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RO Property

Summary

Location:	Nevada, USA. The property is located 2.4 kilometres south-southwest of the Sleeper gold deposit, approximately 41.8 kilometres northwest of Winnemucca, Nevada on the west flank of the Slumbering Hills in Humboldt County.
Communities:	The immediate area in and around the project is uninhabited. The Sleeper Gold Property of XCal Resources Ltd. along with the historic mine facilities adjoin the Geologix property on the north. The RO property is covered with post mineral sediments and alleviated.
Infrastructure:	Good infrastructure is present in and near the property, partly a result of the historic mine workings in the immediate vicinity of the property.
Properties:	60 claims covering 4.53 square kilometres of Government (BLM) land
Ownership:	100% owned. Geologix granted an option right to Montezuma Mines Inc., whereby Montezuma may acquire a 55% interest in the RO property.
Royalties:	N/A

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Introduction

The RO property was acquired based on a favorable location geologically. The project is located at the northern end of the Battle Mountain Eureka trend, a structural lineament known to host other giant gold deposits in northern Nevada. The land acquisition allows Geologix to evaluate the southwestward extension of the Sleeper Mine stratigraphy and structure.

Details of the RO Property

The Sleeper deposit produced 1,685,500 ounces of gold and 2,334,400 ounces of silver from high-grade veins and lower grade stockwork and breccia ores. Ninety percent of the ore mined was hosted by the Sleeper Rhyolite, a volcanic unit that is covered by alluvial gravels. At the present time XCal Resources Ltd. is evaluating a renewed geological interpretation. Published geological maps and publicly available data strongly suggests that the favorable mine stratigraphy and structure trends southwestward from the Sleeper pit onto ground controlled by Geologix. Specifically, the gold-silver veins of the original Sleeper mine, a prominent magnetic low, and Landsat TM lineaments all trend towards the RO claims which are covered by alluvial gravels along the western range front. Targets include high-grade gold-silver veins hosted by volcanic units that are covered by pediment gravels.

RO Property Option Terms

On February 20, 2009 Geologix (US) Inc. and Montezuma Mines Inc. ("Montezuma"), a wholly owned subsidiary of CMQ Resources Ltd. entered into an option agreement whereby Montezuma could acquire 55% of the RO Claims located in Humboldt County, Nevada. To acquire a 55% interest Montezuma will fund a series of escalating exploration expenditures totalling US$3,000,000 over a five year period.

Montezuma is bound to minimum exploration expenses of US$60,000 during the first contract year and will pay to the Company any shortfall in making these expenditures.

Montezuma may elect to continue funding of exploration expenditures by completing the following exploration expenditures:

Date	Exploration expenditures
On or before 1st Anniversary On or before 2nd Anniversary	US$ 60,000 400,000
On or before 3rd Anniversary	700,000
On or before 4th, Anniversary	840,000
On or before 5th Anniversary	1,000,000
Total	US$3,000,000

Any excess exploration expenditures in one year will be carried forward as a credit against exploration expenditures in subsequent years. Montezuma will maintain the BLM and county claim maintenance payments over the term of the option.

Once Montezuma has earned its 55% interest in RO Claims, the parties will execute a joint venture agreement to be managed by Montezuma. Additionally, Montezuma may earn an additional 10% in the project by completing one of the following options:

Electing within 90 days after earning a 55% interest, to prepare and bear the costs of preparation of a feasibility study. Montezuma shall have a period of four years to complete the feasibility study and must incur minimum exploration expenditures on the project of US$500,000. If Montezuma fails to complete the feasibility study within four years, the Montezuma retained interest will remain at 55% and the Company may earn back a 10% interest by completing a feasibility study within four years under the same terms.
If Montezuma, upon earning its 55% interest, does not elect to proceed with the preparation of a feasibility study, Montezuma and the Company shall form a joint venture with 55% and 45% respective ownership. Montezuma will have the right to earn an additional 10% interest by electing to and completing a feasibility study within two years of making such election. If Montezuma, as the operator, proposes a budget of less than US$500,000 for any given year, the Company may propose a budget greater than US$500,000 per year, become the operator and have the right to elect to complete the feasibility study and earn an additional 10% interest in the joint venture.
If after completion of the feasibility study the joint venture decides to develop a mine on the property, the party then designated as the manager and operator has the right to earn an additional 5% interest by arranging financing at its expense for the project through to commercial production.

Maps & Figures

None available

Technical Reports

There are no Technical Reports on this Project at this Time.

Drill Results