St. Elias Mines Ltd., (the “Company”) owns a 51% interest. The Jales/Gralheira Gold Property in northern Portugal covers 2,200 acres and encompasses three major zones:

• Jales Gold Mine produced 830,000 oz of gold at an average grade of 12.9g/t Au and nearly 3,000,000 oz of silver, between 1932-1992.  The Jales was mined to depth of 2,030ft (620m) over a strike length 5,900ft (1,800m).  The mine remains open at depth and along strike.
• Gralheira Vein System is located 1,640ft (500m) north of the Jales and has over 100 drill holes completed to a maximum depth of 1,675ft (511m) over a strike length 8,860ft (2,700m).  In addition, an adit 1,150ft (350m) long approx. 330ft (100m) below surface has been completed.  Gold mineralization in the Gralheira’s vein system occurs in shoots along veins with grades in the adit ranging from 8.0g/t to 130g/t Au.
• Jales Extension, a new zone recently discovered between the Jales and the Gralheira, indicates one continuous (large) system rather than two separate systems.  Widespread gold occurs within this highly altered and shattered area.

An independent 43-101 geological report completed February 28, 2004 states that the untapped potential of the Jales/Gralheira Gold Property is in the 2,700,000 oz. gold level [Note:  This estimate is based on a depth of 1,970ft (600m) only and does not take into account any work completed after February 2004].
In Fall of 2004, the Company contracted Quantec Geoscience Inc. to complete a deep penetrating TITAN24 Geophysical Survey over the Gralheira Vein System.  Results of this geophysical survey:

• indicated that the mineralizing system within at least the central 2,300ft (700m) of the Gralheira Vein system extends to a depth of at least 4,100ft (1,250m) which is more than four times the depth of previous drilling;
• defined 100 anomalies (drill targets), including 50 strong IP anomalies;
• indicated that the mineralization in the adit zone extends to the east by an additional 1,600ft (500m);
• confirmed the potential for a much larger and deeper mineralized body; and
• included recommendations for an initial 27 drill holes, totalling 62,000 feet (19,000m) of drilling.

In Spring/Summer 2005, the Company completed a drill program consisting of six (6) drill holes (11 separate pierce points as the majority of drill holes were wedged) totalling 13,048 feet (3,989m).  Results of this drill program confirmed the TITAN 24 geophysical survey results and the continuation of mineralization to depth.  The drill program successfully intersected mineralization up to 1,675ft (511m) below surface.  Prior to this drill program, the majority of holes previously drilled tested for mineralization only between the surface and a depth of 650ft (200m).  Widths and grades intercepted in some veins are consistent with those mined at Jales.
A Winter 2005 drill program consisting of 12 holes totalling 2,400 meters has recently been completed on the Gralheira Vein System.  All of the holes have intersected the Gralheira structure near or at the planned depth.  The holes have been designed to provide information in sections, at approximately 50 meter intervals along the strike of the structure and at 25 to 30 meter centers vertically.  These intercepts will assist in the defining of categories of resources.  The holes have been designed to provide at least three “pierce” points per section.  The current program is concentrated in and around the “Adit Zone” where previous drilling and tunneling have identified high-grade “shoots”.  The program will further define the orientation of the high grade “shoots” and improve the knowledge of the mineralized structures in this area.  As of Feb. 8, 2006, results are pending.