Humanity has a love affair with gold. From the crusades and armadas of ancient times, to the morerecent Californian and Yukon gold rushes, our quest for this elusive element has defined much ofworld history. Pundits offer differing but equally compelling arguments as to whether or not gold hasany intrinsic value, but none can dispute that there continues to be a healthy demand from buyerswilling to exchange dollars, pounds, and other currencies for gold.

This presentation presents an approach that substantially reduces the risk and increases the rewardfor the business of successful gold exploration and DISCOVERY.

In 2011, if the relatively small state of Nevada had been a country it would have been the fifth largestgold producing country in the world ranking behind China, Australia, South Africa and Russia.

2011 also marked the 23rd consecutive year of gold production from Nevada greater than 5.0 millionounces each year. Clearly, Nevada is a world-class gold producing region.

Nevada, has the highest concentration of multi-million ounce gold deposits per unit area of any placeon earth.

This is important because gold is hard to find and the business of successful exploration can be veryexpensive, so it is extremely important to focus as early as possible on the very best places on whichto place exploration bets.

If it is true that the best place to look for gold is next to a known gold mine, then Nevada is the bestplace on earth to look for another multi-million ounce gold deposit - but there is a problem.

Nevada is centered in the geologically unique Basin and Range physiographic province where golddeposits, shown here as bright yellow dots, are exposed in N-S elongate mountain ranges, shown ingray. The problem is that hundreds of geologists supported by millions of dollars from both MajorMining and Junior Exploration companies are also aware of Nevada’s prolific gold endowment andhave combed these Mountain Ranges in search of gold for decades using some of the mostsophisticated exploration tools ever developed.

Despite the state’s prolific gold endowment, a disturbing trend has been developing in recent years –the rate of discovery is slowing dramatically and reflects, in part, the advanced stage of exploration inthese exposed areas, i.e.- the “low-hanging” fruit available to current technology is showing signs ofbeing exhausted.

The idea that it is simply time to move on to more prospective locations elsewhere in the world is notsupported by recent world-wide trends in Discovery Rate v.s. Exploration Expenditures.

This graph presents the Number of Discoveries in the Western World v.s. Exploration Expenditurethrough time and highlights the disturbing trend of rising exploration costs and falling explorationdiscoveries.

The number of discoveries are plotted as blue-green bars against the left vertical axis, and theexploration expenditures in dollars as a red line plotted against the right vertical axis through timeplotted along the horizontal axis. Due to the lag time in reporting new discoveries, recent discoverieshave been estimated as grey bars.

Over the past seven years, world-wide exploration expenditures shown by the red line have increased dramatically and recently reached record highs. Yet, even after taking into account estimated new discoveries the rate of discovery is clearly decreasing.

… and the industry is exploring under deeper cover.

Pundits offer differing but equally compelling arguments for the disconnect between rising explorationexpenditures and falling discovery rates, but all agree that we need new discoveries, that they will have to come from under cover and that New Exploration Tools and New Strategies for using them are needed, if the industry is to reset the risk/reward ratio for the business of successful exploration and discovery.

So, 50% of the best place on earth remains essentially unexplored in any systematic mannerbecause the bedrock that contains the gold deposits is covered by sand & gravel and is hidden fromview, so conventional exploration tools are challenged.

Nevada Exploration Inc., or NGE, is one company that has risen to this challenge.

This presentation explains Nevada’s prolific gold endowment, it’s significant remaining explorationpotential, the keys to discovering it and the new, innovative exploration methodology that NGE hasrefined from work firmly rooted in initial research done by the US Geological Survey.

But first, let’s take a look at some recent data compiled by Minex Consulting of Australia thathighlights some important trends in world-wide exploration methods.

MinEx Consulting has examined the discovery histories of 1,750 deposits world-wide and has made some interesting observations regarding Trends in Exploration Methods.

The preferred search method used varies by commodity type, depth of cover and scale.

A review of these search methods through time can be used to predict the direction of evolution of the most promising exploration technologies and help the industry focus research and development on those tools and strategies with the greatest potential for discovery.

