TECHNICAL REPORT ON THE MARCELLA CONCESSION Navojoa Area, State,

Prepared For: VAN GOLD RESOURCES INC. Apt 2203, 588 Broughton Street, Vancouver BC. V6G 3E3

Prepared By: MARVIN A. MITCHELL P.ENG. Suite 1831-470 Granville St. Vancouver, BC. V6C 1V5

July 9, 2012

Contents 1.0 SUMMARY ...... 1 2.0 INTRODUCTION ...... 3 3.0 RELIANCE ON OTHER EXPERTS ...... 3 4.0 PROPERTY DESCRIPTION AND LOCATION ...... 3 5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 8 6.0 HISTORY ...... 9 7.0 GEOLOGICAL SETTING AND MINERALIZATION ...... 10 7.I REGIONAL GEOLOGY ...... 10 7.2 CONCESSION GEOLOGY ...... 10 7.3 MINERALIZATION10 7.4 STRUCTURE ...... 13 8.0 DEPOSIT TYPES ...... 13 9.0 EXPLORATION ...... 13 10.0 DRILLING ...... 19 11.0 SAMPLE PREPARATION,ANALYSIS AND SECURITY ...... 19 12.0 DATA VERIFICATION ...... 19 13.0 MINERAL PROCESSING AND METALLURGICAL TESTING ...... 19 14.0 MINERAL RESERVE ESTIMATES ...... 19 15.0 ADJACENT PROPERTIES ...... 22 16.0 OTHER RELEVANT DATA AND INFORMATION ...... 23 17.0 INTERPRETATION AND CONCLUSIONS ...... 23 18.0 RECOMMENDATIONS ...... 24 19.0 COST OF RECOMMENDATIONS ...... 26 20.0 REFERENCES ...... 26 21.0 CERTIFICATE OF QUALIFIED PERSON ...... 28 APPENDIX A ...... 29 APPENDIX B ...... 35 APPENDIX C ...... 38 APPENDIX D ...... 45

Figure 1 LOCATION MAP...... 5 Figure 2 CONCESSION MAP...... 6 Figure 3 MAGNETIC ANOMALY...... 7 Figure 4 GEOLOGY MAP...... 12 Figure 5 GROUND MAGNETIC SURVEY-REDUCTION TO THE POLE MAP...... 15 Figure 6 3D MAGNETIC INVERSION MODEL, 25M BELOW TOPOGRAPHY...... 16 Figure 7 3D MAGNETIC INVERSION MODEL, 50M BELOW TOPOGRAPHY...... 17 Figure 8 MAGNETIC INVERSION MODEL, 300M BELOW TOPOGRAPH...... 18 Figure 9 CROSS SECTION DDH MC1 and MC2...... 21 Figure 10 CROSS SECTION DDH MC 3...... 22 Figure 11SECTION ALONG LINE 10 DDH MC1, MC2, MC3 and PROPOSED DRILL HOLE...25

1.0 SUMMARY

Mr. Martial H. Levasseur, president of Van Gold Resources Inc., Apt 2203, 588 Broughton Street, Vancouver, BC. V6G 3E3 has requested Marvin A. Mitchell, of Mitchell Geological Services Inc. Suite 831, 470 Granville St. Vancouver, BC. to prepare a 43-101 compliant technical report on the Marcella concession in the State of Sonora, Mexico. Mr. Mitchell visited the property on May 22, 2012.

Van Gold Resources Inc. is a US company, incorporated in the State of Nevada on December 16, 2006 with offices at Nevada Corporate Headquarters, 101 Convention Center Drive, Suite 700, Los Vegas, Nevada 89109, telephone 800-508-1726 and Agent, Mr. Dennis Bovarone, Attorney at Law, 18 Mountain Laurel Drive, Littyleton CO. 980127, telephone (303) 466-4092.

Van Gold Resources Inc. has a wholly owned subsidiary Minera Van Gold,S. DE R.L. DE C.V. with offices at Cerrada Montiel N. 25, Colonia Puerta Real Residential, , Sonora, Mexico.

The author has relied on information supplied by Van Gold Resources Inc. as to the listing of the company and other information concerning legal, environmental and tax matters. The portions of this report which are totally reliant on this information are the property description and location.

