The Dalaghna gold project is located approximately 80km south of the town of Kankan in eastern Guinea.  The concession covers an area of 500km2 and is underlain  predominately by deformed Archean greenstone belts, historically productive for gold mineralization in the region, and Proterozoic granite gneiss terrain.  The area is dominated by the northwest-flowing Milo River system and tributaries, including the productive Sibiri River, which have been worked extensively for alluvial and colluvial gold by artisanal miners.

Modern exploration at Dalaghna has been limited and largely focused on alluvial gold.  During the period 1992-1996 the Russian group SIDE mapped the area and identified a number of alluvial and primary gold occurrences along the Sibiri River in the central sector of the concession.  Shallow sampling through test pits and auger holes outlined a historic resource from multiple zones, not compliant with current western standards, totaling 1500 kg gold (~50,000 ounces) at an average grade of 0.63g/m3.  A number of primary occurrences, with samples containing up to 5 gpt gold, were also identified by SIDE but not fully evaluated.

The Dalaghna concession covers an area of highly prospective greenstone terrain characterized by a network of drainage systems which have been historically productive for alluvial gold but never explored for primary mineralization.  Working off the SIDE data base, which identified numerous gold prospects within the concession, SMG has implemented a program of prospecting and grid soil sampling to further define gold target areas and prioritize them for more detailed evaluation and drilling.  Initial results are expected by mid-year.