At the Project-Scale those exploration methods that rely on being able to see the rocks exposed at the surface, that is, those methods characterized by Minex as - Serendipity, Prospector, Other, Visual and Geological Mapping have become much less important through time and those methods emphasizing Conceptual/Geological, Extrapolations from Known Mineralization, Geophysics (although decreasingly so) and especially Geochemistry have become more important.

The end of the era of being able to simply put a bounty on a grab sample of ore as the primary means of discovery is coming to a close.

As the focus narrows to the Prospect-Scale, Extrapolations from Known Mineralization decrease in importance as known mineralization in heavily prospected areas that hasn’t already been extrapolated is generally scarce, Geophysics becomes a slightly more important tool at the prospect-scale for drill hole placement, but Geochemistry is becoming the most important tool as exploration moves under deeper cover and is the only tool that can provide a direct indication that the metal sought is actually nearby.

1. At this point it is important to understand that gold ore bodies, shown here in red, formed withinthe rocks of the Earth’s crust across Nevada through various geologic processes from 40 to 25million years ago (Ma).

2. Starting around 15 Ma, the bedrock, AND the gold ore bodies contained therein, were separatedinto large blocks by major post-mineral N-S fault zones as Nevada was pulled apart breaking thecrust into large blocks.

3. Some blocks were dropped down to form BASINS relative to some that were thrown up to formmountain RANGES.

4. The mountain RANGES were eroded, filling and covering the valley BASINS with boulders,gravel, sand, and clay. In some Basins the gravel is too thick for a gold deposit to be economicunder existing exploration and extraction technologies. In other Basins the overlying gravel isshallow enough to permit the gold deposit to be mined economically – But first, it must bediscovered through the overlying cover.

Understanding why so much of such a prolific gold producing region remains effectively unexplored,and appreciating the potential of NGE’s new exploration approach requires a brief consideration ofthe unique characteristics of Nevada’s gold endowment, and Nevada’s unique geologic history.

After the first few Carlin-type gold deposits were discovered it was observed that for no knowngeologic reason they seemed to line up on what became known as “Trends”. That Trends somehowcontrolled the distribution of large gold deposits was a simplification that was easily understood byinvestors looking for a short-cut to discovery. This “Big Idea” has dominated the ability to fundexploration for more than 50 years. With new discoveries, the original Trends have become broaderand new ones have been proposed, so the “guide” is nearly useless as a discriminator for increasedgold exploration potential.

Simply drilling near an existing gold mine or between two gold mines are strategies that are nowyielding diminishing returns and investors are understandably frustrated.

Fortunately, there is much more to know about Carlin-Type Gold Deposits than that they seem tocluster along “Trends”.

Hundreds of geologists supported by millions of dollars from both Major Mining and JuniorExploration companies working for decades have certainly added much new detailed geologicinformation to the story, but in many ways the detailed information only serves to dramaticallycomplicate exploration and further confuse the investor.

Detailed genetic models, explained by often confusing geologic jargon, attempt to present the detailsof rock types, complex structures, alteration and geochemistry that generate colorful target cartoons,but do little to inspire confidence in the odds of success. There are thousands of prospect pitsscattered across Nevada that have been studied since the mid-1800’s and they still source hundredsof grab samples each year containing gold that further generate prospect submittals and lengthyreports that all recommend drilling deeper and leaving the investor and even the geologistoverwhelmed with information.

A unified genetic model explaining why Nevada should be so uniquely endowed has been lackingand is the first step in understanding how to sort through all the information and regain confidence inthe exploration process. A recent technical paper by John Muntean, published in 2011 provides thisfirst step by presenting a coherent genetic framework for the origin of Carlin-Type Gold Deposits andexplains why so much gold likely remains to be discovered in Nevada.

Most importantly, this new information leads to the development of New Exploration Tools and betterExploration Strategies to focus exploration resources by those first to understand and then use thesenew observations. The unique gold endowment of such a small part of the planet is NOT due to onesimple process, that can be reduced to a simple “Trend”. The industry now suspects that at leastfour separate geologic processes that while separately are common to other parts of the world,came together uniquely in time and space much like a Perfect Storm to create a world-class goldproducing region.

The same geologic processes that can be seen operating today operated 385 Million Years Ago (Ma)when an ocean once covered what is now Nevada.

