Nugget Pond Processing Facility - Canada

On October 27, 2006, the Corporation reached an agreement with New Island Resources Inc to acquire Nugget Pond in Newfoundland, Canada. The Corporation refurbished the facility and commenced processing ore produced from Nalunaq in early 2007.

Ore processing commenced in late February 2007 and has continued since then. Performance of the plant has been better than expected and consequently, the planned activities to expand production have not been required. Ore is shipped to Goodyear Cove at South Brook in Newfoundland and then trucked to site.

The Nugget Pond plant processed a total of 40,653 dry metric tonnes of ore at an average grade of 13.2 g/t during the quarter (quarter ended September 30, 2007 – 41,336 tonnes at an average grade of 15.2 g/t).   Total ore processed in the nine months ended September 30, 2008 was 102,092 tonnes at a grade of 12.4 g/t (period from the commencement of mill operations at the end of February 2007 to September 30, 2007 – 92,396 tonnes at 15.7 g/t).

Gold produced from the plant during the quarter ended September 30, 2008 was 15,865 oz (quarter ended September 30, 2007 – 20,613 oz). Total gold produced in the nine months to September 30, 2008 was 38,372 oz (nine months ended September 30, 2007 – 45,283 oz). Gold poured in the quarter was 15,265 oz (quarter ended September 30, 2007 – 20,287 oz) and for the nine months to September was 40,162 oz (nine months to September 30, 2007 – 43,338 oz). Gold sold during the quarter was 16,252 oz at an average realised gold price of $857/oz (quarter ended September 30, 2007 – 21,285 oz at an average price of $693/oz). For the nine months ended September 30, 2008, gold sold totalled 40,411 oz at an average gold price of $890/oz (nine months ended September 30, 2007 – 41,761 oz at an average price of $681/oz).

Due to the production halt at Nalunaq, it is expected that Nugget Pond will be placed on care and maintenance when it has completed processing the pre December 31, 2008 ore from Nalunaq if profitable toll milling contracts are not negotiated.