EXHIBIT
        99.1



















ANNUAL
        INFORMATION FORM



FOR
        THE YEAR ENDED DECEMBER 31,
        2007

DATED
        AS OF MARCH 28, 2008











P.O.
        BOX 41, AXA PLACE

SUITE 1260, 
        999 WEST HASTINGS STREET

VANCOUVER,
        B.C. V6C 2W2 CANADA

PHONE:
        (604) 688-9592

FAX: (604)
        688-9532









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TABLE OF CONTENTS

****
        Page

PRELIMINARY NOTES

                    1


Date of Information

                    1


Currency

                    1


Conversion Table

                    1


Cautionary Statements Regarding
                        Forward Looking Statements

                    1


Cautionary Note to United
                        States Investors

                    3


Glossary of Terms

                    3


Mineral Property Application
                        Process in Argentina

                    6


Mineral Application Process in
                        Chile

                    7


CORPORATE STRUCTURE

                    8


Name and
                        Incorporation

                    8


Intercorporate
                        Relationships

                    8


GENERAL DEVELOPMENT OF THE
                        BUSINESS

                    8


Three Year History

                    8


DESCRIPTION OF THE
                        BUSINESS

                    11


General

                    11


Specialized Skills

                    11


Competitive
                        Conditions

                    11


Business Cycles

                    12


Environmental Protection
                        Requirements

                    12Employees

                    12Foreign
                    Operations

                    12Social or Environmental
                    Policies

                    12Risk Factors

                    13


PRINCIPAL PROJECTS

                    18


CERRO MORO

                    18


Acquisition terms

                    19


Cerro Moro Property Description
                        and Location

                    19


Accessibility, Climate, Local
                        Resources, Infrastructure and Physiography

                    20


History

                    21


Geological Setting

                    22


Mineralization

                    23


Exploration

                    25


Drilling

                    26


Sample and Analysis

                    27


Exploration and
                        Development

                    29


CASPICHE

                    30


Acquisition terms

                    30


Property Description and
                        Location

                    30


Accessibility, Climate, Local
                        Resources, Infrastructure and Physiography

                    31


History

                    31


Geological Setting

                    33


Mineralization

                    35


Exploration

                    35


Drilling

                    36


Sample and Analysis

                    38


Exploration and
                        Development

                    39


DON SIXTO (LA
                        CABEZA)

                    40


Acquisition terms

                    40


Property Summary

                    40


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Exploration and
                        Development

                    44


DIVIDENDS

                    44


DESCRIPTION OF CAPITAL
                        STRUCTURE

                    44


MARKET FOR
                        SECURITIES

                    45


DIRECTORS AND
                        OFFICERS

                    46


Name, Address and
                        Occupation

                    46


LEGAL PROCEEDINGS

                    47


INTEREST OF MANAGEMENT AND
                        OTHERS IN MATERIAL TRANSACTIONS

                    48


TRANSFER AGENT

                    48


MATERIAL CONTRACTS

                    48


NAME AND INTEREST OF
                        EXPERTS

                    49


AUDIT COMMITTEE

                    49


ADDITIONAL
                        INFORMATION

                    51


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EXETER
        RESOURCE CORPORATION



PRELIMINARY NOTES

Date of
        Information



In this
        Annual Information Form (the “AIF”), Exeter Resource Corporation, together with
        its subsidiaries, is referred to as “Exeter” or the “Company”. All
        the information contained in this AIF is as at December 31, 2007, the last day of the
        Company’s most recently completed financial year, unless otherwise
        indicated.



Currency

All
        dollar amounts referenced in this AIF are expressed in Canadian dollars, unless otherwise
        indicated.

Conversion Table



For ease
        of reference in this AIF, the following conversion factors from metric measurements into
        imperial equivalents are provided:



|To Convert from Metric | To Imperial           | Multiply by
|---------------------- | --------------------- | -----------
|                       |                       |            
|Hectares (ha)          | Acres                 | 2.471      
|Metres (m)             | Feet (ft)             | 3.281      
|Kilometres (km)        | Miles                 | 0.621      
|Tonnes                 | Tons (2000 pounds)    | 1.102      
|Grams/tonne (g/t)      | Ounces/ton (troy/ton) | 0.029      



Cautionary Statements Regarding Forward Looking Statements



This AIF contains “forward-looking statements”
        within the meaning of securities legislation and the United States Private Securities
        Litigation Reform Act of 1995.Such forward looking statements concern the Company’s
        anticipated results and developments in the Company’s operations in future periods,
        planned exploration and development of its properties, plans related to its business and
        other matters that may occur in the future. These statements relate to analyses and other
        information that are based on forecasts of future results, estimates of amounts not yet
        determinable and assumptions of management.

Statements concerning reserves and mineral resource estimates
        may also be deemed to constitute forward-looking statements to the extent that they involve
        estimates of the mineralization that will be encountered if the property is developed, and
        in the case of mineral reserves, such statements reflect the conclusion based on certain
        assumptions that the mineral deposit can be economically exploited. Any statements that
        express or involve discussions with respect to predictions, expectations, beliefs, plans,
        projections, objectives, assumptions or future events or performance (often, but not
        always, using words or phrases such as “expects” or “does not
        expect”, “is expected”, “anticipates” or “does not
        anticipate”, “plans”, “estimates” or “intends”,
        or stating that certain actions, events or results “may”, “could”,
        “would”, “might” or “will” be taken, occur or be
        achieved) are not statements of historical fact and may be forward-looking statements.
        Forward-looking statements are subject to a variety of known and unknown risks,
        uncertainties and other factors which could cause actual events or results to differ from
        those expressed or implied by the forward-looking statements, including, without
        limitation:



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•

                    risks related to our lack of revenues from operations and
                        our lack of ongoing mining operations;


•

                    risks related to our lack of history in producing metals
                        from our mineral exploration properties and risks relating to our ability
                        to successfully establish mining operations or profitably produce precious
                        metals;


•

                    uncertainty in our ability to fund the development of our
                        mineral properties or the completion of further exploration
                        programs;


•

                    risks related to differences between U.S. and Canadian
                        practices for reporting resources and reserves;


•

                    uncertainty as to actual capital costs, operating costs,
                        production and economic returns, and uncertainty that our development
                        activities will result in profitable mining operations;


•

                    risks related to our reserves and resources figures being
                        estimates based on interpretations and assumptions which may result
                        in less mineral production under actual conditions than is currently
                        estimated;


•

                    changes in the market price of gold, silver, and other
                        minerals which in the past has fluctuated widely and which could affect the
                        future profitability of our operations and financial
                        condition;


•

                    risks related to currency fluctuations;


•

                    risks related to the inherently dangerous activity of
                        mining, including conditions or events beyond our control;


•

                    risks related to governmental regulations, including
                        restrictions related to the Don Sixto gold project;


•

                    risks related to our primary properties being located in
                        Chile and Argentina, including political, economic, and regulatory
                        instability;


•

                    uncertainty in our ability to obtain and maintain certain
                        permits necessary for our current and anticipated operations;


•

                    risks related to our business being subject to environmental
                        laws and regulations which may increase our costs of doing business and
                        restrict our operations;


•

                    risks related to land reclamation requirements for our
                        properties which may be burdensome;


•

                    uncertainty relating to our ability to attract and maintain
                        qualified management to meet the needs of our anticipated growth and risks
                        relating to our ability to manage our growth effectively;


•

                    risks related to our mineral properties being subject to
                        prior unregistered agreements, transfers, or claims and other defects in
                        title;


•

                    risks related to our history of losses, which we may
                        continue to incur in the future;


•

                    risks related to increased competition that could adversely
                        affect our ability to attract necessary capital funding or acquire suitable
                        producing properties for mineral exploration in the future;


•

                    risks related to our officers and directors becoming
                        associated with other natural resource companies which may give rise to
                        conflicts of interests;


•

                    the volatility of the Company’s common share price and
                        volume; and


•

                    tax consequences to U.S. shareholders.




This list is not exhaustive of the factors that may affect
        our forward-looking statements. Some of the important risks and uncertainties that could
        affect forward-looking statements are described further in this AIF. Should one or more of
        these risks and uncertainties materialize, or should underlying

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assumptions prove incorrect, actual results may vary
        materially from those described in the forward-looking statements. Forward-looking
        statements are made based on management’s beliefs, estimates and opinions on the date
        the statements are made, and the Company undertakes no obligation to update forward-looking
        statements if these beliefs, estimates and opinions or other circumstances should change.
        Investors are cautioned against attributing undue certainty to forward-looking
        statements.

Cautionary Note to United States Investors



This AIF
        has been prepared in accordance with the requirements of the securities laws in effect in
        Canada, which differ from the requirements of United States securities laws. Unless
        otherwise indicated, all resource estimates included in this AIF have been prepared in
        accordance with Canadian National Instrument 43-101 Standards of
        Disclosure for Mineral Projects (“NI 43-101”) and the
        Canadian Institute of Mining and Metallurgy Classification System. NI 43-101 is a rule
        developed by the Canadian Securities Administrators which establishes standards for all
        public disclosure (oral statements as well as written documents and websites) an issuer
        makes of scientific and technical information concerning mineral projects, and requires
        that all such disclosure be made under the supervision of a “qualified person”
        as define in NI 43-101. It also requires issuers to file technical reports at certain times
        under a prescribed format.



Canadian
        standards differ significantly from the requirements of the United States Securities
        Exchange Commission (“SEC”); resource information contained herein may not be
        comparable to similar information disclosed by U.S. companies. In particular, and without
        limiting the generality of the foregoing, the term “resource” does not equate
        to the term “reserves”. Under U.S. standards, mineralization may not be
        classified as a “reserve” unless the determination has been made that the
        mineralization could be economically and legally produced or extracted at the time the
        reserve determination is made. The SEC’s disclosure standards normally do not permit
        the inclusion of information concerning “measured mineral resources”,
        “indicated mineral resources” or “inferred mineral resources” or
        other descriptions of the amount of mineralization in mineral deposits that do not
        constitute “reserves” by U.S. standards in documents filed with the SEC, unless
        such information is required to be disclosed by the law of the Company’s jurisdiction
        of incorporation or of a jurisdiction in which its securities are traded. U.S. investors
        should also understand that “inferred mineral resources” have a great amount of
        uncertainty as to their existence and great uncertainty as to their economic and legal
        feasibility. It can not be assumed that all or any party of an “inferred mineral
        resource” will ever be upgraded to a higher category. Under Canadian rules, estimated
        “inferred mineral resources” may not form the basis of feasibility or
        pre-feasibility studies except in rare cases. Investors are cautioned not to assume that
        all or any part of an “inferred mineral resource” exists or is economically or
        legally mineable. Disclosure of “contained ounces” is permitted disclosure
        under Canadian regulations; however, the SEC normally only permits issuers to report
        “resources” as in place tonnage and grade without reference to unit
        measures.



Glossary of Terms

Ag
        - symbol used for silver in the periodic table of
        elements.



Alteration - any
        change in the mineral composition of a rock brought about by physical or chemical
        means.



Andesite - a
        dark-colored, fine-grained extrusive rock that, when porphyritic, contains phenocrysts
        composed primarily of zoned sodic plagioclase and one or more of the mafic
        minerals.



As - symbol used for arsenic in the period
        table of elements.





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Assaying- laboratory examination that
        determines the content or proportion of a specific metal (e.g. silver) contained within a
        sample. Technique usually involves firing/smelting.



Au - symbol used for gold in the periodic table
        of elements.



Breccia - a rock in which angular fragments are
        surrounded by a mass of fine-grained minerals.



Bulk
        Sample - a collection of representative mineralized material
        whose location, geologic character and metal assay content can be determined, and then used
        for metallurgical or geotechnical testing purposes.



Carbon In Leach -
        a recovery process in which a slurry of gold ore, carbon granules and
        cyanide are mixed together. The cyanide dissolves the gold content and the gold is absorbed
        in the carbon. The carbon is subsequently separated from the slurry for further gold
        removal.



Channel Sampling -
        cutting a groove in a rock face or outcrop to obtain material for
        sampling.



Chip
        Sampling - taking of small pieces of
        rock with a pick along a line, or at random, from the width or face of an exposure or
        outcrop for exploration sampling.



Clastic - fragments of minerals and rocks that
        have been moved individually from their places of origin.



Cu - symbol used for copper in the periodic
        table of elements.



Cut-off grade -
        the lowest grade of mineralized material that qualifies as resource in a
        deposit. i.e.: contributing material of the lowest assay that is included in a resource
        estimate.



Diorite - an intrusive igneous rock.



Diamond Drilling - a type of rotary drilling in
        which diamond bits are used as the rock-cutting tool to produce a recoverable drill core
        sample of rock for observation and analysis.



Dip - the angle that a structural surface, a
        bedding or fault plan, makes with the horizontal, measured perpendicular to the strike of
        the structure.



Disseminated - where minerals occur as
        scattered particles in the rock.



Epithermal - low temperature hydrothermal
        process or product.



Exploration - work involved in searching for
        ore, usually by drilling or driving a drift.



Fault - a fracture or break in rock along which
        there has been movement.



Feasibility Study - means a comprehensive study of a
        mineral deposit in which all geological, engineering, legal, operating,
        economic, social, environmental and other relevant factors are considered in sufficient
        detail that it could reasonably serve as the basis for a final decision by a financial
        institution to finance the development of the deposit for mineral
        production.



Felsic -
        an adjective describing an igneous rock having mostly light colored minerals
        and rich in silica, potassium and sodium.





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Grade - the metal content of rock with precious
        metals, grade can be expressed as troy ounces or grams per tonne of rock.



Hg - symbol used
        for mercury in the periodic table of elements.



Hydrothermal - the products or the actions of
        heated waters in a rock mass such as a mineral deposit precipitating from a hot
        solution.



Ignimbrite - a
        felsic volcanic tuff in which the fragments were welded together as the tuff
        cooled.



Intrusion; Intrusive - molten rock that is
        intruded (injected) into spaces that are created by a combination of melting and
        displacement.



Magnetometer - an
        instrument for detecting and measuring changes in the earth’s magnetic field,
        including those in different rock formations which may indicate the presence of specific
        minerals.



Metallurgy - the study of the extractive
        processes which produce minerals from their host rocks.



Metallurgical Tests- are scientific
        examinations of rock/material to determine the optimum extraction of metal contained. Core
        samples from diamond drill holes are used as representative samples of the mineralization
        for this test work.



Mineral - a naturally formed chemical element
        or compound having a definitive chemical composition and, usually a characteristic crystal
        form.



Mineralization - a natural concentration in
        rocks or soil of one or more metalliferous minerals.



Net
        Smelter Return Royalty / NSR Royalty-
        a phrase used to describe a royalty payment made by a producer of metals
        based on gross metal production from the property, less deduction of certain limited costs
        including smelting, refining, transportation and insurance costs.



Open
        Pit - a mining method whereby the mineral reserves are accessed
        from surface by the successive removal of layers of material usually creating a large pit
        at the surface of the earth.



Outcrop - the part
        of a rock formation that appears at the surface of the ground.



Oxide - a compound
        of oxygen with another element.



Phyllic Alteration -
        hydrothermal alteration common in porphyry base-metal systems.



Porphyry - any igneous rock in which relatively
        large crystals are set in a fine-grained matrix of rock.



Pyroclastic - produced by explosive or aerial
        ejection of ash, fragments, and glassy material from a volcanic vent. Applied to the rocks
        and rock layers as well as to the textures so formed.



Quartz - crystalline silica; often forming
        veins in fractures and faults within older rocks.



Resource - a concentration of mineral material
        in such form and amount that economic extraction of a commodity from the concentration is
        currently or potentially feasible. Locations, grade, quality or quantity are estimated from
        specific geologic evidence.





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Reverse
        Circulation (RC) Drilling - a type of percussion drilling where
        hammer force is transmitted down a length of steel drill rods to a rotating bit that breaks
        the rock into chips. The rock chips are forced to the surface using air or water forced
        down the outer chamber of a twin-walled drill rod and driven back to the surface through
        the inner chamber. The rock chips are then collected for analysis.



Rhyolite - a group of extrusive igneous rocks,
        typically porphyritic and commonly exhibiting flow texture, with phenocrysts of quartz and
        alkali feldspar in a glassy to cryptocrystalline groundmass; also, any rock in that group;
        the extrusive equivalent of granite.



Sampling - taking
        a sample of rock or material in order to test and assay its mineral composition.



Sediments; Sedimentary - rocks formed by the
        deposition of sediment or pertaining to the process of
        sedimentation.



Shear
        zone - a zone in which shearing has occurred on a large scale so
        that the rock is crushed and brecciated.



Silification - the in situ alteration of a
        rock, which involves an increase in the proportion of silica minerals.



Tuff
        - a general term for all consolidated pyroclastic
        rocks.



Stockwork - a mineral deposit consisting of a
        three-dimensional network of planar to irregular veinlets closely enough spaced that the
        whole mass can potentially be mined.



Vein
        - a thin, sheet-like, crosscutting body of hydrothermal
        mineralization, principally quartz.



Volcanics - those originally molten rocks,
        generally fine grained, that have reached or nearly reached the Earth’s surface
        before solidifying.



Mineral
        Property Application Process in Argentina

There is
        no actual ground staking of mineral claims for securing mineral rights in Argentina.
        Mineral rights are acquired by application to the government for concessions to seek, own
        and sell minerals located within a specified parcel of land. Generally, all persons or
        entities qualified to acquire and possess real estate can obtain mineral rights. The three
        levels of mineral rights and titles are described below:

Cateo



An
        exploration permit, known as a “Cateo”, allows the holder of the permit to
        explore the concession by way of prospecting, mapping, sampling and conducting geophysical
        surveys. The rights of the Cateo holder are subject to surface rights. To conduct drilling
        and trenching programs on the Cateo, the permit holder has to submit a
        report to the mining office outlining the proposed program which must include a plan for
        any reclamation.

Term of Cateo



Once a Cateo is granted, it has a lifespan that is predicated
        upon its size. A Cateo is measured in 500 ha units and can range in size from a minimum of
        1 unit (500 ha) to a maximum of 20 units (10,000 ha). A



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one-time
        fee of Peso 0.80 per ha is due within 5 days of approval. During the term of a Cateo, which
        begins 30 days after approval, periodic relinquishment of ground is made such that 300 days
        after approval, 50% of the area in excess of 4 units must be relinquished and after 700
        days, 50% of the remaining area must be relinquished. A Cateo of 1 unit has a duration of
        150 days and for each additional unit, its duration is increased by 50 additional
        days.



Mining Permit



A Cateo
        will expire if, within its specified term or duration, no mineral discovery is reported by
        the Cateo holder. If a mineral showing or an ore zone has been discovered while exploring
        the property, where the holder is a company, it may apply for a “Manifestacion de
        Descubrimiento”, or “MD” for mining rights to a maximum of 3,500 ha. Once
        an MD is granted, the property must be surveyed in order to apply for a “Mina”,
        or mining lease. This is usually done after the results of exploration indicate a potential
        ore body.



Mineral
        Application Process in Chile



There
        are two types of mining concessions in Chile: exploration concessions and exploitation
        concessions. The principal characteristics of each are the following:



Exploration Concessions



The
        titleholder of an exploration concession has the right to carry out all types of mining
        exploration activities within the area of the concession. Exploration concessions can
        overlap or be granted over the same area of land; however, the rights granted by an
        exploration concession can only be exercised by the titleholder with the earliest dated
        exploration concession over a particular area as indicated by their ROL number. The ROL is
        a number used to identify a concession, it is not an acronym.



For each
        exploration concession the titleholder must pay an annual fee of approximately US$1.10 per
        hectare to the Chilean Treasury and exploration concessions have a duration of two years.
        At the end of this period, they may (i) be renewed as an exploration concession for two
        further years in which case at least 50% of the surface area must be renounced, or (ii) be
        converted, totally or partially, into exploitation concessions.



A
        titleholder with the earliest dated exploration concession has a preferential right to an
        exploitation concession in the area covered by the exploration concession, over any third
        parties with a later dated exploration concession for that area or without an exploration
        concession at all and must oppose any applications made by third parties for exploitation
        concessions within the area for the exploration concession to remain valid.



Exploitation Concessions



The
        titleholder of an exploitation concession is granted the right to explore and exploit the
        minerals located within the area of the concession and to take ownership of the minerals
        that are extracted. Exploitation concessions can overlap or be granted over the same area
        of land; however, the rights granted by an exploitation concession can only
        be exercised by the titleholder with the earliest dated exploitation concession over a
        particular area.



