KESTANELIK GOLD PROJECT

(Chesser earning up to 100%, Turkish Partner 100%)

Drill permits received for Kestanelik Project Phase 3 Drilling

Followup drilling successfully extends gold mineralisation at Kestanelik

Geophysical results expand scope of Kestanelik gold project

High grade gold up to 29 g/t intersected at the Kestanelik Gold Project

Drilling under way at the Kestanelik Gold Project

The Kestanelik property consists of a series of epithermal quartz veins of up to 30 metres thickness, outcropping over an aggregate strike length of approximately 2550 metres, a large proportion of which remains untested by drilling.  Geophysical data suggest that a further 18,500 metres of quartz veins occur on the property under shallow cover, for a total of at least 21 kilometres.   The host sequence is partially covered by a post-mineral sequence of sediments, volcanics and alluvium.   Mineralisation on the property is typical of low sulphidation epithermal vein systems, examples of which include Vera Nancy in Queensland (North Queensland Metals) and the  Eureka project in  Argentina (Andean Resources).

The property is located in northwestern  Turkey in an area with good access and infrastructure. The property is at low elevation and can be easily explored 12 months of the year.

Previous exploration on the property included collection of 122 sample profiles across outcropping veins, which returned values of up to 7.7 metres at 23.4 g/t gold; 4.5 metres at 31.5 g/t gold and 6.1 metres at 20.2 g/t gold.  The length-weighted average gold grade from all surface sample profiles is 3.8 g/t gold over an average profile width of 3.73 metres.

The previous operator drilled 30 shallow drill holes (20 percussion and 10 diamond) atKestanelik, averaging 49 metres in depth, with the deepest drillhole reaching140 metres depth.  Best results fromdrilling on the property include 4 metres at 14.6 g/t gold; 3 metres at 12.8 g/t gold and 5.6 metres at 10.2 g/t gold. The weighted average grade of all drill intercepts through vein material and associated stockwork andsilicification is 1.68g/t gold.

February 2010 Drilling Results

The company drilled 16 holes as part of the first phase program, focusing on areas where historical surface chip channel sampling and shallow drilling have returned high gold grades over significant intervals.  Highlights from the recent program include:

• 6 metres at 15.44 g/t Au from 21m (est. true thickness of 5.6m) in hole KERC-01, as part of a larger intersection of 30 metres at 4.41 g/t Au from 3m (est.true thickness of 28.1m), including 10 metres at 10.32 g/t Au from 20m 
  

• 4 metres at 8.37 g/t Au from 23m (est. true thickness of 3.7m) in hole KERC-02, as part of a larger intersection of 22 metres at 3.47 g/t Au from 7m (est. true thickness of 20.1m) inhole KERC-02, including 7 metres at 5.58g/t Au from 22m (est. true thickness of 6.4m)

• 14 metres at 3.46 g/t Au from 14m (est. true thickness of 11.2m) in hole KERC-03, including 4 metres at 8.6 g/t Au from 24m (est. true thickness of 3.2m) with a highgrade interval of 2 metres at 14.79 g/tAu from 26m (est. true thickness of 1.6m) in hole KERC-03

• 10 metres at 3.05 g/t Au from 33m (est. true thickness of 6.4m) in hole KERC-08, including 4 metres at 6.1 g/t Au from 37m (est. true thickness of 2.6m)

• 9 metres at 6.27 g/t Au from 27m (est. true thickness of 6.4m) in hole KERC-10, including 3 metres at 9.81 g/t Au from 32m (est. true thickness of 2.1m)

• 12 metres at 3.49 g/t Au from 38m (est. true thickness of 7.8m) in hole KERC-12, including 3metres at 8.23 g/t Au from 43m (est. true thickness of 2m) in hole KERC-12

• 8 metres at 3.42 g/t Au from 65m (est. true thickness of 5.2m) in hole KERC-13, including 4 metres at 5.94 g/t Au from 67m (est. true thickness of 2.6m) in hole KERC-13

The following preliminary observations can be made about the phase one drill program

• Results from the drilling are broadly consistent with the historical drill and sampling results on the property, confirming the potential of the property for high grade gold, and providing justification for the planned larger scale drill program scheduled tobegin in June

• The drill results show that highgold grades continue to depths of more than 50 metres, suggesting that the existing high grade results on the property are not the product of supergeneenrichment.

• Results of drilling and mapping to date suggest that the mineralized quartz veins are typical of a the upper to mid levels of a low sulphidation epithermal gold system, which reinforces the potential of mineralisation to continue to significant depths on the property

• Drilling on the Karakovan West vein returned intersections of greater width and higher grade than previous drilling, and confirmed the potential of this vein to host significant gold mineralisation.

• Drilling on the K1 vein returned relatively narrow intersections, suggesting that the section drilled based on existing access did not represent the best location to test this vein.  The outcrop pattern of the vein suggests that wider intersections may exist to the northeast and southwest of the drilled section.

• Drilling on the K3 vein returneda number of broad, high grade intersections, confirming the potential of this vein to host significant gold mineralisation. 

A program of Gradient Array IP Resistivity surveying is nearly complete on the Kestanelik property, with the aim of defining the position of covered extensions of the proposed vein system.  The gradient array resistivity part of the survey is expected to be complete before the start of the drill program, and preliminary results strongly indicate extensive vein continuations under cover.   Once the results of the survey are interpreted, the company intends to submit permit applications for all target areas on the property.  It is expected that these additional permits would be granted by June, and a larger drill program would commence on the property at that point, with the aim of culminating in a JORC resource by the end of the calendar year.