nilam_8k-ex1002.htm


    EXHIBIT 10.2

     

    
      


      


      


      SUMMARY
REPORT ON THE

      


      


      QUINCHIA PROPERTY


      


      Department
of Risaralda, Colombia

      


      


      Mineral
Contracts

      Exploration License
18567  

      Exploration License
22159  

      Concession Contract No.
22270

      


      


      


      


      


      


      Prepared
by

      Caribbean
Copper & Gold Corporation

      Cobre y
Oro de Colombia SA

      


      


      


      


      


      


      


      February,
2008

      


      
        
          
          

        

        
           

          
            

          

        

        
          
          

        

      

       

      TABLE
OF CONTENTS

      


      1.
SUMMARY

      


      2.
INTRODUCTION AND TERMS OF REFERENCE

      2.1
TERMS OF REFERENCE

      2.2
SOURCES OF INFORMATION AND RELIANCE ON OTHER EXPERTS

      


      3.
GEOGRAPHIC SETTING

      3.1
PROPERTY LOCATION AND DESCRIPTION

      3.2
MINERAL TENURE

      3.3
ACCESS, INFRASTRUCTURE AND LOCAL RESOURCES

      3.4
PHYSIOGRAPHY AND CLIMATE

      


      4.
HISTORY

      


      5.
GEOLOGICAL SETTING

      5.1
REGIONAL GEOLOGY

      5.2
PROPERTY GEOLOGY

      


      6.
DEPOSIT TYPE

      


      7.
MINERALIZATION

      


      8.
QUINCHIA EXPLORATION AND RESULTS: 2005 to 2007

      


      9.
DRILLING

      9.1  DOS
QUEBRADAS DRILL RESULTS

      9.2  MANDEVAL
DRILL RESULTS

      


      10.
SAMPLING METHOD AND APPROACH

      


      11.
SAMPLE PREPARATION, ANALYSES AND SECURITY

      


      12.
DATA VERIFICATION

      


      13.
ADJACENT PROPERTIES

      


      14.
MINERAL PROCESSING & METALLURGICAL TESTING

      


      15.
MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

      15.1
PRELIMINARY MINERAL RESOURCE – DOS QUEBRADAS

      


      16.
OTHER RELEVANT DATA AND INFORMATION

      


      17.
INTERPRETATION AND CONCLUSIONS

      


      18.
RECOMMENDATIONS

      


      
        
          
          

        

        
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      1. SUMMARY

      


      This
technical report on the Quinchia Property is intended to provide an assessment
of the economic potential of the Quinchia property through a description of its
geologic characteristics and prior exploration results.

      


      The
Quinchia Gold Project is located within the Municipality of Quinchia, Department
of Risaralda, Republic of Colombia, approximately 190 kilometers WNW of the
Colombian capital of Bogotá and 55 kilometers to the north of Pereira, the
regional capital of the Department of Risaralda

      


      The
Project is located in the southern edge of a newly identified Au (Cu) porphyry
sub-belt of the Middle Cauca.  The basement in the Middle Cauca region
is form by basaltic oceanic rocks; this basement is covered by Oligocene
continental basin sedimentary rocks of the Amaga Formation that in turn is
covered by the 6 to 9 My volcano-sedimentary Combia Formation.  Quartz
diorite stocks, interpreted as co-genetic with Combia are genetically associated
with the known mineralization that varies in style from Au (Cu) porphyries to Au
(Au-Cu-Zn) intermediate sulfidation systems.

      


      The
Quinchia project is composed by at least three mineralized centers associated
with quartz diorite complexes with possible ages varying between 6 to 9 My and
represent typical Au (Cu) porphyry systems.  These quartz diorite
centers are part of the evolution of the volcano-sedimentary Combia
Formation.

      


      Between
January and November 2006, AngloGold Ashanti’s Colombian
subsidiary,  Sociedad Kedahda SA (now AngloGold Ashanti de Colombia
SA), drilled 4701.17m in 18 holes in the Quinchia District. The Drilling focused
on three porphyry gold targets named Dos Quebradas, Mandeval, and La
Cumbre.

      


      Eight
core drill holes were drilled on the Dos Quebradas target and a preliminary
resources estimation was carried out using the information from the drill
holes.

      


      Seven
core drill holes were drilled on the La Cumbre porphyry target proving that the
porphyry style mineralization covers an area of at least 400 x 500 m, with
possible extensions of the porphyry target that remain untested. Average gold
grades from the surface samples and drill holes from La Cumbre target is 0.745
ppm.  More drilling is needed to have a good estimation of the mineral
potential of the La Cumbre target.

      


      Three
drill holes were drilled at the Mandeval target with gold grades varying between
0.2 and 0.4 ppm, which is very similar to the results of outcrops
samples.  Kedahda concluded that there is no mineral potential in the
Mandeval target.

      


      The Juan
Tapado area is a known large gold stream sediment anomaly toward the north of
Dos Quebradas that have not been evaluated yet.

       

      
        
          
          

        

        
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      Diamond
drilling and initial economic evaluation was focused on Dos Quebradas, La
Cumbre. Anglo determined that the Dos Quebradas target has an overall potential
of 2 million ounces at 0.7 ppm Au cut off.  This target is located in
a somewhat incised valley. There are theoretically two sub-targets with >1 g
Au/t potential: a) Don Miguel Ladino sector and b) Don Albercio Ladino sector.
The Don Miguel Ladino sector is related to +3ppm Au surface sample results and
the open +1.4 ppm Au intersection at the bottom of borehole DQ-DD-3, plus
mineralized basalt blocks in borehole DQ-DD-2. The theoretical ore potential
would be a body of approximately 100m x 100m x 200m depth x 2.5 x 1.5 g Au/t or
approximately 200.000 oz at 1.5 ppm Au. The Don Albercio Ladino sector is more
difficult to envisage as the +1g Au/t intersection in DQ-DD-5 does not reach
surface. Any operation will suffer from increased stripping, internal waste and
the Mandeval creek.

      


      The La
Cumbre prospect has very favorable topography for open pit mining and heap leach
operation. High gold values in early diorite present good spatial correlation
with hydrothermal biotite and fine-grained chalcopyrite. Gold was progressively
leached by the overprinting of intermediate argillic alteration. Though there
are isolated assay results >1 ppm Au, the expected average gold grade for
large volumes of the mineralized system is around 0.7 ppm, and there is
potential for small areas with > 1 ppm Au. The identified target cover and
area of approximately 400m x 400m that is open to the south.

      


      Drilling
proved that the Mandeval target has gold grades < 0. 4 ppm and is no consider
an exploration target anymore.

      


      A large
stream sediment anomaly remain untested in the northern part of the Quinchia
project; Phase II follow up work in the district should be advanced according to
agreements with indigenous population, and the municipality of
Quinchia.

       

      
        
          
          

        

        
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      2.
INTRODUCTION AND TERMS OF REFERENCE

      


      2.1 TERMS OF REFERENCE


      


      This
technical report on the Quinchia Property was prepared by Caribbean Copper &
Gold Corporation. It is intended to provide an assessment of the economic
potential of the Quinchia property through a description of its geologic
characteristics and prior exploration results.  This report was
completed to comply with the norms and standards set out in National Instrument
43-101 of the Canadian Securities Administrators.

      


      2.2 SOURCES OF INFORMATION AND
RELIANCE ON OTHER EXPERTS 

      


      This
technical report is based upon published and unpublished data, primarily from
geological reports as described in the sections herein entitled History and
References.  Some of these reports were written prior to the
implementation of the standards relating to National Instrument
43-101.

      


      The
authors relied upon mineral tenure representations by AngloGold Ashanti Ltd. and
its Colombian affiliates, and by Cobre y Oro de Colombia SA, who attest to the
validity of the mineral exploitation and exploration contracts.  This
report assumes good standing of the joint venture agreement between AngloGold
Ashanti Ltd.’s Colombian affiliate Sociedad Kedahda S.A. and Cobre y Oro de
Colombia SA.

      


      3. GEOGRAPHIC SETTING


      


      3.1 PROPERTY LOCATION AND DESCRIPTION


      


      The
Quinchia property consists of 1,408 hectares of mineral exploitation contracts
granted by the Colombian Ministry of Mines to the individuals Silvia Rios Estela
Martinez and Juan Uribe David Hurtado.

      


      Geographically,
the mineral contracts are located within the Municipality of Quinchia,
Department of Risaralda, Republic of Colombia, some 190 kilometers WNW of the
Colombian capital of Bogotá or alternatively, some 55 kilometers to the north of
Pereira, the regional capital of the Department of Risaralda (FIGURE
3.1).

