Capital Requirements & Policies

PROPOSED “CAP” ON THE NUMBER OF OUTSTANDING SHARES OF THE COMPANY’S COMMON STOCK:

The Directors of the Company do not wish to increase the number of shares of the Company’s Common Stock. To that end, they have secured agreements from the holders of Convertible Loan Notes issued by the Company, not to convert these Notes at this time. All of the holders of these Convertible Loan Notes are significant stockholders in the Company; conversion of any of these notes would be contrary to their interests which are aligned with the Company’s Management.

The Company will address the instruments planned for (a) cash raising and (b) acquisitions in separate paragraphs hereunder.

Should the Company be presented with an extraordinary opportunity to increase the value of the shares of Common Stock, it would under those circumstances, consider the issuance of additional but restricted shares of the Company’s Common Stock.

COMPANY’S OPERATING EXPENSES AND FINANCIAL POSITION AS AT DECEMBER 5, 2011:

The Company has incurred cash losses in respect of administrative expenses and professional fees to date in the amount of circa US$75,000. These were funded by a third party whom has accepted a long term Convertible Loan Note in settlement. Its trade creditors amount to US$3,000. Additional losses are reflected by non-cash entries in our Income Statement.

The Company has an unsecured loan facility with certain of its stockholders in the amount of US$100,000 which the Company has not yet utilized. This will partly be utilized in the next month to fund professional fees, immediate BLM Claims, State of Arizona Prospecting Permits, exploration expenses, Investor Relations, Acquisition of additional Claim Blocks adjacent to our existing Claims in our portfolio, Press Releases and Regulatory Filings.

This loan facility is to be repaid in full upon the Company’s receipt of the initial fund raising monies in the amount of US$500,000.

The terms of the Company’s planned fund raising in the immediate term are outlined in another paragraph hereunder.

MANAGEMENT PLANS FOR THE RAISING OF CASH IN THE IMMEDIATE TERM:

The Company’s Management believes that the Company requires US$500,000 in cash to meet it exploration budget for the next six months. The Company overheads are nominal and the Directors are not drawing any remuneration from the Company.

This initial amount of US$500,000 will be raised in cash from several of the Company’s existing stockholders in exchange for Three Year Convertible Loan Notes bearing interest at 4.5% per annum plus Options to acquire 500,000 shares of the Company’s Common Stock at a price of US$1.00 per share, exercisable after one year from the date of their issue. This cash will be raised immediately upon the filing of the appropriate paperwork and the Financial Statements with the OTC Markets Group.

The Company will require no less than an additional US$500,000 within six months thereafter. In all likelihood this amount required by the Company will considerably larger as additional mining properties are very likely to be acquired by the Company. This will last the Company for additional six months before additional cash will be required.

This second tranche of funding (which is expected to be no less than the amount of US$1,000,000) will be raised through the issue of financial instruments including but not limited to

Corporate Bonds, Classes of shares Preferred Stock (Convertible and Non-Convertible, Voting and Non-Voting), Warrants, Options, Types of Units or Linked Units.

Should this be unsuccessful in the second tranche of fund raising, the Company’s Management may consider the issue of shares of restricted Common Stock marked as “Regulation S” to foreign investors. This is not a desirable option given the Company’s Management desire to avoid the issuance of any additional shares of the Company’s shares of Common Stock.

NOTE: Should the Company obtain a Dual Listing for its shares of Common Stock on a European Exchange, it will be coupled with a Capital Raising. Should this be the case, Company Management acknowledges that the Company’s cash reserves would be significantly increased.

MANAGEMENT PLANS FOR THE RAISING OF ADDITIONAL CASH IN THE FUTURE (POST THE NEXT TWELVE MONTHS)

Management expects that post the next twelve months it will have established the Company in a very superior position within its Mining & Exploration peers. This would be the case should Management be successful in (a) its exploration efforts to prove up reserve bases in its portfolio assets (b) in the appointment well respected competent persons to its Board of Directors and its Advisory Committee (c) its ability to make acquisitions (d) in its ability to dispose of assets for cash and (e) establish Joint Venture Partners for at least one of its Mining Properties.

