UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 20-F
MAY 30, 2007
SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d) OF THE ACT. | ||||||||||||||||
None | ||||||||||||||||
(TITLE OF CLASS) | ||||||||||||||||
INDICATE THE NUMBER OF OUTSTANDING SHARES OF EACH OF THE ISSUER’S CLASSES OF CAPITAL OR COMMON SHARES AS OF THE CLOSE OF THE PERIOD COVERED BY THE ANNUAL REPORT. | ||||||||||||||||
17,986,953Shares | ||||||||||||||||
Indicate by check mark whether the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act. | ||||||||||||||||
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| NO | X |
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If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. | ||||||||||||||||
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Note – Checking the box above will not relieve any registrant required to filed reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. | ||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ||||||||||||||||
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one): | ||||||||||||||||
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Large accelerated filer | Accelerated filer | Non-accelerated filer | X | |||||||||||||
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Indicate by check mark which financial statement item the registrant has elected to follow. | ||||||||||||||||
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If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of this Exchange Act). | ||||||||||||||||
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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) | ||||||||||||||||
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Indicate by check mark whether the registrant has filed all documents and reports to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. | ||||||||||||||||
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TABLE OF CONTENTS
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GLOSSARY | 5 |
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PART I |
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ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS | 8 |
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE | 8 |
ITEM 3. KEY INFORMATION | 8 |
A. Selected Financial Data | 8 |
B. Capitalization and Indebtedness | 9 |
C. Reasons for the Offer and Use of Proceeds | 9 |
D. Risk Factors | 9 |
ITEM 4. INFORMATION ON THE COMPANY | 13 |
A. History and Development of the Company | 13 |
B. Business of the Company | 14 |
C. Organizational Structure | 14 |
D. Property, Plants, and Equipment | 14 |
1. Bancroft Uranium Properties, Bancroft, Ontario | 14 |
2. Bathurst Property, Bathhurst, New Brunswick | 31 |
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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 105 |
A. Operating Results | 105 |
Twelve months ended January 31, 2007 Compared to Twelve Months Ended January |
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31, 2006 | 107 |
Twelve months ended January 31, 2006 Compared to Twelve Months Ended January |
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31, 2005 | 107 |
Twelve months ended January 31, 2005 Compared to Twelve Months Ended January |
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31, 2004 | 107 |
B. Liquidity and Capital Reserves | 107 |
Twelve months ended January 31, 2007 Compared to Twelve Months Ended January |
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31, 2006 | 107 |
Twelve months ended January 31, 2006 Compared to Twelve Months Ended January |
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31, 2005 | 107 |
Twelve months ended January 31, 2005 Compared to Twelve Months Ended January |
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31, 2004 | 107 |
C. Research and Development, Patents and Licenses, etc. | 107 |
D. Trend Information | 107 |
E. Off-Balance Sheet Arrangements | 107 |
F. Tabular Disclosure of Contractual Obligations | 108 |
G. Safe Harbour | 108 |
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 109 |
A. Directors, Senior Management | 109 |
B. Compensation | 111 |
C. Board Practices | 115 |
D. Employees | 117 |
E. Share Ownership | 117 |
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 120 |
A. Major Shareholders | 120 |
B. Related Party Transactions | 120 |
C. Interests of Experts and Counsel | 120 |
ITEM 8. FINANCIAL INFORMATION | 121 |
A. Consolidated Statements and Other Financial Information | 121 |
B. Significant Changes | 121 |
ITEM 9. THE OFFER AND LISTING | 121 |
A. Offer and Listing Details | 121 |
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B. Plan of Distribution | 123 |
C. Markets | 123 |
D. Selling Shareholders | 123 |
E. Dilution | 123 |
F. Expense of the Issue | 123 |
ITEM 10. ADDITIONAL INFORMATION | 123 |
A. Share Capital | 123 |
B. Memorandum and Articles of Association | 124 |
C. Material Contracts | 124 |
D. Exchange Controls | 124 |
E. Taxation | 124 |
F. Dividends and Paying Agents | 131 |
G. Statements by Experts | 131 |
H. Documents on Display | 131 |
I. Subsidiary Information | 131 |
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK | 131 |
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PART II |
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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 132 |
ITEM 13. DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES | 132 |
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 132 |
ITEM 15. CONTROLS AND PROCEDURES | 132 |
ITEM 16. (RESERVED) | 133 |
ITEM 16A. AUDIT COMMITTEE FINANCIAL REPORT | 133 |
Charter of the Audit Committee of the Board of Directors | 133 |
ITEM 16B. CODE OF ETHICS | 136 |
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES | 136 |
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | 136 |
ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 136 |
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PART III |
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ITEM 17. FINANCIAL STATEMENTS | 136 |
ITEM 18. FINANCIAL STATEMENTS | 136 |
ITEM 19. EXHIBITS | 137 |
A. Financial Statements | 137 |
B. Exhibits | 137 |
SIGNATURES | 138 |
Exhibit 1 – Certificate of CEO and CFO Pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
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Exhibit 2 – Certification of CEO Pursuant to 18 USC Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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Exhibit 3 – Certification of CFO Pursuant to 18 USC Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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Exhibit 4 – Code of Business Conduct and Ethics |
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Exhibit 5 – Certificate of Ethics for the Chief Executive Officer and the Chief Financial Officer |
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GLOSSARY
The following are abbreviations and definitions of terms commonly used in the mining industry and this Annual Report.
Adit | A horizontal passage or tunnel that leads from the surface into an underground working. |
Anomaly | Any departure from the norm, which may indicate the presence of mineralization in the underlying bedrock. |
Assay | A chemical test performed on a sample of ores or core to determine the amount of valuable metals contained. |
Assessments | The amount of work, specified by mining law, that must be performed each year in order to retain legal control of mining claims. |
Breccia | A rock in which angular fragments are surrounded by a mass of fine-grained materials. |
Channel Sample | A sample composed of pieces of vein or mineral deposit that have been cut out of a small trench or channel, usually about 10 cm wide and 2 cm deep. |
Chip Sample | A method of sampling a rock exposure whereby a regular series of small chips of rock is broken off along a line across the face. |
Claim | Area on which the holder usually has the right to carry out mineral exploration and apply to mine on the located area. |
Diamond Drill | A rotary type of rock drill that cuts a core of rock that is recovered in long cylindrical sections, two cm or more in diameter. |
Diorite | An intrusive igneous rock composed chiefly of plagioclase, hornblende, biotite or pyroxene. |
Dyke | A long mass of eruptive rock, a dyke (vein) may consist of mineral deposits located between other rocks. |
EM Survey | A geophysical survey method which measures the electromagnetic properties of rocks. |
Fault | Fracture in the earth’s crust, along which there has been displacement of the sides relative to one another parallel to the fracture. |
Geophysics/ Geophysical Surveys | Study of the various physical properties of the earth and the composition and movement of its component layers of rock. Geophysics is applied to mining exploration to detect zones characterized by their physical properties such as magnetism, gravity or conductivity (electromagnetism). |
Gneiss | Layered granite-like rock. |
Grab Samples | A sample of rock taken more or less indiscriminately in any place. |
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Granite | A coarse-grained intrusive igneous rock consisting of quartz, feldspar and mica. |
Grenville | The youngest portion of the Canadian Shield, consisting of rocks ranging from 1.76 billion to 1 billion years in age, extending from Philadelphia and New York City to Labrador. It hosts gold, industrial minerals, building stone, iron, lead, zinc, and uranium. |
Kimberlite | A blue-grey igneous rock which contains olivine, serpentine, calcite and silica. |
Leach | To dissolve from a rock. For example, when acidic water passes through fractured rocks, soluble minerals leach, or dissolve, from the rocks. |
Mafic | Igneous rocks with dark minerals. |
Metamorphism | Changes over time in the composition and structure of rocks caused by pressure and temperature. |
Mineralization | The concentration of metals and their chemical compounds within a body of rock. |
Mo | The chemical symbol for molybdenum. |
NSR | Net Smelter Royalty. |
Ore | A natural aggregate of one or more minerals, which at a specified time and place, may be mined and sold at a profit, or which from some part may be profitably separated. |
Pegmatite | A coarse-grained igneous rock with exceptionally large crystals, formed from a magma that contains a high proportion of water. |
Proterozoic | Period of time in earth’s history between 2.5 billion years ago and 544 million years ago. |
Pyroxene | A common group of minerals characterized by short stout crystals and good prismatic cleavage in two directions. |
Radiometric | The science of radiation measurement. The detection and measurement of radiant energy, either as separate wavelengths or integrated over a broad wavelength band, and the interaction of radiation with matter in such ways as absorption, reflectance and emission |
Sample | A small portion of rock or a mineral deposit taken so that the metal content can be determined by assaying. |
Schist | A strongly foliated rock with concentrations of medium to coarse grained mica flakes along the folia, which represents advanced regional metamorphism. |
Scintillometer | An instrument for measuring radioactivity, based on emission of light by certain crystals under impact of gamma rays. |
Showing | An indication of mineralization, the extent and economic value of which are unknown. |
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Southern Shield | The Southern Province is the portion of the Canadian Shield which comprises a variety of Proterozoic rocks that either rest unconformably on, or intrude into, the older rocks of the surrounding Superior Province, and which are found around the Lake Superior Basin. It hosts gold, silver, uranium, copper, industrial minerals, and kimberlite. |
Sphalerite | A zinc sulphide. |
Strike | The coarse or bearing of a bed or layer of rock. |
Tailings | Material rejected from a mill after most of the recoverable valuable minerals have been extracted. |
ThO2 | The chemical symbol for thorium. |
U3O8 | The chemical symbol for uranium. |
Uraninite | A mineral consisting of uranium oxide and trace amounts of radium and thorium and polonium and lead and helium; uraninite in massive form is called pitchblende which is the chief uranium ore. |
Vein | A fissure, fault or crack in a rock filled by minerals that have traveled upwards from some deep source. |
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PART I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
ITEM 3.
KEY INFORMATION
A.
Selected Financial Data
The Company has a limited history of operations and has not generated any operating revenues in the period. The following table sets forth, for the periods and the dates indicated, selected financial and operating data for the Company. This information should be read in conjunction with the Company's Financial Statements and Notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere herein. The selected financial data provided below are not necessarily indicative of the future results of operations or financial performance of the Company. To date the Company has not paid any dividends on the Common Shares and it does not expect to pay dividends in the foreseeable future.
The Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”). There are differences between Canadian GAAP and the accounting principles that are generally accepted in the United States (“U.S. GAAP”) as applied to the Company including disclosure items. For a comparison of these differences, refer to Note 12 to the Financial Statements.
SELECTED FINANCIAL DATA
CANADIAN GAAP
(IN CANADIAN DOLLARS)
Selected Financial Data for the Year Ended January 31
| 2007 | 2006 | 2005 | 2004 | 2003 |
Cash | 170,177 | 279,567 | 113,448 | 31,818 | 28,485 |
Project advances | 457,547 | - | - | - | - |
Total Assets | 3,389,941 | 284,220 | 120,569 | 33,000 | 29,679 |
Current Liability | 87,331 | 16,838 | 49,073 | 19,673 | 52,838 |
Total Administrative Expenses | 1,148,715 | 105,203 | 89,136 | 124,491 | 81,714 |
Exploration Expenses | 1,879,167 | 153,362 | 63,481 | 2,539 | 4,831 |
Net Loss | 2,973,538 | 240,864 | 152,881 | 127,030 | 86,545 |
Deficit | 6,370,065 | 3,396,527 | 3,155,663 | 3,002,782 | 2,875,752 |
Weighted Avg # Shares | 13,072,409 | 6,521,086 | 4,665,436 | 3,535,930 | 3,071,546 |
Basic Earnings (loss) per share | (0.23) | (0.04) | (0.03) | (0.04) | (0.03) |
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SELECTED FINANCIAL DATA
US GAAP
(IN CANADIAN DOLLARS)
Selected Financial Data for the Year Ended January 31
| 2007 | 2006 | 2005 | 2004 | 2003 |
Cash | 170,177 | 279,567 | 113,448 | 31,818 | 28,485 |
Project Advances | 457,547 | - | - | - | - |
Total Assets | 3,472,391 | 284,220 | 120,569 | 33,000 | 29,679 |
Current Liability | 87,331 | 16,838 | 49,073 | 19,673 | 52,838 |
Future Income Tax Liability | 451,544 | - | - | - | - |
Total Administrative Expenses | 1,148,715 | 105,203 | 89,136 | 124,491 | 81,714 |
Exploration Expenses | 1,879,167 | 153,362 | 63,481 | 2,539 | 4,831 |
Net Loss | 2,973,538 | 240,864 | 152,881 | 127,030 | 86,545 |
Other comprehensive income | 82,450 | - | - | - | - |
Comprehensive loss | 2,891,088 | 240,864 | 152,881 | 127,030 | 86,545 |
Deficit | 6,287,615 | 3,397,927 | 3,155,663 | 3,002,782 | 2,875,752 |
Accumulated other comprehensive income | 82,450 | - | - | - | - |
Weighted Avg # Shares | 13,072,409 | 6,521,086 | 4,665,436 | 3,535,930 | 3,071,546 |
Basic Earnings (loss) per share | (0.23) | (0.04) | (0.03) | (0.04) | (0.03) |
B.
Capitalization and Indebtedness
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
C.
Reasons for the Offer and Use of Proceeds
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
D.
Risk Factors
From time to time, the Company may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors including those set forth in this section entitled “Risk Factors of the Company’s Business” could cause the Company’s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements.
Resource exploration is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. There are no commercially viable bodies of mineralization located on any of the properties held by the company at this time. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals , and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.
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(i)
Exploration and Development Risks
Mineral exploration and development involves a high degree of risk and few properties which are explored are ultimately developed into producing mines. There is no assurance that the Company’s mineral exploration activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will be in part directly related to the cost and success of its exploration programs, which may be affected by a number of factors.
Substantial expenditures are required to establish ore reserves through drilling, metallurgical processes to extract the metal from the ore, and in the case of new properties to build the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that the funds required for further expansion can be obtained on a timely basis. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly exploration of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project. Reserves are reported as general indicators of mine life. Reserves should not be interpreted as assurances of mine life or of the profitability of current or future operations. There are currently no reserves on any of the company’s properties.
The Company’s properties are currently being explored or assessed for exploration and as a result, the Company has no source of operating cash flow. The Company has limited financial resources and there is no assurance that if additional funding were needed, that it would be available to the Company on terms and conditions acceptable to it. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and the possible, partial or total loss of the Company’s interest in current properties. The Company presently has sufficient financial resources to undertake all of its currently planned exploration programs. The exploration of any ore deposits found on the Company’s exploration property depends upon the Company’s ability to obtain financing through debt financing, equity financing or other means. There is no assurance that the Com pany will be successful in obtaining the required financing. Failure to obtain additional financing on a timely basis could cause the Company to forfeit its interest in such property and reduce or terminate its operations.
None of the Company’s properties have commenced commercial production and the Company has no history of earnings or cash flow from its operations. As a result there can be no assurance that the Company will be able to generate any of its property profitably or that its activities will generate positive cash flow. The Company has not declared or paid dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The only present source of funds available to the Company is through the sale of its Common Shares. Even if the results of exploration are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists on any property. While the Company may generate additional working capital through the operation, sale or possible joint venture expansi on of its properties, there is no assurance that any such funds will be available for operations.
The foregoing would apply in the event that the Company has reserves at some point in the future.
(ii)
Operating Hazards and Risks
Mineral exploration involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. The Company has no operations. Exploration properties in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, of metals and minerals, such as unusual or unexpected formations, cave-ins, pollution, all of which could result in work stoppages, damage to property, and possible environmental damage. The Company does not have general liability insurance covering its operations and does not presently intend to obtain liability insurance as to such hazards and liabilities. Payment of any liabilities as a result could have a materially adverse effect upon the Company’s financial condition.
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(iii)
Lack of Cash Flow and Non-Availability of Additional Funds
The Company’s property has not commenced commercial production and the Company has no history of earnings or cash flow from its operations. As a result there can be no assurance that the Company will be able to generate any of its properties profitably or that its activities will generate positive cash flow. The only present source of funds available to the Company is through the sale of its Common Shares. Even if the results of exploration are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists on any property. While the Company may generate additional working capital through the operation, development, sale or possible joint venture of its property there is no assurance that any such funds will be available for operations.
(iv)
No Proven Resources
All of the properties in which the Company holds an interest are considered to be in the exploration stage only and do not contain a known body of commercial ore.
(v)
Title Risks
Full investigation of legal title to the property has not been carried out at this time. The Company’s properties consist of recorded mineral claims which have not been surveyed, and therefore the precise area and location of such claims is undefined.
While the Company has reviewed and is satisfied with the title for any claim in which it has a material interest and, to the best of its knowledge, such title is in good standing, there is no guarantee that title to such claim will not be challenged or impugned.
(vi)
Uncertainty or Contestation of Contract Rights
The Company owns or has the right to earn interests in properties under contract with a number of individuals and corporations.
(vii)
Conflicts of Interest
Certain of the directors of the Company are directors of other mineral resource companies, and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In the event that such a conflict of interest arises at a meeting of the directors of the Company, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In appropriate cases the Company will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. From time to time several companies may participate in the acquisition, and exploration of natural resource properties, thereby allowing for their participation in larger programs, pe rmitting involvement in a greater number of programs and reducing financial exposure in respect of any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In accordance with the laws of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interest of the Company. In determining whether the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to the Company, the degree of risk to which the Company may be exposed and its financial position at that time. Other than as indicated, the Company has no other procedures or mechanisms to deal with conflicts of interest. The Company is not aware of the existence of any conflict of interest as described herein.
(viii)
Competition and Agreements with Other Parties
The mineral resources industry is intensely competitive and the Company competes with many companies that have greater financial resources and technical facilities than it. Significant competition exists for the limited number of mineral acquisition opportunities available in the Company’s sphere of operations. As a result of this competition, the Company’s ability to acquire additional attractive mining properties on terms it considers acceptable may be adversely affected.
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The Company may, in the future, be unable to meet its share of costs incurred under agreements to which it is a party and the Company may have its interests in the properties subject to such agreements reduced as a result. Furthermore, if other parties to such agreements do not meet their share of such costs, the Company may be unable to finance the costs required to complete the recommended programs.
(ix)
Fluctuating Mineral Prices
The mining industry in general is intensely competitive and there is no assurance that, even if commercial quantities of mineral resources are developed, a profitable market will exist for the sale of same. Factors beyond the control of the Company may affect the marketability of any minerals discovered. There is no assurance that commodity prices will remain at current levels; significant price movements over short periods of time may be affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically the U.S. dollar relative to other currencies), interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. The effect of these factors on the price of minerals and therefore the economic viability o f any of the Company’s exploration projects cannot accurately be predicted. As the Company is in the exploration stage, the above factors have had no material impact on operations or income.
(x)
Shares Reserved for Future Issuance; Potential Dilution
As of January 31, 2007, the Company had granted, 1,527,642 common shares for issuance upon the exercise of incentive stock options and 7,118,223 common shares for the issuance upon the exercise of warrants. Such common shares represent a potential equity dilution of approximately 48%, based upon the number of outstanding common shares at January 31, 2007, of 17,986,953. Furthermore, the Company may enter into commitments in the future which would require the issuance of additional common shares and may grant additional stock options and/or issue additional warrants. At January 31, 2007 the Company had unlimited authorized but unissued and unreserved common shares. Issuance of additional shares would be subject to Exchange regulatory approval and compliance with applicable securities legislation. The Company currently has no plans to issue common shares other than for the purposes of raising fund s for property acquisition and general working capital requirements which issuance would be subject to Exchange approval.
(xi)
Environmental Regulation
All phases of the Company’s operations are subject to environmental regulations. It is the Company’s belief that if environmental legislation in Canada evolved and required stricter standards and enforcement, in conjunction with increased fines and penalties for non-compliance, including more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees, the cost of compliance therewith may substantially increase and thereby affect the Company’s operations. However, the Company is not aware of any pending environmental litigation or amendments to existing environmental litigation which will affect the Company’s current or prepared operations or which would otherwise have a material adverse effect on the Company or its operations. There is no assurance that future changes in environmental regulation, i f any, will not adversely affect the Company’s operations.
(xii)
Canadian Jurisdictional and Enforceability of Judgments, Risks
The Registrant is a Canadian Company. All of its directors and officers are residents of Canada except one who is a resident of the United Kingdom. As a result, it may be difficult for shareholders resident in the United States to effect service within the United States upon the Registrant, and as such directors, officers or experts who are not residents of the United States, or to realize in the United States upon judgments of courts of the United States predicated upon civil liability or any of the Registrant, such directors or officers under the United States federal securities laws. The Registrant has been advised by its Canadian counsel that there is substantial doubt as to whether Canadian courts would (i) enforce judgments of the United States courts of competent jurisdiction obtained against the Registrant, such directors, or officers predicated upon the civil liabilities provisions of such securities laws or (ii) impose liabilities in original actions against the Registrant or their respective directors and officers predicated solely upon such securities laws. Accordingly, United States shareholders may be forced to bring actions against the Registrant and its respective directors and officers under Canadian law and in Canadian courts in order to enforce any claims that they may have against the Registrant or its directors and officers. Subject to necessary registration under applicable provincial corporate statutes in the case of a corporate shareholder. Canadian courts do not restrict the ability of non-resident persons to sue in their courts.
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(xiii)
Adequate Labour
The Company will depend upon recruiting and maintaining other qualified personnel to staff its operations. The Company believes that such personnel currently are available at reasonable salaries and wages in the geographic areas in which the Company intends to operate. There can be no assurance, however, that such personnel will always be available in the future. In addition, it cannot be predicted whether the labor staffing at any of the Company’s projects will be unionized. The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of its management. The loss of services of any of its management could have a material adverse effect on the Company.
(xiv)
Forward Looking Statements
This document contains forward looking statements concerning the Company’s operations, economic performance and financial condition, including, in particular, the likelihood of the Company’s success in operating as an independent company and expanding its business. These statements are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company, and reflect future business decisions which are subject to change. Some of these assumptions inevitably will not materialize, and unanticipated events will occur which will affect the Company’s future results. All such forward looking statements are qualified by reference to matters discussed under this section entitled “Risk Factors of the Company’s Business”. See Item 5: “Operating and Financial Review and Prospect s”.
ITEM 4.
INFORMATION ON THE COMPANY
A.
History and Development of the Company
El Nino Ventures Inc. ("El Nino," or the "Company") was incorporated under the laws of the Province of British Columbia by registration of its Memorandum and Articles pursuant to the Company Act under the name Triple A Gold Mines Ltd. On February 16, 1989 the name was changed to Westwego Resources Ltd. and on October 2, 1995, the name of the Company was changed to Corum Resource Corp. On May 19, 1999, the shares of the Company were consolidated on a 12 old share for 1 new share basis. After consolidation the authorized number of shares was increased from 1,666,666 (post-consolidation) to 100,000,000 and the name was changed to El Nino Ventures Inc. At January 31, 2007 the Company had unlimited authorized but unissued and unreserved Common Shares.
