The Korn Kob Mine copper oxide project is located on the northeast flank of the Santa Catalina Mountains in Pima County, Arizona, approximately 35-40 miles northeast of Tucson, and 15 miles south of San Manual.

Korn Kob consists of 36 unpatented lode claims, approximately 760 acres and 613.4 acres of State Land. There is addition Federal, State and private lands available. The site has 2 existing wells with draw down studies done. There is a permit in place to drill 44 core/RC holes to verify past drilling. Historically Budge Mining commenced surface exploration in the fall of 1989. Budge drilled 61 reverse circulation holes, totaling 20,790 feet, and 6 core holes, totaling 1,488 feet. The majority of these holes were drilled in the area of the proposed South Pit to confirm reserves. Budge's total costs in the Korn Kob Project were slightly less than $1 million. The exploration drilling program identified copper oxide mineralization within a limestone skarn. Mintec, Inc. of Tucson had calculated preliminary geologic reserves of acid leachable copper in excess of 10 million tons in the South Pit which can be mined by open-pit methods. Additional reserves exist in the North Pit. Metallurgical test work has been performed to establish the amenability of this material to conventional processing. Budge had developed and consolidated a strong land position in the area with the acquisition of several State Prospecting Permits, and the staking of several hundred additional claims. A Pre-feasibility Study was commissioned and completed by Roberts & Schaefer Company of Salt Lake City in September, 1990. Mining costs for the study were developed by Derry, Michener, Booth and Wahl, Inc. of Toronto and Denver. Korn Kob Mine is approximately 9 miles to the southeast from the Oracle Ridge Mine that is owned by Oracle Mining Corp. a Canadian TSX company. The Oracle Mine is located in the same Forest Service area, Coronado National Forest, as Korn Kob. Oracle Ridge is currently in the final stages of permitting to reopen the mining operations.

REGIONAL GEOLOGY

The Korn Kob copper oxide deposit is located on the northeast flank of the Santa Catalina Mountains. Elevations in the area range between 3,400 feet and 4,050 feet. Copper mineralization is hosted in a replacement skarn within limestone, dolomites and marbles of Paleozoic age. These units are part of a sequence of sedimentary rocks which overlie the Catalina granite-gneiss metamorphic core complex. Both the skarn and the associated copper mineralization appear spatially and genetically related to the intrusion and uplift of the core complex which occurred in Tertiary time during the Laramide Orogeny. Gravity induced faults within the detached sedimentary rocks probably formed conduits and allowed the hydrothermal fluids to penetrate the overlying sediments.

SITE GEOLOGY

The Korn Kob skarn is a massive, but highly fractured, dark brownish-red garnetite replacing marbles and limestones of the Devonian Martin and the Mississippian Escabrosa formations. The dominant mineral is garnet along with varying amounts of quartz, magnetite, hematite, biotite, actinolite, tremolite and diopside. Copper occurs primarily as cupriferous iron oxide and chrysocolla along with minor tenorite. Oxidation of the skarn is almost complete and primary sulfides are virtually absent. Throughout the skarn, copper is fairly evenly distributed with grades usually ranging between 0.3 percent and 0.6 percent total copper. Minor amounts of silver (less than 1 oz./ton) and zinc (less than 0.2 percent) are also locally present.

Up section, the skarn is transitional to light colored, weakly mineralized, siliceous carbonates and eventually to marbles. Footwall to the skarn is 5- to 200-foot thick white quartz­ muscovite schist. The upper 30 feet of the schist occasionally carries as much as 0.5 percent total copper; however, the remainder of this unit is generally barren. The schist is thought to be a slide plane along which gravity induced faulting has occurred either contempory with or prior to mineralization. Stratigraphically below the schist is a variably altered quartz­ epidote-hematite-garnet quartzite which is probably a metasomatized arenaceous carbonate belonging to the PreCambrian Dripping Spring or Cambrian Abrigo formation. In outcrop this formation is commonly very hematitic with occasional chrysocolla.

The skarn at Korn Kob is well exposed at the surface in three locations known as the South Pit, the North Pit, and Donovan's Camp area. The South Pit portion of the Korn Kob skarn is the largest and most thoroughly drill-tested segment of the overall Korn Kob deposit.