       

      
        
          
          

        

        
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      3.2
MINERAL TENURE

      


      The
Quinchia property primarily consists of three granted mineral contracts (two
exploration licenses and one concession contract), totaling 1,408
hectares,  flanked by other mineral tenements controlled primarily by
Cobre y Oro and by B2Gold.  The entire area of the claims is located
within an approximate 10,000 hectare area of interest, which defines the
Quinchia property for the purposes of the Agreement between Kedahda and Cobre y
Oro.

      


      The main
Quinchia project area, where recent exploration and drilling was focused, is
covered by three claim blocks totaling 1,408 hectares. The location and details
regarding the claim blocks are outlined in TABLE 3.1 and are shown in FIGURE
3.2.

      


      TABLE 3.1: MINERAL CONTRACTS,
QUINCHIA PROPERTY 

      


      
        	
                CONTRACT NUMBER
      

              	
                SIZE HECTARES
      

              	
                REGISTERED
      TITLE HOLDER

              	
                CONTRACT
      STATUS

              
	 
      	 
      	 
      	 
      
	
                18567

              	
                869.79

              	
                URIBE
      HURTADO JUAN DAVID; RIOS MARTINEZ SILVIA STELLA

              	
                Current

              
	
                22159

              	
                250.60

              	
                URIBE
      HURTADO JUAN DAVID; RIOS MARTINEZ SILVIA STELLA

              	
                Current

              
	
                22270

              	
                288.46

              	
                URIBE HURTADO JUAN DAVID; RIOS
      MARTINEZ SILVIA STELLA

              	
                Current

              


      

      


      The
tenement information outlined in TABLE 3.1 is confirmed with the Colombian
authorities as of February, 2008.  Claim status as presented herein
however, may evolve as applications are approved or as contracts are signed by
the Colombian government.  Updated tenement may be verified with the
government, and historical (not regularly updated) information can be seen
online via the Colombian government’s mineral tenement website at:
www.ingeominas.gov.co. This website is in Spanish. The procedure for mineral
title verification is as follows:

      


      • Go to
homepage: www.ingeominas.gov.co


      • Go to:
“Nuevo CMC”, located on the upper left of the homepage

      • Go to:
“Consultas de Expediente”

      • Under
“Clasificacion” enter “Titulo” or “Solicitud”

      • Enter
number from CONTRACT NUMBER in TABLE 3.1, where solicited in “Codigo de
Expediente”

      • Press
“Buscar” (Search) at bottom of page.

      • In the
case that “Titulo” does not produce a positive result, repeat search using
“Solicitud”.

       

      
 

      
        
          
          

        

        
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      Figure
3-2   Claim Map – Quinchia Property

      


      


      


      The area
of the three known porphyry systems of the Quinchia project is covered by
tenements owned by Kedahda/Cobre y Oro and by Juan David Uribe (optioned to
Kedahda/Cobre y Oro ).  The northern part of the project (Juan Tapado
area) is mainly covered by tenements of Cobre y Oro and by a Special Mining
Reserve owned by the municipality of Quinchia (Fig. 3-2).  The
municipality has expressed their interest to negotiate the area of the special
mining reserve.

      


      In the
map above of the Quinchia project with Tenements:  3rd party type 1
are tenements optioned to Cobre y Oro, 3rd party type 2 are tenements not
optioned to Cobre y Oro; and the Municipality Especial Area can be optioned for
exploration.

      


      3.3
ACCESS, INFRASTRUCTURE AND LOCAL RESOURCES

      


      Access
and infrastructure surrounding the Quinchia project is good.  The area
is surrounded by gravel roads which connect a dense rural farm population to
various nearby 10,000+ person population centres, including the towns of
Quinchia, Riosucio and Anserma (FIGURE 3.3). Various mid-sized cities, including
Manizales, Pereira and Armenia are located within a two-hour drive of the
project area, and full services are available from any of these
centers.

       

      
        
          
          

        

        
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      Access to
the Quinchia property is accomplished overland.  The project is
located about five kilometers (30 minutes) SSE, along gravel-topped roads, from
the town of Quinchia, Risaralda. Based upon a Colombian entry point, access to
the Quinchia project may be achieved along the following routes:

      


      Travelling
overland along well maintained paved highways from Medellin, via the towns of
Caldas, Versailles, Santa Barbara, La Pintada, Marmato,  and Riosucio
to the town of Quinchia (approximately 3 hours, depending upon traffic
conditions); or

       

      Traveling
by air from Bogota to Manizales, and then overland along well maintained roads
through the town of Anserma to the town of Quinchia (approximately 2 hours,
depending upon traffic conditions); and,

      


      Traveling
overland along maintained gravel roads from Quinchia to the Quinchia project
area (approximately 30 minutes).  The use of a four-wheel-drive
vehicle on the gravel road section is recommended but usually not
essential.  Gravel roads afford direct access to the exploration areas
of Los Cumbres and Dos Quebradas.

       

      

      
 

      
        
           

        

        
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      Economically,
the Municipality of Quinchia and the Quinchia area may be characterized as
rustic and rural.  Agricultural activities dominated by coffee and
mixed-crop farming are principal sources of sustenance and
income.  Small-scale, artisanal gold mining is important in various
areas such as Miraflores, El Chuscal and Quinchia.

      


      Sociedad
Kedahda S.A. secured a surface access agreement with the local property owners
in the areas of planned exploration and drilling.  Additional surface
rights may be necessary for the establishment of additional exploration and for
a potential commercial mining project.

      


      Water,
power and labour are readily available at the project site.  Local
labour is not trained in modern exploration and mining technique, indicating the
need to provide training and import qualified personnel.  All
requirements (personnel, equipment, contractors) for project exploration and
development can be acquired\contracted out of Quinchia, Anserma or
Riosucio.  Heavy equipment and diamond drills can be contracted out of
Manizales, Medellín, or Bogotá.

      


      3.4 PHYSIOGRAPHY AND CLIMATE


      


      The
Quinchia property is located overlooking the Cauca River valley, along the
eastern margin of Colombia’s physiographic Western Cordillera (FIGURE
3.1).  The topographic expression of the region is steep and,
characterized by high-relief, vegetated mountains and steeply incised active
drainages. Elevations are highly variable ranging from ca. 800 metres above sea
level along the Cauca River valley to the east, to ca. 2,800 metres over some of
the peaks surrounding the Quinchia area.  The elevation at the
Quinchia project area ranges from about 1,000 to 1,500 metres above sea
level.  Topography is moderate to steep.

      


      Climatically,
the region is tropical to sub-tropical, with daytime temperatures throughout the
year averaging in the 20 to 24 degree Celsius range. The climate is humid, being
somewhat more so during punctuated rainy seasons (March to May; September to
December).  Rainfall ranges between 900 and 3,000 millimeters per
year.  Natural vegetation is dominated by lush, low-growth Andean
forest, mostly preserved along the course and headwaters of the natural
drainages and over to peaks of higher elevation hills.  Approximately
70% of the area including and surrounding the Quinchia project has been cleared
for agricultural purposes, including primarily commercial coffee production and
subsidence food crops such as plantain, beans, bananas and manioc.

      


      


      4. HISTORY 

      


      The
Quinchia property forms part of a Pre-Colombian to modern-day artisanal gold
mining district which extends from Anserma in the south to Riosucio in the
north. (FIGURE 4.1). Production on an artisanal level has been more or less
continuous throughout the region through to modern times, but with respect to
the present property boundaries, it is not possible to quantify with any
certainty the amount of gold extracted from the mines surrounding Quinchia to
date.  According to Rodriguez et al. (2000),

       

      
        
           

        

        
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      artisanal
gold production was most significant in the general area in the
1950’s.  Interest was renewed in the area in the late 1970’s (likely
due to the increase in world gold price) and culminated in the 1980’s in the
Miraflores area with the formation of the artisanal mining cooperative
“Asociacion de Mineros de Miraflores”. Activity has been relatively consistent
since this time, ebbing and flowing with fluctuations in the gold
price.

      


      With
respect to modern exploration and development in the vicinity of Quinchia, the
mines at Miraflores have drawn the attention of various foreign-financed
exploration companies since the mid 1990’s, when Canadian junior companies such
as Gran Colombia Resources Inc. and Sur American Gold Inc. reviewed the property
and staked claims in the surrounding area (TVX, 1997). Data from these reviews
are not available. The most serious foreign-company review of the prospect was
undertaken in 1997 by T.V.X. Mineria de Colombia, a subsidiary of the then
Canadian mid-tier gold producer T.V.X. Gold Inc (T.V.X).  The social
situation in the area during the 1990’s did not lend itself to a secure
exploration environment and no at-depth exploration was completed by
T.V.X.  In 2000, the Colombian government’s geological division,
INGEOMINAS, recognizing the apparent mineral potential of the prospect, with the
permission of the Asociacion de Mineros de Miraflores, undertook a series of
technical studies in the vicinity of Quinchia, which included geological
mapping, geochemical and geophysical studies, and  resource
calculations not compliant with National Instrument 43-101.

