Item 4.  Information on the Company

DESCRIPTION OF BUSINESS

Introduction

Avrupa’s executive office is located at:

325 Howe Street, Suite 410, Vancouver, British Columbia, Canada V6C 1Z7

Telephone: (604) 687-3520

Facsimile: 1-888-889-4874

E-Mail: info@avrupaminerals.com

Website: www.avrupaminerals.com

The contact person in Vancouver is Winnie Wong, CFO.

The Company's common shares trade on the TSX Venture Exchange under the symbol "AVU".

The authorized share capital of the Company consists of an unlimited number common shares. As of April 30, 2012, there were 20,603,571 common shares outstanding.

The Company is a growth-oriented junior exploration and development company focused on aggressive exploration, using a prospect generator model, for valuable mineral deposits in politically stable and prospective regions of Europe, including Portugal, Kosovo, and Germany.

During the year ended December 31, 2011, the Company entered into a joint venture with Antofagasta Minerals SA (“Antofagasta”) for its Alvalade property in Portugal.

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The Company’s 2012 activities are influenced by the following factors:

·

The Company established a joint venture with Antofagasta on its Alvalade property in Portugal and Antofagasta increased its exploration budget to US$2.5 million for 2012.

·

The Company established a joint venture with Blackheath Resources Inc. on its Covas property in Portugal to spend € 300,000 in exploration on the property before March 20, 2013.

·

The Company recently completed a $1.2 million financing in March 2012 and is negotiating additional ventures on its existing portfolio of properties.

With the joint ventures established for the Alvalade and Covas properties and the financing completed in March 2012, the Company is able to carry out its exploration activities and further advance its properties in Portugal, Kosovo and Germany during the remainder of the fiscal year.

Corporate Background

The Company was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia under the name Everclear Capital Ltd. On July 7, 2010, the Company changed its name to Avrupa Minerals Ltd.

The Company presently has the following subsidiaries:

Currently, the Company conducts mineral exploration in Portugal, Kosovo and Germany.

History and Development of the Business

Avrupa was incorporated on January 23, 2008 under the Business Corporations Act of British Columbia. The Company became a “Capital Pool Company” as defined in the Exchange’s Listing Policy 2.4 and its common shares began trading on the Exchange on September 2, 2008.

As a Capital Pool Company, the principal business of the Company was to identify and evaluate opportunities for the acquisition of an interest in an asset or business and, once identified and evaluated, to negotiate an acquisition or participation subject to receipt of shareholder approval and acceptance for filing by the Exchange.  Until the completion of such a Qualifying Transaction (“QT”), as defined under Exchange Listing Policy 2.4, the Company did not carry on any business other than the identification and evaluation of assets or businesses in this connection.

The Company completed its QT on July 13, 2010 to acquire 90% of the issued and outstanding shares in MAEPA Empreendimentos Mineiros e Participacoes Lda., a private Portugese company (“MAEPA”) and (b) 92.5% of the issued and outstanding shares of Innomatik Exploration Kosovo LLC, a private Kosovo company (“Innomatik”).  The Company received the final approval from the Exchange for its QT and its common shares resumed trading under its current name and trading symbol “AVU.V” as of July 14, 2010. In April 2012, the Company acquired the remaining 10% of MAEPA to own 100% by paying $150,000 cash and issuing 500,000 common shares.

The Company, through its holding in MAEPA, holds eight exploration licenses in Portugal, spread from the north to the south in the country. The licenses have been issued to MAEPA by the government of Portugal, and are as follows:

*

Marateca

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*

Alvalade / Canal Caveira / Ferreira do Alentejo (3 licenses)

*

Covas

*

Aljesur (Acquired subsequent to December 31, 2011)

*

Arga (Acquired subsequent to December 31, 2011)

*

Alvito (Acquired subsequent to December 31, 2011)

Licenses have varying work commitments, as approved by the government of Portugal, and all licenses carry a 3% net smelter royalty (“NSR”), payable to the government of Portugal.

Marateca:

In its acquisition of MAEPA, the Company allocated all of its acquisition cost to the Marateca project as it had been the subject of the NI 43-101 compliant report.