Its head office and registered and records office is located at 2303 West 41st Avenue, Vancouver, British Columbia V6M 2A3. The Company’s auditors are PricewaterhouseCoopers LLP, Chartered Accountants, Vancouver, British Columbia and the Registrar and Transfer Agent is Computershare Investor Services, 3rd Floor, 510 Burrard Street, Vancouver, British Columbia V6C 3B9.
The Company’s agent in the host country is Incorp Services, Inc., 3155 East Patrick Lane, Suite 1, Las Vegas, NV, 89120-3481.
The Company was also listed on the OTCBB since July 25, 2002 under the trading symbol “ELNOF.” The Company’s common shares trade on the Frankfurt Stock Exchange under the symbol “E7Q”.
The Company is a junior exploration Company focusing on a diversified mineral portfolio. The Company is in the exploration stage and has not generated any revenues from operations.
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B.
Business of the Company
All the mineral properties in which the Company has an interest are currently at the exploration stage. The Company’s primary objective is to explore mineral properties. Its secondary objective is to locate, evaluate and acquire other mineral properties, to finance their exploration and, if warranted, expansion either through equity financing, by way of joint venture or option agreements or through a combination of both. There are currently no quantifiable reserves of any minerals on any of the Company’s properties.
C.
Organizational Structure
The Company is not part of a group.
D.
Property, Plants and Equipment
The Company’s mineral properties and claims are all located in Canada, near Bancroft, Ontario and near Bathurst, New Brunswick. In December, 2005, the Company terminated its option on the Anderson Lake molybdenum property, located in Thunder Bay, Ontario.
1.
BANCROFT URANIUM PROPERTIES, BANCROFT, ONTARIO
In March 2005, the Company entered into 2 option agreements on 8 separate properties, all located near Bancroft, Ontario. The properties total 18 mineral claims and 126 claim units. Detailed claim descriptions are set out below in accordance with their corresponding agreements. The italicized text further below is excerpted from a Report entitled “Summary Report on the Bancroft Option Properties: Faraday, Cardiff and Monmouth Townships, N.T.S. 31-D/16 and 31-E/1, Southern Ontario Mining Division, Ontario, Canada, National Instrument 43-101 (“NI 43-101”) Format, for El Nino Ventures Inc.”, by T.J. Beesley, P.Eng., prepared for the Company following Mr. Beesley’s examination of the properties in May, 2005.
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A.
Silver Crater Property, Bancroft, Ontario, Canada
Ownership
By an agreement dated 9 March 2005, the Company may earn a 100% interest in the Property, which is owned by a third party, for the following consideration:
|
|
| PAYMENTS | SHARES |
| FAIR VALUE |
| EXPLORATION EXPENDITURES |
UPON EXECUTION OF AGREEMENT | (PAID) | $ | 2,500 | - | $ | - | $ | - |
UPON REGULATORY APPROVAL | (ISSUED) | $ | - | 20,000 | $ | 8,000 | $ | - |
ON OR BEFORE DECEMBER 31, 2005 | (INCURRED) | $ | - | - | $ | - | $ | 15,000 |
ON OR BEFORE MARCH 9, 2006 | (PAID/ISSUED) | $ | 5,000 | 10,000 | $ | 4,000 | $ | - |
ON OR BEFORE DECEMBER 31, 2006 | (INCURRED) | $ | - | - | $ | - | $ | 20,000 |
ON OR BEFORE MARCH 9, 2007 | (PAID/ISSUED)* | $ | 5,000 | 10,000 | $ | 4,100 | $ | - |
ON OR BEFORE DECEMBER 31, 2007 |
| $ | - | - | $ | - | $ | 30,000 |
ON OR BEFORE DECEMBER 31, 2008 |
| $ | - | - | $ | - | $ | 40,000 |
|
| $ | 12,500 | 40,000 | $ | 16,100 | $ | 105,000 |
*These paid and issued subsequent to year-end. |
Prior to earning its 100% interest, the Company may joint venture the property upon payment of 40,000 shares or $15,000 to the optionor.
The property is subject to a 3% NSR. The Company has the option to purchase 1% of the total NSR for $250,000.
The Company is required to reimburse the optionors for all related staking costs.
By agreement dated October 23, 2006, the Company optioned its Bancroft properties to CanAm Uranium (formerly Boulder Creek Explorations Inc.) (“CanAm”). Under the terms of this agreement, CanAm may earn a 60% interest in the properties by making a cash payment of CDN $40,000 (paid) and a share payment of 275,000 common shares (received) (fair value $261,250). An additional cash payment of CDN $25,000 (paid) and complete CDN $1,000,000 in exploration expenditures over the next two years. CanAm may earn an additional 20% interest in the properties by issuing a further 300,000 shares and spending an additional CDN $ 1,500,000 in exploration expenditures.
The Company will remain the operator for the first two years of this agreement and will receive a management fee of 10% of exploration expenditures and cash payments of CDN $40,000 for the first year (received) and CDN $20,000 per year thereafter.
Property Title
The Property consists of 31 mineral claim units outside of Bancroft, Ontario, in the Southern Ontario Mining Division.
Property Description and Location
The Silver Crater Property consists of two separate properties, located in the Faraday and Monmouth Townships respectively:
Property Description and Location
-
TheSilver Crater Prospect consists of 12 claim units, in Lots 27 – 30, Con. 15 in Faraday Townships. These claim units are contiguous. This property is approximately 10 km west of Bancroft, Ontario.
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Claim number: | 4201511 |
|
|
These claims are in good standing until January 24, 2008.
-
TheCanadian All Metals Prospectconsists of 19 claim units in Lot 10, Con.9, Lots 5-8 Con. 9, Lots 6-8 + W 3/4 Lot 9, Con. 8 and N 1/2 Lot 9 Con. 9, in Monmouth Township. The claims are contiguous. This property lies approximately 40 km west of Bancroft.
Claim number: | 3006538 | 4201541 | 4201596 | 4201647 |
All of these claims are in good standing until January 24, 2008.
B.
Halo Property, Bancroft, Ontario, Canada
Ownership
By an agreement dated 9 March 2005 and amended 14 April 2005, the Company may earn a 100% interest in the Property, which is owned by a third party, for the following consideration:
|
|
| PAYMENTS | SHARES |
| FAIR VALUE |
| EXPLORATION EXPENDITURES |
UPON EXECUTION OF AGREEMENT | (PAID) | $ | 2,500 | - | $ | - | $ | - |
UPON REGULATORY APPROVAL | (ISSUED) | $ | - | 20,000 | $ | 8,000 | $ | - |
ON OR BEFORE DECEMBER 31, 2005 | (INCURRED) | $ | - | - | $ | - | $ | 15,000 |
ON OR BEFORE MARCH 9, 2006 | (PAID/ISSUED) | $ | 5,000 | 20,000 | $ | 8,000 | $ | - |
ON OR BEFORE DECEMBER 31, 2006 | (INCURRED) | $ | - | - | $ | - | $ | 20,000 |
ON OR BEFORE MARCH 9, 2007 | (PAID/ISSUED)* | $ | 5,000 | 20,000 | $ | 8,200 | $ | - |
ON OR BEFORE DECEMBER 31, 2007 |
| $ | - | - | $ | - | $ | 30,000 |
ON OR BEFORE DECEMBER 31, 2008 |
| $ | - | - | $ | - | $ | 40,000 |
|
| $ | 12,500 | 60,000 | $ | 24,200 | $ | 105,000 |
*These paid and issued subsequent to year-end. |
Prior to earning its 100% interest the Company may joint venture the property upon payment of 40,000 shares or $5,000 to the optionors.
The property is subject to a 3% NSR. The Company has the option to purchase 1% of the total NSR for $250,000.
The Company is required to reimburse the optionor for all related staking costs.
Property Title
The property consists of 95 mineral claim units outside of Bancroft, Ontario, in the Southern Ontario Mining Division.
Property Description and Location
The Halo Property consists of 6 separate properties, all found in the Monmouth and Cardiff Townships, located approximately 30 – 40 km west of the Town of Bancroft.
-
TheHalo Prospect consists of 32 claim units, in Lots 4 - 9, Con. 18, Lots 4 - 9, Con. 16, Lots 6 – 9, Con. 15, in Cardiff Township. The claim units are contiguous.
Claim numbers: | 4201590 | 4201592 | 4201593 |
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These claims are in good standing until December 21, 2007.
-
TheEmpire B Prospect consists of 8 claim units, in Lots 35, Con. 11:Lot A, Lots 1 and 2, Con. 15, in Cardiff Township. The claim units are contiguous, and are located immediately to the west of the Halo Prospect.
Claim numbers: | 4201545 |
|
|
These claims are in good standing until December 22, 2007.
-
TheAmalgamated Rare Earth #2 Prospect consists of 16 claim units, in Lots 17 – 22, Con. 6 and Lots 18 – 19, Con. 5, in Monmouth Township. Two of the claims are contiguous, with the third immediately to the northeast, and are located approximately 5 km southwest of the Empire B Prospect.
Claim numbers: | 4201512 | 4201513 |
|
These claims are in good standing until December 21, 2007.
-
TheSaranacProspect consists of 16 claim units, in N 1/2 Lots 23 and 24, Con. 8, Lot 22, Con. 9, and Lots 23 – 25, Con. 9 & 10, in Monmouth Township. The claim units are adjacent, and located between the Empire B and Amalgamated Rare Earth #2 Properties.
Claim numbers: | 3006545 | 4200835 | 4206607 |
Claim number 3006545 is in good standing until June 3, 2007 and the remaining claims are in good standing until March 3, 2008.
-
TheMcLean-HoganProspect consists of 14 claim units in Lots 8 – 11, Con. 19 and Lots 12-14 Con. 19, in Cardiff Township. The claim units are adjacent, and connect immediately to the north of the Halo Prospect.
Claim numbers: | 3006532 | 3006534 |
|
These claims are in good standing until March 3, 2008.
-
TheCanada Radium Prospect consists of 9 claim units, covering in Lots 6 – 9, Con 12 and N 1/2 Lot 10, Con. 12, in Cardiff Township. The claims are contiguous, and are to the immediate southeast of the Halo Prospect.
Claim numbers: | 3006535 | 3006536 |
|
These claims are in good standing until March 3, 2008.
Accessibility, Climate, Local Resources, Infrastructure and Physiography
All of the Bancroft region properties are accessible by vehicle, and some of the mineral occurrences within the properties are accessible by ATV or by foot. The region is characterized by several small lakes and rivers, and is relatively flat throughout, with elevations ranging from approximately 300 – 450 feet. A railway that runs across Ontario intersects the center of the Canadian All Metals property.
The Climate is relatively temperate, with 4 distinct seasons, typical of the Southern Shield, and is moderated by the proximity to the Great Lakes.
The Bancroft region is located approximately 210 km from Ottawa and 230 km from Toronto. Bancroft has a population of approximately 5,000 people, and that of the wider community of North Hastings County is approximately 12,000. Settlement in the region was based on the logging industry, with cyclical booms in the local mining industry as well. Currently the area is tourism-focused, and is also a cottage destination. The region is easily accessible by major highways and has good transport connections to major centers. The labor force in the region is primarily found in tourism, manufacturing, and lumber-related industries.
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The italicized text below is excerpted from a Report entitled “Summary Report on the Bancroft Option Properties: Faraday, Cardiff and Monmouth Townships, N.T.S. 31-D/16 and 31-E/1, Southern Ontario Mining Division, Ontario, Canada, NI 43-101 Format, for El Nino Ventures Inc.”, by T.J. Beesley, P.Eng., prepared for the Company following Mr. Beesley’s examination of the properties in May, 2005.
Access to the northern part of the Halo property (Lake Zone and Northwest Zone) is by all weather former mine road following on from the Wilberforce road. The Pyroxenite North and South Zones are only accessible by bush traverse, 0.7 km east of the Northwest Zone. The southern part of the Halo Property (Bald Mountain, South, Betafite #1 and #2) is accessed via the Adanac Forest Access Road exiting north from Hwy 118. The McLean-Hogan prospect is not accessible by road and can only be reached by bush traverse northeast from the Halo Northwest and Lake Zones to Cope Creek, a distance of approx. 2 km. The northeast part of the Empire B Zone in Cardiff Twp. is accessed by a 0.5 km traverse southeast from the end of a bush road running east from the Halo Road about 0.5 km past the end of the Wilberforce road. The main Empire B Prospect in Lot 35 Con 11 Monmouth is accessed by exiting north from Hwy.118 onto a secondary road 3.2 km east of the western junction with Hwy. 648 approx. 0.7 km to a sand and gravel pit and then 0.5 km east and north by foot. The Canada Radium Mine is accessed by exiting south from Hwy 118 about 10 km east of the western junction with Hwy 648 on the Cheddar Road. Exit the Cheddar Road left after 300 m and follow a lumber road for 200 m to the old mine site. To access the Saranac prospect take Hwy 118 400 m west of the western intersection with Hwy 648 to the Hadlington Road. Exit south and proceed 2.2 km. The Main Showing East Pegmatite open cut is 200 m east of this point along a bush trail. To access the Canada All Metals property proceed west along Hwy 118 to Tory Hill and take the junction south onto Hwy 503 and proceed 7 km towards Gooderham. On the west side of McCue Creek where it crosses the highway proceed north and east for 2 km along the old railway right of way to a cleared area. From here access the radioactive showings in Lots 6 and 7, Con 9. To access the Amalgamated Rare Earth #2 Shaft proceed south on the Hadlington Road (see Saranac) 4 km from Hwy 118 and cross the Irondale River. On the south side of the river turn right on an old mine road and proceed 1.5 km to the shaft foundations. Continue another 400 m downhill to reach the #2 Shaft adit and ore dump. The Silver Crater-Baumhour-Campbell Occurrence is accessed by proceeding 4 km northeast from the town of Cardiff along the Monck Road to a private road exiting north. The road is gated and locked. Proceed 1.8 km north on this road on foot to a trail exiting north. Follow this trail 600 m to the south end of a lake. Traverse west 600 m from this point to the occurrence in overburden trenches in Lot 29 Con 15 Faraday Twp.
The topography is moderately rolling to steep and rough. Open hardwood forest alternates with poplar-conifer. The area is well drained by small lakes and streams. Most of the claim groups have been partly or completely cut over at some point. Beaver dams are numerous in all forest types. Rock outcropping is sparse, less than one percent to nonexistent.
History of Camp
The history of radioactive mineral development in the Haliburton-Bancroft area is summarized by J. Satterly in Ontario Department of Mines Volume LXV, Part 6, 1956 pp 3-4 (1). The first of three periods in the history was from 1929 to about 1936, when underground operations were conducted by the Ontario Radium Corporation Limited on the Richardson property at Wilberforce. A 150-ton capacity mill was built but never operated successfully. Canadian Radium Mines Limited sank a 400-foot two-compartment shaft in 1932 at Cheddar and opened up three levels. A 100-ton mill completed on this property in 1940 was closed early in 1942 after an unsuccessful trial run.
The second period of activity from 1947 to 1951 saw the reopening of the Richardson property at Wilberforce by Fission Mines Limited, underground development by Cardiff Uranium Mines Limited, and initial development by Lead Ura Mines Limited (later the Rare Earth Mining Corporation of Canada) in Monmouth Township.
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It was not until underground development was begun by Centre Lake Uranium Mines Limited in Cardiff Township in 1953 that the third and greatest period of exploration started. A widespread staking rush followed in 1953 and 1954 and large parts of Cardiff, Faraday, Monmouth, Herschel, Monteagle, Anstruther, Burleigh, Harvey and Cavendish townships were staked. Centre Lake Uranium Mines Limited and Croft Uranium Mines Limited were merged in 1955 to form Bicroft Uranium Mines Limited, which became the first uranium producer in December 1956. Canadian Dyno Mines Limited sank a shaft to 997 feet in 1955-56 and made progress in building a mining plant and a 1,000-ton mill. In Faraday Township Faraday Mines Limited explored its property by three adits in 1954 and in 1955-56 by two shafts, the main shaft to a depth of 863 feet, and lateral work on two levels. Building of a mining plant and a 1,000-ton mill was well advanced by the end of 1956, and production commenced in April 1957. In the same township Greyhawk Uranium Mines Limited in 1955-56 sank a shaft to 361 feet, established three levels, and carried out lateral work on the first level. Cavendish Uranium and Mining Company Limited in 1955-56 sank an exploration shaft to 88 feet and carried out lateral work from the 70-foot level. In 1955-56 Rare Earth Mining Corporation of Canada Limited sank a shaft to 630 feet, established five level s and carried out considerable lateral development on three levels and in an adit. Blue Rock Cerium Mines Limited in the same period sank a shaft to 440 feet and carried out exploration on three levels. These two adjoining properties were merged in 1956 to form Rare Earth Mining Company Limited. In 1955-56 Halo Uranium Mines Limited carried out an intensive exploration program from two adits on its property in Cardiff Township. In early 1957 plans were announced for the amalgamation of Rare Earth Mining Limited, Halo Uranium Mines Limited and Cavendish Uranium and Mining Company Limited, resulting in the formation of two new companies called Amalgamated Rare Earth Mines Limited and Consolidated Halo Uranium Mines Limited.
History of Eight Option Properties (2) (Gordon et al 1981)
Halo Prospect (Northwest and Lake Zones-Con XVIII Lots 4 and 5 Cardiff Twp.)
1953-54: Geological and Geiger surveys; stripping, trenching, limited diamond drilling by Stratmat Limited.
1955-56: Surface diamond drilling for 31,790 feet; a vertical, 3-compartment shaft 75 feet deep; underground development included 1,726 feet in No. 1 adit (Northwest Zone) and 863 feet in No. 2 adit (Lake Zone), and 9,822 feet of diamond drilling in 89 holes. Work by Halo Uranium Mines Limited.
1968: Geological, scintillometer and electromagnetic surveys; trenching and diamond drilling by Amalgamated Rare Earth Mines Limited.
1973: Surface exploration by Imperial Oil Limited.
Uranium minerals, chiefly uraninite, occur in granite or syenite pegmatite characterized by abundant pyroxene and brecciation. Country rock paragneiss strikes west to northwest and dips south.
An estimate of tonnage and grade of uranium contained at the Northwest and Lake Zones is given in a report on the Halo Property prepared by A.S. Bayne and Company in 1968 (3). The estimate is the lowest of three prepared independently by three professional geologists: G.A. McCartney, June 25, 1956; D.C. McKechnie, June 29, 1957; and W.C. Ringsleben, August 14, 1957. Calculation was made of 54,000 tons ‘available ore’ grading 0.108 % U3O8, above the No. 1 and 2 adits to the surface, 263,000 tons of ‘drill indicated ore’ grading 0.114% U3O8 from the No. 1 adit to 315 ft. below adit, and the No. 2 adit to 105 ft. below adit, and 155,000 tons of ‘possible drill indicated ore’ grading 0.112% U3O8 from, at the No. 1 adit from 315 ft. to 515 ft. below adit and at the No. 2 adit from 105 ft. to 305 ft. below adit, for a total estimate of 472,000 tons grading 0.112 % U3O8 . The tonnage and grade was apparently calculated on geometric forms around 100 drill holes and is probably accurate. However, no record remains of the calculations and the ore categories don’t correspond to the CIM Standard of August 20, 2000. Consequently the author would regard these figures as an accurate historic estimate of tonnage and grade.. Notes accompanying the estimates state that the total length of ’available ore’ partially developed on No. 1 Adit level and indicated by underground drilling is 357 feet, with widths of from 6 to 70 feet averaging 23 feet. The corresponding length of ‘available ore’ in No. 2 Adit is 120 feet with widths from 7 to 13 feet averaging 9 feet. The surface drilling below the adits to 600 feet below surface reportedly (3) indicated at least as good widths over the same lengths, with significantly higher grade. The raise driven 106 feet from No.1 Adit to the surface (See Figures 3, 4 and 5) reportedly averaged 0.13 % U308.
Halo Occurrence (Pyroxenite, South and Bald Mountain Zones) (Con XVII and XVIII, Lot 6; Con XVI, Lot 5; Con XV, Lot 6, 7 Cardiff Twp.)
1953: Geological and scintillometer surveys, stripping, diamond drilling by Stratmat Limited.
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1955: Sixteen trenches and 27 diamond drill holes for 5064 feet in the Pyroxenite Zone; stripping and sampling and 23 diamond drill holes for 9491 feet in the South Zone; 7 diamond drill holes for 1516 feet in the Bald Mountain Zone. Work by Halo Uranium Mines Limited.
1968: Radiometric survey by Amalgamated Rare Earth Mines Limited.
1973: Surface exploration by Imperial Oil Limited.
At the Pyroxenite Zone uraninite occurs erratically adjacent to syenite or syenite pegmatite. In the South Zone uranium mineralization occurs, in separate showings, as uranothorite in granite pegmatite, as uraninite in a syenite dikelet and as betafite in calcite veins. The Bald Mountain Zone comprises paragneiss, pyroxene gneiss and marble. Drilling in the Pyroxenite Zone cut sections from 1 to 3 feet wide grading 0.15 to 0.20% U3O8. In the South Zone drill intersections averaged from 0.05 to 0.75% U3O8 over 1.5 to 5.4 feet. In the Bald Mountain Zone the best drill intersection graded 0.25% U3O8 over 8.4 feet (2).
McLean-Hogan Occurrence (Con XIX, Lots 8-10 Cardiff Twp.)
1953: Eleven trenches by E.T. Hogan and some short drill holes by Cope Lake Mines Limited.
1954-55: Scintillometer and geological surveys, bulk sampling, 69 diamond drill holes totaling 3,585 feet by Anuwon Uranium Mines Limited.
1968: Scintillometer and geological surveys by Cope Lake Mines Limited.
1975: Two diamond drill holes for 332 feet by E.T. Hogan (for Canadian Nickel Company Limited.).
Scattered uranothorite occurs in a granite pegmatite which intrudes mica pyroxenite country rock. Grab samples assayed from 0.019 to 0.54 % U3O8 (2).
Empire ‘A’ (Con XV and XVI, Lots A, 1, 2 Cardiff Twp)
1954-55: Scintillometer and geological surveys; 4 drill holes for 1,972 feet by Empire Oil and Minerals Inc.
1967-70: Airborne magnetic, electromagnetic and radiometric surveys. 5 drill holes for 2,138 feet by Canuc Mines Limited.
1971-1975: Prospecting for fluorite; 4 diamond drill holes for 2,523 feet by Landair Explorations Limited.
1976: Scintillometer and VLF-EM surveys by Powerex Resources Limited.
