March 11, 2016

Reykjanes

Summary

The 897.5 km2 Reykjanes licence area is in close proximity to build up areas Reykjavik and Keflavik and is supported by good transport links and has main highways running through it. The high level of development in this area will facilitate exploration in terms of accessibility but further down the line certain areas of geological interest may have been otherwise purposed.

The Reykjanes peninsula can be considered one of the most mature areas of Iceland, having been exploited for its geothermal fields. Despite this, exploration has been focused towards the exploitation of this field, rather than towards minerals, this is considered to lower the actual maturity of this district from the perceived.

Abnormal metal contents have been observed in Reykjanes outlets, both with regard to scales in wellhead expansion chambers and to geyserite (siliceous sinter) deposits associated with the industrial “cool” water effluents. Metal values in pipe scales have been shown to reach 106 g/t gold, 2,743 g/t silver, 12.80% copper, 7.75% lead and 17.00% zinc.

Maximum metal values in the volumetrically more important sinter deposits are similarly high with regard to gold (2.55 g/t), silver (+200 g/t), copper (0.50%), lead (0.34%) and zinc (also 0.34%). Manganese reaches 0.16% and iron can reach as much as 30 percent. °

It is interesting to postulate that the base metal content of these solutions, that are being brought up from a minimum of 900 metres, reflect the more basal, base metal rich zones of epithermal deposition and that the upper portions of these deposits will be more gold rich.

The historic data has been insufficient exploration to define a current resource and the Company cautions that there is a risk further exploration will not result in the delineation of a current mineral resource.

Faro_de_Valahnúkur,_Suðurnes,_Islandia,_2014-08-13,_DD_034

Exploration Summary

This will consist mainly of geological field work, including mapping and sample collection in order to improve our exploration coverage of Iceland, generate quantitative geochemical sample assay data and produce geological and alteration maps of promising areas. The exploration will both recover previously explored areas known to carry some gold and also cover previously unexplored territory. Exploration will be guided by all previously collected sample data.  Aster data covering areas of interest will also be bought and processed to highlight alteration in order to help map the extents of targets and find new ones.

Salt lake at Reykjanesska