Grass Valley 101 Providence Mine Road, Suite 105 Nevada City, CA 95959 Phone 530/470-0215 Fax 530/687-9399

Ventura 1838 Eastman Avenue, Suite 200 Ventura, CA 93003 Phone 805/644-7976 Fax 805/644-5929 www.wcenviro.com

GEOLOGICAL EVALUATION REPORT LOS FLORES MINE PROPERTY MX Mining Yuma County, Arizona August 6, 2010 West Coast Environmental and Engineering (WCE) is pleased to present this geological evaluation report of the Los Flores Mine Property located in Yuma County, Arizona. This report presents the results of reconnaissance fieldwork, on-site collection of rock samples, analytical laboratory testing, and review of documents available from the Arizona Department of Mines and Mineral Resources (ADMMR) and from the United States Geological Survey (USGS). INTRODUCTION The Los Flores Mine is located on the east flank of the Laguna Mountains approximately 15 miles northeast of the city of Yuma (Figure 1). The property is on land administered by the Bureau of Land Management (BLM). The property is in the historic Laguna Mining District, also known as the Las Flores District. Note: Los Flores has been spelled Las Flores in many historical documents that reference both the mine and the district. The property consists of seven lode mining claims located within the northwest corner of Section 35 and the southwest corner of Section 26, Township 7 South and Range 21 West (Figure 2). The Los Flores Mine is identified on the USGS Laguna Dam 7 minute quadrangle map. Historical documents indicate the Los Flores Mine has the potential for containing significant gold resources within quartz veins. The claim names and BLM serial numbers are listed below. Claim Name Los Flores #1 Los Flores #2 Los Flores #3 Los Flores #4 Los Flores #5 Los Flores #6 Los Flores #7 Serial Number AMC 401635 AMC 401636 AMC 401637 AMC 401638 AMC 401639 AMC 401640 AMC 401641

Access to the property is obtained by travelling east on U.S. Interstate 8 from the city of Yuma, then north on Arizona State Highway 95 for approximately nine miles to a series of unmaintained gravel roads the lead westward to the mine site. The property consists of mining

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MX Mining August 6, 2010

claims situated predominantly on bedrock. Available information reports Mexican and American Indian placer miners were active in the Las Flores area in the 1860's (AGS, 1961; Johnson, 1987). Historic records indicate Spanish miners developed gold-bearing veins prior to 1750. Efforts were made in the mid-1880s to dredge gravels in the Laguna Dam area about seven miles west-northwest of Los Flores, but the dredge was destroyed in a flood. In the early 1900's, small amounts of gold were produced from potholes in gulches along the Colorado River. Total gold production through 1959 was roughly 24,500 ounces and mostly from placer operations. Therefore, the Los Flores Mine appears to be essentially undeveloped. PROPERTY EVALUATION The following tasks were conducted by WCE to prepare the Los Flores Mine Evaluation: Compilation and review of pertinent available historic documents pertaining to the property and vicinity, including geologic and topographic maps. Field examination and site reconnaissance of the property on February 11 and 12, 2009, to document past mining activities, infrastructure, and the existing environmental scenario of the property. Collection of 14 rock samples from mine openings, prospects, and mine dumps and submission of samples to Jacobs Assay Office (Tucson Arizona) for laboratory analysis of gold, silver, and other metals. Summarize historical documents, review assay results, and develop calculation of gold resources and estimated value of the property.

DOCUMENT REVIEW Geology Historical geology and mining references on the Los Flores Mine indicate the local geology consists of Proterozoic age igneous, metamorphic, and sedimentary rocks of the Laguna Mountains, and exposures of outcrop are prevalent. These metamorphic rocks are geologically important because they are the host rocks of numerous prolific vein-controlled gold mines in Arizona. Metallic mineralization is reported to consist of free, often ragged, gold grains up to 1/20-inch diameter, often with silver and copper in minor concentrations. The gold occurs in lenticular and brecciated quartz veins, usually containing abundant iron oxides and fault gouge. The veins formed along fault or fracture zones in schist which are cut by dikes and irregular masses of granite and pegmatite. The quartz veins are typically fractured and iron-stained. The Los Flores Mine vein is up to 18 inches thick as exposed at the surface, strikes to the North, and dips to the west at a consistent angle of 40 to 45.