Uranithorite occurs in lenticular, discontinuous leucogranite or granite pegmatite intruding hornblende gneiss. Drill core samples average 0.078% U3O8 over 1 foot (2). Maximum values from the 4-hole 1955 diamond drill program varied from 0.021 % U3O8/2.0 feet to 0.048 % U3O8/5.0 feet, radiometric equivalent. (12)
Canada Radium Occurrence (Con XII, Lots 7-11, Con XIII Lots 7-9 Cardiff Township)
1932-36: A 400-foot shaft with levels at 125, 250 and 375 feet sunk on Lot 9, Con XII. 1,810 feet of lateral work.
1939-42: 200 tons of feldspar pegmatite milled and magnetically separated in a 110 tpd mill.
1954-55: Workings dewatered, magnetometer, scintillometer and geological surveys; 90 diamond drill holes totaling 43,184 feet.
1968-69: Three diamond drill holes for 869 feet by Cam Mines Limited.
1969-70: Geological and radiometric surveys; 7 diamond drill holes totaling 1,366 feet by Initiative Explorations Inc.
1974: Preliminary work to dewater shaft by Golden Giant Mines.
1975: Radon soil gas survey by Kerr Addison Mines Limited.
Mineralization (uraninite and uranothorite) occurs within narrow, discontinuous mafic-rich lenses in leucogranite or leucogranite pegmatite dikes. In 1955 five radioactive zones, the largest 400 feet long, were outlined by diamond drilling. Maximum assay from 1968 drilling of numerous narrow pegmatites was 0.116% U3O8/1.0 foot. (2)
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Empire ‘B’ (Con XI, Lots 33-35; Con XII, Lot 35, Monmouth Twp.)
1954-55: Scintillometer and geological surveys; 26 diamond drill holes for 12,509 feet by Empire Oil and Minerals Inc.
1967: Airborne magnetic, electromagnetic, electromagnetic and radiometric surveys by L.T. Chandler.
1968-70: Eleven diamond drill holes for 6,922 feet by Canuc Mines Limited.
1971-75: Prospecting for fluorite; 6 diamond drill holes for 3,319 feet by Landair Explorations Limited.
1976-77: VLF-EM and radiometric surveys; at least 3,241 feet of diamond drilling in 6 holes by Powerex Resources Limited.
Uranium mineralization within thin lenticular, discontinous leucogranite or granite pegmatite, in uranothorite or uraninite, conformably intruding syenitic rock, granite gneiss, hornblende-biotite gneiss, amphibolite and marble. Grades and widths from the 1954-55 drilling range from 0.05% U3O8/2.0 feet to 0.14% U3O8/4.0 feet with the best intersection recorded 0.5% U3O8/5.0 feet. Average grade of the intersections reported is 0.077% U3O8. (24)
Saranac – East Occurrence (Con IX, Lots 23 and 24, Monmouth Twp.)
1954-56: Open cut 150 feet long and 32 diamond drill holes for 7,286 feet by Saranac Uranium Mines Limited.
1973: Geological survey and 4 diamond drill holes for 643 feet by Imperial Oil Limited.
1975: Scintillometer survey by Imperial Oil Limited.
1989: Sampling of Main Showing for Rare Earth Elements (REE) by H. Grant Harper.
Mineralization occurs as accessory uranothorite with fractures and rusty stain within a 7-foot thick sill of medium-grained pale-pink biotite-hornblende granite.
In drill logs from the 1954-56 Saranac diamond drilling narrow pegmatite intersections generally from 3-11 feet are typically described as ‘pegmatite composed chiefly of quartz and pink feldspar containing biotite, pyroxene and hornblende’. No mention is made of radioactivity and samples were apparently not taken. (19, 22) Drill logs from four Imperial Oil Limited drill holes mention narrow pegmatites alone or in swarms grading from 0.007% U3O8/1.0 feet to 0.048% U3O8/0.3 feet (25). Results of REE sampling were negative.
Saranac – Zircon Occurrence (Con X, S1/2 Lot 24, Monmouth Twp.)
1954-56: Scintillometer survey, stripping, trenching, 10 drill holes for 1,212 feet by Saranac Uranium Mines Limited.
1973: Geological survey by Imperial Oil Limited.
1975: Scintillometer survey by Imperial Oil Limited.
1989: Sampling of Zircon Showing for REE by H.Grant Harper.
The zone, 1,500 feet long and 1 to 8 feet in width, contains an average concentration of 15-20% zircon. A grab sample assayed 0.298% U3O8 and 2.10% ThO2 (2). Drilling indicates mineralization does not continue down dip. Results of REE sampling were negative.
Canadian All Metals Occurrence (Con IX, Lots 5-9;Con XVIII, Lot 6, Monmouth Twp.)
1955: Work by Canadian All Metals Explorations Limited included stripping, trenching, 38 diamond drill holes totaling 5,040 feet, 4 underground drill holes for 531 feet, an adit in N1/2 Lot 6, Con IX, with 642 feet of crosscutting and 490 feet of drifting.
1977: Ten diamond drill holes totaling 1,976 feet by Imperial Oil Limited.
Property is underlain by complex of marble, quartzite, paragneiss and granite gneiss. Radioactive minerals uraninite and pyrochlore are erratically disseminated in discontinuous lenses within zones of silicated marble containing tremolite, pyroxene, mica, serpentine and salmon-pink calcite. Drill hole samples reportedly average 0.184% U3O8 over 49 inches (2). Results from Imperial Oil drilling indicate uranium intersections <0.05% U3O8 over widths up to 50 feet, with exceptions 0.33% U3O8/1.0 feet, 0.083% U3O8/8.0 feet, 0.099% U3O8/2.0 feet and 0.295% U3O8/ 1.6 feet (26).
Amalgamated Rare Earth #2 Prospect (Con V, Lots 16-21;Con VI, Lots 17-21, Monmouth Twp.)
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1952: Trenching and 7 diamond drill holes by Blue Rock Cerium Mines.
1953: Geophysical survey by Blue Rock Cerium Mines.
1954: Scintillometer survey, trenching and diamond drilling in 7 holes for 201 feet by Stratmat Limited.
1955: Geological survey by Blue Rock Cerium Mines.
1954-56: A 440-foot shaft on the Main Zone with levels at 100, 250 and 400 feet. 3,416 feet of drifting and 2,456 feet of crosscutting; adit driven to the 100 level. 53,949 feet of surface diamond drilling. Work by Blue Rock Cerium Mines and Rare Earth Mining Corporation.
1969: Scintillometer survey by Amalgamated Rare Earth Mines Limited.
1974: Diamond drilling by Imperial Oil.
The property is underlain by bands of amphibolite and marble that strike east to northeast and dip 50-85 deg. SE. Uranium-bearing ‘ore shoots’ from a few to 20 feet wide and 10 to 200 feet long occur in lenticular granite-granite pegmatite bodies which intrude metagabbro. ‘Ore shoots’ are brick red, medium-grained well-fractured leucogranite, with altered pyroxene, abundant zircon and allanite, and also titanite, uranothorite, fergusonite, uraninite and uranophane.(2) In 1957 reserves were independently calculated by two of the three professional geologists who calculated reserves at the Halo Prospect in 1957 (see previous), W.C. Ringsleben and D.C. McKechnie. Their minimum estimate (4) is 292,444 tons grading 0.095% U3O8, within 500 feet of the shaft and above the 600 foot level. The estimates are not categorized but are thought to be historically accurate. As at the Halo Prospect the estimates are believed by the author not to conform to the current CIM Standards established August 20, 2000. Several deeper intersections are described (4). Ten intersections from 1.5 to 30 feet wide grading from 0.03 to 0.097% U3O8 were made between 575 and 800 feet vertical. Seven intersections from 4.2 to 26.0 feet wide grading from 0.035 to 0.15 % U3O8 were made between 800 and 1,000 feet vertical. One intersection of core recovered in bad ground at the 1,210-foot level averaged 0.17% U3O8 across 3.0 feet within a total radioactive zone of 11.7 feet.
Silver Crater-Baumhour-Campbell Occurrence (Concession B, Lots 28N1/2, 29;
Con XIV, Lots 27-33; Con XV, Lots 27-30; Con XVI, Lots 29, 30N1/2, 31N1/2)
1954-56: Trenching, magnetometer survey, packsack drilling, 7,075 feet of diamond drilling by Silver Crater Mines Limited.
1967-69: Geological, magnetic and radiometric surveys, 20 diamond drill holes for 8,377 feet by Fidelity Mining Investments Limited.
1968: Trenching and radiometric survey by F.H. Jowsey.
1975: Geological, geophysical and radiometric surveys by R. Laird.
1975: Geological, geophysical and radiometric surveys by Brascan Resources.
1975-76: Radiometric and radon soil gas surveys by Kerr Addison Mines Limited.
1977: Airborne electromagnetic and magnetic surveys by Brascan Resources, Projex and R.Laird.
The property is underlain by granite and granite gneiss to the northeast and syenite and nepheline syenite to the southwest. The rocks are cut by dikes, sills and irregular masses of granite pegmatite and pegmatitic granite, which host the radioactive showings, of which three are present: (No. 1) uranothorite occurs in pyroxene in calcite-scapolite-pyroxene syenite pegmatite, 1 to 5 feet wide and 20 feet long, along a 200 foot exposure; in (No. 2) bodies of leucogranite, granite pegmatite and syenite pegmatite, 6 to 18 feet wide and 170 feet long occur with accessory uranothorite, titanite and zircon; and in (No. 3) a discontinuous leucogranite dike with patches of pyroxene and accessory zircon, allanite, uranothorite and uranophane, is exposed over 300 feet, striking E and dipping 70SE. Drill logs were examined for 10 holes drilled for 3,214 feet into Showing No. 3 in the N1/2 of Lot 29, Con XV. Gr anite and pegmatite, locally brick red, intrude paragneiss and amphibolite. Only one of the 10 holes was sampled (Hole 52 over a length of 18 feet with disseminated uranothorite, and fluorite and molybdenite). No assays were reported. Of the remaining holes ‘slight radioactivity’ was reported in pegmatite over 1.1 feet in Hole 57 and 29.2 feet in adjacent hole 58, and ‘no radioactivity’ was reported over pegmatites in the remaining seven holes. (28)
Geological Setting
22
The geology of the host rocks of the radioactive deposits of the Bancroft-Haliburton area is described by D.F. Hewitt in Ontario Department of Mines, Volume LXV, Part 6, 1956 pp 5-8 (1). The host rocks are all of Precambrian age. The two main groups of rocks present are: Grenville-type metasediments, mainly marble, paragneiss and amphibolite; and the plutonic rocks, mainly granite, syenite and gabbro, together with their gneissic and hybrid equivalents. The metasediments were laid down as limestones, sandy and shaly limestones, and sandstones in early Precambrian seas. The sediments were highly metamorphosed. The limestones and dolomites became marble, the shaly and sandy limestones became impure silicated marble, the limy shales became amphibolites and pyroxenic amphibolite, the sandy shales became paragneiss and the sandstones became quartzite.
The Grenville sediments were intruded by a series of plutonic rocks, the oldest of which were gabbro, diorite and ultrabasic rocks. After this period of basic intrusion three other groups of plutonic rocks were emplaced, the nepheline syenites, the syenites and the granites. During the emplacement of these rocks there was lit par lit injection, granitization and syenitization, resulting in the formation of large areas of granitic and syenitic geisses of hybrid origin. Dykes of granite and syenite pegmatite, and diabase, are the youngest Precambrian rocks in the area.
For specific geological characteristics for each of the properties, please refer to the historical development sections above.
Deposit Types
The types of radioactive deposits of the Bancroft area are subdivided by Satterly (1).
I. Deposits in granitic and syenitic bodies
A.
Simple bodies of intrusive origin (fissure fillings)
1.
Unzoned (no known radioactive occurrences)
2.
Zoned-granite pegmatite (MacDonald feldspar mine)
B. Complex bodies of both intrusive and replacement origin plus assimilation
of country rock. Typical ore-shoot units are:
1.
Pyroxene granite (or syenite) pegmatite (Bicroft, in part) (Faraday, in part) (Halo, in part) (Greyhawk, in part) (Canadian Dyno, C Zone)
2.
Leucogranite, leucogranite pegmatite+/-magnetite (Faraday, in part) (Greyhawk in part) (Canadian Dyno, B Zone) (Cavendish)
(Rare Earth)
3.
Cataclastic quartz-rich granite pegmatite (Bicroft, in part)
(Greyhawk, in part) (Halo, in part)
II Metasomatic deposits in limy rocks
A.
Metasomatic deposits in marble
B.
Metasomatic deposits in metamorphic pyroxenite
III Hydrothermal deposits
A.
Calcite-fluorite-apatite veins (Fission) (Nu-Age) ( Halo)
B.
Calcite-fluorite-apatite-biotite-pyroxene (Cardiff Uranium)
C.
Calcite-biotite-apatite (Silver Crater, Basin Property)
Mineralization
The radioactive minerals occurring in the Bancroft area are described by Satterly (1). Uraninite-thorianite forms a complete series between UO2 and ThO2 and is isometric and occurs in steel-grey to black cubes and octahedrons with a submetallic luster. Neither end member is present in the pure form, but the closer to the uraninite end member the greater the U:Th ratio and the more desirable for uranium recovery. Examples of high U:Th ratios include 8.8:1 U:Th at the Faraday Mine, (70.0% U3O8/7.7% ThO2), 8.1:1 U:Th at the Bicroft Mine (65.0% U3O8/7.7% ThO2), and 7.59:1 U:Th at the Halo Prospect (66.7% U3O8/8.5% ThO2). Uranothorite is one of the most common radioactive minerals in the Bancroft area. Its composition is (Th,U)O2.SiO2. Uranothorite is commonly visible to the eye and occurs in fine black vitreous cubes. Uranophane is a bright yellow secondary uranium mineral (CaO.2UO3.2SiO2.6H20). A number of other radioactive minerals (pyrochlore, betafite, fergusonite, euxenite, allanite and zircon) occur in radioactive zones on the eight option properties, but with the occasional exception of zircon, none is uranium bearing.
23
Exploration
In 2005 the Company carried out a 2-phase preliminary exploration program on all 8 of the Bancroft properties. Phase 1, conducted in May, 2005, consisted of a program of geological and scintillometer reconnaissance on each of the properties. In addition, the Halo Property (North West Zone) and Amalgamated Rare Earth Property, were targeted for more detailed exploration. This program, carried out by T.J. Beesley, P.Eng., consulting geologist, generated the basis for the NI 43-101 report cited above, which was submitted in July 2005, and approved in September 2005, from which the text in this section is excerpted.
Phase 2 was conducted in October, 2005, and focused on the remaining 6 properties, and is summarized further below.
Phase 1 Exploration – May 2005
Halo Property
Each of the eight Bancroft Option Properties was visited. Geological and scintillometer reconnaissance were conducted in an attempt to locate and evaluate the original surface radioactive showings. Two of the eight, the Halo Prospect Northwest Zone and the Amalgamated Rare Earth #2 Shaft Zone, were the subject of more intensive exploration.
Halo Northwest Zone
The original Halo surface showing was relocated via compass and chain surveying from the No. 1 Adit portal and detailed scintillometer prospecting. The showing was covered with 1.0 to 1.5 feet of organic-rich soil which had accumulated in the ensuing 48 years and which was supporting the growth of a blanket of 20-30-foot high hardwood trees. The original showing was stripped with a backhoe in this program, resulting in an 11 x 45 metre trench trending 135 degrees. Numerous other openings were made with the backhoe in an attempt to establish additional radioactive zones. Scrapings were made within the backhoe trench to guide chip sampling for assay (Fig. 3). It was possible to tie the surface zone of radioactivity to the adit level workings (–75 feet) by means of a cement ventilation raise cover. A grid was established with 1-metre stations on 2-metre spaced crosslines t o guide a scintillometer survey The showing trench exhibits strongly anomalous radioactivity, from 1000 to 6000 counts per second (cps), 25 to 150 x background (bkg). Sixteen chip samples were taken at various points along the showing, over intervals of one metre, except for H-14 (0.43% U3O8/1.9 m). The average scintillometer reading at the sample sites is 3000 cps (75 x bkg) and the average U3O8 content is 0.074% in a range from <0.01 to 0.43%..
Samples from a zone of high anomalous radioactivity (3,500-5,000 cps) along the north side of the showing gave relatively low uranium contents (0.02-0.03 % U308). This may be explained by the high thorium content in sample H-2, 0.09% ThO2 vs. 0.02% U308, a phenomenon not anticipated at the Halo Northwest Zone from the literature. The material sampled consisted of medium to coarse-grained highly fractured, brick red syenite pegmatite to granite pegmatite, with from 5-30% black pyroxene altered to chlorite, with accessory limonite and molybdenite.
Other Halo Occurrences
The Pyroxenite Zone east of the Northwest Zone was relocated in the form of a series of evenly spaced overburden trenches in a low, wet area. No anomalous radioactivity was associated with these overburden trenches and no evidence of the former diamond drilling was noted.
It was not possible to relocate the Bald Mountain Zone, where seven diamond drill holes were put down.
24
The South Zone showing, consisting of a hornblende syenite dikelet in a vertical outcrop face, was relocated. Two samples, HS-1 and 2, accompanied by scintillometer readings of 350 and 550 cps respectively were taken and returned <0.01 % U3O8. HS-2 contains 0.03 % ThO2.
Amalgamated Rare Earth No. 2 Shaft
An ore dump north from the 100 Level Adit portal was opened up by extensive backhoe stripping and trenching. Four lines were established in a square grid to guide scintillometer surveying at one-metre intervals along the grid lines. Grab samples of radioactively anomalous dump material were taken coincident with scintillometer stations along the grid at representative parts of the dump. A total of 21 sites having average scintillometer readings of 2360 cps (60 x bkg) were sampled. Average uranium content of the 21 samples is 0.054% U308. Thorium content is less than uranium content. Dump material sampled consisted of medium to coarse-grained pink to brick-red syenite pegmatite with 5-10% altered green pyroxene, +/- limonite staining.
McLean-Hogan
Problems encountered by the author in following up this prospect are fairly typical of the more isolated occurrences. Trenches, mostly in overburden, are overgrown and barely discernible after an interval of 50 years. No evidence remains of drill setups or core. Radioactive showings occur as isolated outcrops of anomalously radioactive pegmatite. Overburden trenches were often established beside boulders of radioactive pegmatite. At McLean-Hogan a ridge of gneiss on the west side of Cope Creek is cut by a granite pegmatite dike 3-m wide reading 150 cps. A grab sample, MAC-1, from this dike returned <0.01% U3O8.
Empire B
Two large outcrops of radioactive pegmatite were located by the author on the Empire B property in Con XV, Lot 35 Monmouth Twp. The two dikes 40-m apart strike 150 deg. and cut country rock gneiss striking 060 deg. Each dike reads 350 cps. Two samples, EB 1 and 2, one from each dike, contained <0.01% U308 and EB2 contained <0.01% ThO2.
Canada Radium
A 30 x 60-m area by the former shaft is covered with broken rock, pink to dark red medium to coarse-grained syenite pegmatite and granite pegmatite, possibly the base of a former ore dump. The rock uniformly reads 400-500 cps Three samples of this material, CR1, 2 and 3, were analysed and each contained < 0.01% U3O8. A fourth sample taken from the same area, CR4, consisted of coarse-grained brick red syenite with coarse books of molybdenite. The sample reads 350 cps on the scintillometer by itself and contains 0.26% U308 and 3.65% MoS2, while yielding only 0.02 % ThO2.
Saranac
The author visited the Main East Pegmatite Showing. A 7-foot thick pegmatite sill is exposed in a 150-foot long open cut. Anomalous radioactivity ranges from 1,000 to 2,000 cps. Grab samples were taken of material reading 1000 cps (SAR 1) and 2000 cps (SAR 2). Both samples returned <0.01% U3O8, and SAR 2 <0.01% ThO2.
Canadian All Metals
The author visited the Track Showing, the South Showing and the North ½ Lot 6 Adit showing. Outcropping was poor at the Track Showing and the South Showing. Although there was some evidence of former diamond drilling (old drill hose) there was no indication of drill collars, etc. A pink granite pegmatite outcrops sporadically down a hill slope in the South Zone, reading 350 cps. A sample of this pegmatite, CAM1, contains <0.01 % U3O8 and <0.01 % ThO2. A large stripped area of marble on top of a hill above an adit in the N1/2 of Lot 6 exhibited no anomalous radioactivity. Similarly no anomalous radioactivity was encountered in the rock around the adit portal.
Silver Crater-Baumhour-Campbell Occurrence
The author visited the Main Showing and the No. 1, 2 and 3 Showings further to the northwest. The Main Showing consists of a 6-m wide red syenite pegmatite striking NW and reading 450 cps. The No. 1, 2 and 3 Showings consist of a number of overburden trenches lined up with the occasional outcrop of granite pegmatite. Sample SC1, from the Main Showing, contains 0.03 % U308. Sample SC2 from a 2-m wide granite pegmatite in No. 2 Showing contains <0.01% U3O8 and <0.01% ThO2.
Sampling Method and Approach
Samples at the Halo original showing trench were chipped continuously across an interval, usually one metre, with a hammer and a moil. Samples from the remaining sites were grab samples taken at the point of scintillometer readings. Both types of sample are considered representative.
25
Sample Preparation, Analyses and Security
Samples were taken directly from the field to the SGS laboratory in Toronto by the author. The samples were crushed, pulverized and pressed into pellets for analysis by the XRF (X-ray fluorescence) method.
Data Verification
The tenor and grade range of historical data relied upon in this report agree with results from the present exploration and sampling carried out on the Halo Property and Amalgamated Rare Earth #2 Shaft.
Mineral Processing and Metallurgical Testing
A 20-ton representative sample bulk sample, 10 tons from the adits in the Halo Northwest and Lake Zones and 5 tons each from the Amalgamated Rare Earth No. 1 and No. 2 Shafts was submitted in 1957 to the Ore Dressing Division, Department of Mines and Technical Surveys, Ottawa (3). Continuous pilot tests on uranium recovery by flotation concentration followed by acid leaching were accompanied by analyses of the head sample and various mill products.
Head sample
Concentrate
U3O8
0.12 percent 0.66 percent
ThO2
0.09 percent
0.54 percent
Predicted mill runs based on the best continuous flotation runs indicate uranium (and thorium) recoveries of 93.3 to 95.3% in flotation concentrates. Acid leaching of the flotation concentrates recovered from 93 to 95.9% of the uranium (and thorium) in the concentrate. The overall predicted mill recovery from flotation concentration, followed by leaching of the uranium concentrate is therefore 86.8% to 91.4%. At the precipitation end of the leaching circuit, the most successful process, in which uranium and thorium precipitates were separately recovered, with respective extractions of 99% U3O8 and from 95 to 99% recovery of ThO2 from leach solutions.