Alvalade / Canal Caveira / Ferreira do Alentejo:

On June 3, 2011, the Company signed a Memorandum of Understanding (“MOU”) with Antofagasta Minerals S.A. (“Antofagasta”) to undertake exploration on the Alvalade project   The MOU covers three exploration licenses:  Alvalade, Canal Caveira, and Ferriera do Alentejo. Antofagasta completed a US$300,000 initial study of the project.  Upon successful completion of the initial study, on December 22, 2011, the Company entered into the Alvalade Joint Venture agreement with Antofagasta whereas the Company granted to Antofagasta the option to acquire an undivided 51% interest in the project, which can be exercised by Antofagasta funding or incurring expenditures of an additional US$4 million over three years.  After exercise of the first option, Antofagasta will be granted a further option to acquire an additional 24% interest in the project, for an aggregate 75% undivided interest, by completing and delivering a Feasibility Study on the project to the Company within five years.  The Company operates the joint venture through the first option period.

Covas:

On May 18, 2011, the Company signed an agreement to option out the Covas Tungsten Project to Blackheath Resources Inc. (“Blackheath”). Under the terms of the agreement, Blackheath has the option to earn a 51% interest in the project by spending € 300,000 in exploration on the project before March 20, 2013, of which € 150,000 (spent) is a firm commitment and must be spent by March 20, 2012. Blackheath can then earn an additional 19% by spending an additional € 700,000 for a total interest of 70% for total expenditures of € 1,000,000, by March 20, 2014.  Blackheath can also earn another 15% for a total interest of 85% by completing a pre-feasibility study (as defined by NI 43-101 regulations) on the property by March 20, 2016.

The Company, through its 92.5% holding in Innomatik, holds five exploration licenses in Kosovo:

*

Glavej

*

Kamenica

*

Bajgora

*

Selac

*

Koritnik (Acquired subsequent to December 31, 2011)

*

Slivovo (Acquired subsequent to December 31, 2011)

The Glavej and Kamenica licenses were originally issued to Innomatik for two years, but have now been renewed for three years, as required by Kosovo law.  Upon renewal, the licenses were reduced in size by 50%.  The Bajgora and Selac licenses were newly issued during Q1 2011 for three years.  The Koritnik and Slivovo licenses were newly issued in Q1 and Q3 2012, respectively.  All licenses carry a work commitment, and there is a 2% NSR, payable to the government of Kosovo, attached to each of the licenses.

Business Overview

The Company currently has interests in mineral exploration projects located in Portugal, Germany and Kosovo. The Company and all of its properties are at the exploration stage. There is no assurance that a commercially viable resource deposit is present on any of the Company’s properties, and additional exploration is required before it is determined if any property is economically and legally viable.

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Operations in certain areas are seasonal as the Company cannot conduct certain exploration activities on its properties year-round. The Company is not currently dependent upon market prices for its operations, nor is it dependent upon any patents, licenses or manufacturing processes. The Company’s operations are dependent upon exploration rights and claims as well as the terms of option and/or joint venture agreements on those properties. Please see the individual property descriptions below for the details of each of the Company’s current exploration projects.

Mineral Properties

The Company currently has interests in 15 mineral exploration properties, including 8 properties in Portugal (3 of which is known as the Alvalade JV), 6 properties in Kosovo, and 1 property in Germany. All of the Company's properties are currently at the exploration stage.

Portugal

The Company through its subsidiary MAEPA, is currently focused in the Portuguese portion of the Iberian Pyrite Belt, a district with over 2,000 years of mining history from at least Roman times.  

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The Company identifies the Alvalade JV which covers 3 licenses (Ferreira do Alentejo, Lousal Alvalade and Canal Caveira) as material property for the Company.  The following table provides a summary of the three licenses:

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* ¹ – Due to legal issues, this contract was suspended for 2 years and that is the reason why the 1 ^st extension only starts in 25 ^th May 2012

The licenses in Portugal are all exploration contracts with exploration commitments but not environmental liabilities attached to any of the contracts.  These licenses have duration of 2+1+1+1 years with the Covas exploration license being extended for 1 additional year.  In addition, all the licenses have a 3% NSR attached which may be negotiated downwards in certain instances.  

The governing body for Portugal is the Direcao-Geral de Energia e Geologia (“DGEG”).  Typically, from application to issuance of licenses, it takes anywhere from 6-12 months, depending on the government’s ability and efficiency to check the application area for competitive application bids, various liabilities (local or regional, political, and/or technical), and anything that might obstruct exploration progress.  Often the wait for issuance depends on the prior activities and obligations of the responsible government officials, and the desire to make a public showing of the signing ceremony which advertises investment into Portugal.  The Company has experienced a couple of delays due to the change of the political party in power where the Company had to wait for a new minister to be selected, and therefore his/her involvement in the signing ceremony

Despite some exploration properties located on sites with historical operations, the Company does not have any potential environmental liabilities associated these properties.