Should this be case, the Company would be in a position to move to a more “serious” market in the USA such as the NASDAQ Small Cap Market and if quoted on the Deutsche Bourse, to a significant Market Tier on that Exchange.

Should the Company’s Management be successful in the above-mentioned, it could enable the Company to raise anything between US$20 million to US$50 million in additional cash.

In the real world, given Mining Exploration operational difficulties, delay in permitting, etc., it is not unreasonable to expect that post the next twelve months, the Company should be in a position to raise at least US$10 million on terms favorable to its stockholders.

FINANCIAL IMPACT UPON THE COMPANY INCREASING THE SIZE OF ITS BOARD OF DIRECTORS AND THE ESTABLISHMENT OF AN ADVISORY COMMITTEE:

The Company’s Management has stated previously that it is imperative for the Company to appoint:

Three additional Independent Non-Executive Directors; and A Chief Financial Officer; and An Advisory Committee comprised of at least four persons.

The Company’s Management would recommend the remuneration of these persons as follows:

Independent Non-Executive Directors each at the rate of US$20,000 per annum, with 100,000 shares of the Company’s restricted Common Stock to each Director plus Options (Expiration Dates to be determined) to acquire shares of the Company’s shares of Common Stock at an amount of 500,000 each and at no less than US$1.00 per share.

The Chief Financial Officer need not be appointed to the Board of Directors of the Company given the current size and resources of the Company. A salary of circa US$40,000 per annum, with 200,000 shares of the Company’s restricted Common Stock plus Options (Expiration dates to be determined) to acquire shares of the Company’s shares of Common Stock at an amount of 200,000 at no less than US$1.00 per share.

Advisory Committee Member each at the rate of US$10,000 per annum, with 100,000 shares of the Company’s restricted Common Stock to each Committee Member plus Options (Expiration dates to be determined) to acquire shares of the Company’s shares of Common Stock at an amount of 100,000 each and at no less than US$1.00 per share.

POTENTIAL UNFORESEEN COSTS NOT ACCOUNTED FOR BY THE COMPANY AT THIS TIME:

The Company’s Management acknowledges that additional and unaccounted for expenses could be incurred by the Company. This includes but is not limited to:

The retaining of Technical and Administrative Staff; and The need to retain the exclusive services of professionals which would include Mining Engineers, etc.

The retention of costly independent and external professional Consultants and Experts in respect of the Exploration and “Value Creation” of the Company’s portfolio of Mining Properties; and

Additional and unbudgeted costs in respect of the Company’s Mining Claims and including Road rehabilitation, etc.

This would be offset by a Capital Raising in that market should the Company proceed with this proposed Dual Listing.

MANAGEMENT PLANS FOR UTILIZATION OF CASH RESERVES FOR THIS FISCAL YEAR:

The Company’s Management is committed to expenditure primarily on Exploration Expenses related to its portfolio of Mining Properties. This would initially and inter alia include but not be limited to the salaries of two full time Geologists, Professional Fees, Assay Laboratories, External Consultants, Bureau of Land Management Fees, Technical Staff including a Mining Engineer, Travel, Public Company expenses, Independent Directors’ Remuneration, Audit Fees, Other salaries and Advisory Committee Members’ Remuneration.

THE RATIONALE FOR THE LARGE BUDGETED EXPLORATION EXPENSES BY THE COMPANY:

To put our message very simply, the Company’s Management believes in the following basic philosophy given the prevailing record high prices for both Gold and to a lesser extent, Silver:

• The Company’s existing and initial portfolio of six Gold & Silver Mining Properties were very carefully selected due to their outstanding characteristics as Exploration Properties coupled with Management’s belief that it can rapidly and inexpensively drill out a “Resource Base”; whilst maintaining the vital “Blue Sky” potential currently being aggressively sought as acquisitions or as Joint Venture opportunities by the Major Global Mining Corporations.

Due to the availability of historic data on the initial portfolio of Mining Exploration Properties owned by the Company any funds expended on exploration should produce a higher than normal return.

This will also result in reducing the time frame to produce scoping and bankable feasibility studies on each tenement, thereby maximizing the economic value of the Company.

These opinions expressed on this page are those of the Company’s Directors. Please refer to our “Risk Factors, Disclaimers and Cautionary Statement”, by clicking here: