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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001137171-07-000448.txt : 20070402
<SEC-HEADER>0001137171-07-000448.hdr.sgml : 20070402
<ACCEPTANCE-DATETIME>20070402170127
ACCESSION NUMBER:		0001137171-07-000448
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20070402
FILED AS OF DATE:		20070402
DATE AS OF CHANGE:		20070402

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			New Gold Inc. /FI
		CENTRAL INDEX KEY:			0000800166
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL MINING [1000]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31722
		FILM NUMBER:		07740059

	BUSINESS ADDRESS:	
		STREET 1:		#601-595 HOWE STREET, SUITE
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2T5
		BUSINESS PHONE:		(604) 687-1629

	MAIL ADDRESS:	
		STREET 1:		#601-595 HOWE STREET, SUITE
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2T5

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DRC RESOURCES CORP                                      /FI
		DATE OF NAME CHANGE:	19860904
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>newgold6k040207b.htm
<DESCRIPTION>NEW GOLD INC. FORM 6-K
<TEXT>
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<HEAD>
<TITLE>FG Filed By Filing Services Canada Inc.&nbsp; 403-717-3898</TITLE>
<META NAME="author" CONTENT="Bradley J. Dick">
<META NAME="date" CONTENT="04/02/2007">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
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<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><B>U.S. SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Washington, D.C. 20549</B></P>
<P style="margin:0px" align=center><BR></P>
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<P style="line-height:21.333px; margin:0px; font-size:18.667px" align=center><B>FORM 6-K</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><B>REPORT OF FOREIGN PRIVATE ISSUER</B></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><B>PURSUANT TO RULE 13a-16 or 15d-16 OF</B></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><B>THE SECURITIES EXCHANGE ACT OF 1934</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center>For the month of April, 2007</P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center>Commission File Number 1-31722</P>
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<P style="margin:0px"><BR></P>
<P style="line-height:21.333px; margin:0px; padding-left:43.2px; text-indent:-43.2px; font-size:18.667px" align=center><B>NEW GOLD INC.</B></P>
<P style="margin:0px; padding-left:43.2px; text-indent:-43.2px" align=center><I>&nbsp;(Exact name of registrant as specified in its charter)</I></P>
<P style="margin:0px" align=center><BR></P>
<P style="line-height:17.333px; margin:0px; padding-left:43.2px; text-indent:-43.2px; font-size:14.667px" align=center><B>595 Howe Street, Suite #601, Vancouver, British Columbia, Canada &nbsp;V6C 2T5</B></P>
<P style="line-height:17.333px; margin:0px; padding-left:43.2px; text-indent:-43.2px; font-size:14.667px" align=center><B>(604) 687-1629</B></P>
<P style="margin:0px; padding-left:43.2px; text-indent:-43.2px" align=center><I>(Address of principal executive offices)</I></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin-top:16px; margin-bottom:0px; text-indent:43.2px; font-size:16px" align=justify>Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.</P>
<P style="line-height:18.667px; margin-top:16px; margin-bottom:0px; text-indent:43.2px; font-size:16px" align=justify>Form 20-F&nbsp;<U>____</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form 40-F&nbsp;<U>_X_</U></P>
<P style="line-height:18.667px; margin-top:16px; margin-bottom:0px; text-indent:43.2px; font-size:16px" align=justify>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):&nbsp;___</P>
<P style="line-height:18.667px; margin-top:16px; margin-bottom:0px; text-indent:43.2px; font-size:16px" align=justify>Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):&nbsp;___</P>
<P style="line-height:18.667px; margin-top:16px; margin-bottom:0px; text-indent:48px; font-size:16px" align=justify>Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.</P>
<P style="line-height:18.667px; margin-top:16px; margin-bottom:0px; text-indent:48px; font-size:16px" align=justify>Yes&nbsp;<U>_X__</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;__<U> _</U></P>
<P style="line-height:18.667px; margin-top:16px; margin-bottom:0px; text-indent:48px; font-size:16px" align=justify>If &quot;Yes&quot; is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): <U>82- 713___</U>.</P>
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<P style="line-height:18.667px; margin:0px; padding-left:48px; padding-right:48px; font-size:16px" align=center><B>EXHIBIT INDEX</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px">The following is a list of Exhibits included as part of this Report on Form 6-K:</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:18.667px; margin-top:0px; margin-bottom:-18.667px; padding-left:96px; text-indent:-96px; font-size:16px" align=justify>1</P>
<P style="line-height:18.667px; margin:0px; padding-left:96px; font-size:16px" align=justify><a href="materialchange.htm">Material Change Report dated April 2, 2007</a></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
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<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><B>SIGNATURES</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=justify>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=289.2></TD><TD width=48></TD><TD width=301.2></TD></TR>
<TR><TD valign=top width=289.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=349.2 colspan=2><P style="line-height:18.667px; margin:0px; font-size:16px" align=justify><B>NEW GOLD INC.</B></P>
</TD></TR>
<TR><TD valign=top width=289.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=349.2 colspan=2><P style="line-height:18.667px; margin:0px; font-size:16px" align=justify>(Registrant)</P>
</TD></TR>
<TR><TD valign=top width=289.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=349.2 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=289.2><P style="line-height:18.667px; margin:0px; font-size:16px" align=justify>Date:&nbsp;&nbsp;April 2, 2007</P>
</TD><TD valign=top width=48><P style="line-height:18.667px; margin:0px; font-size:16px" align=justify><B>By:</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=301.2><P style="line-height:18.667px; margin:0px; font-size:16px" align=justify><B><I>&#147;Christopher J. Bradbrook&#148;</I></B></P>
</TD></TR>
<TR><TD valign=top width=289.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=48><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=301.2><P style="line-height:18.667px; margin:0px; font-size:16px" align=justify>Christopher J. Bradbrook,</P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=justify>President and Chief Executive Officer</P>
</TD></TR>
</TABLE>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>materialchange.htm
<DESCRIPTION>MATERIAL CHANGE REPORT
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>FG Filed By Filing Services Canada Inc.&nbsp; 403-717-3898</TITLE>
<META NAME="author" CONTENT="John Pitcher">
<META NAME="date" CONTENT="04/02/2007">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<P style="margin:0px" align=right><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=center><FONT FACE="Book Antiqua"><B>Form 51-102F3</B></FONT></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=center><B><I>Material Change Report</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 1:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Name and Address of Company</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">New Gold Inc. (the &#147;Company&#148;)</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Suite 601, 595 Howe Street</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Vancouver, B.C.</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">V6C 2T5</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Telephone:</P>
<P style="line-height:17.333px; margin:0px; text-indent:192px; font-family:Book Antiqua; font-size:14.667px">(604) 687-1629</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Or</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-family:Book Antiqua; font-size:14.667px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;:</P>
<P style="line-height:17.333px; margin:0px; text-indent:192px; font-family:Book Antiqua; font-size:14.667px">(877) 977-1067</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 2:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Date of Material Change</B></P>
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<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">April 2, 2007</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 3</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px">:</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>News Release</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px" align=justify>The news release was dated April 2, 2007 and was released to The Toronto Stock Exchange and through various other approved public media and was SEDAR filed with all relevant securities commissions in Canada.</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 4</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px"><B>:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Summary of Material Change</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">A summary of the material change is as follows:<FONT FACE="Times New Roman"> </FONT></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px">The Company announced the results of the Feasibility Study (&#147;FS&#148;) conducted on its 100% New Afton Copper-Gold Project, located 10 kilometres west of Kamloops, British Columbia. </P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Potential to develop an underground block cave, Cu-Au mine, with maximum mining rate of 4 million tonnes per year (11,000 tonnes per day).</FONT></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Reserves containing almost 1 billion pounds of Cu, more than 1 million ounces of Au, and more than 3 million ounces of Silver (Ag).</FONT></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Initial 12 year mine life.</FONT></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Maximum annual Au production of more than 100,000 ounces, and averaging 82,000 ounces.</FONT><SUP>1</SUP></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Maximum annual Cu production of more than 87 million pounds, and averaging 78 million pounds.</FONT><SUP>1</SUP></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Potentially one of Canada&#146;s lowest cost Au producers, with cash costs of negative $852 per ounce (net of Cu and Ag credits)</FONT><SUP> 1,2 </SUP></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Cu cash costs of production of $0.58 per pound (net of Au and Ag credits).</FONT><SUP> 1,2</SUP></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Maximum pre-tax cash flow of more than $120 million per year, and averaging approximately $110 million.</FONT><SUP>1,2</SUP></P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="margin:0px" align=justify><BR></P>
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<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Initial Capital Expenditures of $268 million, and additional Life of Mine expenditures of $215 million. &nbsp;</FONT></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Potential to start production in 2009</FONT></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14.667px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:17.333px; margin:0px; padding-left:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">Pre-tax net present value, at discount rates of 0% and 5%, estimated at $614 million and $266 million, respectively.</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; padding-left:24px; font-family:Book Antiqua; font-size:14.667px" align=justify><SUP>1</SUP> Average of complete years (2012-2020) at full production rate (4 million tonnes per year) </P>