The sea life that forms coral reefs, requires sunlight, and sunlight only penetrates to the bottom ofshallow seas. With time, the coral reefs died and turned to limestone, which accumulated in areasshown here in light blue. Sand, silt and clay were carried by rivers that moved from the land to thesea. Sand, silt and clay are sometimes mixed with limestone, but are also deposited separately atthe bottom of deeper seas, shown here in dark blue, where sunlight does not reach and limestonedoes not form. Over time, both rock types accumulated to great thicknesses like the layers of a cake.

Today, in north-central Nevada the light blue dashed line demarks the western limit of the formationof a large expanse of limestone located across eastern Nevada. Thick layers of sand, silt and claywere located to the west of the light blue dashed line.

The first key to unlocking future discoveries is this light blue line which effectively separates thearea of greater gold mine density (yellow dots) located to the east, from the area of lesser gold minedensity located to the west.

Over time, complex, powerful plate tectonic processes pushed in different areas with varying intensityfrom the west to the east against what will become the Western US.

In north-central Nevada, this pushing resulted in the eastward movement of deep-sea sand, silt andclay rock layers, that acted together like a large ‘plate’ that broke along the western edge oflimestone deposition shown here as a light blue dashed line. The Western Upper Plate of sand, siltand clay rock layers was effectively pushed ~90 miles, up and over the Eastern Lower Platelimestone rocks. The dark blue dashed line shown here is the eastern limit of the Upper Plate sand,silt and clay rock types.

Over time Plate Tectonic compressional forces relaxed and turned to extensional forces.Compression alternated with extension essentially shuffling the various rock layers somewhat like adeck of cards. In places, the Upper Plate rocks acted much like a carpet being pushed along ahardwood floor, slipping and folding to create a variety of structural traps for later rising hot fluidssimilar to the structural traps that control the migration and formation of oil & gas fields.

The Upper Plate sand, silt and clay rocks are generally impermeable to ascending hot fluids. TheLower Plate limestone rocks are more easily dissolved. The Upper Plate rocks effectively acted like alid on a pressure cooker in the overlap area, shown here in yellow, and help to build largeconcentrations of gold in both the Upper Plate and the more reactive Lower Plate rocks.

The second key to unlocking future discoveries is understanding that where either the Upper orLower Plate rocks are absent the resulting gold deposits tend to be smaller and lower grade.Therefore, the area between the two blue colored dashed lines, shown in yellow, where the UpperPlate and Lower Plate rocks overlap offers a significantly increased reward for focused exploration.

These two general processes are already complicated enough, but there is even more complexity, becausewithout rising hot fluids containing gold and other elements, there would only be an empty “pressure cooker”.

Basically, a slab of oceanic crust, shown here as a dark green layer moved relatively rapidly eastward for 100million years underneath Nevada. About 40 million years ago Pacific Plate Tectonics changed and the rate ofunderlying slab movement abruptly slowed and the slab began to sink. Over a 15 million year period the leadingedge of this slab sank towards the center of the earth and steepened. In plan, the leading edge of the slab isseen as sweeping back westward, re-treating ~180 miles.

Now, rocks at the bottom of the ocean contain more water than other rocks. When rocks on the ocean bottomare pushed beneath rocks on land they heat up as they are pushed deeper towards the center of the earth. Thewater contained in the ocean floor rocks lowers the melting point of the descending oceanic slab and when theslab is pushed deep enough it selectively melts and molten bodies of rock called Magmas preferentiallycontaining gold and other elements rise to the surface to form volcanoes in a complex process referred to asMagmatic Activity.

With comparatively fast, shallow subduction the area of first melting was located far inland, beneath NENevada. The rate of subduction abruptly slowed and allowed the slab to sink at a faster rate resulting in slabsteepening and magmatic activity to be seen as sweeping from NE to SW across Nevada. Where the risingmagmas were emplaced beneath Upper Plate rocks in proximity to Lower Plate rocks - the perfect environmentfor deposition of large Carlin-type gold deposits was created.

The third key to unlocking future discoveries is to understand that hot, ascending gold-bearing fluids calledhydrothermal fluids emanated from cooling bodies of molten rock and tended to concentrate along steep,long-lived fault zones and is. Fault zones that formed early were subjected to repeated periods of alternatingcompression and extension and were reactivated several times to guide ore-bearing fluids into the perfectenvironment for deposition of large Carlin-type gold deposits. Lower Plate rocks of porous iron-rich limestonesoaked up gold and other elements like a sponge from hydrothermal fluids that ponded beneath Upper Platerocks.