Interpretation and Conclusions
1. The largest tonnage and grade of uranium mineralization estimated historically on the eight Bancroft Option Properties occurs in the Northwest and Lake Zone Adits on the Halo Property and the No. 2 Shaft area on the Amalgamated Rare Earth Mines Limited Property. The development of an inventory of Bancroft grade (0.10 %) uranium resources on these Options would involve initial follow up exploration here, principally in the direction of establishing the continuity of these two deposits to depth.
2. The average grades of uranium established currently on the recently reestablished original Halo showing and the Amalgamated Rare Earth #2 Shaft Adit dump are less than the historic average grade, but individual results are within recognizable historic ranges for material from these two occurrences.
3. Remote showings (McLean-Hogan, Halo Pyroxenite, Halo Bald Mountain, Halo South Zone, Canadian All Metals, Empire B, Silver Crater) were reestablished after some difficulty after a hiatus of 50 years. In each case radioactively anomalous outcrop was located and sampled.
4. Prospecting should be conducted in the vicinity of the Canada Radium mine workings and dump in an attempt to establish the presence of additional radioactive and molybdenum-bearing material similar to current sample CR4 (0.26% U3O8, 3.65% MoS2).
Recommendations
1. Drill two steep, deep intersecting diamond drill holes down plunge from each of the Halo Northwest Zones and the Amalgamated Rare Earth #2 Shaft Zones to test the potential beneath the 1000-foot (300-m) level. Allow 4 holes 1,500 feet each for 6,000 feet or 1,800 metres.
26
2. Prospect the Canada Radium mine workings and dump to establish the presence and origin of combined higher grade uranium and molybdenum mineralization similar to that in sample CR4.
3. In light of the current higher price of uranium, and in light of further possible price increases to satisfy increasing demand in the intermediate and long term, the author feels the following recommended expenditure is justified to allow the issuer to expand and quantify its historically estimated tonnage and grade of uranium mineralization on the Bancroft Option Properties.
Recommended Budget
1800 m of NQ diamond core drilling @ $60.00 incl. | $108,000 |
Assaying, core logging, report | 8,000 |
Prospecting | 3,000 |
Accommodation and food | 3,000 |
Rentals | 3,000 |
Total | $125,000 |
Phase 2 Exploration – October 2005
The italicized text which follows is excerpted from the Report submitted to the Company in November, 2005, by T.J. Beesley, P.Eng., consulting geologist for the Bancroft Uranium Projects, entitled “Report on An Exploration Program on Six Bancroft Option Properties in Faraday, Cardiff and Monmouth Townships Southern Ontario Mining Division NTS 31-D/16 and 31-E/1 For El Nino Ventures Inc.”.
Summary
El Nino Ventures Inc. conducted an exploration program on six of its eight Bancroft area uranium option properties during the month of October, 2005. In each case the property was reconnoitered to determine the extent of anomalous radioactivity. A chained and flagged grid was established to cover this area of interest. Scintillometer surveying was conducted over the grid, generally on 12.5-m stations on 50-m spaced crosslines, employing a SAPHYMO SRAT SPP2 scintillometer. Overburden trenches from previous exploration were tied into the grid and surveyed radiometrically. Representative bedrock samples coinciding with the highest anomalous radioactivity were obtained as chip or channel samples and analyzed for U3O8 and ThO2 content by the XRF method. Geological characteristics of the samples and trenches were noted. High uranium analyses were obtained on three of the six properties. On the Canadian All Metals property two samples 2 m apart out of eight taken on the property each contained 0.22% U3O8 and a third 125 m away contained 3.02% U3O8, in a coarse biotite-diopside pegmatite skarn within an overall area of anomalous radioactivity 400 m x 200m. On the McLean-Hogan property four of seven samples contained between 0.06 and 0.31% U3O8 within an overall radioactively anomalous area 250 m x 150 m, in a coarse-grained biotite-diopside skarn. On the Silver Crater Baumhour-Campbell Occurrence #2 Showing nine samples within a 250 m x 125 m radioactively anomalous area ranged from <0.01 to 0.69% U3O8 and averaged 0.31%. Five samples taken over a 75-m interval in the central part of the grid contained from 0.37 to 0.69% U3O8 and averaged 0.53% U3O8, in highly mafic augite syenite pegmatite typical of former camp producers. This high grade zone is considered open off the west side of the grid under overburden.
Canadian All Metals (CAM)
The length of grid surveyed was 3.0 km. Background was approximately 70 counts per second (cps). The grid was in open hardwood and outcropping was < 1 percent. Grid scintillometer readings ranged to 4000 cps. Higher readings usually corresponded to overburden trenches. Anomalous readings ranging from 100 to 995 cps however are spread throughout the grid in overburden and are thought to represent local basal till derived from radioactive bedrock. Overburden trenches were previously established within a 400 m x 200 m area between 100E and 500E. Three old drill hole collar casings were located between 100E and 150E drilling NW at 45-50 deg. and vertically. An adit, located at 075S/225E accessed the north side of the grid underground. Two bedrock trenches yielded high anomalous radioactivity (+ 15,000 cps). A sample of bedrock from the first of these at 040N/ 350E contained an extremely high amount of U308, 3.02 %, with 0.05 % ThO2. Two samples from the second, at110N/250E, each contained high amounts of uranium, 0.22 %, with 0.07 % ThO2. All three of these samples exhibit a strong uraninite response and were comprised of coarse biotite-pyroxene (diopside) skarn. The sample containing 3.02% U3O8 also contained coarse phlogopite mica and limonite. The remaining five samples from the grid ranged from <0.01 to 0.08 % U3O8, and 0.02 to 0.16 % ThO2.
27
Sample results from all six properties are summarized along with anomalous radioactivity andgeological descriptions in the ‘Table: Bancroft 6 Properties Assay Results’
Canada Radium (CR)
The length of grid surveyed was 465 m. Background was approximately 150 cps, but this is probably not accurate as the grid encompassed a former shaft and was mainly established over crushed rock from underground. Grid scintillometer readings ranged from 80 to 900 cps with readings over 300 cps exclusively associated with crushed rock. It is not known whether this was a waste dump or ore pile. Anomalous radioactivity with the six rocks sample ranged from 500 to + 15000 cps. U3O8 content ranged from <0.01 to 0.05 %, and ThO2 content from <0.01 to 0.98 %. The + 15000 reading was from an outcrop of dark red augite pegmatite. A sample from this site contained 0.05 % U3O8 and 0.98 % ThO2, a uranothorite response
Empire B (EMB)
The length of grid surveyed was 2.1 km. Background was approximately 70 cps. The grid has an approximate 20 % bedrock exposure. Bedrock consists of interbedded pegmatite sills up to 2 m in thickness in black and white gneiss and amphibolite. Rocks strike parallel to the baseline and dip 30-50 deg. grid south. Grid scintillometer readings range from 50 to 1200 cps and reflect the large amount of radioactive pegmatite. Five bedrock samples were taken at sites of anomalous radioactivity ranging from 1500 to 5000 cps. U3O8 content ranged from <0.01 – 0.02 %, and ThO2 content from 0.01 – 0.09 %, in pink pegmatites +/- quartz.
McLean – Hogan (MAC)
The length of grid surveyed was 1.6 km. Background was approximately 45 cps. The grid has an approximate 1% bedrock exposure. Grid scintillometer readings range from 15 to 540 cps. Higher readings are associated with former overburden trenches which expose biotite-pyroxene skarn over an area 250 x 150 m. Seven samples taken for assay range from <0.01 – 0.31 % U3O8 and < 0.01 – 0.06 % ThO2, a uraninite response, in coarse biotite-pyroxene (diopside) skarn.
Saranac (SAR)
The length of grid surveyed was 2.4 km. Background was approximately 35 cps. Bedrock exposure on the grid is < 1 %. Grid scintillometer readings range from 6 to 930 cps. Most of the readings are less than 100 except in the vicinity of the Saranac East Pegmatite Showing. One day of backhoe excavation of overburden was carried out in an attempt to extend the surface pegmatite body. Unfortunately this effort was unsuccessful, with only a few small lenses of pegmatite being uncovered floating in country rock amphibolite (Figure 17). Anomalous radioactivity in five bedrock samples ranged from 325 to 1950 cps, with U3O8 content from 0.01 – 0.04% and ThO2 content from 0.01 – 0.08%, in coarse to medium-grained pink feldspar-quartz pegmatite or hornblende syenite pegmatite.
Silver Crater Baumhour-Campbell Occurrence (SC)
The length of grid surveyed, at the Silver Crater # 2 Showing, was 1.4 km. Background was approximately 45 cps. Bedrock exposure on the grid is <1%. An elaborate system of overburden trenches was established to expose radioactively anomalous bedrock (Figure 21). Overburden is generally less than 1 m-thick. Grid scintillometer readings varied from 35 to 850 cps. A number of readings in excess of 100 cps are related to overburden trenches, but others such as 425, 180 and 250 cps at 200N/062.5E, 250N/025E and 300N/062.5E, respectively, have probably detected radioactively anomalous float in shallow overburden. Anomalous radioactivity is widespread in bedrock exposed in overburden trenches, over an area 250 x 125 m between 00N and 250N. Anomalous radioactivity mapped ranges from 600 to + 15000 cps. Nine samples selected for assay ranged from 3500 to + 15000 cps and contained between <0.01 and 0.69 % U3O8, averaging 0.31% U3O8. The thorium content of these nine samples ranged from <0.01 to 3.09% ThO2, a uranothorite response. Five of these samples, occupying an interval of 75 m between 25E and 50W along and south of L150N, contained between 0.37 and 0.69% U3O8 and averaged 0.53% U3O8. These values are considered open off the west side of the grid, under overburden. The higher uranium values are hosted in coarse- to medium-grained dark red to dark green augite syenite pegmatite containing up to 50% augite.
28
The SC-1 Showing several hundred metres southeast of the SC-2 showing consists of nine trenches excavated in radioactive pink quartz-feldspar pegmatite over an interval of 85 m. A baseline was chained through the trenches, the trenches mapped in and surveyed by scintillometer (Figure 19). Anomalous radioactivity ranged from 500 to 4500 cps. A sample of bedrock coincident with the 4500 cps reading returned 0.01 % U3O8 and 0.09% ThO2, a uranothorite response.
Table:Bancroft 6 Properties Assay Results
Sample | ThO2 % | U3O8 % | Scint. cps | Description |
|
|
|
|
|
CAM 3 | 0.05 | 3.02 | +15K | Coarse mica (phlogopite)-pyroxene pegmatite, limonitic; outcrop; stronguraniniteresponse |
CAM 4 | 0.16 | 0.06 | 2600 | Medium-grained augite-calcite skarn |
CAM 5 | 0.08 | <0.01 | 4500 | Medium-grained pink-green calcite- diopside skarn |
CAM 6 | 0.07 | 0.22 | 9000 | Coarse mica (biotite) tremolite diopside skarn;uraninite response |
CAM 7 | 0.07 | 0.22 | +15K | Bedrock trench; pink-white calcite-diopside skarn; chip sample 1 m.uraniniteresponse |
CAM 8 | 0.05 | 0.07 | 9000 | Coarse white calcite skarn |
CAM 9 | 0.05 | 0.08 | 4500 | White-pink calcite skarn |
CAM 10 | 0.02 | 0.03 | 4500 | White-green calcite-diopside skarn; outcrop |
CR 1 | <0.01 | <0.01 | 500 | Pink augite pegmatite; epidote |
CR 2 | 0.05 | <0.01 | 600 | Coarse dark red augite syenite |
CR 3 | 0.03 | <0.01 | 1200 | Fine red sand; milled tailings |
CR 4 | 0.98 | 0.05 | +15K | Coarse dark red augite pegmatite; stronguranothorite response |
CR 5 | 0.04 | <0.01 | 1200 | Coarse pink pegmatite |
CR 6 | 0.14 | 0.04 | 3500 | augite syenite pegmatite |
EMB 3 | 0.03 | 0.01 | 1500 | Pink pegmatite 2 m-thick interbedded with grey gneiss |
EMB 4 | 0.06 | <0.01 | 3500 | Pink pegmatite 1 m-thick |
EMB 5 | 0.09 | 0.02 | 2500 | Coarse pink pegmatite, dark patches |
EMB 6 | 0.02 | 0.01 | 5000 | Coarse pink pegmatite, dark patches |
EMB 7 | 0.01 | <0.01 | 2500 | Pink pegmatite, quartz, dark fragments |
MAC 2 | 0.01 | 0.02 | 1150 | Micaceous, limonitic marble skarn |
MAC 3 | <0.01 | <0.01 | 1700 | Micaceous diopside skarn |
MAC 4 | 0.06 | 0.31 | 12000 | Heavy biotite green diopside skarn; uraninite response |
MAC 5 | 0.02 | 0.12 | 4000 | Coarse biotite green pyroxene skarn;uraninite response |
MAC 6 | 0.01 | 0.08 | 6000 | Coarse biotite marble skarn |
MAC 7 | <0.01 | <0.01 | 4000 | Biotite pyroxene skarn |
MAC 8 | 0.01 | 0.06 | 3500 | Coarse biotite pyroxene skarn |
SAR 3 | 0.02 | 0.01 | 1200 | Coarse-grained dark pink quartz-feldspar pegmatite |
SAR 4 | 0.04 | 0.03 | 1950 | Coarse pink feldspar-quartz pegmatite |
SAR 5 | 0.08 | 0.04 | 1180 | Dark pink medium-grained feldspar-quartz pegmatite |
SAR 6 | 0.04 | 0.03 | 720 | Medium to coarse-grained dark pinkto dark red hornblende syenite Table:pegmatite |
SAR 7 | 0.01 | 0.01 | 630 | Coarse graphic dark pink feldspar-quartz pegmatite |
SC1-1 | 0.09 | 0.01 | 4500 | Medium to coarse-grained dark pink augite syenite pegmatite; uranothorite response |
SC2-1 | <0.01 | <0.01 | 10000 | Coarse dark grey to pink quartz-feldspar pegmatite |
SC2-2 | 0.10 | 0.02 | 7000 | Coarse augite syenite; 50% dark |
SC2-3 | <0.01 | 0.55 | +15K | Coarse –grained dark red augite syenite pegmatite; limonitic; stronguraninite response |
29
Table:Bancroft 6 Properties Assay Results (cont’d.)
Sample | ThO2 % | U3O8 % | Scint. cps | Description |
SC2-4 | 2.81 | 0.69 | 4500 | Medium-grained dark green augite syenite; small flat slab in basal till; limonitic; stronguranothorite response |
SC2-5 | 1.99 | 0.66 | 3500 | As SC2-4 above; 5 m to west; stronguranothorite response |
SC2-6 | 2.54 | 0.40 | +15K | Coarse-grained dark pink augite (50%) syenite; stronguranothorite response |
SC2-7 | 3.09 | 0.37 | 12000 | Fine-grained weathered dark redaugite pegmatite; stronguranothorite response |
SC2-8 | 0.80 | 0.04 | 4300 | Coarse-grained dark red augite syenite;uranothorite response |
SC2-9 | 0.56 | 0.07 | 4500 | Medium to coarse-grained dark pink augite syenite;uranothorite response |
CAM=Canadian All Metals CR = Canada Radium EMB=Empire ‘B’
MAC= Maclean Hogan SAR =Saranac SC1=Silver Crater #1 Showing
SC2=Silver Crater #2 Showing
Conclusions and Recommendations
1.
Significant uranium results were obtained from bedrock samples from three of the six properties tested in the current exploration program, particularly the 3.02% U3O8 from Canadian All Metals and the 0.31% average U3O8 from nine samples from the Silver Crater Baumhour-Campbell Occurrence and the five-sample high grade zone averaging 0.53% U3O8 from the same property, as well as a 0.31% U3O8 result from the McLean-Hogan grid.
2.
The trenches from the three properties should be cleaned out with a backhoe and the geology mapped. Detailed radiometric surveying should be conducted and detailed saw cutting sampling undertaken along the trenches. Samples generated should be analyzed for uranium and thorium by the XRF method.
3.
The properties have all been drilled before, but there is no record of the extent or location of this work. There is also no record of high grade mineralization such as obtained on the Canadian All Metals and Silver Crater # 2 Showing during the present program. The high grade areas on all three properties should be tested with vertical percussion drill holes and sampling of radioactive cuttings, initially in the vicinity of the high grade mineralization and then stepped out on a 25-m square grid to test the radioactive zones on the grids. This would involve the drilling of approximately 90 holes 15m in length. Contingent on successful results a follow up diamond drilling program would be implemented to outline zones of economic potential.
Recommended Budget
Phase I
Backhoe stripping and cleaning | $30,000 |
1350 metres percussion drilling @ $50.00 | 67,500 |
Saw cut trench sampling | 20,000 |
Assaying saw cut and percussion samples | 6,000 |
Geological mapping | 5,500 |
Food and accommodation | 8,000 |
Rental equipment | 5,000 |
Supervision and reporting | 8,000 |
| $150,000 |
30
Phase II
Follow up diamond drilling program |
|
3000 metres @ $100.00 all inclusive | $300,000 |
2006 Exploration Program
A program of radon in soil gas reading, backhoe excavation, and rock sampling for U3O8 and ThO2 assaying was carried out in the vicinity of previously discovered high grade uranium mineralization on the Canadian All Metals and Silver Crater # 2 properties over a one-month period in September, 2006. Radon readings were taken on 25-m square centres. Areas of higher readings were excavated to bedrock and sampled.
2007 Diamond Drilling Program
A fifteen hole program of diamond drilling totalling 3,800 metres was completed beneath previous mine workings on the Halo Northwest (6 holes) and Amalgamated Rare Earth # 2 (9 holes) properties between March 16 and May 29, 2007. The program was conducted as a joint venture, operated by El Nino Ventures Inc. with CanAm Uranium earning in. A total of 245 samples of radioactively anomalous core was split and submitted for analysis for U3O8, ThO2 and Rare Earth Elements. Results are pending.
2.
BATHURST PROPERTY - NEAR BATHURST, NEW BRUNSWICK
The Company entered into an Option and Joint Venture Agreement with Falconbridge Limited on May 26, 2006 relating to mineral claims and a large surrounding an area of influence (Fig.1) in the Bathurst area of New Brunswick. Subsequently Falconbridge was taken over by Xstrata plc, and the Agreement is now between Xstrata Zinc Canada (“Xstrata”) and El Nino Ventures Inc.
Property Title
The Xstrata – El Nino Ventures Option and Joint Venture Agreement comprises an area of interest that includes Ordovician aged rocks hosting the Bathurst Mining Camp and parts of the Camp that are overlain by Carboniferous aged sedimentary rocks. This area of interest includes mineral claims and two permit areas totaling the equivalent area of 6,921 unpatented mineral claims overlying approximately 111,698 hectares that are subject to the Joint Venture Agreement (the “Agreement”) between El Nino Ventures Inc. and Xstrata. The claims are either owned by Xstrata or are held under various agreements under which Xstrata may vest with an interest. The properties are located in the Bathurst Mining district of New Brunswick in the counties of Northumberland, Gloucester and Restigouche.
Under the terms of the Xstrata– El Nino Ventures Option Agreement, El Nino has the right to earn 50% interest in the properties and any mineral claims subsequently staked in the area of interest during the option period, by completing a $5.0 million dollar exploration expenditures over a two-year option period. Xstrata is also required to spend $5 million on exploration during this two year period contribution, but this expenditure is conditional upon Xstrata receiving financial support from the Province of New Brunswick.
The following technical data in italics is excerpted from the form 43-101 F1 technical report by Doug Clark, P. Geo., Consulting Geologist Dated: November 1, 2006 (Revised Dec 30, 2006) entitled Xstrata ZINC – EL NINO VENTURES BATHURST OPTION AGREEMENT, BATHURST AREA, NEW BRUNSWICK.
Xstrata has divided the Bathurst Mining Camp into 7 areas for the purposes of description 1) Brunswick Belt North, 2) Brunswick Belt South, 3) Heath Steele Area, 4) Half Mile Lake Area, 5) Mount Fronsac Area, 6) Camel Back Area and 7) Carboniferous Area. The following table of mineral occurrences with geological resource calculations illustrates the assets that bring value to this agreement.
31
Table I Mineral Occurrences with Historical Resources Estimates
| MINERAL OCURRENCES WITH HISTORICAL RESOURCES ESTIMATES |
|
| |||||||
Name | URN | Date | Cu % | Pb % | Zn % | Ag g/t | Au g/t | tonnes | ||
Flat Landing Brook | 0046 | 1975 | 0.03 | 1.27 | 5.62 | 23 |
| 1,270,100 | ||
Devils Elbow | 0285 | 1957 | 1.20 |
|
|
|
| 362,880 | ||
Louvicourt | 0147 | 1964 | 0.42 | 1.23 | 1.00 | 91 |
| 136,000 | ||
Mount Fronsac North | 1418 | 2006 | 0.14 | 2.18 | 7.65 | 40.3 | 0.40 | 1,260,000 |
All information in the above table except Mount Fronsac North is taken from “Economic Geology Monograph 11, Massive Sulphide Deposits of the Bathurst Mining Camp, New Brunswick, and Northern Maine; W.D. Goodfellow, S.R. McCutcheon, and J.M. Peter, 2003” page 20, Table 1, compiled by W.M. Luff.
All the grade and tonnage calculations reported in Table I should be consider as Inferred Mineral Resources as defined in the CIM Definitions Standards, November 2005.
The Flat Landing Brook deposit tonnage calculations were originally completed by Sabina Industries Ltd in 1975. The tonnage calculations were re-calculated in 1982 by New Brunswick Government geologists and published in DNRE Information Circular 83-2. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The methodology and cut-off grades are not discussed in either publication and should be considered NI 43-101 non-compliant.
The Devil’s Elbow deposit tonnage calculations were originally completed by American Metals Co in 1957. The tonnage calculations were re-calculated in 1982 by New Brunswick Government geologists and published in DNRE Information Circular 84-1. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The methodology and cut-off grades are not discussed in either publication and should be considered NI 43-101 non-compliant.
The Louvicourt deposit tonnage calculations were originally completed by L. Gray et al in 1964. The tonnage calculations were re-calculated in 1976 by Sabina Industries from information taken from drill results in assessment report 471255 submitted by Sabina title “Report of Work by P.K. Gummer, Nine Mile Brook Property, Sabina Industries Ltd and Essex Minerals Co, March 1976”. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The methodology and cut-off grades are not discussed and should be considered NI 43-101 non-compliant.
Geological Resource calculations for Mount Fronsac North of taken from a paper co-authored by J.A. Walker and G. Graves titled “The Mount Fronsac North VMS deposit: A recent discovery in the Bathurst Mining Camp, New Brunswick”, 2006 in press. Tonnages and grade calculation methodology are not discussed in the paper and should be considered an inferred mineral resource and is NI 43-101 non-compliant.