The Company views that the other licenses are not material at this stage.  The Company’s goal is to provide some exploration work on them and joint venture them out.

For all its quality control procedures associated with the Company’s sampling data, the Company inserts a variety of control samples into all of its sample shipments.  These controls are blanks, sulfide or oxide Au standards (depending on the host material), field duplicates, and occasionally preparation duplicates, if the situation warrants.  The Company inserts these samples at a rate of about 1 in every 8 samples.  For the Alvalade JV, the Company inserts copper standards and other blanks, provided by its JV partner.  The average insertion rate for the Alvalade JV is about 1 in every 5 samples.  The laboratory does its own QA/QC prior to sending the Company the certified analyses.  The Company gets a certified QA/QC sheet, as well, from the lab.  Finally, the Company controls the certified results, with an eyeball check and in the Alvalade JV, a final computer check.  The Company uses ALS Chemex, based in Vancouver, Canada for the final analyses.  Samples from Portugal are prepped in the Seville, Spain prep facility.  Samples from Germany and Kosovo are prepped in the Rosia Montana, Romania facility.  All splits and pulps needed for analyses are then sent to Vancouver, Canada.

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Alvalade JV Project with Antofagasta (including Alvalade, Caveira and Ferreira do Alentejo)

Acquisition and Location

On June 6, 2011, the Company announced that it signed a Memorandum of Understanding (“MOU”) with Antofagasta Minerals S.A. (“Antofagasta”) to undertake exploration for copper-zinc massive sulfide deposits on the Alvalade project.

The agreement covers three Avrupa licenses:  Alvalade, Canal Caveira, and Ferriera do Alentejo. The formerly operating Lousal and Caveira copper mines are located within the 1,000 square kilometer project area.  Antofagasta completed a US$300,000 Initial Study of the project, which included acquisition of much of the remaining historic data, re-logging of selected drill holes, systematic sampling, and integrated geological and geophysical interpretation of the targeted areas.  

The Alvalade Joint Venture is easily accessed by both paved and unpaved roads.  Regional two to four lane paved roads cross the license block east to west and north to south.  Secondary and Tertiary roads form a network that allows access to much of the JV area.  A railroad line, which is used to transport copper and zinc concentrates from the Neves Corvo Mine to the port of Setubal passes through the Lousal-Alvalade and Canal Caveira licenses.  Several large towns, including Grandola, Ferreira do Alentejo, Castro Verde, and Aljustrel lie within or just outside of the borders of the license block.  Electric power lines are ubiquitous, and a number of year-round rivers cross the license area, the main one being the Sado River.

Rocks in the area include Devonian sediments, volcanic sediments, felsic sub-volcanic domes, and mafic diabase-like rocks form the package of target rocks in the area that potentially host copper- and zinc-bearing massive sulfide deposits.  These are often covered by younger Carboniferous clastic sediments and turbidites.  About 75% of the license block is covered by Tertiary sediments and/or Quarternary gravels.  The Devonian target rocks, form a unit that is traceable from south of Lisbon, Portugal to near Seville, Spain, which is the Iberian Pyrite Belt (IPB).  The IPB is host to many massive sulfide and stockwork sulfide deposits, which have a history of mining that dates back to Roman times. 

The Alvalade JV encompasses the Portuguese part of the IPB that lies just north of the regional Messajana Fault.  The giant Aljustrel massive sulfide body lies just to the south of the fault.  Two formerly producing mines, Lousal and Caveira, lie within the property boundaries.  Previous explorers have drilled upwards of 300 holes within the JV area.  However, many of the holes did not penetrate more than a few 10’s of meters into bedrock.  The Company’s compilation and review of the geology and structure of the Alvalade JV licenses indicates the strong possibility of new interpretations for the stratigraphy and the structural framework of the region, allowing for potential discoveries in previously drilled parts of the property block.

As the Alvalade JV license block is considered to be a pure exploration play, there are no development types of facilities or plants at this time.  The Company uses a warehouse for core storage and detailed review of the core, as well as for a small field office.