The Marcella concession is 9,600 Hectares in area and its Punta partida (Starting Point) located is located 1,000 metres south of the village of Basiabampo, 5,000 metres north west of highway No. 15 (Cuidad Obregon - Navojoa), and 9,500 metres south west of the village of Babojori which puts the concession about half way in between the cities of Cuidad Obregon and Navojoa at Highway No. 15 road marker 178. The title number of the Marcella concession is 235341.

Van Gold has recently optioned the concession Navregon Resource Development Corp. ('NRDC')210 - 905 West Pender Street Vancouver, BC, V6C 1L6 Robert Findlay, President & CEO $25,000 has guaranteed that company a work commitment of $160,000 (on what is easily a drill ready target).

The Marcella Concession is extremely accessible. The south west corner of the concession lies approximately one kilometre to the north of Highway #15 which also has power along side the

MITCHELL GEOLOGICAL SERVICES INC...... 1 highway and provides a right of way for a railroad line.

The Marcella concession area appears to be completely covered with overburden and in fact the drilling that was done in 2010 encountered from 4 to 6 metres of overburden in the western part of the concession.

However, directly to the east of the concession mapping by the Recorsos De Recoursos Minerales shows the area to be underlain by Mesozoic Intrusives including granites granodiorites quartz monzonites diorites and gabbros. (Mi), Un-indifferentiated metemorphic rocks (Mm), overlain by minor Lower Tertiary ignimbrites, breccias Clastic Upper Tertiary rocks including continental clastic deposits (sandstone, conglomerates, mudstone wit interbedded basaltic flows, and the Baucarit Formation and minor basaltic and basaltic andesite flows and volcanic breccias (Tsv), ignimbrites and tuffs with rhyolitic composition with a few andesitic flows.(Tivc).

As was previously mentioned in the previous section the Marcella Concession where the magnetic anomaly exists is completely covered with overburden.

The diamond drill holes drilled in 2010 encountered diorite and a little magnetite.

To sum up, the Marcella Concession has within its boundaries an westerly trending geophysical magnetic anomaly approximately five kilometres long and one plus kilometres wide. This anomaly was discovered during an airbourne survey by Servicio Gerologico Mexicano (SGM) followed up with a ground magnetic survey performed by SJ Geophysics Ltd. on April 2010.

This survey was followed up with a three hole diamond drill programme that was drilled during 2010. These holes did not encounter economic magnetite mineralization but were drilled to give the owners of the concession some idea of the fracture system that could host an potential magnetite mineralized body.

As was shown by the ground magnetometer survey, the the magnetic body does not breach the sub-crop but starts approximately at fifty metres of depth and approximately 45 metres below the overburden.

As the magnetic mineralized body appears to top at a depth of fifty metres below the surface, the only way of establishing size and content of the body is with diamond drilling. A programme of two to three holes of 400 metres each. The third hole would be contingent upon the sucess of the first two holes. The holes should be drilled at -60° in a southerly direction to gain the maximum depth while cross-cutting as much ground as possible and should be drilled in an area to the south of the third hole drilled in 2010.

A total cost of these recommendations is $638,388USD. If sucessful, another $2,000,000 would be needed to start to get some concept of the potential tonnes and iron grade of the body.

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2.0 INTRODUCTION

Mr. Martial H. Levasseur, president of Van Gold Resources Inc., Suite 2203, 588 Broughton Street, Vancouver, BC. V6G 3E3 has requested Marvin A. Mitchell, of Mitchell Geological Services Inc. Suite 831, 470 Granville St. Vancouver, BC. to prepare a 43-101 compliant technical report on the Marcella concession in the State of Sonora, Mexico. Mr. Mitchell visited the property on May 22, 2012.

Van Gold Resources Inc. is a US company, incorporated in the State of Nevada on December 16, 2006 with offices at Nevada Corporate Headquarters, 101 Convention Center Drive, Suite 700, Los Vegas, Nevada 89109, telephone 800-508-1726 and Agent, Mr. Dennis Bovarone, Attorney at Law, 18 Mountain Laurel Drive, Littyleton CO. 980127, telephone (303) 466-4092.