As a partner Xstrata will provide expertise in advanced Airborne geophysical and ground geophysical surveys that will enable the Option Agreement to reap the rewards of a mining camp scale exploration program.
The area of interest includes 524,900 hectares overlying the Bathurst Mining Camp in northern New Brunswick, Canada (Figure 1).
32
FIGURE 1 LOCATION OF BATHURST AREA OF INTEREST
The current number of mineral claims in good standing that fall within this agreement are 4,452 claims (60 individual claim blocks, totaling 72,198 ha); Order-In-Council 2004-121 (Permit 1) with 21,500 hectares and Order-In-Council 2004-443 (Permit 2) with 18,000 hectares. Total area for all claims equals 111,698 hectares. All the above mineral claims are registered under Falconbridge Inc. All of the Falconbridge past producing and producing properties have been withdrawn from this agreement as they carry environmental liabilities.
Property Description and Location
The Xstrata Zinc – El Nino Option Agreement properties are comprised of 4,452 unpatented mineral claims and 2 Orders-In-Council Permit Areas (Permit 1 & Permit 2) overlying an area of 111,698 hectares that are subject to a Joint Venture Agreement (the “Agreement”) between El Nino Ventures and Xstrata Zinc.
The properties are located in the Bathurst Mining district of New Brunswick in the counties of Northumberland, Gloucester and Restigouche. The claims can be located on National Topographic System (NTS) maps 21O/1, 21O/7, 21O/8, 21O/9, 21O/10, 21P/4, 21P/5 and 21P/12. The geographic centre of the properties is at latitude 47°27’N and longitude 66°12’W;
Table II summarizes all the properties under the option agreement. While the claims in individual groups are contiguous, not all groups are contiguous.
Table II Claim Group Summary
| Block | Group Name | Claims | NTS | Expiry Date | Term | Work Applied | Excess Work | Hectares | Work Required | Renewal Fees |
1 | 975 | Brunswick | 263 | 21P/05f | 20-Dec-2006 | 24 | $3,319,070 | $1,083,320 | 4,411 | $157,800 | $7,890 |
2 | 1271 | Loop Road | 135 | 21P/12d | 18-Mar-2007 | 22 | $1,250,360 | $197,360 | 2,144 | $81,000 | $4,050 |
33
| Block | Group Name | Claims | NTS | Expiry Date | Term | Work Applied | Excess Work | Hectares | Work Required | Renewal Fees |
3 | 1301 | Otter Brook | 14 | 21O/08b | 10-Jun-2007 | 22 | $329,730 | $12,730 | 290 | $8,400 | $420 |
4 | 1522 | Heath East | 16 | 21O/08a | 29-Sep-2007 | 21 | $478,371 | ($6,054) | 257 | $9,600 | $480 |
5 | 1694 | Cold Brook | 623 | 21P/05g | 7-Dec-2006 | 19 | $2,994,348 | $309,325 | 9,811 | $373,800 | $18,690 |
6 | 1828 | Little Bald Mountain | 202 | 21O/08d | 13-Oct-2006 | 18 | $1,757,709 | $192,796 | 3,381 | $121,200 | $6,060 |
7 | 1834 | Sabina Option | 479 | 21P/05e | 21-Oct-2006 | 22 | $3,540,169 | $657,329 | 7,540 | $287,400 | $14,370 |
8 | 1878 | Moody Brook | 52 | 21O/08c | 29-Nov-2006 | 18 | $479,500 | $156,000 | 947 | $31,200 | $1,560 |
9 | 1883 | Indian Lake | 308 | 21O/08g | 5-Dec-2006 | 22 | $2,033,632 | $395,210 | 5,003 | $184,800 | $9,240 |
10 | 1938 | Pabineau South | 181 | 21P/05e | 22-Feb-2007 | 18 | $1,377,055 | $320,105 | 3,000 | $108,600 | $5,430 |
11 | 1959 | Mount Fronsac | 31 | 21O/08f | 29-Mar-2007 | 22 | $371,915 | $127,015 | 436 | $18,600 | $930 |
12 | 2350 | Orvan Brook | 32 | 21O/09a | 26-Nov-2006 | 14 | $138,600 | $16,000 | 490 | $16,000 | $800 |
13 | 2555 | Fly Tent Brook | 383 | 21O/08f | 2-Sep-2007 | 13 | $2,042,640 | $901,690 | 6,393 | $191,500 | $9,575 |
14 | 2556 | Portage Brook North | 109 | 21O/08e | 2-Sep-2007 | 13 | $315,399 | ($51,701) | 1,784 | $54,500 | $2,725 |
15 | 3584 | PL Group | 4 | 21P/05e | 9-Jun-2007 | 8 | $16,565 | $9,715 | 61 | $1,200 | $80 |
16 | 3770 | Northwest Miramichi | 31 | 21O/08c | 18-Jul-2007 | 7 | $40,141 | ($159) | 587 | $9,300 | $620 |
17 | 3779 | South Middle River | 38 | 21O/09a | 31-Jul-2007 | 7 | $62,838 | $11,188 | 657 | $11,400 | $760 |
18 | 3884 | SW Upsalquitch | 11 | 21O/09d | 8-May-2007 | 6 | $15,494 | $4,494 | 201 | $3,300 | $220 |
19 | 3885 | Mount Fowler | 10 | 21O/09d | 8-May-2007 | 6 | $33,919 | $23,919 | 157 | $3,000 | $200 |
20 | 3928 | Beehler | 14 | 21P/05f | 27-Jul-2007 | 6 | $19,978 | $5,978 | 231 | $4,200 | $280 |
21 | 4424 | Devil's Elbow | 15 | 21O/08e | 29-Mar-2007 | 3 | $10,422 | $2,272 | 236 | $3,000 | $60 |
22 | 4437 | South Little River Lake | 42 | 21O/08b | 8-Apr-2007 | 3 | $13,442 | $2,942 | 642 | $8,400 | $168 |
23 | 4448 | Sevogle Air Strip | 14 | 21O/01g | 30-Apr-2007 | 3 | $5,494 | $1,994 | 213 | $2,800 | $56 |
24 | 4449 | Mount Hay | 32 | 21O/07h | 30-Apr-2007 | 3 | $83,872 | $75,872 | 505 | $6,400 | $128 |
25 | 4451 | Clearwater Stream | 25 | 21O/01b | 7-May-2007 | 3 | $26,942 | $20,692 | 417 | $5,000 | $100 |
26 | 4452 | Taylor Brook | 175 | 21P/05c | 7-May-2007 | 3 | $217,923 | $174,173 | 2,820 | $35,000 | $700 |
27 | 4454 | Middle River South | 6 | 21O/09a | 13-May-2007 | 3 | $726 | ($774) | 109 | $1,200 | $24 |
28 | 4456 | Middle River South | 6 | 21O/09a | 13-May-2007 | 3 | $15,000 | $13,500 | 109 | $1,200 | $24 |
29 | 4457 | Orlo Lake Brook | 9 | 21O/08h | 13-May-2007 | 3 | $4,201 | $1,951 | 141 | $1,800 | $36 |
30 | 4458 | Boobey Brook | 12 | 21O/01a | 13-May-2007 | 3 | $30,000 | $27,000 | 140 | $2,400 | $48 |
31 | 4459 | Pabineau West Block | 10 | 21P/05e | 13-May-2007 | 3 | $25,000 | $22,500 | 152 | $2,000 | $40 |
32 | 4460 | Murray Brook | 22 | 21O/09d | 13-May-2007 | 3 | $51,722 | $46,222 | 390 | $4,400 | $88 |
33 | 4465 | Boucher Brook | 22 | 21O/08h | 21-May-2007 | 3 | $2,662 | ($2,838) | 361 | $4,400 | $88 |
34 | 4468 | Taylor Brook 5 | 8 | 21P/05c | 25-May-2007 | 3 | $2,638 | $338 | 113 | $1,600 | $32 |
35 | 4509 | Mount Perley | 71 | 21O/08e | 10-Aug-2007 | 3 | $49,077 | $31,327 | 1,138 | $14,200 | $284 |
36 | 4514 | Mount MacIntosh | 35 | 21O/08e | 18-Aug-2007 | 3 | $16,511 | $7,761 | 630 | $7,000 | $140 |
37 | 4521 | Mount MacIntosh Ext | 57 | 21O/07h | 3-Sep-2007 | 3 | $81,420 | $67,170 | 965 | $11,400 | $228 |
38 | 4525 | Restigouche South | 21 | 21O/07h | 17-Sep-2007 | 3 | $28,145 | $22,895 | 366 | $4,200 | $84 |
39 | 4531 | Mt. MacIntosh East Ext | 18 | 21O/08e | 23-Sep-2007 | 3 | $2,178 | ($2,322) | 295 | $3,600 | $72 |
40 | 4534 | Nine Mile East | 3 | 21P/05e | 1-Oct-2007 | 3 | $7,500 | $6,750 | 80 | $600 | $12 |
41 | 4563 | Rio Grande | 9 | 21P/12c | 3-Dec-2006 | 2 | $1,089 | $189 | 108 | $1,350 | $36 |
42 | 4564 | Sevogle Airstrip | 16 | 21O/01g | 3-Dec-2006 | 2 | $1,936 | $336 | 247 | $2,400 | $64 |
34
| Block | Group Name | Claims | NTS | Expiry Date | Term | Work Applied | Excess Work | Hectares | Work Required | Renewal Fees |
43 | 4565 | Tingley Brook | 25 | 21P/04f | 3-Dec-2006 | 2 | $6,982 | $4,482 | 390 | $3,750 | $100 |
44 | 4566 | Gordon Meadow Brook | 35 | 21P/05f | 3-Dec-2006 | 2 | $11,629 | $8,129 | 586 | $5,250 | $140 |
45 | 4568 | McLaughlin Brook | 15 | 21P/04f | 3-Dec-2006 | 2 | $4,783 | $3,283 | 234 | $2,250 | $60 |
46 | 4569 | North Middle River | 9 | 21O/09b | 3-Dec-2006 | 2 | $1,089 | $189 | 101 | $1,350 | $36 |
47 | 4586 | South Tetagouche | 14 | 21P/12c | 31-Dec-2006 | 2 | $4,662 | $3,262 | 212 | $2,100 | $56 |
48 | 4598 | The Gorge | 4 | 21O/09a | 10-Jan-2007 | 2 | $484 | $84 | 69 | $600 | $16 |
49 | 4599 | Murray Lake | 30 | 21O/09d | 10-Jan-2007 | 2 | $3,630 | $630 | 641 | $4,500 | $120 |
50 | 4602 | East Caribou | 97 | 21O/09b | 25-Jan-2007 | 2 | $58,996 | $49,296 | 1,547 | $14,550 | $388 |
51 | 4609 | Camp Cluster | 17 | 21P/05e | 14-Feb-2007 | 2 | $4,515 | $2,815 | 268 | $2,550 | $68 |
52 | 4640 | Camel Back Terry | 11 | 21O/09c | 25-May-2007 | 2 | $955 | ($145) | 173 | $1,650 | $44 |
53 | 4796 | Heath Steele West | 60 | 21O/08b | 6-Feb-2007 | 1 | $0 | $0 | 1,084 | $6,000 | $240 |
54 | 4841 | Duck Island | 126 | 21P/05g | 7-Apr-2007 | 1 | $0 | $0 | 1,719 | $12,600 | $504 |
55 | 4870 | California Lake | 102 | 21O/08a | 18-Dec-2006 | 3 | $52,921 | $27,421 | 1,677 | $20,400 | $408 |
56 | 4871 | California Lake | 38 | 21O/08f | 18-Dec-2006 | 3 | $23,104 | $13,604 | 691 | $7,600 | $152 |
57 | 4873 | California Lake | 26 | 21O/08b | 18-Dec-2006 | 3 | $16,636 | $10,136 | 412 | $5,200 | $104 |
58 | 4874 | California Lake | 164 | 21O/08d | 18-Dec-2006 | 3 | $100,698 | $59,698 | 2,741 | $32,800 | $656 |
59 | 4884 | Taylor Brook East | 36 | 21P/05d | 27-Jun-2007 | 1 | $0 | $0 | 578 | $3,600 | $144 |
60 | 4913 | Tozer Brook | 79 | 21P/05c | 16-Aug-2007 | 1 | $0 | $0 | 1,117 | $7,900 | $316 |
61 | Permit 1 | O-I-C 2004-121 | 1344 | 21P/05 | 16-Jun-2007 | 3 | $1,402,978 | $824,853 | 21,500 | $268,750 | $5,375 |
62 | Permit 2 | O-I-C 2004-443 | 1125 | 21P/06 | 29-Nov-2007 | 3 | $774,467 | $208,082 | 18,000 | $225,000 | $4,500 |
|
|
| 4452 |
|
|
| $23,763,862 | $6,102,029 | 111,698 | $2,429,550 | $100,319 |
All the claim groups (“Properties”) in the above table are registered to Falconbridge Inc (Xstrata). Under the terms of the option agreement, El Nino Ventures has the mutually exclusive right to earn 50% interest in the properties by completing a $5,000,000 dollar exploration program over a two-year period. To earn 50%, El Nino must contribute $5,000,000 dollar in exploration expenditures over the two-year period, $2,500,000 million the first year and $2,500,000 million the second year. Xstrata’s contribution is conditional upon financial support from the Province of New Brunswick. To the extent that Xstrata receives its annual funds under the Grant Program from the DNR, Xstrata intends to contribute to the Programs funds of $2,500,000 in the first year of this Agreement and $2,500,000 in the second year of this Agreement.
The Bathurst Option Agreement includes an Area of Interest that encompasses the entire Bathurst Mining Camp with the exception of certain Excluded Properties that are listed as follows:
Table III Falconbridge Inc. Excluded Properties
Property Name | Block | Claims | Date Staked | Expiry Date |
HALF MILE LAKE SOUTH FALCO | 1900 | 30 | 1/4/1985 | 1/4/2006 |
HALF MILE LK CENTRAL | 1681 | 25 | 11/18/1983 | 11/18/2006 |
HALF MILE LAKE NORTH | 1850 | 18 | 11/8/1984 | 11/8/2004 |
Grant No 12 (producing mine) |
|
|
|
|
Grant No 6 ( former producing mine) |
|
|
|
|
Heath Steele Watershed (former producing mine) |
|
|
|
|
Mining Lease 253 – Stratmat (former producing mine) |
|
|
|
|
35
With the exception of the Excluded Properties, further acquisitions within the Area of Interest by El Nino or Xstrata during the term of the Agreement will be subject to the terms of the Bathurst Option Agreement.
The unpatented mining claims comprising the Properties are on crown land owned by the Province of New Brunswick except Block 4056 located in North Tetagouche, Block 0975 that overlies select portions of the communities of Grand Falls and Permit 2 centred over the community of Allardville. Each 16 hectare claim requires assessment work as follows: $100 in year one, $150 in year two, $200 in year three, $250 in year four, $300 in year five to ten, $500 for each of years eleven to fifteen and $600 for each of years sixteen to twenty. The expiry date for each property is shown on Table II.
To date, a total of $23,763,862 of assessment work has been filed on the Properties. The Properties are in good standing and assessment credits are sufficient for renewal in 2006. To renew in 2006, assessment work credits of $1,256,650 are required. Current existing credits available for renewal are $6,102,029. Total renewal fees payable during 2006 will be $60,422.
The properties have not been legally surveyed. The Properties, the Excluded Areas and the Area of Interest are shown on Figure 2. All blue coloured properties in Figure 2 are part of the Xstrata Zinc – El Nino Ventures Option Agreement.
FIGURE 2 PROPERTIES & EXCLUDED PROPERTIES
Three of the Xstrata properties are subject to previous agreements and royalty provisions as follows:
1) Mount Fronsac – Block 1959 (Property 11) is subject to an Option Agreement dated August 8, 1997 between Falconbridge Inc. and Brancote Canada Limited (now Landore Resources Inc.) wherein Falconbridge may earn a 51% interest up to a 75% interest in the option property.
36
2) Sabina Option – Block 1834 (Property 7) is subject to an Agreement dated July 15, 1980 between Falconbridge Inc. and Sabina Industries Limited (now Sabina Resources Limited) where Sabina holds a 12 ½ % Net Carried Interest.
3) A portion of the Brunswick Property – Block 975 (Property 1), specifically claim numbers 337263 to 337289 inclusive, is subject to a 10% NPR to Terry Mersereau and Norm Pitre of Bathurst, NB.
There are no environmental liabilities to which the Properties are subject.
On crown land, a Notice of Planned Work must be filed prior to field activities such as line cutting, geophysics, geochemistry and diamond drilling. On private land, a Notice of Planned Work is also required. Any disturbed areas most be reclaimed and stumpage fees paid to the land owner. During the fire season between May and the end of October the company is required to get a work permit for the New Brunswick Department of Natural Resources. If crossing a watercourse the company would be required to get a Water Course Alteration Permit. These permits are relatively easy to attain and come with conditions of operation. Usually such permits are obtained immediately prior to the planned work.
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
The Properties occupy the northeast part of the Miramichi highlands that is characterized by steep rolling hills. Relief varies from 250 metres to 700 metres above sea level. Most of the area is covered by a relative thin layer of glacial till. Outcrops comprise less than 5% of the area. Three river systems, the Miramichi, the Nepisiguit and the Tetagouche drain the area. Vegetation of the Bathurst Mining District is boreal forest and comprised 65% regeneration and plantation growth and 35% mature black spruce-fir forest. Mixed maple, birch, red spruce and fir can be found on highland portions. Local growths of alder, cedar and black spruce occupy lowland and swampy areas.
The Properties are readily accessed via a network of logging roads along with some paved and all-weather secondary roads. The Bathurst Option Agreement Properties occupy parts of the Bathurst Mining Camp. Year round access is available for much of the area on Route 430, a secondary road. Winter access to some of the Properties is by snowmobile. Alternatively, snow-plowing contractors are available to clear roads for winter access.
The geographic centre of these Properties is approximately 40 kilometres west of Bathurst, New Brunswick and 60 kilometres northwest of Miramichi, New Brunswick. Bathurst is the major population centre providing supplies and services. Bathurst is serviced by the Canadian National Railway Halifax to Montreal main line. There is a seaport in Belledune, 30 kilometres north of Bathurst, which handles ocean-going ships. Brunswick Mining and Smelting (Xstrata) operates the Brunswick No. 12 deposit at a rate of 10,000 tonnes per day and ships copper and zinc concentrate through the Belledune port. Noranda also operates a lead smelter in Belledune. The former producing Caribou Mine and Mill, owned by Breakwater Resources Inc., are located within 10 kilometres of some of the Properties.
The climate in this area is temperate with four distinct seasons. Snow-fall amounts can reach two metres. Winter temperatures generally range from –5° to –20° Celsius but can dip to -40°. With the exception of a six-week period during the spring, logging operations proceed year-round and provide ready access to the Properties. Geophysical and diamond drilling activities can be conducted throughout the year although access is somewhat hampered in spring. Geological, geochemical and trenching activities are restricted to the months of June to November. The Brunswick No. 12 mining operation continues 365 days per year.
The majority of Properties and the Area of Interest are located on crown land owned by the Province of New Brunswick. Ready access is available for mining activities on these properties. Water is plentiful in the area. With mines in operation over the past fifty years, a well-trained work-force is available locally. The Brunswick No. 12 mining operation has about five years of reserves left. Any potential production from the Bathurst Option Agreement could be processed at this existing milling operation. The Caribou Mine and Mill are currently shut down but are scheduled back in operation by the spring of 2007. There are existing tailings disposal areas at Brunswick No. 12, Brunswick No. 6 and Caribou Mines.
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History of the Bathurst Camp
The Bathurst Option Agreement is a large scale regional exploration program scheduled to last at least two years. The program covers an area of prospective geological units that are known to host several volcanogenic massive sulphide deposits. These deposits are well distributed throughout the area of interest.
The roots of mining in this area began with iron and in 1953 the Heath Steele Mine was discovered by airbourne magnetometer technology that was developed for submarine hunting during the Second World War. In the 1950' and 1960's most of the known and near surface sulphide deposits were discovered by prospecting or using shallow penetrating geophysical and geochemical surveys. With the progressive development of Airborne Electromagnetic and Gravity surveys it has become possible to explore mature mining camps with deeper penetrative and sensitive detection equipment. As a result of these advancements and the gradual depletion of massive sulphide ore reserves at the Brunswick No. 12 Mine near Bathurst, New Brunswick, Xstrata Zinc has proposed a 2 year plan to discover new economic volcanogenic massive sulphide ore bodies that may exist below the previous detection limits. El Nino Ventures negotiated an exclusive right to exp lore with Xstrata Zinc.
As this project is a large scale project with an extensive amount of data to review it would be difficult if not impossible to report extensively on the whole area. As a result, this report will summarize the mineral exploration that has come to El Nino Ventures as a result of this agreement. Xstrata has divided the Bathurst Mining Camp into 7 areas based on the distribution of their mineral claims and for the purposes of description. These are:
1) Brunswick Belt North,
2) Brunswick Belt South,
3) Heath Steele Area,
4) Half Mile Lake Area,
5) Mount Fronsac Area,
6) Camel Back Area and
7) Carboniferous Area
Note: Carboniferous Area covers eastward dip of the Bathurst Mining Camp stratigraphy beneath the Carboniferous aged sedimentary cover rocks.
The following is a description of the various areas that comprise this project.
Brunswick Belt North
The Brunswick Belt North is located 20 to 25 kilometres southwest of the City of Bathurst (Figure 3). The approximately 10 by 15 kilometre property comprises several claim blocks encircling two separate Crown Grants. The Crown Grants host the Brunswick No. 12 and Brunswick No. 6 massive sulphide deposits. These Crown Grants comprise part of the excluded areas due to their inherent environmental liabilities. Access to the central and southern part of the belt is via Highway 430 (paved) and various secondary gravel roads. The northern part of the belt has access via the main road to Brunswick No. 12 and numerous logging roads.
The Brunswick deposits were discovered in the 1950's and began production around 1964. Most of the exploration during the past several years has focused in the vicinity of the Brunswick No. 12 deposit while attempting to delineate additional zinc-lead-silver-copper. The ore reserves of this deposit are scheduled to be depleted by 2010. As a result of the intense mineral exploration in the immediate vicinity of the Brunswick No. 12 deposit it is has been concluded that there is very limited potential for a near surface discovery of a significant sulphide body near the mine.
