J & L PROJECT    

J & L Polymetallic (Au-Ag-Zn-Pb) Project, BC

The J & L property is located 45 kilometres north of Revelstoke, British Columbia. The 2,325 hectare property has two known and significant polymetallic base and precious metal deposits. The Main Zone is a stratiform, structurally controlled base and precious metal (Au-Ag-Zn-Pb) deposit. Underground development on Main Zone is comprised of 2.0 kilometres of drifting, crosscuts, and raises, with the Main Zone exposed for a distance of 0.85 kilometres along the drift. Historic underground drilling has defined the Main Zone for a 1.4 kilometre strikelength. Surface exploration has traced the Main Zone for 3 kilometres. The Main Zone averages 2.5 metres thick. The Yellowjacket Zone is a very siliceous Zn-Pb-Ag stratabound deposit that sub parallels and is in the immediate hangingwall of the Main Zone.

The Company entered into an option agreement dated April 13, 2007, whereby it may acquire a 100% undivided interest in the J & L property in consideration for payments totalling $10.79 million over a seven year period. Within the first year of the option agreement, Merit may acquire an 85% interest in the property by making cash payments totalling $5.0 million and by issuing 275,000 common shares. To retain its 85% interest and acquire the remaining 15% interest in the property, Merit must make payments totalling $5.79 million, in the form of cash payments and semi-annual advanced royalties and/or production royalties. In addition, Merit must issue 125,000 common shares annually until the earlier of the commencement of Commercial Production or the payment of the $5.79 million.

An historic resource estimate (Source: Equinox Resources Ltd. 1991) is summarized as follows:

Main Zone	Tonnes	Au (g/t)	Ag (g/t)	Zn (%)	Pb (%)
Proven & Probable Ore Reserve	1,700,000	7.38	75.9	4.43	2.64
Possible Ore Reserve	1,900,000	7.12	85.5	3.48	3.32
Yellow Jacket
Probable Ore Reserve	693,000		52.3	7.06	2.45
Possible Ore Reserve	337,000		53.1	7.15	2.50

* Merit has not prepared nor confirmed this resource estimate and as it pre-dates National Instrument 43-101, it does not comply with NI 43-101 requirements for mineral resource estimation. Merit and Mr. David Makepeace, P.Eng., independent Qualified Person, do not treat these numbers as a current resource on the property and the resource should not be relied upon, but remains a historic figure. In Mr. Makepeace's opinion, the historic "Proven and Probable Ore Reserve" category and the "Possible Ore Reserve" category would likely be equivalent to an "Indicated Mineral Resource" category and "Inferred Mineral Resource" category, respectively, under the current CIMM classification (CIM Definition Standards, 2004).

In August 2007 a $10.8 million program of surface diamond drilling, underground rehabilitation and development and underground diamond drilling was approved for the winter of 2007/spring 2008. By December 2007 a 40-man camp was installed, construction of a shop/mine dry complex was completed and mining equipment was procured. Rehabilitation of the 832 portal and underground development commenced in January 2008. 

The Company completed a 1363 metre 9 hole surface drill program on the Yellowjacket zone in November 2007 with the objective of verifying historic drilling over a portion of the Yellowjacket deposit. The program successfully achieved this objective by intercepting multiple zinc-lead-silver zones similar in grade and width to previous drilling. The fall drill program was the first step in the Company's plans to verify both the Yellowjacket and Main Zone historic resources on the J&L. Highlights of the fall 2007 drill campaign are tabled in the Company's April 1, 2008 news release. Underground development is ongoing at the J&L to provide the drill stations for conducting the necessary underground drilling to accomplish these larger plans. The 2008 exploration plan includes 1,000 metres of underground development and 5,000 metres of underground diamond drilling.