Finland

The Vammala Plant is located in the Tampere region, an area well endowed with gold and nickel mineralisation in southern Finland and within close proximity to the Orivesi and Jokisivu Gold Mines.

The Vammala Plant is a 600,000 tonne per annum crushing, milling and flotation facility which was successfully recommissioned in June 2007 and is being operated on a 24 hour basis, 6 days on, 4 days off roster. Ore is currently being sourced from the Orivesi Gold Mine and will also soon be sourced from the Jokisivu Gold Mine.

The environmental permit for the Vammala Production Centre is valid until 2016.

The following table represents the Vammala Production Centre statistics for the period to 31 March 2009.

*6 months of production

The Orivesi Mine commenced production in 1994, and produced 419,600 ounces of gold from a series of near vertical pipe-like lodes at Kutema, the ore processed through the Vammala Plant. Mining was undertaken by mechanised methods with access provided by a decline. Two of the five principal pipe-like lodes are known to continue beyond the decline base at 720 metres, with intersections at Kutema have been made as deep as 1000 metres below the surface.

Mining recommenced in June 2007 from the Kutema stopes and from the Sarvisuo lode system in May 2008, where mining is being conducted between the 285m and 440m levels.

Drilling activities have continued to focus on expanding the resources at Sarvisuo. Results received from the 44 holes completed in 2008 have indicated the presence of new lode positions on and below the 420m level. In particular, high grade intercepts such as 7.55m @ 15.62 g/t gold from the 540m level indicates that at least one high grade shoot remains open with depth.

In response to the drilling success and confidence in the structure of the ore lodes, the Sarvisuo development was extended to the 440m level.

Drilling is now focused between the 440m and 540m levels and pending successful results, a decision to extend the Sarvisuo development down to the 540m level should occur in 2009. The testing of the Sarvisuo extensions between the 540m and 560m levels and deeper extensions and exploration targets close to the known ore bodies will be completed later in 2009.

The Sarvisuo resource estimate has been updated by independent consultants Runge Limited, incorporating all new drill data and resulted in a total Indicated and Inferred Resource figure of 307,100 tonnes @ 7.1 g/t gold (70,200 ounces) between the 130m and 600m levels. The increase in resources from the 2008 drilling campaign has effectively offset production over the past twelve months.

The 150,000 ounce Indicated and Inferred Resource for Kutema Deeps remains unchanged and represents a substantial, medium to high grade depth extension below the existing underground mine which has been developed to the 720m level. Planning of new development to deepen the mine to the 820m level continues to be considered for development by way of an internal feasibility study, which will review and access the viability of mining this portion of the deposit. A decision to mine Kutema Deeps is expected to be made in 2009.

The Jokisivu Gold Mine is a greenfields discovery, where mineralisation has been identified in two locations – Kujankallio and Arpola, with resources totalling 325,000 ounces. Jokisivu is located 40 kilometres southwest of the Vammala Production Centre, near the town of Huittinen. The project is Dragon’s third operating mine, with ample capacity available at the Vammala Production Centre to process the ore. The decision to proceed with development of the Kujankallio open-pit was made in May 2009.

Jokisivu Development Concept

Mineralisation is hosted within relatively undeformed and unaltered diorite, in 1 to 5 metre wide shear zones that are characterised by laminated, pinching and swelling quartz veins and a well developed moderately east-northeast plunging lineation. The Kujankallio vein sets have been shown by drilling to extend to at least 500 metres depth, though resource drilling currently extends only down to 350 metres. Arpola has only been drilled down to 200 metres.

A diamond core drilling program designed to improve confidence in the resource estimate in preparation for open pit mining of the Kujankallio gold deposit has been completed, returning a number of significant intercepts from the 4,400 metre diamond core drill program, including intercept highlights:

• 2.73m @ 20.99 g/t gold
• 3.83m @ 7.91 g/t gold
• 6.68m @ 5.76 g/t gold

• 2.10m @ 6.39 g/t gold
• 2.55m @ 7.50 g/t gold
• 2.30m @ 5.03 g/t gold

An update to the Kujankallio resource was prepared by independent consultants Runge Limited, increasing the Indicated and Inferred resource to 1,077,000 tonnes @ 6.3 g/t gold (218,300 ounces) to a vertical depth of 350 metres, a modest increase from the previous estimate undertaken in 2005. The Arpola Indicated and Inferred Resource is unchanged at 490,000 tonnes @ 6.8 g/t gold (106,700 ounces) to a vertical depth of 200 metres.

Development of the Kujankallio open pit has commenced following completion of an internal feasibility study, which confirmed a positive return on the project, the key features of which are summarised below are based on a gold price of US$800 per ounce and a USD/EUR exchange rate of 1.20.

Logging was completed during April with logs stockpiled and stumps and cut off material removed for sale to local energy suppliers.