Exploration

Historically, minimal exploration work was conducted on the property and the areas between the three historic mines were left undeveloped. These are now referred to as the mine gap areas. Since taking control of the property in 2002, Bralorne Gold Mines focused surface and underground exploration work in these previously under-explored mine gap areas to locate extensions of the past-producing veins as well as parallel structures. The Company's goal was to discover sufficient resources in the land gaps between the historic mines to start a new mine operation.

This strategy has born significant discoveries, beginning in 2006 with two bonanza high grade intercepts in the gap between the Bralorne and King mines, later known as the BK Zone. SB-06-109B intersected 0.61 m of 15.87g/t gold and then intersected a 0.34 m vein assaying 402.58 g/t gold and 0.37 m vein assaying 246.99g/t gold. In 2007, a major underground drill program of 47 holes totalling 8603 metres was focused on following up on the Bonanza discovery in 2006. This exploration work lead to further significant intercepts along the BK Zone. In 2008, the Company began developing the BK Zone through drifting, with raising and trial mining following in 2009.

Development work completed in 2009 included driving two raises in order to investigate the extent of mineralization above the 800 Level. An upper adit was also collared and a decline was driven 109.7 metres for access to the upper portion of the BK vein. The Company also conducted mine development to gain access to the 51BFW vein, one of a series of veins located south and in the footwall of the 51 vein in the Bralorne mine. A new adit was collared and a track drift was driven 140.2 metres to intersect the 51BFW vein on the Bralorne 400 level.

Starting in 2010, Bralorne focused on bringing the property back into production, with trial stope mining on the BK-800 shoot. A total of 5,645 tonnes of material grading 11.31 grams per tonne gold was extracted and stockpiled from the BK-800. Development work also began on the BK North vein including of a footwall access drift and sublevels along the vein plus raises to determine the extent of a potential mineralized zone. Trial mining on this zone resulted in extraction of 3,687 tonnes of material grading 14.50 grams per tonne gold. In April 2011, the Company commenced processing the stockpiled material from the BK North and BK-800 mineralized areas. Bralorne Gold Mines poured its first gold bar---containing 254 ounces of gold and 59 ounces of silver---on May 27th 2011, marking the official opening of the new Bralorne Mine operations.

In addition to mining activities, Bralorne continued exploration drilling to locate additional resources on the BK Zone. The 2009 surface drill program included 16 holes for a total of 3,658.9 metres with a purpose of exploring the BK vein above the 800 Level as well as parallel structures inferred both north and south of the vein in order to confirm the presence of interpreted vein structures and test their resource potential. Significant intercepts included SB-09-149 which intersected 0.9 m grading 43.51g/t gold late in the drilling season.

In 2010, Bralorne carried out a surface drill program totalling 11 holes from 2712 meters that was designed to follow-up on significant intercepts on the BK Zone from the 2009 drill program. Further significant intercepts were obtained, including hole 169 which assayed 140.46 g/t gold over 0.6 metres. This new mineralized shoot was named BK-3 since it was the third mineralized shoot discovered on the BK zone. Underground development during 2011 included the advancement of the upper BK decline specifically targeting the BK-3 zone.

In 2011, the exploration program consisted of 30 drill holes totalling 5,012.4 meters targeting the BK Gap area including the BK North vein and the BK South vein as well as the area above the intercepts on the BK-3 zone during the 2010 surface drilling program. Highlights from the BK-3 zone included hole SB11-013 which assayed 12.6 g/t gold over 1.8 metres and hole SB11-013, which assayed 22.9 g/t gold over 0.5 metres.

On the BK zone, exploration drilling led to a new discovery---the highest grade intercept recorded in the history of the Bralorne property. Drill hole SB11-021 intersected 800.6 grams per tonne gold over 0.9 metres. A second metallics assay for this interval returned 1,765 g/t gold. The new zone, named the M-Vein, is currently being explored by underground development from the BK-3 workings.

The 2012 underground drill program was focused on the under-explored BK gap area located between the historic Bralorne and King mines, which together these two of the three historic mines produced nearly three million ounces of gold from 1928 to 1971. The 2012 underground drill program has completed a total of 15 holes (1,935 m) to date. The main objective of the program is to test for extensions of high grade gold mineralization previously discovered in the BK-3 Zone, where underground drifting previously reported results of 68.7 grams gold per tonne (un-cut) over 0.8 metres (true thickness) along a 160 metre strike length (See news release dated June 18, 2012).

The most recent hole UB12-015 intersected a quartz vein interval that contains several grains of visible gold and assayed 385.57 grams gold per tonne (uncut) over 1.2 metres. This intercept is located just west of the underground development currently underway on the BK-3 zone and will be investigated by sub-level drifting in the coming months.

Bralorne's focus moving forward is to extend the life of the mine by developing additional resources on surface and below the area presently being mined. The exploration and development activities continue to locate mineralized zones and define an inventory of measured and indicated resources on which a mine plan can be formulated. As at August 2012, measured and indicated resources have been delineated above the 800 level totalling 154,750 tonnes grading 9.11 g/t Au (0.266 oz Au/t) plus an additional 246,835 tonnes grading 8.78 g Au/t (0.256 oz Au/t) classified as inferred resources.