Georgia Permitting Update

Our previous management update has caused some confusion concerning our efforts to move toward production on our Georgia mining operation. Our full intent is to secure necessary permits in order to mine our Georgia claims. We have been in regular contact with the proper local and state departments to begin the permitting process.

As part of our ongoing preparations for our Georgia mining claim, Drake Gold has discussed at length the permitting process and procedures with several representatives from the Environmental Protection Division (EPD) in Georgia. Over recent months, since the beginning of our preproduction efforts, they have been a helpful resource for us, explaining the required steps toward acquiring all necessary permits for our surface mining endeavors.

We have learned through our dealings with the EPD we will need to apply for several permits from various branches of the EPD, as well as county offices. For example, the Land Protection Branch of the EPD requires a permit for all surface-mining projects, as well as a Surface Mining Land Use Plan, the process of which we have already begun. Also, the Water Protection Branch requires permitting for projects affecting storm water and related water withdrawal. We will need to secure the proper permits for the storm water and have been assured by the EPD that a water-withdrawal permit is only necessary when drawing 100,000 or more gallons of water per day. Because our mining equipment allows us to recycle the water used, we do not foresee the water-withdrawal permit a pressing matter at this time. In the event our future daily water requirements are to exceed 100,000 gallons per day, the necessary permit will be filed for in a timely fashion as to not impede production. As a direct result of recent hard-rock samples, we will be filing for a permit from the Air Protection Branch of the EPD. This particular permit is required when dust or particles rise into the surrounding air. Because we will be processing slurry with our machine, it is unlikely this will be an issue. However, we believe it would be prudent to secure this permit anyway in the remote chance it may be needed in the future.

Another crucial step in securing the necessary permitting for our mining operation is the rezoning of our acreage for commercial mining purposes. Due to the thorough guidelines of the county zoning board, this paperwork needs to be filed in person at their office. In the coming weeks, as we move through the permitting process and get near production capability, our management team will make additional trips to Georgia to make any necessary changes/revisions in person with state and county officials. In-person meetings speed up the permit-application review process and can help us iron out any wrinkles with our ultimate plans for the property. We plan to work closely with county and state representatives regarding form applications other matters.

Recent lab analysis of samples have opened up the need for an expanded plan of operations. While we had intended to focus solely on the placer grades, the recent discovery of substantial gold quantities in the hard rock have prompted us to broaden our intentions in Georgia so as to fully exploit our initial target zone. We expect no delays as a result of this recent development, as our permitting needs remain the same. We are anxiously awaiting the arrival of the Explorer 500 from Dove Mining Equipment. To our knowledge this will be the first Explorer unit to arrive in the USA and will allow Drake the opportunity to showcase this equipment in its role as an official distributor of Dove Mining Equipment.