Pedra Branca, Brazil– PGM Project

In 2008, 27 drill holes totaling 1,839 meters were completed at the Pedra Branca PGM Project located in Ceará State, Brazil. Pedra Branca is joint ventured with Anglo Platinum.  Six different prospect areas were drilled with five returning favorable results (2008 Drilling Results).  These successful tests were at four Cedro area prospects and extensions to known mineralization at the high-grade Curiu deposit.  All of these successes were in the central core of the project area. 

Even with 270 holes completed on the project, we continue to develop new drill targets.  In 2009 we plan to conduct the first-ever drilling on the Galante and San Francisco prospects that are situated approximately 10 kilometers north of our main exploration area.  Both prospects display geochemical and geophysical (magnetic) anomalies that are very similar to signatures found in the main Esbarro-Cedro-Curiu prospect area.

Anglo Platinum has once again agreed to fund our exploration program with a $1.5 million budget.  Approximately 4,000 meters of core drilling, which is the single largest drilling campaign yet, is planned to begin in mid-2009.  Drilling highlights are provided in the table below.

The Pedra Branca Agreement with Anglo Platinum

Anglo Platinum has funded approximately $4.5 million on exploration since signing the initial Letter Agreement in January 2003 and has earned a 30% interest in the project.   Anglo Platinum has the option to incrementally earn up to a 51% interest in the project by spending an additional $2.5 million (total of $7 million) on exploration at Pedra Branca by December 31, 2010.  However, Anglo Platinum is not required to fund any future exploration expenditures.  Anglo Platinum can earn an additional 9% interest (for a total of 60%) by spending an additional $10.0 million on exploration or development.  After Anglo Platinum has spent $17.0 million, we would fund our 40% share of feasibility expenses.  Anglo Platinum has the option to earn an additional 5% interest (for a total of 65%) by arranging for 100% financing to put the project into commercial production.