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There are also gold-bearing placer gravels east of the Los Flores Mine that are derived from the gold-quartz veins exposed in bedrock. There are many gold placer prospects within the numerous washes and benches that compose the Laguna Mountains area. These drainages obtain alluvial material from outcrops exposed in the central part of the Laguna Mining District. Los Flores Group of Mines The Los Flores group of mines includes the Golden Queen, Traeger, India, and Pandino mines, and all have reported production of gold and silver. These mine workings are reported as relatively shallow shafts and declines (angled shafts) developed circa 1931 and 1932. The quartz vein developed within Traeger mine was at least two feet wide and extended for about 300 feet. The Pandino mine is reported to have had a shaft probably about 190 feet deep. (Arizona Bureau of Mines, 1934) There are also several shallow old stopes, adits, and open-cut prospect pits within the Los Flores group of mines. The Los Flores mine group was worked intermittently from the 1860's to about 1940. During 1931, the combined production from the Las Flores group was estimated at 500 tons of ore averaging about 0.4 ounces per ton gold, one ounce per ton silver, and 198 pounds of copper (Arizona Bureau of Geology and Mineral Technology, 1978). This amount of ore would contain about 200 ounces of gold and 500 ounces of silver. Las Flores District The Las Flores (Laguna) District has an extensive history of gold development and production, from both lode vein-type underground mines and surface alluvial placer deposits. The lode mines and prospects had a reported production of 556 tons of ore yielding 324 ounces gold and 661 ounces silver (Arizona Bureau of Geology and Mineral Technology, 1978). The gold grade calculated from these production figures is .583 ounces of gold per ton of ore, with a calculated silver grade of 1.189 ounces silver per ton. The Las Flores District placers historically produced 7500 ounces of gold as of 1978. The Las Flores placers produced several thousand ounces of gold for the total period from the late 1850s to 1950s. Arizona Geological Survey Open-File Report 85-12 (1985) provides a summary of the ore grades for the metallic mineral districts of Arizona. The average gold grade for the Laguna District is .342 ounces gold per ton, and the average for Yuma County is .357 ounces gold per ton. These gold grades support those stated within previous reports, and are evidence to support the occurrence of potentially high gold grades within the Los Flores Mine. FIELD EXAMINATION The property was examined by Craig L. Parkinson, PG on February 11 and 12, 2009 after an initial property orientation meeting with Mr. Brian Grinn. Mr. Parkinson conducted a reconnaissance of the property topography, geology, surface exposures, infrastructure, access, historical mine workings and prospects. Exposed quartz veins were indentified at the surface
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existing mine workings, which mostly consisted of shafts, declines, and shallow prospect pits. Declines are underground mine workings that are developed along a vein, and thus are at an angle from the surface. For reference, a shaft is vertical, an adit is horizontal, and a tunnel is open at both ends. It was not possible for Mr. Parkinson to identify the bottom of most of the shafts and declines at the time of the field examination. For the geological evaluation of gold mineralization on the Los Flores property, WCE performed the following: Noted the lithological, mineralogical, and structural characteristics of the sample site Collected samples of rock (typically quartz vein material) for subsequent geochemical analysis Photographed the property, sample sites, and any geologically distinct features Mr. Parkinson collected 14 representative samples from the Los Flores Mine property (LF1 through LF14), and the sample locations are shown on Figure 2. He then shipped the samples via Federal Express to Jacobs Assay Office in Tucson Arizona for laboratory analysis. Property Description The