Three different cutoffs are shown as Management is considering the most economical way to mine, i.e. bio/heap leach or conventional milling methods. Two result tables are shown; an uncut, in which all assays were used and a cut, in which assays over 0.5 oz Au/t were cut to 0.5 oz Au/t for the block calculation. Assays that were cut were then restored to the block that contained the drill hole. This ensures that high grade, which is present in the deposit, is included in the calculation but prevents the high grade intersections from being used to calculate any of the surrounding blocks. Management considers this to provide a reasonable accurate resource estimate.
 

At a 0.01 oz Au/t cutoff there is an uncut inventory of;

At a 0.02 oz Au/t cutoff there is an uncut inventory of;

At 0.03 oz Au/t cutoff there is an uncut inventory of;

 When cut to 0.5 oz Au/t at a 0.02 oz Au/t cutoff there is;

The difference between the two overall grades is the result of the cutting, which is severe; given the fact that previous mining has shown that the high grade material does exist. Additional work is required in order to establish the true resource which should lie between the uncut and cut values. In addition, blocks accounting for a total of 47,443,182 tons could not be calculated within the model as no composites could be found within the search distances. It can be reasonably assumed that 5 % or 2.3 million tons of this material would become part of the resource, if the grade distribution remained the same. Finally an additional 7 to 10 million tons of resource has been identified below the 4200 foot to a depth of 3900 feet, which is 100 feet below 15 level. This resource is the down dip continuation of the mineralized zones and has not been drilled by the Company, it is reasonable to believe that an additional million ounces is in this area.

Geologic Systems Ltd. is now proceeding to calculate a mineable resource calculation by putting a pit around the block model. Once the economic mining parameters have been determined, this calculation will be used to produce a mineable reserve required for a feasibility study.

The resource was calculated by using a standard industry approved geological controlled inverse squared distance block model method. The following assumptions and dimensions are used in the calculation.

• Block sizes used measured 25 ft. wide by 25 ft. long by 10 ft. vertically.

• All assays from 374 drill holes were used to calculate 10 foot vertical composites. Unassayed intervals were assumed to be zero grade.

• Two types of composites were calculated: Uncut and Cut. Cut composites were calculated by cutting all assays over 0.5 oz Au/t to 0.5 oz Au/t

• Three classifications of resource were calculated based on distances from the block center to assay composites.

  MEASURED 50 feet wide by 50 feet long by 20 feet vertical
  INDICATED 75 feet wide by 75 feet long by 30 feet vertical
  INFERRED 100 feet wide by 100 feet long by 40 feet vertical

All composites found within each of the areas are used to calculate the grade of an individual block.

• A tonnage factor of 11 cubic feet per ton was used.

• Each block was identified as being within or outside the mineralized zone. Such that only composites belonging to the same geology as the block, were used to calculate individual blocks.

• The block model calculation was from 4740 feet to 4200 feet (13 level) in elevation.

• Total number of blocks in model is 225,421.

Work resumed at the Cariboo Gold Project January 11, after the Christmas break. The work plan for 1999 exploration will include:

• The computerized 3D model of the Cariboo Gold Project will be updated with all the new information included. A new enhanced pit design, and 3D model of the BC Vein will be included in the model.
• A bulk sample will be taken for metallurgical testing, including a bottle-roll and column analysis for a bio/heap leach study at Lakefield Research Laboratories.
• An application will be submitted to the B.C. Provincial Government to start the Environment Assessment process to obtain a mine permit.
• 1500 Level (4,000 elevation) rehabilitation and underground drilling will be undertaken to evaluate the additional resource indicated by the new Mineral Inventory.
• 10,000 feet of surface drilling on the BC Vein will be completed: as only 600 feet of the exposed 2,400 of strike length has been drilled.
• Mapping and channel sampling of the two new targets Black Bull and Canusa Veins which lie parallel to the BC Vein.
• 5,000 feet of surface drilling will be completed on the Wells mineralized trend, which is parallel to the open pit zone.
• A 20 km soil geo-chemical survey will be completed around Barkerville Mountain
• A surface exploration program on Cow Mountain will be undertaken to locate and trace the limestone band which is the host rock for the higher grade replacement ore.

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