<P style="line-height:17.333px; margin:0px; padding-left:24px; font-family:Book Antiqua; font-size:14.667px" align=justify><SUP>2</SUP> 3 Year (2 Jan 2004 &#150; 1 Jan 2007) Trailing average LME spot prices &#150; Cu $2.01; Au $487; Ag $8.54</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 5</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px"><B>:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Full Description of Material Change</B></P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>FEASIBILITY STUDY BACKGROUND</B></P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The FS was carried out by a team which included, and was coordinated by, Hatch Ltd. (&quot;Hatch&quot;) which completed the processing and surface infrastructure engineering components of the study. Mine planning and reserves were completed by AMC Consultants Pty. Ltd. (&quot;AMC&quot;), and Scott Wilson Roscoe Postle Associates Inc. (&quot;Scott Wilson RPA&quot;) completed the geology and resource sections. Environmental services and permitting were completed by Rescan Environmental Services Ltd. (&quot;Rescan&quot;). The Tailings disposal analysis was completed by Vector Engineering Inc. (&#147;Vector&#148;). &nbsp;The groundwater modeling was carried out by Piteau Associates Engineering Ltd. (&#147;Piteau&#148;). &nbsp;The purpose of the FS was to determine the potential for, and the technical and economic parameters of, developing the New Afton Project into a new bulk underground mini
ng operation. </P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The New Afton FS was co-ordinated by Mr. John Shillabeer. P.Eng., of Hatch (who is a Qualified Person under National Instrument 43-101), and the technical content of the news release was reviewed and approved by him. &nbsp;A NI 43-101 compliant Technical Report (&#147;The Technical Report&#148;), summarizing the FS, will be filed on SEDAR as soon as possible. &nbsp;It should be noted that the capital cost estimate, operating cost estimate, and economic analysis described are subject to important qualifications, assumptions and exclusions, all of which will be set out in the Technical Report. &nbsp;To fully understand the cost estimates and economic analysis the Technical Report should be read in its entirety.</P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>PROJECT SUMMARY</B></P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The New Afton Project is host to a Cu-Au porphyry, which is among the highest grade in the world of this deposit type. &nbsp;It is the site of a former open pit Cu-Au operation (the Afton Mine) which operated from 1978 to 1987, producing approximately 500 million pounds of Cu, 500,000 ounces of Au, and 3 million ounces of Ag. &nbsp;In 1999 New Gold acquired the mineral rights through staking. &nbsp;An exploration program from 2000&#150;2003 outlined an extensive body of high grade Cu-Au porphyry style mineralization, which a 2004 Scoping Study indicated had the potential to become a new underground mine. &nbsp;A 2005 underground exploration program completed more than 2 kilometers of tunneling, which provided access to complete infill drilling and conduct geotechnical analysis. &nbsp;The data gained from this work was used to undertake the FS, which commenced at the end of 2005.</P>
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<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 2 -</FONT></P>
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<P style="line-height:18.667px; margin:0px; font-size:16px; page-break-before:always" align=justify>&nbsp;</P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">The FS has confirmed that the New Afton Project is economically and technically feasible as an underground block cave mine. &nbsp;Access will be by ramp from surface. &nbsp;The initial construction period will be approximately 2 years in order to reach commercial production in the second half of 2009. &nbsp;Upon start-up, production will be at an annualized rate of 1.6 million tonnes per year for 2 years. &nbsp;During this time ore will be trucked to surface and processed on site to produce a concentrate, which will be transported by rail, either to smelters in Eastern Canada, or to Vancouver and then by ship to smelters in Asia. &nbsp;Once the ramp-up period is complete the full production rate will be 4 million tonnes per year, making it one of Canada&#146;s largest underground metals mines (based on ore production rate). &nbsp;From that time onward, ore will b
e crushed underground before being transported to surface by conveyor. &nbsp;For the entire mine life, tailings will be deposited in a new facility, constructed from cycloned tailings. &nbsp;Water will be supplied initially from the Afton open pit, and thereafter from Kamloops Lake to the north.</FONT></P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The mine plan is based around 3 cave blocks. &nbsp;Mining will commence from the central block (block 2), as this will allow time to remove water from, and stabilize accumulated rock debris at the bottom of, the Afton pit. &nbsp;The eastern and western blocks 1 and 3 will be mined simultaneously.</P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>In order to be in a position to expedite development, Cementation Canada Inc., who has been appointed as the underground mining contractor, is currently mobilizing to site, and is scheduled to commence underground work at the beginning of April. &nbsp;In addition, the Company has commenced the process of ordering the longest lead-time item, which is the 11,000 tonne per day SAG Mill, by committing to the principal components by making required cash payments.</P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>PROJECT ANALYSIS</B></P>
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<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The FS uses the 3-year trailing (2/1/04 to 1/1/07) average LME spot metal prices and exchange rates for the economic analysis, which are Cu US$2.01/lb; Au US$487/oz; and Ag US$8.54/oz, and a CDN:US$ exchange rate of 0.82 (and is based on constant dollars without escalation).</P>
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<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 3 -</FONT></P>
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<P style="margin:0px" align=justify>&nbsp;</P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 1</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Economic Summary</B></P>
<P style="margin:0px" align=center>(All dollar amounts in US$)</P>
<P style="margin:0px" align=center><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=295.2></TD><TD width=295.2></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-top:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><FONT FACE="Arial"><B>Assumptions</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Copper Price (US$/lb)<SUP>1</SUP></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$2.01</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Gold Price (US$/oz)<SUP> 1</SUP></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$487</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Silver Price (US$/oz)<SUP> 1</SUP></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$8.54</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>CDN$:US$ Exchange Rate<SUP>1</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.82</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Financial Results</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Internal Rate of Return (pre-tax)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>13.6%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Internal Rate of Return (after tax)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>10.4%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>NPV 0% discount (pre-tax)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$614 million</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>NPV 5% discount (pre-tax)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$266 million</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Cash Flow</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Average Annual (pre-tax) cash flow<SUP>2</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=295.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$108 million</P>
</TD></TR>
</TABLE></center>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><FONT FACE="Times New Roman"><SUP>1</SUP></FONT> 3 year (2 Jan 2004 &#150; 1 Jan 2007) trailing average LME spot prices</P>
<P style="margin:0px" align=justify><SUP>2</SUP> Average of complete years (2012 &#150; 2020) at full production rate (4 million tonnes per year)<BR>
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<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 4 -</FONT></P>
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<P style="line-height:18.667px; margin:0px; font-size:16px; page-break-before:always" align=justify>&nbsp;</P>
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<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 2</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Production Summary</B></P>
<P style="margin:0px" align=center>(All dollar amounts in US$)</P>
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<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=196.8></TD><TD width=196.8></TD><TD width=81.6></TD><TD width=115.2></TD></TR>
<TR><TD style="border:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Units</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Amount</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Mine Description</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Mine Life</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Years</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>12</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Pre-Production Capital Cost</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$millions</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$268</P>
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<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Expansion and &nbsp;LOM Capital Cost</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$millions</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$215</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Mine Production</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Total Ore Tonnage Milled</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Millions of Tonnes</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>44.4</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Annual Mill Throughput<SUP>1</SUP></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Millions of Tonnes per Year</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>4.0</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Daily Mill Throughput<SUP>1</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Tonnes per Day</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>11,000</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Average Metal Production<SUP>1</SUP></B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>LOM<SUP>2</SUP></B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>Full Production<SUP>1</SUP></B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Cu</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Thousands of Pounds/year</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>70,000</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>78,000</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Au</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Ounces/year</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>74,000</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>82,000</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Ag</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Ounces/year</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>204,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>240,000</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Maximum Metal Production</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Cu</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Thousands of Pounds/year</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>87,000</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Au</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Ounces/year</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>102,000</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Ag</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>Ounces/year</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>324,000</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Unit Operating Costs</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>LOM<SUP>2</SUP></B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>Full Production<SUP>1</SUP></B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Mining </P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$/t</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$4.21</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$3.72</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Processing</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$/t</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$3.55</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$3.20</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>G&amp;A</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$/t</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.89</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$0.79</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Utilities</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$/t</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1.82</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$1.72</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Total</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$/t</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$10.47</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$9.43</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Cash Operating Costs<SUP>1</SUP></B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>LOM<SUP>2</SUP></B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>Full Production<SUP>1</SUP></B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Cu<SUP>3</SUP></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$/pound</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.64</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>$0.58</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Au<SUP>4</SUP></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=196.