Exploitation concessions are of indefinite duration and an
        annual fee is payable to the Chilean Treasury in relation to each exploitation concession
        of approximately US$5.80 per hectare.





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Where a
        titleholder of an exploration concession has applied to convert the exploration concession
        into an exploitation concession, the application for the exploitation concession and the
        exploitation concession itself is back dated to the date of the exploration concession. A
        titleholder to an exploitation concession must apply to annul or cancel any exploitation
        concessions which overlap with the area covered by its exploitation concession within a
        certain time period in order for the exploitation concession to remain valid.



In
        accordance with Chilean law, from the date that an application for a mining concession is
        made to the court, the applicant has the right to transfer or grant an option to purchase
        the mining concession in the process of being constituted and the court has no discretion
        to refuse the final grant of the concession.



CORPORATE STRUCTURE

Name
        and Incorporation

The
        Company was incorporated under the name of Square Gold Explorations Inc. on February 10,
        1984 under the Company Act of the
        Province of British Columbia (subsequently replaced by
        the Business Corporation Act (British
        Columbia)) with an authorized capital of 20,000,000 common shares without par value. On
        July 13, 1987, the Company changed its name to Glacier Resources Inc. and on August 19,
        1988 changed its name to Golden Glacier Resources Inc.

On June
        10, 2002 shareholders approved (i) a share consolidation on the basis of ten (10) old
        shares for one (1) new share (the “Consolidation”), (ii) an increase in the
        authorized share capital post-consolidation from 2,000,000 to 100,000,000 common shares,
        and (iii) a name change to Exeter Resource Corporation. The Consolidation and name change
        were made effective October 11, 2002.

The head
        office of the Company is located at Suite 1260, 999 West Hastings Street, Vancouver,
        British Columbia, V6C 2W2. The address for service and the registered and records office of
        the Company is located at Suite 2900, 550 Burrard Street, Vancouver, British Columbia V6C
        0A3.



Intercorporate Relationships



The
        Company has four wholly owned subsidiaries: Cognito Limited (“Cognito”),
        Estelar Resources Limited (“Estelar”), Sociedad Contractual Minera Eton Chile
        (“Eton Chile”) and Eton Mining Corp. (“Eton”). Cognito and Estelar
        are British Virgin Island corporations, registered to conduct the Company’s business
        in Argentina. Eton Chile is a Chilean corporation, registered to conduct the
        Company’s business in Chile. Eton is a British Columbia corporation, and is not
        currently active.



GENERAL
        DEVELOPMENT OF THE BUSINESS

Three
        Year History

The
        Company is engaged in the business of acquisition, exploration and development of mineral
        properties located in Argentina and Chile; its business development over the last three
        years is described in the following paragraphs. Unless otherwise noted,
        Matthew T. Williams, the Exploration Manager of the Company, is
        the “qualified person” under NI 43-101 responsible for the preparation of
        scientific or technical information in this AIF.





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2005



During
        2005, the Company completed the acquisition of the remaining 50% of the shares of Cognito,
        a company holding the right to acquire a 100% interest in the Don Sixto gold silver
        property (“Don Sixto project”) in Argentina, subject to a 3.5% NSR Royalty in
        the favour of the property owners, by issuing 2,500,000 common shares of the Company to
        Rowen Company Limited (“Rowen”), a company controlled by the Company’s
        President and CEO.

The
        Company continued with the exploration programs initiated in 2004, and advanced its Don
        Sixto project through continued drilling programs and engineering studies. The Company
        commenced work on projects in Chile pursuant to agreements with Rio Tinto Mining and
        Exploration Limited (“Rio Tinto”) and Minera Anglo American Chile Limitada and
        Empresa Mantos Blancos S.A. (together, “Anglo American”).

In
        addition, the Company closed the following non brokered private placements:



|• | 1,907,667 units at a price of $1.20 per unit. Each unit
                    consisted of one common share and one-half share purchase warrant to purchase
                    one additional share at a price of $1.35 exercisable for one year. Gross
                    proceeds of $2,289,200 were used to further the exploration and development of
                    the Company’s properties in Argentina and for working capital.
                    Finder’s fees totalling $117,910 were paid in cash in connection with the
                    private placement. All warrants have been exercised.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | 5,979,334 units at a price of $1.30 per unit. Each unit
                    consisted of one common share and one-half share purchase warrant to purchase
                    one additional common share for one year at $1.70. Gross proceeds of $7,773,134
                    were used to advance the Don Sixto project, in Argentina, for exploration of
                    other projects in Argentina and Chile, and for general working capital.
                    Finder’s fees of $124,800 in cash and 44,500 units, having the same
                    attributes as the units sold in the private placement, were paid in connection
                    with the private placement. All warrants have been exercised.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



2006

During
        2006, the Company continued exploration on its Don Sixto project with the objective of
        expanding its existing resource estimate and raising the level of confidence in that
        resource estimate. The Company advanced its exploration activities in Patagonia on its
        projects held through an alliance with Cerro Vanguardia Sociedad Anónima
        (“CVSA”), and in Chile continued work on the Caspiche property. The Company
        also entered into a new agreement with Rio Tinto which gave it the right to explore 48
        targets in Southern Chile.



The
        Company began trading its common shares on the American Stock Exchange (“AMEX”)
        on November 9 under the symbol “XRA”.

In
        addition, the Company closed the following non brokered private placements:



|• | 3,600,000 units at a price of $2.50 per unit. Each unit
                    consisted of one common share and one-half share purchase warrant to purchase
                    one additional common share for a period of 18 months at a price of $3.00.
                    Gross proceeds of $9,000,000 were used to advance the Don Sixto project, in
                    Argentina, for exploration of other projects in Argentina and Chile, and for
                    general working capital. The Company paid a finder’s fee
                    of $450,000 in cash and issued 252,000 warrants, each to purchase one common
                    share at a price of $2.50 for 18 months. All warrants have been
                    exercised.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|• | 500,000 units at a price of $2.50 per unit. Each unit consisted
                    of one common share and one-half share purchase warrant to purchase one
                    additional common share for a period of 18 months at a price of $3.00. Gross
                    proceeds of $1,250,000 were used to advance the Don Sixto project, in
                    Argentina, for exploration of other projects in Argentina and Chile, and for
                    general working capital. Currently all 250,000 warrants are outstanding, and
                    will expire on April 18, 2008.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
        Company relocated its head office to the current address, and entered into a five year
        lease agreement with an arms length party.



2007



In early
        2007, the Company curtailed drilling on its Don Sixto project to focus primarily on the
        construction of geological, mineralization and structural models in preparation for updated
        resource estimates for Don Sixto which were released in August, 2007. With the curtailment
        of drilling at Don Sixto, the Company’s geological teams focused on advancing both
        its Cerro Moro and Caspiche projects in Argentine Patagonia and Chile respectively.
        Following the introduction of legislation which banned the use of certain chemicals,
        traditionally used in mining, by the Mendoza Provincial Government in June, 2007,
        exploration and independent engineering studies at Don Sixto were suspended.



Drilling
        resumed at Cerro Moro in March, and with the addition of a second drill rig in June,
        exploration progressed rapidly. In May 2007 the Company provided notice to CVSA that it had
        incurred the exploration expenditures required under the agreement with CVSA and
        exercised its option to acquire the Cerro Moro properties in San Cruz Province, the
        remainder of properties in Santa Cruz Province, and the properties in Rio Negro Province
        and Chubut Province covered by the agreement. By early August, the Company had completed
        10,000 metres of drilling at Cerro Moro, triggering CVSA’s back-in right to gain a
        majority interest in the Cerro Moro project. The Company collated all geological data
        generated on Cerro Moro up to the completion of the 10,000 metres of drilling and forwarded
        it to CVSA in early September. Upon receipt of that data, CVSA had 45 days in which to
        exercise its back-in-right. On October 30, 2007, CVSA advised the Company that it would not
        exercise its back in right and consequently its interest reverted to a 2% NSR Royalty with
        the Company owning 100% of the project.



Exploration programs at Cerro Moro are planned to continue through
        2008.



At
        Caspiche, located in the Maricunga region of the Chilean Andes in an area known to be rich
        in porphyry gold deposits, two drilling campaigns were conducted in early 2007 with the
        final drill hole being drilled into a very promising porphyry gold target. Drilling at
        Caspiche is currently underway and is expected to continue until the onset of the southern
        winter.



Subsequent to year end, on March 5, 2008 the Company entered into a letter
        of intent with Fomento Minera de Santa Cruz Sociedad del Estado (“Fomicruz”), a
        company owned by the Government of Santa Cruz Province, Argentina, for the future
        development of the Company’s Cerro Moro project in Santa Cruz. Under the terms of the
        letter of intent, Fomicruz will acquire a 5% interest in the Company’s 176 square
        kilometre Cerro Moro project, and the Company will have the right to earn up to an 80%
        interest in 763 square kilometres of Fomicruz exploration properties adjoining the Cerro
        Moro project by incurring US$10 million in exploration expenditures over a number of years.
        The Company will fund all exploration and development costs of the Cerro Moro project and
        Fomicruz will repay an agreed amount of those costs from 50% of its share of net
        revenue from future operations.  The Company will manage the exploration and
        potential future development on the properties.





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On March 6,
        2008, the Company announced that it had entered into an agreement with a syndicate of
        underwriters led by Canaccord Capital Corporation and BMO Capital Markets and including
        National Bank Financial, Dundee Securities and Haywood Securities to sell on a private
        placement basis 7,780,000 special warrants at a price of $4.50 per special warrant to raise
        gross proceeds of $35,010,000. Each special warrant is exercisable to acquire one common
        share of the Company. The Company has agreed to use its best efforts to file and obtain a
        receipt for a prospectus in certain provinces of Canada qualifying the common shares for
        trading. If a receipt is not obtained by May 6, 2008, each special warrant shall be
        convertible into 1.1 common shares of the Company. The Company intends to use the net
        proceeds of the offering for exploration and development of the Company’s properties
        in Argentina and Chile and for general corporate purposes. The offering closed on March 26,
        2008.



DESCRIPTION OF THE BUSINESS

General

The
        Company is a mineral resource exploration company. The Company’s principal properties
        are the Cerro Moro property in Santa Cruz Province, Argentina, the Caspiche property in
        northern Chile, and the Don Sixto property in Mendoza Province, Argentina.



The
        Company is in the exploration stage of its corporate development; it owns no producing
        properties and, consequently has no current operating income or cash flow from the
        properties it holds, nor has it had any income from operations in the past three financial
        years. As a consequence, operations are primarily funded by equity
        subscriptions.



The
        progress on, and results of, work programs on the Company’s properties are set out in
        the Mineral Project section of this AIF. At this time, based on the exploration results
        to-date, the Company cannot project significant mineral production from any of its existing
        properties.



Specialized Skills

The
        Company’s business requires specialized skills and knowledge in the areas of geology,
        drilling, planning, implementation of exploration programs, and compliance. Recently, the
        increased level of activity in the mining industry is making it more difficult to source
        competent professionals in these areas. To date, the Company has been able to locate and
        retain such professionals both in Canada, Argentina and Chile, and believes it will be able
        to continue to do so.



Competitive Conditions

The
        Company is in a very competitive industry, and competes with other companies many of which
        have greater technical and financial facilities for the acquisition and development of
        mineral properties, as well as for the recruitment and retention of qualified employees and
        consultants. In addition, over the past year, increased activity in the mining industry on
        a global scale has made it more challenging to procure certain service providers, such as
        drilling contractors, for the industry. The high demand for these service providers may
        increase exploration cost or delay some exploration programs.



Business Cycles

The
        mining business has cycles marked by commodities prices, which are also affected by a
        variety of economic indicators and worldwide cycles. These cycles affect the overall
        environment in which the Company conducts its business and the availability of capital. In
        addition to the commodity price cycles,



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exploration activity may be also affected by seasons and weather conditions
        in Argentina and Chile.  In particular, exploration on some of the Company's
        properties at higher altitudes may not be possible in the winter.



Environmental Protection Requirements

The
        Company’s operations are subject to environmental regulations promulgated by
        government agencies from time to time. Environmental legislation provides for restrictions
        and prohibitions on spills, releases or emissions of various substances produced in
        association with certain mining industry operations, such as seepage from tailings disposal
        areas, and use of cyanide which would result in environmental pollution. A breach of such
        legislation may result in imposition of fines and penalties. In addition, certain types of
        operations require the submission and approval of environmental impact assessments.
        Environmental legislation is evolving in a manner which means stricter standards, and
        enforcement, fines and penalties for non-compliance are more stringent. Environmental
        assessments of proposed projects carry a heightened degree of responsibility for companies
        and directors, officers and employees. The cost of compliance with changes in governmental
        regulations has a potential to reduce the profitability of operations. The Company intends
        to comply with environmental regulations in Argentina and Chile.

Recent
        political events in Mendoza, Argentina, where the Don Sixto project is located, resulted in
        legislation being passed by the Mendoza government in June 2007, prohibiting the use of
        chemicals typically used in the extraction of gold and other metals. The legislation
        effectively puts the Don Sixto project on hold, unless the government amends the law. The
        Company has filed suit in the Mendoza Courts challenging the constitutionality of the new
        legislation which has effectively banned conventional mining in the province. The Company
        will, however, continue to work with authorities in Mendoza, and with representatives of
        other mining companies, to effect legislative amendment. These political developments could
        have a serious negative impact on the Company and the value of its securities.



Employees

As of
        December 31, 2007, and the date hereof, the Company has four full time employees in Canada,
        seventy two full time employees in Argentina, and one full time employee in Chile. The
        Company relies on and engages consultants on a contract basis to provide services,
        management and personnel who assist the Company, to carry on its administrative or
        exploration activities either in Canada, Argentina or Chile.



Foreign Operations

Mineral
        exploration and mining activities in Argentina and Chile may be affected in varying degrees
        by political stability and government regulations relating to the mining industry. Any
        changes in regulations or shifts in political conditions may adversely affect the
        Company’s business. Operations may be affected in varying degrees by government
        regulations with respect to restrictions on production, price controls, export controls,
        income taxes, expropriation of property, environmental legislation and mine safety.
        Argentina’s and Chile’s status as developing countries may make it more
        difficult for the Company to obtain any required exploration, development and production
        financing for its projects.

Social
        or Environmental Policies

In
        March 2008, the Company adopted an “Environment and Corporate Social Responsibility
        Principle and Policy” and expects to begin the policy implementation process in the
        near future.

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The Company’s environmental and corporate social
        responsibility principles and policies sets out the principles that all directors,
        management and employees are required to adhere to while conducting Company business.
        The principles are (i) environmental stewardship, which sets the objective of minimizing
        negative impacts on the environment, (ii) the commitment to conduct due diligence before
        undertaking material activities on the ground to ensure proper management of issues
        surrounding these activities, (iii) a commitment to engage host communities and other
        affected and interested parties by including all parties and providing clear and accurate
        information, (iv) contribute to community development, (v) upholding Human Rights, (vi)
        safeguarding the health and safety of workers and local population by implementing sound
        health and safety policies, (vii) a commitment to accurate and transparent reporting and
        (viii) the commitment to ethical business practices.

Risk
        Factors

All of
        the properties in which the Company has or is acquiring an interest are in the
        exploration stage only. The activities of the Company are speculative due to the high risk
        nature of its business which is the acquisition, financing, exploration and development of
        mining properties. The following risk factors, which are not exclusive, could materially
        affect the Company’s business, financial condition or results of operations and could
        cause actual events to differ materially from those described in forward-looking statements
        relating to the Company. These risks include but are not limited to the
        following:



**Risks Associated with the Company’s Operations and
        Mineral Exploration**



The
        Company is involved in the resource industry, which is highly speculative, and has certain
        inherent exploration risks which could have a negative effect on the Company’s
        operations. Resource exploration is a speculative business,
        characterized by a number of significant risks including, among other things, unprofitable
        efforts resulting not only from the failure to discover mineral deposits but from finding
        mineral deposits which, though present, are insufficient in quantity and quality to return
        a profit from production. The marketability of minerals acquired or discovered by the
        Company may be affected by numerous factors which are beyond the control of the Company and
        which cannot be accurately predicted, such as market fluctuations, the proximity and
        capacity of milling facilities, mineral markets and processing equipment, and such other
        factors such as government regulations, including regulations relating to royalties,
        allowable production, importing and exporting of minerals, and environment protection, the
        combination of which factors may result in the Company not receiving an adequate return on
        investment capital.



The
        Company has no known reserves and no economic reserves may exist on its properties, which
        would have a negative effect on the Company’s operations and valuation.
        Despite exploration work on its mineral claims, no known bodies of
        commercial ore or economic deposits have been established on any of the Company’s
        mineral properties. In addition, the Company is at the exploration stage on all of its
        properties and substantial additional work will be required in order to determine if any
        economic deposits occur on the Company’s properties. The Company may expend
        substantial funds in exploring its properties only to abandon them and lose its entire
        expenditure on the properties if no commercial or economic quantities of minerals are
        found. Even in the event that commercial quantities of minerals are discovered, the
        exploration properties might not be brought into a state of commercial production. Finding
        mineral deposits is dependent on a number of factors, not the least of which is the
        technical skill of exploration personnel involved. The commercial viability of a mineral
        deposit once discovered is also dependent on a number of factors, some of which are the
        particular attributes of the deposit, such as size, grade and proximity to infrastructure,
        as well as metal prices. Most of these factors are beyond the control of the entity
        conducting such mineral exploration. The Company is an exploration stage company with no
        history of pre-tax profit and no income from its operations. There can be no assurance that
        the Company’s operations will be profitable in the future. There is no certainty that
        the expenditures to be made by the Company in the exploration of its properties as
        described herein will result in discoveries of mineralized





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material in
        commercial quantities. Most exploration projects do not result in the discovery of
        commercially mineable deposits and no assurance can be given that any particular level of
        recovery of mineral reserves will in fact be realized or that any identified mineral
        deposit will ever qualify as a commercially mineable (or viable) mineral deposit which can
        be legally and economically exploited. There can be no assurance that minerals recovered in
        small scale tests will be duplicated in large scale tests under on-site conditions or in
        production. If the Company is unsuccessful in its exploration efforts, the Company may be
        forced to acquire additional projects or cease operations.



The Company does not own certain of its properties but is
        required to make option payments and exploration expenditures to earn its
        interest. If the Company is unable to make the required outlays,
        its entire investment could be lost. Certain of the Company’s properties, including
        its most advanced project, the Don Sixto project, are currently held under option.
        The Company has no ownership interest in these properties until it meets, where applicable,
        all required property expenditures, cash payments, and common share issuances. If the
        Company is unable to fulfill the requirements of these option agreements, it is likely that
        the Company would be considered in default of the agreements and the option agreements
        could be terminated resulting in the complete loss of all expenditure, including
        the option payments made on the properties to that date.



Recent legislation in Mendoza, Argentina could have a
        serious negative impact on the Don Sixto project and the Company as a
        whole. Recent political events in Mendoza, Argentina, where the
        Don Sixto project is located, resulted in legislation being passed by the Mendoza
        government in June 2007, prohibiting the use of chemicals typically used in the extraction
        of gold and other metals. The legislation effectively puts the Don Sixto project on hold,
        unless the government amends the law. The Company has filed suit in the Mendoza Courts
        challenging the constitutionality of the new legislation which has effectively banned
        conventional mining in the Province. The Company will, however, continue to work with
        authorities in Mendoza, and with representatives of other mining companies, to effect
        legislative amendment. These political developments could have a serious negative impact on
        the Company and the value of its securities.



The
        Company conducts mineral operations in Argentina and Chile which, as developing economies,
        have special risks which could have a negative effect on the Company’s operations and
        valuation. The Company’s exploration operations are
        currently located in Argentina and Chile. Argentina is currently experiencing economic
        instability associated with unfavorable exchange rates, high unemployment, inflation and
        foreign debt. These factors could pose serious potential problems associated with the
        Company’s ability to raise additional capital which will be required to explore
        and/or develop any of the Company’s mineral properties. As a developing economy,
        operating in Argentina has certain additional risks, including changes to or invalidation
        of government mining regulations; expropriation or revocation of land or property rights;
        changes in foreign ownership rights; changes in foreign taxation rates; corruption;
        uncertain political climate; terrorist actions or war; and lack of a stable economic
        climate. The presence of any of these conditions could have a negative effect on the
        Company’s operations and could lead to the Company being unable to exploit, or losing
        outright, its properties in Argentina. This would have a negative impact on the Company and
        the value of its securities.



