Mineralization at EC1 consists of copper oxides filling fractures within brecciated quartzites. Several very impressive intercepts of high-grade copper oxide were encountered including 56.0 meters of 7.40% Cu in hole KA-05-05 and 81.1 meters of 4.58% Cu in hole KA-05-06. The oxide mineralization appears to be amenable to SXEW (solvent extraction/electrowinning) processing allowing for the low cost production of cathode copper.

Exotic copper deposits typically form near large tonnage copper sources. The source of the copper oxide mineralization is another high priority exploration target at Khok Adar. As drilling continues and more information is added to the database, vectors to the potentially large primary copper source are becoming apparent.

Location and Access

Khok Adar is located in Tolbo County of the Bayan Olgii Provence in western Mongolia (Figure KA1), and consists of four exploration licenses totaling 100,823 hectares. It is located approximately halfway between the towns Olgiy and Altay. The road between these towns and and electrical power lines pass within 7 kilometres of the property. A good lake source of water is located within 10 kilometres.

Work History

Copper anomalies were first identified by Russian exploration teams in the late 1980s. Previous Soviet work within the Khok Adar license area included trenching and 11 shallow drill holes. Shortly after the drilling campaign, the Soviet system collapsed, resulting in Russia's withdrawal from Mongolia and EAS has not been able to recover all data from this work.

2004

EAS optioned the property from Kainar, a Mongolian company, and completed a first-phase program of mapping, trenching, geophysics (induced polarization and magnetics) and diamond drilling during the fall and winter. A total of 450 metres of trenching and 942 metres of drilling in 6 holes were completed. Results were very encouraging. Significant intercepts were encountered in the EC1 Zone, including Trench C1 with 210 metres of 1.43% copper and 14 grams silver, and drill hole KA-04-01 with 89.1 metres of 2.08% copper and 12.6 grams silver.

2005

EAS drilled 37 holes totaling 4852 metres at Khok Adar and completed its $1million earn-in expenditure to acquire 75% interest in the project. Several good intercepts including 56.0 meters of 7.40% Cu in KA-05-05 from 0 to 56 metres and 81.1 meters of 4.58% Cu KA-05-06 from 0.9 to 82 metres were intercepted. It was recognized that EC1, EC2 and East Zone 1 zones were aligned within a six km east-southeast trending structural corridor.

2006

As of August over 7,000 metres have been drilled to delineate the EC1 deposit and to explore other targets. Also, a +400 hole aircore program was completed that defined a four kilometre long copper-zinc anomalous zone within the six km altered structural corridor. Eight copper oxide zones, including the EC1 deposit, the EC2 and East Zone 1 prospects, the Baruun Bayan anomaly and 4 newly identified anomalies have been located within this zone. As of September 1, 2006, one rig is drilling at Khok Adar.

Geology

Khok Adar is hosted in Cambrian metasediments of the Altai Forearc Basin. After accretion, the metasediments were subjected to continental magmatism, volcanism, and more recently, continental extension. Calcareous quartzites and siltites dominate the stratigraphy, along with lesser phyllites and schists. Mafic sills outcrop several hundred metres peripheral to the main area of mineralization, and mafic volcanics with recently discovered massive sulphides underlie much of the sequence.

Structurally, there are two major fold phases, two different-aged shear zones, and a high-angle fault-set with brittle deformation. Folding includes an F1 isoclinal fold-event that has very large amplitudes Second-stage F2 asymmetric, shear-type folds are a dominating structural feature and have slightly overturned limbs that are often greatly thinned to attenuated.

Several N70� to N80�W trending shear zones are present at Khok Adar and are important to localization of mineralization. They are nearly conformable with the stratigraphy, but crosscut at acute angles along strike. These structural corridors commonly exhibit varying intensities of quartz-sericite-pyrite alteration. A later N10�W trending fault/shear zone and N15�E trending brittle faults offset the structural corridors and are very important to the localization of high-grade exotic copper oxide mineralization at Khok Adar.

Mineralisation

A six kilometre, N70� to N80�W trending structural corridor has been identified at Khok Adar in which 8 zones of +0.1% copper oxide mineralisation within a larger halo of zinc mineralisation have been discovered as of August, 2006. The 8 zones include, from west to east, the Baruun Bayan anomaly, the EC1 deposit, the EC2 prospect and the East Zone 1 prospect (Figure KA3). The other 4 anomalies were discovered under shallow cover during the 2006 Aircore program and no additional work has been conducted on them yet.