The heat, gold, other elements and some of the hot water required to form a Carlin-type gold depositcame from molten rock chambers that were generated as a result of volcanic and deeper magmaticactivity that swept from the NE corner to the SW corner of Nevada from 40 to 25 million years ago.

This genetic model for the creation of Carlin-type gold deposits provides very good reasonsto believe that there should me many more large gold deposits hidden in the regions betweenthe “Trends”.

But also understand:

That these processes are extraordinarily complicated at all scales and task any expert’s ability toextrapolate what is and what is not known even a short distance from an area of outcrop. Suchgeologic ramblings simply task the patience of the non-geologist and do little to increase investorconfidence that anything good lies in the near future.

However, the investor can take away from this overview a sense of increased confidence that thevery best area to look in Nevada and likely the world for multi-million ounce Carlin-Type gold depositsis indeed located under the yellow highlighted area – BUT the area still contains nearly 65,000 sq-km(25,000 sq-mi) of some very unique and very complicated geology.

Now, remember, a fourth major event commenced around 15 million years ago to further complicate the story. After undergoing the last period of major compression, Nevada was subjected to major extension, which resulted in the formation of the modern day Basin & Range Topography. Everything was once again moved around by major faults and 50% of this most prospective area was completely hidden from view by sand & gravel!

The best covered areas, then, within the most prospective area in Nevada, which is one of the best places in the world to look for multi-million ounce gold deposits are highlighted here in yellow. But understanding that this same area is still very large and contains some very complex geology AND that it is hidden from view by sand & gravel leads many to simply abandon the search as hopeless.

The fourth key to discovery is to understand that this apparently hopeless situation represents a tremendous opportunity!

Knowing that 1) there are good reasons that additional multi-million ounce gold deposits exist within the narrowed search area, that 2) multi-million ounce gold deposits are large and likely to have already been discovered if any part had been exposed in the Range and that an unexplored covered area is likely the best place to look as it is large enough to hide a multi-million ounce gold deposit and that 3) there is less competition in these covered areas because few tools exist with which to continue the search all provide a powerful incentive to figuring out how to best go about it.

Now imagine if it was possible to ‘look beneath’ the cover of sand & gravel in these most prospective basins and separate areas where the bedrock that potentially contains the covered gold deposits is much thinner from areas where the cover is much thicker.

The fifth Key to unlocking future discoveries is understanding that Gravity Geophysics can furtherfocus exploration resources within the most prospective basins by constraining the search to theareas with the thinnest cover of sand & gravel.

Regional gravity geophysical data, collected by the oil & gas industry during the 1980’s can now beused to further focus on the areas of shallowest bedrock, shown here as yellow-orange areas, withinthe best Basins, within the most prospective area in Nevada. Blue highlights the areas of thedeepest basin fill.

Now imagine if there was a way of identifying which thinly-covered area was directly associated withgold and gold-associated trace-elements in the underlying bedrock.

Geophysical techniques only provide indirect indications of covered gold mineralization by providinginformation on depth to bedrock, rock types and fault zones. And, as we have seen, Nevada hasenough rock types and fault zones on a per unit area basis to source any number of “anomalies”.Sometimes areas of possible alteration can be discerned, but no geophysical technique can providea direct indication of the presence of the element being sought – gold. Sand & gravel covercomplicate the direct detection of gold in the underlying bedrock because the sand & gravel havebeen transported great distances from the adjacent exposed mountain ranges. Soil, vegetation andgas sampling techniques work well where bedrock is nearby or only a few meters deep and directlyderived from nearby bedrock, but become challenged when bedrock is covered by hundreds ofmeters transported material.

Ground water is the one medium that travels through the underlying bedrock. Where ground waterinteracts with a covered gold deposit it picks up a kind of chemical ‘scent’ of that interaction.

And the sixth and final key to unlocking future discoveries is to understand the potential ofGround Water Chemistry to filter through an extraordinary amount of complexity to simplify thesearch for additional multi-million ounce gold deposits at Regional, District, Property and Prospect-Scales.