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$/oz</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=81.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>(790)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>($852)</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=196.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=81.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE></center>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><FONT FACE="Times New Roman"><SUP>1</SUP></FONT> Average of &nbsp;complete years (2012 &#150; 2020) at full production rate (4 million tonnes per year) </P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><SUP>2 &nbsp;</SUP>LOM = Life of Mine which &nbsp;Includes First 2 years at 1.6 million tonnes per year</P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><SUP>3</SUP> Net of precious metal credits. &nbsp;</P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><SUP>4</SUP> Net of copper and silver credits</P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="margin:0px; font-family:Book Antiqua" align=justify>The results of the metals price sensitivity analyses are illustrated below.</P>
<P style="margin:0px" align=justify><BR><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 5 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 3</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Metals Price Sensitivity<SUP>1</SUP></B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>(US$)</B></P>
<P style="margin:0px" align=justify><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=65.6></TD><TD width=109.6></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD></TR>
<TR><TD style="border:1px solid #000000" valign=top width=65.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Cu</B></FONT></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>US$/lb</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=109.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Gold US$/oz</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify><B>Silver US$/oz</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$450</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$8.00</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$500</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$9.00</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$525</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$10.00</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$550</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$11.00</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$600</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$12.00</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$650</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$13.00</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$700</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$14.00</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" width=65.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$1.50</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=109.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 0% </P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">IRR</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cash Cost Au<SUP>2</SUP></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cash Cost Cu<SUP>3</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$262</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$47</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>6.8%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(417)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.57</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$307</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$76</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>7.8%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(419)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.52</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$330</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$90</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8.3%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(422)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.49</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$354</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$105</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8.8%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(424)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.46</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$399</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$134</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>9.7%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(427)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.40</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$444</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$162</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>10.6%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(429)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.35</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$489</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$191</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>11.5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(432)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.29</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" width=65.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$1.75</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=109.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 0% </P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">IRR</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cash Cost Au<SUP>2</SUP></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Cash Cost Cu<SUP>3</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$415</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$142</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>10.0%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(595)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.63</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$460</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$170</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>10.8%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(598)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.58</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$484</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$185</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>11.3%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(600)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.55</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$507</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$200</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>11.8%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(603)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.52</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$552</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$229</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>12.6%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(605)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.46</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$597</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$257</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>13.5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(607)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.40</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$642</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$286</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>14.3%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(610)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.35</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" width=65.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$2.00</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=109.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 0% </P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">IRR</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cash Cost Au<SUP>2</SUP></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Cash Cost Cu<SUP>3</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$574</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$241</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>12.9%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(781)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.68</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$619</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$269</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>13.7%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(783)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.63</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$643</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$284</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>14.1%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(785)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.60</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$666</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$299</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>14.6%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(788)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.57</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$712</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$327</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>15.3%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(790)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.51</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$757</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$356</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>16.1%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(793)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.46</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$802</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$384</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>16.9%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(795)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.40</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" width=65.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$2.50</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=109.