Silver Grail Resources

Midas

The Midas covers the southern portion of the larger north-south trending Del Norte-Midas property spanning 3 placer gold-bearing streams. A northerly-trending contact zone between volcanic and sedimentary rocks is related to multiple zones of gold-silver mineralization. Portions of the property are underlain by rocks broadly similar to those hosting the rich, silver-gold Eskay Creek mine 50 miles to the northwest.

Ownership of the Midas property is 50% Silver Grail and 50% Teuton Resources Corp. Sabina Silver Corp. (“SBB”-TSX) has an option to earn a 50% interest in the Midas property (as part of the Del Norte property option) by spending $2.5 million in exploration. Sabina may increase its interest to 65% by taking the property to the feasibility stage.

In 2006, three drill holes on a previously identified 3 Oz showing on the Midas property encountered promising intercepts of bulk tonnage-type gold mineralization spatially related to a gold-rich vein. The best result was in Hole SDN-06-02 which returned a wide interval of gold mineralization grading 2.52 g/t gold (0.07 oz/ton) over 32.4 meters. True width is estimated at 29.2 meters or 96 feet. Within this intersection, a sub-interval ran 26.77 g/t gold (0.78 oz per ton) over 0.7 meters. Follow-up drilling to expand the zone is currently under way.

Midas Gold Discovery--3 Oz Vein Area

Location

The Midas property is located approximately 17 miles east of Stewart, British Columbia, in the upper drainage area of the White River system. Nearest road access is about five miles to the east, at the western end of a network of logging roads connecting to Highway 37.

Mineralization

3 Ounce Zone

Prospecting in the 3 ounce area of the Midas claims resulted in the 2003 discovery of quartz float boulders grading up to 3 oz/ton gold, near the same volcanic-sediment contact which hosts the LG mineralization some 6 miles to the north. One day of trenching in 2004 partially exposed a quartz vein mineralized with tetrahedrite. In 2006, optionee Sabina Silver tested the structure on one section with three holes and intersected broad widths of gold mineralization in all holes. Results from the three holes drilled on the Midas property are as follows:

Hole (SDN-)	Zone	From (meters)	To (meters)	Interval (meters)	Silver (g/t)	Gold (g/t)	TWF*
06-02	3 Oz	78.33	126.01	47.68	10.4	1.77	0.90
...including		92.05	124.45	32.40	12.5	2.52
...including		123.00	124.45	1.45	86.4	20.70
...including		123.00	123.70	0.70	92.7	26.77
06-03	3 Oz	75.29	153.60	79.24	2.6	0.68	0.74
...including		108.81	153.60	44.79	4.1	0.97
...including		108.81	124.05	15.24	2.5	1.48
...including		122.53	124.05	1.52	2.4	4.30
06-04	3 Oz	85.50	243.68	158.18	3.5	0.44	0.54
...including		135.94	242.50	106.56	4.9	0.61
...including		151.49	157.58	6.09	5.4	1.67
*TWF True Width Factor 1 metre = 3.28 feet 1 g/t = 0.029 oz/ton

The three holes drilled on the 3 Oz vein tested the vein/shear over a vertical difference of approximately 300 meters on one section (see Fgig 1 & Fig 2). The upper portion of this section between surface and the intersection in Hole SDN-06-02 represents an outstanding target for further drilling in 2007, the more so because surface samples indicate the potential for higher grades. Grab and chip samples have ranged from trace to 29.65 g/t (0.86 oz/ton) in gold, and float samples from trace to 102.8 g/t (3 oz/ton) gold.

The 3 Oz vein/shear lies within a northerly trending alteration zone marked by pronounced clay alteration with local areas of silicification. Host rocks include various pyroclastics with admixed epiclasts. At present, geological mapping is too limited to trace the alteration zone conclusively but a series of linear magnetic lows, suggestive of the destruction of primary magnetic minerals, indicates a strike length of up to 2 km and more.

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