entrance to the main underground workings is on claim #2 and is marked with signs identifying the mine, and indicating imminent danger of open mine shafts (Photo 1). There are numerous prospects, declines, and shafts situated on the east part of claims #1 and #2, and they are aligned in a general north-south direction (Photo 2). There is abundant quartz vein material scattered on the surface near the mine workings. The underground workings are developed to follow the quartz veins into the subsurface. The predominant quartz veins exposed in the main mine area dip consistently at a 45 angle toward the west, and thus the declines dip west at around 45. Photo 3 shows sample LF1 that was taken from the predominant quartz vein within a decline on claim #2, and Photo 4 shows increasing vein width with depth. Sample LF1 returned the highest gold assay value obtained during the site reconnaissance, with a gold grade of 2.371 ounces of gold per ton of rock. This quartz vein set extends for at least 1,000 feet in a northsouth direction on claims #1 and #2. The openings of the declines expose the veins on the surface and at depth, such as observed in Photo 5 where sample LF3 returned the second highest assay values on the property, with a grade of .399 ounces gold per ton. Photo 6 was taken looking north from the site of LF3 and shows the north-south alignment of the surface workings. The photo also shows the location of samples LF10 and 11 on claims #3 and #4 to the northwest, and samples LF 12, 13, and 14 on claims #4 and #7 on the northeast corner of the property. The north-south alignment of the prospects, shafts, and declines is clearly visible from the south end of the property at claims #5 and #6 (Photo 7). Again, these workings are developed along the predominant quartz veins shown in the previous photos. The sites of samples LF 1-3, 7-9, and 12-14 are also indicated on Photo 7, and the location of samples LF10 and 11 is about 300 feet west of the view in the photo. This view shows that quartz veins and related surface and underground workings are exposed in an east-west direction for approximately 1,000 feet, and
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in a north-south direction for about 3,000 feet. Photo 8 was taken looking south toward the Los Flores Mine Site from the northeast end of the property at claim #4 (site of samples LF 12-14). Much of the surface in the center of Photo 8 shows alluvial gravels which probably cover additional near-surface exposures of the predominant quartz veins. There is a Tunnel depicted on Figure 2 that is situated on claims #3 and #4, and this is the area referred to as the Pandino Mine in historical reports. The tunnel actually consists of adits and declines developed along a north-trending fault zone. Samples LF10 and 11 were collected from quartz vein pieces on the surface that originated from the underground workings (Photo 9). Sample LF11 returned the third highest gold assay value on the property, with .190 ounces of gold per ton of rock. The north-trending fault zone that contains the gold-bearing quartz is over five feet thick and dips about 45 to the west (Photo 10) onto the property. This bearing and dip is similar to that of the fractures and quartz veins exposed in claims #1, 2, and 5. At the northeast corner of claim #4 and the southeast corner of claim #7, there are numerous shallow prospects, shafts, and declines within brecciated silicified schist. This is the site of samples LF12-14 and is shown on Photos 7, 11, and 12. Sample LF14 returned the fourth highest gold assay value, with .168 ounces of gold per ton of rock. An old piece of ore extraction equipment consisting of cables and pulleys attached to steel poles was observed at the site of LF14 (Photo 11). The presence of this equipment suggests the underground workings were at one point deep enough to require such equipment to safely extract the ore. This in turn implies there is considerable potential for significant amounts of gold to occur at depth, which is highly probable due to the north-south alignment of the predominant goldbearing quartz veins observed in claims #1, 2, and 5.