      


      In 2005,
Sociedad Kedahda S.A. entered into an agreement with the holders of the mineral
concessions (Juan David Uribe Hurtado and Silvia Stella Rios Martinez), and
exploration by Sociedad Kedahda S.A. had been ongoing through 2006, when the
decision to farm-out the project was made.

      


      In
November 2007, Cobre y Oro de Colombia S.A. entered into an agreement with
Sociedad Kedahda S.A. to obtain all rights to the Quinchia
Project.  Under the agreement, Cobre y Oro assumed the obligations and
rights contained underlying Option Contract in place between Kedahda and the
holders of three mineral concessions (Juan David Uribe Hurtado and Silvia Stella
Rios Martinez).

      


      5. GEOLOGICAL
SETTING

       

      5.1 REGIONAL
GEOLOGY

      


      The
Quinchia project is located in the southern edge of a newly identified Au (Cu)
porphyry sub-belt of the Middle Cauca.  The basement in the Middle
Cauca region is form by basaltic oceanic rocks; this basement is covered by
Oligocene continental basin sedimentary rocks of the Amaga Formation that in
turn is covered by the 6 to 9 My volcano-sedimentary Combia
Formation.  Quartz diorite stocks, interpreted as co-genetic with
Combia are genetically associated with the known mineralization that varies in
style from Au (Cu) porphyries to Au (Au-Cu-Zn) intermediate sulfidation
systems.  The western and eastern limits of the Middle Cauca sub-belt
are marked by the regional faults of Cauca and Romeral
respectively.  The geology of the block located toward the west the
Middle Cauca is composed by a Precambrian gneiss, Paleozoic schist, Triassic
clastic rocks, and Cretaceous andesite.  The geology of the block
located toward the west is composed by volcano- sedimentary lithologies with
oceanic floor affinity intruded by middle Miocene intermediate
stocks.

       

      
        
           

        

        
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      The
Quinchia property is located along the eastern margin of Colombia’s
physiographic Western Cordillera.  According to Cediel and Cáceres
(2000) and Cediel et al. (2003), the region is underlain by a highly complex
basement known as the Romeral terrane, which may be characterized as a tectonic
mélange (FIGURE 5.1).  The basement took form as middle-upper
Mesozoic-aged volcanic and sedimentary oceanic rocks collided with and were
accreted to the northern Andean paleo-continental margin, beginning in the early
Cretaceous.  The resulting suture is known as the Romeral fault system
and mélange can be traced for over 1,000 kilometers along the northern
Andes.  The original Romeral fault system is generally north-striking
and dextral transcurrent in nature whilst the Romeral melange contains
mega-scale blocks and fragments of the oceanic allochthon and crustal slivers of
autochthonous Paleozoic metamorphic rocks which formed the paleo-continental
margin.  The structure of the Romeral system has been modified by
various post-Romeral tectonic events.  Following accretion, the
Romeral terrane and mélange was unconformably overlain in the late Oligocene –
early Miocene by autochthonous silici-clastic sedimentary sequences of the Amaga
Formation, including basal conglomerates, quartz sandstones, siltstones, shales
and coals. In the middle - late Miocene both the Romeral mélange and the Amaga
Formation were overlain by mafic and intermediate volcanic rocks (flows and
pyroclastics) of the Combia Formation, associated with at least one middle-late
Miocene volcanic arc emplaced into the Romeral terrane basement during this time
period. Also associated with late arc formation was the syntectonic emplacement
of a series intrusives, including poly-phase hypabyssal stocks, dykes and sills
of dioritic, granodioritic and monzonitic composition.  These
intrusives cut all of the above mentioned stratigraphic units. K-Ar whole rock
dates for the intrusive rocks range from 8 to 6 Ma (Cediel et al.,
2003).  The Combia Formation and accompanying hypabyssal intrusive
rocks are well represented along an ca. 100 kilometer by 20 kilometer N-S
trending belt extending from Anserma in the south to Jerico, Fredonia and
Titiribi, located to the north of the Quinchia project (FIGURE
5.2).

      


      Following
the early accretionary events, the region was compressionally deformed in the
early - middle Miocene and again in the middle – late Miocene, in both cases by
additional tectonic accretionary events taking place to the west along the
active Pacific margin. The structural architecture of the Romeral fault and
mélange system is essentially that of a 10+ kilometer wide series of N-S
striking, vertically dipping dextral transcurrent faults.  Virtually
all lithologic contacts within the Romeral basement are structural,
characterized by abundant shearing, mylonitization and the formation of
clay-rich fault gouge.  Structural reactivation during the Miocene
resulted in orthogonal compression accompanied by mostly west-directed (back)
thrusting and high-angle reverse fault development in the basement
rocks.  The Amaga Formation was deformed into generally open, upright
folds with tilting and near isoclinal folding being associated with generally
localized west-vergent thrusting. The Combia Formation records tilting and open
folding and both the Amaga and Combia Formations exhibit moderate to strong
diapiric doming where affected by the emplacement of the mid-late Miocene
intrusive suite.  N-S, NE, NW and E-W-striking conjugate shearing and
dilational fracturing affects all of the above geologic units.  Some
of these elements can be observed as structural lineaments traversing the
region, visible on Digital Elevation Model (DEM) images, such as form the base
of Figure 5.2.

       

      
        
           

        

        
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      5.2  PROPERTY
GEOLOGY

      


      The
bedrock geology of the Quinchia property and surrounding area is shown in Figure
5.4, and is discussed below under two headings: Lithology and
Structure.  It is important to note that the Quinchia property is
essentially 100% vegetated by native Andean forest, dense secondary scrub
growth, agricultural crops and\or grassy cattle pastureland, making detailed
geologic mapping difficult.  Natural outcrop is sparse and is limited
to road cuts and road-side quarries, mule and walking paths and steeply incised
active drainages.  In addition, tropical to semi-tropical oxidation
and weathering at surface masks original bedrock texture and mineralogy in many
outcrops.

      


      LITHOLOGY:

      


      The
Quinchia property and surrounding area is underlain by four principal rock
units. These include 1) a basement complex consisting of mafic and ultramafic
oceanic volcanic rocks and granitoid intrusive

       

      
        
           

        

        
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      rocks
belonging to the Romeral terrane, 2) stratified clastic sedimentary rocks of the
Amaga Formation, 3) bas-andesitic through felsic volcanic and pyroclastic rocks
of the Combia Formation and 4) dioritic to monzonitic hypabyssal porphyritic
intrusive rocks. Each of these units is described in detail as
follows.

      


      1)  Romeral
Terrane: Romeral terrane rocks form a tectonically disrupted basement complex at
Quinchia, and the Quinchia breccia and mineralization is entirely developed
within Romeral terrane rocks. Fresh outcrops are relatively
rare.  Where observed, they form isolated fine-grained packages of
mafic oceanic igneous rocks, including basalt, diabase and micro-gabbro, locally
interstratified with fine-grained pelagic sediments.  The mafic
igneous rocks are dark grey altering to dark green in color.  They are
macroscopically aphanitic and mineralogically dominated by labradoritic
plagioclase and clinopyroxene (augite), both of which occasionally form isolated
phenocrysts in a compact groundmass. Bedding features are difficult to ascertain
in outcrop due to tectonic disruption, weathering and poor exposure, although
pillow structures and auto-brecciation are occasionally observed, as are
amygdules containing zeolites, epidote and chlorite.  In most
instances the basalts, diabases and micro-gabbros can only be distinguished in
thin section, due to their fine-grained to microcrystalline nature. In proximity
to hypabyssal porphyritic rocks, the basement mafic lithologies are variably
exhibit hornfels, fractured, veined and hydrothermally altered.

      


      Development
of hornfels results in a compact recrystallization of the mafic wallrock.
Intrusion-induced fracturing \ veining occurs in dense stockworks with quartz
and magnetite as the filling phases, accompanied by the formation of secondary
(hydrothermal) biotite, and resulting in a potassic alteration assemblage (A-
and M-veining + biotite) directly linked to porphyry-style mineralization in the
hypabyssal intrusions.  These assemblages are commonly overprinted by
late propylitic alteration, dominated by chlorite and epidote which introduces a
greenish coloration to the Romeral lithologies.  Chemical analyses
indicate that Romeral basement rocks are tholeiitic in composition and appear to
represent slivers of oceanic crust and aseismic oceanic ridges. The Romeral
assemblage has not been directly dated at Quinchia, but based upon regional
correlations is considered to be broadly lower Cretaceous in age, and to have
accreted to the continental margin in the Aptian – Albian.

