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 Location: North Simpson Park Range, Eureka County, Nevada located immediately south of Rye Patch Gold's 100% owned Garden Gate Pass project; 10 kilometres south-southeast of Barrick Gold's recently announced Red Hill and Goldrush discoveries; and east and adjacent to US Gold's Tonkin Springs project along the western margin of the Northern Nevada Rift (NNR) in portions of T24N, R49E, T25N, R49E, T24N, R50E, and T25N, R50E. Deal: Under the terms of the agreement, Rye Patch has the right to earn a 60% undivided interest in the Patty Project by spending US$5 million over a five-year period, of which the first year's expenditure of US$500,000 is committed. As part of the commitment, Rye Patch will reimburse the Patty Joint Venture for $93,120 of lease payments and one half of federal claim rental fees paid by the Patty Joint Venture in 2011. Once Rye Patch completes its earn in, Rye Patch will control 60% undivided interest with Barrick Gold, US Gold and Chapleau Resources having 24%, 12%, and 4% respectively. Upon completion of the earn-in amount by Rye Patch, the Patty Joint Venture will have the right to back in to a 60% interest by expending US$15 million over a five year period, of which amount one-third will be paid in cash to Rye Patch. The Patty Joint Venture must exercise its back-in right within 90 days of Rye Patch completing its earn in. If the Patty Joint Venture completes its back in, Rye Patch will control 40% undivided interest with Barrick Gold, US Gold and Chapleau Resources having 36%, 18%, and 6% respectively. Upon completion of the back in, Rye Patch's remaining 40% will be carried until production commences on the property. The Patty joint venture may recover such carried costs, plus interest at the prime rate plus 2%, from 80% of Rye Patch's share of production from the property. In addition, the Patty Joint Venture is required to spend a minimum of US$500,000 annually on the property until the commencement of production. The core Damale claims retain a 3% NSR and an annual 1,500-metre (5,000-foot) drill commitment; however, for 2012, there is a 3,300-metre (10,800-foot) drill commitment that is required to be completed before December 31, 2012. Property Size: The Patty project consists of 616 unpatented lode claims covering 53.1 square kilometres (13,120 acres). Annual holding costs total $86,240 of which Rye Patch is responsible for $43,120 in 2011. Property Geology: The Patty property contains the lower-plate carbonate section that hosts the Cortez-area deposits and is on-trend with the NW alignment of Cortez deposits within the greater Battle Mountain-Eureka Trend. This favorable stratigraphic section is covered by up to 800 feet of post-mineral volcanic rocks. Portions of the carbonate section crop out in the southwest portion of the property. Slope facies carbonate sequences thicken eastward from a basinal or lower slope setting producing a prospective stratigraphic section. The Simpson Park thrust is a district-scale structure traversing the claim block that is associated with gold deposits to the NW including the 15-million ounce Cortez Hills deposit located 21 kilometres to the north-northwest. The general geology and three target areas identified by Barrick are illustrated on Figure 1. Conceptual cross-sections through three untested target areas are shown in Figures 2,3 and 4. Gold Mineralization: The property lies in the Battle Mountain - Eureka trend defined by alignment of Cariin-type gold deposits and a deep gravity gradient. Patty is within a NNW trending 5-mile-wide swath of gold deposits, which includes the group of deposits in the Roberts Mountains, the Tonkin Springs deposits, and the Cortez trend mega-deposits -- Pipeline and Cortez Hills mines, and the newly discovered Red Hill and Goldrush deposits. Rye Patch Gold Targets: The target areas are the Patty Resource, Patty North, Western Rift, West Geyser, South Pediment, and Indian Creek. At the Patty Resource, gold is localized along the regional Simpson Park thrust system and the east-northeast trending OS structural zone. The non-compliant resource is approximately 40,000 ounces of gold and is open in several directions. Mineralization is near surface with expansion potential to the north and east. The bulk the known resource is within siliciclastic units of the upper plate. Rye Patch will focus on exploration along strike of the Simpson Park thrust by drilling more favorable carbonate lithologic units beneath the thrust zone. At the Patty North target, mapping shows a major structural intersection between the Simpson Park thrust fault and a north-south structural corridor. Samples of float material in the area have returned gold values ranging between 0.2 g/t Au to 1.4 g/t Au. The Patty North target is roughly 1.5 kilometres north of the Patty Resource and is geologically connected by the Simpson Park thrust fault. The target is within lower plate carbonates in the structural intersection beneath the Simpson Park thrust fault. The Western Rift target lies along the western margin of the NNR within a similar geologic environment as Barrick's new gold discoveries. In 2005, Placer Dome drilled gold in Devonian carbonate rocks along the western margin of the NNR. Drillhole PIR05-010 intersected 102 metres grading 0.32 g/t gold including 1.5 metres grading 4.16 g/t gold. Follow up drilling focused along an east-northeast OS fault zone. With the discovery of Barrick Gold's Red Hill and Goldrush deposits, the gold intercept in PIR05-010 shows mineralization could be associated with more northerly trending structures. The gold mineralization is open to the north, south and east. Located 2 kilometres north of the Western Rift target, drillholes KIR-006 and KIR-007 define the West Geyser drill target. Drilling in the area intersected altered lower plate carbonate lithologies with high levels of arsenic and antimony (trace elements associated with Carlin-type gold deposits). This target also lies along the western margin of the NNR within similar geology and structural setting to Barrick Gold's new Red Hill and Goldrush gold discoveries. The South Pediment target is within an area of alluvial and volcanic cover. Historic drilling in the area intersected dolomite and limestone formations of the lower plate carbonate section and returned low grade gold mineralization -- 21.3 metres grading 0.56 g/t gold. The area requires additional evaluation and drilling to follow up on this blind, pediment covered discovery. The Indian Creek target encompasses the southern extension of the Cortez Hills inversion structure. The structural zone is highly deformed with surface rock-chip samples returning gold in the 100 to 200 ppb gold range. Additional field mapping and rock-chip sampling are required to advance the target to a drilling stage. Initial mapping and cross section work show the target has promise. Maps
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