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 0% </P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">IRR</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cash Cost Au<SUP>2</SUP></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Cash Cost Cu<SUP>3</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$935</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$464</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>18.6%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,200)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.74</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$980</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$492</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>19.4%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,202)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.68</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,003</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$507</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>19.7%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,205)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.65</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,027</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$522</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>20.1%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,207)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.62</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,072</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$551</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>20.7%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,210)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.56</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,117</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$579</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>21.4%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,212)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.51</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,162</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$608</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>22.0%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,215)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.45</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" width=65.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$3.00</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=109.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 0% </P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">NPV @ 5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">IRR</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cash Cost Au<SUP>2</SUP></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Cash Cost Cu<SUP>3</SUP></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,295</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$687</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>23.6%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,619)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.79</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,340</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$716</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>24.2%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,622)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.73</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,364</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$731</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>24.5%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,624)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.70</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,387</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$746</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>24.8%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,627)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.67</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,433</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$774</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>25.4%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,629)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.62</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,478</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$802</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>26.0%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,632)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.56</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$1,523</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$831</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>26.6%</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$(1,634)</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$0.50</P>
</TD></TR>
</TABLE></center>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><FONT FACE="Times New Roman"><SUP>1</SUP></FONT> NPV&#146;s and IRR&#146;s all pre-tax. &nbsp;All dollar amounts in US$</P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><SUP>2</SUP> Life of Mine Net of Cu and Ag credits (US$/oz)</P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><SUP>3</SUP> Life of Mine Net of Au and Ag credits (US$/oz)</P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify>&nbsp;</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>MINERAL RESOURCE ESTIMATE</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>All Mineral Resources were estimated by Qualified Person (under National Instrument 43-101) &nbsp;David Rennie of Scott Wilson RPA. &nbsp;The Measured and Indicated resource, which was used as the basis for estimating the reserve, was released on September 21, 2006. This estimate was made by Ordinary Kriging, and used the information from drilling completed at the project since 2000. &nbsp;This included 90 surface holes, totalling 42,450 metres (m), drilled during the period 2000 to 2003, and 65 underground holes, totalling 25,805m, completed from the exploration decline in 2005. &nbsp;In estimating the resource, the following metal prices were used - Copper (Cu) US$1.20/lb; Gold (Au) US$450/oz; and Silver (Ag) US$5.25/oz.</P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify>&nbsp;&nbsp;&nbsp;</P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Mineralization, in the Measured and Indicated categories, occurs over a length of approximately 1000m, to a depth of approximately 800m below surface, with the bulk of it contained within a Main Zone trending southwest, and which averages approximately 100m in </P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 6 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px" align=justify>&nbsp;</P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">width and 350m in height. &nbsp;In places, the width and height of mineralization can reach in excess of, respectively, 150m and 500m. &nbsp;Smaller amounts of mineralization are present in parallel lenses (&#147;Hanging Wall Lenses&#148;) to the south of the Hanging Wall Fault . &nbsp;</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>This resource estimate has been constrained within mineralogical and geological boundaries. &nbsp;Mineralization occurs within a structural corridor outlined by the well-defined Hanging Wall Fault (to the south), and the less well-defined Footwall Fault (to the north). &nbsp;In places the Hanging Wall Fault truncates the mineralization. &nbsp;The boundaries of the mineralization are generally clearly defined between the higher grades of the resource and distinctly lower grades of the surrounding rocks. &nbsp;This lower grade enveloping mineralization was not included within the resource estimate, as it was considered unlikely that it would become economic at any currently reasonable metal price assumptions. &nbsp;Three zones of mineralization were noted &nbsp;&#150; 1) Hypogene<B> </B>(primary mineralization), with chalcopyrite and lesser bornite being the dominant Cu-bearing minerals; 2)
 Mesogene, where chalcocite is the dominant Cu-bearing mineral with lesser chalcopyrite; and 3) Supergene, where native Cu, and minor chalcocite, is present. &nbsp;Hypogene comprises approximately 52% of the total resource tonnage, Mesogene 39%, and Supergene 9%.</P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>&nbsp;</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 4</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Measured And Indicated Resource &#150; Main Zone and Hanging Wall Lenses</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Cu - $1.20/lb; Au - $450/oz; Ag - $5.25/oz</B></P>
<P style="margin:0px" align=center><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=91.2></TD><TD width=96></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD><TD width=60></TD><TD width=96></TD></TR>
<TR><TD style="border:1px solid #000000" valign=top width=91.2 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Cut-Off (CDN$/T)</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=96 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Tonnage</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>&nbsp;</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=180 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Grades</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=120 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Contained Metal</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=96 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Dollar Value Per Tonne (CDN$)*</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Cu </B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(%)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Au</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>&nbsp;(g/t)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Ag</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>&nbsp;(g/t)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Cu</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(m. lbs)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Au</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(m. oz)</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=583.2 colspan=8><P style="margin:0px; font-family:Arial" align=center><B>Measured Resource</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=91.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$15</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>39,870,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.18</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.87</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>2.79</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1,035</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.115</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>39.35</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=91.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$10</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>43,250,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.12</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.83</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>2.68</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1,065</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.154</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>37.26</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=583.2 colspan=8><P style="margin:0px; font-family:Arial" align=center><B>Indicated Resource</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=91.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$15</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>18,780,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.93</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.73</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>2.60</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>385</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.440</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>31.37</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=91.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$10</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>22,410,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.84</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.66</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>2.42</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>415</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.476</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>28.34</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=583.2 colspan=8><P style="margin:0px; font-family:Arial" align=center><B>Measured and Indicated Resource</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=91.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$15</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>58,640,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.10</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.83</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>2.73</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1,420</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.555</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>36.79</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=91.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$10</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>65,660,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.02</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.77</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>2.59</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1,480</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.630</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=96><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>34.22</P>
