The Pincher Creek property is located approximately 16 km south of the town of Pincher Creek, Alberta, primarily in township 4, Range 29, W4M. Goldnev currently has working interests averaging 12.5% in 10,560 gross contiguous acres of land in Southwestern Alberta.

A well was drilled in February 2000 at 02-11-004-29 W4M (01-11 Bottom Hole). It was tested in the Turner Valley formation at a depth below 11,000 ft, and then later abandoned. The well was re-entered in September 2007, when it was completed uphole in both the Cadomin formation and the lower Brown Sands formation. The well averaged about 300 Bbl/d of 42 API light oil from each of these zones and is scheduled for tie-in in January 2011.

The Pincher Creek Rundle A pool was discovered in 1948, shortly after the original Leduc oil discovery. This area was drilled extensively for Rundle sour gas that was produced into the Waterton plant. The Rundle is made up of Mississipian carbonates in a structurally controlled, overthrust imbricate trending NW-SE. Due to the time of the discovery, and the significance of the Rundle pools, little attention was paid to the shallower zones of the Cretaceous and Jurassics. These were generally drilled through without evaluation. Limited testing, however, indicated that there were hydrocarbon accumulations.

The most promising of these upper zones were the Lower Cretaceous Cadomin and Upper Jurassic Kootenay / Nikinassin (Brown) Sands. The Cadomin is productive in a field to the north. The Brown is productive in the Turner Valley field to the west. The 01-11 discovery showed both to be productive here. These intervals were deposited mainly as fluvial valley fill. They are characterised by sandstone with 20 to 30 ft of net pay, 10% porosity, and 15 to 20% water saturation.

An independent valuation was done on only the 1-11 well by Reliance Engineering Group Ltd., with an effective date of December 31st, 2008. The results were as follows:

There is at least one more recompletion opportunity with probable reserves, at the 16-29 well. Two other possible recompletion targets, where the well logging is incomplete, are also candidates. All petroleum engineers reviewing this play have assigned 12 or more probable drilling locations, in addition to a recompletion. Based on this, our current internal valuation, made by Chapman Petroleum Engineering, is $8.0 Million, discounted at 15%, for the existing proved, probable, & possible.

Other oil and gas companies in this play include Twin Butte Energy, Penn West, Paramount Resources and Crocatta.

We are expecting to complete a short 258m, tie-in to Twin Butte and have the well at 1-11 on production in January 2011. Production depends on adding a gas compressor and making this tie-in, as solution gas recovery is mandatory. The site already has a pumpjack, metering, separator and tanks in place. Work will begin on a second recompletion immediately following.