Overview

The Fenelon Gold Project is located about 600 kilometres northwest of Montreal, Quebec along the Detour-Sunday Lake Deformation Zone which hosts the Detour Lake Gold Deposit 70 kilometres to the west. Balmoral Resources purchase a 38% interest in the Fenelon Project in November 2010 and maintains an option to purchase the remaining 62%. Balmoral is the operator of the Fenelon Project.

Historic work at Fenelon has included construction of an underground access ramp and two underground working levels, initial test milling, commercial-scale metallurgical tests and environmental studies. Balmoral controls an active mining lease which hosts the high-grade Fenelon Discovery Zone and a land position totaling 75 square kilometres which includes several other zones of anomalous gold mineralization.

Cyprus Canada Inc. (now Freeport MaMoRan Copper and Gold Inc.) discovered high-grade gold mineralization on the Fenelon property in 1993. Through 1998, Cyprus and Fairstar Explorations Inc. expended in excess of $8 million on the Fenelon Project. This work included extensive shallow diamond drill testing and the preparation of an open-pit mine prefeasibility study focused on the development of gold resources above the 75 metre level in the Discovery Zone. In 1998 Cyprus withdrew from Canada and International Taurus Resources Inc. purchased Cyprus' Canadian gold properties, which included Fenelon, N2 and Martiniere (all now controlled by Balmoral). As part of this purchase Taurus acquired an option to purchase Cyprus's 62% interest in the Fenelon project.

Under Taurus' direction exploration at Fenelon focused on the potential for development of a high-grade, underground mining operation based on the existing shallow high-grade resources. Between 1999 and 2005 Taurus and Fairstar spent an additional $13 million drilling, bulk sampling, underground development and resource assessment.

In March 2005, Taurus merged with American Bonanza Gold Mining Corp. to form American Bonanza Gold Corp. In a concurrent transaction, American Bonanza purchased outright a 38% interest in the Fenelon Project from Fairstar. In November of 2010 Balmoral purchased the Fenelon Project from American Bonanza including the Cyprus option.

Drilling to date has intersected high-grade gold mineralization associated with the Discovery Zone for a minimum of 300 metres along strike, across widths of 75 metres and to vertical depths of at least 150 metres. The deposit remains open to depth in all directions and there are early indications of potential strike extensions to the high-grade Fenelon gold system.