The property consists of one mineral claim covering 70 hectares. The claim is subject to an L.O.I. for an option agreement with a Mexican owner.

Location and Access

The Jabali property is located in the Sahuarita Sonora Mexico municipal region. The center of the claim lies at approximate coordinates 714,500 meters North and 3,171,000 meters East (NAD27). The property consists of a single exploration concession covering an area of approximately 70 hectares. Access to the Jabali property is by road from Hermosillo (approximately 8 hours) via highway #16, which passes south of the project. Gravel roads provide access from the highway to the Jabali property and the Mulatos mine. The Mulatos mine is 6 km to the east of the Jabali property.

Figure 1. General Location of Jabali property.

Figure 2. Historic gold mine in central part of Jabali claim.

History

Gold in the Mulatos area was first discovered in 1635 by Jesuit priests. In terms of modern exploration, Kennecott explored around Mulatos for a number of years beginning in 1990. Minera Real de Angles (MRA) acquired the Nuevo Mulatos claim in 1986, carried out extensive exploration activities and achieved prefeasibility in 1990 for the Mulatos deposit based on a mineral resource of 15.5 Mt grading 1.83 g/t Au. Placer Dome, Inc. (PDI) acquired full ownership of the claims from MRA in 1993. Subsequently, PDI and Kennecott entered into a joint venture agreement covering the Mulatos deposit and 34,000 ha of surrounding land. In 2001 National Gold Corporation (National), through its Mexican subsidiary Minas de Oro Nacional, S.A. de C.V. (MON) (formerly O.N.C. de Mexico, S.A. de C.V.) acquired a 100% interest in the Salamandra Property from Minera San Augusto, S.A. de C.V. (MSA), a Placer subsidiary, for cash and a sliding scale Net Smelter Royalty in favor of MSA on the first two million ounces of gold. Alamos Minerals (AM) optioned 50% of the assets by being responsible for exploration and other expenditures. In 2003, Alamos and National Gold merged to form Alamos Gold, Inc. (AGI). AGI, through its wholly owned Mexican subsidiary MON owns 100% interest in the Salamandra Property.

The Salamandra Property consists of the Mulatos deposit and eight satellite gold systems known as El Halcon, La Yaqui, Los Bajios, El Jaspe, La Dura, Cerro Pelon, El Victor/San Carlos and El Carricito (Figure 2). The La Dura satellite gold system is covered by the Jabali claim.

The Jabali property was acquired by lottery. An exploration program of rock chip sampling and limited drilling was done on the property prior to the lottery. Rock chip sample results from this program are significant with several significant gold values ranging up to 27.7 g/T Au.

Geological Settings

The Jabali property lies within the Sierra Madre Occidental Tertiary volcanic terrain and within the Mulatos mining district, part of the Sierra Madre gold belt. The Sierra Madre Occidental volcanic province is composed of two distinct packages of volcanic rocks, a lower early Oligocene (28 to 36 Ma.) group of predominantly andesitic volcanic rocks, and a younger Miocene (18 to 24 Ma.) group of bimodal rhyolitic to basaltic volcanic rocks. Paleozoic to Cretaceous age sedimentary rocks and early Tertiary sediments are inferred to underlie the volcanic rocks at depth. Several large intrusive bodies of presumed mid-Tertiary age are present within the area, one near Matarachi and the other about 10 km north of Mulatos along the Rio Mulatos.

The Mulatos deposit is an epithermal, high sulfidation or acid sulfate, disseminated gold deposit hosted within a mid-Tertiary dacitic to rhyodacitic volcanic dome complex. Gold mineralization is closely associated with silicic and advanced argillic alteration occurring near the upper contact of a rhyodacite porphyry and in overlying dacite flows and volcaniclastic rocks. The deposit is located within a large area of hydrothermal alteration approximately three square kilometers in extent. Tilting and post-mineral normal faulting associated with late Tertiary extensional tectonics have affected both the mineralized sequence and overlying volcanic rocks at Mulatos.

Alteration assemblages at Mulatos are typical of high sulfidation deposits, with zonation from distal propylitic alteration to illite to kaolinite to dickite/pyrophyllite to pervasive and vuggy silica alteration. Gold is predominantly hosted within silicic alteration. Gold mineralization controls are both structural and stratigraphic; structural zones control silica alteration and higher-grade gold concentrations, and secondary stratigraphic control is along flow boundaries and within coarse grained volcaniclastic fragmental units.

The Jabali property covers a massive, cliff-forming, silica-hematite altered rhyolite. Massive to banded rhyolite is exposed in the area of mineralization, on cliffs to the east of the claim, and extending north and south of the claim (Figure 4).

Alamos described this area in their 2003 Annual report as the La Dura prospect:

“The La Dura prospect contains a large area of intense silicic alteration of over 3.5 kilometres in length with several historic gold workings. A core concession is not controlled by Alamos.”

The core concession referred to is the Jabali claim. Figure 5 shows the regional resisitivty map.

The La Dura (=Jabali) hydrothermal system is contiguous with another prospect to the south that is described in the Alamos 2003 Annual report as Los Bajios:

“The Los Bajios area may be the central part of one large, regional hydrothermal system, with Halcon located in the western portion, La Dura to the north, and La
Yaqui on the south as lateral, distal equivalents. The size of the airborne resistivity anomalies and extent of alteration indicates potential for at least one
Mulatos-size deposit within the zone.”

Figure 3. District airborne resistivity response. Silicified areas show up as highly resistive anomalies, shown in red. (La Dura = Jabali indicated by gold star.) Allknown gold and gold-copper occurrences are associated with resistivity anomalies. (Alamos Annual report for 2003.)

Figure 4. Photos of cliff-forming rhyolite on Jabali property: view to northeast at mid-cliff level showing strong blood red hematite stain.

Mineralization

Jabali

Mineralization on the Jabali property is associated with iron-stained outcrops of silicified volcanic rocks. Mineralized areas area are distinguished by yellowish limonite-jarosite or blood red hematite staining, vuggy silica or grey silicification, and zones of crackle breccia.

The main mineralized zone is marked by a glory hole that exposes highly fractured and jarosite-stained silicified and brecciated rhyolite (Figure 1). An adit located just south and down hill from the glory hole leads to a honeycomb of old underground mine workings that extend downward from the glory hole. Several
fault and fault breccia structures are evident in the underground exposures.

Gold was observed during the site examination just west of the old mine. The gold is very fine and occurs on fractures in a vuggy silica altered rhyolite. There
are also physical remains of a crude slucing operation which indicates that free gold is present.

Neighboring Property

Alteration and Gold Occurences