Advancing A New Discovery
In The Parral Silver District, Mexico

• Staked by Northair and joint ventured to American Consolidated Minerals Resources Corp., which has a 50% interest in the property;
• Six zones of mineralization - best initial values: 711 g/t silver and 10.79 g/t gold from San Rafael Zone;
• Abundant placer gold workings in main drainage - may be additional undiscovered zones of gold mineralization;
• Ground geophysics, geological mapping, soil and rock sampling completed;
• In 2012, drill results within the Rafael Zone was highlighted by Hole SR-003 where a 7.5 meter interval returned 179.3 g/t silver and 0.287 g/t gold and a 4.9 meter interval assayed 66.7 g/t silver and 0.614 g/t gold;
• Excellent exploration potential.

The Sierra Rosario silver/gold project is located in the state of Sinaloa, Mexico. The project is located approximately 25 linear kilometers northwest of Choix, Sinaloa; and 40 kilometers east of Alamos, Sonora. The property can be reached by road from Choix, and has good local infrastructure.

Sierra Rosario contains dozens of historic placer gold workings in numerous small drainages, as well as abundant gambusino workings in hard rock. Northair's exploration staff staked the concessions in 2002 and has since discovered six gold and silver occurrences within the property. In early 2004, Northair optioned the 1090 hectare property to Sparton Resources Inc., who earned a 51% interest in the project by paying Northair $130,000 (CAD) in cash, issuing 275,000 common shares and incurring $800,000 (CAD) in exploration expenditures over a four year period. Sparton's exploration was focused on the southern part of the concession, but included construction of the first road access to the San Rafael Zone. Sampling completed in 2008 along the road cuts in San Rafael included an additional 321 samples using continuous channel sampling along 3 meter sample lengths. Two continuous channel samples in this area,34.8 meters and 27 meters long, averaged 192 g/t silver and 91.8 g/t silver, respectively -- reinforcing the bulk minable potential. In May 2011, Sparton sold its 50% stake in the Sierra Rosario to American Consolidated Minerals Corp. and transferred a 1% interest and operatorship interest to Northair.

Northair's field programs concentrated primarily in the San Rafael Zone which contains strong epithermal silver with gold mineralization within an intensely altered rhyolite porphyry having a surface expression of approximately 200 by 70 metres. First phase mapping and sampling by Northair in 2003 within the San Rafael Zone returned an average of 181 g/t silver and 0.321 g/t gold from 23 chip channel samples.

Sparton's ongoing field program confirmed Northair's exploration results, and indicated that Sierra Rosario contains numerous mineralized zones. In the fall of 2005, Sparton completed a sampling and geological mapping and program over the property as well as a geophysical survey over selected targets. Each three separate zones of mineralization explored by Sparton, referred to as La Josca, Las Tahunas and San Rafael, are areas of historical production from small underground and open cut excavations. The analytical results confirmed the presence of high grade gold, base metal and silver mineralization in these three areas of the property and magnetic and electrical surveys established distinct geophysical signatures for the mineralization in each area. In June 2006 Sparton completed a seven hole drill program to test high priority targets in the La Josca Zone. The holes tested a 500-metre-long portion of the 1.1-kilometre-long La Josca structure with the best results of 2.62 g/t gold over a one-metre core length in hole 7 and 1.12 g/t gold over a one-metre core length in hole 3.

The San Rafael Zone is the principal target area on the property and the geophysical work, in particular the magnetic survey, delineated a well defined magnetic anomaly associated with the San Rafael rhyolite porphyry body and also located a similar anomaly which is covered by upper volcanic series tuffs and may represent a new buried intrusion. After reviewing the results of Sparton's exploration programs, the Company and Sparton filed an application to increase the size of the claim holdings by 590 hectares to 1,090 hectares. The new claim area covers the extensions of the San Rafael Zone indicated by the geophysical surveys which now appear to be substantially larger than initially estimated. The new holdings may host both skarn type carbonate replacement deposits as well as the extensions of the known vein-structure hosted mineralization.

In 2008, an access road was constructed to the San Rafael Zone that allowed mechanical trenching to be completed. A total of 321 samples were taken in 20 sample lines from outcrops in roads and trenches throughout the zone with highlights of the trenching program including 34.8 metres of 192 g/t silver with 0.22 g/t gold; and 27 metres of 91.8 g/t silver with 0.15 g/t gold. There appears to be excellent potential the San Rafael Zone to be far more extensive than the present surface exposure and drilling will be required to establish the grades and geometry of the intrusive at depth.

In June 2012, the joint venture partnership completed a six hole diamond drill program totalling 1,392 metres in the San Rafael Zone. The holes were drilled in the northwestern section of a coincident induced polarization geophysical anomaly and silver/gold geochemical soil anomaly. The program was designed to test only 30 percent of the anomalies as well as a small portion of the area which had returned encouraging silver and gold values from trench sampling. The most significant drill results were obtained in Hole SR-003, where a 7.5 meter interval returned 179.3 g/t silver and 0.287 g/t gold and a 4.9 meter interval assayed 66.7 g/t silver and 0.614 g/t gold. In Hole SR-005, located approximately 400 metres to the southeast of Hole SR-003, a 3.35 meter interval returned 84.1 g/t silver, 0.102 g/t gold and 1.59% lead.

Concurrent with the drill program, a follow up soil sampling program was completed which was designed to extend the existing soil sampling grid to the south and to the northeast. This open ended silver/gold soil anomaly, currently measures 1,400 metres in length and 1,300 metres wide. Three lines added to the southeast reported no significant results, but sampling to the northeast saw an expansion in this still open direction.

Northair and its joint venture partner, American Consolidated, are continuing to evaluate the results from its 2012 drill program in anticipation of completing further follow-up work on the property.

Sierra Rosario contains basement rocks of Laramide age granodiorite overlain by weakly metamorphosed andesite belonging to the Lower Volcanic Complex. These rocks are overlain by Cretaceous massive limestone and calcareous sandstone, and younger rhyolite ignimbrite belonging to the Upper Volcanic Complex. Intrusive rocks consisting of intermediate porphyry dikes and a large intensely altered rhyolite porphyry are exposed at the San Rafael Zone.

In the San Rafael zone, both skarn and structurally controlled mineralization containing barite, copper, gold, and silver are present and values of up to 7.28% Cu and 13 g/t gold were obtained from samples taken from boulders in a gully below an old mine dump. Strong base/precious metal mineralization is located in a shear fracture zone east of the main rhyolite intrusive as well as in fault zones associated with rhyolite dykes in limestone on the east side of the property where there is a large multi element soil anomaly.