Annual Information Update-Pt1

RNS Number:2933R
Moydow Mines International Inc
01 April 2008


                        MOYDOW MINES INTERNATIONAL INC.

                            ANNUAL INFORMATION FORM

                      FOR THE YEAR ENDED DECEMBER 31, 2007


                                 MARCH 30, 2008

                        Moydow Mines International Inc.

                         Suite 1220, 20 Toronto Street

                            Toronto, Ontario M5C 2B8

                               TABLE OF CONTENTS







Item 1.   Cover Page                                Cover

Item 2.   Table of Contents                             2

Item 3.   Corporate Structure                           3

     3.1.   Name and Incorporation                      3

     3.2.   Intercorporate Relationships                3

Item 4    General Development of the Business           4

              History of the Moydow Group               5

Item 5.   Description of the Business                  13

              General                                  13

              Dala                                     13

              Hwidiem                                  36

              Okumpreko                                41

              Kanyankaw                                41

              Port Loko                                50

              Other properties                         66

              Risk Factors                             66

Item 6.   Dividends                                    69

Item 7.   Description of Capital Structure             69

Item 8.   Market for Securities                        70

Item 9.   Escrowed Securities                          70

Item 10.  Directors and Officers                       71

Item 11.  Promoters                                    72

Item 12.  Legal Proceedings                            72

Item 13.  Interest of Management and Others in 
          Material Transactions                        72

Item 14.  Transfer Agent and Registrar                 72

Item 15.  Material Contracts                           72

Item 16.  Interest of Experts                          72

Item 17.  Audit Committee                              72

Item 18.  Additional Information                       73

Appendix "A"                                           75



ITEM 3:  CORPORATE STRUCTURE



3.1   Name and Incorporation



Moydow Mines International Inc. ("Moydow" or the "Company") was incorporated
under the laws of the province of Alberta, Canada, by certificate of
incorporation issued December 12, 1972, continued under the laws of the province
of British Columbia on January 16, 1981 by certificate of incorporation and
continued under the laws of the province of Ontario by articles of continuance
effective on December 9, 1998.  On December 18, 2006 the Company continued under
the laws of the province of British Columbia.  The Company's registered office
is located in Vancouver, British Columbia and the head office is located at 20
Toronto Street, 12th Floor, Toronto, Ontario, M5C 2B8.  The Company also has
offices in Dublin, Ireland, in Accra, Ghana, in Luanda, Angola and in Freetown,
Sierra Leone.  The Company's outstanding common shares are listed on both the
Toronto Stock Exchange and the Alternative Investment Market ("AIM") of the
London Stock Exchange under the symbol "MOY".  Further information on the
Company can be found on the Company's website at www.moydow.com or on the public
filings on SEDAR at www.sedar.com.



3.2   Intercorporate Relationships



The following diagram sets forth the relationship of the Company including its
material subsidiaries and associated companies (the Company together with such
subsidiaries and associated companies is collectively referred to herein as the
"Moydow Group"), including their jurisdictions of incorporation, and the
percentage interests of the Moydow Group in its current material mineral
properties:




Notes:

1. Shankill Limited (Isle of Man) ("Shankill (Isle of Man")) was incorporated
under the laws of the Isle of Man on April 5, 2003.  Shankill (Isle of Man)'s
subsidiaries were created as follows:

*  Shankill Limited (Ghana) ("Shankill (Ghana)"): incorporated on August 7,
2003;

2. Haddington Limited (Isle of Man) was incorporated under the laws of the Isle
of Man on May 7, 2003.

3. The Company holds a joint venture interest in the Kanyankaw gold property
with Antubia Resources Limited ("Antubia"), a subsidiary of Glencar Mining plc
("Glencar").  See "Description of Properties - Kanyankaw Property".

4. In 2004, Moydow signed an agreement with PW Limited to earn a majority
interest in the Nyaduom and Kushea mining leases, known as the Okumpreko gold
project.  In early 2005, Moydow and its partner, Concord Minerals LLC entered
into an agreement with Endiama, the Angolan state diamond mining company and
Cimader, an Angolan company, to explore for alluvial diamonds on the Dala
concession in Angola.  Moydow can earn a 16.5% interest in the concession by
spending $2.5 million by October 2007.

5. On December 9, 1998 the Company completed the acquisition (the "RTO
Transaction") of all of the outstanding shares and warrants of Moydow (Isle of
Man) in consideration for shares and warrants of the Company and commenced its
current business activities.  In accordance with the terms of the RTO
Transaction, the name of the Company was changed from Westley Mines
International Inc. to its present name, the management of Moydow (Isle of Man)
took over management of the Company and the outstanding common shares of the
Company were consolidated on a 12 for 1 basis.  The RTO Transaction resulted in
the former shareholders of Moydow (Isle of Man) owning, immediately following
the completion of such transaction, over 90% of the outstanding shares of the
Company.  Moydow (Isle of Man), which was incorporated under the laws of the
Isle of Man on January 27, 1992, holds an interest in a gold mine and several
exploration and development properties in Ghana.



ITEM 4:  GENERAL DEVELOPMENT OF THE BUSINESS



Overview



The Company is engaged primarily in the acquisition, exploration and development
of mineral properties.  The Company has focused its exploration efforts in
Africa and, in particular, the historical gold producing regions of Ghana
(formerly the Gold Coast), Angola and Sierra Leone.  The property portfolio
currently includes interests in properties in Ghana - Kanyankaw, Hwidiem and
Okumpreko, properties in Sierra Leone and Angola.



On March 1, 2006, the Company announced that it had reached an agreement with
Diamond Fields International Ltd. (Diamond Fields) effective February 28, 2006;
pursuant to which, Moydow common shareholders will exchange their Moydow
securities for securities of Diamond Fields (the acquisition).  As all the
necessary stipulations required under the terms of agreement were not reached by
May 31, 2006, therefore, the agreement automatically terminated.



On December 8, 2003, the Company sold its wholly owned subsidiary, Moydow
Limited (Isle of Man), which, following an internal restructuring, owned the
Company's 50% joint venture interest in the Ntotoroso property but no other
mineral properties, to Newmont Mining Corporation (Newmont).



In connection with the sale, the Company entered into a royalty agreement,
whereby the company acquired the right to a net smelter return royalty of 2% on
all recovered ounces of gold and silver produced from the Ntotoroso property
after the first 1,200,000 gold equivalent ounces in consideration for $250,000.
No value has been ascribed to the royalty rights acquired by the Company.



At the time of sale, the reserve at Ntotoroso was calculated at 1,200,000 ounces
of gold.  This figure was based on a gold price of $325 per ounce and assumed
that only the Subika pit would be mined down to a depth of 150 metres.



In March 2005, Newmont published public disclosure documents relating to the
development of the Ahafo mine.  These documents showed a newly calculated
reserve on Subika of 2,460,000 ounces of gold and envisaged mining the pit to a
depth of 270 metres.  In addition, the Awonsu pit schedules to start production
during 2008 falls partly under the royalty agreement.



The project poured it's first gold on July 18, 2006 and as at December 31, 2007
had produced 390,294 ounces of gold of which 263,741 ounces of gold was produced
in 2007.  Assuming the same rate of production, we expect our first royalty
payment in year 2011.  Using the price of gold as at December 31, 2007 of $845
per ounce, we expect annual royalty payments of up to $4.50 million.