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The most recent exploration work on the remainder of the belt included completion of a 3D seismic survey. Following up on a technical success at Halfmile Lake in 1999 with a newly developed 3D seismic technique adapted for mineral deposit detection, an approximate 36 sq km block west of Brunswick No. 6 and south of Brunswick No. 12 was covered. No anomalies comparable to the Halfmile Lake reflector were delineated as a result of the survey. Anomalies with less definition do exist in the data and these have never been tested. It is possible that the weaker response may be due to the 65°to 70°dips of the stratigraphy in the Brunswick North area compared to the 20°to 45°dips at Halfmile Lake.
The Brunswick Horizon can be traced from north of Brunswick No. 12 to south of Brunswick No. 6. Several structural repetitions of this sulphide bearing iron formation horizon also occur in this claim package and there is still much exploration to be done.
The following mineral occurrences have been discovered in this area: Fab Main Zone, Fab East Zone, Fab West Zone, Grandroy, Flat Landing Brook Deposit, Louvicourt, Coulee and No. 6 Southwest. The following brief histories of these mineral occurrences have been taken from the Mineral Occurrence Database File on the New Brunswick Department of Natural Resources website (see the following linkhttp://www1.gnb.ca/0078/GeoscienceDatabase/index.htm). Descriptions for the mineral occurrence files were provided by S.J. Gower (1992-93), J.A. Walker (1996) and S.A.A. Merlini (1998). Site visits and descriptions were made by E.A Brooks (1993). Assessment Report numbers are six (6) digit GEOSCAN File Numbers used to record assessment files for the New Brunswick Department of Natural Resources.
FIGURE 3 BRUNSWICK NORTH BELT
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Fab Main Zone - MOD Unique Record Number 0122
The Fab Property is located between the Brunswick No. 12 and No. 6 mine sites and was originally staked in the early 1950's by Fab Metal Mines Limited. An extensive drilling program was carried out in 1953 with most of the activity concentrating on the Fab Main Zone. A total of 97 diamond drill holes were drilled on the property between 1953 and 1977. The holes were drilled to test various anomalies identified by magnetic, gravimetric, electromagnetic, induced potential, resistivity and soil geochemical surveys carried out in the area during this period. Drill logs for holes drilled between 1963 and 1966 are available in assessment report GEOSCAN File 471155. With the exception of three holes drilled west of the Main Zone in 1959 (assessment report 471153, DDH 59-1,2,3), data on earlier drilling is not available in the assessment files. McAllister (1954, ref. 394) describes the mineralization a s "the pyrite, pyrrhotite-chalcopyrite type with only a minor content of zinc and silver and little or no lead".
Rayrock Mines Limited (assessment report 471156) optioned the property and drilled one hole in 1974 (DDH 74-1) to test the mineralization at depth. The mineralized zone, intersected from 1,582 to 1,630 feet (482-496 metres), consists mainly of pyrite with minor pyrrhotite, sphalerite and chalcopyrite. The best assay results from DDH 74-1 was 5 feet (1.5 metres) grading 0.25% Cu, and 0.21% Zn.
Asarco Exploration Company of Canada Limited (assessment reports 472483 and 472636) staked the area in the late 1970’s and drilled at least one hole (82-1). They concluded that the property had been adequately tested for near-surface, massive sulphide zones.
In 1984, Brunswick Mining and Smelting (BMS) carried out magnetometer, gravity, and Max-Min II horizontal loop E.M. surveys over the prospect as part of project 218 (assessment report 473082). In 1985 (assessment report 473219), BMS carried out geological mapping, a VLF-EM survey and drilled seven holes (218-1 to 7). These holes, however, were located on geophysical anomalies west of the Fab Main Zone (see NB mineral occurrence file 1410). Hole 229-1 (assessment report 473220) was drilled in 1985 to test geophysical anomalies and to test the Fab Zone at depth. The intersection from 923 to 1,002 feet carried consistently anomalous zinc values (0.25% Zn over 9.5 metres) and possibly correlates with the Brunswick horizon. Weakly chloritic sedimentary rocks with pyrite and pyrrhotite mineralization and minor sphalerite and chalcopyrite were intersected from 1,367 to 1,480 feet and are interpreted to correlate with the Fab Main Zone. The best assay results were 0.65% Pb, 2.32% Zn, 0.12% Cu and 0.7 oz./ton Ag over 0.3 metres. Holes 229-2 and 3 (assessment report 473976) were drilled to test the Brunswick Horizon along strike to the north and south of 229-1. These two holes were also a follow up on 65-6 which intersected 0.7 metres of 3.14% Pb, 0.62% Zn, 0.5% Cu and 7.7 oz/ton Ag. The best assay result was 0.26% Pb, 1.13% Zn, 0.03% Cu and 7.54 g/t Ag over 1.5 metres in DDH 229-3.
The Fab Main Zone deposit is approximately 1,675 metres long, 9 metres wide and 400 metres deep. The tonnage has been calculated by MacLennan of DNR, 1984 (Mineral Occurrence file 0122) as having a historical resource estimate of 16,330,000 tonnes at 0.3% Cu, 0.6% Zn and 10.29 g/t Ag. Tonnage calculated by DNR is based on the dimensions of sulphide body and presented on the New Brunswick Mineral Occurrence Database website. Grade is also approximate. The original calculations and methodology used by MacLennan are not available or discussed on the DNR website. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The above tonnage calculations should be considered NI 43-101 non-compliant.
The Fab Zone is parallel to the Fab East trend and a few hundred metres to the west. This mineralized panel is situated on the main Brunswick Horizon, which can be traced from Brunswick No. 12 to Brunswick No. 6. The style and extent of mineralization is very similar to the mineralization at Fab East. Drilling has tested this area to the 400 metre level where numerous sulphide intervals carrying minor base metals have been intersected. The Time Series Distributed Acquisition Survey (TSDAS or Titan-24) coverage recommended over the Fab East zone would cover the Fab Zone at the same time due to their proximity. This area is very conveniently situated with respect to Brunswick No. 12, which are only 5 or 6 km away along a paved highway.
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Fab West Zone - MOD Unique Record Number 1256
The Fab West Zone was first drilled in 1963 (assessment report 471154, DDH 63-3, 4, 5 and 6) to follow up "long wire anomalies" in the north-west sector of the Fab property. Scattered mineralization was found in several of the holes and "lean magnetite iron formation" was encountered. Several more holes were drilled on this horizon by Fab Metal Mines in 1965-66 (see assessment report 471155). Chloritic iron formation and minor sulphide mineralization were described.
In 1984, Brunswick Mining and Smelting carried out magnetometer, gravity, and Max Min 11 horizontal loop E.M. surveys over the Fab property as part of project 218 (assessment report 473082). In 1985, BMS (assessment report 473219) conducted geological mapping, a VLF-EM survey and drilled seven holes (DDH-218-1 to 7) to test geophysical anomalies west of the Fab Main Zone and to try to locate the Brunswick horizon. Intersections of chloritic sediment with stringer and disseminated sulphides were interpreted to represent the ore horizon. Narrow zones (less than 0.3 metres) of fine-grained massive sulphides were intersected locally but base metal values were low. The best intersection was 0.15 metres grading 1.81% Zn, 0.36% Cu, 0.13% Pb, 1.71g/t Au and 10.63 g/t Ag in DDH 218-2.
A borehole Pulse EM survey carried out on the 1985 drill holes indicated a conductive body beneath DDH 218-4. Two more holes were drilled in 1986 (assessment report 473330) to intersect this conductor and test the argillaceous sediment horizon at depth. The PEM anomaly was explained by narrow zones of fine-grained massive pyrrhotite. The best assay was 1.21% Zn, 0.3% Pb, 0.01% Cu and 5.14 g/t Ag over 0.15 metres in DDH 218-9. Borehole Pulse EM surveys were conducted on 218-8 and 218-9 but no "off hole" pulse anomalies were found (assessment report 473688).
Grandroy - MOD Unique Record Number 1265
In 1957, Jacquet River Mines Limited (assessment report 471177) conducted an electromagnetic survey. The survey was followed up by DDH 14-2 to 14-5. Hole 14-4 was drilled to test a combined electromagnetic anomaly (anomaly J) and favourable geology. Six metres of pyrite and chalcopyrite mineralization was intersected in chlorite-quartz schist. Apparently only one analysis was done. Results were 0.68% Cu over a 0.6 metre section. Hole 14-5 was drilled beneath hole 14-4 for a deeper intersection. The same mineralized zone was intersected but there was no increase in grade.
BMS (assessment report 474189) compiled data on the Grandroy property. Most of the drilling was concentrated on the Brunswick Horizon situated in the northern part of the property. The holes drilled by Jacquet River Mines however are located in the southern part of the property and are interpreted to intersect the Headway Red Lake Horizon. BM&S drilled two holes and excavated three trenches approximately 1 kilometre east along strike of DDH 14-4 to verify the continuity of the mineralized horizon. No mineralization was encountered and Brunswick concluded that the occurrence is a mineralized shear zone rather than a stratabound unit.
The Grandroy area is situated roughly 3 kilometres south of the Brunswick No. 12 deposit in a structurally complex area where the Brunswick Horizon swings from north-south to east-west. There are thought to be three structurally repeated Brunswick Horizon intervals in this area as defined by iron formation with weak base metal signatures. A new Cu rich zone was discovered in 1995 after trenching in an area of iron cemented till. Boulders from the trenching program contained over 5% Cu and contained an average of 3.45% Cu calculated from analysis for samples collected from over 30 boulders. Diamond drilling indicated that the surface mineralization continued to depth but was confined to narrow widths.
Flat Landing Brook Deposit - MOD Unique Record Number 0046
The Flat Landing Brook property was staked by several individuals and companies since 1953 including Bayne and Isaacs (55-56), New Laguerre Mines Ltd. (1957), Riocanex, (1958), Noranda (1959-60), Coulee Lead and Zinc, Headway Red Lake, and Great Northern Development (65-68), Mattagami Lake Mines (1972 to 1974). In 1974, a Questar Mark VI input E.M. and magnetometer survey was flown (assessment report 470483) by P. Gummer of Minserv Ltd. for Sabina Industries. Sericitic, rhyolite float containing massive sulphides was found when following up airbourne anomaly 11. The target was better defined with an I.P. survey. The Flat Landing Brook massive sulphide deposit was discovered in 1975 when the anomaly was drilled.
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Management of the property was turned over to Essex in 1976. During the period 1975 to 1978, 25 holes were drilled 75-11 to 75-20, 76-5 to 76-13, Z-11-1 to Z-11-9 (assessment report 472901). The objective of the 1975-76 program was to establish surface and near surface dimensions of the ore body. The 1977-78 objective was to test the sulphide zone at depth. Sabina estimated that deposit contained 1.7 million MT grading 4.9% Zn, 0.94% Pb, 19.54 g/t Ag.
The property was optioned to Noranda Exploration Co. Ltd. in early 1981. IP, Max-Min II, proton magnetometer, gravity, soil geochemistry, and McPhar HEM were carried out in 1980-81 (assessment report 472839). Eleven (11) drill holes were put down by Brunswick in 1981-82 (DDH 161-1-81 to 161-11-81). BMS indicates that the Flat Landing Brook deposit comprises four sulphide lenses (A,B,C and D) within a chloritic, felsic tuffaceous sequence. A and B are the most significant horizons. They grade laterally and vertically from Zn-Pb rich massive sulphide to disseminated, pyrite-rich mineralization to magnetite-chlorite-chert-sulphide-iron formation. The footwall is composed of fine-grained tuff interbedded with quartz augen tuff and the hanging wall is composed of felsic tuffs ranging in size from ash to agglomerate. The sulphide deposits and host rock have been intruded by an irregular mass of metagabbro which cuts off the mineralization in places.
In 1982, (assessment report 472946) additional magnetometer, gravity, Max-Min II EM, VLFEM surveys were carried out. In addition, holes 161-12-82 to 161-15-82 were drilled and extensions were drilled on holes 161-5-81, 76-5-82 to 76-8-82. The drilling indicated the massive sulphides extend from surface to approximately 500 feet. From 500 feet to 1,750 feet, minor disseminated mineralization occurs. Below 1,750 feet, a new zone of massive sulphides has been intersected by three drill holes. The best intersection was 19.5% Pb-Zn and 295 g/t Ag across a true width of 12.3 feet (3.7 metres) in DDH-161-7-81. D.G. Troop (1984, ref. 101) undertook a Masters thesis on this deposit. The Flat Landing Brook deposit is described as a small stratabound Zn-Pb-Ag sulphide deposit occurring in a similar stratigraphic position as the Brunswick No. 12 deposit. Host rock alteration of the footwall rocks is characterized by albitiz ation of potassic feldspar, chloritization and locally the development of spessartine garnets. The mineralogy, texture and composition of the iron formation associated with the sulphides was detailed allowing the development of a geochemical model. Further drilling was done by BMS in 1984-85 but this work has apparently not been filed for assessment. Assessment report 474101 details work done by BMS on the Sabina Option mineral claims from 1988 to 1990.
The Flat Landing Brook Deposit extends from surface to over 1 kilometre depth. The deposit contains a historical resource estimate of 1.27 Mt at 1.29% Pb, 5.62% Zn, 0.03% Cu and 23 g/t Ag (Goodfellow, et al, 2003). The Flat Landing Brook deposit tonnage calculations were originally completed by Sabina Industries Ltd in 1975. The tonnage calculations were re-calculated in 1982 by New Brunswick Government geologists and published in DNRE Information Circular 83-2. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The methodology and cut-off grades are not discussed in either publication and should be considered NI 43-101 non-compliant.
The deposit is hosted by a thin metasediment/iron formation horizon of the Brunswick Horizon situated at the contact between hanging wall rhyolitic to cherty tuff (Flat Landing Brook Formation) and footwall quartz augen tuff of the Nepisiguit Falls Formation. There is much gabbro present in the vicinity. Two types of sulphide are present: pyrrhotite - pyrite - chalcopyrite hosted by strongly chloritized and silicified tuff interpreted to represent feeder style mineralization, and finely banded pyrite-sphalerite-galena-magnetite interpreted to represent stratiform exhalative massive sulphides. The deposit is tabular in shape, strikes north-south, dips at 70°and plunges sub-vertically. Thickness of the sulphide exceeds 30m in the lowest sections of the deposit which is still open to depth.
Flat Landing Brook East - MOD Unique Record Number 0186
The ground was held by Uddlen Mines Ltd. (assessment report 471270) in the early 1950's.They drilled several holes (U-1 to U-5) but did not find any mineralization at the time.
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Brunswick Mining and Smelting held the ground from 1969 to 1972. They identified geochemistry and magnetometer anomalies and found weakly pyritized boulders in the vicinity of this occurrence but the ground was allowed to lapse.
The ground was staked again by BMS in late 1974. An aerial INPUT survey identified an anomaly in the northwest part of the claim group. A grid was cut in the area of the airbourne INPUT anomaly in 1976 (assessment report 470395) and magnetometer, gravity and electromagnetic surveys were carried out. Three holes were drilled in 1976, DDH 104-1, 2 and 3 (assessment report 470395) to test a coincident magnetic, gravity and INPUT anomaly. The drill holes intersected a steeply west-dipping zone of disseminated sulphides varying from 2 to 14 metres wide comprising 4 to 25% pyrite-pyrrhotite locally accompanied by sphalerite-galena-chalcopyrite mineralization. The two southerly holes intersected magnetite iron formation. The best assay was 0.76% Pb, 1.03% Zn, 0.32% Cu and 34 g/t Ag over 0.9 metres in DDH 104-3. Rocks to the east of the sulphide zone were chloritized and contained disseminated sulphides. Quartz-augen schist was fo und on the footwall side of all holes. The rocks were predominantly rhyolite tuffs with local massive rhyolite. The sulphide horizon is assumed to be correlative with the Flat Landing Brook occurrence located to the west.
BMS drilled three more holes, 104-5, 6 and 7 (assessment report 472549) in 1979 to further investigate the sulphide bearing horizon at depth and laterally. The drill holes cut a sequence of felsic tuff, tuffaceous sediment, augen schist and crystal tuff containing layers of magnetite-quartz and magnetite-chlorite iron formation. Small amounts of disseminated to semi-massive sulphide are associated with the iron formation. The heaviest sulphide intersection was 0.9 metres of 90% pyrite-pyrrhotite in DDH 104-4. The highest assay was 0.68% Pb, 1.95% Zn, 0.08% Cu and 12.7 g/t Ag over 8 centimetres in DDH-104-4. The drilling done in 1976 and 1979 covers a strike length of 366 metres.
In 1986 a borehole Pulse EM survey were carried out on three of the drill holes, DDH 104-3, 4, and 5 (assessment report 473322). BMS concluded that no anomalies were outlined that warranted further investigation. In 1990, BMS drilled one hole 63-1-90 (assessment report 474101) to test the strike potential at Flat Landing Brook. The area is underlain by the Flat Landing Brook Formation of the Tetagouche Group (MP PL91-40f).
Louvicourt Deposit - MOD Unique Record Number 0147
Gossan was discovered by L. Gray when a new road was put in from Bathurst to the Wedge and Heath Steele mines in 1964 (assessment report 471255). The ground was staked by L. Gamble,
L. Gray, and C. Smyth and subsequently optioned by Louvicourt Goldfields Corporation. Louvicourt carried out horizontal loop electromagnetic, self potential and magnetic surveys. The self potential survey revealed several isolated anomalies, one of which was tested by holes 3 and 4. Hole 4 intersected massive sulphides including a 0.18 metre wide section grading 14.4 g/t Au, 308 g/t Ag, 8.46% Cu, 24% Pb, and 0.09% Zn. DDH's 5 to 10 (assessment report 471192), 11 to 16 (assessment report 471258, filed under Smyth, C.) further defined the Louvicourt occurrence.
In 1966 drill holes 66-1 to 66-4 were drilled to test the continuity of the sulphide zone at depth. DDH's 66-2 and 66-3 intersected low values, while DDH's 66-4 intersected 1 metre of very high-grade, lead-zinc-copper mineralization in fractured, altered rhyolite. During 1967, holes 67-1 to 67-4 were drilled. Logs for the 1966 and 67 holes are not available in the assessment files. The mineralization was interpreted to occur on the west limb of a fold. DDH's 17 to 21 (assessment report 471192) probed the east limb of the fold and narrow zones of base metal mineralization were intersected in some of the holes. Louvicourt dropped their option in 1969.
P. Gummer (1966, ref. 208) prepared an undergraduate paper at Mount Allison University on the geology of the prospect. He indicates that the mineralization comprises mainly pyrite and barite with lesser amounts of freibergite, galena, sphalerite and chalcopyrite. This mineralization occurs along the upper contact of a rhyolite unit as well as within the rhyolite in sheared and brecciated zones. In a later paper, P. Gummer (1972) describes sericite, kaolinite and pyrite alteration in the footwall and chloritic alteration associated with the hanging wall of the stratabound sulphide lenses. A quartz-jaspilite-hematite rock occurring at and above the sulphide iron-formation horizon is interpreted as a fumarolic deposit.
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In 1974, the property (Mining License 1171) was optioned to Sabina Industries and Essex Minerals Co. In April of the same year a Questor Mark VI input airbourne electromagnetic survey and magnetometer survey were flown (assessment report 470483, filed under Gummer). This led to the discovery of the Flat Landing Brook occurrence (URN 0046) located east of Louvicourt. Essex Minerals Company and Sabina Industries Limited carried out extensive exploration in the Nine Mile Brook area between 1974 and 1978, including further geophysical surveys in the vicinity of the Louvicourt occurrence (assessment reports 471255, 472200). In 1976, four holes DDH 76-1 to 76-4, were drilled along the "Smyth Horizon" on strike from the Louvicourt (also called Smyth deposit, assessment report 470393). Mineralization was general low grade in these holes with the best assays grading 0.07% Cu, 0.65% Pb, 1.84% Zn, 0.17 g/t Au, 5.83 g/t Ag. The fo llowing description is taken from assessment report 471255. "The Smyth sulphide deposits consist of the closely related types: 1) a mineralized breccia zone in a phacoidal rhyolite dome postulated to represent the source of the mineralization for 2) two lenses of stratabound massive sulphides consisting of pyrite, barite, Ag, Au, Zn, Pb, Cu mineralization. Associated tuffs have iron exhalite lenses of jasper, quartz hematite, magnetite, barite, and chlorite". Geological resource are calculated to be 136,000 tonnes grading 90.86 g/t Ag, 0.96g/t Au, 1.23% Pb, 1.0% Zn and 0.42% Cu (assessment report 471255, page 78). The main sulphide zone is cigar shaped with a width of about 25 feet (7.6 metres) and a length of over 500 feet (152 metres).
BMS optioned a large property including the Louvicourt property (M.L. 1171), in 1981 and carried out induced polarization, Max-Min II (horizontal loop electromagnetic), gravity, magnetometer and soil surveys (assessment report 472839).
The Department of Natural Resources mapped the Nine Mile Brook deposit in 1980. Open File Report 80-5 states "the Nine Mile Brook deposit is a conformable lens of massive and disseminated pyrite-sphalerite-galena-tetrahedrite-barite with minor chalcopyrite, magnetite and arsenopyrite. The amount of barite apparently sets this deposit apart from the normal Bathurst type sulphide deposit. The sulphides occur between a footwall suite of rhyolite tuff breccias, agglomerates and graphitic rhyolite, and a hanging wall dominated by mixed Fe-Mn chemical sediments and rhyolitic tuffs. "Beaumont-Smith (1987) investigated the presence of clastic sulphide fragments in the hanging wall of the Louvicourt deposit in a B.Sc. thesis at UNB. He suggests a proximal autochthonous massive sulphide classification for the deposit based on the presence of a sphalerite-galena footwall vein system possibly representing a feeder zone. The following paragenetic sequence is outlined by Beaumont-Smith: "1) initial deposition of colloform and subhedral pyrite; followed by 2) the deposition of sphalerite, galena and tetrahedrite, often as replacements of pyrite; and finally 3) the deposition of chalcopyrite, often as replacements of earlier deposited sulphides."
In 1989, BMS (assessment report 474101) drilled hole 4263-1-89 to test the north limb of the Louvicourt stratigraphy.
Mineralization in this deposit occurs as a stratiform barite-pyrite-sphalerite-galena zone within rhyolite tuffs at or very near the contact with an overlying sequence of argillaceous sediments and iron formation. Pyrite content varies within the zone from 20% to 50% with locally massive pyrite and interstitial barite. This is the only example of a deposit with significant barite known in the camp. It is also anomalous in Au, Ag with respect to other deposits with drill intersections of 0.053 oz/t Au, 4.68 oz/t Ag, 0.52% Cu, 1.87% Pb, 0.88% Zn / 7.13m. A resource calculated in 1979 estimated that the deposit contained 136,000 tonnes of 1.23% Pb, 1.0% Zn, 0.42% Cu, 2.65 opt Ag, 0.028 opt Au (this paragraph from Falconbridge Inc. Bathurst Mining Camp Data Book).
