F2 System–Resource Potential of Size

BARRY ALLAN, Mackie Research Capital Corp. (10/08/2009)
"RMX has adopted a vertical grid system to allow for better interpretation of drill results. The practical significance is that with more drilling, the boxes continue to fill up with data, and with more data we gain better confidence as to the size and quality of F2's resource potential. In our prior estimate, we captured hole 122-10 to increase the resource potential to 4.0 million ounces, but incorporating prior data points into their respective boxes, the potential is more like 4.8 million ounces–mostly due to better average grades.

RMX indicates that the F2 mineralizing system has been tracked over a strike length of 1.0 kilometer and down to a depth of 1.1 kilometers. And, in its presentation, RMX has calculated an average grade of 12.5 g/t over a width of 5.8 meters, suggesting a mineral system that has the capacity to contain 6.5 million ounces, and is a system that is roughly equal in size to the mineralizing system at the Bruce Channel deposit of Goldcorp (aka Gold-Eagle).

Based on drilling to date, we estimate that the F2 Zone has resource potential (diluted to 2.0 meters and high grades cut to 311 g/t) of approximately ~4.8 million ounces. Based on this resource potential and incremental ounces just added, we are moving our target price from C$5.00 to C$5.75. In our opinion, the summer drill campaign continues to establish that the F2 Zone is in fact materially larger than what we previously believed (1.5 million ounces).

RMX is undertaking an 80,000-metre drilling program on the F2 Zone, and we fully believe additional good drill results will be forthcoming."

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