      


      Forming
part of the Romeral basement and outcropping in the southern part of the
Quinchia district is the Irra stock.  This calc-alkaline,
granodioritic to monzonitic and locally syenitic intrusive has been mapped over
an ca. 32 square kilometer area.  It is coarse grained and
holocrystalline, light grey to pink in color and is dominated by andesine and
orthoclase +\- quartz with augite and biotite forming the mafic phases. It has
been dated at ca. 97 +\- 10 Ma (K-Ar, biotite). Contacts between the Irra stock
and the Romeral basement are not well exposed and where present are structurally
modified. It is not clear whether the Irra stock was emplaced in Romeral
basement before, during or after Romeral accretion to the continental
margin.

       

      2)  Amaga
Formation: The conglomerates, sandstones and siltstones of the Amaga Formation
outcrop along road cuts to the SE.  The formation was unconformably
deposited upon Romeral terrane basement rocks. Based upon pollen analyses, it
ranges from upper Oligocene to lower Miocene in age. The Amaga Formation is
dominated by greyish-green to cream colored sandstones which form well
stratified thickly to moderately bedded packages containing intercalations of
conglomerate and

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

      siltstone.
The sandstones occur in coarse- to medium-grained, moderately to poorly sorted
beds up to six metres thick. In composition they range from quartz arenite to
clay-rich wacke. The conglomerates form thin to moderate interbeds within the
sandstones.  They are generally matrix supported, with sub-rounded
quartz pebbles ranging from one to five centimeters in diameter.  The
siltstones form larger interbeds within the sandstones and may locally dominate
on the outcrop scale, forming laminated beds not exceeding ten metres
thick.  Organic partings are commonly observed. The Amaga Formation is
considered to be of continental origin, having been deposited in transtensional
(pull-apart) basins along the middle Cauca, in response to transpression and
uplift generated by post-Romeral tectonism along the Pacific margin to the west.
Structurally – morphologically, the Amaga Formation forms elongate NNE-SSW
trending ridges, and structural measurements on bedding indicate moderate to
steep dips to the west, suggesting east-vergent folding and possibly thrust
fault imbrication. The formation is locally intruded by the hypabyssal porphyry
suite, in the vicinity of which it is domed, highly fractured and contains
abundant disseminated hydrothermal pyrite and illite +\- sericite.

      


      3)  Combia
Formation: Widespread throughout the Quinchia district. In the district, it is
dominated by two main units 1) a lower sequence of massive, compact magnetic
flow rocks and agglomeratic pyroclastics of bas-andesitic composition, and 2) an
upper finer-to-medium grained, interbedded tuffaceous and agglomeratic
pyroclastic unit of more felsic (intermediate) composition.  The true
thickness and stratigraphic age relationships between these units have not been
clearly determined.  The lower unit is of dark gray-green in color and
contains primary mafic phases including hornblende and magnetite.  The
upper unit is volumetrically dominant and is composed of mixed coarse- to
fine-grained crystal, lithic, ash and lapilli tuffs.  Lithic fragments
comprise up to 40% of the coarse grained pyroclastic rocks, and include
fragments of basalt, bas-andesite and hypabyssal
porphyry.  Geochemical whole rock analyses indicate that the lower
Combia unit is of tholeiitic, basaltic to bas-andesitic composition and has been
interpreted to have formed in a back-arc setting. The upper unit is of
calc-alkaline volcanic arc affinity.  As with the Romeral suite, in
proximity to hypabyssal porphyritic rocks, the Combia Formation is variably
fractured, veined and hydrothermally altered.  Intrusion-induced
fracturing \ veining occurs in dense stockworks with quartz and magnetite in a
potassic alteration assemblage (A- and M-veining + biotite) directly linked to
porphyry-style mineralization.  These assemblages are overprinted by
late propylitic alteration. The Combia Formation has not been accurately
dated.  The lower unit is considered to range from about 14 to 11 Ma
in age.  Both lower and upper units have clearly been intruded by the
hypabyssal porphyry suite which has been dated at ca. 8 to 6 Ma (see
below).

      4)  Hypabyssal
Porphyry Suite:  The suite is both volumetrically and
metallogenetically significant in the Quinchia district. The porphyry suite
manifests in various sub-tabular intrusive centres in the Quinchia (Dos
Quebradas, La Cumbre, Mandeval) and Irra (Chuscal) areas. In detail it is
comprised of multiple phases of hypabyssal porphyry which range in composition
from diorite to quartz diorite.  The porphyries are light grey to
greenish-grey in color, and texturally range from sparsely populated to
crowded.  Plagioclase is a ubiquitous phenocryst, followed by biotite,
hornblende and augite, with quartz occurring as bipyramidal eyes up to 8
millimeters in section in the more felsic porphyry pulses.  A fine
grained biotite micro-diorite body is observed within the suite and in some
areas it appears

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      
 

      transitional
to sparsely populated plagioclase porphyry.  The Quinchia district
porphyry suite forms the southern extension of an arc of porphyritic rocks which
extends from Anserma – Quinchia to Titiribi in the north.  At various
locations these porphyries have been dated and generally return ages ranging
from 9 to 6 Ma. An unpublished whole rock (K-Ar, biotite) date produced from the
Dos Quebradas porphyry by Sociedad Kedahda S.A. returned 8.1 +\- 1
Ma.

      


      Coincident
with the hypabyssal porphyry suite at Quinchia, a series of porphyry-style Au-Cu
occurrences are observed (Sillitoe, 2000; Sillitoe, 2006).  These
mineralized alteration centres are hosted within a kilometer-scale propylitic
(chlorite-epidote-carbonate-quartz-pyrite) halo which intensifies inwards to a
series of Au (+\-Cu) mineralized centres with alteration types which range from
calcic-potassic (A-veining, calcic amphibole, disseminated magnetite and
magnetite veining, K-spar +\- biotite) to intensely fractured \ stockwork
“phyllic” (or "D-type" with sericite-illite-pyrite) and “intermediate argillic”
(with sericite-chlorite-clay (illite-smectite)).  The emplacement of
the porphyry and the resulting concomitant hydrothermal alteration, affects all
of the lithologic units in the Quinchia district.  As outlined in
section 6, Deposit Type, below, the gold occurrences of the Quinchia district,
including those contained within the Quinchia property, are linked to the
emplacement and cooling history of the hypabyssal porphyry suite.

      


      STRUCTURAL
GEOLOGY:

      At the
regional scale the most prominent structural control in the Quinchia district is
the generally N-S striking, subvertical basement architecture of the Romeral
fault system, as reflected in DEM-observed structural lineaments and in the N-S
trend of the general Middle Cauca porphyry belt.  Structural
reactivation during various post-Romeral events is also recorded, and principal
and secondary faults at the Quinchia property scale strike WNW – ESE and
NE-SW.

      


      6.  DEPOSIT
TYPE

      


      The Dos
Quebradas-Mandeval-La Cumbre porphyry gold targets are associated with three
Miocene intrusive centers in a NS trend that extends approximately 3km and at
elevations between 1600m and 1950m. (Figure 6-1)  The intrusive
centers are composed by dikes and stocks separated in three groups as early,
intra-mineral,  late intra-mineral and post-mineral dioritic phases
emplaced in intermediate to felsic volcanic rocks of the Miocene Combia Fm. and
in Cretaceous basalts. The highest gold and/or copper grades occur in the early
diorite phases characterized by potassic (mainly biotite with subordinated Kfds)
and potassic-calcic alteration that is characterized by the addition of traces
of amphibole and garnet to the potassic assemblage. Significant amount of A (B)
veinlets, and >3% hydrothermal magnetite is common in these early phases.
Gold grades are lower in the Intra-mineral phases; they still have potassic
alteration with lower density of A-B veins compared with the early intrusive
phases. Sulfide contents in early and intramineral phases are normally lower
than 1% but up to 3 % and include py, cpy, mo, and bn. Late intra-mineral
intrusive phases present moderate to strong

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      
 

      intermediate
argillic alteration with an average sulfide content of 3 to 5 % composed mainly
by pyrite and traces of molybdenite and chalcopyrite.  The late
intra-mineral phases are devoid of potassic alteration and A-B
veins.  Post-mineral dikes only present argillic alteration
(kaolinite) with subordinated chlorite and epidote.