</TD></TR>
</TABLE></center>
<P style="line-height:14.667px; margin:0px; padding-left:36px; text-indent:-36px; font-size:12px"><FONT FACE="Times New Roman">* &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- &nbsp;Recovered value, assuming metallurgical recoveries of 90% for Cu and Au, and 75% for Ag, and a CDN$:US$ Exchange Rate of 0.88</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify>Subsequently (on March 20, 2007) the Company released an Inferred resource for mineralization outlined vertically below the Main Zone resource described previously. &nbsp;This mineralization is called the <B>C Zone</B>. &nbsp;This Inferred resource was estimated from the results of 11 underground diamond drill holes and 1 surface hole. &nbsp;The mineralization is all Hypogene, or primary, with chalcopyrite being the dominant Cu-bearing mineral. &nbsp;The drill density was sufficient only to place the resource in the Inferred category. &nbsp;Additional infill drilling will be required to increase the confidence level in the resource and upgrade it to the Indicated and/or Measured categories.</P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 7 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:17.333px; margin:0px; font-size:14.667px; page-break-before:always" align=center><B>Table 5</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>C Zone Inferred Resource</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>At $1.20 Cu, $450 Au, and $5.25 Ag</B></P>
<P style="margin:0px" align=center><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=79.2></TD><TD width=84></TD><TD width=48></TD><TD width=48></TD><TD width=48></TD><TD width=60></TD><TD width=60></TD><TD width=98.933></TD></TR>
<TR><TD style="border:1px solid #000000" valign=top width=79.2 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Cut-Off (CDN$/T)</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=84 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Tonnage</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=144 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Grades</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=120 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Contained Metal</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=98.933 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Dollar Value Per Tonne (CDN$)*</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Cu</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(%)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Au (g/t)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Ag (g/t)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Cu</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(m. lbs)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Au</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(m. oz)</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=79.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$15</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>6,590,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.10</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.97</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.75</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>160</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.206</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=98.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>39.41</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=79.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>$10</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>7,940,000</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.96</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.88</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=48><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1.55</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>168</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>0.225</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=98.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>34.89</P>
</TD></TR>
</TABLE></center>
<P style="line-height:14.667px; margin:0px; font-size:12px"><FONT FACE="Times New Roman">* Recovered value, assuming metallurgical recoveries of 90% for Cu and Au, and 75% for Ag,</FONT></P>
<P style="line-height:14.667px; margin:0px; padding-left:12px; font-size:12px">and a CDN$:US$ Exchange Rate of 0.88</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The C Zone mineralization is contained within 2 separate blocks (east and west) which cover a combined total strike length of approximately 700 metres (m), and each of which has a maximum vertical extent of more than 300m. &nbsp;The lower limit of the mineralization is constrained by available information, and it remains open at depth. &nbsp;Additional drilling below the resource is required to determine the true extent of the C Zone. &nbsp;The Company is currently assessing potential options to conduct this work. &nbsp;Relative to the Main Zone, the C Zone has higher gold grades, but lower copper grades.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Of the 2 blocks, the western one is the more significant with greater widths and higher grades. &nbsp;The eastern block is separated from the Main Zone, while the western block is, in places, contiguous with the Main Zone.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>MINERAL RESERVE ESTIMATE</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Reserves were estimated by Qualified Person (under National Instrument 43-101) Mike Thomas MAusIMM(CP) of AMC, and utilized the Measured and Indicated resource model described above. &nbsp;The starting point for estimating the reserve was an analysis of the mineralization contained within the resource model (excluding the C Zone), which AMC broke down into the following components &#150; East Block, West Block, and Pit Protection Pillar in the Main Zone, and the Hanging Wall Lenses - as illustrated in attached plan view of resource block model (Figure 2). &nbsp;To this breakdown, AMC applied knowledge gained from all geotechnical data, in addition to geological interpretations of faults and other structures. &nbsp;In estimating the reserves, the following metal prices were used - Copper (Cu) US$1.45/lb; and Gold (Au) US$475/oz.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>As the Hanging Wall Lenses are lower grade, isolated from the Main Zone and would require separate underground infrastructure, they were not considered in the FS. &nbsp;The Main Zone was split into the east and west blocks by an area of lower grade mineralization that was not included in the reserve. &nbsp;A decision was made to leave a pillar under the west area of the pit (Pit Protection Pillar), as the mineralization was slightly lower grade than the bulk of the main zone and, because of its higher elevation, could not easily be recovered within the same block cave panel as the East Block (Block 1). &nbsp;This pillar was not considered in the reserve estimation.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 8 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-size:16px; page-break-before:always" align=justify>&nbsp;</P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><FONT FACE="Book Antiqua">AMC determined that the Main Zone mineralization could be mined as three cave areas, Block 1 (B1) and Block 2 (B2), separated by a low-grade pillar would have the same cave base, whilst Block 3 (B3) would have its base at a lower elevation.</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>To enable a single cut-off parameter to be used when selecting the economic parts of the resource to be mined, AMC estimated the theoretical value (Value) received for concentrate produced from each tonne of resource, assuming that the concentrate is sold at the mine gate. All costs and losses incurred in the off-site transportation and processing of concentrate being the responsibility of the buyer. </P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The block caving method requires the orebody to be undercut enabling the ore to collapse and fragment (cave) into underlying drawpoints where it is extracted. &nbsp;The shape and size of the area to be undercut (the footprint) was determined by comparing a nominated cost of establishing each drawpoint (CDN$300,000) with the total recoverable value of the overlying column of ore, after deducting mining, processing and all other site costs. The footprint was designed to encompass those drawpoints with a positive net value and, where necessary, a number of sub-economic drawpoints to ensure that the undercut area was large enough to cave, (determined by geotechnical investigations as being an area with a minimum span in any direction of approximately 95m). &nbsp;</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>As a result of establishing the most suitable block cave footprints, some areas of remnant mineralization remain beneath the cave outlines, and were, therefore, not included in the reserve. &nbsp;</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>To determine the heights of the caved ore columns, AMC used two separate simulation programs (Cave-Sim, and PC-BC). on the block model, analyzing individual columns with a base area of 13m x 13m. These programs model the progressive mixing of various mineralized and unmineralized materials within the cave as the orebody is mined. &nbsp;Once the value of the ore being extracted from the drawpoint reached less than CDN$15 per tonne the programs determined the cave column had been drawn to its maximum economic height (at the metal prices used in the reserve calculation) and the drawpoint was closed. </P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The mineral reserve estimate is summarized below and results from mixing of measured and indicated resources with dilution from low-grade and barren material from within the cave outline and from the overlying material entering from above. &nbsp;The reserve also takes account of mineralized material that would be uneconomic to recover at the metal prices used for the reserve estimation and would remain in the cave. &nbsp;The net effect is a dilution of approximately 15% of the original mineral resource within the cave outlines.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">- 9 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 6</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Mineral Reserve Estimate<SUP>1</SUP></B></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><B>At $1.45 Cu, $475 Au, and $8.00 Ag</B></P>
<P style="margin:0px" align=center><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=89.667></TD><TD width=90.667></TD><TD width=74.333></TD><TD width=74.333></TD><TD width=62.333></TD><TD width=62.333></TD><TD width=62.333></TD><TD width=74.4></TD></TR>