Van Gold Resources Inc. has a wholly owned subsidiary Minera Van Gold,S. DE R.L. DE C.V. with offices at Cerrada Montiel N. 25, Colonia Puerta Real Residential, Hermosillo, Sonora, Mexico.

3.0 RELIANCE ON OTHER EXPERTS

The author has relied on information supplied by Van Gold Resources Inc. as to the listing of the company and other information concerning legal, environmental and tax matters. The portions of this report which are totally reliant on this information are the property description and location. The author has also relied on information contained in a set of drill logs by Mr. Levasseur which are contained in the section on drilling. Mr. Levasseur is not a geologist and is not registered with and association. The author has reviewed the logs and examined the drill core and believes that the logs are accurate.

4.0 PROPERTY DESCRIPTION AND LOCATION

The Marcella concession is 9,600 Hectares in area and is its Punta partida (Starting Point) located is located 1,000 metres south of the village of Basiabampo, 5,000 metres north west of highway No. 15 (Cuidad Obregon - Navojoa), and 9,500 metres south west of the village of Babojori which puts the concession about half way in between the cities of Cuidad Obregon and Navojoa at Highway No. 15 road marker 178. The title number of the Marcella concession is 235341.

The UTM coordinates of the Punta Partida are 3,016,792.643 mN and 641,346.058 mE on zone 12 of WGS 84 and the Punta Partida lies 18,535 851 metres north east at 80° 15' 12.36" of control point No. 4167.

Point 1 is 1,000 metres south of the punta partida

From Point 1 to Point 2 is 5,700 metres east Point 2 to Point 3 is 8,000 metres north Point 3 to point 4 is 12,000 metres west Point 4 to Point 5 is 8,000 metres south Point 5 to Point 1 is 6,300 metres east

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The coordinates of the points are displayed in Table 1.

Table 1

Point Northing Easting PP 3,016,792. 643 641,346.058 1 3,015, 149.643 641,346.058 2 3,015, 149.643 647,046.058 3 3,023, 149.643 647,046.058 4 3,023, 149.643 635,046.058 5 3,015, 149.643 635,046.058

Van Gold Resources Inc. has 100% ownership in the Marcella concession through its Mexican subsidiary Minera Van Gold S. DE R.L. DE C.V.

Van Gold has recently optioned the concession to Navregon Resource Development Corp. ('NRDC')210 - 905 West Pender Street Vancouver, BC, V6C 1L6 Robert Findlay, President & CEO $25,000 has guaranteed that company six months to carry out a work commitment of $160,000 (on what is easily a drill ready target). Management is now considering a couple of\ options to carry out drilling the Marcella concession.

Option 1

The company can earn an 80% interest by advancing the project through to an independent feasibility study, carry out $3.5 million exploration work, and pay $600,000 in accordance with the following schedule:

Cash Shares Work On signing $25,000 6 months $25,000 $200,000 Minimum work by end of first six months 12 months $50,000 $300,000 Work from 7 to 12 months 0r $500,000 in first year 18 months $0 $0 $0 24 months $50,000 $100,000 $1,000,000 Work in second year 30 months $100,000 36 months $150,000 $100,000 $2,000,000 Work in third year Sub-total $400,000 $200,000 $3,500,000 To represent a 60% interest 80/20 JV triggered upon delivery of independent ("bankable") Feasibility Study.

Option 2 (100% interest)

Increasing interest from 80% to 100% with a retained 2% NSR to Van Gold can be negotiated at any time as per prevailing market conditions. First 1/2% of 2% NSR is available for purchase at $1.0 million.

The author does not know of any environmental liabilities to which the property is subject.

The concession is shown on Figures 1 and 2. Figure 3 shows the magnetic anomaly which the concession was staked over.

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Figure 1 LOCATION MAP.

