El Aguila Project

The El Aguila Project, located 120 kilometers southeast of the capital city of Oaxaca, Mexico, is a significant, newly discovered high-grade gold and silver system. The property has yielded several exceptional gold and silver surface samples, including a 36 grams-per-ton (g/t) gold sample and a 3,100 g/t silver sample. *

The first drill hole initiated from the area of these surface samples resulted in the discovery of 16 meters of mineralization at 6.56 g/t of gold. Subsequent drilling identified a shallow, sub-horizontal mineralized zone (manto) with an inferred grade of 7.43 g/t of gold and 63 g/t of silver. The Company believes the discovery can be mined via an economical, shallow open pit.

The cross-section of Figure 1 (below) shows the exceptional high-grade nature of this discovery. In addition, the best 2-meter drilled intercept, off section, of 101.5 g/t of gold and 1,040 g/t of silver suggests the intersection of a high-grade, vein type, feeder zone to this manto deposit, with the potential for mineralization extending to depth.

The second round of drilling confirmed and expanded this initial mineralization and established the possibility of additional vein mineralization at El Aire, located 2 kilometers south east from El Aguila along the same important structural corridor, with the best intercept of 4 meters of 1.9 g/t of gold and 755 g/t of silver.

Management believes this limited, early work on one very small portion of the property is an encouraging indicator, as there are numerous additional areas along this important structural corridor where high-grade surface samples exist, such as Turkey Hill (up to 20.9 g/t of gold), Cerro Colorado (up to 18.9 g/t of gold) and Andesite Hill, where the highest-grade surface samples of both gold (35.2 g/t) & silver (3,170 g/t) occur.

The gold and silver mineralization at the El Aguila Project is of classic low-sulfidation, epithermal character. These types of deposits form some of the richest, most sought-after deposits in the world.

An exploration program designed to expand the known mineralization and test the many additional targets of high-grade surface samples over 4 kilometers is underway. Management's objective is to define sufficient mineralization to justify mine development at El Aguila.

Scoping Study

A Scoping Study was performed in June 2004 by the independent Denver engineering firm Lyntek Inc. The goal of the study was to assess certain aspects of a possible mining operation based on results from the first round of drilling. As part of that study, metallurgical testing indicated excellent recoveries of 94% for gold and 90% for silver (in 72 hours at 100 mesh grind) as can be seen by the graph of Figure 2 (below).

Cost Assumptions

Based on the assumptions made at the time of the Scoping Study, cash costs of producing an ounce of gold would be $102 using silver revenues as a credit against costs (the silver price used for the study was $7.00/ounce and the gold price used was $430/ounce) The payback of the capital for the project would be 7 months.

Based on the work performed to date, GRC believes it has an exciting project that will meet the Company's development and production criteria.

* 1 gram = approx. 0.03215 ounces