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Sample Site Descriptions

Sample ID Claim Number Vein Width (inches) Strike Dip and Dip Direction Remark Entrance of decline with exposed brecciated milky-gray quartz vein increasing width with depth. Fe and Mn oxides adjacent to wallrock. Hanging wall very broken for 20 and abundant red-brown Fe-stained clay along vein-wallrock contact. Golden Queen Mine area of Claim. Photo 3 and 4. Entrance of decline with exposed brecciated milky-gray quartz vein increasing width with depth. 40 south of LF1 and similar to LF1 but more massive and less fractured. Golden Queen Mine area of Claim. Entrance of decline with exposed brecciated milky-gray quartz vein. Similar to LF1 but the quartz vein does not expand with depth. Approximately 300 south of LF1. Golden Queen Mine area of Claim. Photo 5 and 6. Entrance to a short adit prospect with surface exposures containing quartz veins and stockworks. Discontinuous quartz veins and fractures are strongly brecciated and Fe-stained. About 800 southwest of LF3. The Traeger Mine appears to be located between sample site LF3 and LF4. Entrance of decline with exposed brecciated quartz veinlets and lenses within an apparent fault zone. India Mine area of Claim. Mined quartz pieces from LF5 decline. Fe oxides on vuggy quartz pieces. 20 below surface between LF1 and LF2 and within the same decline exposing brecciated quartz vein. Fe and Mn oxides adjacent to wallrock. Abundant red-brown Fe-stained clay along vein-wallrock contact. Golden Queen Mine area of Claim. Surface samples of quartz that are apparently mined material from the adjacent declines of LF1, LF2, and LF7. Golden Queen Mine area of Claim. Surface samples of quartz that are apparently mined material from the adjacent declines of LF1, LF2, and LF7. Golden Queen Mine area of Claim. Entrance to large decline with mined material containing quartz fragments. The decline is developed on a quartz vein within a fault zone 5 wide. Pandino Mine area of Claim at the location of the Tunnel on Figure 2. Photo 9 and 10. Same location and description as LF10. Photo 9 and 10. Surface exposure of small shaft with mined material containing quartz fragments. Geology consists of schist with strong brecciation, bleaching, clay, and minor silicification. Site is at the northeast corner of Claim. Photo 11 and 12. Surface exposure of small decline with mined material similar to LF12. Site is at the northeast corner of Claim and may not be on the Los Flores Mine Property. Photo 11 and 12. Surface exposure of small prospect pit with scattered quartz material similar to LF12. Site is at the northeast corner of Claim. Photo 11 and 12.

LF1

6-14

360

44 West

LF2

14-18

015

42 West

LF3

10

025

45 West

LF4

315

90 (Vertical) 50 West - 44 West

LF5 LF6 LF7

6 6 2

24

035 - 360

LF8 LF9 LF10 LF11 LF12 LF13* LF14

2 2 3 3 4 4 4

24 -

- - 360 360 - - -

- - 40 West 40 West - - -

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Sample Assay Results Jacobs Assay Office (Jacobs) conducted analysis for gold and silver by fire assay, and also a multi-element ICP analysis. Jacobs are Registered Assayers located at 1435 S. 10th Avenue, Tucson, Arizona, 85713. The results for gold and silver analysis and the sample sites by claim number are summarized below, and the sample locations are shown on Figure 2. The Certificate of Assay from Jacobs is attached. Sample Number LF1 LF2 LF3 LF4 LF5 LF6 LF7 LF8 LF9 LF10 LF11 LF12 LF13 LF14 Average of all samples Average of LF1-3 & 7-14 Assay Ounces per Ton Gold Silver 2.371 .014 .399 .009 .001 <.001 .058 .072 .031 .049 .190 .010 .075 .168 .246 .312 .25 .05 .05 .05 .05 .05 .05 .05 .05 .05 <.05 <.05 .05 .05 .06 .07

Sample Location Claim Number Los Flores #2 Los Flores #2 Los Flores #1 Los Flores #5 Los Flores #6 Los Flores #6 Los Flores #2 Los Flores #2 Los Flores #2 Los Flores #3 Los Flores #3 Los Flores #7 Los Flores #4 Los Flores #4 Los Flores #1-#7 Los Flores #1-#4 & #7

Note: Values of < were treated as = for purposes of averaging GOLD RESOURCES A mineral resource is defined as an occurrence of natural solid material in the Earths crust in such form, quantity, and quality (grade) that the material has a reasonable prospect for economic extraction. WCE believes that the location, quantity, grade, continuity, and geologic characteristics of the Los Flores Mine Property mineral resources are known and have been adequately interpreted from the available geologic evidence, data, and geochemical sample assay test results. The Los Flores Mine mineral resources have a reasonable prospect for economic extraction by modern surface and underground mining methods, and under current metal prices and economic conditions. A mineral resource is based on geologic evidence, historic and modern sampling, and