4.1              History of the Moydow Group



The Chairman of the Board of the Company, Noel Kiernan, has over 20 years of
experience in West Africa and is the Ghanaian Honorary Consul to Ireland.  Mr
Kiernan was the original applicant for the property now known as the Teberebie
gold mine located in Ghana and, as managing director of the project, brought the
mine through feasibility and into production.  The Teberebie gold mine has
produced over one million ounces of gold since it commenced production in the
early 1990's and is now owned and operated by Ashanti Goldfields Co. Ltd.  Noel
Kiernan is also the Chairman of Minerex Drilling International Inc., a drilling
company that is active in West Africa and from time to time provides drilling
and other services to the Moydow Group.



In March 1989, Noel Kiernan formed Moydow (Ghana) to acquire the Kanyankaw
property, which was subsequently the subject of an agreement with Glencar.
Brian Kiernan joined the management of the Moydow Group in 1993, as Chief
Executive Officer of Moydow (Isle of Man), and Joseph Breen joined as Chief
Operating Officer of Moydow (Isle of Man) in 1996 after three years of
consulting for Moydow (Isle of Man).



Moydow (Isle of Man) began operations in June 1994 with the acquisition of a 42%
interest in Wassa Holdings, which held a 90% interest in Satellite, which held a
100% interest in the Wassa Property.  Over the next three years, Moydow (Isle of
Man)'s interest in Wassa Holdings was diluted to 34%; the remaining 66% of Wassa
Holdings is held by Antubia, a subsidiary of Glencar.  Satellite holds a 30-year
gold mining lease for the Wassa Property, which expires in the year 2022.



Moydow (Isle of Man)'s interest in the Ntotoroso Property was obtained in
September 1996 with the acquisition of Moydow (Ghana) from Noel Kiernan, then
Chairman of the Company.  Moydow (Ghana) held the property indirectly through
its 60% ownership of Rank.  Pursuant to an October 1997 agreement, Normandy
LaSource, a subsidiary of Normandy Mining Limited, held 40% through their
commitment to fund $2.5 million of exploration expenditures by June 30, 1999,
which was achieved.  Normandy LaSource increased its ownership through its $4
million funding of further exploration expenditures and holds a 50% beneficial
interest in Rank.  In early 2002, Newmont Mining Corporation acquired Normandy
Mining Limited.



Moydow (Isle of Man)'s interest in the Kanyankaw prospecting licence was
obtained in September 1996 with the acquisition of Moydow (Ghana) from Noel
Kiernan, a related party.  Moydow (Ghana) held the licence as a joint venture
with Antubia.  Currently, the partners have agreed to split the property into
two parcels and application for the property split was approved by the Ghanaian
Minerals Commission.



History of West Africa



History of the West Africa has a long history of mineral production that dates
back to the 10th century A.D. and possibly as early as the 5th century B.C.  A
significant gold trade began with overland transportation to North Africa and
the Middle East in the 12th and 13th centuries.  As European economies grew and
the great marine explorers of the 15th century took to the seas, Portuguese,
Dutch, English, and French merchants launched aggressive trading activities
between Europe and West Africa.  Gold was the most valuable commodity in this
lucrative trade.



In the 18th and 19th centuries, the region was colonized and the "Gold Coast"
was carved into dependencies of Portugal, England, and France.  France colonized
most of the region covering Senegal, Guinea, Cote d'Ivoire, Mali, Dahomey, and
Niger.  England became the protector of Sierra Leone, Ghana, Upper Volta and
Nigeria.  The early history of Ghana and Mali is somewhat entwined because the
tribes of this region were nomadic.  Ghana appears to have been the principal
source of West African gold and Mali a subsidiary source and main route for gold
that found its way to North America, Europe and the Middle East in the 13th and
14th centuries.  The first record of gold from the region is connected with an
account that Emperor Cainca Moussa brought four tons of gold to Mecca on a
pilgrimage in 1433.



Mineral Rights



Mineral Rights and Mining in Ghana



Under the constitution and the mining laws of Ghana, all minerals in Ghana in
their natural state are the property of the state and title to them is vested in
the President on behalf of and in trust for the people of Ghana, with rights of
prospecting, recovery and associated land usage granted by the state under
licences or leases.  Three types of tenure are granted as a company progresses
through the reconnaissance, exploration, development and production phases: a
reconnaissance licence, a prospecting licence and a mining lease.  In addition,
a licence is required for the export or disposal of minerals and the government
has a pre-emptive right over all minerals produced.  Activities such as the
diversion of water require separate licences or consents.  A rental fee is
payable to the government in respect of licences and leases.



A reconnaissance licence permits the holder to carry out geophysical,
geochemical and photo-geological surveys, but not drilling, excavation or
subsurface activities.  They are granted for a period of up to twelve months and
may be renewed, provided the renewal application is made at least three months
prior to the expiration of the licence and the government determines that the
renewal is in the public interest.  While a reconnaissance licence is not
necessary in order to secure a prospecting licence, it does grant the holder
with the exclusive right to obtain a prospecting licence in respect of the lands
/minerals.



A prospecting licence permits the holder to carry out both reconnaissance work
and surface excavation and drilling work, including trenching.  Prospecting
licences are granted for a period of up to three years and may be renewed for
additional periods of two years, provided the renewal application is made at
least three months prior to the expiration of the licence and the government
determines that the renewal is in the public interest.  Upon the renewal of a
prospecting licence, the area covered by the initial licence may be reduced by
one-half of the area covered by the previous licence.  The licence holder is
able to select the areas to be eliminated upon renewal.  If a licence holder
fails to expend any monies that the holder designated in its program for
exploration under the prospecting licence, then such non-expended monies will
become a debt due to the Republic of Ghana.



A mining lease grants rights to take all reasonable measures on or under the
surface to mine the mineral to which the mining lease relates, to erect
necessary equipment, plant and buildings, to prospect within the mining area and
to stack or dump mineral waste in an approved manner.  A mining lease may only
be obtained by the holder of a prospecting licence who has given notice to the
government that a mineral covered by the terms of the licence exists in
commercial quantities, provided the proposed development plan ensures that
mining operations will be carried on in an efficient and environmentally safe
manner.  The application for the mining lease must be made within three months
of such notice.  A mining lease may also be obtained on request by persons who
do not hold a relevant prospecting licence over an area, but such grants are
discretionary.



A mining lease normally is valid for 30 years although the Ghanaian Government
may, where it considers that it is in the national interest to exceed this time
limit, direct that the grant of a mining lease exceed 30 years.  A mining lease
may be renewed for an additional period of 30 years provided that the renewal
application is made no later than one year before expiry of the initial lease.
Persons proposing to undertake the mining and processing of minerals are
required to register the undertaking with the Environmental Protection Agency
(the "EPA") and obtain an environmental permit prior to commencing this
undertaking.  Additionally, no person may commence activities in respect of the
undertaking which, in the opinion of the EPA, has, or is likely to have an
adverse effect on the environment or public health unless, prior to the
commencement, the undertaking has been registered with the EPA and an
environmental permit has been issued by the EPA in respect of the undertaking.
An environmental impact assessment ("EIA") is required to be submitted to the
EPA prior to issuance by the EPA of any environmental permit where the
undertaking is the mining and processing of minerals in areas where the mining
lease covers a total area in excess of 10 hectares.  The grant of a mining lease
takes place upon approval of the EIA.  A holder of a mining lease is obliged to
commence commercial production on the date specified in a program which it has
submitted to the government and to develop/mine the mineral in accordance with
such programs.