Argentina’s economy has a history of instability and, future
        instability and uncertainty could negatively effect the Company’s ability to operate
        in the country. Since 1995, Argentina’s economy has
        suffered periods of instability, which include high inflation, capital flight, default on
        international debts, and high government budget deficits. Results of these problems
        included domestic disturbances and riots, government resignations and instability in the
        currency and banking system. Such disorder in the future could make it difficult or
        impossible for the Company to operate effectively in the country, and require the Company
        to reduce or suspend its operations in Argentina.





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The
        Company’s operations contain significant uninsured risks which could negatively
        impact future profitability as the Company maintains no insurance against its
        operations. The Company’s exploration of its mineral
        properties contain certain risks, including unexpected or unusual operating conditions
        including rock bursts, cave-ins, flooding, fire and earthquakes. It is not always possible
        to insure against such risks. The Company currently maintains no insurance against its
        properties or operations and may decide to not take out any such insurance in the future or
        such insurance may not be available at economic rates or at all. Should such events arise,
        they could reduce or eliminate the Company’s assets and shareholder equity as well as
        result in increased costs and a decline in the value of the Company’s
        securities.



The
        Company has not surveyed any of its properties, has no guarantee of clear title to its
        mineral properties and the Company could lose title and ownership of its properties which
        would have a negative effect on the Company’s operations and valuation.
        The Company has only done a preliminary legal survey of the boundaries of
        some of its properties, and therefore, in accordance with the laws of the jurisdictions in
        which these properties are situated, their existence and area could be in doubt. If title
        is disputed, the Company will have to defend its ownership through the courts. In the event
        of an adverse judgment, the Company would lose its property rights.



The
        natural resource industry is highly competitive, which could restrict the Company’s
        growth. The Company competes with other exploration resource
        companies, which have similar operations, and many competitors have operations, financial
        resources and industry experience greater than those of the Company. This may place the
        Company at a disadvantage in acquiring, exploring and developing properties. Such companies
        could outbid the Company for potential projects or produce minerals at lower costs which
        would have a negative effect on the Company’s operations.



Mineral operations are subject to market forces outside of the
        Company’s control which could negatively impact the Company’s
        operations. The marketability of minerals is affected by numerous
        factors beyond the control of the entity involved in their mining and processing. These
        factors include market fluctuations, government regulations relating to prices, taxes,
        royalties, allowable production, import, exports and supply and demand. One or more of
        these risk elements could have an impact on costs of an operation and if significant
        enough, reduce the profitability of the operation and threaten its continuation.



The
        Company is subject to substantial environmental requirements which could cause a
        restriction or suspension of Company operations. The current and
        anticipated future operations of the Company require permits from various governmental
        authorities and such operations are and will be governed by laws and regulations governing
        various elements of the mining industry. The Company’s exploration activities in
        Argentina and Chile are subject to various Federal, Provincial and local laws governing
        land use, the protection of the environment, prospecting, development, production, exports,
        taxes, labor standards, occupational health, waste disposal, toxic substances, and other
        matters. Such operations and exploration activities are also subject to substantial
        regulation under these laws by governmental agencies and may require that the Company
        obtain permits from various governmental agencies.



Exploration generally requires one form of permit while development and
        production operations require additional permits. There can be no assurance that all
        permits which the Company may require for future exploration or possible future development
        will be obtainable on reasonable terms. In addition, future changes in applicable laws or
        regulations could result in changes in legal requirements or in the terms of existing
        permits applicable to the Company or its properties. This could have a negative effect on
        the Company’s exploration activities or its ability to develop its
        properties.





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The Company is also subject to environmental regulations,
        which require the Company to minimize impacts upon air, water, soils, vegetation and
        wildlife, as well as historical and cultural resources, if present. In Argentina, prior to
        conducting operations, miners must submit an environmental impact report to the provincial
        government, describing the proposed operation and the methods to be used to prevent
        environmental damage. Approval must be received from the applicable bureau and/or
        department, which will also conduct ongoing monitoring of operations before exploration can
        begin. In Chile, exploration activities require a environmental declaration, while mining
        activities require an environmental evaluation, these documents are presented with the
        government entity (Conama or Corena) before activities begin. As the Company is at the
        exploration stage, the disturbance of the environment is limited and the costs of complying
        with environmental regulations are minimal. However, if operations result in
        negative effects upon the environment, government agencies will
        usually require the Company to provide remedial actions to correct the negative
        effects.



Failure to comply with applicable laws, regulations and
        permitting requirements may result in enforcement actions, including orders issued by
        regulatory or judicial authorities causing operations to cease or be curtailed, and may
        include corrective measures requiring capital expenditures, installation of additional
        equipment or other remedial actions.

Recent political events in Mendoza, Argentina, where the Don
        Sixto project is located, resulted in legislation being passed by the Mendoza government in
        June 2007, prohibiting the use of chemicals typically used in the extraction of gold and
        other metals. The legislation effectively puts the Don Sixto project on hold, unless the
        government amends the law. The Company has filed suit in the Mendoza Courts challenging the
        constitutionality of the new legislation which has effectively banned conventional mining
        in the province. The Company will, however, continue to work with authorities in Mendoza,
        and with representatives of other mining companies, to effect legislative amendment. These
        political developments could have a serious negative impact on the Company and the value of
        its securities.



**Financing Risks**



The
        Company has a history of losses and expects losses to continue for the foreseeable future
        and will require additional equity financings, which will cause dilution to existing
        shareholders. The Company has limited financial resources and has
        no operating cash flow. As of December 31, 2007, the end of the last financial year, the
        Company had incurred accumulated losses totalling $51,861,173. The continued exploration
        efforts will require additional capital to help maintain and to expand exploration on the
        Company’s principal exploration properties. Additionally, if the Company decides to
        proceed with a full feasibility study on its Don Sixto project, substantial additional
        funds will be required to complete the study as well as to complete the acquisition of the
        project held under option agreements. The Company may not be able to obtain additional
        financing on reasonable terms, or at all. If the Company is unable to obtain sufficient
        financing, it might have to dramatically slow exploration efforts and/or lose control of
        its projects. The Company has historically obtained the preponderance of its financing
        through the issuance of equity, and has no current plans to obtain financing through means
        other than equity financing. If equity financing is required, then such financings could
        result in significant dilution to existing or prospective shareholders. These financings
        may be on terms less favorable to the Company than those obtained previously.



The
        Company has a lack of cash flow sufficient to sustain operations and does not expect to
        begin receiving operating revenue in the foreseeable future. None
        of the Company’s properties have advanced to the commercial production stage and the
        Company has no history of earnings or cash flow from operations. The Company has paid no
        dividends on its common shares since incorporation and does not anticipate doing so in the
        foreseeable future. Historically, the only source of funds available to the Company has
        been through the sale of its common shares. Any future additional equity financing
        would





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cause
        dilution to current shareholders. If the Company does not have sufficient capital for its
        operations, management would be forced to reduce or discontinue its activities, which would
        have a negative effect on the value of its securities.

The Company operates in foreign countries and is subject
        to currency fluctuations which could have a negative effect on the Company’s
        operating results. The Company’s operations are located in
        Argentina and Chile which makes it subject to foreign currency fluctuation as the
        Company’s accounts are maintained in Canadian dollars while certain expenses are
        numerated in U.S. dollars and the local currency. Such fluctuations may adversely affect
        the Company’s financial position and results. Management may not
        take any steps to address foreign currency fluctuations that will eliminate
        all adverse effects and, accordingly, the Company may suffer losses due to adverse foreign
        currency fluctuations.



**Risks Relating to an Investment in the Common
        Shares of the Company**



The market for the Company’s common shares has been
        subject to volume and price volatility which could negatively effect a shareholder’s
        ability to buy or sell the Company’s common shares. The
        market for the common shares of the Company may be highly volatile for reasons both related
        to the performance of the Company or events pertaining to the industry (i.e. mineral price
        fluctuation/high production costs/accidents) as well as factors unrelated to the Company or
        its industry such as changes to legislation in the countries in which it operates. In
        particular, market demand for products incorporating minerals in their manufacture
        fluctuates from one business cycle to the next, resulting in change in demand for the
        mineral and an attendant change in the price for the mineral. In the last five financial
        years, the price of the Company’s common shares has fluctuated between $0.22 and
        $5.52. The Company’s common shares can be expected to continue to be subject to
        volatility in both price and volume arising from market expectations, announcements and
        press releases regarding the Company’s business, and changes in estimates and
        evaluations by securities analysts or other events or factors. In recent years the
        securities markets in the U.S. and Canada have experienced a high level of price and volume
        volatility, and the market price of securities of many companies, particularly
        small-capitalization companies such as the Company, have experienced wide fluctuations that
        have not necessarily been related to the operations, performances, underlying asset values,
        or prospects of such companies. For these reasons, the Company’s common shares can
        also be expected to be subject to volatility resulting from purely market forces over which
        the Company will have no control. Further, despite the existence of a market for trading
        the Company’s common shares in Canada, the U.S. and Germany, shareholders of the
        Company may be unable to sell significant quantities of Common Shares in the public trading
        markets without a significant reduction in the price of the common shares.



The
        Company has a dependence upon key management employees, the absence of which would have a
        negative effect on the Company’s operations. The Company
        depends on the business and technical expertise of its management and key personnel,
        including Bryce Roxburgh, President and Chief Executive Officer, and Yale Simpson,
        Chairman. There is little possibility that this dependence will decrease in the near term.
        As the Company’s operations expand, additional general management resources will be
        required. The Company may not be able to attract and retain additional qualified personnel
        and this would have a negative effect on the Company’s operations. The Company has
        entered into formal services agreements with Bryce Roxburgh and Yale Simpson and some of
        its other officers. The Company maintains no “key man” life insurance on any
        members of its management or directors.



Certain officers and directors may have conflicts of interest, which
        could have a negative effect on the Company’s operations.
        Certain of the directors and officers of the Company are also directors
        and/or officers and/or shareholders of other natural resource companies. While the Company
        is engaged in the business of exploiting mineral properties, such associations may give
        rise to conflicts of interest from time to time. The directors of the Company are required
        by law to act honestly and in good faith with a view to

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uphold
        the best interests of the Company and to disclose any interest that they may have in any
        project or opportunity of the Company. If a conflict of interest arises at a meeting of the
        board of directors, any director in a conflict must disclose his interest and abstain from
        voting on such matter. In determining whether or not the Company will participate in any
        project or opportunity, the directors will primarily consider the degree of risk to which
        the Company may be exposed and its financial position at the time.



The Company could be deemed a passive foreign investment
        company which could have negative consequences for U.S. investors.
        The Company could be classified as a Passive Foreign Investment Company
        (“PFIC”) under the U.S. tax code. If the Company is declared a PFIC, then
        owners of the Company’s common shares who are U.S. taxpayers generally will be
        required to treat any so-called “excess distribution” received on its common
        shares, or any gain realized upon a disposition of common shares, as ordinary income and to
        pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes
        a qualified electing fund (“QEF”) election or a mark-to-market election with
        respect to the Company’s common shares. A U.S. taxpayer who makes a QEF election
        generally must report on a current basis its share of the Company’s net capital gain
        and ordinary earnings for any year in which the Company is classified as a PFIC, whether or
        not the Company distributes any amounts to its shareholders.



U.S. investors may not be able to enforce their civil
        liabilities against the Company or its directors, controlling persons and
        officers. It may be difficult to bring and enforce suits against
        the Company. The Company is a corporation incorporated in British Columbia under the
        Business Corporations Act. A majority of
        the Company’s directors and officers are residents of Canada and all of the
        Company’s assets and its subsidiaries are located outside of the U.S. Consequently,
        it may be difficult for U.S. investors to effect service of process in the U.S. upon those
        directors or officers who are not residents of the U.S., or to realize in the U.S. upon
        judgments of U.S. courts predicated upon civil liabilities under U.S. securities laws.
        There is substantial doubt whether an original action could be brought successfully in
        Canada against any of such persons or the Company predicated solely upon such civil
        liabilities under the United States Securities Act of 1933, as amended.



As a
        “foreign private issuer”, the Company is exempt from Section 14 proxy rules and
        Section 16 of the Securities Exchange Act of
        1934. The submission of proxy
        and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K
        may result in shareholders having less complete and timely data. The exemption from Section
        16 rules regarding sales of common shares by insiders may also result in shareholders
        having less data.



PRINCIPAL PROJECTS

CERRO
        MORO

The
        following description of the Cerro Moro property was extracted and/or summarized from a
        report titled “Technical Report Cerro Moro Project” dated November 26, 2007
        prepared by Jerry Perkins, B.Sc (Hons Chem. Eng.), C.P., FAusIMM, the Company’s Vice
        President – Development & Operations, and Matthew T. Williams, B.App.Sc. Applied
        Geology, MAusIMM, Exploration Manager of the Company, both “qualified persons”
        under NI 43-101, which is incorporated by reference herein and is available for public
        viewing at www.sedar.com and
        www.sec.gov/ among the Company’s
        disclosure documents.



The
        reader is cautioned that the following is an abridged summary only. To put the contents
        hereof in the context of the full technical report, together with its illustrations,
        figures, footnotes, bibliography, assay

---

- 19 -



certificates, etc., the reader should view the full technical report on
        SEDAR at www.sedar.com or on  EDGAR at www.sec.gov/.



Acquisition terms



In January 2004, the Company announced that it had secured an
        option from CVSA to acquire all of CVSA’s exploration projects (the “CVSA
        Properties”), except those surrounding the Cerro Vanguardia gold mine, in Patagonia,
        Argentina. CVSA is owned 92.5% by AngloGold Ashanti Ltd. and 7.5% by Fomicruz
        S.A.



Under the option agreement, the Company paid CVSA US$100,000
        for the right to earn a 100% interest in the CVSA Properties by spending US$3 million
        within five years, including completing a total of 8,000 metres of drilling on any of the
        four major projects which comprise the CVSA Properties. CVSA also has the right to back
        into a 60% interest in a project following the completion of 10,000 metres of drilling on
        that project, by paying the Company 2.5 times its expenditures and paying for all project
        costs to the completion of a bankable feasibility study. CVSA can increase its interest to
        70%, by financing the Company’s share of mine development costs, at industry standard
        terms. Should CVSA elect not to back into a project, its interest will revert to a 2% NSR
        Royalty.



At the
        end of 2006, the Company had met the obligation to incur total aggregate expenditures of
        US$ 3 million, and completed 12,000 metres of drilling, and in early 2007 notified CVSA
        that it was exercising the option to acquire the CVSA Properties subject to their back in
        right. On August 2, 2007, the Company notified CVSA that it had completed 10,000 metres of
        drilling at the Cerro Moro project, and provided it with a report containing
        exploration results in early September. In October, CVSA advised the Company that it had
        elected not to exercise the back-in right and its interest has reverted to a 2% NSR
        Royalty in Cerro Moro.



To date,
        the Company has completed 7,820 metres of drilling on a second Santa Cruz project (drilled
        at Cerro Puntudo and Verde). Further drilling scheduled for 2008, is dependent on the
        Company contracting additional qualified geologists and drill rigs. The Company has not
        conducted any drilling on either of the Rio Negro or Chubut projects, which comprise the
        remainder of the projects held under the CVSA agreement.



Cerro
        Moro Property Description and Location

Cerro
        Moro is located in southern Argentina, some 60 kilometres (100 kilometres by road)
        southwest of Puerto Deseado, a port city in the Province of Santa Cruz. The project area is
        approximately 176 square kilometres and is geographically centered at approximately 48°
        01’ 55” south latitude and 66° 33’ 45” west
        longitude.

Cerro
        Moro comprises fifteen titles covering the main prospects.  One of these titles is a
        Cateo and the remainder are MDs as reflected in the following table:





Number

                    Letter

                    Year

                    Title Holder*

                    Type

                    Name

                    Area (Hectares)404908

                    CV

                    2002

                    CVSA

                    MD

                    La Virginia

                    699407082

                    M

                    1993

                    CVSA

                    MD

                    Bárbara II

                    420407083

                    M

                    1993

                    CVSA

                    MD

                    Michelle

                    420






---

- 20 -





Number

                    Letter

                    Year

                    Title Holder*

                    Type

                    Name

                    Area (Hectares)407084

                    M

                    1993

                    CVSA

                    MD

                    Michelle II

                    420407087

                    M

                    1993

                    CVSA

                    MD

                    Bárbara I

                    420407088

                    M

                    1993

                    CVSA

                    MD

                    Bárbara

                    420407101

                    M

                    1993

                    CVSA

                    MD

                    Michelle I

                    420407102

                    M

                    1993

                    CVSA

                    MD

                    Nini

                    420412988

                    M

                    1995

                    CVSA

                    MD

                    Hansen I

                    3,000412989

                    M

                    1995

                    CVSA

                    MD

                    Hansen II

                    3,000412990

                    M

                    1995

                    CVSA

                    MD

                    Hansen III

                    3,000412991

                    M

                    1995

                    CVSA

                    MD

                    Hansen

                    2,500412992

                    M

                    1995

                    CVSA

                    MD

                    Nini I

                    402412993

                    M

                    1995

                    CVSA

                    MD

                    Nini II

                    408411599

                    B

                    2004

                    Estelar**

                    Cateo

                    Robert

                    746.15Total Hectares

                    16,695






|* | Note that at the time of writing the technical report, title to
                    the properties was in the process of being transferred to the Company following
                    CVSA’s decision not to exercise its back-in right.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Estelar is a wholly owned subsidiary of the Company.
|-- | ----------------------------------------------------

Accessibility, Climate, Local Resources, Infrastructure and
        Physiography



Access

Cerro
        Moro is accessible from either Rio Gallegos City to the south, the capital of Santa Cruz
        Province or Comodoro Rivadavia City to the north, a southern city in Chubut Province. Both
        cities have national airports with regular commercial jet services from Buenos Aires. The
        major centres in close proximity to the project area are Puerto Deseado, approximately 100
        kilometres by road to the northeast and Puerto San Julian, approximately 260 kilometres by
        road to the southwest. Road access from each of these centres is via a combination of paved
        and all-weather gravel roads. A network of local farm roads and tracks provide reasonable
        access to all areas of interest within the project area. Exploration is possible on a
        year-round basis.



Climate



The
        climate in the area is dry and has been classified as semi-arid with minimum temperatures
        of -18° C and maximums of 20° C. The area has a low rainfall (mostly in winter),
        with some snow and is affected by moderate to strong wind.



Local
        Resources and Infrastructure



The
        immediate vicinity of Cerro Moro is sparsely populated. Farm stations or
        ‘estancias’ consisting of one to a few houses dot the country side, occurring
        several kilometres apart. The main occupation is raising sheep. The operating Cerro
        Vanguardia Gold Mine (“Cerro Vanguardia”), owned and operated by CVSA, is
        located approximately 130 kilometres (approximately 200 kilometres by road) to the
        west-southwest of the project.





---

- 21
        -



The nearest major centres are Puerto Deseado (pop. 10,000),
        Puerto San Julian (pop. 6,000), Caleta Olivia (pop. 36,000) 210 kilometres by road to the
        northwest and Comodoro Rivadavia (pop. 140,000) 290 kilometres by road to the
        north-northwest of the project area. Rio Gallegos (pop. 79,000), the capital of Santa Cruz
        Province, is approximately 500 kilometres by road to the south of the project. These major
        centres can provide basic goods and services. The national power grid serves these major
        centres. Comodoro Rivadavia and Rio Gallegos are serviced with national airports. Puerto
        Deseado, which is serviced via small to mid-size charter aircraft, has a well
        maintained concrete airstrip.



Physiography



Cerro Moro has low relief of approximately 60 metres above
        sea level with an average elevation of 115 metres. There are no permanent watercourses and
        several saline lagoons and saltpans are found throughout the area.



History

There is no record of previous ownership of Cerro Moro prior
        to its acquisition by Mincorp Exploration S.A. (“Mincorp”), the company that
        discovered the property in 1993 while investigating a satellite image.



Regional Landsat TM satellite imagery analysis identified 33
        targets, which were initially reviewed by helicopter reconnaissance. Major structures with
        extensive quartz veining were recognized at the “4 Verde” anomaly (now Cerro
        Moro). Initial rock chip sampling of the veins returned anomalous gold.



