Ann: Quarterly Activities Report, page-2

very encouraging quarterly report today

CÁRMENES COBALT-COPPER-NICKEL-GOLD JOINT VENTURE - SPAIN

Riedel can earn interests up to 90% in the Cármenes Project by way of funding staged exploration and development expenditure, with provision to acquire the remaining 10%

The high-grade cobalt-copper mines at La Profunda (~1860) and Divina Providencia (~1906) were discovered by visual detection of cobalt-copper minerals deposits that outcropped at surface making them visible to explorers that traversed the tenement area. Limitations on exploration techniques at that time made discovery of concealed (non-outcropping) deposits elusive. As a result, a significant opportunity now exists for Riedel to apply modern exploration techniques to the Cármenes Cobalt-Copper Project tenement area, where 95% remains untested by modern exploration.

Both the La Profunda and Divina Providencia mines were comprised of ‘pipe’ or ‘cylindrical’ style ore bodies with subvertical orientation, typically with dimensions of 30-50m in diameter and at least 200m (known extent) in length (see Figure 2).

From the eleven targets identified by SIEMCALSA, additional analysis on targets 1, 2 and 3 has already resulted in their target status being escalated to advanced. Importantly, the three most advanced targets are located near La Profunda mine.... Most encouragingly, coincident signatures have been recorded from multiple tests and all of the advanced targets show potentially larger diameters than the pipe mined at La Profunda.

Similar coincident signatures were encountered on the other advanced targets (2 and 3) near La Profunda and at target 11 near Valverdin (see Figure 12). Target dimensions also exhibited similar or larger sizes.

15 rock samples coincident with these new high priority radiometric targets submitted to ALS Laboratories for detailed analysis, results now pending.