      


      


      

      


      


      7.
MINERALIZATION

      


      The Dos
Quebradas-Mandeval-La Cumbre porphyry gold targets are described as
follows:

       

      The Dos
Quebradas target covers an area of approximately 700 x 700m.  The
mineralized target occurs in the somewhat incised Dos Quebradas
valley.

      


      Mandeval
is a small target of 300 x 300m.

      


      La Cumbre
target covers an area of 800m x >1km and is open to the south. Gold in these
targets occurs in altered dioritic intrusions and in the diorite-basalt contact
zones.

      


      Gold and
copper grades in basaltic wallrock follow potassic biotite and potassic-calcic
(biotite-actinolite) alteration.  A-veinlet density reaches up to
>50 veinlets per meter. All mining activity in the area follows
cm-fault-gauge-pyrite zones along faults in tuffaceous volcanic rocks with
strong intermediate argillic alteration. Gold occurs with the fault gouge that
contains fine grained pyrite. Examples of these small miners operations are the
Mandeval and the La Cumbre adits; there is no economic potential associated with
style of mineralization.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      
 

      GEOCHEMISTRY

      


      The
distribution of seven elements and correlation matrix of all drill holes is
presented in Tables 7-1 and 7-2.

      


      Table 7-1. Quinchia project
percentiles for seven elements, all data from the 18 holes.

      
        	 
      	
                Au(ppb)

              	
                Ag(ppm)

              	
                As(ppm)

              	
                Cu(ppm)

              	
                Mo(ppm)

              	
                Pb(ppm)

              	
                Zn(ppm)

              
	
                Population

              	
                2,343

              	
                2,343

              	
                2,343

              	
                2,343

              	
                2,343

              	
                2,343

              	
                2,343

              
	
                Max
      Value

              	
                3,930

              	
                23.90

              	
                576.0

              	
                4,020.0

              	
                377.00

              	
                2,300.0

              	
                6,490

              
	
                Min
      Value

              	
                3

              	
                0.05

              	
                0.5

              	
                2.4

              	
                0.20

              	
                1.1

              	
                3

              
	
                Percentile
      98th

              	
                1,362

              	
                4.48

              	
                96.4

              	
                1,960.8

              	
                139.08

              	
                114.4

              	
                586

              
	
                Percentile
      95th

              	
                1,010

              	
                2.95

              	
                69.3

              	
                1,649.5

              	
                99.09

              	
                71.6

              	
                391

              
	
                Percentile
      90th

              	
                789

              	
                2.32

              	
                50.1

              	
                1,420.0

              	
                74.68

              	
                50.3

              	
                300

              
	
                Percentile
      85th

              	
                669

              	
                2.05

              	
                39.2

              	
                1,268.5

              	
                60.70

              	
                41.6

              	
                264

              
	
                Percentile
      80th

              	
                587

              	
                1.80

              	
                34.6

              	
                1,155.0

              	
                50.00

              	
                35.1

              	
                231

              
	
                Percentile
      70th

              	
                467

              	
                1.54

              	
                26.3

              	
                972.0

              	
                38.60

              	
                27.6

              	
                189

              
	
                Percentile
      60th

              	
                372

              	
                1.32

              	
                21.0

              	
                822.0

              	
                30.90

              	
                22.2

              	
                160

              
	
                Percentile
      50th

              	
                295

              	
                1.12

              	
                16.6

              	
                687.0

              	
                25.40

              	
                18.2

              	
                139

              
	
                Median

              	
                295

              	
                1.12

              	
                16.6

              	
                687.0

              	
                25.40

              	
                18.2

              	
                139

              
	
                Average

              	
                380

              	
                1.34

              	
                23.5

              	
                725.2

              	
                34.22

              	
                29.7

              	
                178

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                Table 7-2.
         CORRELATION MATRIX

              
	 
      	
                Au

              	
                Ag

              	
                As

              	
                Cu

              	
                Mo

              	
                Pb

              	
                Zn

              
	
                Au

              	
                1

              	 
      	 
      	 
      	 
      	 
      	 
      
	
                Ag

              	
                0.32

              	
                1

              	 
      	 
      	 
      	 
      	 
      
	
                As

              	
                -0.11

              	
                0.30

              	
                1

              	 
      	 
      	 
      	 
      
	
                Cu

              	
                0.72

              	
                0.47

              	
                -0.06

              	
                1

              	 
      	 
      	 
      
	
                Mo

              	
                0.43

              	
                0.12

              	
                -0.13

              	
                0.39

              	
                1

              	 
      	 
      
	
                Pb

              	
                -0.01

              	
                0.40

              	
                0.40

              	
                0.01

              	
                -0.02

              	
                1

              	 
      
	
                Zn

              	
                -0.01

              	
                0.42

              	
                0.36

              	
                0.11

              	
                -0.02

              	
                0.82

              	
                1

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      


      

      


      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      


       

      Porphyry
gold targets of Quinchia display typical features described by Sillitoe (2000)
for Au-Cu porphyry systems and in particular similar to the porphyry systems of
the Maricunga sub-belt in Chile.  Ore zones of the Quinchia targets
(minimum 10m grading >500ppb Au, maximum 10m internal waste <300ppb Au)
plot in the “Au-Cu field” in Sillitoe’s Cu-Au diagram for gold-rich porphyry
deposits (Fig. 7-1)

      


      


      


      


      
        
           

        

        
          21

          
            

          

        

        
           

        

      

       

      8. QUINCHIA EXPLORATION AND RESULTS:
2005 to 2007 

      


      National
Instrument 43-101 compliant exploration has been completed at Quinchia by
Sociedad Kedahda S.A..  These activities included target
identification and first round diamond drilling.

      


      All
recent exploration work at Quinchia to date has been carried out by Sociedad
Kedahda S.A. technical personnel.  All data was collected under the
supervision of professional senior-level geologists utilizing generally accepted
international exploration standards and the resulting information is believed to
be highly reliable.  The details of each work phase are outlined
below.

      


      


       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      The
Quinchia Au-Cu porphyry district was conceptually identified within Sociedad
Kedahda S.A’s regional target generation program.  The well known
Miraflores mine area was considered part of the Quinchia district, but not
necessarily a priority target for Sociedad Kedahda S.A.

       

      In March,
2005 Kedahda initiated a work program in two phases, 1) target identification by
surface and underground mapping and sampling; and 2) diamond drill
testing.

       

      Pre-drilling
target identification exercises completed by Sociedad Kedahda S.A. around and at
Quinchia included:

       

        
          	
                  ·  

                	
                  stream
      sediment, 1:10,000 mapping and reconnaissance sampling between Dos
      Quebradas – La Cumbre,

                


        

        
          	
                  ·  

                	
                  1:1000
      scale topography, soil sampling at Dos Quebradas and La
      Cumbre,

                


        

        
          	
                  ·  

                	
                  1:2500
      mapping at Dos Quebradas - La Cumbre – Manzanares -
    Matecaña,

                


        

        
          	
                  ·  

                	
                  4701.17m
      of diamond drilling,

                


        

        
          	
                  ·  

                	
                  conceptual
      metallurgical test work at SGS Lakefields in Chile,
  and

                


        

        
          	
                  ·  

                	
                  preliminary
      resource estimation of the Dos Quebradas
target.

                


        



      


      


      


      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      


      Both Dos
Quebradas and La Cumbre were covered by B-horizon soil sampling. The grid at Dos
Quebradas was 100m x 25m. The grid at La Cumbre was 200 x 50m. At Dos Quebradas,
samples with >100ppb Au values match with the overall outline of the drill
target. The outline of the mineralized zone at La Cumbre by the soil sample is
less clear with variable gold values within the anomalous area maybe due to the
effect of the intermediate argillic overprint.

      


      


      


      Dos
Quebradas was originally indicated by surface channel sampling in saprolitic
diorite (>3g  Au/t over at least 50m); the results of these samples
are presented in Table8-1.

       

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

       

      Table 8-1.  Channel
rock samples that originally indicated the presence of the Dos Quebradas Target.
West – East channel line; the last three samples are in basaltic
rocks.