<TR><TD style="border:1px solid #000000" valign=top width=89.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=90.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=211 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Grade</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=199.067 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Contained Metal</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=89.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=90.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Tonnes</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(millions)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=74.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Cu</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(%)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=74.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Au</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(g/t)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=62.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Ag</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>(g/t)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=62.333><P style="margin:0px" align=center><FONT FACE="Times New Roman"><B>Cu</B></FONT></P>
<P style="margin:0px" align=center><B>(m. lbs)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=62.333><P style="margin:0px" align=center><B>Au</B></P>
<P style="margin:0px" align=center><B>(m. oz)</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=74.4><P style="margin:0px" align=center><B>Ag</B></P>
<P style="margin:0px" align=center><B>(m. oz)</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=89.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Probable Ore Reserve</B></FONT></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" width=90.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>44.4</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" width=74.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>0.98</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" width=74.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>0.72</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" width=62.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2.27</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" width=62.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>960</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" width=62.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>1.03</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" width=74.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>3.24</P>
</TD></TR>
</TABLE></center>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><FONT FACE="Times New Roman"><SUP>1</SUP></FONT> Estimated using a cut-off Value of CDN$15/t ore</P>
<P style="margin:0px; font-family:Book Antiqua" align=justify>&nbsp;</P>
<P style="margin:0px; font-family:Book Antiqua" align=justify>&nbsp;</P>
<P style="margin:0px; font-family:Book Antiqua" align=justify>Metal prices, metallurgical recoveries, transportation and treatment charges used in the estimation are shown in the tables 7 and 8.</P>
<P style="margin:0px" align=center><BR></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px; page-break-before:always" align=center><B>Table 7</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>&nbsp;Metallurgical Recoveries and Concentrate Grade Used to Estimate the Mineral Reserve</B></P>
<P style="margin:0px" align=center><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=193.867></TD><TD width=100.067></TD><TD width=84.933></TD><TD width=84.867></TD><TD width=85.2></TD></TR>
<TR><TD style="border:1px solid #000000" valign=bottom width=193.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Units</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=center><B>Hypogene</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.867><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=center><B>Mesogene</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=85.2><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=center><B>Supergene</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=193.867><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Metallurgical Recovery Cu</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>92.7%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.867><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>88.1%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=85.2><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>79.5%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=193.867><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Metallurgical Recovery Au</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>89.0%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.867><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>83.1%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=85.2><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>68.8%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=193.867><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Concentrate Grade</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>Cu%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>27.0%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.867><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>27.6%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=85.2><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>58.1%</P>
</TD></TR>
</TABLE></center>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><FONT FACE="Times New Roman"><B>Table 8</B></FONT></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:7.333px; font-size:14.667px" align=center><B>Metal Prices and Other Parameters Used to Estimate the Mineral Reserve</B></P>
<center><TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=213.067></TD><TD width=100.067></TD><TD width=84.933></TD></TR>
<TR><TD style="border:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px"><FONT FACE="Arial"><B>Parameter</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=center><B>Units</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=center><B>Value</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Moisture Content</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>8.0%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Exchange Rate</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">CDN$ : US$</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$0.88</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Copper Price</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US$/lb</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$1.45</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Gold Price</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US$/oz</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$475.00</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Concentrate Transport</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">CAN$/t (wet)</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$54.00</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Concentrate Shipping</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US$/t (wet)</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$40.00</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Concentrate Treatment</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US$/t (wet)</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$80.00</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Cu Refining</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US$/lb</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$0.08</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Payable Copper</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>96.6%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Payable Gold</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>97.1%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Copper Price Participation* </P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US cents/lb</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>2.5</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Arsenic**</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US$/dmt</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$2.50</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=213.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">Mercury***</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=100.067><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px">US$/dmt</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=84.933><P style="line-height:14.667px; margin-top:2px; margin-bottom:2px; font-family:Arial; font-size:12px" align=right>$2.00</P>
</TD></TR>
</TABLE></center>
<P style="margin:0px"><BR></P>
<P style="line-height:13.333px; margin-top:0px; margin-bottom:-13.333px; padding-left:37.8px; text-indent:-1.8px; font-family:Book Antiqua; font-size:10.667px"><FONT FACE="Book Antiqua">Notes:</FONT></P>
<P style="line-height:13.333px; margin:0px; padding-left:37.8px; text-indent:58.2px; font-family:Book Antiqua; font-size:10.667px">The contribution to ore value from silver is small and has been excluded from the estimation process.<BR>
*Copper price participation = 10% above a threshold price of US1.20 per lb.<BR>
**Arsenic penalty= US $2.50 per dmt of concentrate for each 0.1% over 0.2%<BR>
***Mercury penalty = US $2.00 per dmt of concentrate for each 10 ppm over 10 ppm.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">-
10 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify>The Measured and Indicated Resources lying within the vertical projection of the footprint that are expected to cave are shown in Table 9. No inferred resources are included in the outline.</P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center>&nbsp;</P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 9</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:7.333px; font-size:14.667px" align=center><B>Mineral Resources Contained Within the Vertical Projection of the Cave Footprint</B></P>
<center><TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=185.6></TD><TD width=104></TD><TD width=85></TD><TD width=75.6></TD><TD width=75.6></TD></TR>
<TR><TD style="border:1px solid #000000" valign=bottom width=185.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Mineral Resource Category</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=104><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Tonnes<BR>
(millions)</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=85><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Cu<BR>
(%)</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Gold<BR>
(g/t)</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Silver<BR>
(g/t)</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=bottom width=185.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Measured </B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=104><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>31.4</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=85><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>1.22 </P>
</TD><TD style="border-right:1px solid #000000" valign=top width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>0.89 </P>
</TD><TD style="border-right:1px solid #000000" valign=bottom width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2.75 </P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=bottom width=185.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Indicated </B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=104><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>8.9 </P>
</TD><TD style="border-right:1px solid #000000" valign=top width=85><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>0.83 </P>
</TD><TD style="border-right:1px solid #000000" valign=top width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>0.73 </P>
</TD><TD style="border-right:1px solid #000000" valign=bottom width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2.50 </P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=185.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Inferred </B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=104><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>- &nbsp;&nbsp;</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=85><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=185.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Total</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=104><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>40.2*</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=85><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>1.13 </P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>0.86 </P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=75.6><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2.69 </P>
</TD></TR>
</TABLE></center>
