HARPSUND JV

Harpsund Joint Venture (Dragon earning up to 80%)

Dragon Mining entered into a Joint Venture Agreement in October 2010 with listed Swedish exploration company Botnia Exploration AB (Botnia) to earn up to 80% in Botnia’s  Exploration Permits in the Harpsund area.

Dragon Mining has subsequently moved to the first earn-in phase of the Harpsund Joint Venture, having expended SEK 1.5 million during the Exclusivity Period.

The Harpsund area  is located immediately adjacent to Dragon Mining’s Svartliden project, and is situated 4 kilometres northeast of the Svartliden Gold Mine.  The area encompasses  4,423  hectares covering  prospective geological units associated with the Gold Line.

Though some exploratory activities have historically been  conducted, the Harpsund area remains at an early stage of systematic evaluation. The area is considered to be very prospective, with the potential to host  gold mineralisation  similar to that which occurs at Svartliden and elsewhere in the region.

Location of the Sjöliden target, Harpsund Joint Venture

Encouraging results were received from a 14 hole, 403 metre campaign of shallow reconnaissance drilling at the Sjöliden target, in the central portion  of the Harpsund  area. This program was designed to test an area where grab sampling of outcrop material returned elevated gold values ranging up to 9.6 g/t gold.

Analytical results  returned a best intercept of 2.0m @ 14.03 g/t gold, within a broader anomalous gold zone that averaged 1.54 g/t over 20 metres.  A second program of drilling is scheduled to commence at Sjöliden in March.

A detailed airborne magnetic survey of Dragon Mining’s northern Permit holding and including the Harpsund  area was undertaken  in May 2011. The 1,927.5  line kilometre survey was flown by helicopter on a line spacing of 50 metres and mean terrain clearance of 30 to 40 metres.  Processing and interpretation of the data has been completed, by independent consultants, Astrock Oy in Finland. 

A review of the Quaternary geology of the area north east of Svartliden and including the Harpsund area has been undertaken, the conclusions drawn from this study, geological mapping and geophysical interpretation to be used in the planning of geochemical sampling and other programs, which are proposed to be undertaken in 2012.