GREENWOOD PROJECT     Lonestar

The Lone Star property lies adjacent to the Lexington property but entirely in Washington State. The Lone Star property hosts the Lone Star deposit 1.1 kilometres south of the Company's Lexington-Grenoble deposit, which lies on the Canadian side of the border. The Greenwood Gold Project is located near Greenwood, British Columbia and is comprised of the Lexington-Lone Star and the Golden Crown gold-copper properties.

Based on higher copper prices, Merit geologists re-evaluated historic drilling, resulting in the identification of a high grade copper-gold deposit on the Company's Lone Star property. In order to use the historic Lone Star drill data for a NI 43-101 compliant resource estimate, in-fill verification drilling was required to prove the existence, continuity and grade of the interpreted zones. An 11 hole program was designed and completed to fulfill this objective. Results from the 2006 drill program successfully substantiated the historic drilling. The polygons or zones can be seen in red in the following figure.

The verification drill program focused on the larger interpreted polygons or zones. Holes 1 through 9 tested shallower mineralized zones around the existing pit. Holes 10A and 11A tested the bulk of a deeper series of zones. Overall, the polygons or zones were confirmed and in some cases found to be larger. Most of the interpreted Lone Star polygons are still open to expansion by future drilling.

The Lone Star was originally mined underground in the early 1900's. In the mid 1970's it was open- pitted by Granby for its copper-gold mineralization. Over 460,000 tons were trucked 17 kilometres north for processing at its Phoenix mill, located near Greenwood, BC. Copper grades were in the range of 1 - 4% and gold, although not routinely analyzed, was about 1 gram/tonne. The immediate area around the pit has received in excess of 113 diamond and percussion drill holes with an average drill hole density of 20 - 30 metres. Some examples of historic drill intercepts are 3.10m of 16.25% Cu and 16.5m of 3.71% Cu.

The isometric figure below demonstrates the high grade copper +/- gold zones in red overlying lower serpentinite in light grey, relative to the contoured green topography layer and historic Lone Star open pit. Two of the historic drill hole intercepts are shown in black along with some of the 2006 drill intercepts (blue) recently reported.

The NI-43-101 resource estimate, completed by P&E Mining Consultants, was announced in September 2007, as tabled under PROJECTS/Greenwood Gold. The addition of the Lone Star resource increases the tonnage of the total Greenwood Gold Project resource by 164%, contributing significantly to the robustness of the Greenwood Gold Project.

The Company plans further drilling on the Lone Star property in 2008.