Exploration History

At the start of the Initial Study, first-pass review of re-processed regional gravity and magnetics covering the Alvalade license led to the identification of up to ten target areas on the potential Alvalade JV property.  The Company has upgraded three of these areas – Aldeia dos Elvas, Monte da Bela Vista, and Azinheira dos Barros – and has defined drill targets in all three areas for the Alvalade Joint Venture.  Four more of the target districts need further detailed examination, while the other four areas have been temporarily downgraded, though will be re-visited at a later date.  Further first-pass review of recently completed re-processing of regional geophysics, covering the entire three-license block (Canal Caveira, Ferreira do Alentejo, and Alvalade licenses), is continuing.  

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On October 19, 2011, the Company announced that work completed to date included re-logging of an additional 31 historic drill holes, collection of approximately 250 more samples from the drill core, re-processing of regional gravity and magnetics data, first-pass selection of specific target areas, including the Azinheira dos Barros and Aldeia dos Elvas locations, detailed re-processing of gravity data for the Aldeia area, and 1:10,000-scale geologic mapping and rock chip sampling at Aldeia and Azinheira.  Integration of geophysical data, geochemical data, and the results of recent surface work in these two districts suggests the potential for multiple drilling targets in both places.

Upon successful completion of the Initial Study, on December 22, 2011 (announced on January 3, 2012), the Company entered into the Alvalade Joint Venture agreement with Antofagasta, whereas the Company granted to Antofagasta the option to acquire an undivided 51% of the project, which can be exercised by Antofagasta funding or incurring expenditures of an additional US$4 million over three years.  After exercise of the first option, Antofagasta will be granted a further option to acquire an additional 24% interest in the project, for an aggregate 75% undivided interest, by completing and delivering a Feasibility Study on the project to the Company within five years.  The Company operates the joint venture through the first option period.

Current and Anticipated Exploration

The Company, along with its JV partner, operates an aggressive exploration program, which includes/ will include drilling of up to 6,000 meters or more in 2012.  This is a “brownfields” exploration program in the vicinity of several old mines and prospects, but there are no known reserves at any of the old mines.  The JV partners have established a program of targeting which aims to test at least 10-12 target areas, by drilling, in 2012.

On February 2, 2012, the Company announced the commencement of exploration work in the Portuguese Pyrite Belt under the Alvalade Joint Venture. The budget for work in 2012 has been increased to US$2.5 million and approved by Antofagasta. The work program includes up to 6,000 meters of drilling on various targets in the 1,000 km ² project area.  Most of the targets are buried under recent gravels and unconsolidated sedimentary rocks of Tertiary to Quarternary age.  Detailed geological mapping, sampling, re-logging of old core, and re-interpretation of historical geophysical data will be utilized to create a subsurface targeting program.

Marateca

Acquisition

In its acquisition of MAEPA, the Company allocated all of its acquisition cost to the Marateca project as it had been the subject of the NI 43-101 compliant report.

Exploration History

On August 23, 2011, the Company provided an update for the ongoing Marateca drill project in the Pyrite Belt of southern Portugal.  Four holes were completed, though two of these holes did not reach target depth due to difficult drilling conditions in fault zones and silicified rock units.  Avrupa commenced the drilling in the Serrinha District on the Marateca license in late 2010 with a planned 3-hole, 1300-meter campaign to upgrade the understanding of two classic massive sulfide targets (São Martinho and Monte de Volta) and one stockwork sulfide target (Serrinha).  

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The following table details the final status of each hole.  

The São Martinho hole was originally drilled to 333.60 meters, before being lost due to difficult drilling conditions.  However, the hole was cleaned out and cased to depth, and the Company continued coring towards the geophysical target which lies at a depth of 375-450 meters.  Eventually, the hole was again lost in a wide fault zone at 400 meters, without reaching target stratigraphy.

Drilling at the Monte de Volta target halted above the target zone due to inability to penetrate further.  Avrupa decided not to attempt to re-drill the hole during the 2011 field season.  No decision has been made as to when and how to re-drill either the São Martinho target or the Monte de Volta target.

Avrupa re-drilled the upper portions of the Serrinha hole to collect better samples of the zone of strong alteration and possible mineralization, located at 135.82-184.30 meters in SE 11-01.  A fine grained (-80 mesh), pyrite-rich sludge sample that was collected from a potentially mineralized zone, located at 156.80-168.10 meters in SE 11-01, ran 263 ppm silver, 993 ppm copper, 997 ppm tungsten, and 358 ppm zinc.  The coarse fraction of the same sample ran 80.7 ppm silver and 1060 ppm tungsten.  Core recovery from this interval was less than 5%, and thus the Company collared SE 11-01A, about 10 meters to the southeast of SE 11-01.