Louvicourt East - MOD Unique Record Number 1257
In 1954, Coulee Lead and Zinc Mines carried out an electromagnetic survey on claims held in the Nine Mile Brook area (assessment report 471143) but no further work was done at this time. Following the discovery of base metal sulphides on an adjacent property held by Louvicourt Mines Limited in the 1960's, induced polarization and self potential surveys were carried out on the Coulee property. Several anomalies were outlined and a total of 31 holes were drilled on the property in 1966 (assessment report 471144). Holes 6 to 10 were drilled on an S.P. anomaly located in the northwest corner of the Coulee property, about 400 metres east of the occurrence found by Louvicourt (URN 0147). Diamond drill holes 7 and 8 intersected disseminations andstringers of sphalerite, galena and chalcopyrite in rhyolite. The best assay result was 1.8 feet (0.54 metres) grading 0.33% Cu, 2.58% Zn, 0.61 % Pb in hole # 7. The mineralization is associated with up to 40% barite and a few bands of red jasper. The mineralization is located in proximity to the northeast trending Louvicourt Fault (PL 91-40f).
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Headvue - MOD Unique Record Number 0148
The ground was staked by L. Gamble, L. Gray and C. Smith following the discovery of gossan by L. Gray when a new road was put in between Bathurst and the Wedge and Health Steele Mines in 1964 (assessment report 471255). Subsequently, the property was optioned to Louvicourt Goldfields Corporation, who carried out horizontal loop, E.M., S.P., and magnetic surveys. The Louvicourt sulphide body (see URN 0147) was discovered by drilling an S.P. anomaly in 1965. During the fall and winter of 1965, four holes, N-1 to N-4 were drilled to test
S.P. and I.P. anomalies at the north end of the property. Extensive pyritic zones, some yielding low grade lead-zinc and minor copper (0.1%) in rhyolite agglomerate and tuff were outlined. The best assays were 14.7 feet (4.5 metres) grading 1.3% Zn and 0.2% Pb in DDH N-3 and 9.1 feet (2.8 metres) grading 0.5% Zn and 0.1% Pb in DDH N-4. The mineralization is described as "typical footwall-type, stringy sulphide mineralization" (assessment report 471255).
Coulee - MOD Unique Record Number 0146
In 1954, Coulee Lead and Zinc Mines carried out an electromagnetic survey on a property in the Nine Mile Brook area (assessment report 471143) but no further work was done at this time. Following the discovery of base metal sulphides on an adjacent property by Louvicourt Mines Limited in the 1960's induced polarization (IP) and self potential (SP) surveys were carried out on the Coulee property. Several anomalies were outlined and 31 holes were drilled in 1966 (assessment report 471144). Holes 2 to 5, 18, 19, 21, 22, 24, 26, 27 and 29 to 31, were drilled near I.P. "zone 3". Disseminated pyrrhotite-pyrite-chalcopyrite mineralization was intersected at the contact of cherty chlorite-magnetite iron formation and felsic volcanic rocks. The best assays were from DDH #3 0.2 metres of 1.12% Zn, 0.02% Pb and 0.6 metres of 1.17% Zn, 0.07% Pb and DDH #4 0.15 metres of 0.72% Cu and 0.76 metres o f 0.42% Cu, 0.01% Zn.
Sabina Industries Ltd. and Essex Minerals carried out exploration over a large property in the Nine Mile Brook area in the 1970's. They refer to the Coulee occurrence as Zone 17. In 1977 two holes (77-1 and 77-14) were drilled to test coincident magnetic and horizontal loop anomalies at Zone 17. The anomalies were attributed to pyrite and pyrrhotite concentrations that were intersected in the drill holes.
The Coulee Occurrence lies 2 km southeast of the Louvicourt Deposit within a sequence of interbanded felsic tuffs, iron formation, and mafic volcanics. It consists of disseminated pyrite, minor disseminated and stringer chalcopyrite and sphalerite and bands of semi massive to massive pyrite associated with banded magnetite-chlorite iron formation (this paragraph from Falconbridge Inc. Bathurst Mining Camp Data Book).
No. 6 Southwest – MOD Unique Record Number 1260
In August of 1996 three trenches excavated over the newly discovered No. 6 Southwest zone encountered disseminated and stringer base metal sulphides in addition to narrow massive pyrite zones and banded magnetite iron formation. The zone is situated in the northern portion of the eastern boundary of the Sabina property. A tier of holes drilled beneath the trench and along strike and one undercut hole all encountered similar mineralization to the mineralization exposed in the trenches. More drilling is warranted to test this horizon at depth (this paragraph from Falconbridge Inc. Bathurst Mining Camp Data Book).
Other Targets (this section from Falconbridge Inc. Bathurst Mining Camp Data Book).
A short hole drilling program in 1999 focused on a new iron formation discovered in 1996 roughly 1 km south of the Coulee Occurrence. The drill holes were short scout holes (~10m to 40m) drilled to evaluate the stratigraphy, structure and mineral potential of an iron formation occurrence in a recent trench and to locate the bedrock source of several massive sulphide boulders situated roughly 400 metres west northwest. Two of the holes in the area of the iron formation encountered chlorite-magnetite iron formation with minor galena. A bedrock source for the massive sulphide boulders has not been located.
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With the exception of the Flat Landing Brook Deposit, the depth of drilling in the area of these deposits and occurrences is quite shallow. Base metal bearing iron formations are known to be situated in close proximity to Brunswick No. 12 and Brunswick No. 6 in a study by Jan Peters of the GSC. The lack of near surface conductivity in the area indicates that this may be ideal for target selection from using the Titan-24 survey.
Table IV Summary of Previous Work for Sabina Option
Year | Company | Work Description |
1953-54 | Uddlen Mines Ltd. | EM and Mag surveys as well as five diamond drill holes |
1953-54 | Headvue Mines and New Goldvue Mines | Discover sulphide occurrence later delineated by Coulee Lead Zinc Mines. |
1954-66 | Coulee Lead Zinc Mines ltd. | S.P. and I.P. surveys and 31 ddh’s. |
1955 | Astrabrun Mines Ltd. | Line cutting, EM, gravity and S.P. surveys and soils |
1957 | New Laguerre Mines Ltd. | VLEM |
1965-68 | Coulee Lead Zinc and headway Red Lake | I.P. and S.P. Surveys |
1966 | Win-Eldrich Mines Ltd. | Line cutting, EM and Mag surveys |
1965-67 | Louvicourt Goldfields Corporation | Line cutting, HLEM, S.P., I.P., Mag, geochem, and geological surveys, as well as 30 ddh’s delineating the Nine Mile Brook (Louvicourt) |
1966 | Southwest Potash Corporation (AMCO) | EM and I.P. surveys |
1972-74 | Mattagami Lake Mines Ltd. | Regional geochem and radem reconnaissance program. |
1974 | Questor | Airborne EM and Mag survey on behalf of Sabina Industries Ltd. |
1974-78 | Essex Minerals Co.-Sabina Industries Ltd. | Follow-up work on airbourne survey, extensive geophysical (i.e., EM, Mag, I.P. and gravity) geochemical and geological s r e s Diamond |
1980 | Brunswick Mining and Smelting Corporation | Claims and mining licenses comprising Sabina property optioned. |
1980-1994 | Brunswick Mining and Smelting Corporation(Noranda) | Line cutting, EM, Mag, gravity, I.P., soil and till geochemistry, prospecting, geological mapping trenching and diamond drilling |
1995-96 | Noranda Mining and Exploration | Line cutting, HLEM and Magnetic Surveys, Lithogeochemical Analyses of historic drill core and outcrops prospecting trenching and |
1996-99 | Noranda Inc. | Line cutting, seismic survey, diamond drilling, till sampling. |
Brunswick Belt South
The Brunswick Belt South area is centred approximately 35 km south southwest of the City of Bathurst (Figure 4). Access to the property is via the Taylor Brook Road and a series of secondary logging roads. The abandoned CN rail spur to Heath Steele Mine runs through the southern portion of the property. A small number of claims are located north of the Nepisiguit River, accessible via a logging road branching off Highway 430 east of Nine Mile Brook.
The Brunswick Belt South area is located immediately south of Brunswick No. 6. There are several repetitions of the Nepisiguit Falls - Flat Landing Brook contact (i.e. Brunswick Horizon) that underlie the four claim blocks that comprise this area. Historic work has focused on four main areas from north to south are Old Stump, Taylor Brook, Gilmour South, and Tozer Brook. A significant effort has gone into exploration of the Gilmour South area since 1998 where mineralized sections of up to 7.63% Pb, 13.57% Zn / 2.89m in GS-98-14, and 1.02% Pb, 9.61% Zn / 7.98m in GS-99-22 were encountered. No Brunswick Horizon had been mapped in this area prior to the discovery and subsequent work has identified several kilometers of prospective ground not previously identified.
46
Old Stump Area
The Old Stump area is located immediately north of the Nepisiguit River, predominantly on the Brunswick claim block but trending southward onto the Narrows Group. Drilling in the Old Stump area has focused on a fairly continuous band of cherty magnetite - chlorite iron formation situated between porphyritic rocks of the Nepisiguit Falls Formation and massive aphyric rocks of the Flat Landing Brook Formation (i.e. Brunswick Horizon). The sequence youngs from east to west and a belt of Patrick Brook Formation, which is the youngest formation of the older Miramichi Group sediments, occurs immediately east of the Nepisiguit Falls volcanic unit. Structural repetition of the Brunswick Horizon occurs along a major north-south trending thrust fault that marks the eastern boundary of the Patrick Brook sediments. The entire Old Stump belt has been thrust over a belt of Little River basalts that makeup part of the hanging wall sequence to Brunswick No. 6. Surprisingly few drill holes have tested the Old Stump area considering the presence of anomalous base metals in Brunswick Horizon iron formation and the geographic proximity to Brunswick No. 6. The following table is extracted from an assessment report summarizing the results of the drilling in the Old Stump area.
FIGURE 4 BRUNSWICK SOUTH BELT
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Table V Drill Results Old Stump Area
DDH | LENGTH | TARGET / RESULTS |
6SW-97-3 | 295.7 | Target: Undercut trench that exposed a 100 m+ zone of pyritic and chloritic argillite at the Grandroy-Old Stump horizon. Sphalerite-galena stringers at 133.2m, 3-5% pyrite. |
OS-95-3 | 201.17 | Target: Down-dip extension of copper-rich mineralization exposed in 1994 trenches. Between 88.39-89.30m: chloritized metasediment with 15-18% py+po and 2-3% cpy. |
OS-95-4 | 356.62 | Target: Gravity anomaly on down-dip side of mineralization exposed on L12+00S. Between 47.75-246.40m: Multiple layers of disseminated to semi-massive pyrite with local cpy stringers. |
OS-95-6 | 396.24 | Target: Undercut hole OS-95-3 to test for down-dip continuity of copper mineralization. Between 156.45-181.42m: Chlorite-magnetite IF in chloritic argillites with disseminated to sub-massive pyrite and trace cpy. |
This area clearly needs further evaluation. A deep penetrating geophysical method like Titan-24 would be ideally suited to evaluate this stratigraphy. The nearest formational conductive trend is associated with the Patrick Brook Formation sediments that lie roughly 500 metres to the east so the response over the Old Stump trend will not be affected.
Gilmour South - MOD Unique Record Number 1394
In 1998, Noranda Mining and Exploration Inc. (assessment fine 475150) carried out geological mapping, trenching (13 trenches), 3D Pulse EM, HLEM, magnetometer, soil and whole rock geochemistry surveys, line cutting and drilling (22 DDH totaling 9,116.3 metres on the "Narrows" property). The following are the significant results from diamond drilling: GS-95-2 intersected 6.52 metres of a mineralized black chert with a 45 centimetre massive pyrite- sphalerite-galena zone. The best value from this unit was 5.8% combined Pb-Zn over 0.45 centimetres. The remainder of GS-series drilling was designed to follow up this intersection. GS-97-1 (total length of 466.34 metres) intersected a 43.39 metre exhalative horizon that is in a similar stratigraphic position to the Brunswick No. 6 and No. 12 deposits. The mineralization appears to be syngenetic. The best assay was 8.9% combined Pb-Zn over 1.75 met res. GS-98-2 (total length of 585.22 metres) intersected a 22 centimetre interval of massive pyrite, sphalerite, and galena assaying 29.3% combined Pb-Zn.
The following is the list of assessment file reports for previous work: 472939, 483831, 471138, 471190, 471109, 471248, 471249, 471269, 472294, 472305, 471110, 471162, 471251, 471135, 472295, 471124, 471137, 471160, 471187, 471145, 471172, 471173, 471209, 471210, 471211, 471212, 471213, 472413, 470427, 471214, 471218, 472900, 472130, 472251, 472434, 472639, 472640, 472641, 472642, 473066, 473184, 473140, 473317, 473272, 474141, 474477, 474736, 474737, 474827.
Noranda Data Book Description
No outcrop occurs in the vicinity of the Gilmour South Occurrence. Drilling southward along strike from the Taylor Brook Showing indicated that the volcanic sequence and the Brunswick Horizon continued beyond what was indicated on the geology maps. DDH 95-5A intersected disseminated and wispy lead, zinc and copper mineralization in a felsic volcanic unit in addition to a significant thickness of weakly sulphidic chert and cherty rhyolite. Follow up drilling encountered massive sulphides grading 7.63% Pb and 13.57% Zn over 2.89 metres in GS-98-14 and 1.02% Pb and 9.61% Zn over 7.98 metres in GS-99-22. The longitudinal section (Figure 5) shows the drilling that was done over a three year period and the mineralized intercepts. Significant sulphidic chert and footwall mineralization/alteration occurs in nearly all the drill holes.
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FIGURE 5 GILMORE SOUTH DEPOSIT – LONGITUDINAL SECTION
The Gilmour South Occurrence demonstrates dramatic thickening and pinching of the hanging wall felsic and mafic volcanic units within very short distances. It is thought that synvolcanic faults could be responsible for the rapid changes in thickness of the units. The volcanic sequence at surface is approximately 200 metres thick but in some deeper intersections the sequence thickens to greater than 500 metres. The thickness of the footwall Nepisiguit Falls Formation is up to approximately 100 metres which compares to the thickness of the Nepisiguit Falls Formation at the Brunswick No. 6 open pit mine. At the southern limit of the drilling the entire volcanic package, footwall and hangingwall, is compressed to a thickness of about 20 metres.
Recent work has focused on evaluating the projected trend of the volcanic sequence to the south. Tetagouche Group volcanics were known to occur roughly 5 kilometres to the south in the Tozer Brook area. A drill program of short holes was undertaken to try to identify the continuation of the trend in this overburden covered area and to determine the potential for more mineralization. Nepisiguit Falls Formation was identified in all of the drill hole fences. Altered and arsenopyrite bearing footwall rocks were encountered (arsenopyrite is common in the footwall at the Gilmour South Occurrence). The area with the thickest section of Nepisiguit Falls Formation occurs roughly 600 metres south of the most southerly drill holes at the Gilmour South Occurrence (~20 metre thick total volcanic sequence) and exceeds 200 metres in thickness. The Nepisiguit Falls Formation contained weakly mineralized cherty sections as at Gilmour South. A d iamond drill hole to undercut this area of weak mineralization was started in 2001 but was stopped due to the shortage of water. This hole was never completed to the target depth.
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Exploration in the Gilmour South area has been mainly based on geology and direct targeting on geophysical and geochemical anomalies has been hampered by the local conditions. Soil sampling conducted in the area yielded low results with only weak spurious anomalies. It is thought that glaciofluvial and glaciolacustrine deposits that overlie bedrock may mask any potential underlying deposits of volcanogenic massive sulphides. Overburden depths in the drill program varied widely over short horizontal distances from a few metres to greater than 40 metres indicating rugged bedrock topography and thick overburden. This rugged bedrock topography is also a severe impediment to interpretation of gravity surveys. The EM response of the mineralized horizon is overprinted by pronounced electromagnetic trends reflecting graphitic horizons in both the hangingwall Tomogonops Formation as well as the footwall Miramichi Group. Magnetic trends a re very weak and may reflect areas where the mafic volcanics are present in the hangingwall.
Table VI Summary of Exploration Expenditures – Gilmore South
Year | Claim Area | Type of Work | Expenditure |
1987 | Maritime Mining | Diamond Drilling (2 holes). | $30,245.00 |
1987 | Gilmour Brook | Diamond Drilling (4 holes). | $ 51,022.86 |
1989 | Gilmour Brook | Line cutting, HLEM, gravity, soil geochemistry. | $ 17,052.66 |
1989 | FAB | Pulse EM (2 holes). | $ 5,935.22 |
1989 | Maritime Mining | Gravity, HLEM, Mag, VLF-EM. | $10,156.00 |
1989 | Grandroy | Line cutting, Mag, HLEM, gravity, soil geochemistry, diamond drilling (3 holes). | $ 36,162.00 |
1989 | No. 6 Southwest | Line cutting, soil geochemistry, Mag, VLF-EM. | $ 44,565.00 |
1990 | No. 6 Southwest | Diamond Drilling (1hole). | $ 66,742.30 |
1990 | No. 6 Southwest | Soil geochemistry, gravity, IP | $43,534.00 |
1990 | FAB |
| $49,435.00 |
1992 | Grandroy | Trenching, diamond drilling (2 holes) | $82,627.00 |
1992 | Maritime Mining | Pulse EM (1 ddh), diamond drilling (1 hole) | $48,546.00 |
1996 | Brunswick Group | Line cutting, geological mapping, trenching, diamond drilling (15 holes) | $706,408.06 |
1997 | Brunswick Group | Trenching, soil geochemistry, TDEM, HLEM, mag, VLF-EM, 3D Pulse EM, diamond drilling (36 ddh’s) | $1,654,519.83 |
|
| TOTAL EXPENDITURES to end of 1997 | $2,846,950.90 |
Gilmour Brook-Beehler - MOD Unique Record Number 0143
Nubar Mines Ltd. drilled five holes near the northern part of the occurrence in 1953 (DDH N-1 to 5, assessment report 471248). Three of the holes (N-1 to 3) intersected iron formation and low grade, base metal mineralization. The best intersection was 0.6 metres in DDH N-1 grading 0.44% Pb and 0.25% Zn. The host rock is described as chloritic tuff with quartz eyes. The highest copper assay was 0.3 % over 2.1 metres in hole N-3.
New Jersey Zinc carried out exploration on the property immediately south of Nubar Mines Ltd. from 1954 to 1959. Following the completion of electromagnetic, self potential and magnetic surveys, ten holes were drilled, B-1 to B-10 (assessment report 471227). Several holes intersected a mineralized horizon associated with iron formation, similar to that discovered by Nubar Mines Ltd. The highest assay obtained was 1.21% Cu over 0.4 metres in DDH B-1. Four more holes were drilled in 1956, DDH 56-1-A, 56-1 to 3 (assessment report 471228). Pyrite, pyrrhotite (up to 80%) and minor chalcopyrite (up to 0.77% Cu) occur in chlorite-sericite schist, associated with chlorite-magnetite iron formation. New Jersey Zinc (assessment report 472320) drilled holes B59-1 and B-59-2 west of the mineralized horizon in 1959. No mineralization was encountered.
BM&S obtained the ground held by Nubar Mines and New Jersey Zinc and refer to the properties as Project 116 and Project 210 respectively. BM&S carried out soil geochemical, gravity, electromagnetic and magnetometer surveys in 1981. Using the geophysical surveys BM&S was able to trace a layer of iron formation associated with the mineralization intersected by Nubar Mines Ltd. and New Jersey Zinc across the properties for approximately 1,280 metres.
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The area has recently been mapped by John Langton (DNR). According to his preliminary map the area is underlain by the Nepisiguit Falls and Flat Landing Brook formations of the Tetagouche Group and the mineralized horizon may be truncated to the south by a strike slip fault.
Table VII Summary of Assessment Work Gilmour (Sabina Option)
GEOSCAN | Company | Work Performed | Significant Results |
471190 | Kontiki Lead and Zinc Mines | Gravity, electromagnetic and diamond drilling. | DDH’s K-5 to K-7; shales and phyllites |
471269 | J.C. UDD | Soil sampling, gravity and diamond drilling. | DDH’s U-1 to U-3; shales |
471109 | BM&S | Geochemical, mapping, magnetometer and gravity surveys | Assisted in locating contacts between rock units. |
472295 | BM&S | Mapping, diamond drilling | ddh 20-1 - 0.20% Zn, 0.13% Pb/5ft. ddh 20-3 - 0.23% Zn, 0.06% Pb/150’ Drilled down dip. ddh 20-5 - 194’ I.F. ddh 20-6 - 32’ I.F. open at depth. ddh 20-7 - 310’ I.F. open at depth |
472130 | Key Anacon Mines Ltd. | EM, Magnetometer and soil surveys, diamond drilling. | ddh TBL-2 - 198’ of chloritic I.F. |
472641 | Preussag Canada Ltd. | Mapping, magnetic VLF survey and diamond drilling. | Conductor explained by graphite. |
483831 | BM&S | Geophysical, geological and geochemical surveys. | Assisted in locating contacts between rock units. |
Taylor Brook Road - MOD Unique Record Number 0165
In 1975, Key Anacon Mines Ltd. (assessment report 472130) staked mineral claims to cover a 4.8 kilometres strike length of coincident magnetic and electromagnetic anomalies. Magnetometer, EM-16 VLF and soil geochemistry surveys were carried out and followed up by a trenching program. A massive sulphide lens, up to 2.4 metres thick comprising mainly pyrite, was exposed. The stratigraphic sequence in the trench from east to west is acid volcanic rocks, massive sulphides, chloritic iron formation, magnetic iron formation and rhyolite. Two diamond drill holes, TBR-1 and 2, were completed by Key Anacon Mines in 1977 but they were not located near the surface showing. Chloritic iron formation was intersected in TBR-2, located 1 kilometre south of the trenches.
Brunswick Mining and Smelting (assessment report 472482) staked the property when it fell open in 1978 and carried out gravity, magnetometer, horizontal loop EM and geochemical surveys. In 1979, 8 holes were drilled (DDH 116-1 to 116-8, assessment report 472516) in the vicinity of the sulphide lens exposed by Key Anacon's trenching. The best intersection graded 13.6% Pb, 13.23% Zn, 0.11% Cu and 37.37 g/t Ag over 0.15 meters in DDH 116-4. The stratigraphy from top to bottom comprises: rhyolite and acid tuff, iron formation and tuffaceous sedimentary rocks. The iron formation is predominantly chloritic with lesser amounts of siderite, magnetite and cherty iron formation. The sulphides consist of up to 50% pyrite and pyrrhotite over a distance of 4.9 metres. The combined Pb-Zn content, however, is generally less than 1%. The sulphide zone was tested over a strike length of 610 metres.
