DESCRIPTION OF PROPERTY

We have options to acquire 100% interests in the Altan and Ovorkhangai property licenses, as described in detail in Item “Description of Business”. We do not own or lease any property other than our options to acquire interests in the Altan and the Ovorkhangai Property Licenses.

Net Smelter Royalty

A 1.5% net smelter royalty payment is required to be paid to Ton Fei Fred Tham and Associates for both properties. Net smelter royalty is defined as the net revenue generated fro the sale of the metal or product produced by a mine. The payments are required to be paid annually and will continue as long as the mine is in production. The payments are limited to cash, unless another method is agreed upon by both parties. If we are unable to pay the royalty payments or fall short of our work exploration programs, we will lose our interests in the Altan and Ovorkhangai property mineral licenses.

UNDURSHIL AIMAG (ALTAN) PROPERTY – SUMMARY DESCRIPTION REPORT

Location and Access

The Altan project area is located in the Undurshil district and spans the Dundgovi province of Mongolia (figure 1). These provinces are located approximately 385 kilometers south of Ulaanbaatar, the Capital of Mongolia. The central point of the license is located approximately 75 kilometers southeast of the nearest town named Undurshil. Access from Ulaanaatar to the town of Undurshil is via the Mongolian interstate highway and access from Undurshil to the property is via a gravel road.

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Property and Ownership

The property was originally comprised of 20,000 hectares (located on map sheet L49-109) in the Dundgovi provinces of Mongolia. However, on August 23, 2004, pursuant to a “Memo Regarding Downsizing of Undershil Aimag (Altan) Property,” the Altan property has been reduced to 8,000 hectares. See Exhibit 10.12. The claims are under license number 4767X, which is held by Ton Fei Fred Tham & Associates. The license was issued on September 27 ^th , 2002 and is valid for a period of two years and eleven months (see Figure 2 for license boundary). Pursuant to the above-mentioned “Memo Regarding Downsizing of Undershil Aimag (Altan) Property, the license has been renewed as of August 23, 2004.

Figure 2, Altan Claim Boundary Location

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Conditions to keep mineral title

In order to maintain the mineral title, payments must be made to the Mineral Resources Authority of Mongolia at the following rates:

• US $0.05 per hectare for the first year and US $0.10 per hectare for each of the second and third years.
• US $1.00 per hectare for each of the 4 ^th and 5 ^th years during the first exploration license renewal.
• US $1.50 per hectare for each of the 6 ^th and 7 ^th years during the second exploration license renewal.

Rock Formations

The Altan property displays typical basin (lows) and range (highs) style topography. The basin is covered with flat lying Devonian (geological period from 345 million to 405 million years ago) to Cenozoic (geological period from 63 million years ago) sediments, with topographic highs associated with igneous intrusions (produced under conditions involving intense heat; “igneous rock” is rock formed by solidification from a molten state) of carboniferous (from 280 million to 345 million years ago, of or relating to the Carboniferous geologic era; “carboniferous rock system”) granite.

The surficial (pertaining to or occurring on or near the earth’s surface) geology of the Altan property consists of old sediments and modern sand and gravel deposits, constituting 60% of the surface exposure. The remaining part of the property is composed of carboniferous Matad (an area in Mongolia) rock granitic (granite formed rock which is “very hard”) complex, limestone and sandstone formations, and Cretaceous (geological era from 63 million to 135 million years ago) basalt (the most common type of solidified lava).

Previous geological studies have shown two geological regions: the Olziit and the South Mongolian Belts, which are separated by a Fault that runs through the center of the property. A portion of the Olziit Metallogenic Belt (geological belt containing or made of or resembling or characteristic of a metal) overlays the northern section of the property and the dominant mineralization associated with this belt includes base metal, precious metal, and gold deposits. A portion of the South Mongolian Metallogenic Belt (geological belt containing or made of or resembling or characteristic of a metal) overlies the southern area of the property. Mineralization found in this belt includes base metal, manganese, and gold-silver mineralization.

The Present Condition

All mineral claims are currently in good standing with the Mongolian Government and are readily available for the company’s activities.

Work Completed 2003

The company is currently involved in a grassroots exploration in Mongolia and in October 2003, Rio Minerals Limited of Vancouver was contracted by Ton Fei Fred Tham & Associates to undertake a reconnaissance geological investigation of the Altan property.

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The geological program consisted of prospecting (looking for mineralization) and ground truthing (testing the validity of the government geology maps) the Matad (an area in Mongolia) rock complex, the Erdenebayan (an area in Mongolia), and the Hotol (an area in Mongolia) rock formations. The Matad (an area in Mongolia) rock complex is located in the north-east portion of the property whereas the Erdenebayan and Hotol rock formations are located in the southern part of the property. While on the property, the Rio Minerals crew undertook prospecting and ground truthing (testing the validity of the government geology maps). A total of nine ground truth locations (verifying the data on the map verses what seen on the ground) were observed.

Source of Power

Currently, there are no sources of power on the Altan property; however, the use of portable gas and wind electric generators are common throughout Mongolia.

Clear Statement

The company is currently involved in a grassroots exploration program on the Altan property and is not aware of any economic mineralization on the property.

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OVORKHANGAI PROVINCE PROPERTY – SUMMARY DESCRIPTION REPORT

Location and Access

This newly acquired mineral property is located in the Ovorkhangai province of Mongolia, between 46? 00' to 46? 20' North and 102? to 102? 28' East. The property is located immediately west of the town of Arvajheer. Access to Arvajheer is via the Mongolian interstate highway. Access to the property from the town of Arvajheer is via a gravel road.