During
        the period between January and April of 1994, Mincorp conducted mapping and surface
        sampling of the main quartz veins. The tape and compass mapping of the veins was at scale
        of 1:1,000 and a total of 223 short trenches were dug by hand. No further work was carried
        out until May 1997 when detailed mapping and trench sampling restarted. The more obvious
        outcropping quartz vein structures were identified and named: Moro, Nini, Laura, Susy,
        Dora, Romina, Lourdes, Barbara, Ana, Deborah, Belen, Maria and Michelle. An interpreted
        geology map at a scale of 1:20,000 was also produced. In total 2,982 samples were collected
        and all of the samples were analysed at Cerro Vanguardia. After an analysis of the surface
        sampling results and mapping, a total of 19 diamond holes for 1,016 metres were drilled by
        Mincorp on the Loma Mosquito, Moro, Nini, Esperanza, Escondida, Deborah and Michelle vein
        structures.



In
        June 1997, Richard Sillitoe conducted an interpretation and revision of exploration
        strategies on all of Mincorp’s properties in the Santa Cruz and Rio Negro Provinces.
        He proposed a mineralization model for the Cerro Moro veins which speculated on the level
        of erosion and potential for further discovery.



During
        December 1997, detailed mapping was conducted at the Tres Lomas, Loma Escondida and Loma
        Stock-work prospects to improve the geologic understanding of these areas. A lag sampling
        program was conducted at the Loma Mosquito prospect.



In
        May 1998, Richard Sillitoe undertook a second site visit, to review the potential for
        disseminated-bulk tonnage mineralization at Cerro Moro.



During
        April to June in 1999, Mincorp conducted an RC percussion drilling program, totalling 15
        holes for 1,577 metres, at the Michelle, Loma Mosquito, Virginia, Loma Stock-work, Loma
        Escondida and Tres Lomas prospects.





---

- 22
        -

In
        February 2000, an analysis and interpretation of the RC drilling results was completed
        and in March of the same year an internal technical report was written that summarized all
        of the previous exploration activities. Mincorp conducted no further work on the
        property.



In 2001
        the rights to the property were transferred to CVSA following the corporate takeover of
        Mincorp.



Geological Setting



Regional Geology



Cerro
        Moro is geologically located within the Deseado Massif, which is a tectonic block in the
        central-portion of the Santa Cruz Province, covering an area of approximately 60,000 square
        kilometres.



The
        oldest rocks within the Deseado Massif are the Upper Pre-Cambrian and Lower Palaeozoic
        metamorphics of the La Modesta Formation (also known as the Rio Deseado Complex). This
        formation is intruded by granites of Lower to Middle Palaeozoic age. During the Jurassic
        and Cretaceous Periods the region underwent extensional tectonics, which initially resulted
        in the epiclastic and pyroclastic Roca Blanca Formation, followed by the widespread mafic
        volcanic field of the Bajo Pobre Formation during the Mid-Jurassic. During the Mid and
        Upper Jurassic, these rocks were overlain by felsic and intermediate volcanics and
        sediments of the Bahia Laura Group. The Bahia Laura Group includes the Chon Aike and La
        Matilde Formations. The Chon Aike Formation constitutes a thick sequence of rhyolitic
        ignimbrites, tuffs and volcaniclastics, and is interpreted to host the gold mineralization
        at Cerro Moro.



Local and Property Geology

Three
        major rock groups have been mapped at Cerro Moro, including: sub volcanic, volcanic and
        cover units. The sub volcanic and volcanic units are interpreted to belong to the Chon Aike
        and La Matilde Formations of Jurassic age, and the cover consists of Tertiary marine
        sediments and Quaternary gravels. The volcanic units have a north-west strike and dip
        between 10 to 50 degrees toward the south-west.



In
        general, the project area is composed of many structural blocks produced by a conjugate set
        of north-west and north-east faults. Both fault directions contain mineralized quartz
        veins. In the east and central part of the project the north-easterly faults control the
        mineralization at the Deborah, Belen, Maria, Michelle, Barbara and Ana prospects. In the
        central and west part of the project, the north-westerly structures control the
        mineralization at the Escondida, Esperanza (including Esperanza South-East), Nini, Dora,
        Moro, Florencia, Gabriela, Natalia, Tres Lomas and Lala prospects. Several secondary
        east-west structures occur between the primary north-west structures, and these control the
        mineralization at the Patricia, Loma Escondida, Carla and Carlita prospects. At present the
        east-west structures are thought to be tensional, pull apart structures resulting from
        minor strike-slip movement of the larger north-west structures. In general, large
        strike-slip displacements have not been observed.



In the
        north of the project the Laura and Georgina prospects are controlled by north-south
        structures.



Deposit Types

The
        polymetallic gold-silver mineralization at Cerro Moro is of the low sulphidation epithermal
        vein type. Individual prospects vary from simple, single veins to complex vein systems with
        spur and cymoid loop structures. The thickness of the veins varies generally from 1 to 5
        metres, but there are examples of veins up to 10 metres in width. The strike length of
        individual veins varies and is generally between 200 metres



---

- 23
        -



and 1
        kilometre. The Escondida structure has been followed with drilling for more than 1.8
        kilometres, and remains open along strike and at depth.



The discontinuous ore shoots within the larger structures
        appear to be locally controlled by changes in strike, which are thought to have produced
        dilational flexures and jogs allowing for greater fluid flow. Changes in wall-rock
        lithology, along the structures, may be an important factor in controlling the local strike
        direction of the structures. It has also been noted that the brittle, felsic units have a
        tendency to produce stronger stock-work style development around the main structures than
        the intermediate units.



The main prospects delineated and drilled to date include:
        Escondida, Esperanza, Loma Escondida, Nini, Moro, Tres Lomas, Carla, Deborah, Dora,
        Gabriela, Virginia, Loma Mosquito, Loma Stock-work, Michelle and
        Patricia.



Mineralization

The polymetallic gold-silver mineralization is associated
        with epithermal veins. The high-grade gold and silver mineralization is strongly associated
        with the presence of sulphides such as: pyrite, sphalerite, galena, acantite and
        chalcopyrite. Detrimental toxic elements such as arsenic and mercury are at relatively low
        levels.



Escondida



Initially the Escondida east and west prospects were thought
        to be two separate veins, but they have recently been proven to be separate shoots within
        one continuous structure. The Escondida structure has now been traced by drilling for more
        than 1.8 kilometres in length and it is still open along strike in both directions.
        Drilling has shown that the mineralization occurs to a minimum depth of 100 metres below
        the present land surface. The Escondida quartz vein occurs within a major north-west,
        pre-mineral fault, dipping between 70 to 85 degrees to the south-west. The high-grade
        mineralization is associated with relatively late, black silica quartz which crosscuts and
        fills breccia voids within an earlier quartz phase. The black silica is rich in coarse
        sulphides, including galena, sphalerite, pyrite, chalcopyrite and acantite.



Esperanza



The
        Esperanza prospect is a north-west structure with one or more quartz veins, which dip
        steeply to the north-east. At the north-west end of the prospect the veins have been
        emplaced within coherent andesite on both sides of the structure. The mineralization to the
        south-east is characterized by a 15 metre wide stock-work zone between several higher grade
        veins. The Esperanza structure has a present strike length of 1.2 kilometres, and
        mineralization has been drilled to a vertical depth of approximately 80 metres. The main
        veins are generally between 1 to 3 metres in width. The gold-silver mineralization is
        associated with disseminated fine pyrite and copper, lead, zinc sulphides within quartz
        veins. Sulphidic ginguro banding, with pyrite, chalcopyrite and sphalerite within quartz
        veining is observed in the high grade zones. The structure is presently open to the
        south-east and to the north-west and it may be connected to the Nini prospect.



Loma
        Escondida



The Loma
        Escondida vein is an east-west structure dipping steeply to the north and is hosted
        entirely within andesite of the L1 unit. This vein is located 500 metres north of the
        Escondida prospect and has been interpreted as a secondary dilational structure formed by
        strike-slip movement of the major north-west structures. The vein crops out poorly, but has
        currently been followed by drilling and trenching for more than 600 metres in length, and
        is still open to the east and west. It is a relatively narrow vein ranging



---

- 24
        -



in
        thickness between 0.30 to 2 metres. Pyrite, galena, sphalerite and acantite are associated
        with the high-grade shoots.



Deborah



The Deborah prospect is a north-east trending structure with
        a shallow north-west dip. The hanging wall rocks consist of felsic ignimbrite, with the
        footwall rocks consisting of an intermediate to rhyodacitic ignimbrite. The vein has a
        total length of 700 metres and mineralization has been tested to approximately 80 to 100
        metres vertical depth. The thickness varies between 0.50 to 5 metres.



Nini



The Nini prospect occurs as a major north-west vein structure
        which is partially covered by Tertiary sediments and has been traced by drilling and
        trenching for approximately 1.2 kilometres in length. To the south-east the structure may
        be connected with the Esperanza structure beneath Tertiary cover. The mineralization is
        generally observed within a single quartz vein, however vein breccias and stock-works with
        disseminated sulphides have been observed in places.



Tres Lomas



The Tres Lomas prospect is named after three small hills
        aligned in a north-west orientation. Quartz veining on the hills can be traced for
        approximately 200 metres along strike and are hosted in rhyodacitic ignimbrite of
        the P1 unit. The veins are mostly near vertical and have well developed stock-works with
        widths ranging between 0.3 to 5 metres. The gold-silver mineralization is associated with
        chalcedonic quartz with considerable disseminated pyrite.



Carla



The
        Carla prospect contains short east-west quartz veins and breccia veins related to a major
        north-west fault. This major fault has been interpreted as the same regional structure that
        controls the mineralization at the Esperanza and Nini prospects. Patchy mineralization has
        been followed by drilling and trenching for over 150 metres and is truncated by a major
        post mineral fault within 50 vertical metres of the surface. The thickness of the
        mineralization is variable between 1 to 10 metres. The mineralization is emplaced close to
        a wide tectonic breccia zone that separates a felsic ignimbrite to the north and a coherent
        andesite unit to the south.



Dora



The Dora
        prospect is a wide quartz filled structure with a north-northwest strike, dipping steeply
        to the east. Low-grade quartz has been traced for 240 metres and widths vary between 1 to
        11 metres. The mineralization is low grade and the white massive quartz vein is low in
        sulphides. The structure occurs in a felsic tuff with strong argillic
        alteration.



Virginia



The
        Virginia prospect has been interpreted as an eroded acid sulphate cap, commonly found in
        the preserved upper portion of low sulphidation system. Two zones, each 200 metres in
        length, have been tested by shallow drilling with some significant results. The trend of
        this silica-cap has a north-east strike and the disseminated mineralization is associated
        with pervasive silica-kaolin-alunite alteration in a felsic tuff.





---

- 25
        -

Loma
        Mosquito



The Loma
        Mosquito prospect is characterized by the presence of possible sinter caps and eruption
        breccias, which have been interpreted as the upper portion of a low sulphidation system.
        Loma Mosquito is located in the northern part of the property near the Virginia prospect
        and is the only place where sinters have been recognized. Drilling in this area has
        confirmed the presence of anomalous gold associated with shallow, east dipping eruption
        breccias and silicified tuff.



Loma
        Stock-work



The Loma
        Stock-work prospect is a small hill with abundant stock-work veining emplaced in a
        silicified rhyolite rock over an area of approximately 1 hectare. One drill hole has
        confirmed low-grade mineralization in the pyritic quartz stock-work veining.



Michelle



The
        Michelle prospect consists of several parallel sub-vertical quartz veins, trending
        approximately north-south to north-northeast. The veins have been tested by drilling and
        trenching over approximately 400 metres in length and were found to be up to 2 metres wide.
        The low-grade veins contain crystalline quartz with poorly developed coarse banding and
        occur in rhyolite.



Patricia



The
        Patricia prospect is an east-west, narrow quartz vein structure dipping steeply to the
        north and emplaced in coherent andesite. The area is partly covered by Tertiary and
        Quaternary sediments. The structure has an outcrop expression for 300 metres, but is
        interpreted, from the ground magnetics, to continue for an additional 300 metres to the
        west and 200 metres to the east. High-grade gold and silver mineralization has been
        intersected in trenches and drill holes and is more elevated to the west, before
        disappearing under cover. This mineralization is associated with copper, lead and zinc
        sulphides in quartz veins, approximately 1 metre in width. It is currently interpreted that
        this east-west vein occurs within a similar structural setting to that of the Loma
        Escondida prospect to the south, and that both are secondary dilational structures formed
        by strike-slip movement of the major north-west structures such as Escondida and
        Esperanza.



Exploration

Since
        commencing work in June 2003, the Company has carried out diverse exploration activities at
        Cerro Moro that includes: several geological mapping campaigns, satellite image
        interpretation, various geophysical surveys (ground magnetic, induced polarization and
        resistivity), surface sampling (soil, trench, and lag sampling) and drilling (reverse
        circulation and diamond drilling).



Results
        from the ground magnetics differentiated known structures. Importantly, the structures are
        interpreted to extend under the shallow Tertiary marine sediment cover. The Escondida
        structure is interpreted to continue to the north-west under cover for more than 1
        kilometre and the Esperanza structure also appears to extend for approximately 600 metres
        to the south-east. Both extensions have been tested by drilling with positive
        results.





---

- 26
        -



Surface Sampling



Rock Chip Samples



A total of 911 spot rock chip samples were collected from all
        of the main prospect areas: Escondida, Loma Escondida, Patricia, Tres Lomas, Patricia,
        Natalia, Gabriela, Nini, Carla, Deborah, Belen, Maria, Michelle, Moro, Dora, Lala, Laura
        and Georgina. This program of sampling was undertaken to assess targets identified in the
        geophysical products, as well as outcropping veins which had not been previously
        sampled.



Lag Sampling



A total of 10 lag soil sampling lines were completed for 457
        samples totalling 14.1 line kilometres. The areas sampled included: Deborah, Escondida,
        Loma Escondida, Tres Lomas, Patricia, Barbara, Ana, Carla and Carlita. Several anomalies
        were detected, particularly over the known veins, indicating the effectiveness of the
        method. Each sample represents a composite over a 25 metre interval, and the material
        sampled is between 2 and 5 millimetres in size.



Soil and Mobile Metal Ion
        Samples



The soil sample program during 2004 and 2005 aimed to define
        potential drill targets over resistivity anomalies. During this program 404 samples were
        collected. The method failed to provide geochemical targets over areas of cover with the
        only anomalous results returned being from samples located proximal to the known
        outcropping veins.



The
        Mobile Metal Ion (“MMI”) soil sample program was conducted between the
        Esperanza and Nini structures, in an area with recent cover and no outcrop. A total of 17
        samples were collected for analysis. Samples were collected over two lines, an orientation
        line passing over the Nini vein with the second over marine sediments that form a ridge
        which separates the Nini and Esperanza prospects. The orientation line contained anomalous
        values, however the line over the covered area contained no anomalous results.



Trenches and Rock Chip Channels Samples



The
        Company has, to date, completed a total of 135 trenches for 2,390 metres, from which
        1,431 samples have been collected and assayed. Trenching was conducted at the Carla,
        Carlita, Deborah, Escondida, Esperanza, Gabriela, Loma Escondida, Natalia, Patricia and
        Tres Lomas prospects. The samples in the trenches were collected by hammer and chisel,
        every 2 metres, or less, as dictated by geology. Depending on the length of the samples,
        samples weights ranged between 1 and 7 kilograms, with an average sample weight of 5
        kilograms.



Drilling

To the date of the technical report, the Company had drilled
        a total of 142 drill holes for 10,026 metres, comprised of 82 diamond holes for 4,826
        metres and 91 RC percussion drill holes for 5,200 metres. 60% of the drilling was conducted
        on the Escondida, Esperanza and Deborah veins, with over half at the Escondida prospect.
        The following table details the drilling completed by prospect:



---

- 27
        -



Drilling SummaryProspect

                    Diamond

                    RC

                    TotalHoles

                    Metres

                    Holes

                    Metres

                    Holes

                    MetresCarla

                    5

                    398.45

                    3

                    301.00

                    8

                    699.45Deborah

                    4

                    198.45

                    15

                    965.00

                    19

                    1,163.45Dora

                    0

                    0.00

                    8

                    342.00

                    8

                    342.00Escondida

                    47

                    2,830.02

                    0§

                    1,411.50

                    47

                    4,241.52Loma Escondida

                    7

                    303.80

                    0§

                    60.00

                    7

                    363.80Esperanza

                    14

                    794.35

                    11

                    984.50

                    25

                    1,778.85Moro

                    0

                    0.00

                    5

                    378.00

                    5

                    378.00Nini

                    0

                    0.00

                    9

                    488.00

                    9

                    488.00Patricia

                    5

                    300.70

                    0

                    0.00

                    5

                    300.70Virginia

                    0

                    0.00

                    9

                    270.00

                    9

                    270.00Totals

                    82

                    * 4,825.77

                    60

                    # 5,200.00

                    142

                    10,025.77






|* | Excludes metres drilled by RC as pre-collar for diamond
                    holes.                      | 
|- | ------------------------------------------------------------------------------------------------------- | 
|# | Includes metres drilled by RC as pre-collars for diamond
                    holes.                     | 
|§ | RC metres drilled as pre-collars for diamond holes are not
                    categorized as RC holes.

The
        style of all mineralization intersected by drilling on the Cerro Moro property to date is
        of the low sulphidation epithermal vein type. Vein true widths vary from less than one
        meter to over five meters, averaging around two to three meters and vein lengths vary from
        over a kilometre to less than one hundred metres. There are distinct variations from one
        vein to another in gold and silver grades, the silver/gold ratio, the percentage of
        sulphide minerals present and vein textures. Generally veins toward the south have an
        increase in gold and silver grades; higher amounts of silver compared with gold and contain
        a greater percentage of sulphide minerals such as pyrite and base metal sulphides. This
        along with the vein textures observed indicates higher temperatures of formation for veins
        exposed in the south compared with those exposed in the north signifying that at the levels
        observed they are closer to the source of mineralizing magmatic fluids. It remains to be
        established if the mineralizing fluids for all veins originated in the south and spread
        laterally northward, or if the depth of erosion in the south is greater exposing deeper
        levels of vein mineralization. If the latter is true, then deeper drilling could expect to
        intersect higher gold and silver grades in veins in the north of the property. Within
        individual veins mineralization occurs in discrete zones termed “ore shoots”.
        Drilling outside of the ore shoots intersects sub economic gold and silver grades. Hence
        the density of drill holes must be closely enough spaced to ensure that ore shoots are not
        overlooked. At present Exeter is exploring at an eighty meter horizontal spacing and a
        forty to fifty meter vertical spacing. When economic tenor mineralization is discovered the
        horizontal spacing is reduced to forty metres.



Sample and Analysis



Surface Sampling



All the
        samples were taken by a field assistant under a geologist’s supervision utilizing
        hammer and chisel. The samples to be collected are initially marked up by a geologist using
        a nominal 2 metre sample length with smaller lengths dependent on geological or
        mineralization contacts. All of the sampling in the trenches and surface rock chip channels
        are continuously sampled. Representative chips of each sample
        interval are stored in plastic boxes for future reference. The samples are
        placed in marked plastic bags, sealed and transported to the assay laboratory.



The lag
        soil samples are composites of 5 sites taken every 5 metres over every 25 metres. The
        sampling was performed by field assistants under a geologist's supervision. The sampled
        material is sieved on-site to between 2 and 5 millimetres.



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- 28
        -

Diamond Drilling



Diamond
        holes drilled were orientated using the Ballmark gravity system that makes a mark on an
        aluminium disk with a small ball, representing the bottom of the hole in the oriented core.
        A Company technician on the drill site measures core recovery and draws an initial
        orientation line on the core. The drill core is then placed in marked wooden core boxes at
        the drill site and transported to the camp for verification and data recording. Every
        diamond hole is digitally photographed, wet and dry, by technicians before cutting and
        sampling.



On
        completion of logging and photography a geologist marks the core for sampling. Sample
        lengths through the obvious mineralized zones vary between 0.3 and 1.5 metres dependent on
        geological and structural contacts, and these samples are classified as “high
        priority”. The remainder of each drill hole, classified as “low
        priority”, is generally sampled every one metre. Technicians utilize a diamond saw
        on-site to cut the core in half. One half of the core is sampled and sent to the laboratory
        and the remaining half is stored on-site in the core boxes. The core saw is cleaned with a
        brick or other abrasive stone between each high priority sample to eliminate contamination
        between potential high grade samples. The samples are placed in marked plastic bags, sealed
        and transported to the assay laboratory.



