The Company maintains a 5% net smelter royalty on 10 unpatented mining claims in Dubuisson
Township, located approximately five kilometres from Val d’Or, Quebec. The claims form part of the
Goldex Mine property owned by Agnico-Eagle, which was originally discovered in the 1960s. As the
Company maintains only a royalty interest in the 10 claims, it is not responsible for any exploration work
that is carried out on the property.
Initial feasibility studies of the Goldex Mine were completed in 2004 and results from a recent bulksampling
program have been announced by Agnico-Eagle. An 18,213 ton sample taken from three
raises spanning 1,000 feet with a vertical distance of 650 feet returned a grade of 0.081 ounces of gold
per ton, exceeding that of an earlier bulk sample taken in 1996, which returned 0.074 ounces per ton. In
response to these results, Agnico-Eagle proceeded with a final feasibility study and announced on
October 27, 2005, that a new mine would be built at Goldex. The Goldex Mine was approved for
construction by Agnico’s board and official production at the mine began in June 2008, processing ore
from outside the royalty boundary.
As the 10 unpatented mining claims of the Goldex Mine royalty only form part of the Goldex Mine project,
and as the Company does not know whether any part of these claims will be mined under the current
mine plan, it is not possible to determine at the present time to what extent royalty payments, if any, might
be received by the Company pursuant to the terms of the Goldex Mine royalty. The Company will
continue to watch for future developments regarding the Goldex Mine from Agnico-Eagle, as the royalty
interest has the potential of generating revenues that will help finance exploration on existing and future
projects.