Even though Nevada is a desert, ground water exists everywhere in contact with the coveredbedrock that floors the separated basins and contains the covered gold deposits. Ground watermoves both horizontally over and vertically through the bedrock. Where ground water interacts witha covered gold deposit it picks up a kind of chemical ‘scent’ of that interaction that contains higher-than-normal or anomalous concentrations of gold and gold-related trace elements that initiallyenlarges the target area and can then focus exploration resources with increased confidence that ahidden gold deposit is likely concealed somewhere nearby.

Ground water does not care how large or complicated a prospective area is and neithershould the investor that is following the chemistry of the ground water to the hidden golddeposit with a dramatic increase in the odds of success in the short term.

NGE is alone in pioneering the collection, sample preparation, analysis and reduction of groundwater chemistry to identify the most prospective prospects of the most prospective projects, in themost prospective districts of one of the most prospective gold producing regions in the world.

The Getchell Gold “Trend” is located at the northern end of the Battle Mountain – Eureka “Trend” innorth-central Nevada and is host to approximately 56 MMoz of gold. Looking more closely at thiscluster of world-class gold deposits provides revealing insights into the role ground water chemistrycan play in practice as part of a successful exploration program in Nevada’s basin and range terrane.

Now note the presence of one small prospect pit, shown as a small black “X” in the exposed rangefront. Geologic mapping along this exposed range front provided few clues to the presence of aworld-class gold deposit covered by sand & gravel hidden a short distance to the east. The prospectpit was reviewed by Goldfields Mining Company as a prospect submittal. To the credit of theexploration geologist reviewing the prospect he made a reconnaissance traverse of the area andcollected several rock chip samples for analysis. The story goes that he “sampled it anyway”. Whichis ‘geo-speak’ for “the rocks did not look that interesting”. But to his surprise the samples returnedgold values interesting enough for the Company to begin a Poke ‘N’ Hope drilling program directedbeneath the gravel-covered area located immediately east of the prospect pit in the covered area thatwould become the Chimney Creek gold deposit.

At the time, Carlin-Type Gold Deposits were only beginning to be understood, so there was little uponwhich to base geologic concepts or extrapolations. Neither geophysical nor geochemical techniquesfor looking beneath cover had been well developed. Therefore, extrapolations from knowmineralization and the presence of a regional structural fabric that could be projected beneath covergenerated a similar Poke ‘N’ Hope drilling program for Santa Fe Pacific Gold Corporation in the areathat was to become the Twin Creeks gold deposit located to the south of the Chimney Creek deposit,also concealed beneath a thin cover of sand & gravel.

The program was designed to test for the Presence of: shallow bedrock, the right kind of bedrock,hydrothermal alteration, oxidation, and gold-related trace-elements.

To the surprise of many, the first ten holes all returned positive results, but lacked the presence ofgold, so even within the exploration team there was disagreement over the next exploration steps.The argument went to the observations that 1) the holes were drilled over a wide area that 2) hadbeen subjected to the effects of a large hydrothermal system that 3) contained everything but gold.To the project champion this suggested that an efficient mechanism to concentrate gold might havebeen operating somewhere within the newly discovered, large hydrothermal system plus, the holeshad not been drilled to their planned depth and had only tested the upper 300ft of the hydrothermalsystem.

Each hole was deepened to the originally planned depth of 1,000ft, several intersected potentiallyeconomic ore-grade intervals in what would become the Twin Creeks gold deposit, a 17MMoz world-class gold deposit, a deposit that continues to play an important role in Newmont’s Nevadaoperations.

Clearly, this exploration process involved a great deal of hope and luck, which are lousy strategies inwhich to place much confidence.

At the time of discovery regional gravity geophysical data was regarded as too expensive and onlybeginning to become available from oil & gas industry surveys.

But what if it had been available?

Gravity geophysics would have clearly identified several broad areas of relatively shallow bedrockcovered by sand & gravel that would certainly have been regarded as prospective and would haveserved to increase confidence that the planned drilling program would at least encounter shallowbedrock. The orange colors shown here identify the areas of shallowest bedrock, yellow the nextshallowest and blue the areas of deepest bedrock.