An underground Mo-W-Cu-Zn-Ag-Fe-Au mine/prospect/occurrence located in South-central sec. 14, North-central sec. 15 and North-central sec. 23, T.12S., R.17E. (Bellota Ranch 15 minute topo map), 18 miles ENE of Tucson in Buchman Canyon, and 5 miles north of the Redington Pass, on the eastern flank of the Santa Catalina Mountains. (Reference Mindat.org website) http://www.mindat.org/loc-36325.html

Prospecting in the area began at the turn of the century. The Corn Cob Mining Company operated ca. 1910-1916. The target was high grade, underground copper ore. After four years of development and no discovery of large tonnages, work was suspended in 1916. Reported production from the property was 90 tons of ore containing about 6 tons of copper and 140 ounces of silver, which equates to over 6% copper and 1.5 ounces of silver per ton. Workings included a 130 foot (39.62 meters) deep shaft and tunnels with 3,900 feet (1,188.7 meters) of workings on 2 levels.

Various companies have evaluated the property over the years, including Keystone Minerals, Inc., Essex International, Inc. (1970-72). A report by Holmes & Narver, Inc. in March, 1974, Budge Mining, the early 1990’s details the results of drilling and the metallurgical test work carried out during this period.

Most of the drilling was performed during the 1970's. A.F. Budge Mining Company optioned the property in 1989 and drilled 65 holes additional drill holes in the early 1980’s.

In February, 1990 Mountain States R&D in Vail, Arizona was commissioned to carry out metallurgical test work on material from the Korn Kob. A large bulk sample was excavated from a surface road cut in the area of the South Pit. Two, 4-inch diameter column leach tests were run on this material. The first tests had to be abandoned because the solutions would not percolate through the columns. It appears that the highly oxidized and decrepitated surface sample may not have been the ideal test material. The columns were loaded again with agglomerated material. Resulting acid consumption was higher than expected, in the range of 15 to 16 lbs.; however, the tests did indicate that copper recoveries of 70% could be expected in about 30 to 40 days of leaching.

In May, 1990 Dawson Metallurgical Labs began a large diameter column leach test on the same material. Results were similar to those achieved by Mountain States.

More recently, Mountain States R&D carried out column leach tests on drill core from the Korn Kob. This material, much more representative of the mineralized and mineable reserves at depth, produced better results. Composite No. 1, consisting of material from core holes drilled in the South Pit, was leached and the overall copper recovery was 72.89%; acid consumption was 88.49 pounds/ton, or, approximately 11 pounds of acid per pound of copper. Leaching tests on Composite No. 2, representing material in the North Pit, resulted in an overall copper recovery of 75.37% and acid consumption of only 56 pounds per ton, or 5 pounds per pound of copper. This would indicate an overall average acid consumption for the Korn Kob deposit in the range of 9 to 10 lbs.

Additional test work is needed to confirm the need for agglomeration. There are several adits on the property which provide access to underground portions of the North and South Pits. It is hoped that a large underground bulk sample excavated from these adits will provide a much more representative sample for the test work. And that further testing will prove that agglomeration is either totally unnecessary, or necessary on a smaller percentage of the mined material. In the latter case, the fines could possibly be vat leached for increased recovery, without agglomerating.

RESERVES

Mintec, Inc. of Tucson calculated the diluted, recoverable mining reserves in the South pit at 11,581,376 tons at a grade of 0.411% total copper. DMBW (Denver)calculated a mining reserve of 9,122,900 tons grading 0.48% total copper and used a dilutant of 2,280,725 tons grading 0.15% copper for a total reserve of 11,403,625 tons of 0.41% copper. A waste to ore ratio of 1.5:1 was used in the calculations.

It is probable that additional reserves exist in the area of the North Pit which has had some, albeit limited, drilling in the past. If we were to assume that 25% of the overall Korn Kob reserves exist in the North Pit, then the overall mining reserve for the two areas could approach 15,300,000 tons. Other areas exist on the property which have not been drill tested that could possibly bring this total to over 20 million tons.

The deposit is very amenable to open pit mining methods. Water is available on the property and a power line is accessible within 7 miles of the proposed plant site.

Current studies indicate that the Korn Kob could produce high quality cathode copper using conventional Solvent Extraction Electrowinning (SX/EW) technology at costs comparative with other operations, and at costs which would result in an economic and profitable venture.