<P style="line-height:normal; margin:0px; text-indent:37.8px; font-family:Book Antiqua; font-size:16px"><FONT FACE="Book Antiqua">* </FONT><SMALL>Totals do not equal the sum of the components because of rounding adjustments<BIG> </P>
</big></small>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Although a large volume of mineralization encompassed by the projected footprint has a Measured Resource classification, a Probable Reserve classification has been assigned because of the uncertainty in predicting the material movement within the cave and the absence of any historical information to provide a reconciliation of actual versus forecast grades to provide more detailed guidance. &nbsp;Also, a large quantity of indicated resource and unclassified material mixes with the measured resource within the cave. As it is not possible to mine the measured resource separately from this material, the effect is to lower the classification of the total reserve. This is not unusual practice when completing reserve estimates for block cave mines.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>METALLURGY</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The processing facilities have been designed to treat 4.0 million tonnes per year and recover copper, gold and silver values. A conventional crushing, grinding, gravity concentration and flotation circuit has been designed utilizing standard unit processes and equipment. &nbsp;The process design criteria have been based on a combination of testwork results, experience from similar operations and industry practice.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>A concentrate containing Cu, Au, and Ag will be produced on site at the New Afton Project. &nbsp;The metallurgical characteristics of the various ore types (Supergene, Mesogene and Hypogene) are summarized in Table 10 below.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Penalty elements (Arsenic and Mercury) are associated with the Mesogene and Supergene mineralization which are located within the eastern block (#1). &nbsp;The Hypogene ore of the central and western blocks (#&#146;s 2 and 3) do not contain any meaningful quantities of these penalty elements. &nbsp;The mine plan is designed to have Block 1 mined simultaneously with Block 3 such that the blend of the various ore types reduces the concentration of penalty elements.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>With the FS now complete, the Company will engage in more detailed discussions with smelters in order to secure off-take arrangements for the concentrate.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">-
11 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px" align=center>&nbsp;</P>
<SMALL><BIG>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 10</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Metallurgical Characteristics of Ore Types</B></P>
<P style="margin:0px" align=center><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=139.2></TD><TD width=65.333></TD><TD width=115></TD><TD width=105.8></TD><TD width=106.733></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-top:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=65.333 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Average LOM</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=327.533 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Ore Type</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=139.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Hypogene</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=105.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Mesogene</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=106.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Supergene</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Recoveries</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=65.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=115><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=105.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=106.733><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=65.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=115><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=105.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=106.733><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cu recovery (%)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=65.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>87.4%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>90.2%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=105.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>86.6%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=106.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>67.3%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Au recovery (%)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=65.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>85.9%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>88.9%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=105.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>83.2%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=106.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>68.7%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=139.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Ag recovery (%)</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=65.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>75.8%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>76.5%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=105.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>77.0%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=106.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>63.8%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Concentrate Grade</B></P>
</TD><TD style="border-right:1px solid #000000" valign=top width=65.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=115><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=105.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=106.733><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=65.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=115><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=105.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=106.733><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000" valign=top width=139.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Cu (%)</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=65.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>27.6%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=115><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>27.4%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=105.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>26.5%</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=106.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>58.1%</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=139.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Moisture Content (%)</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=65.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8.0%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=115><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8.0%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=105.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8.0%</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=106.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8.0%</P>
</TD></TR>
</TABLE></center>
<P style="margin:0px" align=justify><BR></P>
</big></small>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>INFRASTRUCTURE</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The surface infrastructure and facilities will be located in a relatively flat area to the west of the Afton open pit and will be connected by a 2 km road to an existing junction on the Trans-Canada Highway. There will be three major buildings and a number of smaller structures. Power will be supplied by a 300m connection to the BC Hydro 138 kV grid located to the north of the Trans-Canada Highway.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The mill will initially utilize water stored on site in the Afton and Pothook open pits, which will last approximately two years. Fresh water will initially be pumped from Kamloops Lake via an existing pump station and pipeline for potable use and then as process make up water once on-site sources are depleted. </P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Water and tailings management have been designed to achieve zero discharge from the site. The existing Afton pit and future cave provide a sink for groundwater run off and seepage collection.</P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>&nbsp;</P>
<P style="margin:0px" align=justify>&nbsp;</P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">-
11 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>PERMITTING</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Earlier this year New Gold submitted the formal Mines Permit application. &nbsp;The application was made under the Mines Act (BC), and is for the approval of both the Mine Plan and Reclamation Program. The Mines Act review and approval process is administered through the multi-agency South-Central Mine Development Review Committee (&quot;SCMDRC&quot;) which is responsible for coordinating the permitting requirements of its member agencies. The application is currently being reviewed by these agencies. In addition, presentations have been made to the local First Nations, and to the public. At the conclusion of this review period, the SCMDRC will prepare a recommendation report which will be submitted to the Chief Inspector of Mines for a permit decision. Additional permits which are required as project construction moves forward will be applied for as necessary.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The permit application process is continuing well. &nbsp;Currently, the Company is addressing the questions which have been put forward by various parties, including relevant government agencies. &nbsp;In addition, the Government of B.C. is conducting its required consultations with the local First Nations communities (Kamloops Indian Band and Skeetchestn Indian Band).</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>CAPITAL COSTS</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>The capital costs for the development of the project can be broken down into three distinct phases as shown in Table 11: Pre-Production (approximately 24 months), Expansion to 4.0 mtpa production (approximately 24 months) and sustaining for the remainder of the mine &nbsp;life.</P>
<P style="margin:0px" align=center><BR></P>
<SMALL><BIG>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Table 11</B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>Capital Cost Components <SUP>2,3</SUP></B></P>
<P style="line-height:17.333px; margin:0px; font-size:14.667px" align=center><B>US$ millions</B></P>
<P style="margin:0px"><BR></P>
<center><TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=247.2></TD><TD width=108></TD><TD width=84></TD><TD width=84></TD><TD width=60></TD></TR>
<TR><TD style="border-left:1px solid #000000; border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=247.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><FONT FACE="Arial"><B>Pre-Production</B></FONT></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Expansion</B></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Sustaining</B></P>
