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## Exploration 

Cortez continues to aggressively and systemati- cally explore and evaluate the Pipeline Mining Complex lands, with various drilling programs. 

In October 2000, Cortez advised that additional gold mineralization had been encountered immedi- ately southeast of the South Pipeline deposit, in an area referred to as Crossroads.A small portion of the mineralization at Crossroads lies on ground cov- ered by GSR1; a majority of the mineralization is covered by Royal Gold’s GSR2 (“super”) royalty; and all of the mineralization is covered by both the GSR3 and NVR1 royalties. 

The geological controls to gold mineralization at Crossroads are similar to those in the South Pipeline deposit. Local long intercepts of low grade, oxide gold mineralization are encountered in this area beneath 400 to 750 feet of pediment gravels and valley-fill sediments. Gold mineralization increases in intensity (thickness and/or grade) to the south- east. In the south eastern corner of the drill pattern, thicker intercepts of higher grade gold mineralization have been encountered. 

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GOLD POUR AT THE PIPELINE MINING COMPLEX. 

In October 2000, Cortez also announced it had outlined about 12.6 million tons (11.4 million tonnes) of oxide mineraliza- tion, at an average grade of 0.044 opt (1.5 gpt).This esti- mate did not consid- er mining dilution or processing losses. 

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MINING COMPLEX. 

As of August 10, 2001, Cortez had completed 69 drill holes at the Crossroads area of the Pipeline Mining Complex, during its 2001 drilling program. This recent drilling program expands the Crossroads area of mineralization to dimensions of approximately 2,200 feet east-west by 1,900 feet north-south.The 2001 drilling program has not fully defined the extent of mineralization, particularly to the east and south. Additional drilling will be required before a new resource estimate for the deposit can be defined. 

Any decision by Cortez to reclassify any por- tion, or all, of the additional mineralized material or resources reported herein to proven and probable ore reserve status will depend upon consideration of additional drilling and metallurgical test results, and application of economic and technical feasibility fac- tors such as mining, dewatering and processing costs. 