The EPA is required to hold a public hearing in respect of an application for an
environmental permit where there is material adverse public reaction to the
commencement of the proposed undertaking, where the undertaking will involve
dislocation, relocation or resettlement of communities, or where the undertaking
could have extensive and far reaching effects on the environment.  Where an EIA
is ultimately found to be acceptable to the EPA, the environmental permit will
be required to be issued to the applicant.  The permit is valid for 18 months
from the date of issuance.  Failure to commence operations of the undertaking
within that time renders the permit invalid and the applicant is required to
resubmit an application to the EPA and provide reasons for the new application.



After commencement of mining operations, the applicant is required to apply for
an environmental certificate that may be issued subject to terms and conditions.
  A certificate may not be issued by the EPA until the person responsible for
the certificate application has submitted to the EPA evidence or confirmation of
actual commencement of operations, acquisition of other permits and approvals
where required and compliance with mitigation commitments indicated in the EIA
or preliminary environmental report.



A mineral right or interest may not be transferred, assigned or otherwise dealt
with in any other manner without the Minister of Energy and Mines' prior written
approval.  Also, a company holding, directly or indirectly, a mining lease in
Ghana must obtain the written consent of the Minister of Energy and Mines before
it undertakes any action which would result in a change of control of such
holder.  The Ghanaian government must be advised of all changes in "significant
shareholders" of such a company, as well, which refers to shareholders holding
5% or more of the voting rights thereof.



The Minister of Energy and Mines has the power to negotiate, grant, revoke,
suspend or renew any mineral right, subject to a power of disallowance
exercisable within 30 days of such grant, revocation, suspension or renewal by
the cabinet.  The powers of the Ministry of Energy and Mines are to be exercised
on the advice of the Minerals Commission, which is responsible for regulating
and managing the utilization of mineral material and coordinating policies
relating to them.  The grant of a mining lease by the Ministry of Energy and
Mines is subject to parliamentary ratification.



The Ghanaian government holds, as of right and without payment of any
compensation, a 10% interest in all mineral rights in Ghana.  The government has
the option to acquire a further 20% interest where any mineral is discovered in
commercial quantities on terms agreed between the government and the holder of
the mining lease or, failing such agreement, on terms established through
arbitration.  The government normally secures its 10% interest upon the grant of
a mining lease through a special class of shares in the company holding the
lease, which are typically non-assessable shares entitling the holder to 10% of
any dividends distributed by the holder.  The Ghanaian government is also
entitled to a royalty of 3% to 12% of mineral sales after direct expenses.
Companies are required to make a payment on account of every quarter based on a
3% rate.  At the end of each year, companies are required to compute the actual
royalty due on the basis of the profitability of the mine and to make any
further payment that may arise from the computation.  The specific royalty rate
is determined by discussion with the Minister of Mines at the time of
commencement of feasibility studies and commencement of production.



Furthermore, the government may, if it so desires, acquire a "special share" in
a company holding, directly or indirectly, a mining lease in Ghana, which would
result in such company having to obtain the government's approval for: any
amendment to the regulations of the company that would have the effect of making
a person control of the company; the voluntary liquidation of the company; or
the disposal of any mining lease or the whole or a material part of the
company's assets.  Control is considered a person who either directly or
indirectly directs the affairs of the mining company or controls at least 20% of
the voting power of the company, either alone or with an associate or
associates.  The issuance of a "special share" may, at the government's option,
be for no consideration or at such consideration as the government and the
mining company may agree.



Mineral Rights and Mining in Sierra Leone



Since independence, the Government of Sierra Leone has encouraged foreign
investment.  Investors are protected by an agreement that allows for arbitration
under the 1965 World Bank Convention.  Legislation provides for transfer of
interest, dividends, and capital.  The government passed the Investment
Promotion Act in August 2004 to attract foreign investors and has been working
with international financial institutions to lower its administrative barriers
to trade.



Licenses and Requirements



The Mines and Minerals Act of 1996 and the Environmental Protection Act of 2000
are the main acts regulating the mining licensing regime.



For major mining companies there are three different licenses available:

  * A prospecting license (exclusive and non-exclusive);
  * An exploration license;
  * A mining lease;



In addition to the application form, an applicant for a mining lease has to
submit to the Director for Geological Surveys at the Ministry of Mineral
Resources the following documents:

  * Survey plan of area;
  * Work program;
  * Evidence for work ability;
  * Available technical resources; and
  * For a mining lease also among others:

o       Feasibility study;

o       Determination of reserves and profitability;

o       Cash flow forecast; and

o       Evidence for funding.



The application form asks the following information to be provided, in the case
of an individual applying for the lease, the name of the applicant, his
nationality and period of residence in Sierra Leone.  For corporate bodies, in
addition to the name of the organisation, its details such as place and date of
registration or incorporation, registration number, names of the directors and
the principal shareholders with more than 5% shares is required.



In addition to this information the applicant must also provide the following:

  * Address in Sierra Leone;

  * Record of previous of previous applications for mineral rights;
  * Record of minerals rights held in the last four years;
  * Information on the minerals that are being sought and their locations;
  * Required duration of the lease sought;
  * A detailed financial and technical proposal for the mining of the minerals
    including sources of support and finances; and
  * A proposed programme of development and mining operations and an
    environmental impact Statement that will include mitigation plan.



Licenses for prospecting are issued on a first come first served basis within 60
days of application by the Board comprising the Director of Mines (chairman),
Solicitor-General, Director of Environment, Representative of Local Government,
Chamber of Mines and two nominees of the Minister of Mines.  Applications for
renewal of Licenses must be made three months before the expiry of the existing
Licenses.



Non-exclusive Prospecting License: This license allows the holder to prospect
for specific mineral(s) in the specified area.  The duration of the license is 1
year with a possible extension of 1 year.  The licensing fee is US$ 10-50 per
sq. mile depending on the mineral(s).  Standard fee is US$ 20 per sq. mile.



Exclusive Prospecting License: This License gives the holder exclusive
prospecting rights in the specific area for a specified mineral(s).  The
duration of the license is two years with an option to extend it for another
year.  Licensing fees are US$ 50-200 per sq. mile depending on the mineral(s).
Standard fee for precious minerals is US$ 200 per sq. mile.



Exploration License: This license gives the holder the right of exploration for
the specified mineral(s) in a specific area.  The duration of the License is
three years with the option to renew for additional two years.  The licensing
fee is US$ 100 - 400 per sq. mile depending on the mineral(s).  Standard fee is
US$ 400 for precious minerals.



Mining Lease: The mining lease gives the holder the right for mines development
and exploitation of specified mineral(s) in the area covered by the lease.  The
duration is 25 years maximum with the possibility of renewing for a further
period of 15 years.  The lease cost US$ 500 - 5,000 per sq. mile depending on
the mineral(s) and type of deposit.

In order to receive a mining lease an application has to be made to the Minister
of Mines that will include the following:

  * Plan of the area for which the License is being sought;
  * An indication of the period for which the lease is being sought;
  * Details of mineral deposits in the site for which the lease is being
    sought including details of all known minerals proved, estimated or
    inferred, ore reserved and mineral deposits;
  * A technical report on mining and treatment possibilities and the
    applicant's intentions in this regard; and
  * A statement giving the particulars of the applicant's programme of works
    for exploiting the reserves.



