The Timok Project comprises the Jasikovo-Durlan Potok, Brestovac-Metovnica and Leskovo exploration permits that are held by Rakita d.o.o., a Serbian subsidiary company in which RMC has a 45% and Freeport-McMoran Exploration Corp. (FMEC) a 55% indirect ownership interest; FMEC can obtain additional 20% indirect ownership interest by completing a Bankable Feasibility Study. The exploration permits cover an area of 245 sq. km.

The Čoka Kupijatra, Tilva Njagra, Nikolicevo and Kraljevica Exploration Permits are 100% owned by Reservoir Minerals and cover an area of 293.2 sq. km.

Location of Timok Exploration Permits

The Timok Project comprises the Jasikovo-Durlan Potok, Brestovac-Metovnica and Leskovo Exploration Permits that are held by a Serbian subsidiary of RMC in which Freeport-McMoran Exploration Corp. (FMEC) has earned a 55% ownership interest. RMC and FMEC are forming a Joint Venture to continue exploration of the Project, and FMEC is now the operator.

Freeport-McMoran Exploration Corp. gave notice to the Company (News Release August 16, 2012) that it has elected to continue to sole fund expenditures on or for the benefit of the Project until the completion and delivery to the Company of a feasibility study, or such earlier time as it elects to cease such funding. The feasibility study must be in such form as is normally required by substantial, internationally recognized financial institutions for the purpose of deciding whether or not to loan funds for the development of mineral deposits. If FMEC completes the feasibility study, FMEC will indirectly own 75% and the Company will own 25% of the Timok Project.

The Bor - Majdanpek copper-gold district is a world-class mining district, where mining dates back to 4500 BC and there has been continuous modern mining of copper-gold deposits since 1902. The Bor - Majdanpek mine complex has a recent historical production of 7 million tonnes of copper and 300 tonnes of gold (BRGM publication BRGM/RC-51448-FR). The current combined resources and reserves at the state-owned RTB Bor mining complex are stated on their website (www.rtbbor.rs) to be approximately 2.5 billion tonnes over a number of different deposits with grades ranging from 0.28 to over 5% copper, with total copper and gold metal content of 10.5 million tonnes and 11.7 million ounces respectively. The RTB Bor resources and reserves were calculated according to the Russian system for reporting Resources and Reserves that are not compliant with National Instrument 43-101 guidelines and should not be relied on, but the Company considers that they are relevant to the assessment of the Timok Project.

The Timok Permits are located within the central zone of the Timok Magmatic Complex (TMC), in the Serbian section of the East European Carpathian-Balkan Arc. The TMC developed as an extensional back-arc basin during the late Cretaceous (86 - 83 Ma), and was deformed during the Alpine (late Cretaceous – Early Cenozoic) orogeny. The TMC has one of the highest concentrations of copper enrichment in the Tethyan Belt.

The Bor and Majdanpek copper-gold mining districts contain both porphyry and high-sulphidation epithermal types of mineralization. There are at least 5 individual porphyry systems (Veliki Krivelj, Cementation/Cerova, Borska Reka, Borski Potok) in the central area of the TMC centered around the Bor metallurgical complex, and additional deposits located on the trend extending north from Bor towards the world-class Majdanpek system.

Previous workers have described a close association of porphyry-type copper-gold mineralization and alteration with high-sulphidation epithermal copper-gold massive sulphide mineralization.  In the Bor district, both porphyry and epithermal hydrothermal systems are coupled and spatially related to each other. The mineralization is hosted by late Cretaceous andesites and volcaniclastics related to the first magmatic phase in the TMC.

The Timok permits are host to the favourable geology with excellent potential for porphyry copper-gold mineralization on the strike extension of the controlling structures.

Location of Timok Exploration Permits

Cukaru Peki Prospect

The Cukaru Peki prospect is a blind target covered by younger Miocene sedimentary rocks that unconformably overlie late Cretaceous andesite volcanics, volcaniclastics and sedimentary rocks. High-sulphidation copper-gold “massive sulphide” mineralization consists of covellite with bornite and chalcocite in veins, hydrothermal breccias and replacements hosted by strongly altered andesite. Porphyry style chalcopyrite-pyrite with rare molybdenite has been intersected in several holes (e.g. FMTC 1210).

At this early stage of exploration for a deep high-sulphidation epithermal and porphyry copper mineralized system typical of the Timok magmatic complex, it is not possible to determine the orientation of the mineralized zones, or to estimate their true thickness. The extent of the high-grade copper-gold mineralization remains open, and drilling is continuing in order to define the limits to the mineralized system.

As of December 31^th, 2012, 16,815 m drilling had been completed at the Cukaru Peki prospect.

Cukaru Peki drill hole locations

Cukaru Peki Sections

* Analysis by ICP-AES using 0.5 g aliquot for samples containing less than 1% copper, by AAS for samples containing 1 - 11% copper, and by ICP-AES using 0.1 g aliquot for samples containing >11% copper.
** Analysis by fire assay with AAS finish for samples containing less than 3 g/t gold and, for FMTC 1213 and 1217 only, by fire assay with gravimetric finish for samples containing greater than 3 g/t gold.
*** The copper equivalent (CuEq%) is calculated from the formula (Copper % + 0.6 x g/t of gold).

Corridor Zone Prospect

In 2005-2007, Reservoir previously discovered a high-grade epithermal gold system hosted by brecciated and altered late Cretaceous andesites and volcaniclastics in the Brestovac Licence. The mineralization occurs over a strike length of 320 meters, with best intercept 16.90 meters at 13.04 g/t gold.

Corridor Zone Prospect – resistivity and drill collar locations

Corridor Zone Prospect - Cross section through BN-9/BN4/BN-3

The Ogashu Kucajna target, close to the Corridor Zone prospect, was drilled in 2011. The two holes intersected intensely altered andesites and volcaniclastics with epithermal gold mineralization.

Yanko Target

The Yanko target consists of combined geochemical and geophysical indicators of blind porphyry copper mineralization in favourable geology. Three drill holes, total 2,531.8 metres, were drilled in 2011. Holes FMTC-1105 and FMTC-1108 intersected wide zones of skarn and vein-type copper sulphide mineralization and associated hydrothermal alteration in a complex sequence of sedimentary rocks, andesites and diorites. FMTC-1106 intersected weak copper sulphide mineralization over 56 meters from 466 - 532 meters.

(i) Mean of atomic absorption and ICP values.