The Hislop Property, consisting of approximately 24 leased or patented claims in Hislop and Guibord Townships totaling approximately 571 hectares, is located approximately 85 kilometres by road east of Timmins, Ontario and 50 kilometres by road west of the Holt Mill and is accessible from Highway 101 using paved secondary roads. 

History

Exploration on the Hislop Property dates from 1934 with initial production from some deposits beginning in 1939. The property has changed ownership several times and there have been numerous diamond drilling campaigns conducted. In 1990 and 1991, the property was operated as a joint venture with Goldpost Resources Inc. and St Andrew during which 288 underground diamond drill holes totaling 5,401 metres were drilled with some underground mining. In 1993, St Andrew purchased the remaining interest in the property, and subsequent underground mining was conducted from 1993 to the end of 1994. From 1990 through 1994 a total of 215,990 tonnes grading 5.55 g/t Au were mined.
In 1999 and 2000, St Andrew conducted open-pit mining operations at the Hislop Property. Production during this period totaled 185,100 tonnes of ore, processed at an average grade of 3.4 g/t gold, producing about 20,000 ounces. The operations were placed on care and maintenance in late 2000 because of the then-prevailing low gold prices.

Geology and Mineralization

Several gold zones have been identified on the Hislop Property. These zones occur along a strike length of 1,200 metres, following the fault contact between mafic flows to the north and ultramafic rocks to the south. Gold is associated with the margins of feldspar porphyritic syenite dikes that have intruded the mafic and ultramafic rocks. The dikes are generally conformable to the contact between the mafic and ultramafic rocks striking west-northwest and dipping steeply to the north. The mineralized areas have been called from west to east - the West Zone, Shaft Zone and the South Area.

Mineral Reserves and Resources

Scott Wilson RPA provided an estimate of the mineral reserves and resources of the Hislop Project in the September 2009 "Tehcnical Report on Preliminary Feasibility Study of the Hislop Project", and in the August 2009 "Technical Report on the Hislop Project - Resource Estimate". The reserve/resource estimates are summarized in the tables below: 

Hislop Project - Mineral Reserves Estimate, December 31, 2011

Hislop Project - Mineral Resource Estimate, December 31, 2011

Notes:

• Mineral Reserves were estimated by Management according to CIM definitions -- 2010;
• Mineral Reserves for Hislop were estimated using an average long-term gold price of US$1,100 per ounce and an exchange rate of $1.00 = US$0.98;
• Mineral Reserves for Hislop were estimated using a cut-off grade of 1.7 g/t Au;
• There was an ore stockpile consisting of approximately 37,000 t grading 1.4 g/t from Hislop at December 31, 2011;
• Tonnes and gold ounce information is rounded to the nearest thousands and as a result, totals may not add exactly due to rounding.

• Mineral Resources are inclusive of Mineral Reserves;
• Mineral Resources were estimated by Management according to CIM definitions -- 2010;
• Mineral Resources were estimated using a gold price of US$950 per ounce, and an exchange rate of $1.00 = US$0.85;
• Mineral Resources were estimated at a block cut-off grade of 0.94 g/t Au; a minimum mining width of 2.0 m was used;
• A bulk density of 2.84 t/m3 was used for all rock types except syenite (2.68 t/m3);
• Tonnes and gold ounce information is rounded to the nearest thousands and as a result, totals may not add due to rounding.

Development and Mining

The Mineral Reserves are amenable to open pit mining and processing at the Company's nearby Holt Mill for recovery of the gold.

SAS completed an independant Pre-feasibility Study in September of 2009, and subsequently made a positive production decision to begin open pit mining operations in 2010.

Stripping activities at the Hislop Project commenced in the beginning of 2010, waste rock drilling and blasting commenced in March 2010, and site preparation work performed during the second quarter 201, included the re-electrification of the Hislop site, site planning and office mobilization, as well as mobilization of the crusher, fuelling station and mobile equipment. As of March 2010, the crusher was fully operational and connected to the power grid.

Ore mining activities at the Hislop Project commenced in March 2010. Production commenced in Q3/2010 and currently all facets of the pit mining activities are in place. The Hislop Mine is expected to produce between 20,000 - 22,000 ounces of gold for 2011.

Processing

Ore mined from production at the Hislop Mine will be milled at the Company's nearby Holt Mill, located approximately 45km east of the Hislop Mine.