The drill results were announced on the August 23, 2011’s news release.  Based on the geochemical results, detailed core logging, and physical appearance of the sludge samples in zones of poor core recovery, it appears that the Serrinha holes intersected a zone of stockwork quartz-pyrite mineralization hosted by strongly altered felsic volcanic rocks.  

Current and Anticipated Exploration

The Company plans to further evaluate the remainder of the Marateca license, and offer it for joint venture to a larger, mining-oriented company, according to the prospect generator business model.  The Company has identified a number of other target areas with potentially mineral-hosting rock formations, consistent with other target areas in the Iberian Pyrite Belt of Portugal.  Work will include detailed mapping, sampling, and target upgrade to drill-ready status.  Known target areas provide potential to discover base metal-bearing massive sulfide systems.

Covas

Location

The Covas tungsten deposit is a ring of tungsten-bearing pyrrhotite skarns that surrounds a 3 kilometer by 2 kilometer presumed buried multiple-intrusion complex, called the Covas Dome.  

Exploration History

Previous operators drilled nearly 27,000 meters in 329 drill holes, and Union Carbide, the last major explorer in the district, developed a non 43-101 compliant historic resource of 922,900 thousand metric tonnes @ 0.78% WO ₃ at

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Covas.  Information about the historic Covas tungsten resource comes from NI 43-101 technical report entitled “Covas Tungsten Deposit”, written for Wega Mining ASA by B.J. Price, P. Geo., in 2007.  The historical estimates here might have also used categories that are different from the categories in the National Instrument 43-101. The Company has not completed sufficient work recently to validate the information, although it is considered to be reliable and relevant.  Despite the large amount of drilling, the skarn ring has only been about 40% explored, and only cursory work has been completed in the Dome area.

Joint Venture

On May 18, 2011, the Company announced the signing of an agreement to option out the Covas tungsten project to Blackheath Resources Inc. (“Blackheath”). Under the terms of the agreement, Blackheath has the option to earn a 51% interest in the project by spending € 300,000 in exploration on the project before March 20, 2013, of which € 150,000 is a firm commitment and must be spent by March 20, 2012. Blackheath can then earn an additional 19% by spending a further € 700,000 for a total interest of 70% for total expenditures of € 1,000,000, by March 20, 2014.  Blackheath can also earn another 15% for a total interest of 85% by completing a pre-feasibility study (as defined by NI 43-101 regulations) on the property by March 20, 2016.

During the year ended December 31, 2011, Blackheath completed the € 150,000 exploration commitment by incurring € 26,127 directly, reimbursing € 64,687 for MAEPA ’ s exploration expenses and advancing € 59,186 to the Company for future exploration work.

Current and Anticipated Exploration

On July 12, 2011, the Company announced the results of geological mapping, sampling, and drill targeting in the Covas Dome portion of the Covas W-Au project under the work program funded by Blackheath.  The most important result of the work by senior American-based consultant Bill Fuchs, Ph.D., C.P.G., of SFM Micro is the identification of a significant Reduced Intrusion-Related Gold (RIRG) target in the Covas Dome area.  The target area lies along a pronounced east-west trending magnetic lineament and presumed structural zone that, at present, measures +900 meters in length by an average of 100 meters in width.  The anomalous zone, generally located in an area of thick vegetation and lack of outcrop, is open-ended to both east and west.

The target zone is defined by the occurrence of quartz veining and mild to occasionally moderate development of gossan in and around the veining.  Quartz veins contain arsenopyrite and pyrite and/or oxidized versions of arsenic-bearing sulfides.  In addition, there is a quartz-muscovite greisen breccia blowout located in the same trend area.  The geochemical signature of the rock sampling results is similar to other RIRG’s found in the Tintina Gold Belt of the US and Canada.  See the Company’s news release on July 12, 2011 for the sampling results.

In addition to the discovery of the previously-unknown gold potential at Covas, this season’s work, combined with earlier work completed in 2009, has delineated and upgraded a total of 17 tungsten and now gold targets lying in the Covas Dome and the Skarn Ring prospect areas.  Further work, including trenching and several drill holes, will be planned for later in the year after Blackheath has completed its TSXV listing obligations and fund-raising program.