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reasonable geologic and grade continuity assumptions. The mineral resource estimate presented in this report is based on geologic information and gold grade data obtained by appropriate techniques from current and historic lode and placer mining operations. WCE evaluated the gold resources available in the lode quartz veins only. There is not sufficient information on the placer gold resources to make a confident determination of the quantity of gold in the placer gravel deposits on the property. However, total historical placer-gold production in the Las Flores District is estimated at 7500 ounces of gold from placer operations. Calculated Gold Grade To calculate the potential gold resources on the Los Flores Mine Property, WCE reviewed the available references that reported gold grades from the Los Flores mine group and mining district. WCE then compared these reported gold grades to the results of fire assay analysis of the geochemical samples collected by Mr. Parkinson during his field reconnaissance of the site. A reporting of the gold production and grades from the Los Flores Mine area is provided in the Document Review section above, and the data relevant to gold grades is repeated herein. Gold production records for the lode mines and prospects in the Las Flores District state the following: From mines and prospects, some 556 tons of ore yielded about 324 ounces of gold, 661 ounces of silver, and minor copper. The gold grade calculated from these production figures is .583 ounces gold per ton of ore. Gold production records for the Las Flores mine group state: Relatively shallow shafts, tunnels, and open cut operationsWorked intermittently from 1860s to about 1940, producing some estimated and recorded 500 tons of ore averaging about 0.4 oz. Au/T, 0.1 oz. Ag/T, and 198 lbs. of copper. The gold grades are summarized as follows, stated as ounces gold per ton ore: Location Los Flores Mine Group Las Flores District Yuma County Gold Grade .400 .583 .342 .357 Source Arizona Bureau of Geology & Mineral Technology Arizona Bureau of Geology & Mineral Technology Arizona Geological Survey Arizona Geological Survey

WCE collected 14 rock samples for analysis: LF1 through LF14. Samples LF4, LF5, and LF6 are from Claim #5 and #6 located south of the actual Los Flores Mine (Claim #1 and #2). The assay results of these three samples did not show anomalous gold concentrations, as indicated by the Sample Assay Results above. The gold resource valuation estimate of this report will not include the area occupied by most of claims #5 and #6. Thus, the projected gold grade estimate for the property does not include the assay results from samples LF4, LF5, and LF6. The projected average gold grade for the Los Flores Mine property only includes the assay results for samples LF1-3 and LF7-14 from Claims #1, 2, 3, 4, and 7.

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Samples LF1 through LF3 and LF7 through LF14 exhibited anomalous gold concentrations. The range of assay values was .010 to 2.371 ounces gold per ton, and the average was .312 ounces gold per ton. If WCE was evaluating only the specific areas from which these samples were collected, the gold grade used in the evaluation would be the average gold grade of .312 ounces per ton. Using an average gold grade from assay results is typical in the mining industry when evaluating a specific site. However, WCE is evaluating not only the specific sites where the samples were collected, but the evaluation also incorporates the near-surface down-dip extension of the gold-bearing quartz veins and the region between sample sites that are along the same alignment. For the valuation of the Los Flores Mine Property, the projected gold grade for the property is conservatively estimated to be 10 percent of the average assays from claims #1, 2, 3, 4, and 7. Specifically, the projected gold grade of the property is 10 percent of the average assay results for samples LF1 through LF3 and LF7 through LF14. Thus the average gold grade for the property is estimated at .0312 ounces gold per ton of rock. WCE feels this 10% of average grade discount is reasonable because the two highest assay results came from an area of the property with a width of less than 100 feet, whereas the width of the property being valuated is 1000 feet. Thus, 100 feet is 10 percent of 1000 feet. WCE believes a gold grade of .0312 is a conservative estimate of the gold grades underlying the Los Flores property. Note that the Arizona Bureau of Geology and Mineral Technology reported an average gold grade of .4 ounces per ton for the Los Flores mine group. Using a conservative estimate of the gold grades will thus result in a conservative valuation analysis of the property. It is likely that gold grades higher than an average of .0312 may be encountered during development of the property. For example, only two assay results used in the calculation of the average gold grade of the property were lower than .0312 ounces per ton: LF2 showed .014 and LF12 showed .010 ounces of gold per ton of rock. Calculated Tonnage of Gold-Bearing Material The average width of the quartz vein on the property is estimated at two feet (24 inches). This was observed by WCE on the surface and in the underground workings within Claims #1 and #2, and is supported by historical documentation. It is also documented in geology and mining literature of Arizona that the width of the gold-bearing quartz veins in volcanic and metamorphic rocks typically increases with depth. Therefore, an average quartz vein width of two feet is a conservative estimate and is presumed by WCE to be consistent throughout the claims. It is projected that numerous quartz veins and vein sets of comparable size occur within the property and could be mined together. WCE identified gold-bearing quartz veins within many surface exposures on the property, and the veins exhibited a general trend (strike in geology terminology) of north to slightly northeast. These quartz veins were observed during the site reconnaissance to occur at various locations throughout most of the Los Flores claim group, for a total west-east width of 1000 feet of quartz veining. The north-south length of the mineralized vein system is about 3000 feet based on field observations and WCE sample collection assay results.