However, gravity geophysics alone would have done nothing to indicate which areas were associatedwith significant gold mineralization.

Now imagine if ground water chemistry had been available for this same area.

This slide presents Au concentrations in ground water as colored dots relative to areas of goldmineralization known at the time of sampling shown here as red highlighted areas . The larger thedot and the warmer the color the higher the relative gold concentration. Yellow, Orange and Red areconsidered progressively more anomalous and indicative of nearby gold mineralization in theunderlying covered bedrock.

During the period from 1989-1993 when exploration was active in the area, the US Geological Surveyunder the direction of David Grimes collected 383 ground water samples from 112 sample sites nearthe Twin Creeks, Getchell, Turquoise Ridge and Pinson gold mines. Grimes was interested inexploring the possibility that ground water chemistry might be useful in exploration programs for golddeposits covered by sand, gravel and ground water. The samples were mostly collected fromreverse-circulation exploration drill holes at intervals of 60 to 100ft from the surface to depths asgreat as 1,000ft.

His data was published in two USGS Open File Reports and a summary of the results of his detailedstudy were published in the Journal of Geochemical Exploration in 1995.

Importantly, he concluded that background concentrations for Au in the ground water, up-gradientfrom the buried deposits was less than 1ppt, near the known deposits the Au values from the upperparts of the ground water table ranged from 1 to 140ppt and in drill holes that penetrated mineralizedbedrock, but were not known to be economic gold deposits at the time, concentrations of Au inground water were as high as 4,700ppt and strongly suggested target areas worthy of additionaldrilling. Finally, under-sampled prospective areas with low-level concentrations of gold were alsoidentified that clearly warranted additional ground water sampling.

Arsenic was also studied. And Arsenic concentrations in the ground water near the gold deposits,shown here as yellow, orange and red dots to represent progressively higher concentrations, werealso significantly enriched relative to normal concentrations in ground water away from the golddeposits, shown as blue dots.

Antimony also showed a similar distribution pattern.

….And abnormally high concentrations of Tungsten were also associated with the known golddeposits.

The USGS study of ground water chemistry demonstrated too late that Au, As, Sb and W in groundwater could have helped focus early exploration resources with increased confidence, but it didclearly point the way to a new exploration methodology.

After many years of work in the district the regional structural fabric is just now becoming clear andprovides the structural context to help explain the early ground water chemistry results of Grimes.Ground water moving upward from depth along high-angle fault zones through covered, oxidizinggold deposits clearly carries with it gold and trace element signatures that can be used to guide theearly stages of exploration.

Following up on regional gravity geophysics and reconnaissance ground water sampling with aprogram of more detailed gravity geophysics plus additional in-fill ground water sampling would haveclearly increased confidence in the placement of important early drill holes and undoubtedlyshortened the time and reduced the cost of discovery. Soil, vegetation and Hg gas sampling surveysare other more conventional exploration techniques for looking beneath cover that might addadditional targeting information after ground water sampling has identified the area of greatestexploration potential.

Clearly, the initial ground water data still suggests several large areas that warrant additionalexploration follow-up and areas where additional ground water sampling could be conducted yettoday to more efficiently and effectively continue exploration within this important district. BothBarrick and Newmont are currently active in the Midway area.

The rationale and logic were clear, the science was sound and vetted through the peer-reviewedgeochemical community, so why is NGE alone in picking up on the trail first blazed by the pioneers ofthe US Geological Survey?

Basically, transferring new knowledge and technology from university and government researchgroups often takes more work than researching and creating the new technology in the first place.

Many examples exist of good technologies that failed at some stage of transfer to the market placefor two major reasons.

1) First, good research results need to be clearly communicated outside the research community.It’s important to publish research in peer-reviewed journals, so knowledge doesn’t get lost. Butjust publishing in journals isn’t enough, if the goal is to actually transfer the technology to themarket place. Researchers need to publicize their work by giving talks and lectures, writingarticles for industry magazines, and creating and maintaining websites.

2) And second, researchers need to supervise every detail of the new technology application toensure that early adopters do not fail. Creators need to choose companies with managementthat believes in the new technology and they need to stay on top of every detail of it’s initialapplication to assure success.