RC
        Percussion Drilling



RC percussion drilling samples are collected at one metre
        intervals using a cyclone attached to the drill rig. Geological logging is performed by
        Company geologists at the drill site. The high priority, potentially mineralized zones are
        sampled at one metre intervals, and composite samples of three metres are collected through
        the low priority zones. Each of the one metre samples are stored in plastic bags and are
        weighed and recorded by technicians at the drill site. The geologist records the diameter
        of the drilling tools (bit and shoes) at the beginning and end of each hole and uses these
        measurements to calculate an estimated weight of each sample. The sampling is performed at
        the camp by technicians, utilizing a riffle splitter, where each metre sample is split 3
        times. The average 1 metre sample weight is approximately 3 kilograms, with an average of 9
        kilograms for the 3 metre composite samples.



Sample Preparation, Analysis and
        Security



All samples were sent for preparation to the ALS-Chemex
        preparation facility in Mendoza, Argentina and the prepared samples are then sent for
        analysis at the ALS-Chemex laboratory in La Serena Chile; both ISO-9001:2000 certified
        laboratories. Quality control procedures include the use of geochemical standards, sample
        duplicates (RC percussion and lag soil samples only), geochemical blanks and check
        assaying. As part of the assaying procedure, ALS-Chemex re-assay all samples that return
        gold values of greater than 1.0 ppm Au.



Sampling of rock chips, trenches and rock chip channel
        samples, percussion chips and drill cores have been conducted on-site by Company personnel
        under the supervision of experienced Company geologists.



Assay samples are placed in sealed plastic bags with a
        numbered sample tag firmly stapled inside the bag. Depending on individual sample size, two
        to six samples are then placed in larger woven plastic bags which are then sealed with
        cable ties and numbered in readiness for transport to the laboratory. All Company samples
        are transported from site by Company vehicle to the bus station in either Caleta Olivia
        City or to Comodoro Rivadavia City. The samples are then transported by bus to the
        ALS-Chemex preparation facility in Mendoza.



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- 29 -

Exploration and Development



Based on
        the significant gold and silver mineralization encountered at the various prospects at
        Cerro Moro to date, coupled with the interpreted potential for new discoveries on the
        property, numerous work programs are planned to progress the project to a potential
        development stage decision. Currently, a three-component drilling program consisting of
        resource, extension and discovery drilling is underway.



The
        Cerro Moro technical report proposes a three phase drilling program: firstly, to bring the
        known mineralization to at least a potential inferred resource category (compliant with the
        CIM Mineral Resource and Mineral Reserve Definitions); secondly, to extend the known
        mineralization laterally and at depth; and thirdly, a ‘discovery drilling
        phase’ to test geophysical, geological/structural, and geochemical targets in the
        search for new high-grade gold-silver discoveries on the property. A preliminary resource
        estimate, compliant with the CIM Mineral Resource and Mineral Reserve Definitions, of the
        various veins at Cerro Moro was proposed for the second quarter of 2008 and a preliminary
        development options study was intended to be completed at the beginning of the third
        quarter of 2008. The actual timing of the resource estimate and preliminary development
        option study will be determined by ongoing exploration results. Along with proposed ongoing
        metallurgical test work, the commencement of environmental and social base line studies
        will be initiated.



Over 20
        new targets have been identified that require testing. These targets are at various levels
        of investigation, and geochemical surface sampling, detailed geological mapping, trenching
        and drilling has been proposed.



A
        13-month preliminary budget estimate of US$8,535,000 is recommended to complete the above
        proposed programs.



The
        Company currently has three drill rigs working at Cerro Moro. Two rigs have been assigned
        to drill the Escondida and Loma Escondida zone extensions, both testing the veins to the
        northwest, and testing the target zone immediately to the southeast of
        Escondida.



Results
        from exploratory drilling, announced on January 15 and February 12, 2008 reflect the
        discovery of a blind high grade shoot under cover along a westerly extension of the
        Escondida vein. Gold and silver mineralization within the Escondida structure has now been
        tested over a 1,600 metre strike length. In addition, follow-up drilling on the Loma
        Escondida vein, located immediately to the north of the Escondida structure, has
        intersected significant high grade gold-silver mineralization, as detailed in the news
        release dated February 5, 2008, and has extended the strike length of the vein to 400
        metres. Follow-up drilling at the Gabriela, Patricia and Silvia vein systems, has
        demonstrated that these veins can now be traced for a minimum of 700, 450 and 200 metres,
        respectively (news release dated 18 March 2008). Importantly, the new drilling at Gabriela
        and Patricia have demonstrated that these veins are silver rich compared to others on the
        property.



A third
        rig is committed to a “discovery oriented” drilling program testing expansions
        to the zones at Escondida, Loma Escondida and Esperanza. A fourth rig, which will be
        dedicated to detailed resources definition drilling, is scheduled to be added in
        2008.



Up to
        March 28, 2008, the Company has drilled a total of 308 holes for 28,124 meters, comprised
        of 165 diamond holes for 18,180 meters and 143 RC holes for 9,944 meters. Approximately 50%
        of the drilling has been conducted on the Escondida vein with the balance having been
        drilled on over 14 additional vein targets.



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- 30 -

CASPICHE



The
        following description of the Caspiche property was extracted and/or summarized from a
        report titled "Technical Report and Proposed Exploration for Caspiche Project " dated
        December 24, 2007 prepared by Jason Beckton, B.Sc.(Hons), M Econ Geol, MAusIMM, MAIG, the
        Company’s former Exploration Manager – Chile, and Jerry Perkins, B.Sc (Hons
        Chem. Eng.), C.P., FAusIMM, the Company’s Vice President – Development &
        Operations both “qualified persons” under NI 43-101 which is incorporated
        herein by reference and is available for public viewing at
        www.sedar.com and www.
        sec.gov/ among the Company's disclosure documents.



The
        reader is cautioned that the following is an abridged summary only. To put the contents
        hereof in the context of the full technical report, together with its illustrations,
        figures, footnotes, bibliography, assay certificates, etc., the reader should view the full
        technical report on SEDAR at www.sedar.com
        or EDGAR at www.sec.gov/.



Acquisition terms



In 2005,
        the Company entered into an agreement with Anglo American over seven properties in the
        Maricunga region of Chile. The terms of the agreement provide for increasing annual
        drilling and exploration commitments over five years, and the phased reversion of five
        properties to Anglo American after the second and third years. Once the Company has spent a
        total of US$2.55 million, including completing 15,500 metres of drilling, it will have
        earned a 100% interest in the remaining properties. Anglo American will be entitled to a 3%
        NSR Royalty from production. To date, the Company has met all the expenditure and drilling
        requirements under the agreement.



Property Description and Location

Caspiche is located 120 kilometres southeast of the city of Copiapó
        in northern Chile. The Caspiche tenements encompass a contiguous 1,274 hectare area. The
        tenement “Caspiche 1-10”, located on level ground, was previously selected as a
        potential camp site or for future mining infrastructure. The geographic centre of the
        property is located at approximately 27° 41 ́ south latitude and 69° 18 ́
        west longitude. The coordinates in the Peruvian coordinate system (UTM Zone 19), in the
        datum PSAD, are 471,000 m east and 6,937,000 m north.

The
        Caspiche property consists of the following exploration concessions owned by Anglo
        American. Of the seven concessions two have been elevated to the status of
        exploitation concessions and the remaining five are currently under application for
        exploitation status. A list of the concessions that form the Caspiche property is
        as follows:





Concession Name

                    Hectares

                    Claim Holder

                    Concession TypeCaspiche 1-10

                    100

                    Anglo

                    ExploitationVega de Caspiche 1-20

                    81

                    Anglo

                    ExploitationCaspiche II 1 al 32

                    312

                    Anglo

                    ExploitationCaspiche III 1 al 10

                    100

                    Anglo

                    ExploitationCaspiche IV 1 al 30

                    75

                    EMABLOS

                    Exploitation in ApplicationCaspiche IV 11 al 16

                    4.25

                    EMABLOS

                    Exploitation in ApplicationCaspiche V 1 al 20

                    186

                    EMABLOS

                    Exploitation in ApplicationCaspiche VI 1 al 30

                    245

                    EMABLOS

                    Exploitation in ApplicationCaspiche VII 1 al 20

                    171

                    EMABLOS

                    Exploitation in ApplicationTotal Hectares

                    1,274.25




Anglo refers to Anglo American Chile
            Limitada Emablos refers to Minera Mantos Blancos S.A.







- 31 -

Accessibility, Climate, Local Resources, Infrastructure and
        Physiography



Access



Caspiche
        is accessible by road from the city of Copiapó, the capital of the province of
        Copiapó located in Region III of northern Chile. The principle route departs
        Copiapó south by paved highway through the town of Tierra Amarillo. At 22 kilometres
        from Copiapó a left turn-off is taken to the east on a mixed sealed/gravel road,
        which follows the Quebrada (“gully”) Carrizalillo for 98 kilometres towards the
        La Guardia community. At this point the road divides, and the route to the project follows
        the northern fork for 46 kilometres through the El Gato Creek. At the 46 kilometre mark a
        sign advises “Proyecto Caspiche 17 km” further to the east. The total distance
        by road is approximately 185km.



Climate



The
        climate is typical for these elevations in the central Andean Cordillera: windy, cold at
        night with limited precipitation, usually in the form of snow. Exploration field seasons
        generally run from late October through mid May. The operating mines, such as the nearby
        Refugio gold mine, are operated year-round at elevations of 4,200 to 4,500 m.



Local
        Resources and Infrastructure



All
        transport is by private vehicle. The operating Refugio mine, located 15 kilometres north of
        Caspiche, transports their employees from Copiapó by bus or company owned trucks and
        vans. A number of daily scheduled jet air services fly between Copiapó and
        Santiago.



Local
        semi-skilled and skilled labour is available for work on mineral projects in the Maricunga
        region and Chile supplies high quality mining professionals. Power for the existing
        projects in the Maricunga region is normally sourced from Copiapó and is carried to
        the mines by private power lines owned by the operating companies. At Caspiche two areas of
        relatively level ground for locating potential infrastructure are held under Anglo American
        mineral concessions.  The process for obtaining permits for easements and water
        rights is straightforward in Chile nevertheless this does not guarantee adequate water
        supply.



Physiography



Topography within the property consists of broad open areas of gentle relief
        with two ridges with limited cliff zones of exposed bedrock. The elevations within the
        property range between 4,200 and 4,700 metres above mean sea level. Vegetation is
        limited to grasses and small thorny bushes and small marsh at the junction of
        creeks.



History

The
        southwest quadrant of the property was first staked in 1986 by Anglo American as part of a
        generative program covering the entire Maricunga Belt. Minera Newcrest Chile Limitada
        (“Newcrest”) held the project through an option agreement with Anglo American
        from 1996 to 1998, during which time it discovered the Caspiche III mineralization,
        and staked an additional 2,561 hectares to cover it. Part of this new ground was not
        subject to reporting under their agreement with Anglo American. Following the Newcrest
        group’s decision to abandon worldwide exploration in 1998, Newcrest withdrew
        from





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- 32 -



exploration on all of their ground in Chile, including Caspiche. The
        concessions held by Newcrest lapsed following which Anglo American staked portions of this
        ground to form the current Caspiche property.



Commencing in 1986 Anglo American conducted three field campaigns at
        Caspiche. Total exploration expenditures on the property are unknown. A total of 842 rock
        chip samples were collected, and of these 80 returned values greater than 1 g/t Au. The
        highest reported value was 5.45 g/t. At Caspiche Central, 431 soil samples were collected
        on an 80 by 40 metre grid. Both the rock chip and soil samples demonstrated that the
        Caspiche Central sector of the property was strongly anomalous in Au, Ag, Cu and As over a
        650 metre by 300 metre area.



During
        the 1988 field season, Anglo American drilled 12 short (approximately 50 metre deep) air
        core holes for an aggregate of 580 metres. The drilling produced Au values between 0.1 and
        6.5 ppm and Ag values of between 1 to 40 ppm.



During
        the 1990 season, Anglo American drilled six RC percussion holes of 150 to 200 metres each,
        for a combined total of 950 metres. It was also reported that drill hole SPC-05 contained
        an overall intercept of 148 metres grading 0.49 ppm Au. Anglo American estimated a geologic
        inventory for Caspiche Central of 6.3 million metric tonnes averaging 0.45 ppm Au using a
        0.1 ppm Au cut-off and a specific gravity of 2.3 gram/cm3.This estimate does not
        comply with the current CIM Mineral Resource and Mineral Reserve Definitions or NI 43-101,
        and should not be relied on, but is included as a historical reference only.



Newcrest
        signed a purchase option agreement with Anglo American in June 1996, for the 312 hectare
        CASPICHE II 1/32 mineral tenement that encompassed the Caspiche Central prospect. During
        the 1996-97 and 1997-98 field seasons Newcrest reported exploration expenditures on the
        property of US$ 587,000 in various work programs and an additional US$ 360,000 in land
        payments and holding costs. Upon commencement of work on the property, Newcrest increased
        its land position by staking an additional 2,561 hectares of open ground surrounding the
        Anglo American property. During their first field season of 1996-97, Newcrest conducted
        geologic mapping, rock geochemistry, a 275 line-kilometre helicopter-borne aeromagnetic
        survey, 19.4 lineal kilometre IP/Resistivity ground geophysical survey and drilled 3,000
        metres in 14 RC percussion holes. Twelve holes were drilled at Caspiche Central, to
        follow-up on disseminated mineralization discovered by Anglo American, and the additional
        testing of newly defined geophysical targets. Two holes were drilled at Caspiche III to
        follow-up on anomalous Au and Hg surface geochemistry, indicating a potential
        epithermal-style target.



Two
        drill sections were constructed from the combined drill data at Caspiche Central. Line
        A-A’ is orientated WNW-ESE and looks to the NNE. On this section, drill holes CDH-03
        and CDH-2b intersect an upper zone containing higher Au:Cu ratios that corresponds to a
        zone of oxidation described in the drill logs. There is also an indication of the
        development of a weak Cu enrichment zone at the base of the oxide zone.



During
        the 1997-98 field season, Newcrest conducted a soil geochemistry orientation survey
        including Mobile Metal Ion (MMI), Enzyme Leach and ICP analyses. A series of advanced
        geologic investigations were also performed including oxygen isotope, fluid inclusion
        studies, thin-section petrography and K/Ar geochronology. Newcrest also drilled two RC
        percussion holes south of Caspiche Central that yielded only anomalous Au and Cu values. An
        additional 18 RC percussion holes were drilled at Caspiche III, however, Newcrest did not
        report the results of these holes to Anglo American. At that time this portion of the
        property was not covered by their joint venture agreement and Newcrest was under no
        contractual obligation to report the results of this work. The Company approached Newcrest
        in an attempt to acquire the missing drill results; however they appeared to no longer
        reside in the Newcrest geologic database. The Company was only able to recover the softcopy
        collar, survey, geology and assay files; and



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- 33
        -

significant twinning of old drill holes would be required to verify the
        validity of the data. Accordingly, the data from the last 22 holes drilled by Newcrest has
        been used for targeting purposes only.



In
        October of 1997, Geodatos S.A.I.C. flew a 275 line-kilometre helicopter-borne aeromagnetic
        survey. The survey covered 100% of what then comprised the Caspiche mineral tenements at
        the time. The survey was flown at an average elevation of 80 metres with 150-metre line
        spacings and crossing control lines at approximately 1,000-metre intervals. The flight
        lines were oriented at 060 degrees to cut WNW, NW and N-S striking structural fabrics at
        the latitude of the property. The RTP magnetic map usually provides a more intuitive
        depiction of the magnetics than does the total field magnetic map. The RTP magnetics show a
        series of magnetic highs in the central portion of the property. The most southern of these
        is coincident with the magnetite alteration surrounding the porphyries located at Caspiche
        Central. A stronger magnetic high northeast of Caspiche Central is
        coincident with a porphyry exposed on the northern margin of the property. This high is
        associated with two magnetic low anomalies located to the southeast and to the
        west.



During
        December 1996 and January 1997, Quantec Ltda. conducted an IP/Resistivity survey over
        portions of the Caspiche property. The survey was conducted with 200 metre dipole spacing
        on a pole-dipole configuration. The survey was exploratory in nature with wide-spaced lines
        at various orientations. Geophysical Line #1 transects the property crossing through
        Caspiche Central. The chargeability section clearly shows the “Caspiche
        porphyry”, the low-grade Au-Cu mineralized microdiorite porphyry, cut by drill hole
        CDH-03. The potential silica cap of the porphyry, which outcrops at Caspiche Central, is
        well defined in the resistivity pseudo-section. The northern limit of this resistivity
        anomaly is located beneath Filo Central. The Caspiche III sector of the property is crossed
        by Line #4 and the northern end of this line terminates in a high resistivity anomaly
        beneath Filo Central.



In
        addition to the 1990 Anglo American estimate of 6.3 million metric tons averaging 0.45 ppm
        Au, Newcrest mentioned in their 1997 report the exploration potential for 15 to 20 million
        tonnes (“Mt”) of 0.64 ppm Au oxide and 35 to 50 Mt of 0.65 ppm Au and 0.30% Cu
        sulphide material.



These
        historical estimates do not comply with the current CIM Mineral Resource and Mineral
        Reserve Definitions or NI 43-101, and therefore should not be relied on, and are included
        here only as an historical reference.



Geological Setting



Regional Geology



The
        Maricunga Metallogenetic belt is located south of the Eocene-Oligocene Porphyry Copper Belt
        of northern Chile, west of the Bajo de la Alumbrera Cu-Au porphyry in Argentina, and north
        of the El Indio – Pascua-Lama-Veladero Au-Cu belt.



The
        Maricunga Belt is composed of a series of north-south trending chains of andesite to dacite
        volcanoes. These volcanic rocks are generally restricted to north-south trending grabens
        with Paleozoic-Triassic basement rocks exposed in intervening horst blocks. The volcanism
        occurred in four events grouped into two main episodes.



There
        are three main structural trends affecting the Maricunga belt. The most predominant of
        these are the north-south to north-northeast trending high-angle reverse faults that bound
        basement rocks. These form a series of horsts and graben blocks with the Tertiary volcanic
        rocks, which host the economic mineralization, confined to the graben
        structures.





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- 34 -

The
        second and most important structural orientation in terms of associated economic
        mineralization are the west-northwest to north-northwest trending structures. These
        manifest as normal trans-tensional faults, dykes, veins and linear alteration
        zones.



The
        Maricunga Belt hosts numerous and large alteration zones that are the result of
        hydrothermal alteration and the oxidation of sulfides in the surface environment. Several
        of these zones host economic concentrations of metals. These hydrothermal systems form a
        continuum between porphyry Au-Cu style mineralization and high sulphidation epithermal
        Au-Ag mineralization. Examples of the porphyry end-member deposits are Refugio,
        Aldebarán (Cerro Casale), Marte and Lobo. High sulphidation-end member examples
        include La Coipa, and La Pepa. Several of the deposits exhibit a strong northwest-southeast
        structural control to the mineralization. Another characteristic of some deposits in the
        belt is the superimposition of characteristic porphyry and epithermal alteration textures
        and alteration mineral assemblages.



Local
        & Property Geology



Local
        geology consists of three sequences of volcanic and sedimentary rocks separated by
        dis-conformities. These are informally divided into the Caspiche Formation, the Rio Nevado
        Formation, and the Yeguas Heladas Formation. Unconsolidated Quaternary deposits cover a
        large portion of the bedrock geology within the property.



The
        Caspiche Formation is exposed at the western margin of the property. It is composed of
        columnar jointed andesite lava flows. Approximately one kilometre west of the property
        boundary, the lavas are viewed overlying a sedimentary sequence of rocks. These range from
        volcaniclastic siltstones to sedimentary breccias.