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The vertical extent of the gold-bearing quartz veins was projected to extend to a depth of 300 feet. This projected depth is based on documents that state the Pandino shaft was 190 feet deep coupled with the fact numerous vein-hosted underground mines in Arizona are developed to depths well beyond 500 feet (Vulture and Oatman mines, for example). Thus, a minimum depth of 300 feet of gold mineralization is presumed by WCE to be consistent throughout the claims. The bulk density of the gold-bearing rock (quartz veins in schist) was estimated based on the average densities of solid and broken quartz (131 pounds per cubic foot), shale (133 pounds per cubic foot), and slate (136 pounds per cubic foot). WCE used a conservative value of 130 pounds per cubic foot for the bulk density of the Los Flores Mine rock. Therefore, the projected tonnage of gold-bearing rock on the Los Flores is calculated as follows: Volume of Rock Tons of Rock = 300 ft deep x 1000 ft wide x 3000 ft long = 900 million cubic feet = 900 million cubic feet x 130 pounds/cubic foot 2000 pounds/ton = 58.5 million tons

Calculated Gold Resources The potential gold resources on the property are calculated as follows: Potential Gold Resources = Tons of Rock x Gold Grade = 58.5 million tons x .0312 ounces per ton = 1.8 million ounces of gold

Los Flores Mine Property Valuation Total resources on the Los Flores Mine Property are conservatively estimated at approximately 58.5 million tons of gold-bearing rock containing approximately 1.8 million ounces of gold. Using a price of $1150 per ounce of gold (InfoMine: Approximate 1-Year Average Price), the InPlace Gross Value of the gold resources on the property is projected at $2.07 billion. This valuation does not include development, production, and operational costs. The in-place gross value of $2.07 billion for the gold resources on the Los Flores Mine Property provided in this evaluation report is based on the available data and the assumption that the information provided to and obtained by WCE is accurate and reliable, the assay results from the analytical laboratories are valid, the sample assay results represent the entire Property, and previous workers have conducted their evaluations using a standard professional level of care for the mining industry. Additional analysis including exploratory drilling and assay testing along with an operational analysis will increase the level of confidence in this valuation.

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West Coast Environmental and Engineering thanks you and your associates for the opportunity to work on this project. We look forward to assisting MX Mining develop the Los Flores Mine Property into an economically feasible gold mining operation. Sincerely,

Craig L. Parkinson, P.G. Arizona Registered Geologist #30843 Attachments: Jacobs Assay Office: Certificate of Assay Figure 1: Location Map Figure 2: Claim and Sample Location Map Photos Qualifications of Craig L. Parkinson