      
        	
                 

                Sample

              	
                 

                AU50_PPB

              	
                 

                AG_PPM

              	
                 

                AS_PPM

              	
                 

                CU_PPM

              	
                 

                MO_PPM

              	
                 

                PB_PPM

              	
                 

                ZN_PPM

              
	
                2019866

              	
                1355

              	
                0.3

              	
                10

              	
                295

              	
                102

              	
                19

              	
                22

              
	
                2019865

              	
                1535

              	
                0.2

              	
                11

              	
                233

              	
                187

              	
                14

              	
                14

              
	
                2019864

              	
                2020

              	
                0.4

              	
                9

              	
                384

              	
                79

              	
                23

              	
                12

              
	
                2019863

              	
                5080

              	
                0.7

              	
                4

              	
                308

              	
                53

              	
                26

              	
                25

              
	
                2019862

              	
                4880

              	
                0.5

              	
                11

              	
                363

              	
                19

              	
                40

              	
                13

              
	
                2019861

              	
                3130

              	
                0.7

              	
                8

              	
                189

              	
                50

              	
                34

              	
                17

              
	
                2019860

              	
                3930

              	
                0.4

              	
                11

              	
                275

              	
                114

              	
                60

              	
                21

              
	
                2019858

              	
                4550

              	
                0.8

              	
                3

              	
                286

              	
                18

              	
                47

              	
                48

              
	
                2019859

              	
                7760

              	
                0.9

              	
                3

              	
                218

              	
                19

              	
                49

              	
                33

              
	
                2019857

              	
                5690

              	
                1.2

              	
                15

              	
                230

              	
                190

              	
                55

              	
                74

              
	
                2019856

              	
                3410

              	
                1.8

              	
                10

              	
                156

              	
                62

              	
                46

              	
                96

              
	
                2019855

              	
                5280

              	
                1.6

              	
                27

              	
                139

              	
                101

              	
                46

              	
                55

              
	
                2019847

              	
                4210

              	
                1.0

              	
                10

              	
                180

              	
                204

              	
                60

              	
                63

              
	
                2019848

              	
                2820

              	
                0.5

              	
                62

              	
                330

              	
                70

              	
                90

              	
                16

              
	
                2019849

              	
                604

              	
                0.3

              	
                79

              	
                356

              	
                149

              	
                51

              	
                39

              
	
                2019850

              	
                2130

              	
                0.8

              	
                7

              	
                522

              	
                293

              	
                37

              	
                69

              
	
                2019851

              	
                340

              	
                1.7

              	
                56

              	
                1140

              	
                88

              	
                43

              	
                108

              
	
                2019852

              	
                220

              	
                2.7

              	
                17

              	
                1195

              	
                28

              	
                32

              	
                135

              
	
                2019854

              	
                259

              	
                1.5

              	
                19

              	
                1115

              	
                16

              	
                34

              	
                193

              


      

      


      


      
        
           

        

        
          25

          
            

          

        

        
           

        

      

      


       

      9. DRILLING 

      


      Between
January and November 2006 AGA drilled 4701.17m in 18 holes in the Quinchia
District. The Drilling focused on three porphyry gold targets named Dos
Quebradas, Mandeval, and La Cumbre. (Figure 9-1)

      


      Eight
core drill holes were drilled on the Dos Quebradas target and a preliminary
resources estimation was carried out using the information from the drill holes
indicating 937,905 ounces of Au with and average gold grade of 1.155 ppm at 0.75
ppm cut off.

      


      Seven
core drill holes were drilled on the La Cumbre porphyry target proving that the
porphyry style mineralization covers an area of at least 400 x 500 m, with
possible extensions of the porphyry target that remain untested. Average gold
grades from the surface samples and drill holes from La Cumbre target is 0.745
ppm.  More drilling is needed to have a good estimation of the mineral
potential of the La Cumbre target.

      


      Three
drill holes were drilled at the Mandeval target with gold grades varying between
0.2 and 0.4 ppm, which is very similar to the results of outcrops samples. There
is no mineral potential in the Mandeval target.

      


      The Juan
Tapado area is a known large gold stream sediment anomaly toward the north of
Dos Quebradas that have not been evaluated yet.

       

      

      
 

      
        
           

        

        
          26

          
            

          

        

        
           

        

      

      


      
        	
                 

                DDH

              	
                 

                Zone

              	
                 

                EOH
      (m)

              	
                 

                Summary
      of results

              
	
                DQ-DD-1

              	
                Dos
      Quebr.

              	
                23.37

              	
                Lost
      Hole

              
	
                DQ-DD-2

              	
                Dos
      Quebr.

              	
                318.00

              	
                110m
      @ 0.685 ppm Au - 831 ppm Cu

              
	
                DQ-DD-3

              	
                Dos
      Quebr.

              	
                269.50

              	
                90m
      @ 0.628 ppm Au - 708 ppm Cu, 39.5m @ 1.67 ppm Au - 1746 ppm
    Cu

              
	
                DQ-DD-4

              	
                Dos
      Quebr.

              	
                170.55

              	
                68m
      @ 0.521 ppm Au - 690 ppm Cu

              
	
                DQ-DD-5

              	
                Dos
      Quebr.

              	
                261.60

              	
                48m
      @ 0.642 ppm Au - 1297 ppm Cu, 84m @ 0.765 ppm Au - 789 ppm
    Cu

              
	
                DQ-DD-6

              	
                Dos
      Quebr.

              	
                250.75

              	
                76.8m
      @ 0.712 ppm Au - 1192 ppm Cu,  awaiting
  results

              
	
                DQ-DD-7

              	
                La
      Cumbre

              	
                265.30

              	
                100m
      @ 0.568 ppm Au - 768 ppm Cu, 53m @ 0.606 ppm Au - 1286 ppm
    Cu

              
	
                DQ-DD-8

              	
                La
      Cumbre

              	
                282.65

              	
                276.65m
      @ 0.746 ppm Au - 1425 ppm Cu

              
	
                DQ-DD-9

              	
                La
      Cumbre

              	
                245.00

              	
                -

              
	
                DQ-DD-10

              	
                La
      Cumbre

              	
                249.00

              	
                -

              
	
                DQ-DD-11

              	
                Dos
      Quebr.

              	
                259.30

              	
                -

              
	
                DQ-DD-12

              	
                Mandeval

              	
                250.00

              	
                -

              
	
                DQ-DD-13

              	
                Mandeval

              	
                250.35

              	
                18m
      @ 0.522 ppm Au - 1726 ppm Cu

              
	
                DQ-DD-14

              	
                Mandeval

              	
                261.50

              	
                -

              
	
                DQ-DD-15

              	
                La
      Cumbre

              	
                108.50

              	
                102.5m
      @ 0.677 ppm Au - 1102 ppm Cu

              
	
                DQ-DD-16

              	
                La
      Cumbre

              	
                193.10

              	
                42m
      @ 0.508 ppm Au - 580 ppm Cu

              
	
                DQ-DD-17

              	
                Dos
      Quebr.

              	
                492.70

              	
                60m
      @ 0.627 ppm Au - 1077 ppm Cu, 72m @ 0.686 ppm Au - 1177 ppm
    Cu

              
	
                DQ-DD-18

              	
                La
      Cumbre

              	
                550.00

              	
                126m
      @ 0.53ppm Au - 1217 ppm Cu, 112m @ 0.689 ppm Au - 1296 ppm
    Cu

              
	
                TOTAL
      (m)

              	 
      	
                6114.27

              	 
      


      

      ____________________

      Table 9-1:  summary
of best intercepts in drill holes drilled in the Quinchia project.

      


      9.1  DOS
QUEBRADAS DRILL RESULTS

       

      The best
mineralized area at Dos Quebradas occurs along the eastern contact of the
qz-diorite dike complex and the basaltic volcanic host rock. The highest gold
values are associated with high density of A-B veins, potassic (mainly
biotitic), and calcic-potassic altered basalts affecting igneous breccias,
qz-diorite, and basalts. The western contact of the diorite complex is only
weakly altered and mineralized with dominant intermediate argillic and
propylitic alteration.

      


      The
diorite-basalt contact zone on the eastern side is about 150m wide as shown in
section DQ-DD-4_5_6_17 (Fig.9-3). This contact zone has a high density of quartz
veins (A-veinlets, 50-100 veinlets per meter); alteration is dominantly
chloritic with minor patches of biotitic and calcic-potassic assemblages. The
contact zone is sub-vertical with narrow dykes, truncated quartz veinlets, and
contact-igneous breccias with fragments of diorite and basalt. The highest gold
grades occur in the narrower section at the end of borehole DQ-DD-3 with 1.6 ppm
gold over 40m. Mineralization is open to depth; the hole was abandoned in
mineralization due technical problems on the drill rig. The continuation and
limits of the eastern contact zone to the south is delineated by borehole
DQ-DD-11, the northern limit is open and interpreted at no more than 150 m from
borehole DQ-DD-05 and by the soil anomaly. The approximate north-south extent of
the eastern contact zone is 600m.

