McLennan Property

Angel Hill Gold Zone

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In 2003 a 130m segment of the Angel Hill Gold Zone on the McLennan property mechanically stripped, washed, sampled and mapped. The zone ranged from trace to 71.3 g/mt Au.

From 2003 to 2005 Houston conducted magnetic, VLF-EM and IP geophysics. These combined with gold showings on the Gold Sun Property show a strike potential of 3.3km.

In 2004 additional channel sampling in Angel Hill Gold Zone ranging from 0.59 g/mt Au to 115.5 g/mt Au.

In November 2003 to February 2004 a Phase I- 20 hole 1139m shallow diamond drilling program was carried out to test the Angel Hill Gold Zone. 0-40m depth was tested. Twelve of these holes intersected values of 2 g/mt Au or higher and 5 of those intersected grades higher than 1 oz/st Au.

In December of 2004 a Phase II - 7 hole, 701m diamond drill program performed further shallow testing of the Angel Hill Gold Zone to an approximate depth of 60m below the stripped area. Four of the 6 drill holes intersected values in excess of 2 g/mt Au and one drill hole exceeded 1 oz/st Au. One drill hole was done on the McLennan Gold Zone and returned 5.736 g/mt Au over 5.05m.

In Spring 2006 a Phase III nine hole 1037m (3402ft.) step out diamond drill program builds upon the results of two prior delineation drill programs which defined an inferred mineral resource from surface to a depth of 60m (196.8ft.) over a strike length of 200m at the Angel Hill Gold Zone. Seven bore holes of the drill program tested the depth extent of the gold zone. All seven drill holes successfully intersected the altered rocks of AHGZ and extended the zone to an approximate depth of 100m (328ft). The last two holes of the diamond drill program tested the McLennan Gold Zone (“MGZ”). Both of these drill holes intersected the sulphide mineralization characterizing the MGZ.

Six of the nine holes (and three of the last five holes) of the drill program encountered gold values in excess of 7 g/mt Au (0.204 oz/st Au). Holes 28 to 34 targeted the Angel Hill Gold Zone (“AHGZ”) while holes 35 and 36 tested the subparallel McLennan Gold Zone (“MGZ”). Drill Hole 35 intersected a core length of 4.25m grading 6.69 g/mt Au (13.37ft. grading 0.195 oz/st Au) including 1.00m grading 15.86 g/mt Au (3.28ft. grading 0.463 oz/st Au).

In Spring 2006 a bulk sample from the Angel Hill gold sample was drilled, blasted and hauled to a third party mill for processing. A total of 1000 tonnes (1147.7 short tons) yielded an average head grade of 5.67 g/mt Au (0.165 oz/st Au). The total contained gold was 5,903.6 grams (189.8 ounces) and 5,490.4 grams (176.5 ounces) of gold was produced at a reported recovery of 93%.

In 2009 IP geophysics traced Angel Hill Gold Zone trend. The Angel Hill Gold Zone (AHGZ) forms the flank of a coincident magnetic and IP chargeability high that can be traced for over 3.3 km (1.98 miles) on the property. Values up to 1.22 metres grading 479 g/t gold have been intersected along this trend. This anomaly can be traced northward for a distance of 1.4km from the AHGZ bulk sample site and across the Dogpaw and Dogpaw West properties.

Figure IV: IP Chargeability Anomalies and Identified Properties

Angel Hill Mineral Resource and Mineral reserve estimates
The most current mineral resource estimate in compliance with NI 43-101 and CIM standards was done on the McLennan Property’s Angel Hill Gold Zone on the West Cedartree Gold Project. The resource estimate was undertaken by Dean R. Cutting, B.SC., P.Geo and E. Grayme Anthony, B.Sc., P.Geo., M.B.A. The effective date of the resource estimate was October 20, 2005 and does not include any Phase III drilling phase done subsequent this date.

Table 4: Angel Hill Gold Zone Inferred Resource Estimate

McLennan Property

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Prior to fiscal 2011, Houston accomplished the following significant exploration work on the Angel Hill and McLennan Gold Zones: