Altai Resources Inc V.ATI

sedar

[ICU812]

REVIEW OF OPERATIONS

Gaspé Peninsula

The Company, through its subsidiary, Petrolympia, holds a 100% interest in two (2) oil and gas

(PG) and underground reservoir (RS) exploration permits covering 40,885 hectares in the Gaspé

region between Rimouski and Matane. The Matapedia permit 2003 RS 092, was initially granted

by the Québec government in September 2003 to Prospection 2000 Inc. who transferred the

ownership in 2004 to Petrolympia. The Mitis permit 2006 PG 905, was granted by the

government to Petrolympia in the spring of 2006. Both permits are located to the southwest of

Highway 132, a few kilometres south of Val-Brillant. Main roads and various secondary, as well

as private or forestry roads allow very good access to the properties for the acquisition of seismic

surveys.

In late fall 2006, Petrolympia recorded 61 kilometres of high fold seismic data. Three lines were

shot over the Matapédia property in order to improve the seismic coverage and to tie the

previously drilled C-123 and C-125 wells. A 26.3 km long regional profile was also recorded

across the Mitis property to show the continuation westward of large anticline structures.

Interpretation and integration of these new seismic lines with previous data was performed in

2007, confirming different areas of interest and suggesting various exploration leads over both

properties. From these results, a second seismic program was designed over the Mitis permit and

was acquired in January 2008. The interpretation results brought the selection of a first

exploration well location to be drilled during 2008 over the Matapedia permit.

St. Lawrence Lowlands

The Company, through its subsidiary, Petrolympia, holds a 100% interest in four (4) oil and

exploration permits covering 73,021 hectares in the St. Lawrence Lowlands located on the south

shore of the St. Lawrence River directly south of the City of Valleyfield, less than 30km

southwest of Montreal.

The permits block lies in the south-western portion of the St. Lawrence Lowlands sedimentary

basin in the shallow part of a more or less undisturbed Ordovician carbonate platform. Three

permits covering 56,622 hectares were granted in April 2006 by the Québec government. In

April 2007, Petrolympia increased the size of the block in acquiring a fourth permit covering an

area of some 16,399 hectares.

Numerous paved and gravel roads exist throughout the permitted area. A secondary gas pipeline

connected to the main Gaz Metro line to the north of the St. Lawrence River runs across the

property. The area is believed to have potential for shallow gas production. The permits are

located at short distance of important normal faults bringing the Utica Formation source rocks in

contact with potential reservoir rocks in the Beekmantown and Potsdam Formations. Possible

trapping mechanisms for gas accumulation in the eastern part of the property are inferred from

surface geology.

On May 16, 2008, the Company announced that it entered into a binding letter of agreement (the

"Agreement") with Ressource & Énergie Squatex inc. ("Squatex") pursuant to which

Petrolympic will acquire a 30% legal and beneficial interest in 36 exploration permits totaling

672,438 hectares in the St. Lawrence Lowlands, Bas St-Laurent and Gaspé Peninsula in Québec

(the "Transaction"). Upon signing of the Agreement, Petrolympic made an initial payment of

$500,000 to Squatex in order to cover certain outstanding payments on the permits. In order to

complete the acquisition of the interest in the Squatex properties, Petrolympic is required to

make additional cash payments of $1,000,000 on June 30, 2008 and $1,000,000 on July 31,

2008, with $1.8 million of such funds to be used for exploration of the properties and $200,000

made available to Squatex for its working capital. If Petrolympic does not make these payments

for any reason, it will convert the initial $500,000 payment to an 8% equity interest in Squatex.

The Transaction remains subject to Petrolympic's satisfactory due diligence.

EXPLORATION PROGRAM

The Company has completed the interpretation of the seismic data acquired in late 2006 and

decided to acquire a further 25 km of seismic data on its Gaspé properties. The Company

anticipates defining one or more drill targets based on the already identified anomalies and

interpretation of the seismic data and plans to drill one 1,500m well in the fall of 2008. On its St.

Lawrence Lowlands property, the Company will drill a first 400m well in the spring of 2008 to

test the possibility for shallow gas production.