       

      
        
           

        

        
          27

          
            

          

        

        
           

        

      

      
 

      A
potassium k-feldspar altered core zone has only been intersected in borehole
DQ-DD-5, but in general biotite appears to dominate over K-feldspar on the
potassic zone. Zones with K-feldspar flooding coincides with a zone of amphibole
veining, with minor garnet and quartz-garnet, and A-veinlet density of about 50
veinlets/meter. Pyrite is low where potassic alteration dominates, chalcopyrite
and bornite are present in quartz veinlets, fractures and
disseminated.

      


      Table 9-2: Dos Quebradas Ore
zones.

      
        	
                 

                DDH

              	
                 

                From
      (m)

              	
                 

                To
      (m)

              	
                 

                Orezone
      (m)

              	
                 

                Comp
      Au (ppb)

              	
                 

                Comp
      Cu (ppm)

              
	
                13.03.DD2

              	
                158

              	
                226

              	
                68

              	
                621

              	
                748

              
	
                13.03.DD2

              	
                232

              	
                268

              	
                36

              	
                895

              	
                1076

              
	
                13.03.DD3

              	
                140

              	
                230

              	
                90

              	
                628

              	
                708

              
	
                13.03.DD3

              	
                230

              	
                269.5

              	
                39.5

              	
                1670

              	
                1746

              
	
                13.03.DD4

              	
                76

              	
                126

              	
                50

              	
                554

              	
                702

              
	
                13.03.DD4

              	
                134

              	
                144

              	
                10

              	
                539

              	
                665

              
	
                13.03.DD5

              	
                0

              	
                48

              	
                48

              	
                642

              	
                1297

              
	
                13.03.DD5

              	
                120

              	
                130

              	
                10

              	
                664

              	
                771

              
	
                13.03.DD5

              	
                140

              	
                156

              	
                16

              	
                540

              	
                663

              
	
                13.03.DD5

              	
                156

              	
                204

              	
                48

              	
                972

              	
                936

              
	
                13.03.DD6

              	
                0

              	
                226

              	
                226

              	
                728

              	
                1098

              
	
                13.03.DD17

              	
                126

              	
                186

              	
                60

              	
                627

              	
                1077

              
	
                13.03.DD17

              	
                198

              	
                224

              	
                26

              	
                532

              	
                1033

              
	
                13.03.DD17

              	
                236

              	
                248

              	
                12

              	
                510

              	
                954

              
	
                13.03.DD17

              	
                288

              	
                360

              	
                72

              	
                686

              	
                990

              
	
                13.03.DD17

              	
                370

              	
                380

              	
                10

              	
                552

              	
                1177

              
	 
      	 
      	 
      	 
      	 
      	 
      
	
                Minimum
      10m grading >500ppb Au

              	 
      	 
      	 
      
	
                Maximum
      10m internal waste (<300ppb Au)

              	 
      	 
      


      

      


      


      


      
        
           

        

        
          28

          
            

          

        

        
           

        

      

      


      


      
        
           

        

        
          29

          
            

          

        

        
           

        

      

       

      


      9.2  MANDEVAL
DRILL RESULTS

      


      The
Mandeval stock is composed of early medium grained qz-diorite. Exposures and
boulders of massive banded silica occur in the Mandeval creek. These are thought
to be form by the coalescence of A veins.  Basalts with intense quartz
veins and partially biotite-altered form the northern contact of the Mandeval
qz-dioritic stock; the southern contact is with rhyodacitic tuffs of the Miocene
Combia Formation. The Mandeval sector is dominated by a strong intermediate
argillic overprint, which affects significant portions of the early diorite and
rhyodacitic tuffs.  With minor sections of the intrusive characterized
by chlorite-overprint with subordinate hydrothermal biotite. There is a tunnel
of illegal miners in Mandeval that follows an illite-sericite altered fracture
zone in diorite that ends in illite-altered tuff.

      


      The
intensely quartz-veined contact zone with patchy biotite (amphibole, garnet)
alteration was cut in boreholes DQ-DD-12 and 14 without observing elevated gold
values. Gold values from outcrops and drill holes are mostly between 0.2 and 0.4
ppm and no more mineral potential is interpreted for the Mandeval
target.

       

      
        
           

        

        
          30

          
            

          

        

        
           

        

      

      


      


      


      
        
           

        

        
          31

          
            

          

        

        
           

        

      

      


      


                 

      


      9.2  LA
CUMBRE DRILL RESULTS

      


      La Cumbre
is located on the highest ground of the prospect area; stripping ratios
theoretically are very low.

      


      The
qz-diorite stock in La Cumbre is about 700 m in diameter, and is mostly form by
an early diorite intrusive phase with fine grained porphyritic texture, locally
carrying clasts of an older porphyritic intrusive rock. About 75% of the stock
carries remnant hydrothermal biotite, locally hydrothermal garnet, and A-B
veinlets. The sulfide present is mainly pyrite with traces and up to 0.7 %
chalcopyrite.

      


      Early
gold-bearing hydrothermal biotite alteration was overprinted by intermediate
argillic alteration, which significantly affects more than 50% of the stock. The
illite-pyrite alteration clearly lower the gold values indicating hypogene
leaching of metals by this late alteration event. This advanced argillic
alteration also affects the felsic-intermediate tuffaceous volcanic rocks, which
is the dominant lithology on the high ground and partially surrounds the La
Cumbre stock.

      


      The early
biotite-altered diorite was intruded in the south by intramineral diorite with
weak to moderate chlorite-epidote-magnetite alteration and significantly less
(or no) quartz veining. The exposure has been mapped for >0.5km and continues
beyond the Manzanares – Matecaña mapping limit.  The La Cumbre
informal miner workings follow narrow N-S structures developed in strongly
intermediate argillic altered felsic-intermediate tuffaceous rocks.

       

      
        
           

        

        
          32

          
            

          

        

        
           

        

      

      


      


      


      
        
           

        

        
          33

          
            

          

        

        
           

        

      

      


      


      

       

      
        
           

        

        
          34

          
            

          

        

        
           

        

      

      10.
SAMPLING METHOD AND APPROACH

      


      Based
upon sampling method and target materials, two types of samples have been
collected within the property;

      


      1) Chip
and channel rock samples of in situ or near in situ materials, from outcrop and
within mine workings, across and peripheral to zones of observed alteration \
mineralization.

       

      2)
Samples collected from diamond drill core.

      


      Sampling
method and approach are described for each of these sample types.

      


      Chip and
channel rock samples of in situ materials were collected with a geological pick
\ hammer and chisel or metal spatula.   Due to the fine
fracture-controlled and “disseminated” nature of mineralization many samples
were collected as “scatter-chips” or continuous panels over areas of generally
greater than one square metre. Various more selective chip and linear channel
samples were collected over isolated mineralized structures.

      


      Grab
samples were collected in areas of poorly exposed “rubble-crop”.  In
the case of in situ sampling (panels, channels), three to five kilograms of
material were generally allowed to fall upon a clean plastic sheet spread in
front of the outcrop.  The entire sample was described by a
supervising geologist, and sealed in numbered plastic bags containing laboratory
sample tags.

      


      Upon
return to the camp, samples were inventoried, packed into sacks and shipped to
SGS Laboratories (Barranquilla) or ALS Chemex Laboratories (Bogotá) for drying
and preparation. Information regarding the location and nature of all chip and
channel samples collected by Sociedad Kedahda S.A. is available on
site.

      


      Samples
collected from diamond drill core were collected after the core was boxed,
measured, had the recovery per drilled interval calculated, and was logged for
geological, mineralogical and alteration features by a supervising
geologist.  Due to the disseminated nature of the mineralization,
Sociedad Kedahda. S.A. decided to sample core at consistent two meter intervals
throughout.  Core for individual holes was measured and two meter
samples intervals were laid out along its entire length.  The core was
cut using a diamond core saw and ca. 50% of the core for each interval was
randomly selected and sealed into number plastic sample bags. Samples were later
inventoried and shipped to ALS Chemex Laboratories (Bogotá) for drying and
preparation and ALS Chemex Laboratories in Lima, Peru, for
analysis.

      


      Based
upon the observations regarding the strength and style of alteration \
mineralization at the Quinchia project and the QA \ QC procedures and check
sampling programs utilized by Sociedad Kedahda S.A., sample results obtained by
these companies appear to be reliable and accurate. Surface sampling procedures
are considered justified and adequate, and show good repeatability based upon
check sampling.

       

      
 

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

      11. SAMPLE PREPARATION, ANALYSES AND
SECURITY 

      


      As part
of its sample quality control system Sociedad Kedahda S.A.  applied
the same sample management that AngloGold Ashanti Ltd. utilizes on a global
level in all its early phase (“greenfields”) exploration
programs.  This includes recording each individual sample on a
uniquely numbered sample card, and, upon analysis of a sample series, inserting
sample duplicates, sample standards and sample blanks.

