SUMMARY

This Exploration Contract covers an area of approximately 16.4 square kilometers and was granted for an initial period of two years in May of 2007. The contract can be renewed for a further 3 year period. The area encompasses several small mines that produced antimony from high grade veins at the end of the 19th and at the beginning of the 20th century. Gold is known to have been recovered from the antimony veins toward the end of the life of the antimony mines. Drifting along veins at Alto Sobrido by the Portuguese State Mining authority (Servico do Fomento Mineiro) in the 1960’s encountered pockets of high grade gold mineralisation associated with the antimony veins.

From 1998 to 2002 Connary Minerals explored the area. Work consisted of the completion of 2 diamond holes for 188 meters, the completion of 30 percussion holes for 714 meters, channel sampling of underground workings, extensive surface sampling and trenching.

Earlier work completed on the property includes the completion of 4 holes diamond drill holes by CBD (a Joint Venture between BRGM, EDM and Empresa Carbonifera de Douro). The holes drilled were SS1 to SS4 for 211.0 meters, the JV also conducted surface sampling along mineralized structures and underground channel sampling.

Diamond drilling on both the Alto Sobrido and Ribeiro da Serra prospects is planned to commence early in 2008.

There are three main known prospects within the Alto Sobrido concession and they are aligned along a 4 kilometer long northwest trending zone. From south to north they are as follows

Alto do Sobrido, the  Ribeiro da Serra and the Tapada Prospects

Alto do Sobrido

There are small surface and underground workings at the Alto do Sobrido. The project area is situated on the western limb of the Valongo Anticline. The workings here are confined to an area of 300 meters x 500 metres. Most of the workings relate to the mining antimony in the late 19th century. However there is evidence that gold was recovered from the mineralized system. In addition extensive sampling has shown the presence of pervasive gold mineralization in the area.
Drilling, trenching and sampling has identified 3 veins sub parallel to each other and generally striking east west.

They are:

Vein A: This has been intersected in 3 places by drilling and returned values as: 3.2% Antimony across 2.0 meters (percussion) 3.92% Antimony over 4.75 meters (diamond drill) and 1.17 % Antimony over 1.0 meters (diamond drill). These intercepts occur from near surface up to 50 meters below surface.

Vein B: Has four intercepts, three from percussion holes and one from diamond drill (2.0% Antimony across two meters). Vein C: Has two intercepts, one from percussion drilling and one from diamond drilling (2.1% Antimony across 1.65 meters).

All of the intercepts have gold mineralization associated with them noted as: 9.20 g/t Au across 1.0 meter in Percussion Hole 6 and 9.8 g/t Au across 1.0 meter at a depth of 33 meters from Percussion Hole 17. In addition diamond drill hole DDAS 1 recorded an assay of 1.16 g/t Au across 1.65 meters from this vein. Most other gold values are in the 0.5 g/t to 1.0 g/t Au across 1.0 meter range.

True widths of the individual veins are estimated, from underground observations, to be between 0.25 meters and 2.0 meters.

The Servico do Fomento Mineiro completed and sampled some 300 meters of tunneling in the mid 1960’s. Channel sampling across the vein structure exposed in the Adit Minus 25m level returned strong antimony values along with exceptional gold grades:

These grades are NOT representative but show that high grade pockets of gold exist in association with the antimony. More representative grades and widths are recorded as follows:

To west of the area a well silicified and brecciated structure of variable width (4 to 16 meters) has been identified by surface mapping, channel and chip sampling, trenching and by several drill holes (both percussive and diamond drill holes). The structure strikes initially to the north for some 200 meters. When striking north the structure dips steeply to the east.

Mapping has shown the structure then swings to the east and has been traced for another 100 meters. As the structure swings to the east the dip appears to flatten. Channel sampling and surface sampling has shown elevated values for gold along the entire 300m meters of the structure identified to date.

Gold grades in trenching are as follows:

Kernow sampled the flat lying structure and returned values as follows:

Percussion drilling gave similar results to those seen in trenching and they are tabulated below.

Ribeiro da Serra – Tapada Prospects

Ribeiro da Serra is an old antimony mine located some 650 meters northwest of the Alto Sobrido prospect. There are extensive underground workings but there are only two tunnels are currently accessible, the remaining old workings being flooded. The veins mostly trend in a northerly direction. The flatter-lying veins have been found not to be particularly rich in gold but have been extensively stoped during the mining of antimony down to depth of about 150 m below surface. Kernow has sampled the antimony veins and has recorded values as follows:

Higher grade gold mineralisation is associated  with the steeply dipping quartz veins that cross cut the flat lying antimony veins.
 
A  review of  previous data has shown that in the Gallery One grades of the following tenor are recorded from channel sampling (undertaken by Connary) across the vein structure.

The above samples were taken at varying intervals along a 50 meter length of the Tunnel / Gallery 1 which strikes to the north.

Kernow completed confirmation sampling in this gallery and returned the following results:

Tapada Prospect

The Tapada deposit along with Fontinha is located between 300m and 700 m North West of Ribeiro da Serra and is a slightly larger mine development than Ribeiro da Serra. The dominant trends of quartz veins are North-North West and North East. Kernow sampled a quartz vein in  the adit Number Six with the following result:

NOTE:

The assay and sampling results quoted in the foregoing document are historical results. Kernow is in the process of verifying the data by conducting its own surface and underground sampling. In addition Kernow will re-sample and re-assay diamond drill core from the two drill holes DDAS-01 and DDAS-02

To date the majority of the confirmation samples taken by Kernow have returned higher antimony values than previously recorded. Kernow believes this is due to the application of a different more accurate assaying technique for antimony.

About Antimony

In common with most industrial metals, antimony is enjoying strong market conditions with prices having strengthened during the last two years to the current level of US$5,600/t ($2.55 /lb) for Antimony ingots.  Supplies from China, which has historically contributed about 85% of world production, have tightened, opening opportunities for other producers to sell into a market where demand is forecast to grow at some 5% per annum.

Links to web sites about Antimony

www.antimony.net

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