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REFERENCES Arizona Bureau of Geology and Mineral Technology, 1965: Bibliography of the Geology and Mineral Resources of Arizona, Bulletin 173 Arizona Bureau of Geology and Mineral Technology, 1978: Index of Mining Properties in Yuma County, Arizona, Bulletin 192 Arizona Bureau of Geology and Mineral Technology, 1983: Metallic Mineral Districts and Production in Arizona, Bulletin 194 Arizona Bureau of Geology and Mineral Technology, 1983: Metallic Mineral Districts of Arizona, Map 18 Arizona Bureau of Geology and Mineral Technology, 1985: Geology and Production of Middle Tertiary Mineral Districts in Arizona, Open-File Report 85-1 Arizona Bureau of Geology and Mineral Technology, 1985: Mine Index for Metallic Mineral Districts of Arizona, Bulletin 196 Arizona Bureau of Geology and Mineral Technology, 1986: Bibliography for Metallic Mineral Districts in La Paz, Mohave, and Yuma Counties, Arizona, Circular 25 Arizona Bureau of Mines 1933: Geology and Mineral Deposits of Southern Yuma County, Arizona, Bulletin 134 Arizona Bureau of Mines, 1934: Arizona Lode Gold Mines and Gold Mining, Bulletin 137 (revised1967) Arizona Bureau of Mines, 1960: Geologic Map of Yuma County, Arizona Arizona Bureau of Mines, 1969: Geology and Mineral Resources of Arizona, Bulletin 180 Arizona Department of Mines and Mineral Resources: Mine file data American Geological Institute,1976: Dictionary of Geological Terms, Revised Edition Arizona Geological Survey, 1961: Gold Placers and Placering in Arizona, Bulletin 168 Arizona Geological Survey, 1985: Ore Grades for Metallic Mineral Districts of Arizona, OpenFile Report 85-12 Bureau of Land Management (BLM), 2007: Surface Management Status Map, Yuma Arizona, 1:100,000 Scale Glover, T.J: Pocket Ref, Second Edition, Sequoia Publishing

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Raymond, R.W. (1872) Statistics of mines and mining in the states and territories west of the Rocky Mountains [3rd report]: U.S. Treasury Department, 566 p.: 272. United States Geological Survey (USGS), 1977: El Centro, Ariz.-Calif. 2 Series Topographic Map USGS, 1979: Laguna Dam, Ariz.-Calif. 7 Minute Series Topographic Map USGS, 1987: Placer Gold Deposits of Arizona, Bulletin 135 USGS, 2000: Geology of Arizona, Map M-35

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West Coast Environmental and Engineering

February 19, 2009

Job: WC-001-A

CERTIFICATE of ASSAY

Sample ID

Au oz/t

Ag oz/t 0.25 0.05 0 05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 <0.05 <0.05 0.05 0.15

LF-01 LF 02 LF-02 LF-03 LF-04 LF-05 LF-06 LF-07 LF-08 LF-09 LF-10 LF-11 LF-12 LF-13 LF-14

* *

2.371 0.014 0 014 0.399 0.009 0.001 <0.001 0.058 0.072 0.031 0.049 0.190 0.010 0.075 0.168

* Samples have been Rechecked

CRAIG L. PARKINSON, P.G., C.H.G.

Senior Managing Geologist

EXPERIENCE OVERVIEW Craig Parkinson has over 20 years experience conducting professional geological services in mining, natural resource development, environmental management, and mineral property valuations. He has managed multiple precious and base metal exploration and development programs in the western United States. These activities included identifying high concentrations of metallic mineralization and coordinating extensive detailed geological, geophysical, and geochemical investigations. He has also supervised successful exploration, development, and production programs for stone, sand and gravel, cement, clay, silica sand, and industrial mineral mining and processing operations. SMARA Mining Inspector, State Mining and Geology Board, California. Served as the State Mine Inspector for mining operations within the Lead Agency jurisdiction of SMGB to observe compliance with the Surface Mining and Reclamation Act (SMARA). Inspected 36 historical and present mining sites that produced sand and gravel, crushed stone, clay, and gold. Activities included review of

EDUCATION

M.S. Hydrogeology University of Nevada School of Mines, 1993 M.S. Mining Geology University of Idaho College of Mines, 1984 B.S. Geology Cornell College, 1980