On March 27, 2012, the Company announced that the Government of Portugal has approved and signed a one-year extension to the Covas W-Au exploration license. The permit will be valid until March 20, 2013, and requires a work investment of € 500,000, including up to 2,100 meters of drilling, to fulfill all exploration commitments. Work will include more detailed review of recently-discover gold anomalies, follow-up ground geophysical work to cover the gold targets, possibly trenching, and finally drilling.  

If Blackheath drops the option, then the Company will drop the property due to insufficient mineral potential.  At the moment, Blackheath is planning to move full speed ahead to make the second earn-in of an additional € 700,000, for a total of € 1 million.  The Company and Blackheath are planning a drilling program that will start in the fall, and is budgeted at about € 425,000, which will put the Company over the spending level required by the government.

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Other Portugal Properties

The Company is also actively exploring in other parts of the country, using its experience-amassed database to review old prospects and districts from new angles and to develop wholly new generative ideas.  

The Company has a number of new exploration licenses covering attractive areas around the country.  There are also several applications in early-stage processing at the Portuguese Mining Bureau.

Aljesur

The Aljesur exploration license covers 270 square kilometers of land in southwestern Portugal with the target being potential REE and precious metal mineralization related to an alkalic intrusion complex.  Copper and zinc stream sediment anomalies from previously-undertaken sampling bracket the western and southwestern margins of the intrusion complex.  Analysis for gold in these samples was never requested.  In addition, several academic studies of the intrusion from the 1970’s thorough 1990’s note the presence of elevated values of rare earth elements.  Near-term work will include first-pass reconnaissance-style geological mapping, prospecting, and sample collection.  Little work has been completed in this area in the past.  The Company plans to upgrade the property to a point where a decision can be made, as to whether the property will be suitable for joint venture or should be returned to the government of Portugal.

Alvito

The Alvito exploration license covers 988 square kilometers of prospectable land straddling the northeastern margin of the Pyrite Belt, adjacent to the Marateca license, and the Ossa Morena zone of southern Portugal.  There has been some scattered exploration in the lands covered by the permit, but the Company expects to undertake the initial systematic grassroots program in the region for possible porphyry copper and gold mineralization.  The license area also covers extensions of several target areas from the Company’s Marateca license, lying immediately to the west of Alvito.  There has been a moderate amount of previous work, which has been documented and archived by the Portuguese geological survey.  The Company is in the process of obtaining the relevant data and will continue to construct an exploration database, while performing reconnaissance-style exploration mapping, sampling, and prospecting.  The goal of the planned first-pass work is to evaluate known targets for prospectivity, delineate new targets, and attempt to form a regional-style joint venture program with a medium to large sized mining company to explore for and develop porphyry copper and gold projects.

Arga

The Arga license, covering 28.4 square kilometers, is located in northwestern Portugal, adjacent to the south of the Company’s Covas tungsten property.  The Arga area has seen previous mapping and sampling, but no drilling.  The property covers gold-silver-arsenic-bearing quartz vein swarms spatially related to a granitic intrusion complex.  The regional structure that controls location of the Covas tungsten deposit also localizes the Arga vein systems.  The Company has obtained data from previous work in the property area, and is presently in the process of evaluating and upgrading potential target areas with the license.  Following the compilation of all the known data, the Company will further evaluate significant field targets, for the potential to be drilled.  Once drill targets have been delineated, the Company will attempt to form an advanced exploration joint venture.  According to the agreement with Blackheath Resources, that company will have the first right of refusal to make a JV at the Arga property.

The Company will commence regional-style first pass reconnaissance exploration during the 2012 field season begins in earnest.  There are already known areas of interest on all three potential properties, and the Company will also concentrate in these places, during the initial work.  The goal of the exploration programs on these licenses will be to upgrade the projects to an interest level where they can be considered for single-target or strategic joint ventures with larger companies.

At Arga, there is known surface mineralization that has never been drill-tested, and could possibly be drilled in 2012.  At Alvito, the Company will attempt to open up a whole new potential mineral exploration area, with the intent of attracting larger mining companies into the area, as potential JV partners, at an early stage of regional exploration.

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The Company continues to actively pursue other possibilities around the country and look for potential JV partners.

Kosovo

The Company through its subsidiary Innomatik Exploration Kosovo (IEK) has been advancing its prospects in Kosovo towards JV-ready status.  The Company is actively searching in Europe and North America for suitable strategic partners to advance the Kosovo program.

