Elray Resources (ELRA.OB)

Elray Resource, Inc. was incorporated in Nevada on December 13, 2006.

In the business of precious minerals exploration. Currently own one mineral claim only, named the DL Claim, situated near the Town of Osoyoos in southern British Columbia, Canada. Does not have any current plans to acquire interests in additional mineral properties, though they may consider such acquisitions in the future.

The DL Claim is the subject of a geological report prepared by James W. McLeod, P. Geo., dated December 23, 2006. According to the report, the deposit types that historically predominate in the general area of the DL Claim are the porphyry-type base and precious metal (copper-gold-palladium or copper-molybdenum) occurrences with peripheral base and precious metal occurrences as veins and/or contact zones of mineralization. The primary focus of planned exploration activities will be to find commercially viable deposits of gold.

There is no assurance that a commercially viable precious minerals deposit exists on the DL Claim property.

Plan of Operation

Plan of operations is to carry out exploration of the DL Claim property.

Mineral property exploration is typically conducted in phases. Each subsequent phase of exploration work is recommended by a geologist based on the results from the most recent phase of exploration. In his geological report, Mr. McLeod recommends a three phase process of exploration. Once they have completed each phase of exploration, they will make a decision as to whether or not to proceed with the next phase based upon the analysis of the results of that program.

Completed Phase One explorations. If warranted by results from Phase One, they will conduct Phase Two explorations. Their business plans after the next 12 months will depend upon the results from preceding exploration activities. Assuming Phase Three exploration activities are warranted by the results from Phase Two exploration activities, they will execute Phase Three exploration plans after the next 12 months.

Even if they complete current exploration program and it is successful in identifying a mineral deposit, they will have to spend substantial funds on further drilling and engineering studies before they will know if they have a commercially viable mineral deposit or reserve. This will necessitate raising additional funds, as the funds available to them through equity investments and shareholder loan commitments will not be sufficient to carry them forward.

If their exploration activities indicate that there are no commercially viable gold deposits on their mineral claim, they will abandon the claim and stake a new claim to explore in British Columbia. They will continue to stake and explore claims in British Columbia as long as they can afford to do so.