REGISTRATIONS

Registered/ Licensed Professional Geologist: AK, AR, AZ, CA, FL, GA, ID, OR, PA, UT, WA, WY Licensed Engineering Geologist and Hydrogeologist, WA Certified Hydrogeologist, CA Certified Environmental Manager, NV Mine Safety and Health Administration (MSHA), Certified Training Instructor

reclamation plans and financial assurance documents, site inspections, preparation of Annual SMARA Mine Inspection Report, and formal presentation of the results to SMGB.
Jerritt Canyon Open-Pit Mine, Nevada. Responsible, as Senior Geologist, for the development and mining of two high-grade orebodies at the Jerritt Canyon open pit gold mine in Nevada. This included working closely with the engineering department, drill and blast crew, maintenance department, and milling operations to maximize reserves while maintaining compliance with environmental regulations. Industrial Minerals Resource Study, Various States. Coordinated between the Exploration Department and Corporate Reserves Group of Texas Industries (Dallas) to successfully develop additional sand and gravel, crushed stone, cement limestone, decorative rock, and clay resources in compliance with county, state, and federal regulations in California, Colorado, Texas, Oklahoma, Arkansas, and Louisiana. Regulatory Compliance of Mining Operations, Various States. Managed successful exploration and development programs for sand and gravel, crushed stone, and industrial minerals mining operations that conformed to environmental regulatory compliance standards in Texas, Oklahoma, Arkansas, and Louisiana.

1838 Eastman Ave., Suite 200, Ventura, CA 93003 Phone (805) 644-7976 Fax (805) 644-5929 www.wcenviro.com

CRAIG L. PARKINSON, P.G., C.H.G.

Senior Managing Geologist

AFFILIATIONS

American Institute of Professional Geologists (AIPG) National Stone, Sand and Gravel Association (NSSGA) Geological Society of Nevada (GSN) Society for Mining, Metallurgy, and Exploration (SME) Northwest Mining Association (NWMA) Nevada Mining Association (NvMA)

Production & Exploration Coordination, Texas, Oklahoma and Louisiana. Coordinated aggregate production projects between the general managers of surface mining operations in Texas, Oklahoma, and Louisiana. Trained exploration personnel in regulatory compliance requirements, and increased reserves at 18 surface mining operations in accordance with existing permits. Engineering Geology, El Dorado County, California. Geologically mapped over 20 landslides along Highway 50 between Placerville and South Lake Tahoe, California. Prepared slope stability engineering mitigation plans and recommendations that were implemented for design and construction for each landslide. Environmental Compliance, Nevada. Involved with numerous soil and groundwater contamination and remediation projects as a Certified Environmental Manager in Nevada. Conducted soil and water sampling for analytical testing, and prepared field logs and final project reports. Internal Environmental Health Compliance Training, Reno, Nevada. Trained office staff in environmental health compliance while serving as the Geology-Engineer Health and Safety Representative for the firm Kleinfelder (Reno). MSHA Certified Instructor. Received training required to be a Mine Safety and Health Administration (MSHA) Certified Training Instructor. Incorporated this training into daily routines within the exploration department and at site-specific gravel and stone mining operations. Initiated an operations and equipment inspection and maintenance program that resulted in no lost-time accidents for over three years. Groundwater Development, California. Supervised and implemented the installation of six high-capacity municipal water wells in California, including Nevada County, Placer County, and El Dorado County. These projects conformed to the requirements of the County Environmental Health Department, California Office of Drinking Water, and the Tahoe Regional Planning Authority. Water Resource Feasibility, Western United States. Managed and coordinated water resources feasibility programs in California, Nevada, Idaho, Arizona, and Utah. Integrated hydrologic information, evaluated analytical data, designed and engineered hardware, and managed the construction of water wells capable of pumping over 2000 gallons per minute.

1838 Eastman Ave., Suite 200, Ventura, CA 93003 Phone (805) 644-7976 Fax (805) 644-5929 www.wcenviro.com