North Porphyry Target

The North Porphyry prospect occurs at the intersection of northeast-southwest faults with a splay of the north-trending Philippine Fault, which is the structural setting of porphyry copper-gold deposits in the Surigao District. The North Target is a very large and strong chargeability anomaly covering about 1.2 km by 500 m. It is coincident with soil copper and gold anomalies, and unusually intense alteration of ultramafic rocks (pyrite and magnetite disseminations and silica micro-veinlets).

Panning of heavy mineral concentrates taken along creeks draining the North Target yielded significant gold counts of up to 21 grains from 26 kg of raw creek sediment sample draining ultramafic rocks. This implies significant mineralization "leakage" from intrusive rocks below, and very possibly a porphyry mineralization source. Several copper showings and intrusive dikes have also been found in the area.



Four drill holes with an aggregate length of 505 m were drilled in late 2005. Considerable operational difficulties were experienced in the intensely fractured, broken and gougy ultramafic cap rock and three holes were lost at shallow depths. No core samples were taken from these four holes as the rock intercepted was solely ultramafic. Except for very scanty fine pyrite, no significant mineralization was noted.

In 2009, the 8th hole for the American Tunnels drill program was drilled into the North Target IP chargeability anomaly. The hole, which bottomed at 336 m, intersected meta-sediments below the ultramafic cap rocks. Two narrow intrusive dikes were intersected with porphyry-related alteration and weak copper mineralization. Hole 8 is likely quite distal to the porphyry mineralization source (interpreted to be on the south-east margin of the porphyry system, which is likely centered in the center of the donut-shaped geophysical anomalies).

South Porphyry Target

The South Porphyry Prospect lies 3 km south of the North Porphyry Target. It is a large, 1.5 km by 500 m area. The prospect exhibits a classic stacking of geophysical, geological and geochemical features associated with Philippine porphyry copper-gold systems. The South Porphyry Prospect occurs in a favorable structural setting, at the intersection of a strong NNW fault, likely a splay of the nearby Philippine Fault, and major SW faults extending through the Asiga River area.

Soil geochemical surveys partially covered the South Target and defined gold, zinc and copper anomalies. The South Target geological, geochemical and geophysical results are interpreted as reflecting a porphyry copper-gold system at depth. Intrusive stocks had been mapped in the area, and artisanal gold workings noted.

Gold soil anomalies are associated mainly with the northern end of the prospect and associated with artisanal workings. Copper anomalies are extensive and flank the chargeability anomaly to the west and east. A strong zone of copper anomalism along the east flanks of the chargeability high is associated with extensive, structurally-controlled phyllic alteration, which is also reflected by a resistivity anomaly. Broad areas of zinc anomalism, characteristically distal to porphyry systems, occur extensively in the area.

Rock samples taken from the structurally-controlled phyllic zones returned from 0.01 -- 0.509 Au g/t. One float sample with malachite taken from Guinaringan Creek assayed 0.92 % Cu, 0.01 Au g/t, 1.80 Ag g/t. Another float sample taken from Mapaso Creek to the south of this prospect area assayed 0.08 % Cu. Samples taken from outcrops of the altered limestone assayed from 0.01 to 8.46 Au g/t.

In 2006, a single hole was drilled on the South Target, designed to drill into the high chargeability zone. The hole encountered operational difficulties and, after three months, it was terminated at 251.20 m before reaching the target depth. No significant mineralization was noted.

NEWS RELEASES

November 20, 2006

Results of Agata Project Drilling Project Reported

TECHNICAL REPORTS

April 25, 2005

Independent Geological Report on the Surigao Property Group