Property and Ownership

The property is comprised of 118,223 hectares located in the Ovorkhangai province of Mongolia. The claim number is 6524X, which is held by Ton Fei Fred Tham & Associates. The license was issued on November 7 ^th , 2003 and is valid for a period of two years and eleven months; see Figure 3 for license boundary.

Figure 3. Paleogeographic Interpretation of Southern Mongolia-Central Asia during the Devonian and the Paleotectonic reconstruction for the Early Devonian displaying the Tuva-Mongol arc (simplified and modified from Sengö and Natal’n 1996).

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Conditions to Keep Mineral Title

In order to maintain the mineral title, payments must be made to the Mineral Resources Authority of Mongolia at the following rates:

• US $0.05 per hectare for the first year and US $0.10 per hectare for each of the second and third years.
• US $1.00 per hectare for each of the 4 ^th and 5 ^th years during the first exploration license renewal.
• US $1.50 per hectare for each of the 6 ^th and 7 ^th years during the second exploration license renewal.

Rock Formations

Investigations were carried out at the Geological Information Centre in Ulaanbaatar to obtain information pertaining to the geology and mineral potential of the property.

The majority of the property, consisting of the western and central portions (approximately 60%), is underlain by intrusive rocks (diorite, granodiorite, granite). The remaining 40% of the property, mainly the eastern and southeast portions, is underlain by sedimentary (resembling or containing or formed by the accumulation of sediment; “sedimentary deposits”) rocks. The southeast portion is comprised mainly of Devonian (geological period from 345 million to 405 million years ago) age to Carboniferous (from 280 million to 345 million years ago, of or relating to the Carboniferous geologic era; “carboniferous rock system”) age rocks; consisting of variable chert, shale and sandstone. The north and north-easterly portions of the property contain younger sediments.

The Mongolian government geological reports were examined to provide geological information. Report numbers 3912 and 4098 provided the most pertinent information for the Ovorkhangai province property.

All geological maps pertaining to the area were examined closely for mineral occurrences. The focus of the investigation was to gather data pertaining to base metal (metals such as copper, zinc, tin molybdenum mainly used for industrial use) and precious metal (gold, silver, platinum) potential. There are several geochemically anomalous areas outlined on the geological maps that are mainly anomalous (abnormal chemistry of the earth’s crust) in tungsten. Several gold location sites are shown on the geological map for report 3912, but were not referenced in the accompanying text for the report. There is, however, one gold location site on the Mineral Occurrence map for Mongolia. This is a gold occurrence that is located in the northwest corner of the property and is described as an igneous (produced under conditions involving intense heat; “igneous rock” is rock formed by solification from a molten state) related gold occurrence. Also, several placer (an alluvial deposit that contains particles of some valuable mineral) gold occurrences are found just off the northeast corner of the property. Another placer gold occurrence is found in the southwest corner of the property.

The base metal potential for the property is unknown at this point as there are no known occurrences for copper, silver, lead, or zinc. Although numerous samples have been taken during previous surveys, no values approaching economic grade have been obtained.

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The Present Condition

All mineral claims are currently in good standing with the Mongolian Government and are readily available for the company’s activities.

Source of Power

Currently there are no sources of power on the Ovorkhangai province property, however, the use of portable gas and wind electric generators are common.

Clear Statement

The company is currently involved in a grassroots exploration program on the Ovorkhangai province property and is not aware of any economic mineralization on the property.

Property Selection

The Properties were selected based on the technical information obtained from the Geologic Information center in Ulaanbaatar, Mongolia.

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The technical information used to select the properties was obtained by Derrick Strickland, a professional geologist, and Greg Thompson, also a professional geologist, by spending several days at the Geologic Information center in Ulaanbaatar Mongolia researching publicly available scientific data.

Altan Property Selection -

The Altan property was selected based on the proximity to Ivanhoe Mine Ltd and Magnum d’Or Resources Inc mineral claims. The geologic structure present on the Altan property it genetically related to the same structures on both Ivanhoe Mine Ltd and Magnum d’Or Resources Inc mineral claims. Each of the above companies have had success exploring for mineral resources on their respective properties.

Ovorkhangai Property Selection -

Several gold location sites are shown on a government geological map, but were not referenced in the accompanying text for the report. There is however, one gold occurence referenced on the Mineral Occurrence map for Mongolia. This occurrence is located in the northwest corner of the property and is described as a granitoid (resembling granite in granular appearance) related gold occurrence. Also, a placer (an alluvial deposit that contains particles of some valuable mineral) gold occurrence is found at the southwest corner of the property.

Derrick Strickland, a professional geologist, has created two separate geological reports; one on the Altan property and the other on the Ovorkhangai property.

Greg Thompson, a professional geologist, and Ivan Bebek have visited the Altan and the Ovorkhangai properties.

We intend to continue to use the services of consultants for exploration work on our properties. For future mineral exploration programs the company intends to use the following contractors:

• Derrick Strickland P.Geo, Geologist, B.sc, MBA, a professional geologist with over 15 years of mineral exploration experience.
• Greg Thompson P .Geo, Geologist, B.sc, a professional geologist with over 20 years of minerals exploration experience.
• Rio Minerals Limited of Vancouver, B.C., who has been providing mineral exploration services to the mining industry for over 10 years.

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