The objective of the phase 1 metallurgical test work by Gekko Systems of Victoria in Australia, was to compare the amenability of the Granada gold mineralization to gravity, flotation and cyanide processing steps.

The combined gravity-flotation gold recoveries in two separate tests were 93.9% and 97.2% at grind of 100% passing 150 microns.

Conventional leaching tests yielded 81.1% gold recoveries after 24 hours while intensive leaching produced recoveries of 90.6% after 24 hours.

Test samples were taken from phase 1 drill core from three holes last spring that penetrated the gold bearing structures in the LONG Bars Zone Eastern Extension, outside Gold Bullion’s Preliminary Block Model.

The composite samples were free of any high grade intercepts and the assayed and calculated head grade ranged between 0.45 – 0.60 g/t Au (lower than the assayed hole grades due to the removal of the high grade intercepts).

A total of 140,000 tonnes was processed by Gekko from an open-pit at the Granada deposit of which 30,000 tonnes was milled using an on-site mill.

The average gold grade from this sample was 1.62 grams per tonne with a 90% rate of recovery realized.