Nugget Pond Processing Facility - Canada

Acquisition

On October 27, 2006 the Corporation completed the acquisition of the Nugget Pond processing facility in Newfoundland, Canada from New Island Resources Inc. (“New Island”) following the issue of three million shares. Additionally, the agreement also provides New Island with the opportunity to process ore mined on their Nugget Pond mineral leases at commercial rates.

The refurbishment of the facility was completed ahead of schedule and Nugget Pond is fully utilized to process ore produced from Nalunaq.

Nugget Pond processed a total of 26,691 dry metric tonnes of ore at an average grade of 12.9 g/t during Q2 2008. Operations at Nugget Pond were interrupted by ore availability as weather conditions adversely affected ore shipping. Milling was suspended between May 14 and June 2 and also between June 18 and July 3 because of the depletion of available ore stockpiles at Nugget Pond. Total ore processed in the six months ended June 30, 2008 was 61,439 tonnes at a grade of 11.9 g/t (period from the commencement of mill operations at the end of February 2007 to June 30, 2007 – 51,060 tonnes at 16.0 g/t).