Neither of these two steps were taken by Grimes or his team. And…………

Despite the stated interest by industry in new exploration methodologies and the proof of conceptoffered by Grimes, key technological challenges remained:

1) The analytic methods available at the time for the direct detection of gold in ground water weredifficult and expensive.

2) Access to ground water over large areas of desert terrane seemed problematic.

3) Understanding ground water movement through local aquifers also presented a barrier to wide-spread acceptance and further development of the concept.

Grimes’ work also suffered from poor timing.

It was published before the era of computer enhanced graphics that would have made hisinvestigation more easily understood and appreciated by a wider audience.

And when combined with a falling gold price there was simply little incentive for producers focused onthe short term to expend dwindling resources on Research and Development related to Exploration inthe long term to overcome the perceived remaining obstacles.

Grimes retired from the USGS. His work has since been referenced in geochemical explorationjournals as an excellent case history, but when the price of gold recovered investors went back todoing what had worked previously, but now with diminishing returns.

In hindsight, NGE was alone in recognizing, building on and applying the work of the USGS pioneersspecifically because the author of this presentation was intimately involved with the early explorationphases of exploration and discovery at Twin Creeks and had direct knowledge of Grimes’ originalresearch work, so was in a unique position to understand and appreciate its importance to the futureof exploration in Nevada.

Driven by more than 30 years of successful Nevada exploration experience and the realization thatthe time was right for a new way of exploring directly for gold beneath the sand & gravel that covered50% of the best place on earth in which to discover multi-million ounce gold deposits the author ofthis presentation went to work.

To deal with the perceived poor analytic methods available at the time for the direct detection of goldin ground water, NGE assumed the role of researcher and worked with Paul Taufen a world leader inExploration Geochemistry and Eric Hoffman of Activation Laboratories to further develop a lower costand improved Quality Assurance/Quality Control protocol for ground water sample analysis.

To address the need for a large number of regional ground water samples:

NGE assumed the additional role of developer and identified and digitized legacy ground water datafrom 28 separate public domain sources to create a large proprietary ground water database thatnow contains more than 46,000 samples.

The blue dots shown here represent unique sample locations. Some locations are associated withmultiple chemical analyses. Although legacy data does not report gold and some trace elements arealso not reported, it helps to initially prioritize the underlying prospective basins shown in yellow formore detailed ground water sampling follow-up.

Each year water evaporates from the Pacific Ocean, leaves behind most trace elements and moveswestward picking up oxygen. This water falls in the mountains of Nevada as fresh rain, but mostly assnow to recharge ground water that flows off the mountains and into sand- & gravel-filled basins.This trace-element depleted, oxygen-rich ground water interacts with the bedrock and any hiddengold deposit along it’s flow path.

Equipped with its improved proprietary sampling protocol and legacy database, NGE next beganapplication of this new technology and committed to a long term program of consistent andsystematic primary ground water sample collection from existing streams, springs, windmills andvarious kinds of wells throughout Nevada for first-pass access to the ground water table at regional-and district-scales.

It quickly became clear that many existing sampling points were not located in the best places basedon gravity geophysics and geologic extrapolations from range fronts beneath the adjacent sand &gravel cover.

To better locate ground water samples at smaller-scales, it was necessary to pioneer yet anotherexploration innovation – The Use of Direct-Push Water Sampling Technology to create primaryaccess to ground water where and when it was wanted rather than having to rely on that provided bynature or prior well-drilling by others.

This slide presents a diagrammatic plan view above and a cross sectional view below of anarea of a covered bedrock that contains a hidden gold deposit. With Direct-Push samplingtechnology ground water samples can now be collected in a cost-effective manner over alarge, sand & gravel covered prospective area to delineate a smaller area for further, moreconventional exploration.

The Hydroprobe was designed specifically for the environmental sampling industry to minimize thesurface and subsurface impact of extracting a ground water sample. The equipment uses “direct-push” technology, so is not technically a “drill”, i.e.- no rock cuttings are removed and no chemicalsare added to the hole. This makes the equipment more easily permitted with federal and stateenvironmental agencies.

