to 75m depth also exist in some areas such as Mei de Leite.

No previous drilling had taken place on the property until Chapleau commenced drilling on March 24, 2007.

Coringa lies within the southern part of the Tapajós Mineral Province which is located within the northern portion of the Pre-Cambrian Amazon craton, where middle Proterozoic granites, felsic metavolcanic rocks and minor meta-sedimentary sequences are exposed. The principal structural trend evident throughout the Coringa Property is northwest (300° - 315°). Less prominent structures are oriented north-northwest (320° - 340°). The mineralized structures are coincident with the north-northwest trend, and are hosted by both granites and rhyolites. The strike length of the main shear/vein system is about seven (7) km. There are at least four (4) additional mineralized structures, and in total Coringa has mineralized structures extending over at least ten (10) km strike length. The average strike is 335° and structures mainly dip to the northeast at an average dip of 80°. The width of the veins varies from 0.2 to 2.6m. The most significant alteration is sericitization which in general occurs as narrow halos surrounding the mineralization.

High-grade gold mineralization is frequently associated with quartz veins containing a significant amount of base metal sulphides (up to 8% Pb and 6% Zn in the Guaxebinha-Meio-Onza Block), or as in the Serra Block, high gold grades are coincident with quartz and pyrite.

In order to fast track drilling, initial exploration was focused on a 5 by 7km area with known vein systems and historic workings. To date, a total of 81 diamond drill holes have been completed totaling 8785m.

High grade gold, silver, lead and zinc values have been confirmed along the Galena-Boca block which extends over approximately 400m strike length. Gold mineralization occurs within silicified, quartz veins and sericite-altered shear zones surrounded by propylitic alteration envelopes within granite, rhyolites and volcanic breccias. The main sulphide minerals are pyrite, galena, chalcopyrite and sphalerite which together reach levels between 0.5% and 20.0%. Mineralization is open at depth, and two ore shoots have been identified thus far. Drilling to date in this part of the vein system has returned values that include 21.04g/t Au over 1.5m (DDH34) and 20.89g/t Au over 1.5m (DDH4)

At Serra, gold, silver, lead, zinc and copper mineralization has been intersected over 700m strike with values which include 29.31g/t Au over 1.5m (DDH1) and 22.47g/t Au over 1.5m (DDH42). Two ore shoots dipping to the SE have been identified at Serra thus far.

Gold mineralization at Meio extends over at least 1.1 km.and is sub-vertical with an average thickness of 1.36m. Higher grade zones of mineralization plunge approximately 63 degrees to the southeast. Holes 11, 62, 65, 68 and 67 define one such zone, which has an average weighted grade of 18.48g/t Au over a true thickness of 2.08m. Another high grade gold zone is defined by holes 78, 79 and 81 with an average weighted grade of 19.92g/t gold over a true thickness of 1.1m. In addition, the presence of shallow 10-12 m deep historic shafts and artisanal workings beyond the limit of the current drilling is further evidence that the mineralized structure extends towards the southeast and the northwest.

An IP survey (104.7km), together with a 90 line-km ground magnetic survey has highlighted at least 23 new targets which remain to be tested.

The mineral resources for the Coringa Project were updated in March 2012 by Global Resources Engineering Ltd. Resources were calculated for 5 zones and were categorized as Measured, Indicated, and Inferred using both a 1g/t cut-off and a 2g/t cut-off grade. Gold grades were confined to the mineralized zone and estimated using the inverse distance squared method capped at 50g/t gold.

Table 1 Coringa Mineral Resource, 1g/t Gold Cut-Off Grade (Undiluted)

(last updated March 2012)

Resource Area	Tonnes	Au (gpt)	Au (grams)	Au (oz)
Measured
Serra	520,000	7.29	3,793,000	122,000
Valdette	18,000	1.22	22,000	1,000
Meio – Come Quieto	335,000	7.15	2,395,000	77,000
Galena – Mae de Leite	278,000	5.85	1,625,000	52,000
Demetrio
Total	1,151,000	6.81	7,835,000	252,000
Indicated
Serra	383,000	9.23	3,534,000	114,000
Valdette	227,000	1.33	303,000	10,000
Meio – Come Quieto	1,196,000	4.06	4,859,000	156,000
Galena – Mae de Leite	217,000	4.23	917,000	29,000
Demetrio
Total	2,023,000	4.75	9,613,000	309,000
Measured & Indicated
All Areas	3,174,000	5.50	17,448,000	561,000
Inferred
Serra	482,000	6.55	3,156,000	101,000
Valdette	1,661,000	1.33	2,216,000	71,000
Meio – Come Quieto	1,948,000	3.01	5,865,000	189,000
Galena – Mae de Leite	564,000	4.20	2,367,000	76,000
Demetrio	856,000	3.52	3,010,000	97,000
Total	5,511,000	3.01	16,614,000	534,000

Table 2 Coringa Mineral Resource, 2 g/t Gold Cut-Off Grade (Undiluted)

(last updated March 2012)

