GEOLOGICAL REPORT ON THE GYPSY MINE DOUGLAS COUNTY, NEVADA UNITED STATES

Prepared for:

American International Ventures, Inc.

6004 Tealside Court Lithia, Florida 33547

Prepared by: Jim Lawson Geologist, M.Sc Aurum Mining Exploration Services P.O. Box 522 North San Juan, Ca 95960

INTRODUCTION

LOCATION AND ACCESSIBILITY

Douglas, county western Nevada, is located in the obtuse angle formed by the California- Nevada border. The subject area of county is bounded on the north by Washoe and Storey Counties, on the northeast by Churchill County, on the southeast by Mineral County, and on the west by four counties in the State of California, Placer, El Dorado, Alpine, and Mono Counties. Access to the mineral property is by way of a dirt and gravel road that spans 2 1/2 miles from the main road to the claim.

The Gypsy mine is located at UTM N:4327251.59, E272464.75 Zone 11S, and Lat/Long of 39.071893, -119.630141. T14N R21 E Section 21 NE1/4.

 GEOLOGIC FORMATIONS

METAMORPHIC ROCKS Mesozoic metamorphic rocks older than the major granitic intrusive bodies of the Sierra Nevada batholith are widely distributed in the area of the three counties. The metamorphic rocks occur in roof pendants and septa surrounded by the younger granitic rock. Fossil evidence indicates that the metamorphic rocks are predominantly Late Triassic and Early Jurassic in age. The metamorphic rocks occur in relatively small areas, generally only a few miles in extent, although the largest, on the west slope of the southern Pine Nut Mountains, may be as large as 20 miles long and 6 miles wide. These pregranitic rocks are metamorphosed partly as a result of heat from, and deformation by, granitic intrusion. Rocks of the larger masses of metamorphic rocks are less thoroughly recrystallized and metamorphosed than those of the smaller and thinner masses. Generally the metamorphic rocks are in the low and medium grades of metamorphism. In the larger masses the rocks especially siltstones and shales, appear to be very little affected. In the pregranitie sequence, metavolcanic rocks are slightly more abundant than metasedimentary rocks. Commonly, the rocks are intimately interlaced, and the twofold division into metavolcanic and metasedimentary rocks is based on the dominant lithological type in a given area.

Metasedimentary rocks originally consisted mainly of shale, siltstone (commonly audacious), and limestone, but these are interceder with sandstone, graywacke, dolomite, gypsum, and small amounts of chert. Intercalated with them, also, are conglomerate and sedimentary breccia that may have originated as submarine mud flows. The metavolcanic rocks are predominantly meta- andesite and metadacite, largely volcanic breccia. Metabasalt and metarhyolite are also common. The metavolcanic rocks are interbedded with marine sediments, commonly derived from volcanic rocks that probably were partly of submarine origin. The rarity of pillow lava, however, and the association of volcanic rocks with gypsum deposits, suggests that part of the volcanic rock was formed in a terrestrial or nearshore environment.

GEOLOGIC STRUCTURE

The geologic structure of the exposed rocks in Douglas, County is complex, Most of the deformation occurred in two general periods: one preceding and accompanying the emplacement of the Cretaceous granitic rocks, another in late Tertiary and Quaternary time causing normal faulting, warping, and tilting. The complex structure of the pre-Tertiary rocks was not mapped in detail. These rocks have been folded, sheared, and recrystallized partly as a result of the intrusion of the Sierra granitic complex, and meta- morphism has obscured much of the pregranite structure. However, from studies of areas to the east, which have not been so extensively deformed, a complex history of Mesozoic diastrophism is revealed prior to the emplacement of the Cretaceous granitic rocks. The record of late Tertiary and Quaternary normal faulting, tilting, and warping is well preserved. The four largest mountain ranges of the countiesCarson, Pine Nut, Singatse, and Wassuk are all large fault blocks, and all, with the possible exception of the Carson Range, are tilted west and bounded on their east flanks by prominent normal faults. Each of these ranges has a steep eastern front; uplift on the eastern edge of the blocks has been accomplished along a series of major normal faults arranged in a zigzag or en echelon pattern.

Movement on these and related faults has probably occurred from late Tertiary to the present time. Broad range-front warps are present in nearly every range in addition to the steep scarps caused by normal faulting. Down drop of the basin relative to the range crest is commonly accomplished along these warps, which are commonly characterized by numerous small antithetic faults bounding squall blocks, each tilted valley ward. The east trend of the Desert Mountains and Virginia Range sets them apart from the other ranges of the tricounty area, as well as from those of much of the Basin and Range province, where ranges generally trend nearly north. These two ranges show two other features which contrast with the other seemingly typical ranges of the mapped area : ( 1 ) they appear to owe their uplift more to up warping and less to faulting and tilting than the north-trending ranges, and ( 2 ) they are capped by much more extensive areas of Tertiary rocks than the northtrending ranges; this suggests that they originated later and were uplifted less.