There is no fixed period between the date of submission of application and the
reply from the Minister of Mines.  Once received the Minister and the Board must
amongst other things ensure that;

(1)     the rights of the holder of any other exploration License should not be
substantially prejudiced by the grant of the mining lease; and

(2)     that the public interest requires that the mining lease should be
granted.



It should also be noted that:

(3)   No mining lease shall be granted to an applicant, unless -

(a)    A programme of proposed mining operations is submitted and approved and
is accompanied by an environmental impact assessment statement consistent with
the provisions of Part XIII;



Once the Minister of Mines notifies the applicant that his lease is granted the
applicant must within 60 days, give notice of his willingness to accept the
proposed lease.



Mineral Rights and Surface Rights



The Mines and Minerals Act makes provision for and recognises the surface rights
of a lawful occupier of land.  In this regard a holder of a mining lease is
required under law to pay compensation to the owner or lawful occupier of the
land for: - disturbance of the rights of the occupier and for the destruction of
crops trees and buildings.  The basis of the payment shall be the fair market
value.  It should be noted that unless specifically agreed to in writing the
compensation paid is not for the purchase of the land but for the right of
access to the land and compensation for the destruction of all on it.



Should the parties not come to an agreement or should the occupier be
dissatisfied with the compensation offered then there is recourse to the
Minister of Mines and the Board for arbitration and fixing of a fair price.



A claim for compensation for land occupation should be addressed to the mining
company by the lawful owner of the land within two years of occupancy failing
this; a claim to the land is not enforceable.



In addition, the act makes provision for the Government to compulsorily acquire
the land or the rights to for land for the holder of a mining lease.  This can
only happen when the holder of the mining lease shows that he has made all
reasonable efforts to acquire the rights to the land and failed and that that
area is essential to his work.



Though not included in the Mines and Minerals Act of 1996, it is government
policy that all mining companies should pay what is known as surface rent.  The
purpose of surface rent is for compensation for land loss, and to provide the
community development seed money.  The area for which surface rent is paid must
lie with in the mining lease and could be part of or the whole of the lease
area.

This money is to be paid to the District Councils to be split into three parts,
with 1/3rd going to the District Council, 1/3rd (one-third) for the Paramount
Chief, and the final 1/3rd for the land owners.  The quantum of money paid is
generally negotiated between the government and the mining company that has
taken out a mining lease for a specific area.  It is paid annually and is paid
per acre of land.



The implications of the surface rent may vary but in general the payment of such
money means that:

1.       No new capital developments are allowed to take place within the area
without the consent of the consent of the holder of the mining lease;

2.       General access to the area may be restricted for vehicular and
pedestrian traffic;

3.       The company has the right to start mining the area provided it has paid
compensation to the landowners for crops and buildings on the land at the time
of payment of the surface rent.



The agreements made between the company and the Government and the company
regarding surface rent are to be included in an agreement and ratified by
parliament.



At local level the issue of Surface Rent is a controversial one in general the
affected communities are unhappy regarding the quantum and distribution of the
monies paid by the companies.  Because of this, there have been interventions by
locals resulting in work stoppages and bad publicity.



A possible means of resolving this is to include a programme of development that
is agreeable to the government and the community for which the monies accrued
from the surface rent could be put towards.  Such projects could include:

  * Construction of school buildings and support to them;
  * Construction of and support to medical centres; and
  * Community development support.



Support to agricultural development is provided for in the act and should not be
provided for from the surface rent.



Royalties



In accordance with the provisions of Part XIII of the act, the holder of a
mineral right shall pay to the government the following royalties:

  * 5% for precious stones;
  * 4% for precious metals; and
  * 3% for all other minerals and the price shall be calculated ad valorem on
    the ex-mine price as defined by the regulations.



Failure to pay royalties shall result in the Minister prohibiting the disposal
of any mineral in his possession from the mining area concerned of from any
other mining area under the mining leaseholder's control.  If the lease holder
fails to comply with this order he is then liable to a fine not exceeding Le
100,000.00 or 2 years imprisonment or in the case of a body corporate Le
5,000,000.



Environment



Part XIII of the Mines and Minerals Decree of 1994 relates to the "Protection of
the Environment" and provides for the prevention and limitation and treatment of
pollution, and the minimisation of the effects of mining on adjoining of
neighbouring areas and their inhabitants.  This part of the Act is now also
strengthened by the Environmental Protection of 2000 that sets out and
establishes the frame work requiring the preparation of Environmental impact
statements for major capital projects and developments.



The first schedule of the Act makes it mandatory for a License to be obtained
for projects that include extractive industries i.e. mining, quarrying etc.  In
addition Licenses are also required for waste management and disposal, housing
construction and road and bridge construction.



In order for the Environmental Board to issue a License for any project or part
of a project, an application has to be submitted to the Director of the
Environment Department.  The Director will, taking into consideration the
provisions in the second Schedule, decide into which category the project falls.
  This may range from projects that do not require an EIA or require only a
statement to projects that require a full EIA.



Where the Director determines that the project requires a full EIA then one
shall be prepared and shall contain information as laid out in the Third
Schedule.  Once the EIA is received by the Director he is required to distribute
it to professional bodies and other concerned organisations for their comments.
The comments should be returned in seven days and these in addition to the EIA
will be submitted to the environmental Board.  The Board will review all the
submitted documentation and recommend to the Director either to issue the
License, request for additional information or disapprove the application.



The License shall be valid for 12 months and will require renewal.  In making
the application the sum of Le 10,000.00 will have to be paid for the application
form.  This must be submitted with a screening form with which the board will
assess into which category the project falls.  If it is deemed to be a category
C project an EIA will be required.



Once the EIA is completed and submitted to the Environmental Board for approval
then the fees are determined and charged, depending on the capital cost of the
project.  For instance, for a project with a cost proposal of US$ 50 to 0.10 ppm.



(3)           The conclusion of the 2006 evaluation was to not continue the RC
drilling program, but instead to drill some deep holes near the western border
of the concession to intersect structures parallel to mineralized Ntotoroso
structures, if any.



2007 Exploration



No exploration work was done on the property in 2007.



6.             Mineralization



No bedrock information has been found to date to describe gold mineralization.
However, it is expected that gold mineralization on the Hwidiem Licence - if
there is any - is similar to that found on the Ntotoroso property that has been
explored by Moydow and where Newmont is in the process of mining.



7.             Drilling



A 35-hole RC drilling program with a total of 1203 meter was executed in
May-June 2006.  Drill hole spotting, drilling, sampling, logging and sampling
were done following standard procedures.  Drill holes were labelled HRC001 to
HRC035.  The coordinates of the drill holes were established with GPS with the
spacing verified by tape and compass.



Drill samples were collected and logged for each meter.  Three adjacent samples
were combined for analysis.  Samples were analysed for gold at SGS Tarkwa the
same as had been the soil samples (see Item 8).  See above for results.



8.             Sampling and Analysis



All soil samples were collected from a depth of 50 centimetres and each weighed
approximately 500 grams.  Samples were sent to SGS in Tarkwa for analysis.
Analysis was done - after drying, crushing, pulverizing, and splitting - on 50
gram sub samples.  The assay pulp is fused in a lead collection fire assay.  The
resulting lead button contains the precious metal.  The lead is separated from
the silver and precious metals to form a prill or bead.  The bead is dissolved
in aqua regia and presented to an AAS to quantify the gold in the sample.  The
detection limit for gold (Au) is 0.01 ppm.  Infill samples were analysed to a
lower detection level of 2 ppb (using DIBK and AAS).