Resource Area	Tonnes	Au (gpt)	Au (grams)	Au (oz)
Measured
Serra	446,000	8.27	3,688,000	119,000
Valdette
Meio – Come Quieto	285,000	8.14	2,319,000	75,000
Galena – Mae de Leite	200,000	7.49	1,498,000	48,000
Demetrio
Total	931,000	8.06	7,505,000	242,000
Indicated
Serra	324,000	10.59	3,432,000	110,000
Valdette
Meio – Come Quieto	844,000	5.13	4,333,000	139,000
Galena – Mae de Leite	122,000	6.44	786,000	25,000
Demetrio
Total	1,290,000	6.63	8,551,000	274,000
Measured & Indicated
All Areas	2,221,000	7.23	16,056,000	516,000
Inferred
Serra	408,000	7.41	3,025,000	97,000
Valdette	60,000	2.32	139,000	4,000
Meio – Come Quieto	1,355,000	3.64	4,936,000	159,000
Galena – Mae de Leite	449,000	4.90	2,199,000	71,000
Demetrio	448,000	5.39	2,415,000	78,000
Total	2,720,000	4.67	12,714,000	409,000

Global Resource Engineering Ltd. previously completed an independent NI 43-101 mineral resource estimate in October 2009. The current resource estimate of March 2012 builds on the initial 43-101 resource estimate which included 269,500 Measured and Indicated troy ounces of gold representing 982,291 tonnes at an average grade of 8.53g/t gold and 98,224 Inferred troy ounces of gold representing 327,054 tonnes at an average grade of 9.34g/t ton gold on a diluted basis and using a 2g/t gold cut-off. Table 1 below presents the October 2009 Coringa mineral resource by block at a 2 g/t gold cut-off grade.

The complete NI 43-101 report on the Coringa project has been filed on SEDAR and may be accessed through the following link www.sedar.com. Additional information with respect to the resource estimate is set out in the Company's press release dated October 08, 2009.

The definitions below are taken from the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definitions Standards - For Mineral Resources and Mineral Reserves, prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council on November 27, 2010. The CIM Definition Standards are incorporated into NI 43-101 regulations for reporting of resources and reserves.

Mineral Resource

Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.

A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth‟s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.

Inferred Mineral Resource

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

Indicated Mineral Resource

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

Measured Mineral Resource

A ’Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

Mineral Reserve

Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.

A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.

Preliminary Feasibility Study (Pre-Feasibility Study)

A Preliminary Feasibility Study is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental considerations and the evaluation of any other relevant factors which are sufficient for a Qualified Person, acting reasonably, to determine if all or part of the Mineral Resource may be classified as a Mineral Reserve.

Feasibility Study

A Feasibility Study is a comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of realistically assumed mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental considerations together with any other relevant operational factors and detailed financial analysis, that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a Pre-Feasibility Study.

Independent consultants, Global Resource Engineering Ltd (GRE), completed a Preliminary Economic Assessment (PEA) for the Coringa gold project. Full details of the Coringa PEA in the form of a National Instrument 43-101 technical report have been filed on SEDAR and maybe accessed through the following link www.sedar.com. Additional information on the PEA is also set out in the Company's press release dated May 05, 2010.

The PEA was based on the resources defined in Table 1. Although the project contains significant values of silver, lead, copper, and zinc, these metals were not included in the resource estimation.

The PEA indicates a robust Internal Rate of Return ("IRR") of 34% and a Net Present Value ("NPV") of US$41M (assuming a 5% discount rate and a gold price of US$950/troy oz (oz). The project payback period is 3.7 years.

A detailed mine layout and sequence was completed to estimate the project cash flows on a yearly basis. The mine layout was divided into 3 separate areas based on the 3 primary resource areas identified which contain 98% of the gold resource at the 3gpt Au cutoff: Serra (71%), Guaxeninha-Meio-Onza (Meio) (19%), and Galena (8%) (see Figures)

Detailed mine layouts were completed for each resource block based on the surface topography and mineralized area above the cutoff grade. The mineralized area for each block was divided into discrete stopes. A mine sequence was developed for concurrently mining each resource block over the mine life with an average of 8 active stopes.

A conventional Carbon in Leach (CIL) milling circuit is the most attractive method for treating the Coringa ores. Metallurgical testing was completed on two composites (Serra and Meio), representing 90% of the estimated resource. This testing indicates the ore is free milling with a 99% Au recovery for the Serra composite and 98% recovery for the Meio composite. Plant recoveries were estimated at 5% below the testing results or 94% and 93% respectively.

Capital costs were estimated for all facilities, mine equipment, preproduction development, permitting and working capital based on publish ed average costs for 2009, current manufacturer and vendor quotes, and professional experience.

All capital costs include a 20% contingency except for preproduction development which includes a 15% contingency since they were calculated through detailed unit costs estimates.

A detailed design was completed for a tailings storage facility (TSF) along with a subsequent capital estimate based on quantities and unit costs. Closure cost for the TSF were estimated based on this detailed design.

Operating costs were estimated on a unit basis for all mine operations by estimating equipment hours and materials for a set operating unit (Table 3).

Labor costs were estimated separately from unit operations costs by calculating the required number of employees for one man coverage and multiplying by the required number for each workforce. Labor costs were sourced from a Brazilian salary survey completed by a reputable firm in 2009. The average operating costs over the life of the mine are shown in Table 3 below.

The Coringa preliminary economic assessment was prepared under the supervision of Mr. Kevin J. Gunesch a registered Professional Engineer in the state of Alabama (27448) and Principal Mining Engineer of Global Resource Engineering Ltd. (GRE). Christopher K. Chapman a registered Professional Engineer in the State of Colorado (40679) and Principal Mining and Civil Engineer of GRE. Terre A. Lane associate of GRE, AusIMM registered, and Principal Mining Engineer for Gustavson Associates and Richard D. Moritz Principal Mining Engineer for Gustavson Associates, MMSA registered and associate of GRE participated in the Coringa preliminary economic assessment report preparation.

This preliminary assessment is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the results of the preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.