</TD><TD style="border-top:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>Total</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=108><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=84><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=84><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Site development, and surface facilities</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>18</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>3</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>21</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Mill</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>49</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>18</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>67</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Electrical power</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>5</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>5</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Tailings facility</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>5</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>13</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Mining development</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>89</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>64</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>61</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>214</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Mining equipment</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>29</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>4</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>8</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>41</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Indirect costs, EPCM, owners costs.</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>44</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>25</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>69</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Closure</P>
</TD><TD valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>9</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>9</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-bottom:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Contingency </P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>30</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>15</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>45</P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-bottom:1px solid #000000" valign=top width=247.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Total<SUP>1</SUP></B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=108><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>268</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>137</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>78</B></P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=60><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><B>484 </B></P>
</TD></TR>
</TABLE></center>
<P style="line-height:normal; margin:0px; font-size:12px" align=justify><FONT FACE="Times New Roman"><SUP>1</SUP></FONT><BIG> <SMALL>Total does not always equal sum of sub-totals due to rounding</P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><SUP>2</SUP> Capital costs do not include $13 million (plus any applicable interest) to be paid to Teck to purchase surface rights, over and to north of potential mine site</P>
<P style="line-height:14.667px; margin:0px; font-size:12px" align=justify><SUP>3</SUP> Assumes constant dollars without escalation and using a $CDN:$US exchange rate of 0.82</P>
</small></big></big></small>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>MINERAL AND SURFACE TENURE</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>New Gold holds the mineral rights to an area totaling 903 hectares, which surrounds the New Afton mineralization as a Mining Lease (Tenure # 546063). &nbsp;The lease is for a 30 year renewable term, and represents the most secure form of mineral tenure in British Columbia. &nbsp;In addition, New Gold holds 100% of the mineral rights as mineral claims in an area totaling approximately 4,462 hectares immediately to the north of the mining lease. &nbsp;Approximately 10 km to the southeast, the Company holds 100% of the mineral rights as mineral claims in the Ajax Property covering an area totaling approximately 6,078 hectares, which surrounds the past-producing Ajax open pit mine.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Earlier this year (January 9, 2007) New Gold announced it had signed a Letter of Intent (&#147;LOI&#148;) with Teck Cominco Limited (&#147;Teck&#148;) to acquire surface rights to more than 4,000 acres of land, encompassing the New Afton Project. &nbsp;This land is located within the Company&#146;s mining lease and mineral claims. &nbsp;It encompasses all of the land south of the Trans-Canada Highway which covers the site for the proposed development of the New Afton Project into an underground mine. &nbsp;Additionally, it includes a large area of land north of the Trans-Canada Highway to Kamloops Lake. &nbsp;The majority of the land is fee simple, meaning that, upon completion of the acquisition, New Gold will own the land outright. &nbsp;The remainder (which overlies the location of most of the surface facilities for the proposed New Afton mine development) is Crown land currently held 
by a Teck subsidiary as a grazing lease. &nbsp;Upon completion of the acquisition, this leased land will be held by New Gold.</P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center>&nbsp;</P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center>&nbsp;</P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">-
12 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>To complete this acquisition New Gold will pay Teck CDN$10 million upon closing, with an additional CDN$6 million to be paid (with applicable interest) any time within 2 years of closing. &nbsp;Teck will also be granted a 2% Net Smelter Return over the New Afton Copper-Gold Project, which New Gold has the option to repurchase for CDN$12 million. &nbsp;Completion of the transaction described in the LOI is subject to definitive documentation, receipt of any necessary regulatory approvals and customary conditions of closing. &nbsp;New Gold and Teck have agreed to work towards this as expeditiously as possible. &nbsp;</P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify>&nbsp;</P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>PROJECT FINANCING</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>On August 16, 2006, New Gold announced that Barclays Capital (&#147;Barclays&#148;) had been appointed as lead arranger for the debt portion of any project financing to develop the New Afton Project into a mine. &nbsp;With the completion of the FS, the Company is now focused on exploring all avenues to secure the financing required to develop the project into a new underground mine, including continuing its discussions with Barclays.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>QUALIFIED PERSONS</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify>Qualified Persons (under National Instrument 43-101) were responsible for the overall content of the various components of the FS. &nbsp;These are listed below (in alphabetical order), and have all read and approved this press release.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Monte Christie</B>, P. E. of Vector Engineering Inc. &#150; responsible for tailings management.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Andrew Holmes</B>, P. Eng. of Piteau Associates Engineering Ltd. &#150; responsible for groundwater modeling.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Ken Major</B>, &nbsp;P. Eng. of Hatch Ltd &#150; responsible for the mineral processing.</P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify>&nbsp;</P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>David Rennie</B>, P. Eng. of Scott Wilson Roscoe Postle Associates Inc. &#150; responsible for geology and resource estimation.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Rolf Schmitt</B>, P. Geo. of Rescan Environmental Services Ltd. &#150; responsible for permitting and environmental.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>John Shillabeer</B>, P. Eng. of Hatch Ltd &#150; responsible for the overall co-ordination and management of the FS.</P>
<P style="line-height:17.333px; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Mike Struthers</B>, C. Eng. MAusIMM, MIEAust, MISRM, of AMC Consultants Pty. Ltd. &#150; responsible for underground geotechnical.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">-
13 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:normal; margin:0px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Mike Thomas</B>, MAusIMM(CP) of AMC Consultants Pty. Ltd. &#150; responsible for mining and reserve estimation.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>OPPORTUNITIES</B></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify>Potential opportunities which have the potential to improve the New Afton project economics include the following. &nbsp;The Company will continue to examine ways in which the project can potentially be improved, optimized and increased in size.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>C Zone Resource</B> &#150; conversion of the Inferred Resource through additional drilling to Measured and/or Indicated classification, which could add additional life, and/or operating flexibility to the operation.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Earlier Ramp Up to 4 Million Tonnes per Year (Mt/y)</B> &#150; the project schedule provides 2 years of lower mill throughput (1.6 Mt/y). &nbsp;If cave initiation and and early operations are sufficiently successful, this ramp up period may be reduced which would bring forward the production rates and revenue associated with the 4 Mt/y levels.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Optimize Cave Draw Schedule</B> &#150; there is scope to further optimize the cave draw schedule to mine higher grade material earlier.</P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px" align=justify><B>Addition of Sub-Level Caving</B> &#150; the resource narrows below the cave outline. &nbsp;Extraction of these resources using sub-level caving after completion of the overlying block cave extraction may be possible, depending on metal price assumptions.</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 6</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px"><B>:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Reliance on subsection 7.1(2) or (3) of National Instrument 51-102</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Not applicable</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 7</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px"><B>:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Omitted Information</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:16px">No information has been intentionally omitted from this form. </P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 8</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:48px; font-family:Book Antiqua; font-size:14.667px"><B>:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Executive Officer</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">The following senior officer of the Company is knowledgeable about the material change and may be contacted by the Commission at the following address:</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Christopher J. Bradbrook</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">President and Chief Executive Officer</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">New Gold Inc. </P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Suite 601, 595 Howe Street</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Vancouver, B.C.</P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">V6C 2T5</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Telephone:</P>
<P style="line-height:17.333px; margin:0px; text-indent:192px; font-family:Book Antiqua; font-size:14.667px">(604) 687-1629</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">Or</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-family:Book Antiqua; font-size:14.667px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;:</P>
<P style="line-height:17.333px; margin:0px; text-indent:192px; font-family:Book Antiqua; font-size:14.667px">(877) 977-1067</P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-size:16px" align=center><FONT FACE="Times New Roman">-
14 -</FONT></P>
<P style="margin:0px" align=justify><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px">&nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; font-family:Book Antiqua; font-size:14.667px"><B>Item 9:</B></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px"><B>Date of Report</B></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin:0px; text-indent:96px; font-family:Book Antiqua; font-size:14.667px">This report is dated April 2, 2007.</P>
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<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify>&nbsp;</P>
<P style="margin:0px" align=justify>&nbsp;</P>
<P style="margin:0px" align=justify>&nbsp;</P>
<P style="margin:0px" align=justify>&nbsp;</P>
<P style="margin:0px" align=justify>&nbsp;</P>
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