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Figure 2 DETAILED CONCESSION MAP

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Figure 3 MAGNETIC ANOMALY

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Exploration concessions are granted for six years and are not renewable. There are no limits for the mining concession surfaces. Production concessions are awarded for 50 years and are renewable for a similar period. The Mexican offices of the law firm Baker and McKenzie have produced an overview of the legal framework that companies need to consider when obtaining mining concessions in Mexico. http://www.bakernet.com/NR/rdonlyres/9D4AA2AF-D856-4ECC- 828A-D306D05A2564/40322/MiningLawinMexBro1.pdf

SEMARNAT provides the Federal Law, State Laws, regulations and agreements that determine the scope and functions of the Secretariat of Environment and Natural Resources in addition to relevant information related to the Mexican Official Standards and Rules as well as the Mexican force for Advisory Committee for Standardization whose aim is proposing, designing and approving regulations for sustainable environmental conservation and restoration. www.Semarnat.gob.mx

Responsibility for the mining sector belongs to the Secretaría de Economía, while the environmental permitting responsibility resides with the Secretaría de Medio Ambiente y Recursos Naturales .

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

The Marcella Concession is extremely accessible. The south west corner of the concession lies approximately one kilometre to the north of Highway #15 which also has power along side the highway and provides a right of way for a railroad line.

Table 2 shows the average climate for the Navojoa area. The property has a similar climate.

Table 2

Average Temperature Years on Record: 9

YEAR Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

°F 77 65 67 69 74 79 86 89 88 88 83 73 67

Average Precipitation Years on Record: 41

YEAR Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

in. 12 0.7 0.8 0.8 0.9 1.1 1.2 1.3 1.3 1.2 1.1 0.9 0.8

Average Number of Rainy Days Years on Record: 41

YEAR Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Days 26.7 1.3 1.4 2.2 2.5 2.7 2.2 2.4 2.3 2.9 2.8 2.6 1.4

Average Number of Days Above 90F/32C Years on Record: 9

YEAR Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Days 158.1 0.1 0.6 0.8 4.9 14.7 26.8 30.1 30.1 28.9 19.1 2 --- http://www.weatherbase.com/weather/weather.php3?s=116267&refer=

The operating season is year round.

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The position of the concession is shown on figure 1

Señor Eduardo Robles of the legal firm of Tapia, Robles and Cabrera S.C. was commissioned by Van Gold to aid in getting the company incorporated in Mexico.

Senor Robles came to the conclusion that:

(A) the Concession is in good standing and marketable from a legal viewpoint,

(B) the Concession grants full mineral resources exploration and exploitation rights, subject only to the fulfillment of the requirements and obligations provided in the Mining Law and its Regulations, and

(C) the owner of the Concession or whoever has contractual rights on the same holds and will lawfully hold and exercise those mineral rights, subject only to the provisions of the Mining Law and its Regulations.

In order to get to the Conclusions, he has assumed (i) the authenticity of all of the documents shown to me, (ii) the genuineness of all of the signatures in the documents, (iii) the validity and authenticity of all of the seals affixed thereto, (iv) the correctness of all of the calculations contained in the said documents, (v) the sufficiency of all payments reflected in those documents, (vi) the veracity of all of the representations made and information provided in all of those documents, (vii) the regularity of the appointments of all of the persons who signed the reviewed documents, and (viii) their having been filed timely.

Taxes are due on July 1, 2012 and it is the author's understanding that the taxes have not been paid. The tax rate is 0.50 USD for a total of 4,800 USD. 3% interest is due on all unpaid funds.

There are sufficient surface rights for mining operations, and power is available at the south west corner of the concession. there is sufficient water available from many of the rivers in the area water, mining personnel is present in Navojoa and there are potential tailings storage areas, potential waste disposal areas, heap leach pad areas, and potential processing plant sites.

The concession is used mainly for grazing cattle, is mainly savanah with grass, cholla and sparce acacia bushes.

6.0 HISTORY

To the best of the author's knowledge The Marcella Concession is the first to be applied for in the area, based upon an airborne magnetometer performed by Servicio Geologico Mexicano (SGM). Other concessions have been applied for and granted in the area. One concession has been optioned off by Van Gold to Westminister Resources Ltd.

A 3D magnetic inversion survey was carried out on the concession in 2010 and an interpretation report was received by Van Gold in October of 2011.

In 2010 Three diamond drill holes were drilled by Van Gold.

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7.0 GEOLOGICAL SETTING AND MINERALIZATION

7.I REGIONAL GEOLOGY

The Marcella concession area appears to be completely covered with overburden and in fact the drilling that was done in 2010 encountered from 4 to 6 metres of overburden in the western part of the concession.