CARSON RANGE The Carson Range bounds the basin of Lake Tahoe on the cast. It is a northtrending range in the western part of Douglas County. The range extends north of the Ormsby County line for about 25 miles and terminates at the Truckee River Canyon. Southwest of the California State line, the Carson Range merges with the main Sierra Nevada. The Carson Range is underlain almost entirely by pre-Tertiary rock; in this it differs from the other ranges in the mapped area, all of which have large areas covered by Tertiary and Quaternary rocks. Presumably the Carson Range has had greater uplift, and consequently more extensive stripping of its covering of younger rocks.

The granitic rocks of the Carson Range appear to be quite uniform over broad areas, suggesting that the individual intrusive masses are large and relatively homogeneous. The area between the two large mapped metavolcanic pendants appears to be underlain by a single intrusion. The large pendant of metavolcanic rocks west of Genoa is elongate north- northwest and is parallel to the dominant structural grain of the pretertiary reeks. The metavolcanic pendant west of Carson City, however, is somewhat anomalous in that it is elongate westward and has northcast trending bedding and schistesity. The details of Cenozoic structure in the Carson Range are incompletely known because of the scarcity of Tertiary rocks in the range which might serve as marker horizons. In general, the range is horst like and is flanked by impressive fault scarps. The crest of the range is approximately 9,000 feet high, and the floor of Carson Valley on the east and the bottom of Lake Tahoe on the west are at about 4,800 feet. Thompson and Sandburg (1958, p.1277) point out that the east front of the Carson Range represents an alternating serise of large faults and folds. In the mapped area the east front of the range is a large fault scarp from Stewart south, and a broad warp from Stewart north. The southern part of the range, from Stewart south to the California State line, presents an impressive fault scarp approximately 44 feet high, dipping 36 degrees to 60 degrees east, and extending for about 10 miles near the town of Genoa. The time of formation of this scarp is certainly very recent, yet it was in existence in 1854 when the first settlers arrived in the area. The map pattern of this prominent bounding fault in the southern Carson Range is irregular; the fault segments are generally between 1 & 2 miles long and form a zigzag.
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GENERAL GEOLOGY OF MINERAL DEPOSITS

Most of the mineral deposits of the tricounty area fall into four general groups, distinguished on the basis of age of formation, which also divides them roughly into commodity groups and genetic groups. The general age groups are: (1) Triassic and Jurassic, (2) Cretaceous, (3) Tertiary, (4) Quaternary.

Deposits formed during the Triassic and Jurassic Periods are relatively minor in the mapped area. Gypsum (as at Mound House and Ludwig) is the principal mineral resource of this age. The gypsum was presumably deposited as evaporite-type deposits in shallow basins and lagoons. The common association of volcanic rocks (chiefly andesite) suggests these basins were on the shores of volcanic terrain. At Mound House, gypsum has been redeposited in Quaternary terraces below th main outcrop of gypsum and was mined because of ease of working. Limestone is a second commodity of Triassic and Jurassic Age. It is not present in continuous beds, but rather in discontinuous lenses interbedded with volcanic rock and volcanically derived sediments. Limestone is especially important because many later ore deposits, principally copper, iron, and tungsten, utilize limy rocks as their host. Hence, even though many of these deposits are Cretaceous in age, their formation was made possible by the deposition of limy rocks in the Triassic and Jurassic Periods. Within the tricounty area, the greatest mineral production has come from deposits probably formed in the Cretaceous Period or those associated with the intrusive granitic rocks related to the Sierra Nevada batholith. These include the contact of the granitic rocks with limy sedimantary rocks, vein deposits, and formed within the granitic rocks themselves as the Yerington porphyry copper deposits. The principal copper, iron , and tungsten deposits of the area are this type, as are probably some of the gold, lead, zinc, and graphite deposits.

Photos of Gypsy mine site & ore samples:

Estimates based upon our testing, general numbers, and the comparable results in the preliminary test.

Estimated Gold Potential Calculations

Total Mineral Resource Value is estimated over $360 Million Dollars U.S. of the Gypsy Mine.
SALVAGE RESERVES SALVAGE RESERVES 1 SALVAGE RESERVES 2 TONS 120,000 220,000 1,200,000 GRADE 0.52 0.48 0.56 OUNCES AG 62,400 105,600 672,000 VALUE IN U.S. DOLLARS $1,248,000 $2,112,000 $13,440,000

TOTALS

1,540,000

840,000

$16,800,000

CALCULATIONS WERE BASED ON 80% OF $25 SPOT SILVER PRICE. SALVAGE RESERVES SALVAGE RESERVES 1 SALVAGE RESERVES 2 TONS 80,000 450,000 1,000,000 GRADE 0.32 0.21 0.19 OUNCES AU 25,600 94,500 190,000 VALUE IN U.S. DOLLARS $28,672,000 $105,840,000 $212,800,000

TOTALS

1,530,000

310,100

$347,312,000

CALCULATIONS WERE BASED ON 80% OF $1,400.00 SPOT GOLD PRICE.

Jim Lawson-Chief Geologist M.Sc

Aurum Mining Exploration Services Dated: July 10th, 2012

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