The Rio
        Nevado Formation consists of undifferentiated felsic pyroclastic rocks of several hundred
        metres thick. At Caspiche III, at the eastern margin of the property, the formation is
        crudely stratified with shallow westwardly dipping horizons several metres thick. On the
        northern flank of Caspiche Central the formation contains a pumice rich pyroclastic that is
        locally welded. South of Caspiche Central the unit contains bifurcating tubes believed to
        represent molds of plant roots. The upper portion of the formation is composed of felsic,
        flow-banded, and auto-brecciated lava. These lavas are included in the Rio Nevado Formation
        because at several locations they are argillically altered.



The
        Yeguas Heladas Formation consists of a series of stratified volcanic rocks that post date
        alteration and mineralization. They consist of a lower conglomerate unit, an unwelded
        pyroclastic unit containing residual silica, and massive silica altered clasts of the Rio
        Nevado Formation.



Intrusive rocks at Caspiche are limited to a series of small stocks of
        felsic porphyry located at Caspiche Central and extending south. Locally these exhibit
        chilled margins and flow banding. Drilling by Anglo American and, previous explorers
        Newcrest indicated that several additional porphyry rocks are present at depth beneath
        Caspiche Central.



Main
        structural orientations at Caspiche are northwest, east-northeast, and roughly north-south.
        These same orientations are reflected in lineaments observed in the Landsat satellite
        imagery and in the interpretation of disruptions and domain boundaries in the airborne
        magnetics. Lineaments from the two interpretations are coincident with major faults zones
        postulated by Newcrest. One of these is a west-northwest trending structure located between
        Caspiche Central and Filo Central. The juxtaposition of the Rio Nevado Formation and the
        Yeguas Heladas Formation is consistent with an interpreted downward dip-slip component to
        the north of the fault. At the western margin of the property a north-northeast trending
        structure is interpreted. Here the Caspiche Formation is juxtaposed with the Yeguas
        Heladas



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- 35
        -

Formation
        indicating reverse faulting with a minimum stratigraphic throw of 250 metres. The
        orientations and sense of movements on these structures are consistent with the
        regional-scale structures described previously.

Hydrothermal alteration on the Caspiche property is preferentially developed
        in the Rio Nevado Formation. At Caspiche Central the prominent outcrops are residual silica
        to advanced argillically altered and locally have coarse crystalline alunite infilling
        cavities. Bedrock exposures in road cuts on the flanks of the topographic highs are
        argillically altered. At Caspiche III, zoned alteration is also observed with residual
        silica alteration restricted to narrow linear structures within more wide spread massive
        silica flooding alteration. At the eastern boundary of the property the rocks are affected
        by low temperature silica and argillic mineral assemblages characteristic of steam-heated
        alteration found above the paleo-aquifers in high sulphidation style systems.



Deposit Types



There
        are two recognised deposit types at Caspiche. The first is porphyry style mineralization,
        which was the primary target for Anglo American and Newcrest. The second is epithermal,
        high-sulphidation, style mineralization which was the primary target model being
        investigated by the Company.



Mineralization



Based
        upon surface sampling and historic drilling, two zones of known Au +Ag +Cu mineralization
        occur within the boundaries of the Caspiche property. The first is referred to as Caspiche
        Central, which is located in the south-central portion of the property. Mineralization is
        evident from reported drill hole results and by surface rock chip samples. The second known
        mineralized zone is referred to as Caspiche III and is located at the eastern margin of the
        property. Mineralization is also evident from reported results and by surface rock chip
        samples.



Surface
        rock chip geochemistry plainly shows Caspiche Central and Caspiche III as the most
        important exposed gold mineralized zones encountered on the property. The Hg rock
        geochemistry clearly suggests the character of this mineralization is distinct. The style
        of the mineralization reported from the drilling is consistent with a porphyry style of
        deposit with the presence of multiple generations of stockwork quartz-sulfide veining and
        typical porphyry style alteration mineral assemblages. The gold values in the upper oxide
        zone and gold and copper values in the mixed and lower sulphide zones exhibit a good degree
        of sample to sample continuity.



Exploration



The
        Company conducted a field campaign during March to mid May, 2006. The entire project area
        was mapped, and 112 rock chip samples were collected along with 22 PIMA samples. All
        available historic data was compiled into a Geographic Information System (GIS)
        environment. Remote sensing data, including ASTER mineral model maps and QuickBird high
        resolution satellite imagery, was added. Lineament studies were conducted on this data, as
        well as the airborne magnetometer survey data.



During
        the months of November and December 2006, Quantec Chile Limitada (“Quantec”)
        conducted a program of Controlled Source Audio-frequency MagnetoTelluric (CSAMT) surveys
        and Very Low Frequency (VLF) electromagnetic surveys on behalf of the Company. The
        objectives of the geophysical surveys were to map important structures and zones that may
        be associated with high-sulphidation type epithermal gold mineralization.



An
        exploration model has been constructed using surface mapping completed in March 2006 and
        the drilling programs completed to date. Maricunga deposits are characterized by lower
        porphyry style



---

- 36
        -

systems
        overprinted at shallower levels by high sulphidation systems. Caspiche Central and Caspiche
        III are separated by an interpreted normal fault. Caspiche Central is characterized by
        overlapping porphyry style and epithermal style mineralization. To date, Caspiche III
        contains high sulphidation style mineralization. There remains potential for porphyry style
        mineralization at depths greater than 200 metres for Caspiche III. It is interpreted that
        the northern block has been downthrown with respect to the southern block. This has
        resulted in preservation of the relatively shallow level high sulphidation mineralization
        at Caspiche III.



Drilling



During
        2007, the Company conducted a drilling campaign with the results from the two prospect
        areas, Caspiche Epithermal and Caspiche Porphyry reflected below:



Caspiche Epithermal – Caspiche III



The
        drilling confirmed the presence of a high-sulphidation epithermal gold system. The
        mineralization is interpreted to lie within flat lying replacement zones that are probably
        related to a yet un-drilled intrusive body. Significant results are in the table
        below:



|Hole                                                          | From

                    (m)                                                                                                                                                                                                                                                                               | To

                    (m)                                                                                                                                                                                                                                                                                 | Width

                    (m)                                                                                                                                                                                                                                                          | Gold

                    (g/t)                                                                                                                                                                                                                                                                                 | Silver

                    (g/t)                                                                                                                                                                                                                                                      | AuEq(1)

                    gold:silver ratio 1:60                                                                                                                                                                                                                                                            
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|CSDH_001                                                      | 38                                                                                                                                                                                                                                                                                                          | 40                                                                                                                                                                                                                                                                                                          | 2                                                                                                                                                                                                                                                                                       | 0.62                                                                                                                                                                                                                                                                                                            | 0.0                                                                                                                                                                                                                                                                                    | 0.62                                                                                                                                                                                                                                                                                                           
|CSDH_001A                                                     | 36

                    88

                    140

                    180                                                                                                                                                                                                                                | 40

                    90

                    142

                    186                                                                                                                                                                                                                                | 4

                    2

                    2

                    6                                                                                                                                                                                                                  | 0.9

                    0.6

                    0.1

                    0.2                                                                                                                                                                                                                                  | 0.0

                    0.5

                    31

                    41                                                                                                                                                                                                           | 0.9

                    0.6

                    0.5

                    0.9                                                                                                                                                                                                                                 
|CSDH_002

                    

                    Including | 38

                    52

                    (66

                    94

                    134

                    140

                    152

                    166

                    172

                    186                                                                           | 40

                    76

                    72

                    96

                    136

                    148

                    154

                    168

                    178

                    186.7                                                                          | 2

                    24

                    6

                    2

                    2

                    8

                    2

                    2

                    6

                    0.7                                                                     | 0.02

                    1.1

                    3.2

                    0.04

                    -

                    0.07

                    0.07

                    0.2

                    1.7

                    0.08                                                                         | 74

                    23

                    48

                    37

                    46

                    45

                    67

                    27

                    16

                    100                                                            | 1.3

                    1.5

                    3.9

                    0.7

                    0.8

                    0.8

                    1.2

                    0.6

                    1.9

                    1.8                                                                           
|CSDH_003                                                      | 90

                    96

                    148

                    168                                                                                                                                                                                                                                | 92

                    98

                    150

                    172                                                                                                                                                                                                                                | 2

                    2

                    2

                    4                                                                                                                                                                                                                  | 0.01

                    0.12

                    0.02

                    0.85                                                                                                                                                                                                                              | 100

                    25

                    26

                    6                                                                                                                                                                                                             | 1.7

                    0.5

                    0.5

                    0.9                                                                                                                                                                                                                                 
|CSDH_006                                                      | 138

                    144

                    222

                    238                                                                                                                                                                                                                              | 140

                    166

                    228

                    240                                                                                                                                                                                                                              | 2

                    22

                    6

                    2                                                                                                                                                                                                                 | 0.5

                    1.5

                    0.7

                    0.6                                                                                                                                                                                                                                  | 1.6

                    1.6

                    1.4

                    1.4                                                                                                                                                                                                         | 0.5

                    1.5

                    0.7

                    0.6                                                                                                                                                                                                                                 
|CSDH_007                                                      |                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                        | NSR                                                                                                                                                                                                                                                                                                            
|CSDH_008                                                      | 34

                    42

                    72

                    94

                    122

                    132

                    152

                    158

                    190

                    198

                    236

                    266

                    294 | 36

                    58

                    76

                    98

                    128

                    142

                    154

                    160

                    194

                    202

                    238

                    270

                    298 | 2

                    16

                    4

                    4

                    6

                    10

                    2

                    2

                    4

                    4

                    2

                    4

                    4 | 0.4

                    1.3

                    0.1

                    0.5

                    1.2

                    0.6

                    0.9

                    0.4

                    0.7

                    0.9

                    0.6

                    1.1

                    2.5 | 3

                    5

                    24

                    6

                    3

                    2

                    1

                    2

                    1

                    1

                    1

                    0

                    0 | 0.5

                    1.4

                    0.5

                    0.6

                    1.2

                    0.6

                    0.9

                    0.5

                    0.7

                    0.9

                    0.6

                    1.1

                    2.5









---

- 37
        -





|Hole                                                                                                                                                                        | From

                    (m)                                                                                                                                                 | To

                    (m)                                                                                                                                                   | Width

                    (m)                                                                                                                                        | Gold

                    (g/t)                                                                                                                                                        | Silver

                    (g/t)                                                                                                                                          | AuEq(1)

                    gold:silver ratio 1:60                                                                                                                               
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|CSDH_009                                                                                                                                                                    | 132                                                                                                                                                                           | 136                                                                                                                                                                           | 4                                                                                                                                                                     | 0.2                                                                                                                                                                                    | 91                                                                                                                                                                         | 1.7                                                                                                                                                                               
|CSDH_010

                    

                    

                    

                    

                    

                    

                    including | 28

                    36

                    42

                    52

                    74

                    158

                    166

                    174 | 32

                    38

                    46

                    56

                    84

                    160

                    202

                    186 | 4

                    2

                    4

                    4

                    10

                    2

                    36

                    12 | 0.04

                    0.04

                    0.03

                    0.02

                    0.9

                    0.1

                    1.3

                    2.5 | 26

                    32

                    43

                    63

                    14

                    63

                    26

                    26 | 0.5

                    0.6

                    0.8

                    1.1

                    1.1

                    1.2

                    1.7

                    2.9





|CSDH_011 | 30

                    42

                    50

                    76

                    96

                    112

                    120

                    146

                    152 | 34

                    46

                    52

                    84

                    108

                    114

                    128

                    148

                    156 | 4

                    4

                    2

                    8

                    12

                    2

                    8

                    2

                    4 | 1.7

                    0.6

                    0.5

                    0.4

                    1.2

                    1.8

                    0.9

                    0.02

                    0.02 | 3

                    2

                    2

                    13

                    4

                    3

                    12

                    100*

                    32 | 1.7

                    0.6

                    0.5

                    0.6

                    1.3

                    1.9

                    1.1

                    1.7

                    0.6
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|CSDH_012 | 26

                    50

                    58

                    94

                    120

                    140

                    178

                    316 | 28

                    52

                    68

                    110

                    122

                    160

                    180

                    318 | 2

                    2

                    10

                    16

                    2

                    20

                    2

                    2 | 1.8

                    0.5

                    0.6

                    2.1

                    0.9

                    0.7

                    0.4

                    0.4 | 8

                    17

                    13

                    2

                    1

                    2

                    2

                    1 | 2.0

                    0.8

                    0.8

                    2.2

                    0.9

                    0.7

                    0.5

                    0.5
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



NSR = No
        significant result.



1Note: Gold equivalent grade is calculated by dividing the silver
        assay result by 60, adding it to the gold value and assuming 100% metallurgical
        recovery.



Caspiche Porphyry – Caspiche Central



CSDH 013
        was sited over a pronounced IP chargeability anomaly, on the one north-south survey line,
        that fully crossed the area. The anomaly was partly tested by two earlier drill holes,
        CDH-2b and CDH-3, drilled by previous operators.



CSDH 013
        intersected a wider zone of mineralization and at a higher average grade, than both CDH-2b
        and CDH-3, although it appears to have intersected the same mineralized microdiorite
        porphyry as the earlier holes. The area of the three holes is entirely covered by colluvial
        material. CSDH 013 was drilled at the same declination (60 degrees) and azimuth as the
        historical drill holes. Significant drilling results are those that have a greater than 0.5
        g/t gold equivalent grade. The significant results (at a cut off of 0.5 g/t gold
        equivalent1) from CSDH 013 are presented in the table below. The minimum sample
        intercept length is 2 metres.



---

- 38
        -



Significant Results of CSDH 013



Cut-off grade

                    From

                        (metres)

                    To

                        (metres)

                    Width

                        (metres)

                    Gold

                        (g/t)

                    Copper

                        (%)CSDH_013

                        Bulked Intercepts at

                        0.5 g/t gold equivalent lower cut

                        

                        

                        

                        Bulked Intercept

                        - no lower cut

                    40

                        186

                        200

                        210

                        

                        40

                    164

                        196

                        204

                        344

                        

                        344

                    124

                        10

                        4

                        134

                        

                        304

                    1.0

                        0.8

                        0.7

                        0.9

                        

                        0.9

                    NSR

                        NSR

                        NSR

                        0.2%

                        

                        0.1%




NSR = No
        significant result.



1Note: Gold equivalent grade is calculated by dividing the silver
        assay result by 60, adding it to the gold value and assuming 100% metallurgical
        recovery.



Sample
        and Analysis



Surface Sampling



A total of
        119 rock chip samples were collected from Caspiche during the 2005-06 field season. The
        samples were collected from bedrock exposures over the entire project area. Of these 65
        were collected at regular 5 metre intervals along road cuts on the
        western flank of Caspiche Central. The remaining samples were grab and character samples
        collected from exposures throughout the property.



The
        objective of the sampling was to confirm reported values and to provide a better
        understanding of the nature of the mineralization. To achieve this objective character rock
        chip samples were collected by the Company and the author of the technical report. These
        samples were not intended to be representative of the entire exposure from which they were
        taken. Their purpose was to “characterise” a specific aspect of the geology. In
        general, this was to test if the minor amounts of grey silica present were mineralized or
        not. This objective could not be achieved if one or two metre channel samples were taken
        due to an overwhelming amount of dilution. These character samples are only intended to
        indicate whether the fluids that deposited the grey silica were mineralized or not. This
        information is considered important for advancing an understanding the nature of the
        mineralizing processes that took place, rather than directly delineating a potential
        economic resource. This is consistent with the current exploration stage of the
        project.



Rock
        chip samples from Caspiche were analysed by the ALS Chemex laboratory in Coquimbo, Chile.
        Each sample was submitted for gold by Fire assay of a 30 gram aliquot (laboratory code:
        Au-AA23) and for 27 elements ICP by total acid digestion, HCl leach and ICP-AES plus Hg by
        cold vapour (laboratory code: ME-ICP61m).



Drill Campaign



A total
        of 13 RC percussion drill holes were drilled with 1,784 samples collected. The first 12
        holes (CSDH_001 to 012) were drilled on the epithermal target area to confirm and extend
        previous anomalous results generated by Newcrest in 1998. Targets included high resistivity
        anomalies generated by both previously conducted IP and CSAMT programs. The final hole
        for the 2006-2007 field season was





---

- 39 -

CSDH_013
        which was drilled into the northern margin of an interpreted porphyry system, named the
        Caspiche Porphyry.



All
        samples were analysed by ACME laboratories in Santiago. Duplicate intervals were dispatched
        to ALS La Serena.



Sampling
        from a wet cyclone and riffle splitter on the drill rig involved collecting a 2 metre
        composite sample for shipment to the laboratory and a duplicate sample. The rock samples
        were analysed by using fire assay with an AA finish on a 50 gram charge, and a suite of
        elements by ICP.



Samples
        were prepared (ACME code R150) by crushing 1 kilogram to 70% passing 10 mesh, splitting 250
        gram and pulverising it to 95% passing 150 mesh. Analysis for Au was by fire assay of 50
        gram charges with AAS finish and silver by ICP-1D (aqua regia digestion). If the results
        for Ag were higher than 300 ppm then the sample was re-assayed by gravimetric
        finish.



Exploration and Development

The
        conclusions drawn by the authors of the technical report support the speculative potential
        for the discovery of high sulphidation style Au-Ag mineralization on strike with Caspiche
        III along the northern side of the large WNW structure where they are buried by
        post-mineral volcanic cover and Quaternary deposits. The authors recommend a 12 month work
        program commencing July 2007 with a budget of $5 million. Drilling, earthworks and assaying
        is to account for 75% of the budget.



Drilling
        re-commenced on the Caspiche property at the end of 2007, with two diamond drill rigs on
        site by early February and the arrival of a reverse circulation percussion rig in March
        2008.



The
        first drill hole in the current program, diamond hole CSD-014, was completed at a depth of
        744 metres (2,441 ft), the capacity of the rig, with partial assay results for gold and
        copper released in the news release dated February 19, and results for the entire hole
        reported in the release dated March 26, 2008. Diamond drill hole CSD-015 was collared 400
        metres (1,312 ft) to the northwest of hole CSD-014 and drilled to a final depth of 1,001
        metres (3,284 ft). The partial gold and copper assay results for the first 690 metres
        (2,264 ft) of hole CSD-015 were released in the news release dated March 26, 2008. Diamond
        drill hole CSD-016 is located mid way between holes CSD-014 and CSD-016, 200 metres (656
        ft) from each and was at a depth of 690 metres (2,269 ft) when reported in that release.
        Diamond drill hole CSD-018 is located 500 metres (1,640 ft) to the northwest of hole
        CSD-015.



The new
        assay results support the interpretation that the first drill hole is on the edge of the
        porphyry system, with CSD-015 being closer to the centre. This is based on the fact that
        CSD-014 intersected outer phyllic alteration for the length of the drill hole, whereas
        CSD-015 intersected potassic alteration to its final depth of 1,001 metres.



From
        year end to March 26, 2008, the Company had drilled an additional 3 drill holes for
        2,435 metres (7,990 ft).



The
        drill results are to be followed up with at least two diamond rigs in the next field season
        in order to increase confidence in the geological and mineralization models for the
        Caspiche Porphyry (Caspiche Central). At this stage, there are no plans to drill the
        Caspiche III epithermal target. The Caspiche project can only be effectively explored from
        October to the end of April, due to snowfalls in winter.

---

- 40 -



DON
        SIXTO (LA CABEZA)



The
        Company ceased exploration at its Don Sixto project in Mendoza Province, following the
        enactment of the Mendoza Provincial Government’s restrictive mining legislation in
        June 2007.



Acquisition terms



In 2005,
        the Company completed the acquisition of Cognito, a company that has the option to acquire
        a 100% interest in the Don Sixto gold project in Argentina, subject to a 3.5% NSR Royalty
        in favour of the owners of the property. In total, the Company issued 4,100,000 common
        shares and paid $25,000 to Rowen and its principals as consideration for the acquisition of
        Cognito. Bryce Roxburgh, the President and CEO and a director of the Company, is a
        principal of Rowen.



To earn
        its interest in the Don Sixto project, Cognito must pay to the owners of the property, a
        total of US$525,000 in staged payments, by December 2014. On behalf of Cognito, the Company
        has made all required payments, totaling US$175,000 to date. Cognito may terminate the
        staged payments upon making a development decision in respect of the project, provided that
        production commences within two years of the decision, Cognito also has the option to
        purchase the NSR Royalty outright for US$1,000,000.