The tooling consists of hollow, 1.5 inch diameter, 5 ft rods that screw together. A metal point is heldin place by rubber O-rings at the end of the first rod and a cap is placed over the other end to protectthe threads. The cap is placed under a piston that then pounds the rod in to the ground. Another rodis screwed on the end of the first rod and the process repeated until the rods can no longer be driveninto the ground. The hydroprobe has sampled ground water to depths as great as 250ft. The entirelength of the rod string is pulled up, the tip is pulled off the end of the first rod, a screen is pushed outthe bottom of the hole and ground water flows into the hollow rods. A length of PVC tubing isinserted into the hollow rods to below the level of the ground water and ground water is ‘pumped’ tothe surface, filling a 5-gallon bucket. The water is then filtered and processed on site and sent to alab for a high-resolution analysis.

More than 5,000 samples shown here as red dots have now been collected by NGE over Nevada’smost prospective basins shown in yellow and report gold plus 80 other trace elements. Whencombined with legacy data shown here as blue dots NGE’s proprietary ground water database nowcontains more than 52,000 records with more than a million separate element analyses andcontinues to grow.

At one point, all of NGE’s gold in ground water data for Nevada was simply sorted from highest tolowest and plotted as a Cumulative Frequency Distribution Curve. Basically, 100% of the values, asseen along the horizontal axis, have less gold than the sample reporting the highest gold value asseen on the upper right of the graph. To the lower left, then, it can be seen that approximately 40%of all samples plot near zero gold. This emphasizes the extreme anomaly contrast betweenbackground and anomalous samples in this sampling medium, i.e.- if any gold is detected one isjustified in doing further work to understand it’s source.

A key aspect of NGE’s ground water sampling database is the inclusion of gold plus 80 other trace-element analyses for 30 other known gold mines across Nevada to the initial mine dataset of Grimes.This data continues to confirm Grimes’ conclusions and provides a detailed dataset that can be usedmuch like a finger print to characterize known gold deposits. In this manner NGE has identified 20prospective areas with ground water chemistry similar to other known gold deposits that are worthyof more focused conventional exploration.

Many samples exist which could be followed-up as possibly indicative of the leading edge of ananomalous ground water plume, i.e.- additional sampling could be focused in a number of areasreporting gold values in the 80th to 95th percentiles. Currently, NGE is only considering the top 95%of all values as “low-hanging fruit” and immediately actionable. In this manner, the most clearlyanomalous areas can be identified for land acquisition with more conventional exploration follow-up,while continuing to collect first- and second-pass reconnaissance samples from the remainingprospective basins in Nevada and continuing to conduct research on a number of importantquestions.

NGE is now in a unique position to bring it’s ongoing ground water chemistry reconnaissanceprogram to the market place by identifying new projects to feed the company’s property pipeline.

NGE is using its proprietary hydrochemistry exploration technology to identify and advance a portfolioof new, previously unexplored covered gold projects.

NGE currently has an interest in the mineral rights on several projects and has completed enoughground water sampling to identify a number of other prospects that are being held in ‘inventory’without holding cost.

To Manage Risk NGE applies four distinct Exploration Stages, each with specific activities, objectivesand required results for a prospect to advance to the next Stage.

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While using groundwater chemistry together with a strategy of staged exploration offers the certainty that a discovery will eventually be made it does little to predict exactly when that discovery will be made. One of the unintended consequences of the use of groundwater chemistry together with a strategy of staged exploration is that cash flow is generated to manage the need for dilutive financings.

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McEwen Mining is in year two of an Exploration Agreement on the Grass Valley Project located just south of Barrick’s Cortez Hills Breccia Complex (14MMoz) in Central Nevada. NGE identified an area of shallow gravel cover containing highly anomalous gold in ground water. McEwen Mining has just paid NGE an annual payment for continuing to explore the property, is currently paying NGE a Service Fee to collect additional ground water samples and has announced that drilling is expected to commence in Q4 yet this year.

This concludes Part I –

Which describes Nevada’s prolific gold endowment, it’s remaining explorationpotential and what NGE believes are the keys to discovering additional multi-millionounce gold deposits.

Part II –

Will provide a brief overview of NGE’s Regional Ground Water Chemistry databaseas further context for several specific projects that will be available on NGE’swebsite: www.NevadaExploration.com

Thank You for your time, we hope you enjoyed the presentation.