However, directly to the east of the concession mapping by the Recorsos De Recoursos Minerales shows the area to be underlain by Mesozoic Intrusives including granites granodiorites quartz monzonites diorites and gabbros. (Mi), Un-indifferentiated metemorphic rocks (Mm), overlain by minor Lower Tertiary ignimbrites, breccias Clastic Upper Tertiary rocks including continental clastic deposits (sandstone, conglomerates, mudstone wit interbedded basaltic flows, and the Baucarit Formation and minor basaltic and basaltic andesite flows and volcanic breccias (Tsv), ignimbrites and tuffs with rhyolitic composition with a few andesitic flows.(Tivc).

These rocks are shown on FIGURE 4

7.2 CONCESSION GEOLOGY

As was previously mentioned in the previous section the Marcella Concession where the magnetic anomaly exists is completely covered with overburden.

The diamond drill holes drilled in 2010 encountered diorite and a little magnetite.

The author took 4 core samples and sent them in for assay. The assays were a 32 element assay to ensure that there were no other elements that could possibly be considered economic. The results obtained from the assay office are not indicative of the total holes.

The author also sent in a portion of the third hole for petrographic analysis to Vancouver Petrographics Ltd., 8080 Glover Road Langley BC. V1M 3S3. The sample was identified as an altered diorite with Tremolite/actinolite alteration. The report is shown in Appendix B

7.3 MINERALIZATION

Recent inspection of the diamond drill core by the author during his visit to the concession pointed out the fact that the host rock is an iron rich diorite. The last sample which assayed 17% iron was a sheared diorite with calcite and magnetite veining. A copy of the assays is appended to this report as Appendix C.

The author assumes that the aero and ground magnetic anomalies are caused by magnetite mineralization in an westerly trending shear zone approximately five kilometres long and one plus kilometres wide.

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Figure 4 GEOLOGY MAP

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7.4 STRUCTURE

When the diamond drill core was inspected it was discovered that the third hole cut the shearing at approximately 90° giving the shearing a dip of 45° to the north.

8.0 DEPOSIT TYPES

Without having exposed the deposit on the Marcella Concession, it is very difficult to know the type of deposit being explored for. However, two deposit types come to the author's mind: • A magnetite filled shear zone with calcite in a diorite, probably related to a porphyry system. • An iron deposit probably related to the deposit being mined by Arcelor Mittal: who currently operates an iron ore concentrator approximately 17 km north which processes a little over 1.0 million tonnes Fe (62%) annually. It is currently fed by a deposit approximately 80 km’s to the north. Management understands this deposit (El Volcan) to have a 2 year mine life.

Site Name El Volcan

MRDS ID MX00045

Deposit ID 10048874

SITE CHARACTERISTICS Operation Type Open Pit Production Size Medium Ore Minerals or Materials Hematite, Magnetite, Pyrite Gangue Minerals or Materials Apatite, Biotite, Chalcopyrite, Quartz Mineral Deposit Model 158: Volcanic-hosted magnetite Alteration Processes Magnetite Altered To Hematite Previous Names Piedra Iman Reporter Staude, John-Mark G. (Page, Norman J.), Leonard, Kenneth R. Host Rock Type Rhyolite Associated Rock Type Volcanic Rock (Aphanitic),Rhyolite,Andesite Structural Characteristics Discordant To Outline Of Rhyolite Dome http://mineral-resources.findthebest.com/l/48078/El-Volcan

9.0 EXPLORATION

In April 2010 this magnetic survey was acquired to delineate high magnetic zones that could potentially host magnetite mineralization. The grid was chosen by the client based on the results

MITCHELL GEOLOGICAL SERVICES INC...... 13 of an airborne magnetic survey by the Servicio Geologico Mexicano (SGM). The airborne survey revealed an intense positive east-west trending magnetic anomaly approximately two by five kilometres and was considered by the client as potential for further exploration of magnetite ores. The airborne data was acquired at 300m altitude, 200m spacing on visual navigation, which is acceptable for a regional survey, but lacks the precision required for drill targeting. As a result, the ground survey focused on this airborne anomaly.