A drill sample was collected from each one meter interval.  Three adjacent
samples were combined after one, two or three times splitting (depending on
weight of the head sample).  The combined samples were split again to a final
weight of 1 to 3 kilograms.  Split combined samples were sent to the SGS
laboratory in Tarkwa.  The samples were analysed the same as the soil samples
were.  Duplicate splits from each one-meter sample were transported to Accra for
storage at Shankill's office.



9.             Security of Samples



The geologists Dr. Yuriy Deryugin, Victor Litvinov, and/or John Barry supervised
the handling of all soil samples and Victor Litvinov supervised the handling of
all drill samples.



10.             Mineral Resource and Mineral Reserve Estimates



No resource estimates have been made yet.



11.       Mining Operations



No hard rock mining operations have been done or are planned yet.



12.              Explorations and Development



A drilling program is in the planning stage as per recommendation following the
2006 data evaluation and site visit.



Okumpreko Property



As a result of the 2006 data evaluation and site visit, the Company decided to
not continue exploration and to not renew the Okumpreko.



Kanyankaw Property



1.         Project Description and Location



Project area



The Kanyankaw East Property is located in south-central Ghana approximately 50
kilometres north of the important seaport of Takoradi.  Initially, the property
consisted of one prospecting licence of 47.6 square kilometres in the Western
Region.  After relinquishing the northern 50% of the license on the 3rd of
October 2005, the remainder of the license is 23.5 square kilometres, (the
License).



Title and Obligations



The Kanyankaw prospecting licence was obtained by Moydow Limited ("Moydow
(Ghana)"), a company incorporated under the laws of Ghana, and a 100% owned
indirect subsidiary of the Company, and by Antubia Resources Ltd. ("Antubia") on
January 16, 1996.  The licence was held in a joint venture between Antubia, a
subsidiary of Glencar Mining plc ("Glencar"), and Moydow (Ghana), pursuant to
the terms of an agreement dated November 6, 1992, (the "Kanyankaw 1992 Agreement
"), amended on March 17, 1994 and June 20, 1995.  The agreement granted Glencar
(or its nominee) an option to earn a 50% interest in the Kanyankaw prospecting
licence in return for funding U.S.$150,000 of reverse circulation drilling and
then contributing a further U.S. $330,000 in exploration expenditures before
December 31, 1993.



The option was exercised in 1995 after two time extensions were granted to
Glencar in March 1994 and June 1995.  The agreement provided for the funding of
work subsequent to the exercising of the option through pro rata contributions
to work plans in accordance with each party's respective interests in the joint
venture.  Should either party fail to participate in such work plans it would
suffer a dilution of its interest based on the total expenditures and deemed
expenditures of each of them.  As of the formation of the joint venture, Moydow
(Ghana) and Antubia were both deemed to have advanced U.S.$480,000 to the joint
venture.  Each party was entitled to a carried interest through to the
completion of a feasibility study in the event that their interest should be
diluted to a 10% interest.  The carried interest, in such circumstances, was
explicitly not assignable.



Glencar, Antubia, Moydow (Ghana) and the Company entered into an additional
agreement in January, 2000, which required the parties to make an application to
the Ghanaian government for a split of the property into two licences along
longitude 2degrees03'43" west (the "Kanyankaw 2000 Agreement").  Pursuant to the
Kanyankaw 2000 Agreement, Moydow (Ghana) would hold the licence for the eastern
half which contains the old gold workings at Kanyankaw (the "Kanyankaw East
Property") and Antubia would hold the licence to the western half which contains
the old workings at Asheba (the "Kanyankaw West Property").  Application was
made to the Minerals Commission in August 1999 to ratify this proposal and it
became effective in early 2001.



Pursuant to the Kanyankaw 2000 Agreement, each party has the right to back-in
and acquire an interest in the other party's property (40% in the case of the
Kanyankaw East Property and 44% in the case of the Kanyankaw West Property).  In
order to exercise a back-in right, a party (A) must have performed a minimum of
5,000 metres of drilling on its own property and must make a payment to the
other party (B) based on the drilling completed by B.  The payment is calculated
by multiplying the number of metres of drilling completed by B by a figure
ranging between US$50 and US$100 (depending on the overall number of drill holes
completed by B).  The splitting of the licence was designed to facilitate
aggressive exploration of the entire property in 2000.



The License was transferred to Shankill Resources Limited (Shankill) on 8
September 2003.  Shankill is a 100% owned subsidiary of Moydow Mines
International Inc.  The License was renewed for a period of twelve months to
expire on 16 September 2004.



At the end of that period, the Company was required to submit a report and
financial statements, an Environmental Permit from the Environmental Protection
Agency ("EPA") and a site plan indicating areas to be relinquished.  The Company
submitted the required documents and applied for an Environmental Permit.  It
submitted a plan with areas to be relinquished later, as the Company at that
time had not made a decision on this issue yet.


Pillar No.    Lat North     Long West                Pillar No.    Old No.     Lat North     Long West
P1            5degrees 03'  2degrees 03'             P11           3           5degrees 03'  2degrees 00'
              46''          43''                                               58''          55''
P2            5degrees 03'  2degrees 03'             P12           4           5degrees 03'  2degrees 01'
              46''          19''                                               22''          43''
P3            5degrees 04'  2degrees 03'             P13           5           5degrees 02'  2degrees 01'
              51''          19''                                               33''          43''
P4            5degrees 04'  2degrees 02'             P14           6           5degrees 02'  2degrees 00'
              51''          22''                                               33''          58''
P5            5degrees 04'  2degrees 02'             P15           7           5degrees 01'  2degrees 00'
              19''          22''                                               46''          58''
P6            5degrees 04'  2degrees 01'             P16           8           5degrees 01'  2degrees 01'
              19''          50''                                               46''          43''
P7            5degrees 04'  2degrees 01'             P17           9           5degrees 01'  2degrees 01'
              51''          50''                                               22''          43''
P8            5degrees 04'  2degrees 01'             P18           10          5degrees 01'  2degrees 02'
              51''          17''                                               11''          03''
P9            5degrees 04'  2degrees 01'             P19           11          5degrees 01'  2degrees 03'
              17''          17''                                               11''          01''
P10           5degrees 04'  2degrees 00'             P20           12          5degrees 02'  2degrees 03'
              37''          55''                                               10''          01''
                                                     P21           -           5degrees 02'  2degrees 03'
                                                                               49''          43''



The northern 40% of the License falls within the Neung Forest Reserve ("Reserve
").



On October 3, 2005, the Company was granted a two-year extension to its
prospecting license with respect to the Kanyankaw property, by the Minister for
Lands, Forestry and Mines in Ghana.  On March 10, 2008, the prospecting licence
was renewed for two years.



The carrying value of the Kanyankaw property was written off in 2005 in the
amount of $329,235, as exploration results at that time were not deemed
promising, (see Item 12).



Environmental liabilities and Permits



The Company is not aware of any environmental issues, which - without proper
care - could create a liability for the Company.  The Company has no reason to
believe that necessary permits, once applied for, will not be granted.



The "Environmental Permit for Mineral Exploration EPA/PR/PN/296" was granted on
the 18th July of 2005 for a period of two years.



No other permits are required.