Early in
        2007, the Company expanded its holding around Don Sixto by signing an option agreement over
        an additional 81 square kilometres (20,160 acres) of exploration rights, situated to the
        immediate north of Don Sixto. The option was acquired to secure areas considered favourable
        for the discovery of epithermal gold-silver systems. The terms for the
        option provide for annual payments of US$25,000 over six years followed by a purchase price
        comprising three annual payments of US$200,000. There are no expenditure
        requirements.



Subsequent to December 31, 2007, the Company entered an agreement with the
        property owners deferring the annual payments until such time as the legislation is amended
        such that mining can be conducted in Mendoza Province.



Purchase of Surface Rights



The
        Company purchased the 8,000 hectare property overlying the proposed Don Sixto development
        site in late 2005 for $78,000. The purchase agreement requires that the Company build
        two new houses for the prior landowners and grants them the right to reacquire the property
        upon completion of mining activities.



Property Summary

The
        following paragraphs are reproduced from the Summary section of a report titled
        “Technical Report 2007 Revised Resource Estimation Don Sixto Gold Project”
        dated September 14, 2007 prepared by Arnold van der Heyden, B.Sc. Geo. and Dr. William
        Yeo, PhD, B.Sc. Geo., both independent and “qualified persons” under NI 43-101,
        a copy of which is filed on SEDAR at www.sedar.com or EDGAR at www.sec.gov,
        and is incorporated by reference into this AIF.



“This report details the revised resource estimation process and
        results for Exeter Resource Corporation (“Exeter”), for the Don Sixto Gold
        Project (“Don Sixto”, and formally the ‘La Cabeza Gold Project’),
        in Mendoza Province, Argentina. Don Sixto is located in central-western Argentina, some 370
        km (500 km by road) south of the city of Mendoza, the capital of Mendoza Province. The
        project area is



---

- 41 -

geographically centered at approximately 36°17’30” south
        latitude and 68° 22’ 30” west longitude. Resource estimation has been
        undertaken in compliance with CIM Mineral Resource and Mineral Reserve Definitions that are
        referred to in National Instrument (NI) 43-101, Standards of Disclosure for Mineral
        Projects. This technical report has been prepared in compliance with the requirements of
        Form 43-101F1.



The
        property was discovered in 1996 by Argentina Mineral Development S.A. (“AMD”)
        while investigating Landsat TM colour alteration anomalies. The ensuing exploration
        program, comprising mainly geological mapping and rock chip geochemistry, led to the
        discovery of significant and widespread gold mineralisation within a four square kilometre
        area of altered volcanics and sediments. The area designated as the La Cabeza Gold Project
        (and now Don Sixto) became the subject of a comprehensive exploration program carried out
        by AMD from January 1997 to December 1998.



Don
        Sixto lies within a variably dipping sequence of felsic pyroclastics and tuffaceous
        volcaniclastics belonging to the Permo-Triassic Choiyoi Group, as well as underlying
        shallow marine sediments units belonging to the Carboniferous Agua Escondida Formation.
        Locally, these rock units have been intruded by fine-grained and coarse-grained felsic
        porphyries close to the base of the pyroclastics. Gold mineralisation occurs as fine
        disseminations and occasional blebs in north to northwesterly-trending quartz veins, quartz
        stockworks and siliceous breccias close to, or on, the contact of the lower member of the
        felsic pyroclastics and fine-grained felsic porphyry domes indicating some form of
        structural-stratigraphic control. The style of mineralisation is essentially a gold-silver,
        silica-sericite/ illite-adularia low sulphidation epithermal system related with epizonal
        intrusives, with low pyrite (<2%) and minor clay alteration.



AMD’s comprehensive exploration program included photogrammetry,
        gridding, geological mapping, rock chip geochemistry and a number of airborne and
        ground-based geophysical surveys. These various surveys led to a drilling program
        comprising an aggregate of 15,925 metres of drilling in 129 diamond
        core and reverse circulation (“RC”) percussion drill holes. The
        drilling program delineated eight individual zones of gold mineralisation.



AMD
        ceased all exploration activities in 1999. Exeter acquired the project in 2003, and between
        this date and 1999 no work was performed on-site by any companies.



In late
        2003 Exeter commenced a program of detailed infill/extension drilling and surface
        geochemistry designed to lift the resources, amenable to open pit mining, on the El Cuello,
        La Luna, El Ojo and La Mandibula prospects to Indicated and /or Measured Mineral Resource
        categories. This work program formed part of a scoping study designed and managed by
        Sydney-based Sandercock & Associates Pty Ltd., mining industry consultants. As of the
        end of February 2005, a further 5,243.55 metres of diamond core and RC percussion drilling
        were completed in 87 holes, and 2,050 metres of sawn channel sampling.



In 1999
        AMD calculated a global mineral resource for Don Sixto via the manual polygonal cross
        sectional method of estimation. This work delineated an Inferred Mineral Resource of
        720,000 ounces of gold based on 12 Mt grading 1.8 g/t gold at a cut-off of 0.5 g/t Au
        (according to the CIM Mineral Resource and Mineral Reserve Definitions).



In early
        2005 Hellman & Schofield Pty Ltd (“H&S”) were consulted to prepare a
        revised resource estimates for the El Cuello, La Luna, El Ojo and La Mandibula
        prospects.



The El
        Cachete prospect global resource was re-estimated internally utilising a manual polygonal
        cross sectional method. Although new geological models were utilised in the El Cachete
        estimation process, it was deemed inappropriate to use computer estimation methods at that
        time, due to a lack of substantial





---

- 42 -

drilling
        density. The previous resource estimation figures for the Labio East, South and West
        prospects were utilised, as no new geological information was available at the
        time.



In 2006
        H&S reviewed and validated the project database for completeness and accuracy (this
        review was updated in 2007) utilizing a number of general and detailed checks of the
        database against original data sources. Checks were made of collar locations, down hole
        surveys, geology and assays. A total 6% of all holes were audited in this way.



In 2007
        H&S reviewed the quality control data (QAQC) and prepared revised resource estimates
        for the El Cuello, La Luna, El Ojo, La Mandibula and Central Vein Zone (which comprises
        Labio East, Labio West, Labio South and Mercedes) prospects. The new mineral resource
        estimates (comprising gold, silver and sulphur) were made following a three week visit to
        Mendoza Province towards the end of April and beginning of May, 2007.



QAQC
        measures implemented at Don Sixto includes the routine use of analytical standards and
        blanks, the collection of RC field duplicate samples and limited check assay programs using
        an independent laboratory. Analysis of this data shows that the accuracy and repeatability
        of the assay data is at an acceptable level and that there is little evidence of sample
        contamination. Twin diamond and RC holes show some large difference in grade that need to
        be further investigated.



Estimates of gold grades were made using Multiple Indicator Kriging (MIK)
        whilst silver and sulphur were estimated utilizing Ordinary Kriging (OK). Average density
        values were assigned to the models by rock type for calculation of resource tonnage. MIK
        estimates the proportion and grade of mineralization for an assumed selective mining unit
        (“SMU”) within a larger panel (or “block”) for a range of cut-off
        grades. The deposit is divided into panels and in the case of Don Sixto, a panel size of 5
        m wide x 25 m long x 10 m high was deemed suitable for the data spacing. Within these
        panels, two SMU’s sizes were utilised: for vertical to near
        vertical domains, an SMU of 2.5 m width x 5 m length by 5 m height was used, and for flat
        to shallow dipping domains an SMU of 2.5 m width x 5 m length by 2.5 m height was
        used.



The
        estimates include the dilution incurred when mining the resources at the assumed SMU. This
        methodology can result in a resource estimate of higher tonnes and lower grade than more
        traditional estimation techniques, but has been found to more closely match production
        tonnes and grade than the other grade estimation techniques.



The El
        Cachete prospect resource remains unchanged from the previous resource estimation exercise,
        which was calculated internally by Exeter (in 2005) utilising a manual polygonal cross
        sectional method of estimation.



Exeter
        provided the following information for the main prospects (Cuello, Luna, Ojo, Mandibula and
        the Central Vein Zone):



|• | The main drill hole and sawn channel databases (drill hole
                    geology, assay, collar and down-hole surveys, channels, topography, QAQC, etc),
                    where all of these were internally validated by Exeter and then validated by
                    H&S.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|• | Wireframe models of geological features (which included vein
                    envelopes, faults and base of the lower member of pyroclastic rocks) and gold
                    mineralization (at a 0.5 gram per tonne (“g/t”) gold cut-off) which
                    assisted in differentiating the various styles of mineralization that exist at
                    each prospect and also assisted in defining interpreted mineralisation domain
                    boundaries for data analysis and resource estimation.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





---

- 43 -

Results
        of the new gold resource estimates, at a 0.5 g/t and a 1.0 g/t cut-off are tabulated
        below:



|Table 1 | Don Sixto Gold Resource Estimates at a 0.5 g/t gold
                    cut-off
|------- | -------------------------------------------------------------------------------







Measured

                    Indicated

                    Measured & Indicated

                    InferredMt

                    g/t

                    koz Au

                    Mt

                    g/t

                    koz Au

                    Mt

                    g/t

                    koz Au

                    Mt

                    g/t

                    koz AuCuello

                    1.49

                    1.83

                    88

                    3.80

                    1.39

                    170

                    5.28

                    1.51

                    257

                    1.85

                    1.20

                    71Ojo

                    1.43

                    1.63

                    75

                    1.49

                    1.25

                    60

                    2.92

                    1.44

                    135

                    0.71

                    1.05

                    24Luna

                    1.71

                    1.58

                    87

                    4.50

                    1.23

                    178

                    6.21

                    1.32

                    265

                    1.79

                    1.07

                    61Mandibula

                    2.77

                    1.00

                    89

                    1.77

                    1.09

                    62

                    4.54

                    1.03

                    151

                    4.24

                    0.93

                    126CVZ*

                    0.75

                    2.51

                    61

                    0.76

                    2.24

                    55

                    1.51

                    2.38

                    116

                    0.35

                    1.52

                    17Cachete

                    -

                    -

                    -

                    -

                    -

                    -

                    -

                    -

                    -

                    0.35

                    3.08

                    35TOTAL

                    8.15

                    1.52

                    400

                    12.32

                    1.32

                    525

                    20.46

                    1.40

                    924

                    9.29

                    1.12

                    334




|Table 2 | Don Sixto Gold Resource Estimates at a 1.0 g/t gold
                    cut-off
|------- | -------------------------------------------------------------------------------





Measured

                    Indicated

                    Measured & Indicated

                    InferredMt

                    g/t

                    koz Au

                    Mt

                    g/t

                    koz Au

                    Mt

                    g/t

                    koz Au

                    Mt

                    g/t

                    koz AuCuello

                    0.84

                    2.68

                    73

                    1.87

                    2.09

                    125

                    2.71

                    2.27

                    198

                    0.84

                    1.78

                    48Ojo

                    0.79

                    2.37

                    60

                    0.62

                    2.03

                    40

                    1.41

                    2.22

                    101

                    0.20

                    1.95

                    13Luna

                    0.91

                    2.35

                    68

                    1.82

                    2.01

                    118

                    2.73

                    2.12

                    186

                    0.51

                    2.02

                    33Mandibula

                    0.90

                    1.63

                    47

                    0.66

                    1.73

                    37

                    1.56

                    1.67

                    84

                    1.10

                    1.60

                    57CVZ*

                    0.46

                    3.67

                    54

                    0.46

                    3.24

                    48

                    0.92

                    3.45

                    102

                    0.15

                    2.62

                    13Cachete

                    -

                    -

                    -

                    -

                    -

                    -

                    -

                    -

                    -

                    0.33

                    3.39

                    36TOTAL

                    3.90

                    2.41

                    302

                    5.43

                    2.11

                    368

                    9.34

                    2.23

                    670

                    3.13

                    1.98

                    200




Notes:



(*) CVZ or Central Vein Zone comprises the Labio East, Labio West, Labio
        South and Mercedes prospects.

“Mt” represents million tonnes, and “koz” represents
        thousand ounces.





---

- 44 -

Early in
        2007, the Mendoza Province Governor, J. Cobos, vetoed a proposal of the Mendoza Senate that
        would have suspended the issuance of new mining-related permits. In early June, the
        Governor introduced legislation that suspended environmental approvals for 90 days, citing
        the fact that the Senate commission had not completed a review of proposed environmental
        regulations for mining.



On June
        20, the Mendoza government passed legislation prohibiting the use of chemicals typically
        used in the extraction of gold and other minerals. This legislation effectively has put Don
        Sixto on hold.



Government elections are to be held in Mendoza during October. The company
        continues to work with relevant authorities and other affected mining companies to identify
        acceptable solutions, and in parallel is assessing avenues for legal
        recourse.”



Exploration and Development

Following the introduction of legislation which banned the use of certain
        chemicals, traditionally used in mining, by the Mendoza Provincial Government in June,
        2007, exploration and independent engineering studies at Don Sixto were
        suspended.



A full
        relational database will be constructed and implemented for Don Sixto. This will allow much
        more efficient access to existing data, enable quick and accurate addition of new data and
        improve the general accessibility and security of the project data.



The Company
        will complete the planned check assaying program, using an independent laboratory, of
        samples collected from 2004-2006 drilling programs completed by the Company.



The
        Company will also drill additional holes to increase the number of twinned Diamond RC pairs
        to 3 to 5 pairs per prospect. The differences in average grade between the nine pairs of RC
        and diamond holes presented in the technical report are sufficient to warrant further
        investigation.



DIVIDENDS

The
        Company has not paid any dividends since incorporation and it has no plans to pay dividends
        for the foreseeable future, although there are no restrictions that could prevent the
        Company from paying dividends.



DESCRIPTION OF CAPITAL STRUCTURE



The Company’s capital structure consists of 100,000,000
        common shares without par value. As of December 31, 2007, the Company had 41,226,487 common
        shares issued and outstanding. As of the date hereof the Company has 41,268,762 common
        shares issued and outstanding.



As of December 31, 2007, the Company also had outstanding
        warrants to purchase 250,000 common shares at a price of $3.00 per share until April 18,
        2008.



All of
        the common shares of the Company rank equally as to voting rights, participation in a
        distribution of the assets of the Company on liquidation, dissolution or winding-up and the
        entitlement to dividends.





---

- 45 -

The
        holders of the common shares are entitled to receive notice of all meetings of shareholders
        and to attend and vote the shares at the meetings. Each common share carries with it the
        right to one vote.

In the
        event of the liquidation, dissolution or winding-up of the Company or other distribution of
        assets of the Company, the holders of the common shares will be entitled to receive, on a
        pro rata basis, all of the assets remaining after the Company has paid its liabilities.
        There is no set dividend rate or dividend schedule for the common shares. The board of
        directors of the Company will decide if and when dividends should be declared and
        paid.

The
        Company’s common shares are not subject to any future call or assessment and there
        are no provisions for exchange, conversion, exercise, redemption or retraction.



MARKET
        FOR SECURITIES

The
        Company was incorporated on February 10, 1984 and its common shares were listed for trading
        on the TSX Venture Exchange (“TSX-V”) on August 31, 1988 as a Tier 2 company
        under the symbol “XRC”. Effective February 2, 2005, the Company met the
        requirements for a Tier 1 company and changed its Tier classification.

On
        November 9, 2006, the Company began trading its common stock on the AMEX under the symbol
        “XRA”.

The Company’s common shares were also listed for
        trading on the Deutsche Börse AG Regulated Unofficial Market of the Frankfurt
        Stock Exchange under the symbol “EXB” effective May 3, 2004.

The following table details the price range and volume traded
        for the Company’s securities on the TSX-V on a monthly basis for the most recently
        completed financial year ended December 31, 2007:



Year

                    

                    Month

                    Open

                    High

                    Low

                    Close

                    Volume2007

                    

                    January

                    2.200

                    2.490

                    1.920

                    2.480

                    2,498,178February

                    2.500

                    2.590

                    2.240

                    2.270

                    1,285,481March

                    2.190

                    2.280

                    1.700

                    2.200

                    2,746,901April

                    2.200

                    2.440

                    1.970

                    2.180

                    2,769,847May

                    2.170

                    3.140

                    2.100

                    2.740

                    2,469,635June

                    2.750

                    4.480

                    2.710

                    4.000

                    4,569,337July

                    4.100

                    4.100

                    3.510

                    3.620

                    1,924,601August

                    3.600

                    3.620

                    2.050

                    2.700

                    1,670,791September

                    2.700

                    3.220

                    2.620

                    3.150

                    1,031,924October

                    3.250

                    4.880

                    3.100

                    4.750

                    969,271November

                    4.580

                    5.270

                    4.120

                    4.700

                    1,249,065December

                    4.520

                    5.920

                    4.450

                    5.360

                    481,465






---

- 46 -

DIRECTORS AND EXECUTIVE OFFICERS

Name,
        Address and Occupation

The
        names and municipalities of residence, present positions with the Company and principal
        occupations during the past five years of the directors and executive officers of the
        Company as at December 31, 2007 are as follows:

|Name, Position(s) with the Company (1) and
                    Municipality of Residence (3)                                                                                    | Principal Occupation (2) (3)                                                                                                                                                                                                                                                                                                                   | Period (s) Servedas a Director
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------
|Bryce G. Roxburgh

                    President, CEO and Director

                    Philippines                                                                             | President and CEO of the Company since September 4, 2003;
                    Director of Carlyle Mining Corporation since January 2007; Geological
                    consultant from 2000-2003.                                                                                                                                             | March 20, 2003 to date        
|Yale R. SimpsonChairman of the Board

                    Director

                    West Vancouver, B.C. Canada                                                             | Chairman of the Company since September 11, 2003; President of
                    Canaust Resource Consultants Ltd. since 1992; Director of Diamonds North
                    Resources Ltd. since March 2002, Dynasty Metals & Mining Inc. since
                    September 2003 and Carlyle Mining Corporation since January 2007.      | June 10, 2003 to date         
|Douglas W. Scheving

                    Director

                    Vancouver, B.C. Canada                                                                                   | Served as Corporate Secretary of the Company from July 1993
                    until June 16, 2004; Executive consultant for companies in the resource sector
                    since 1993.                                                                                                                                                 | July 16, 1993 to date         
|Michael R.J. McPhie

                    Director and

                    Executive Vice President Corporate Development and
                    EnvironmentDelta, B.C. Canada | Appointed as Executive Vice President Corporate Development and
                    Environment on January 21, 2008; President & Chief Executive Officer,
                    Mining Association of British Columbia from November 2004 until December 2007;
                    Partner HBA Management Consultants Ltd, since September 2003. | October 8, 2004 to date       

|Robert G. Reynolds

                    Director

                    Sydney, Australia                        | Chartered Accountant; Director of Carlyle Mining Corporation
                    on January 24, 2007; Avoca Resource Ltd. since March 2002; Avoca Resources
                    Limited since April 2002 and Global Geoscience Limited since December
                    2007. | June 12, 2007 to date    
|-------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------
|William D. McCartney

                    DirectorVancouver, B.C. Canada                                       | President of Pemcorp Management Inc. since 1990.                                                                                                                                                                                                                                | September 1, 2005 to date
|S. R. Jeremy Perkins

                    VP Development and Operations

                    Sydney, Australia | Appointed as Vice President Development and Operations on
                    February 1, 2005; professional engineer, since 1989 Director and Principal, J
                    Perkins & Associates Pty Ltd, an industry consultant firm.                                      | N/A                      





---

- 47 -



|Name, Position(s) with the Company (1) and
                    Municipality of Residence (3) | Principal Occupation (2) (3) | Period (s) Servedas a Director
|-------------------------------------------------------------------------------------------- | ---------------------------- | ------------------------------

|Paul Cholakos

                    Chief Operating Officer

                    Mendoza, Argentina | Appointed as Chief Operataing Officer on August 28, 2007;
                    professional engineer since 1985. Commercial Manager of Oil Search Limited from
                    March 2004 until June 2007; General Manager, Asset Development of Orogen
                    Minerals Limited from May 2001 until March 2004.                                                                                                             | N/A
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|Cecil Bond

                    Chief Financial Officer

                    Langley, B.C. Canada  | Appointed as Chief Financial Officer on April 13, 2005;
                    Chartered Accountant. Since 1996 to present Director, and at various times
                    President, CEO and CFO of Argosy Minerals Inc; CFO of Christopher James Gold
                    Corp. from January 2007 until July 2007; CFO of Carlyle Mining Corp since
                    February 2007; Director and officer of various private companies. | N/A

|(1) | For the purposes of disclosing positions held in the Company,
                    “Company” includes the Company and any parent or subsidiary
                    thereof.                                                                                                                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The information as to province or state and country of
                    residence, principal occupation and number of shares beneficially owned
                    by (directly or indirectly or over which control or direction is
                    exercised) has been furnished by the respective individuals.