The extent of the 2010 magnetic survey was situated entirely within the airbourne magnetic high and consisted of 19 north-south lines spaces 125m apart and approximately 31m (100ft) between stations. The grid was modified during acquisition with several lines being extended as well as an additional line being added to the east side of the grid. The survey traverses were between 750m and 1330 m long and totalled 21.142 kilometres. This grid is shown on figure 4 through 7. The following is set of drawings submitted to Van Gold by SJ Geophysics Ltd. 11966 -95A Avenue Delta BC, V4C3W2.

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Figure 5 GROUND MAGNETIC SURVEY-REDUCTION TO THE POLE MAP

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Figure 6 3D MAGNETIC INVERSION MODEL, 25M BELOW TOPOGRAPHY.

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Figure 7 3D MAGNETIC INVERSION MODEL, 50M BELOW TOPOGRAPHY.

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Figure 8 3D MAGNETIC INVERSION MODEL, 300M BELOW TOPOGRAPH

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10.0 DRILLING

In 2010 Three diamond drill holes were drilled to test for magnetite mineralization. The holes were drilled by Majors Diamond De Mexico, SA de CV. and were NQ in size.

Hole #1 was drilled as a vertical hole to a depth of 104 metres. Its collar is at 3,017,884mN, 639,250mE.

Hole #2 was was drilled as a hole to a depth of 154 metres with inclination -45° and direction due north. Its collar is at 3,017,884mN and 639,255mE.

Hole #3 was drilled as a hole to a depth of 246 metres with inclination -45° and direction due south. Its collar is at 3,018,442mN 639375mE.

The holes were logged by M. Levasseur and are shown in plan on figure 5 and in section on figure 9 and 10 The author has reviewed the drill logs and the drill core and except for a shoddy job of putting measuring blocks in the core boxes by the drillers, the core looks complete and the recovery appears to be 95% or better.

11.0 SAMPLE PREPARATION,ANALYSIS AND SECURITY

Four samples were taken from the diamond drill core during the author's visit to the Marcella Concession. The samples were stowed in the author's luggage, brought home to Vancouver BC. and submitted to Acme Labs of 1020 Cordove St East, Vancouver BC. V6A 4A3.

12.0 DATA VERIFICATION

The author visited the Marcella Concession on May 22, 2012 and inspected the diamond drill core at Navojoa the next day. That verification was the only verification possible except for such details involving a trip to the government offices which was not done because of the shortness of time available to the author..

13.0 MINERAL PROCESSING AND METALLURGICAL TESTING

There has been no mineral processing and metallurgical testing work done on the Marcella Concession.

14.0 MINERAL RESERVE ESTIMATES

There are no mineral reserve estimates for the Marcella Concession.

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Figure 9 CROSS SECTION DDH MC1 and MC2

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Figure 10 CROSS SECTION DDH MC 3

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15.0 ADJACENT PROPERTIES

There are four other concessions near the Marcella Concession, Wesminister Resources La Kala and La Kala 2 concessions, August Metal Corporation Las Lajas concession, Penoles Pomaje concession and El Tori concession

The following was excerpted from Westminister Resources Ltd website. http://www.westminsterres.com/projects/navajoa.php.

"Widespread mineralized skarns and surface alteration suggests that at least three potential porphyry systems occur within the district-scale Navojoa Property area. Topographic high outcroppings of malachite (copper) stained oxidized skarns in proximity to or at the contact with multiphase porphryritic granitoid bodies contain garnet, actinolite, tremolite, epidote, and magnetite mineral assemblages. Red box work limonite (after chalcocite) veins and fractures cross cut the skarn bodies. These oxidized leached veins contain eminent copper values and upon crushing pannable gold is recovered. Although not yet mapped on a deposit scale, the district features widespread zones of hydrothermally altered meta-sediments and granitic bodies. Propylitic (chlorite-epidote), potassic (biotite), phyllic (sericite), and argillic (kaolinite- alunite) alteration zones typical of well developed gold-copper porphyry systems are proximal to the known skarns. Navojoa Project Highlights: • Situated in the 70 sq mile New Copper & Gold Mineral District of Mexico • Surrounded by Gold-Copper Porphyry Systems and operating mines o i.e. Cananea, La Caridad, Piedras Verdes • Within the 90-40 ma Laramide Granite Intrusion & Related Porphyry Belt • Geologically inline with the "Great Cluster" Porphyry Copper Deposits • Project claim size of 181 sq Km" • Supported by sound infrastructure " • Based in the politically stable NAFTA Country • Opportunities for cost effective large scale discoveries • The La Kala and La Kala 2 concessions lie 12 kilometres to the northeast of the Marcella Concession.