Mineralization and Mining



Artisan mining of alluvial gold has been done and is still done in some valleys.
  Artisan miners are mining bedrock for gold in various places.  No industrial
mining has been done on the property



For a detailed description, see Items 3 and 6 below.



2.             Accessibility, Climate, Local Resources, Infrastructure and
Physiography



Accessibility and Infrastructure



Kotoka Airport at Accra has scheduled international flights.  The Company has
guesthouse and office facilities in Accra.



The Licence area can be reached by vehicle from Accra in approximately 6 hours
along hard surface roads to within 3km, and thereafter along a good quality
gravel road to a Post and Telecommunications (P&T) tower located approximately
in the centre of the 'workable' licence area.  Access away from this central
track is limited to a few 4WD vehicle tracks pushed through the forest for drill
rig access or timber haulage.  There are several small-scale farms, and
footpaths link these.  In forest areas, the vegetation is dense to extremely
dense, and access is difficult and slow going on foot.



Climate



The License falls within the wet equatorial zone of Ghana.  Rainfall and
temperature records are not available for Kanyankaw or adjacent villages,
however the author understands the rainfall to exceed 2000mm per annum, and the
climate can be classified as seasonally wet humid and tropical.  It is
characterized by an annual double maximum rainfall pattern occurring in the
months of May to July and from September to October.



Work can be done year-round, although certain activities have to be curtailed
during heavy rains.







Local Resources

Villages are common along the Takoradi-Teberebie road.  Major towns are Tarkwa
about 30km to the North and Takoradi about 50km to the south.



Competent and experienced personnel and contractors for exploration and drilling
can be found in Ghana.  Skilled and unskilled labourers are readily available
from towns or from nearby villages.



Physiography



The Permit area is characterized by steep hilly terrain, dendritic drainage and
several broad high level plateaus, which represent an ancient land surface,
rising above a low undulating terrain in the south of the licence (over the
granitoids).  Elevations range from approximately 75 to 125m in the southern 30%
of the License and to 222m in the Reserve.  Drainage channels have incised into
the soft weathering profile, developed beneath the ancient land surface, to
produce both dendritic and radial drainage patterns.



The high plateau ranges in width from 1.5 km down to a few tens of meters.
Close to the plateau edges, blocks of ferruginous duricrust are variably
exposed, as are pisolitic and nodular gravels.  Away from the plateau edges
pisolitic gravels are less evident on the surface, but are ubiquitous within a
meter of the surface.  Off the plateaus hill slopes are generally steep to very
steep and can exceed 60o.  Not all hills have plateau tops.  Some have narrow (<
10m) ridge tops.  Where the hills have sharp crests and distinct ridgelines,
they probably reflect a particular geological unit or structure.



Within the area, natural equatorial forest is variably preserved, and much of it
has been affected by logging or clearance at some time or other for
agricultural, forest products (saw logs and charcoal, or timber props for
mines).  Approximately 60% of the Area has a dense natural or regrowth forest,
15% farming land (cassava, yams, plantain coconut, palm oil, rubber Tree), 5%
mining (bedrock and alluvial) with the remainder (20%) young regrowth forest or
recently cleared for charcoal making or new farms.  Thickets of bamboos grow in
some valleys and some areas of the high plateau surface.



3.         History



The area has a rich history of gold mining and has been mentioned in the
exploration journals of the Portuguese in the 16th century.  In the License
area, underground workings date form the colonial period with the earliest
accounts of Axim Mines in 1904.  Artisan mining has been a continuous occupation
of the local population for well over 100 years and is still very much in
evidence today.  Previous small scale mining targeted a number of high-grade,
quartz reefs in the southeast and southwest parts of the current mining lease
area.  It has been reported that these companies recovered approximately 20,000
ounces of gold from an array of stamp mills.  The narrow high- grade reefs are
locally continuous over hundreds of metres but up to the present, they have been
found too isolated and sporadic to sustain large-scale commercial exploitation.



Soil sampling



Between 1987 and 1990 soil geochemical sampling by Ghana Gold of Australia
targeted the potential for (i) more extensive auriferous quartz reef development
associated with the Upper Birimian - a style of mineralization which had been
exploited previously and (ii) Boddington-type mineralization in the laterite
mantled plateau and overlying residual soils.  A north-south trending broad
anomalous zone was delineated, extending for about 3.5km along the plateau.
Highest gold concentrations were detected just east and north of the P&T
compound and in the Gogossu area of the plateau about 1km north of the compound.
  Soil geochemistry on a 50m x 10m array covered approximately 0.36km2 of a
southeasterly extending tongue of the plateau and about 0.44km2 of the plateau
northeast of the P&T tower.  Another salient of the plateau straddling the
Asheba shear zone (ASZ) in the Kanyankaw West Property was sampled on a 100m x
10m array covering an area of about 0.12km2 southwest of the intersection
between the Boundary fault and the ASZ.  It is not clear why this latter area
was targeted specifically by Ghana Gold.  The only other areas soil sampled were
by Cyprus Amax in the Asheba area (2900 samples) and trail sampling by Glencar /
Antubia in 1999 (1800+) samples.  The result is that only 2% of the exploration
area or about 1 km2 has been soil sampled from an area of 47.6km2 representing
the new Moydow sphere of influence.



Drilling - Glencar



In April-June 1992, Glencar drilled 32 RC holes (3,774M) on the plateau west and
northwest of the old workings designed to "investigate the weathered profile in
the vicinity of the anomalies with a view to establishing an open pittable
resource". In addition, four RC holes were drilled in the Gogossu area.  The
highlight of the program was the intersection of the north-northeast trending
Tribute Reef in holes RC17, 13, 6, and 2 from north to south over a distance of
500 - 600m.  Best intersection was at the northern limit of drilling in RC17,
which returned 12m at 7.3g/t.  To the south the reef pinches to 2m at 8.3g/t in
RC13 and 2m at 10.9g/t in RC 6 and finally 3m at 4.6g/t in RC2 at the southern
limit of drilling.  Glencar drilled six additional holes - RC41 - 43, RC47,
RC49, and RC54.  The RC41-43 fence targeted the northerly extension of the
Tribute Reef and RC47 targeted the Reef at depth beneath the RC17 intersection.
Results were disappointing.



Drilling - Cyprus Amax



Pursuant to an option/joint venture agreement (the "Cyprus Agreement") dated
February 6, 1996 among Antubia, Moydow (Ghana) and Cyprus Exploration and
Development Corporation ("Cyprus"), Cyprus commenced a diamond drilling
programme in September 1996 pursuant to which Cyprus drilled 13 holes for a
total of 2,000 metres.



Cyprus Amax drilled eight-holes (1422.5m) in mid-September around the Kanyankaw
workings, supervised and implemented by CME & Company, an international group of
geological consultants.  Drilling targets were generated from a new
soil-chemical survey on a north-south oriented 100m x 25m grid with lines from
two to four kilometres long, correlated with a ground magnetic survey over the
same grid and an IP survey on seven east-west lines.



Soil geochemistry delineated a strong north-northeast fabric.  The K5-K7
anomaly, about 600m west of the P&T tower, appears to be associated with a
satellite lineament - the Boundary Fault - and also in the case of K6, an IP
target.  The K5 - K7 holes were barren and spaced along a 750m stretch of the
anomaly.  A south-southwest draining stream may have incised along the Boundary
Fault creating an alluvial gold-in-soil anomaly, which did not reflect
complimentary gold concentrations in the sub-stratum.