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The Company’s Kosovo exploration team has long-term experience with the democratically-elected Kosovo government, with the United Nations and European Union administrators of the pre-independent country, and with the metallogeny and mineral deposits of the region.  The Company is currently the most active metals’ exploration group in Kosovo.  There has been little modern, systematic exploration performed in Kosovo to date, leaving an opportunity for successful prospect and project generation. The Company continues to upgrade its two projects at Kamenica and Glavej, and has identified three other prospective areas covered by the Bajgora, Selac, Koritnik and Slivovo exploration licenses.

All of the Company’s Kosovo properties have outcropping base metal mineralization and/or significant alteration zones.  Most of the targets have not been previously drilled and have old workings of perhaps Roman and certainly Saxon age, to possibly early 20th century age in a number of locales.

The Company’s licenses in Kosovo all have work expenditure commitments and are valid for three years, with a two-year renewal possible (which coincides with a 50% reduction in size of the license).  Licenses have a variable 4.5-5% NSR.  There is a lobbying effort to change this level, in order to attract further investment into the country.  The Company has no environmental liabilities attached to its licenses there.  The governing body for licensing is the Independent Commission for Mines and Minerals (“ICMM”).  Once an application is made and all required documents are attached, ICMM is required to respond (positively or negatively) within 3 months of the date of application.  The Company has experienced only one exception to this, in the granting of the Slivovo license, but through all proper channels, the Company received the license after about 5 months of delay.

Despite some exploration properties located on sites with historical operations, the Company does not have any potential environmental liabilities associated these properties.

The Company views that the licenses in Kosovo are not material at this stage.  The Company’s goal is to provide some exploration work on them and joint venture them out.

Kamenica

The Kamenica license was renewed for two years under the new Mining Law.  The size of the license was reduced by 50% to approximately 45 km 2 .  Targets in the Kamenica license are located 2 to 5 kilometers, along strike, from the historic Artana (Novo Brdo) silver/lead/zinc/gold mine.  The Artana Mine has operated intermittently since Saxon times in the 12th to 14th centuries.  According to recently-acquired UNMIK (United Nations Mission in Kosovo) information, in modern times the Artana Mine has produced 4-5 million metric tonnes of +10% Pb and Zn, 140 g/t Ag, and 1 g/t Au, over its still-continuing operation.  Production information was compiled during UNMIK (United Nations Mission in Kosovo) administration of Trepça Mines after the war in Kosovo.  The historic production information for the Artana Mine is non - NI 43-101 – compliant, though Avrupa is of the opinion that the information is accurate with respect to available production records.

On February 14, 2012, the Company announced that it completed an initial round of exploratory drilling in late 2011 on the Kamenica license.  Two core holes, totaling 382.6 meters, were completed at two separate targets located about three kilometers apart.  The most interesting of the two holes, at the Metovic target, intercepted multiple generations of visible Fe-Zn-Pb sulfide mineralization in pervasive disseminations and stockwork quartz veining, hosted by strongly altered, calcareous silt and sandstones over the entire 193.3-meter length of the hole.  The hole bottomed in altered quartz diorite porphyry and brecciated quartz diorite containing fragments of the porphyry.  The widespread anomalous sulfide mineralization and strong alteration may indicate the presence of a possible large porphyry-style system within the Kamenica license.

The second hole, at the Grbes target, encountered pyritic gneisses from close to the surface to 120 meters depth, followed by sooty, pyritic black shales and graphitic schists to the bottom of the hole at 189.3 meters.  These strongly altered rock units do not appear at the surface, and are of an older Vardar formation that has been uplifted in this portion of the exploration area.  Further work is necessary to assist in targeting for a possible large mineral system.

Glavej

The Glavej license was also renewed for two years under the new 2010 Kosovo Mining Law.  The size of the license was reduced by 50%, according to the law, to 8.1 km2.  The license lies close to the historic, and presently producing,

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Stan Terg base metal mine, which has operated intermittently for more than 1,000 years, and has reportedly produced more than 35 million metric tonnes of +10% Pb and Zn, and 80 g/t Ag.  Production information was compiled during UNMIK (United Nations Mission in Kosovo) administration of Trepça Mines after the war in Kosovo.  The historic production information for the Stan Terg Mine is non - NI 43-101 – compliant, though Avrupa is of the opinion that the information is accurate with respect to available production records.  

On February 14, 2012, Avrupa announced that it completed a third hole late in 2011 at the Hazelnut Hill target on the Glavej exploration license.  The hole intersected iron oxide-rich massive silica and silica breccia over the entire length of the hole to a depth of 139 meters.  Anomalous base metal mineralization was present at the very bottom of the hole.  Difficult drilling conditions and winter weather curtailed the drill hole before reaching total planned depth.

