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Overview — The Path to Production Our work is focused on exploring both new and developed ground to expand resources. In 2005 we hired Beacon Hill Consultants, an engineering firm specializing in mining and feasibility, to develop a blueprint for production. Beacon Hill presented eight specific recommendations aimed at upgrading and discovering the resources required to bring the project into full operation. View the October, 2006 Beacon Hill Assessment Report The goal of this program is to delineate resources of 500,000 tonnes of measured and indicated resources grading 12/g Au/tonne (0.35 oz Au/ton). This resource would provide sufficient feed to begin operations at a processing rate of 280 tpd. What's Happening Now We have completed Phase II of a three-phase exploration program outlined by Beacon Hill in 2006. Phase II included 42 holes drilled from underground in a location where no historical drilling had taken place. The result was discovery of an exciting new mineralized structure called the BK Zone, now the focus of Phase III. The New BK Zone This entirely new gold occurrence lies between the King and Bralorne mines. Gold intercepts in the BK Zone ranged from 0.6 to 5.5 m (2 to 17.5 ft) in length, with grades ranging from 2.74 to 86.08 g/t (0.08 to 2.511 oz/ton) gold. Exploration by Drifting Following the mining maxim, "Drill for structure and drift and raise for tonnes and grade," Bralorne will now drive a drift into the BK Zone from the existing Alhambra cross-cut. The diagram at right shows the part of the Alhambra cross-cut previously driven (in purple), with the planned 400-foot extension shown in yellow. This drift will allow access to the BK structure so a drift may be driven on the vein and subsequent raises driven. In addition, the drift will serve as a platform for exploration and drilling of parallel structures with greater precision (also reducing costs). Key Elements of Phase III (underway) Our Phase III exploration includes the following elements:
Phase II Work Completed in 2007 As part of Phase II exploration, the drilling that uncovered the BK Zone was designed to determine the extent of a "Bonanza" structure encountered in 2006. In all, Bralorne drilled 42 holes to further explore this target. Results included a 1.1 ft intersect grading 403.89 g/t (11.781 oz/ton) gold and 1.2 feet assaying 246.94 g/t (7.203 oz/ton) gold at the King Vein. Modeling Shows Further Potential In order to evaluate the significance of these intersections, the results were modeled using the MineSightTM modeling program. This work clearly indicated potential for a vein or vein structures and associated alteration zones not previously recognized. Thus there is excellent potential for additional resources to be delineated based upon further work. Previous Work and Bulk Sampling Since acquiring the project from Avino Silver & Gold Mines in 1995, we have expanded our holdings, completely re-furbished the facility, obtained all permitting and brought it to operation at 120 tpd. Through extensive underground and surface exploration, we have expanded several key gold zones (including the Peter and 51B) and located new zones. In 2004 and 2005 we conducted a 20,000-ton bulk sampling program, recovering 2,916 ounces of gold. Recoveries averaged 92% (61% by gravity, 31% by flotation). We sold approximately 2,300 ounces for proceeds of C$2.1 million. Funding We raised C$1.15 million in the fourth quarter of fiscal 2007, providing sufficient funds to carry out the bulk of Beacon Hill's recommendations. View the Photo Gallery 
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