6.	INTEREST IN EXPLORATION PROPERT Y

Deborah Gold Property

September 16, 2011,

the Company signed an option agreement with Sociedad Minera de Responsabilidad Limitada La Luminose de Cajamarca to acquire the Deborah Gold

property. In order to earn a

100%

interest, the Company is required to make cumulative cash payments of US

$6,000,000

over a minimum of

five

years. The claims are included in the South Zone.

The material terms are as follows:

	Cash Payments (USD)

September 16 (effective date)	50,000 (paid)
On commencing drill testing (“drill date”)		200,000
One year anniversary of drill date		400,000
Two-year anniversary of drill date		600,000
Three-year anniversary of drill date		900,000
Four-year anniversary of drill date		1,200,000
Five-year anniversary of drill date		2,650,000
		6,000,000

The option agreement required an immediate payment of

$50,000

on receipt of TSX.V approval. This payment was made and the Company commenced systematic surface exploration of the property in early

February 2012.

second

payment of US

$200,000

is payable on the commencement of drilling (“Drill Date”) and all subsequent payments are tied to this Drill Date. In addition, a royalty of US

$4.00

per ounce of gold produced is payable to the underlying vendors up to a maximum of US

$2,000,000.

There was

finder’s fee paid by the Company in connection with the option agreement. The option to acquire the property continues to be available to the Company.

During the year ended

January

31,

2014,

the Company wrote-off the remaining

$500,000

in carrying value of its exploration properties (

2013

$5,459,566

) due to the Company

not

having sufficient funds to perform further work on the Deborah Gold property. However, the Company maintains the option to continue with the option agreement, as the Drill Date has yet to occur and therefore

payments beyond the initial (paid) US

$50,000

are yet due.