On
        January 21, 2008, Louis G. Montpelier of Vancouver, B.C., Canada was appointed to the board
        of directors. Mr. Montpelier is, and has for the last five years been, a lawyer with
        Gowling Lafleur Henderson LLP. On March 27, 2008, Mr. Montpelier replaced Mr. McPhie on the
        Compensation Committee. Mr. McPhie resigned as a result of the fact that he is no longer
        independent. Mr. Reynolds was also appointed to the Compensation Committee on March 27,
        2008.

As at the date of this AIF (and at December 31, 2007), the
        Company's directors and executive officers, as a group, beneficially own, control or
        direct, directly or indirectly, a total of 5,210, 902 shares, representing 12.63% of the
        Company’s common shares.

The Company’s current board of directors consists of
        seven directors. The term of office for each director expires at the annual general meeting
        subsequent to that at which he or she was elected.

LEGAL PROCEEDINGS

The
        Company is not a party to any legal proceedings, except as noted below, nor to the
        knowledge of management, are there any legal proceedings which may materially affect the
        business and affairs of the Company.

On June
        20, 2007, legislation was passed by the Mendoza government, in Argentina, prohibiting the
        use of chemicals typically used in the extraction of gold and other metals. The legislation
        effectively puts the Don Sixto project on hold, unless the government amends the law. The
        Company has filed suit in the Mendoza Courts challenging the constitutionality of the new
        legislation which has the effect of banning conventional mining in the province.







---

- 48 -

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

The directors of the Company are required by law to act
        honestly and in good faith with a view to the best interest of the Company and to disclose
        any interests which they may have in any project or opportunity of the Company. The
        directors and officers of the Company are aware of the existence of laws governing
        accountability of directors and officers for corporate opportunity and
        requiring disclosures by directors of conflicts of interest and the Company will rely upon
        such laws in respect of any directors' and officers' conflicts of interest or in respect of
        any breaches of duty by any of its directors or officers. Such directors or officers in
        accordance with the applicable law will disclose all such conflicts and they will govern
        themselves in respect thereof to the best of their ability in accordance with the
        obligations imposed upon them by law.



Except as disclosed herein, during the current financial year
        and the three most recently completed financial years, no director, executive officer or
        person or company that beneficially owns, controls or directs, directly or indirectly more
        than 10% of the shares of the Company or any associate or affiliate of such persons or
        companies had any material interest, direct or indirect, in any transaction which has
        materially affected or is reasonably expected to materially affect the Company or its
        subsidiaries:



In 2005, the Company completed the acquisition of Cognito, a
        company that has the option to acquire a 100% interest in the Don Sixto gold project in
        Argentina. The Company issued a total of 4,100,000 common shares and paid $25,000 to Rowen
        and its principals as consideration for the acquisition of Cognito. Bryce G. Roxburgh, the
        President and CEO and a director of the Company, is a principal of Rowen.



TRANSFER AGENT



The
        Company’s transfer agent for its common shares is Computershare Investor Services
        Inc., at its Vancouver, B.C. offices. Computershare Investor Services United States acts as
        the co-transfer agent for U.S. purposes.



MATERIAL
        CONTRACTS



The Company
        has the following material contracts:



1.

                    Special Warrant Indenture dated March 26, 2008 between
                        Exeter Resource Corporation and Computershare Trust Company of Canada
                        (“Computershare”), providing for the issuance of 7,780,000
                        special warrants of the Company at a price of $4.50 per special warrant and
                        appointing Computershare as warrant agent.


2.

                    Underwriting Agreement dated March 26, 2008 between Exeter
                        Resource Corporation and Canaccord Capital Corporation, BMO Nesbitt Burns
                        Inc., National Bank Financial Inc., Dundee Securities Corp. and Haywood
                        Securities Inc. (collectively, the “Underwriters”) pursuant to
                        which the Underwriters offered to purchase from the Company 7,780,000
                        special warrants at a price of $4.50 per special warrants on a private
                        placement basis. The special warrants will automatically convert into
                        common shares without any additional consideration payable by the holders
                        thereof, on the date which is the earlier of: (a) one business day after
                        the date on which the Company obtains a receipt for a final short form
                        prospectus in certain jurisdictions, qualifying the distribution of the
                        common shares upon conversion of the special warrants; and (b) four months
                        plus one day after the closing of the offering. In consideration of the
                        Underwriters’ services, the Company will pay them a cash fee equal to
                        6.5% of the gross proceeds and will issue to them that number of
                        non-transferable warrants equal to 6.5% of the aggregate number of special
                        warrants sold pursuant to the offering.


- 49 -


3.

                    Agreement dated October 11, 2005 between Exeter Resource
                        Corporation and Minera Anglo American Chile Limitada and Empresa Mantos
                        Blancos S.A. regarding the Caspiche project – see “Principal
                        Projects – Caspiche” above.


4.

                    Agreement dated December 30, 2003 between Exeter Resource
                        Corporation and Estelar Resources Limited and Cerro Vanguardia Sociedad
                        Anonima regarding the Cerro Moro project – see “Principal
                        Projects – Cerro Moro” above.


5.

                    Agreement dated January 27, 2003 regarding the Don Sixto
                        project – see “Principal Projects – Don Sixto”
                        above.




NAME AND INTEREST OF EXPERTS



The
        following persons or companies have been named as having prepared or certified a report
        described or included in a filing, or referred to in a filing made under National
        Instrument 51-102 during or relating to the most recently completed financial
        year:



| | • | Jerry Perkins, B.Sc (Hons Chem. Eng.), C.P., FAusIMM, the
                    Company’s Vice President – Development & Operations, is an
                    author of the Cerro Moro and the Caspiche technical reports. As of the date
                    hereof, Mr. Perkins owns 0.07% of the outstanding common shares of the
                    Company and has stock options to purchase up to 225,000 common shares of the
                    Company.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Matthew T. Williams, B.App.Sc. Applied Geology, MAusIMM,
                    Exploration Manager of the Company, is an author of the Cerro Moro technical
                    report. As of the date hereof, Mr. Williams has stock options to purchase
                    up to 300,000 common shares of the Company.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Jason Beckton, B.Sc.(Hons), M Econ Geol, MAusIMM, MAIG, the
                    Company’s former Exploration Manager – Chile, is an author of the
                    Caspiche technical report. As of the date hereof, Mr. Beckton owns 20,000
                    common shares representing 0.05% of the outstanding common shares of the
                    Company.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | Arnold van der Heyden, B.Sc. Geology, MAusIMM, and
                    Dr. William Yeo, PhD., B.Sc. (Hons) Geology, MAusIMM, are authors of the
                    Don Sixto technical report. Neither of them own any interest in the
                    Company.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | • | PricewaterhouseCoopers LLP is the auditor who prepared the
                    auditor’s report for the Company’s annual financial statements for
                    the financial year ended December 31, 2007. PricewaterhouseCoopers LLP is
                    independent with respect to the Company within the meaning of the Rules of
                    Professional Conduct of the Institute of Chartered Accountants of British
                    Columbia and the rules of the US Securities and Exchange Commission.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

AUDIT
        COMMITTEE

The
        Audit Committee is appointed by the board of directors of the Company to oversee the
        accounting and financial reporting process of the Company, the system of internal
        accounting and financial controls and procedures and the audit procedures and audit plans.
        The Audit Committee also reviews and recommends to the Board for approval the annual
        financial statements, the annual report and certain other documents required by regulatory
        authorities.

The
        Company’s Audit Committee Charter (the “Charter”) is attached as Appendix
        1 hereto.



---

- 50 -

As at
        the date hereof, the Audit Committee is composed of William D. McCartney, Robert
        G. Reynolds and Douglas W. Scheving, all of whom are “financially
        literate” and “independent” within the meaning Multilateral Instrument
        52-110 – Audit Committees
        (“MI 52-110”).



Mr. McCartney, Chairman of the Audit Committee and a Chartered
        Accountant with over 20 years experience, has a clear understanding of the accounting
        principles used by the Company to prepare its financial statements; has the ability to
        assess the general application of such accounting principles in connection with the
        accounting for estimates, accruals and reserves; has experience preparing, auditing,
        analyzing or evaluating financial statements that present a breadth and level of complexity
        of accounting issues that are generally comparable to the breadth and complexity of issues
        that can reasonably be expected to be raised by the Company’s
        financial statements, and has an understanding of internal controls and procedures for
        financial reporting.



Mr. Reynolds is a Chartered Accountant with over 35 years experience in
        commerce and practice, and with over 25 years in the mining industry, which provides him
        with an understanding of the accounting principles used by the Company to prepare its
        financial statements, the ability to assess the general application
        of such accounting principles and analyze or evaluate financial statements, and an
        understanding of internal controls and procedures for financial reporting.



Mr. Scheving’s industry experience in the management and
        administration of publicly traded mining exploration companies provides him with an
        understanding of the accounting principles used by the Company to prepare its financial
        statements, the ability to assess the general application of such accounting principles and
        analyze or evaluate financial statements, and an understanding of internal controls and
        procedures for financial reporting.



Audit Fees, Audit-Related Tax and All Other Fees



The
        following table sets out the aggregate fees billed by the Company’s external auditor
        for the two most recently completed financial years.



PricewaterhouseCoopers LLP
                        (4)Financial Year Ending

                    Audit Fees
                        (1)

                    Tax Fees
                        (2)

                    All Other Fees
                        (3)2007

                    $70,000

                    Nil

                    $3,0002006

                    Nil

                    Nil

                    Nil




|(1) | The aggregate fees billed by the Company’s external
                    auditor for audit and assurance and related services.
|--- | -----------------------------------------------------------------------------------------------------------------------------

|(2) | The aggregate fees billed for tax compliance, tax advice and tax
                    planning services.
|--- | -------------------------------------------------------------------------------------------------------

|(3) | Other than as disclosed above, the Company’s external
                    auditor has not billed the Company for any products or services during the last
                    two financial years.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | PricewaterhouseCoopers LLP were appointed as the Company’s
                    auditor during 2007.
|--- | ---------------------------------------------------------------------------------------------------

MacKay LLP Chartered Accountants
                        (4)Financial Year Ending

                    Audit Fees
                        (1)

                    Tax Fees
                        (2)

                    All Other Fees
                        (3)2007

                    $67,600

                    $5,300

                    Nil2006

                    $41,874

                    $4,302

                    Nil




(1)

                    The aggregate fees billed by the Company’s previous
                        external auditor for audit and assurance and related services. (2)

                    The aggregate fees billed for tax compliance, tax advice and
                        tax planning services. (3)

                    Other than as disclosed above, the Company’s previous
                        external auditor did not bill the Company for any products or services
                        during the last two financial years. (4)

                    MacKay LLP Chartered Accountants was the Company’s
                        auditor for the year ended December 31, 2006.




---

- 51 -

ADDITIONAL INFORMATION



Additional information is provided in the following documents which can be
        found on SEDAR at www.sedar.com and on EDGAR website at www.sec.gov:

| | • | the Company’s audited consolidated financial statements
                    and management’s discussion and analysis for the financial year ended
                    December 31, 2007; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | the Company’s information circular dated May 23, 2007,
                    which includes directors’ and officers’ remuneration and
                    indebtedness, principal holders of the Company’s securities and
                    securities authorized for issuance under equity compensation plans.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Copies
        of the above documents and this AIF are also available upon request to the Administration
        Manager of the Company at its corporate head office.



































---

- 52
        -

Appendix 1

Charter of the Audit Committee of the Board of Directors

of
        Exeter Resource Corporation (the “Company”)



Article 1 – Mandate and Responsibilities



The
        Audit Committee is appointed by the board of directors of the Company (the
        “Board”) to oversee the accounting and financial reporting process of the
        Company and audits of the financial statements of the Company. The Board and management
        will ensure that the Audit Committee has adequate funding to fulfill its duties and
        responsibilities. In addition to other duties that the Board may from time to time assign
        to it, the Audit Committee’s primary duties and responsibilities are to:

| | 1. | Oversee the work of the external auditor engaged for the purpose
                    of preparing or issuing an auditor’s report or performing other audit,
                    review or attest services for the Company, including the resolution of
                    disagreements between management and the external auditor regarding financial
                    reporting.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Review recommendations made by the external auditors of the
                    Company, report to the Board with respect thereto and with respect to external
                    audit reports of the Company, and take any necessary actions in connection
                    therewith.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Consult with the external auditors, senior management of the
                    Company and such other advisers as the Audit Committee may deem necessary
                    regarding their evaluation of the adequacy of the Company’s
                    “internal controls over financial reporting” and “disclosure
                    controls and procedures” (as such terms are defined by the Securities and
                    Exchange Commission (the “SEC”)) or any other such regulatory body
                    having jurisdiction over the Company, and make specific recommendations to the
                    Board in connection therewith.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Review the external audit reports of the Company and the
                    Company’s financial statements, MD&A and if required, annual and
                    interim earnings press releases and discuss such information with the external
                    auditor before the Company publicly discloses this information.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | Be satisfied that adequate procedures are in place for the
                    review of all other public disclosure of financial information extracted or
                    derived from the Company’s financial statements, and to periodically
                    assess the adequacy of those procedures.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | Review periodically the Company’s Code of Ethics and the
                    Company’s program to monitor compliance therewith.
| | -- | -------------------------------------------------------------------------------------------------------------------------------

| | 7. | Review and reassess the adequacy of this Charter on an annual
                    basis in accordance with applicable audit committee requirements of the SEC,
                    the American Stock Exchange (“AMEX”), the TSX Venture Exchange
                    (“TSXV”), the Canadian Securities Administrators (the
                    “CSA”) and any other such regulatory body having jurisdiction over
                    the Company.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8. | Review and evaluate at least annually its own performance and
                    effectiveness.
| | -- | ------------------------------------------------------------------------------------------------



Article 2 – Membership

| | 1. | The Audit Committee shall consist of no fewer than three
                    directors as determined by the Board.
| | -- | ------------------------------------------------------------------------------------------------------------------





---

- 53
        -



| | 2. | All of the members of the Audit Committee shall meet the
                    applicable independence and experience requirements as required by any
                    legislation applicable to the Company, including the Sarbanes-Oxley Act of
                    2002, TSXV, SEC and AMEX rules, and Multilateral Instrument 52-110 Audit
                    Committees (“MI 52-110”).
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | The members and Chairperson of the Audit Committee shall be
                    appointed and may be removed by the Board.
| | -- | --------------------------------------------------------------------------------------------------------------------------

| | 4. | Each member of the Audit Committee shall in the judgment of the
                    Board, have the ability to read and understand the Company’s basic
                    financial statements.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | One of the members of the Audit Committee shall be an
                    “audit committee financial expert” pursuant to the requirements of
                    the SEC and AMEX.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Article 3 – Meeting

| | 1. | The Audit Committee will meet as often as it determines, but on
                    at least a quarterly basis. Special meetings shall be convened as required.
                    External auditors may convene a meeting if they consider that it is
                    necessary.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | The committee may invite such other persons (e.g. the CEO and/or
                    the CFO) to its meetings, as it deems appropriate.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------

| | 3. | The external auditors may be present at each audit committee
                    meeting at the request of the Chairman, and be expected to comment on the
                    financial statements in accordance with best practices.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Minutes of the proceedings of all meetings will be
                    kept.
| | -- | ----------------------------------------------------------------------------



Article 4 - Pre-Approval of Non-Audit Services



The
        Audit Committee will be responsible for the pre-approval of all audit services and
        permissible non-audit services to be provided to the Company by the external auditors,
        subject to any exceptions provided in the Securities Exchange Act of 1934, as amended, and
        the rules of the SEC promulgated thereunder.



The
        Audit Committee may delegate to one or more of its members the authority to pre-approve
        non-audit services to be provided to the Company or its subsidiaries by the Company’s
        external auditor. The pre-approval of non-audit services must be presented to the Audit
        Committee at its first scheduled meeting following such pre-approval.



The
        Audit Committee may satisfy its duty to pre-approve non-audit services by adopting specific
        policies and procedures for the engagement of the non-audit services, provided the policies
        and procedures are detailed as to the particular service, the Audit Committee is informed
        of each non-audit service and the procedures do not include delegation of the Audit
        Committee’s responsibilities to management.



Article 5 - External Advisors



The
        Audit Committee has the authority to conduct any investigation appropriate to fulfilling
        its responsibilities, and it has direct access to the external auditors as well as anyone
        in the organization. The Audit Committee has the ability to retain, at the Company’s
        expense, special legal, accounting or other consultants or experts it deems necessary in
        the performance of its duties.





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Article
        6 - External Auditors



The
        external auditors are ultimately accountable to the Audit Committee and the Board, as
        representatives of the shareholders. The external auditors will report directly to the
        Audit Committee. The Audit Committee will:

| | 1. | Be directly responsible for the appointment and compensation
                    (subject to any necessary shareholder approval), retention and oversight of the
                    work of the Company’s external auditors and the external auditors shall
                    report directly to the Audit Committee.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Ensure receipt of an annual formal written statement from the
                    Company’s external auditors delineating all relationships between the
                    external auditors and the Company and discuss with the external auditors any
                    such relationships that may impact the objectivity and independence of the
                    external auditors; and take appropriate action to oversee the independence of
                    the external auditors.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Assure the regular rotation of the lead audit partner and the
                    concurring partner every five years (with a five year time-out period after
                    rotation), and the regular rotation of other audit partners engaged in the
                    annual audit every seven years (with a two year time-out period after
                    rotation), or as otherwise required by law or the rules of the SEC and
                    AMEX.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Set clear hiring policies for partners and employees or former
                    partners and employees of the present and former external auditors of the
                    Company.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | Be satisfied that the Company has adopted procedures to ensure
                    proper review and oversight of all related-party transactions, as such term is
                    defined by the rules of the AMEX or if applicable TSXV.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | Review the external auditors’ audit plan to see that it is
                    sufficiently detailed and covers any significant areas of concern that the
                    Audit Committee may have.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7. | Before or after the financial statements are issued, discuss
                    certain matters required to be communicated to audit committees in accordance
                    with the standards established by the Canadian Institute of Chartered
                    Accountants.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 8. | Consider the external auditors’ judgments about the
                    quality and appropriateness of the Company’s accounting principles as
                    applied in the Company’s financial reporting.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9. | Obtain and review annually, where considered necessary, prior to
                    the filing of the Company’s Annual Financial Statements and Annual Report
                    on Form 20-F, a report from the external auditors describing (a) all critical
                    accounting policies and practices used or to be used in the Company’s
                    year-end financial statements (b) all alternative treatments, related to
                    material items, allowed within generally accepted accounting principles that
                    have been discussed with management, including ramifications of the use of such
                    alternative disclosures and treatments, and the treatment preferred by the
                    external auditors, and (c) other material written communications between the
                    external auditors and management, such as any management letter or schedule of
                    unadjusted differences, and discuss with the external auditors any material
                    issues raised in such report.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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Article
        7 - Legal Compliance



On at
        least an annual basis, the Audit Committee will review with the Company’s legal
        counsel any legal matters that could have a significant impact on the organization’s
        financial statements, the Company’s compliance with applicable laws and regulations
        and inquiries received from regulators or governmental agencies.



Article 8 - Complaints



Individuals are strongly encouraged to approach a member of the Audit
        Committee with any complaints or concerns regarding accounting, internal accounting
        controls or auditing matters. The Audit Committee will from time to time establish
        guidelines for:



| | (a) | the receipt, retention and treatment of complaints received by
                    the Company regarding accounting, internal accounting controls, or auditing
                    matters; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the confidential, anonymous submission by employees of the
                    Company of concerns regarding questionable accounting or auditing
                    matters.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
        Audit Committee will further review periodically with management these guidelines and, if
        appropriate, any significant complaints received, to the extent required by the
        Sarbanes-Oxley Act of 2002 or MI 52-110 or the rules of the SEC, AMEX, TSXV or the CSA. In
        all cases the Audit Committee will conduct a prompt, thorough and fair examination,
        document the situation and, if appropriate, recommend to the Board appropriate corrective
        action.



To the
        extent practicable, all complaints will be kept confidential. The Company will not condone
        any retaliation for a complaint made in good faith.



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