Guyana Properties

In late October 2006, ValGold signed a letter of intent to enter into an agreement with Newmont Overseas Exploration Limited, a subsidiary of Newmont Mining Corporation, to earn 100% interest (subject to certain interests reserved by Newmont) in four highly prospective properties in northwest Guyana. The total size of the areas is approximately 4,900 km² or 1,213,500 acres.

Under the terms of the proposed agreement with Newmont Overseas Exploration Limited, ValGold's earn-in for 100% interest in the properties will require property expenditures of US$5.0 million over four years. There is a first year commitment of US$750,000 after which further expenditures are optional. Newmont will reserve back-in options by which at any time subsequent to ValGold's earn-in up and until 90 days following the delivery of a feasibility study for any Prospecting License ("PL"), Newmont may acquire 75% interest in that PL by paying ValGold, in cash, an amount equal to 2.5 times ValGold's US$5.0 million earn-in cost plus the post earn-in expenditures on the PL up to the back-in exercise date. After the initial back-in option is exercised, the US$5.0 million earn-in cost will not be reimbursed. Following Newmont's election of a back-in option (whether one or more), if a party dilutes to 10% or less under a joint venture agreement, such party's interest would be converted to a 1% Net Smelter Returns royalty (NSR) in respect of that PL. Newmont would be entitled to a 1.5% NSR in respect of any PLs for which it does not make the back-in election.

The Five Star area permit is valid until late September 2007 at which time the permit may need to be reduced by covering select areas with PLs. Up to 20 PLs, each covering up to 50.6 km² (12,500 acres), are allowed according to Government regulations. ValGold has the exclusive right to occupy and explore the three areas comprising the Otomung Permit for Geological and Geophysical Surveys ("PGGS") until at least January 2008 before it is necessary to reduce the area by way of PLs. The other license areas need not be reduced further and may be renewed as and when required. The following table gives the details of the areas covered by the letter of intent.

License	Type of License	Number of License(s)	km²	Acres
Five Star	PGGS	1	3,605	891,810
Otomung	PGGS	3	1,117	276,090
Kartuni	PL	3	150	38,768
Cuyani River	Medium Scale	6	28	6,893
Total			4,900	1,213,561

The properties are located in the northern part of the Archean-Proterozoic Guiana Shield, which is mapped in Guyana as the Paleoproterozoic Barama-Mazaruni Supergroup. This granite-greenstone terrane is intercalated with Archean-Proterozoic gneisses and was intruded by felsic to ultramafic rocks during the Trans-Amazonian Orogeny. The terrane is considered to be the equivalent of the volcanic-sedimentary Birimian Supergroup in West Africa, which is host to several large gold deposits including AngloGold Ashanti's Obuasi Mine in Ghana that has annual production of approximately 400,000 ounces and a current mineral resource in the order of 24 million ounces. Major deposits found within the Guiana Shield include the Rosebel mine in Suriname, the Omai mine in Guyana and the Las Cristinas and Brisas deposits in Venezuela.

The properties are considered highly prospective for gold and, potentially, diamonds, uranium and copper-nickel and/or platinum group metals (PGM). Several gold occurrences have already been discovered on the properties including the Makapa occurrence where rock samples have returned gold values as high as 136.0 g/T. Limited drilling at the same occurrence has intersected up to 18.3 g/T gold over 2.0 metres in silicified volcaniclastic conglomerate. Large areas have also seen no work or have good gold stream silt anomalies that have not been investigated. Alluvial diamonds have been found at a number of locations yet very little exploration has been conducted for this commodity. Radiometric surveys have identified several uranium anomalies and layered, intrusive, mafic to ultramafic rocks could potentially host copper-nickel and/or PGM mineralization.

All permits are in hand to begin fieldwork immediately. In November 2006, field crews began stream sediment sampling the area to the northwest of the western most Kartuni PL. This area, which measures approximately 6 x 15 kms, is believed to be underlain by a sediment-volcanic contact and is considered highly prospective for shear hosted gold mineralization both along the contact and within the adjacent sediments. The contact is also coincident with a regional shear zone that is a splay off the larger northwest striking Puruni River Fault.

Since fieldwork began in October 2006, a nine hole, 1,331 m diamond drill program has been completed on the Erakiri gold occurrence in addition to minor mapping and soil sampling. Most of the drill holes targeted two parallel volcanic/feldspar porphyry contacts which are believed to be the source of placer gold in the area. The drill program was terminated in mid August 2007 due to a lack of encouragement seen in the drill core assays.

Besides the work at Erakiri several large areas have been soil sampled in an effort to outline future drill targets. The largest and most promising at this stage is referred to as the Whana area which comprises two main soil anomalies within a much larger anomalous area covering several tens of square kilometers. The two main anomalies are referred to as the Reis and Yearwood anomalies. Both have minimum strike lengths of 2,000 metres and have never been followed up by trenching or drilling. Two other major soil sampling programs have taken place in the Piai/Barama areas and in the Masawaki area.

Most of the fieldwork in the fall and winter of 2007 included the follow-up of soil anomalies in the Whana, Piai/Barama and Masawaki areas. This work started with prospecting, mapping and rock chip sampling the best anomalies and if warranted, will be followed up by trenching and drilling in 2008. These areas have basically seen no advanced exploration work such as trenching and drilling in the past and, as a consequence, offer the possibility of discovering a large deposit at or near surface.