       

      The
general “rule-of-thumb” for all sampling, is that for every series of 25 samples
of any type collected; one sample is duplicated, and one commercially purchased
standard and one proven blank, are inserted (thus a 25 sample batch consists of
22 original samples, one duplicate, one standard and one blank). Sample
duplication is carried out by sampling as precisely as possible over a
previously sampled area, using the same technique for sample collection and
collecting a similar sample volume. Commercial sample standards used by Sociedad
Kedahda S.A. were purchased for the international standards companies Geostats
and Rock Labs.  Eight separate standards ranging from 10 to 3,000 ppb
Au are used, and are thought to be highly reliable in their advertised gold
contents. For blanks, Sociedad Kedahda S.A. uses a clean, fine-grained
quartz-arenite sandstone, available in large volume from rock quarries near
Bogotá.  Thousands of analyses of this sandstone have shown it to be
completely barren of gold with very low values other economic metals. Sample
standards and blanks are bagged, numbered and inserted in the field such that
they arrive at the lab packaged with the other original samples.

      


      In
addition to the above checks, two additional laboratory checks are automatically
completed by the ALS Chemex laboratory at the request of Sociedad Kedahda
S.A.  First, for every 20 to 25 samples prepared at the preparation
lab, one is automatically duplicated by taking a new cut from the stored coarse
reject material.  Second, at the analytical laboratory, again, for
every 20 to 25 samples analyzed, one is automatically duplicated by taking a new
aliquot from the pulverized reject material.  All of the analyses from
the sample duplicates are reported to Sociedad Kedahda S.A.

      


      We are of
the opinion that an adequate methodology was maintained with respect to sample
collection, preparation, analyses and security.

      


      12. DATA VERIFICATION


      


      Upon
receipt of assay information, review of analytical data and statistical analysis
of all duplicate, standard and blank information is carried out on a per-batch
(lab order) basis by Sociedad Kedahda S.A.’s in-house Geochemical Database
Administrator (a professional geologist) in Bogotá.  A linear
correlation control curve is plotted from duplicate data to observe natural
variability in gold contents.  A similar plot is used to compare
standards analyses to their published gold content value.  Blanks
analyses are inspected for any possible contamination. This information is then
passed on to the individual project geologists for review and
verification.  We are of the opinion that an
adequate  methodology was maintained with respect to  data
verification, although no additional verification was performed by the
authors.

       

      
        
           

        

        
          36

          
            

          

        

        
           

        

      

      
 

      13.
ADJACENT PROPERTIES

      


      The
Miraflores property is located within the Quinchia Au-Cu porphyry district,
which contains various known mineralized centres.  Sociedad Kedahda
S.A. and B2GOLD Corp.,  and other third party mineral title holders,
hold mineral concessions within the Quinchia district.  Technical
information regarding specific present exploration at Miraflores and results or
mineralization styles within the district, other than the historical presented
herein, has not been sought after, nor has it been utilized by the author during
the writing of the present report.

      


      The
author acknowledges that mineralization, if encountered on the adjacent
properties, is not necessarily indicative of, or physically associated with the
mineralization on the Quinchia property, and an attempt has been made to clearly
indicate that any mineralization styles discussed herein are site specific
within the confines of the Quinchia property.

      


      14. MINERAL PROCESSING &
METALLURGICAL TESTING 

      


      SGS
LAKEFIELD METALLURGICAL STUDIES

      Preliminary
metallurgical data have been obtained from bottle roll test on 1kg samples.
These samples were composites of rejects of -2mm crushed diamond drill
core.

       

      The
metallurgical sample was ground to >75% -200 mesh.

       

      At the
time of submitting the samples only drill core from Dos Quebradas was
available.

       

      DQ-DD-3:
256 – 258m: 1.80 ppm Au, 84% recovery after 24 hours

       

      DQ-DD-2:
244 – 254m: 1.30 ppm Au, 72% recovery after 24 hours

       

      DQ-DD-5:
162 – 172m: 1.56 ppm Au, 79% recovery after 24 hours

      


      No
metallurgical samples from La Cumbre are available.

      


      


      
        
           

        

        
          37

          
            

          

        

        
           

        

      

      


      15.
MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

      


      


      Preliminary
resource modeling was performed by Kedahda at Dos Quebradas and La Cumbre
utilizing Datamine software.  This modeling has not been reviewed in
detail by the authors, and as such is presented as background information but
not 43-101 reporting compliant, although there is reason to believe that the
resources at Dos Quebradas would be classified as inferred resource given the
level of support for the resource estimation.

      


      


      15.1  PRELIMINARY
MINERAL RESOURCE – DOS QUEBRADAS

      


      Preliminary
model results indicate 96.3 million tonnes of inferred resource grading 0.69
grams per tonne, containing 2.136 million ounces of gold at a 0.30 gram per
tonne cutoff.   These results have not been validated by the
authors and as such are not reportable under NI43-101.

      


      


       

      


      
        
           

        

        
          38

          
            

          

        

        
           

        

      

      


      


       

      
 

      
        
           

        

        
          39

          
            

          

        

        
           

        

      

      


      15.2
PRELIMINARY MINERAL RESOURCE – LA CUMBRE Preliminary model results for La Cumbre
indicate 118.3 million tonnes of mineralized material grading 0.58 grams per
tonne, containing 2.191million ounces of gold at a 0.30 gram per tonne
cutoff.   These results are based upon limited information and as
such would likely not be classified as a resource without further
exploration.  Further, the results have not been validated by the
authors and as such are not reportable under NI43-101.  Table
15-2. La
Cumbre mineral resources preliminary model (Datamine - Inverse distance to
square):

      


      


      


      


       

      
        
           

        

        
          40

          
            

          

        

        
           

        

      

      16.
OTHER RELEVANT DATA AND INFORMATION

      


      The
Quinchia property is located in Colombia, and therefore carries certain
political and country risk beyond that found in other South American
jurisdictions. Colombia is host to a disperse and long-running insurgency that
at times in the recent past has manifested itself in widespread civil conflicts.
Company management has warranted to the author that they employ a comprehensive
corporate security program to ensure the safety of all personnel and project
sites. This program includes the use of highly trained and experienced internal
security personnel working in cooperation with military and civil
organizations.  Independent international risk assessors provide
external advice and audit services on a regular basis.

      


      


      17.
INTERPRETATION AND CONCLUSIONS

      


      The
Quinchia property is located within the historically important and present-day
artisanal mining district of Quinchia, Risaralda,
Colombia.  District-scale mineralization at Quinchia is related to
high-level hypabyssal Au (Cu) porphyry bodies.  The district includes
the Quinchia breccia, a significant gold-silver rich, magmatic-hydrothermal
breccia body whose genesis is intimately related to the evolution of the
porphyry mineralization occurring in the Quinchia district.

      


      In
conclusion, limited diamond drilling and metallurgical test work at Quinchia by
Sociedad Kedahda S.A. has been successful at delineating a potentially
significant low-grade large-tonnage Au-Ag deposit at Quinchia which is
potentially amenable to bulk-tonnage mining and mineral extraction techniques.
Quinchia is considered a property of merit.

      


      Past work
completed to date indicates the property warrants further resource definition
via diamond drilling, and continued metallurgical test work, in order to verify
the feasibility of economically recovering gold from the important low-grade
(0.3 to 1 ppm Au) resource the property has to offer.  In the event
that both diamond drilling and metallurgical test work provide positive results,
additional drilling of the project can be recommended.  A program to
carry out additional drilling and metallurgical test work is outlined in section
18, Recommendations

      


       

      
        
           

        

        
          41

          
            

          

        

        
           

        

      

      18.
RECOMMENDATIONS

      


      Based on
the favorable exploration and metallurgical results to date, the Quinchia
property is of sufficient merit to warrant further exploration.

      


      Phase II
work has been proposed to follow up -80# stream sediment anomalies located
toward the north of the Dos Quebradas area, the Juan Tapado-Alacranes
area.  In this sector a vein system was drilled by Minera Esperanza in
1995; drill data is not available.  Most of the unexplored anomalies
are on indigenous ground. Negotiations should continue, and agreements
signed.

      


      In order
to further evaluate the mineral and economic potential of the Quinchia property,
a stage-three exploration diamond drilling program totaling 7,500 metres and
additional metallurgical tests is recommended.  This program will
follow-up on positive results obtained in the Sociedad Kedahda S.A. diamond
drill programs.

      


      Upon
favorable results from stage three, a stage-four program that involves
completing a feasibility study is recommended.

      


      


      42