GREENWOOD PROJECT    

The Greenwood Gold Project is currently on care-and-maintenance.  The project, which is comprised of two advanced stage, high grade gold and copper deposits - the Lexington-Grenoble and Golden Crown deposits - and a third high grade copper and subordinate gold deposit - the Lone Star deposit - is located near Greenwood, British Columbia. The Lone Star property, is located in Washington State and is contiguous with the Lexington property across the Canadian-United States border. The three properties are 100% owned by Merit subject to underlying royalties.The Project is supported by excellent infrastructure - transportation, power, and natural gas - and a local skilled work force.

Construction of a centralized 200 tonne per day (tpd) gravity/flotation mill and tailings facility No. 1 commenced in late August 2007 and was completed ahead of schedule in the first quarter of 2008. Commissioning of the Greenwood mill commenced in March 2008. Processing of the 10,000 tonne bulk sample from the Lexington-Grenoble Mine was completed in the second quarter of 2008. On May 8, 2008 the Company received its Mine and Mill Operating Permits for the Lexington-Grenoble Mine and the Greenwood Mill to operate at a production rate of 72,000 tonnes per annum. 
 

On October 3, 2006 the Company announced the completion of updated resource estimates on the Lexington-Grenoble and the Golden Crown deposits, which were prepared by P&E Mining Consultants Inc. On September 26, 2007, the Company announced the completion of the Lone Star resource estimate also prepared by P&E Mining Consultants Inc. The technical reports are available on Sedar.The Lexington-Grenoble deposit resources based on a 6.0 gram/tonne (g/t) gold equivalent grade cut-off are tabled as follows:

Classification	Tonnes	Au (g/t)	Cu (%)	Au Eq (g/t)	Au (oz)	Cu (million lbs.)	Au Eq (oz)
Measured	6,000	11.55	1.87	16.84	2,200	0.25	3,200
Indicated	291,000	8.29	1.34	12.08	77,600	8.60	113,000
Measured & Indicated	297,000	8.36	1.35	12.17	79,800	8.85	116,200
Inferred	45,000	6.58	1.03	9.50	9,500	1.02	13,700

The Golden Crown deposit resources are presented below at a 6.0 g/t gold equivalent grade cut-off value:

Classification	Tonnes	Au (g/t)	Cu (%)	Au Eq (g/t)	Au (oz)	Cu (million lbs.)	Au Eq (oz)
Indicated	105,000	13.78	0.55	15.33	46,500	1.27	51,800
Inferred	8,000	16.80	0.55	18.35	4,300	0.10	4,700

The Lone Star deposit resource is presented below at a 1.5% copper equivalent grade cut-off value:(5,6)

Classification	Tonnes	Au (g/t)	Cu (%)	Au Eq (g/t)	Cu Eq (%)	Au (oz)	Cu (million lbs.)
Indicated	63,000	1.28	2.30	8.82	2.69	2,600	3.19
Inferred	682,000	1.46	2.00	8.02	2.44	32,000	30.07

1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal title, taxation, socio-political, marketing, or other relevant issues.
2. The quantity and grade of reported inferred resources in this estimation are conceptual in nature.
3. The mineral resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.
4. Gold equivalent grade (AuEq) for the Lexington-Grenoble and Golden Crown was calculated using a gold price of US$494/oz and copper price of US$2.04/lb., based on the 24 month (at August 31, 2006) trailing average of gold and copper prices (gold price = $494/oz or $15.8822/gram, copper price = $2.04/lb. or $0.004497/gram, therefore, 1% Cu = 1 x 10,000/($15.8822/$0.004497) = 2.832 to obtain a conversion factor of % copper x 2.832 + gold g/t = AuEq g/t. Metallurgical recoveries and smelting/refining costs were not factored into the gold equivalent calculation.
5. Gold equivalent grade (Au Eq) for the Lone Star was calculated using a gold price of US$593/oz and copper price of US$2.84/lb., based on the 24 month (at July 31, 2007) trailing average of gold and copper prices, to obtain a conversion factor of % copper x 3.284 + gold g/t = Au Eq g/t. Metallurgical recoveries and smelting/refining costs were not factored into the gold equivalent calculation.
6. The Cu equivalent cut-off value of 1.5% was calculated and rounded utilizing the following: Cu price US$2.84/lb, $US exchange rate $0.88, process recovery $95%, smelter payable 95%, smelting and refining charges C$7/tonne mined, mining cost C$62/tonne mined, process cost $C28/tonne processed, G&A cost $7.50/tonne processed.

On April 9, 2007, the Company announced the completion of a Preliminary Economic Assessment ("PEA") on the Greenwood Gold Project. The PEA is based on an initial four year mining plan with production at a rate of 200 tonnes per day for the first twelve months of operation and includes the current resources at Lexington-Grenoble and Golden Crown only. Download PEA report here in PDF format

Dewatering, rehabilitation, and development of the Lexington-Grenoble mine commenced in July 2007.  Clearing and construction of the mill and tailings facility commenced in September 2007.   Mill construction was completed in March 2008 and processing of a 10,000 tonne underground bulk sample from the Lexington-Grenoble mine commenced in April 2008.   Commercial production was achieved June 1, 2008.  In December 2008, the Company placed the project on care-and-maintenance due to financial difficulties.