Island Gold Mine Reserve and Resource Estimates (100%)

As at December 31, 2007 the Island Gold Mine, Proven and Probable Reserves were estimated at 1,058,881 tonnes of ore at a grade of 8.39 g/t for 285,536 ounces of gold. Measured and Indicated Resources totaled 590,167 tonnes at a grade of 10.14 g/t for 192,422 ounces of gold while Inferred Resources were estimated at 613,635 tonnes at a grade of 9.80 g/t for 193,350 ounces of gold. These tonnages have all increased since the previous estimate dated May 15, 2007 as a result of exploration.

¹ Based on GENIVAR estimates as at May 15, 2007 with geological information available as at January 31, 2007.
² Resources presented in the above table are exclusive of reserves and do not have demonstrated economic viability at this time.

For the reserves, the geological envelope takes into account a cut-off grade of 5 g/t Au and a minimum true thickness of 2.0 metres for stope openings and 3.0 metres for development. Mining dilution of 20% at 0.5 g/t Au was applied. Reserves are based on a gold price of US$650/oz with an exchange rate of C$=US$ of 1.00 (i.e gold price of C$650/oz). For the resources, the geological envelope takes into account a cut-off grade of 5 g/t Au and a minimum true thickness of 1.5 metres for Lochalsh, Goudreau and Inferred Resources at the Island Zone, 2 metres for Indicated and Measured Resources at the Island Zone. High values are cut to 75 g/t Au. The average ore density is 2.82 tonnes/m3. A block model for the reserves and resources was interpolated using the inverse distance to the second power. A 20-metre (Island Zone) and a 25-metre (Lochalsh and Goudreau Zones) spherical search ellipsoid was used in the model with restriction on a maximum of 4 composites.

The Proven Reserve Category and the Measured Resource Category were calculated with a zone of influence of 10 metres from mine openings along strike. The Probable Reserve Category and the Indicated Resource Category were calculated with a maximum of 20 metres between drill holes for the Island Zone and 25 metres for the Goudreau and Lochalsh zones. Finally, the Inferred Resources are defined by isolated drill hole intercepts showing no clustering inside an envelope of 20 and 25 metres respectively. The crown pillar is not included in this resource estimate. The average true thickness of each zone is 2.7 metres for the Island Zone, 2.3 metres for the Lochalsh Zone and 3.1 metres for the Goudreau Zone.

In addition, the Island Gold Project includes the past-producing Kremzar Mine which has historical (pre NI 43-101) Reserves. The latest estimate of resources for the Kremzar mine was completed in December 1990 by Derry, Michener, Booth and Wahl (DMBW), just as the mine was closing. Mineral Reserves at the time of closing were 181,944 tonnes at 6.27 g/t Au in the Proven and Probable Category and Possible Reserves of 85,952 tonnes at 7.04 g/t Au (Parish 1990). The possible category, which was eliminated in 2000 (CIM 2000), is considered roughly equivalent to the Inferred Mineral Resources with dilution added in the new CIM classification system.

Management is not treating the historical estimate as current, but believes that the DMBW estimate is relevant because it is the most recent estimate available and that it is probably reliable. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. Readers are cautioned that the Kremzar Mine reserves are historical estimates that predate NI 43-101 and should not be relied upon.