The following was excerpted from August Metal Corporation website. http://www.augustmetal.com/h.e Las Lajas Project TThe Las Lajas Project Las Lajas Project

The 16, 310 hectare Las Lajas Project consists of 7 contiguous mining concessions and is located in Southern Sonora State, Mexico. The concessions are owned by Minera Goldzone SA de CV a wholly owned subsidiary of Goldzone Exploration Inc. Las Lajas has excellent access and infrastructure as it is located approximately 15 kilometers (9 miles) north of the city of Navojoa. The close proximity to Navojoa combined with low topographic relief on the project provide for efficient exploration.

The Las Lajas property has numerous high grade showings with gold and gold-arsenic mineralization, to date only exploited by local miners. The Project was previously Operated by Minera Glamis and Minera Phelps Dodge in the 1990’s. Work completed by the previous

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Operators included geological mapping, 2,000 soil samples, 28 line kilometers of induced polarization geophysical surveys, 50 shallow percussion drill holes concentrated on one area, and 5 reverse-circulation drill holes scattered over the property. The Las Lajas Project exhibits strong geological, geochemical and structural similarities to the Mesquite (Western Goldfields) and Picacho bulk tonnage gold deposits in southeastern .

No systematic exploration was conducted on the property since 1999 until Goldzone began its work in 2007. Many targets generated by the previous exploration programs remain untested and the Company’s new work has generated additional targets. The work to date has clearly demonstrated the widespread nature of gold mineralization at Las Lajas and has confirmed the potential for both high grade structurally controlled gold deposits, and large, bulk tonnage gold mineralization in 6 separate target areas

August recently completed a 4,395 metre trenching program on the project. The best results were 12 meters grading 2.92g/t Au in trench T-15 in the El Terco Zone, 4 meters grading 202.5g/t Ag in trench T-27, two separate intervals of 12 meters grading 1.30g/t Au and 18 meters grading 1.06g/t Au in trench T-32 in the El Peluchin West zone, and 2 meters grading 8.00g/t Au in trench T-42 in the Peluchin Northwest Extension. A 2,400 drilling program is currently underway to test targets defined and untested by previous operators, and targets generated by the recently completed trenching program on the Las Lajas Gold Project.

The Company has assembled a strong professional Mexico-based support team who will continue to assist in all phases of permitting, exploration and development of the Las Lajas Project. The Company retained Michelle Robinson, MASc., P.Eng., of Mazatlán Mexico who completed a NI 43-101 report on Las Lajas and continues as the Qualified Person for the project.s strong geological, geochemical and structural similarities to the Mesquite (Western Goldfields) and Picacho bulk tonnage gold deposits in southeastern California.

The Las Lajas project lies approximately 4 kilometres east of the Marcella Concession.

Two concessions lie adjacent or close to the Marcella Concession, the El Tori concession and the Penoles Pomaje concession. No data could be found on either of these concessions.

16.0 OTHER RELEVANT DATA AND INFORMATION

The author Knows of no other data or information that may be included in this report that would make the report more understandable and not misleading.

17.0 INTERPRETATION AND CONCLUSIONS

To sum up, the Marcella Concession has within its boundaries an westerly trending geophysical magnetic anomaly approximately five kilometres long and one plus kilometres wide. This anomaly was discovered during an airbourne survey by Servicio Gerologico Mexicano (SGM) followed up with a ground magnetic survey performed by SJ Geophysics Ltd. on April 2010.

This survey was followed up with a three hole diamond drill programme that was drilled during 2010. These holes did not encounter economic magnetite mineralization but were drilled to give the owners of the concession some idea of the fracture system that could host an potential

MITCHELL GEOLOGICAL SERVICES INC...... 23 magnetite mineralized body.

As was shown by the ground magnetometer survey, the the magnetic body does not breach the sub-crop but starts approximately at fifty metres of depth and approximately 45 metres below the overburden.