Holes K1 and K2 tested a >0.5ppm anomaly with maximum dimensions of 300m
north-south and 200m east west centred about 500m north of the P&T tower.  K2 on
the low ground was barren and intersected chloritic schist to 132.5m and
chloritic basalt to the bottom at 165 metres.  Pervasive quartz-carbonate-
chlorite alteration occurs from 70 - 165m.  K1 was collared on the high ground
and intersected 2m at 11g/t from 32m associated with quartz-limonite-manganese
stockworks or stringer mineralization in saprolitic basalt and 6m at 4.96g/t
from 152m associated with two 0.5m quartz veins with quartz-pyrite flooding in a
structure.  Curiously, the Glencar drilling is at the southern end of this blob
and predominantly to the south and west where there is no Cyprus/CME anomaly.



The more interesting area is west and south of the P&T tower where a strong
anomalous zone oriented north-north-east appears to be unaffected by topography,
specifically an east-west salient of the plateau which protrudes into the centre
of the zone.  Only two holes were drilled in this area, K3 and K4, both on low
ground, and both intersected mineralization - the former six narrow zones
including 2m at 16.6g/t from 8m and the latter 2m at 4.44g/t from 18m and 2m at
37g/t from 60m.  Drillhole K3 is characterized by chlorite-quartz-carbonate
basalt, quartz-carbonate stockworks and fine crackle breccias.  Pyrite varies
from 0 to 50% with the latter amount being confined to quartz + pyrite veins of
no more than 8cm in width.  Vein and veinlet angles to core axis indicate that
veins are striking N15(o) - 20(o) E and dipping 50(o) to the northwest.  K4
mineralization is associated with "annealed" shear zones characterized by
quartz-carbonate-tourmaline alteration, post mineral movement and late
quartz-pyrite veining (6-8cm) which could be carrying the gold.



Galamsey Activity



Within the licence, there are some areas with very active galamsey mining.  The
main area of activity is currently northwest of the P&T Tower off the high
plateau where the miners are concentrated along what appears to be two narrow (<
1m wide) quartz veins along a total strike of some 500 meters.



4.             Geological Setting



Regional Geology



The license area is underlain chiefly by Lower Proterozoic Upper Birimian
metamorphosed mafic volcanic rocks (greenstones), which are intruded by small
stocks and dykes of hornblende granodiorite.  Slicing through the rock pile is a
series of NNE-trending fractures with associated minor splays; interestingly,
all recorded past production has come from the minor splays and only minimal
exploration has been conducted over the major lineaments, which
characteristically occupy the low ground in fault-controlled valleys.  Where
these major lineaments cross terrain that is slightly more elevated, their trace
is frequently coincident with a trail of sericitic altered granodiorite dykes,
which show patchy development of gold-bearing, quartz stockworks.



The Kanyankaw prospecting licence is located twenty kilometres south of Tarkwa.
The Tarkwa Goldfields have reportedly produced 10 million ounces of gold and
host reserves in excess of 25 million ounces predominantly from the two major
mines at Tarkwa and Teberebie.



Local Geology



The main gold mineralization within the studied part of the Kanyankaw License is
connected with gold-bearing quartz veins within metamorphosed mafic volcanic
rock of the Upper unit of the Early Proterozoic Birimian Series.  The rocks
hosting gold-bearing veins contain very weak gold mineralization.  Earlier data
about the old underground Axim Mine and recent galamsey workings indicate that
the gold-bearing quartz veins form a sub-parallel system striking towards NNE.
The thickness of these veins is still unknown but it is expected to be less than
1m.  The size of fragments of gold-bearing quartz in galamsey pits seldom
reaches 15-20 cm.  Gold-bearing veins consist of light-gray sugary-grained
quartz with numerous caverns filled with limonite and clay, goethite
pseudomorphs after pyrite, relics of pyrite and fine native gold. The mined
quartz contains gold up to 153g/t.



5.             Exploration



Previous Exploration



(1)          The major part of the licence area away from the colonial workings
at Kanyankaw had never been systematically explored.  A limited exploration
program in 2000 focused on the prospective north-northeast trending NKFZ
lineament/structure and the potential for open- pittable resources.  1467 soil
samples were collected on a 400m x 50m grid within a 2km-wide corridor
straddling the NKFZ.  Airborne magnetic data was reprocessed and interpreted by
consultants and cross-referenced with geology and soil-sampling results.



(2)        Eight holes (KR1-8) totalling 717m RC and 43m DD were drilled
targeting soil anomalies southeast of the old Kanyankaw workings.  Although gold
was recorded, it was not significant enough to warrant further drilling at the
time.  The holes were drilled in two SW-NE fences, 200m apart, in each four
holes 50m apart.



(3)           A landform and regolith study completed by S.J.S. Bolster of
Regolex on the property in 2001 generated nine new targets, which warranted
testing.  During the year, there was a significant increase in the number of
illegal artisan, or galamsey miners.  At one stage, over 6,000 miners were
reported to be working the high-grade quartz reefs on the property, which
restricted access.



(4)                Following a study of all available data by Moydow geologist
Dr. Yuriy Deryugin, the Company executed two drilling programs.  Phase I, from
May to July 2004, and Phase II, from September to October 2004.  For both
phases, Pontil Minerex Ltd. did the drilling and Blue Cross Ltd. was engaged for
organising workers.  Up to thirty workers from the nearest villages and
galamseys, worked as diggers, line-cutters, samplers, guides, and watchmen.  All
the work was directed and supervised by Yuriy Deryugin.



(5)           In December 2007 a site visit was made by Moydow geologist Ebo
Bakker as part of a program to evaluate all data on the property.



Results



(1)-(3)    See above "Exploration work".



(4) I        Phase I drilling was aimed to cross the whole vein system together
with earlier drilled holes. Potential gold mineralization with this type of
veins is of interest for industrial mining only in case if the system forms a
stockwork.  The vein was divided into two intervals: (1) northern part - target
#2 and (2) southern part - target #1.   Additionally, target #3 at the galamsey
mined quartz vein near Kanyankaw village was also drilled.



The sub-parallel vein system at two intervals (target #1 and target #2) was
drilled by 24 45degrees-inclined RC holes total 1732m.  The results confirmed a
proposed system of sub-parallel gold-bearing quartz veins, which in sampled
intervals have thickness not more than 4m.  Gold values vary from 1.1g/t up to
18.25g/t with the highest gold grade in previous hole KAN 4, 2m at 37g/t.
Quartz veins are not accompanied by gold-bearing alteration, which could
increase mineralized intervals.  Quartz veins are situated rather far from one
another and they don't form a stockwork.



Target #3 is situated close the galamseys mined quartz veins near Kanyankaw
village.  There in hole KRC19 the gold-bearing interval extends up to 22m depth,
which has average gold grade 4.24g/t and hole KRC19 contains 1.56g/t at 64m.
Hole KRC35 targeted to cross the quartz vein mined now by galamseys
unfortunately at 66-67m and 82-83m cut pits or adits so the real gold grade in
the mined vein wasn't clear.  Assay results are probably the best ones in all
holes on the License but the geological structure of gold-bearing body (or
bodies) is still unclear.



A target near the highest soil anomaly (gold up to 58.0g/t) was not drilled
because of the complicated landscape and dense.  This anomaly is traced more
than 800 m from the known underground mine towards SWS through the intermediate
wide soil gold anomaly on the previous profile.  At its western edge on the
slope and across the stream there are many old galamseys pits.