Other Kosovo Properties

The Company is also actively exploring in other parts of the country.

Bajgora

The Bajgora property, originally 76.5 km2 in size, is also located near the Stan Terg Mine in northern Kosovo.  The prospect area was originally located by identifying obvious NW-trending Vardar structures intersecting with NE-trending ring shaped volcanic centers and associated caldera migration features.  From the metallogenic map of Kosovo, the Company’s geologists recognized the presence of several reported mercury prospects, and then field-checked a lone gold anomaly generated from a regional stream sediment sampling program produced by the Kosovo government.  The Company’s own property-wide stream sediment sampling, reconnaissance-style geological mapping, and general prospecting work delineated an approximately 18 km2 area for further interest and follow-up work.  During Q4 of 2011, Avrupa applied to the Mining Bureau of Kosovo to reduce the size of the license, in order to better concentrate on the favorable area.  The reduction was approved during Q2 2012 and the size of the license now stands at 17.2 km2.

Selac

The Selac Ag-Pb-Zn property is located 45-50 kilometers NNW of the capital Prishtine.  The three-year license lies 5-10 kilometers north of the historic, and presently producing, Stan Terg base metal mine.  The property covers an area with high potential for identification of new base and precious metal targets.  Of immediate interest on the Selac license is the northerly extension of the Pogledalo geological-geochemical-geophysical anomaly, first observed on the Glavej license.  Detailed geological mapping and sampling of a 4-6 km2 area of alteration and silicification was completed in Q4.  Results of this work indicate several potential drill targets, and follow-up surface work verified the potential of these targets.

Koritnik

On February 14, 2012, the Company announced the acquisition of the Koritnik porphyry Cu-Au exploration license in southern Kosovo. The permit covers approximately 76 km2 of copper and gold stream sediment anomalies draining the Sharr-Dragash intrusion complex and surrounding lands.

Slivovo

The Slivovo license, covering 15.2 km2, was issued to the Company on June 27, 2012.  The company plans surface exploration for precious and base metal mineralization related to Vardar structures similar to the mineralization found at the nearby Artana Mine, presently operated by the Kosovo state mining company.

With six licenses in hand, and all containing surface base and/or precious metal mineralization, the Company is poised to attract JV partners in a regional-style exploration program, anchored by advanced greenfields exploration projects at Kamenica, Glavej and Selac, and by attractive exploration prospects at Bajgora, Koritnik and Slivovo.  The Company is continuing to explore for additional attractive prospects in Kosovo, concentrating on potential copper and gold possibilities.  The Company is actively searching for suitable partners in both North America and Europe. First-pass work on all of the properties has, or will include, stream sediment sampling, rock chip sampling, and reconnaissance-style geological mapping and prospecting.  The Kamenica, Glavej, and Selac licenses all have drill-ready targets.

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Germany

Oelsnitz

On January 23, 2012, the Company announced the signing of a Memorandum of Understanding (“MOU”) with Beak Consultants GmbH (“Beak”) to explore for gold deposits in the Erzgebirge mining district near Oelsnitz in the Free State of Saxony in eastern Germany. The Company must spend € 140,000 for exploration purpose to gain 85% of Oelsnitz Exploration License, which was issued to Beak on January 12, 2012. The license covers 307.2 square kilometers and has been issued for gold, silver, tin, tungsten, molybdenum, copper, lead, zinc, tellurium, barite and fluorite. The license is valid until March 2013, and renewable upon proof of continued exploration activities.  There is no royalty attached to the license.  Once the Company has earned into the project, the two companies will form a joint venture to explore for gold on the property. Initial work will include property-wide stream sediment sampling, reconnaissance-style mapping and prospecting, and compilation of a large amount of old, but scattered data.  The goal of the company is to explore for and find gold targets related to the emplacement of large granitic intrusions.  Previous work has not, at all, been dedicated to gold exploration in this region, and the Company probably the first group to do so.

This exploration license was granted through the mining bureau of the Free State of Saxony, called the Sachsisches Oberbergamt.  The Company received this license in approximately 6 months after application.

The Company views that the license in Germany is not material at this stage.  

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All the exploration programs identified above will be carried out by the Company, along with its joint venture partners.  The exploration programs will be funded by JV partners’ funding and equity financing, and depending on the cash position of the Company, certain of its exploration programs might be modified.