18.0 RECOMMENDATIONS

As the magnetic mineralized body appears to top at a depth of fifty metres below the surface, the only way of establishing size and content of the body is with diamond drilling. A programme of two to three holes of 400 metres each. The holes should be drilled at -50° in a southerly direction to gain the maximum depth while cross-cutting as much ground as possible and should be drilled in an area 150 metres south of the third hole drilled in 2010. Figure 11 shows a section of this proposed work.

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figure 11 SECTION ALONG LINE 10 DDH MC1, MC2, MC3 and PROPOSED DRILL HOLE

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19.0 COST OF RECOMMENDATIONS

These costs are based on an agreement made between Major Drilling S.A. de C.V. and Van Gold Resources in 2010. The costs have been inflated by a factor of 4% for inflation.

Cost of drilling 0-250 m = 95.00 USD 250 - 350m 100.00 USD 350 - 500m 110.00 USD

Total cost of drilling $105.00/metre (escalated by 4% for inflation.)

Phase 1 Drilling 1200 m x 105.00 USD (Infl 4%) $126,000 Mobilization & Demobilization $6,000 Drilling mud and grease $18,7500 Water truck 500.00/dayx90 days $45,000 1 pick-up truck 100.00x90 days $9,000 1 geologist 400 USDx90 days $36,000 1 assistant 200 USDx90/day $18,000 Sustenance,2 persons 300 USDx90days $27,000 Core boxes 500X 5.00 $2,500 Core sawing 50% of holes 600m $7,500 Assaying 400 @ 35.00 USD $14,000 Sub total $478,500 16% government tax $76,560 $555,120 Contingency @ 15% $83,268 $638,388

A total cost of these recommendations is $638,388USD. If these recommendations sucessful, another $2,000,000 would be needed to start to get a concept of the tonnes and iron grade of the body.

20.0 REFERENCES

Findlay,Robert, Apr 2012,MARCELLA CONCESSION, Sonaro, Mexico, Project Overview http://www.westminsterres.com/projects/navajoa.php. http://www.augustmetal.com/h.e http://www.weatherbase.com/weather/weather.php3?s=116267&refer= http://www.bakernet.com/NR/rdonlyres/9D4AA2AF-D856-4ECC-828A- D306D05A2564/40322/MiningLawinMexBro1.pdf http://mineral-resources.findthebest.com/l/48078/El-Volcan

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Vargas J.C.1994, GEOLOGICAL-MINING MONOGRAPH OF THE STATE OF SONORA, 220pp plus maps.

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Suite 831, 470 Granville St., MITCHELL GEOLOGICAL Vancouver, BC CANADA V6C 1V5 SERVICES INC. OFFICE TEL. 604 684 42967 FAX 604 642 4217 HOME TEL 726 2106 CELL 604 753 9952

21.0 CERTIFICATE OF QUALIFIED PERSON

I, Marvin Alford Mitchell, P. Eng., do hereby certify that:

1. I am President of Mitchell Geological Services Inc., Suite 831, 470 Granville St. Vancouver, BC CANADA V6C 1V5.

2. I graduated with a degree in Bachelor of Science in Geological Engineering, (mining option) from the University of Montana’s Montana School of Mines in 1968.

3. I am a member of the Association of Professional Engineers and Geoscientists of the Province of British Columbia (Registration Number, 8322)

4. I have worked as a geologist for a total of 44years since my graduation from university.

5. I have read the definition of "qualified person" set out in National Instrument 43-101 ("NI 43- 101") and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.

6. I am responsible for the preparation of all of the sections of the technical report titled TECHNICAL REPORT ON MARCELLA CONCESSION dated July 9, 2012. I visited the MARCELLA concession property on May 22, 2012.

7. I have not had prior involvement with the property that is the subject of the Technical Report.

8. I am not aware of any material fact or material change with respect to the subject matter of the Technical Report that is not reflected in the Technical Report, the omission to disclose which makes the Technical Report misleading.

9. I am independent of the potential issuer applying all of the tests in section 1.4 of National Instrument 43-101.

10. I have read National Instrument 43-101 and Form 43-101 Fl, and the Technical Report has been prepared in compliance with that instrument and form.

11. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report. Dated this 2nd day of April, 2008

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APPENDIX A

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APPENDIX B

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APPENDIX C

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APPENDIX D

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