(4) II       Phase II drilling aimed T (1) at Target #3 - to extend previous
drilling on the galamsey mined quartz veins near Kanyankaw village, and (2) at
Target #4 - to drill the highest soil anomaly on the License.



At Target #3 saprolite hosts quartz veinlets at intervals contain pseudomorphs
of goethite after pyrite and fragments of pyrolusite.  In fresh rock two types
of quartz veins were distinguished: (1) vein hosting disseminated pyrite (up to
5-7%), malachite, limonite in hole KDD46 looks like strait veins limited at
their contact by cataclasite, (2) cataclastic folded veins associated with
listvenitized (silicification + chloritization + carbonatization + pyritization)
rocks. Both types of veins are gold-bearing.



Gold mineralized intervals within target #3 join into three zones: A, B, C.  The
first two zones were drilled during the first phase of exploration with drilling
extended in the second phase.  Zone C was found in the second phase.



Zone A was crossed by hole KRC35 where from 66m to 68m gold grade is 2.4g/t but
this interval is probably partly mined by galamseys.  Zone A has the most
representative intersection in hole KDD49 with from 156.7 m to 158.1m a light
grey quartz vein, bordered at both contacts by 7-10mm-thick cataclasite.  In
hole KDD49 the gold-mineralized interval from 156m to 159m contains 3.3g/t gold,
the maximum gold grade in sample 5087 is 5.27g/t over 1m.  The quartz vein is
associated with weakly mineralized rocks on the both sides of the vein where
gold values vary from 0.1g/t to 0.7g/t.



Zone B was after the first phase of drilling the most interesting.  In hole
KRC19 from the surface up to 22m depth the average gold grade is 4.26g/t with
maximum value 16.15g/t over 2m.  There, an envelope of weakly mineralized rocks
surrounds strongly mineralized intervals.  Gold mineralization in hole KRC19 is
located within weathered rock represented by saprolite, partly after pyritized
rock hosting quartz veins and veinlets.



More drilling was done in Zone B in the second phase of drilling.  In hole KDD49
Zone B split into four mineralized intervals, which also generally are jointed
by a weakly gold mineralized envelope.  From 77 to 83m the average gold grade is
8.02g/t with maximum value 17.5g/t over 2m.  A similar gold grade from 101
metres to 105 metres at 8.21g/t.  In hole KDD46 zone B was intersected only at
interval 254 metres - 256 metres with 11.8g/t gold.  In hole KDD46 Zone B is
almost absent, but there is a possibility that it goes between two holes.



Zone C is a new gold mineralized interval.  In hole KDD46 from 72m to 128m rocks
host gold mineralization which an average grade of 0.48g/t at 56m depth.  It
includes the best intersection of 10m at 3.63g/t with maximum value 7.7g/t.
Gold-bearing rocks are represented by saprolite, weathered schist, and weathered
pyritized schist hosting quartz veins.



At the target #3 assay results show that the gold mineralization belongs to two
different types.  The first type in Zone A is associated with pyrite-hosting
quartz veins limited by strait cataclastic contacts.  The second type (Zone B,
C) is represented by quartz veinlets hosted by altered (listvenitized) rocks.
Mineralization of the second type forms sub-parallel lenses within wider
envelopes of weakly altered rocks.  This type of gold mineralization looks more
prospective because it organizes wide (up to 40m) envelopes of gold-bearing
rocks with higher gold grade.



Gold mineralization at target #3 was explored only in one profile.  The gold
grade and thickness of mineralized intervals are very changeable; numerous pits,
shaft and adits complicate this.  The morphology of gold-bearing bodies is still
unknown.



At Target #4 the drilled ten holes were aimed to cross the soil gold anomaly
with 58.03g/t.  Weak gold mineralization less than 1g/t was found in many holes
but only one intersection is over 1g/t.  The intersection in hole KRC38 from 54m
to 64m has an average gold grade of 6.93g/t with maximum value of 31.9g/t.  The
gold mineralized interval is associated with quartz veins and veinlets hosted by
saprolite where in panned samples numerous particles of dust-like native gold
were seen.  A weakly gold-mineralized envelope accompanies rich quartz veins.
Most of weakly gold-bearing intervals at Target #4 are associated with rocks
hosting quartz veinlets or pyrite mineralization.



(5)           The conclusion of the site visit was that it was worthwhile to
analyze available data with other geological models in mind.  Another model
would have to be tested with a drilling program if such a model would indicate
the possibility of a resource to be present.





2007 Exploration



No exploration work was done on the property in 2007.



6.             Mineralization



See Item 5.



7.             Drilling



The 2004 Phase I and Phase II programs targeted four areas in a 1.35km by 1.6km
area.  The target areas consisted of fences of approximately 150m to 800m in
length and trending WNW-ESE.  Drill holes were spaced 50m.  Phase I consisted of
the holes KRC09-36 and Phase II of KRC37-45 and KRC47-48, and KDD46 and KDD49.
The 41 holes totalled 250m DD and 2986m RC.  A total of 1876 samples were
submitted for analysis.



Drill hole spotting, drilling, sampling, logging and sampling were done
following standard procedures.  The coordinates of the drill holes were
established with GPS with the spacing verified by tape and compass.



See Item 5 for an interpretation of the results.



8.             Sampling and Analysis



Sampling



RC and DD sampling intervals at the 2004 drilling programs were 1m.  Split
samples were combined to represent 2m intervals unless the mineralogy warranted
1m interval samples.  All samples were sent to the SGS laboratory in Tarkwa for
standard gold fire assay.



All sampling and sampling procedures were done following standard procedures and
the Company does not belief that there are factors that adversely impacted the
accuracy or reliability of the results.



Internal control



For internal control 4.4% of the pulp reject samples with gold values covering
the whole range were selected. These samples with changed numbers and sample
bags were sent to SGS, Tarkwa for gold fire assay.  Discrepancies were followed
up.



Gold values correlated well (cc 0.96).  However, in the control samples gold
values are average 24% higher than in the original samples. SGS explains this
disagreement by the presence of coarser gold in samples, which is then prevalent
near the bottom of the sample bag.  The control samples were poured into new
bags where the coarser gold ended up on top.  If this is the case, then the
problem exists at SGS where samples were not properly mixed.  One sample that
differed more than nine times would be re-assayed.



External control



External control was done by Transworld Laboratories Ghana Ltd. in Tarkwa.  4.2%
of the samples that had been fire assayed for gold at SGS were selected with the
same methodology as for internal control.  Pulp rejects of these samples were
recalled, their bags were changed, and they were sent to Transworld for fire
assay for gold.



Results correlated well (cc 0.97).  The Transworld data average 17% lower than
the SGS values.  All samples that had more than 1g Au/t correspond between the
laboratories.



9.             Security of Samples



The Moydow geologists Dr. Yuriy Deryugin and Victor Litvinov supervised the
handling of all samples.  The RC samples and the DD core is presently stored in
a locked building in a village near the License.



10.             Mineral Resource and Mineral Reserve Estimates



No resource estimates have been made yet.



11.       Mining Operations



No hard rock mining operations have been done or are planned yet.



12.              Explorations and Development



The Company is analyzing all data to see if other geological models in warrant
further exploration.  The nature and amount of further exploration is subject to
the results of this analysis.



                      This information is provided by RNS
            The company news service from the London Stock Exchange
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