BB (Baruun Bayan)

At the Baruun Bayan prospect located 600 metres northwest of EC1, 100 x 100 metre spaced infill aircore drill holes have confirmed a 200 x 500 metre coherent zone of copper oxide mineralization. Highlights include holes KAAC015 (2.0m of 0.58% Cu and 4g/t Ag), KAAC477 (4m of 1.39% Cu and 10.5g/t Ag) and KAAC486 (10m of 0.72% Cu and 3.2g/t Ag). This near surface anomaly is approximately twice the area of the anomalous footprint over the EC1 deposit. Additional RC/diamond drilling is planned for late 2006.

EC1 (Exotic Copper 1)

EC1 is a structurally controlled exotic (transported) copper oxide deposit approximately 200 metres along strike, up to 100 metres wide and 70 metres in average thickness (Figures KA4, 5, and 6). East Asia Minerals discovered the deposit in 2004. Trench C1, an old Soviet trench was cleaned and re-sampled resulting in 210 metres at 1.43% copper and 14 grams silver. Six holes, totaling 942 metres were drilled late in 2004. The first hole drilled, KA-04-01, intersected 0.0 to 89.1 metres of 2.08% copper and 12.6 grams silver. During mid 2005, several holes were drilled as cross sections through the deposit. Highlights included KA-05-08 with 85 metres of 2.11% Cu (including 29m of 4.85% Cu), KA-05-12 with 90 m of 1.23% Cu (including 12 m of 2.34% Cu) and KA-05-14 with 89 m of 1.76% Cu (including 11m of 7.52% Cu). During late 2005 and 2006, 36 delineation holes were drilled at EC1 (Figure KA4). These holes have demonstrated that mineralization extends east of a N15�E trending structure that was originally thought to confine the mineralization.

Mineralization at EC1 consists of copper oxides filling fractures within brecciated quartzites. The copper oxide mineralization is surrounded by a halo of zinc mineralization and appears to be amenable to SXEW (solvent extraction/electrowinning) processing allowing for the low cost production of cathode copper. T

EC2 (Exotic Copper 2)

The EC2 target is located approximately 700 meters east-southeast of the EC1 deposit along the same structure that in part localizes the EC-1 mineralization. KA-05-01 (18m of 2.14% Cu and 69 gpt Ag) and KA-05-02 (12m of 0.54% Cu) were drilled in 2005 to test surface copper oxide mineralization. Mineralization at EC2, similar to that at EC1, occurs as malachite and azurite in brecciated and silicified quartzites and siltites. 2006 aircore results, including 18.0 metres of 0.76% Cu and 5.3g/t Ag in KAAC158 have extended the EC2 target to over 500 metres in length. In July and August, 2006 eleven new RC/diamond holes have been drilled into EC2 (assays pending).

EZ1 (East Zone 1)

The 1000 metre by 500 metre East Zone 1 target is located 2 kilometers east-southeast of the EC1 deposit, also along the same structural corridor as the other oxide zones. It is covered by a thin cover of alluvium within a fault controlled valley that is coincident with an IP chargeability high and resistivity low geophysical anomaly. Three holes were drilled on the margins of the anomaly in 2005. Mineralization intercepted in KA-05-19 (18.6m of 0.58% Cu), KA-05-20 (20m of 0.82% Cu) and KA-05-21 (32m of 0.26% Cu) consists of supergene-enriched chalcocite, hosted in intensely silicified, brecciated metasediments. Some of the chalcocite mineralization is hosted in semi-massive to massive pyrite replacement zones associated with the major shear zone. These holes also intercepted significant zones of zinc (43m of 2.24% Zn in KA-05-21 and 31.5m of 1.34% Zn in KA-05-20) associated with basalt. KA-04-04, located 1.5km west of this target contained 135.8m of 2.04% Zn. 2006 drill results, including Z1ERC-001D with 18.0m of 3.54% Zn and Z1ERC-003D with 7.0m of 2.07% Zn, continue to verify the presence of extensive and increasingly high grade zinc mineralization in this area, which is now interpreted to be similar to a Besshi volcanogenic massive sulpide environment. This model is being further evaluated as the potential source for the transported exotic copper oxide zones discovered to date.



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