In 1987, Brunswick drilled four additional holes north of the Taylor Brook Road occurrence (assessment report 473444). One of these holes (217-1) intersected a broad chloritized zone, more than 100 metres thick, carrying weak pyrite-pyrrhotite mineralization. This zone is located approximately 300 metres east of the mineralized lens that had previously been outlined. The highest assays were 0.62% Cu, 0.24% Zn, 0.06% Pb and 4.8 g/t Ag over 0.3 meters and 0.16% Pb, 0.73% Zn and 0.08% Cu over 0.3 metres.
Rutledge, D.W. (1989, assessment report 473676) states that "It is not clear whether this new mineralized zone represents a repetition of the Brunswick horizon due to thrust faulting or isoclinal folding, or whether it is a renewal of the Fab Zone that occurs between the No. 6 and No. 12 mines". The mineralization is associated with a combined EM-gravity-geochemical anomaly. BMS carried out further electromagnetic, gravity and geochemical surveys on selected parts of the property in 1989 (assessment report 473676).
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The area has recently been mapped by John Langton of DNR. The Taylor Brook Road occurrence is hosted by the Flat Landing Brook Formation of the Tetagouche Group.
Noranda Data Book Description
The property is located approximately 27 kilometres southwest of the City of Bathurst. The showing is situated within the geographically extensive Brunswick Claim block comprising 263 claims. This claim block is situated along the southern boundaries of both the Brunswick No. 12 and Brunswick No. 6 Crown Grants, connected by a magnetic north trending section. A south-southwest trending arm of claims below the portion of the claim block located along the south boundary of Brunswick No. 6 Crown Grant also makes up the claim block and is where the Taylor Brook Showing occurs.
The Nepisiguit River separates the Taylor Brook area from Brunswick No. 6. The main access is via the Taylor Brook Road that runs east-west through the property. The terrain is gently sloping to the east-southeast and covered by a relatively thick (7-15 metres) layer of glacial till. This till is part of the Gordon Meadow Brook and Narrows esker systems. The area has relatively little relief with the exception of stream valleys and the area is estimated to have less than 2% outcrop. Thick accumulations of till are found to the west.
The Taylor Brook property encompasses a segment of the “Brunswick Belt” and is located approximately 7 kilometres south of Brunswick No. 6 and 15 km south-southeast of Brunswick No. 12. Bedrock exposure on the claim group is generally poor and definition of the stratigraphic sequence in this area is inferred largely from drill hole data. The oldest rocks on the claim group occur along its east margin and are poorly exposed. Based on drill hole data and a few small outcrops, it is believed that these comprise interbedded grey siltstone, greywacke and chloritic mudstone. Underlying the grey siltstone-greywacke sequence in the north of the claims are laminated to thinly bedded grey-green siltstones. The nature and orientation of strata on the east half of the property is further obscured by several prominent large fault zones about which intense shearing and alteration has occurred. West of a major north-northwesterly tre nding fault (Central Fault Zone), the stratigraphic sequence is generally well defined. Nepisiguit Falls Formation lithologies including greywackes, argillites, quartz-feldspar augen schist (at least in part reworked), cherty siltstones, chert and iron formation occur along a north-northeast trending belt. Conformably overlying the Nepisiguit Falls Formation are Flat Landing Brook lithologies. The Flat Landing Brook sequence on the claim group comprises rhyolite lapilli tuff-agglomerate overlain by narrow argillaceous horizons that are in turn capped by thick massive rhyolite units. The Flat Landing Brook sequence is generally in fault contact with a mafic volcanic suite (Little River Formation.). This consists of pillowed basalts with minor thin, intermediate-mafic, pyroclastic horizons with numerous intrusions of gabbro and diabase.
Copper-lead-zinc mineralization in the Taylor Brook area occurs:
1)
associated with stratabound iron formation near the top of the Nepisiguit Falls Formation;
2)
as stockworks within the lower part of the Flat Landing Brook Formation;
3)
along the Central Fault Zone;
4)
within chloritic and chloritized mudstones immediately below the Nepisiguit Falls Formation (Patrick Brook Formation?).
1) Iron Formation: Analyses of drill hole data suggests that the iron formation, usually contained within cherty siltstones, is variable in character and base metal content. On Grid 1 and 2 of the Taylor Brook property the iron formation has a known strike length of 1,350 metres. Brunswick Mining and Smelting drilled eight holes (116-1 to 8) in 1979. Drill hole 116-1 intersected up to 50% pyrite and pyrrhotite over 4.9 metres of core; DDH 116-2, 7.6 metres of chloritic iron formation with 30% pyrite and pyrrhotite and 5.5 metres of cherty iron formation with 30% massive pyrrhotite; and minor massive galena bands were cut in DDH 116-4. In 1993 and 1994, the iron formation was tested to a vertical depth of 760 metres. Multiple, closely spaced horizons occur in some holes while in other the iron formation is confined to a single bed. Chlorite or chlorite-siderite-magnetite iron formation commonly grades down ward into a sulphide (pyrrhotite or pyrite) rich facies. Lateral zoning of pyrrhotite-pyrite is also recognized. Massive and semi-massive pyrite occurs below or without chlorite-mag-siderite IF between 16S and 48S within a south-plunging pyritic zone. Drill holes north and stratigraphically
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below the pyrite enriched zone contain bedded pyrrhotite underlying the chlorite-magnetite+/-siderite iron formation averaging 6 to 15 metres in width and grading 0.15 to 0.20% Pb. The bedded pyrrhotite intersects have similar low base metal tenures. Narrow (1 to 2 centimetres thick) beds of sphalerite-galena grading 4% Pb-Zn occur near the top of a 2.5 to 4 metre zone of massive, bedded, pyrite exposed in a trench on line 16S. A second trench 250 metres south, exposed stockwork pyrite-chalcopyrite (1% Cu) associated with bedded magnetite-chlorite-siderite iron formation. A study conducted by Jan Peter and Wayne Goodfellow of the GSC on compositional variations of the iron formation at Brunswick No. 12, Brunswick No. 6, and Austin Brook indicated that Pb values in the 0.3% range in iron formation were very proximal to the major ore deposits.
2) Stockwork Mineralization (Flat Landing Brook): Intense chloritization and stockwork sulphide mineralization commonly occurs within the lower part of the Flat Landing Brook Formation. Host lithologies include lapilli tuffs, agglomerate and spherulitic rhyolite. Local intense silicification is also recognized within this sequence. Stringer-type mineralization may occur at different intervals within this subunit. In diamond drill hole GB-94-19 several 3 metre sections were seen to grade 1-2% combined lead-zinc. A 0.5 foot section in DDH 116-4 graded 26.83% Pb-Zn. In diamond drill holes 217-8 and 217-9, extensive chloritic haloes are located above and below the iron formations. The chlorite-sericite bearing rhyolites contain up to 3-15% pyrite locally and minor base metal sulphides.
3) Central Fault Zones: Trenching carried out in 1994 further exposed a mineralized, north-trending fault structure roughly 300 metres east of the Taylor Brook Road trend. The shear zone / fault zone is vertical to steeply west dipping and is 9-15m wide. The Central Fault zone is truncated (?) to the north by a younger thrust sheet but can be traced to the south for more than three kilometres. Copper, and lesser amounts of lead-zinc, occurs in siliceous or silicified lenses at the north end of the Central Fault Zone.
The following table summarizes previous work completed on the Brunswick Claim block:
Table VIII Summary of Previous Work - Brunswick Claim Block
Year | GEOSCAN | Company | Work Performed |
1953 | 471138 | Conwest Exploration Company Ltd. (M.J. Boylen Group #18) | Mag, EM |
1953 | 471142 | Coulee Lead-Zinc Mines Ltd. (Pabineau River Group) | EM, Mag |
1953 | 471226 | New Highridge Mining Corp. Ltd. (Project 34A) | Mag, Resistivity, Gravity, 12 ddh’s (H-1 to H-12) |
1953 | 471270 | Uddlen Mines Limited (Project 16) | Mag, EM, 5 ddhs (U-1 to U-5 - 2496 ft [761m]). |
1953 | 472316 | Maritimes Mining Corp. Ltd. (FAB Property - Project. 29) | 12 ddhs (H-1 to H-12 renamed as M-1 to M-12 - 8641 ft. [2633.78m]). |
1954 | 471100 | Bathurst Mining Corporation Ltd. | Mag, EM, 5 ddh’s (B-1 to B-5 - 4078 ft. [1233.83m]). |
1954 | 471109 | Brunswick Mining Corporation Ltd. (Project 20, Prospector Group) | Soil Geochemistry |
1954 | 471139 | Conwest Exploration Co. Ltd. (Group 40) | Gravity, EM, 13 ddh’s. |
1954 | 471227 | New Jersey Zinc Company of Canada (Beehler Group) | PEM, Mag, Self-potential. 10 ddhs (B-1 to B-10 - 5397 ft. [1645m]). |
1954 | 471248 | Nubar Mines Ltd. (Project 17A) | Resistivity, mag, 9 ddh (N-1 to N-9 - 1446m). |
1954 | 471249 | Nubulama Gold Mines (Project 19A) | EM survey, local gravity profiles, 7 ddhs (ND-1 to ND-7 - 1145m). |
1954 | 471269 | Stratmat Ltd. (J.C. Udd Option, Grp. A4) | EM, soil geochemistry, gravity |
1955 | 472294 | Bathurst Mining Corporation Ltd. (Project 20-Prospector Grp.) | Gravity, soil geochemistry |
1955 | 472301 | Bathurst Mining Corporation Ltd. (No. 6 Property) | Mag, soil geochemistry |
1956 | 471228 | New Jersey Zinc Mines Ltd. | 4 ddhs (# 56-1, 1A, 2, 3, - 2858.5 ft. [871.27m]). |
1956 | 472305 | Bathurst Mining Corporation Ltd. (Project 20) | 4 ddhs (#1 to 4 - 3129 ft. [953.72m]). |
1957 | 471110 | Bathurst Mining Corporation Ltd. (Project 20) | 3 ddhs (#5 to 7 - 1608 ft. [490.12m]). |
1957 | 471178 | Jacquet River Mines Ltd. (Project 14A & B) | HLEM, 1 ddh (14-1 - 477 ft. [145.39m]) |
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Year | GEOSCAN | Company | Work Performed |
1957 | 471194 | Lucky Lake Mines (Property #9) | Geological mapping |
1957 | 472317 | Maritimes Mining Corp. Ltd. (FAB property) | 3 ddhs (21, 29-15, M-14 - 1676 ft. [510.84m]) |
1958 | 471177 | Jacquet River Mines Ltd. (Project 14). | Line cutting, Turam EM, 4 ddhs (14-2 to 14-5 (1991 ft. [606.86m]). |
1959 | 471153 | FAB Metal Mines Ltd. (Pabineau River Group) | HLEM, Mag, resistivity, 3 ddhs. |
1959 | 472319 | Maritime Mining Corp. Ltd. (Project 30). | Loop-Frame EM, 6 ddhs. |
1959 | 472320 | New Jersey Zinc Mine Ltd. | 2 ddhs (59-1 and 59-2 - 387 m). |
1960 | 471135 | Consolidated Mining & Smelting Company of Canada Ltd. (Tandem, Nictau, and Gilmour Grps). | Geological mapping, EM |
1960 | 471198 | Maritime Mining Corp. Ltd. | Line cutting (142 km), Magniphase EM (142 km), geological mapping. |
1960 | 471199 | Maritime Mining Corp. Ltd. (Project 30) | Magniphase EM, AFMAG EM, 1 ddh #30-5 (308 ft. [94 m]). |
1960 | 472273 | Combined Metal Mining Ltd. (Project 34A) | 2 ddhs (34A-15 and 34A-16 - 1232 ft. [3755 m]). |
1960 | 472295 | Bathurst Mining Corporation Ltd. (Project 20) | 2 ddhs (8 and 9 - 1500 ft. [457m]) |
1962 | 471154 | FAB Metal Mines Ltd. | Gun EM, 8 ddhs (62-1 to 62-8). |
1963 | 471128 | Combined Metal Mining Ltd. (Project 34A, ML 850) | Residual Gravity, Gun EM |
1963 | 471154 | FAB Metal Mines Ltd. | 5 ddhs (1963-1 to 1963-5 - 1641 ft. [500 m]). |
1963 | 471200 | Maritime Mining Corp. Ltd. (Project 29) | General geology, gravity, 1 ddh (29-16 - 1222 ft. [372.47m]). |
1963 | 471201 | Maritime Mining Corp. Ltd. (Project 30) | Gravity |
1963 | 472347 | Jacquet River Mines Ltd. (ML 848A) | Gravity, 1 ddh (14-6 - 606 ft. [185m]). |
1964 | 471155 | FAB Metal Mines Ltd. | Gravity, 6 ddhs (2351 ft. [716m]). |
1964 | 471155 | FAB Metal Mines Ltd. | Mag, diamond drilling. |
1964 | 471202 | Maritime Mining Corp. Ltd. (Project 30) | 1 ddh # 30-7 (1183 ft. [360.58m] ). |
1964 | 472274 | Combined Metal Mining Ltd. (ML 850A) | 4 ddhs (34A-17 to 34A-20 - 1841 ft. [561.14m]) |
1965 | 471129 | Combined Metal Mining Ltd. (ML 850A) | 8 ddhs (34A-21 to 34A-28), Mag (Sharp MF-1), Picket lines (13 km). |
1965 | 471155 | FAB Metal Mines Ltd. | IP and resistivity |
1965 | 471179 | Jacquet River Mines Ltd. (Project 14A and B) | Soil geochemistry, 3 ddhs (14-7 to 14-9 - 2075 ft. [632.46m]). |
1965 | 472318 | Maritime Mining Corp. Ltd. (Project 29, ML 846A). | Gravity, ddh, heavy metal geochemistry. |
1966 | 471137 | Consolidated Red Poplar (Property #4) | Mag, geology, two lines IP. |
1966 | 471247 | North Rock Exploration (ML 2024) | Local mag and EM, 1 ddh (NR-3 - 157m). |
1966 | 471265 | Sullico Mines (Kierans B property) | Cold extraction geochemistry survey. |
1967 | 471145 | Coulee Lead and Zinc Mines Ltd. (Gamble Group) | Self potential, line cutting. |
1967 | 471173 | Headway Red Lake Gold Mines (North Nepisiguit River) | Self-potential, geological mapping. |
1967 | 471273 | Urban Quebec Mines Ltd. (ML 10494-8630-8631). | EM, mag, soil geochemistry, 1 Winkie drill hole. |
1967 | 472326 | Urban Quebec Mines Ltd. (Pabineau Brook claims) | 23 ddhs (66-1 to 66-16 and U66-1 to U66-7); soil geochemistry. |
1969 | 471164 | Grandroy Mines Ltd. (Project 14) | 1 ddh (14-13 - 1472 ft. [448.67m]). |
1969 | 471165 | Grandroy Mines Ltd. (Project 14) | 2 ddhs (14-14 to 14-15 - 2623 ft. [799.49m]). |
1969 | 471229 | New Jersey Zinc (Nepisiguit Falls Group) | Soil geochemistry, line cutting. |
1970 | 471130 | Combined Metal Mines Ltd. (Project 34A) | Soil geochemistry |
1970 | 471166 | Grandroy Mines Ltd. (Project 14) | 4 ddhs (14-16 to 14-19 - 2013 ft. [613.56m]). |
1971 | 471158 | First Maritime Mining Corp. Ltd. (ML 847-A) | Dual coil EM. |
54
Year | GEOSCAN | Company | Work Performed |
1971 | 471159 | First Maritime Mining Co. Ltd. (ML 846A) | EM, mag. |
1973 | 471242 | Noranda Exploration Co. Ltd. (Knights Brook Group) | Mag, RADEM (filtered), CEM horizontal Shootback, SE-200. |
1973 | 471243 | Noranda Exploration Co. Ltd. (Knights Brook Group) | I.P., 1 ddh (KB-73-1 - 803 ft. [244.75m]). |
1974 | 471117 | BM&S Corporation Ltd. | Horizontal Shootback EM, mag, 4 ddhs (C-1 to C-4 - 3254 ft. [991.82m]). |
1974 | 471156 | Rayrock Mines Ltd. (FAB Metal Mines Property) | 1 ddh (74-1 - 1905 ft. [580.64m]). |
1975 | 471118 | BM&S Corporation Ltd. (project 104) | Magnetometer, Horizontal Shootback (CEM), soil geochemistry. |
1975 | 471119 | BM&S Corporation Ltd. | 2 ddhs (C-4 (deepening) and C-5 -843 ft. [256.95m]). |
1975 | 471206 | McDonough Syndicate (BBB group) | 2 ddhs (BBB-1 and BBB-2 - 1375 ft. [419.1m]). |
1975 | 471207 | K.J. McDonough with Noranda Exploration (MMM Claim Group). | Mag, CEM |
1976 | 470337 | K.J. McDonough with Noranda Exploration (MMM Claim Group). | 3 ddhs (MMM-76-1 to MMM-76-3 961 ft. [292.91m]). |
1976 | 470395 | BM&S Corporation Ltd. (Project 104) | Mag, gravity, CEM, PEM, 3 ddhs (104-1 to 104-3 - 2505 ft. [763.52m]). |
1977 | 470441 | Conwest Exploration Company Ltd. (Jacquet River Group) | Soil sampling, HLEM, Mag, trenching. |
1977 | 472130 | Key Anacon Mines Ltd. (Taylor Brook) | Mag, EM-16 (VLF), soil geochemistry, trenching, 2 ddhs (TBR-1 and TBR-2 - 700 ft. [213.36m]). |
1977 | 472142 | BM&S Corporation Ltd. (ML 1244) | 1 ddh (105-1 - 1207 ft. [367.89m]). |
1977 | 472143 | Rayrock Mines Ltd. (FAB Metal Mines Property) | 1 ddh (77-1 - 1906 ft. [580.95m]). |
1979 | 472477 | Metallgesellschaft | Fluxgate Mag |
1979 | 472482 | BM&S Corporation Ltd. (Gilmour Brook Property) | Line cutting (45.7 km), Mag, gravity, HLEM, soil geochemistry. |
1979 | 472483 | Asarco Exploration Company of Canada Ltd. | IP and resistivity, VLF, Mag, HLEM |
1980 | 472516 | BM&S Corporation Ltd. (Project 116 - Gilmour Brook). | 9 ddhs (116-1 to 116-7, 116-7A and 116-8 - 4550 ft. [1386.84m]). |
1980 | 472549 | BM&S Corporation Ltd. (Project 104) | 3 ddhs (104-4 to 104-6 - 3320 ft. [1011.94m]). |
1980 | 472581 | Asarco Exploration Company of Canada Ltd. | Soil geochemistry |
1980 | 472636 | Asarco Exploration Company of | HLEM |
|
| Canada Ltd. |
|
1982 | 472799 | BM&S Corporation Ltd. (Project 209-Lavigne’s Brook Group) | Line cutting, soil geochemistry, gravity, mag, HLEM, geological mapping. |
1982 | 472800 | BM&S Corporation Ltd. (Project 210-Beehler Grp) | Line cutting, soil geochemistry, gravity, mag, HLEM, geological mapping. |
1982 | 472889 | BM&S Corporation Ltd. (Project 116 - Gilmour Brook) | Line cutting (63.25 km), soil geochemistry, gravity, mag, HLEM, geological mapping. |
1982 |
| BM&S Corporation Ltd. | Line cutting, gravity, HLEM |
1984 | 472989 | BM&S Corporation Ltd. (Project 122 - Grandroy Option). |
|
1984 | 473075 | BM&S Corporation Ltd. (ML 1244) | Line cutting (22.2 km), Max-Min II (19.47 km), Proton Mag (22.53 km). |
1984 | 473082 | BM&S Corporation Ltd. (Project 218-FAB). | Line cutting (44.4 km), HLEM, gravity, mag, geological mapping of float. |
1984 | 473085 | BM&S Corporation Ltd. (Mersereau-Pitre Option) | HLEM, line cutting, gravity, mag. |
1985 | 473202 | BM&S Corporation Ltd. | 1 ddh (105-2 - 1052 ft. [320.65m]), VLF-EM. |
1985 | 473219 | BM&S Corporation Ltd. (Project 218 - FAB). | VLF-EM, geological mapping, 7 ddhs (218-1 to 218-7 (12486 ft. [3805.7m]), PEM (ddhs 218-1 to 218-7). |
1985 | 473220 | BM&S Corporation Ltd. (Mersereau-Pitre Option) | 2 ddhs (229-1 - 1741 ft. [530.65m] and part of 218.7 - 1530-1780 ft. [466.3542.5m] - hole 218.7 was divided over two properties). Geological mapping, HLEM. |
55
Year | GEOSCAN | Company | Work Performed |
1986 | 473236 | BM&S Corporation Ltd. (Project 122 - Grandroy). | 1 ddh (122-2 - 846 ft. [257.86m]). |
1986 | 473322 | BM&S Corporation Ltd. (Project 104- #6 SW property). | Pulse EM of holes, 104-3, 104-4, and 104-5. |
1986 | 473330 | BM&S Corporation Ltd. (Project 218-FAB). | Pulse EM (ddh 77-1), 2 ddh’s (218-8 and 218-9 -2740 ft. [835.15m]). |
1986 | 473332 | BM&S Corporation Ltd. | Down hole EM (ddh #105-2) |
1987 | 473360 | BM&S Corporation Ltd. (ML 1254) (Combined Metals Property) | 2 ddhs (103-1 and 103-2) |
1987 |
| BM&S Corporation Ltd. (Project 217-Gilmour Brook) | 4 ddhs (217-1 to 217-4 - 739 m). |
1989 | 473676 | BM&S Corporation Ltd. (Project 217-Gilmour Brook) | Line cutting, HLEM, gravity, soil geochemistry. |
1989 | 473688 | BM&S Corporation Ltd. (Project 218-FAB) | Pulse EM (ddhs 218-8 and 218-9). |
1989 | 473759 | BM&S Corporation Ltd. | Gravity, mag, VLF-EM, HLEM. |
1989 | 473809 | BM&S Corporation Ltd. (#12, Grandroy, and Pabineau claims) | Line cutting, mag, HLEM, gravity, soil geochemistry, 3 ddhs (122-3 to 122-5 - 1653 ft. [503.83m]). |
1989 | 473831 | BM&S Corporation Ltd. (Project 104) | Line cutting, soil geochemistry (1763 samples), mag, VLF-EM. |
1990 | 473855 | BM&S Corporation Ltd. (Project 104) | 1 ddh (104-7 - 2597 ft. [791.6m]) |
1990 | 473969 | BM&S Corporation Ltd. (Project 104) | Soil geochemistry, gravity, IP |
1990 | 473976 | BM&S Corporation Ltd. (Project 218, FAB) |
|
1992 | 474189 | BM&S Corporation Ltd. (Project 122-Grandroy) | Trenching, 2 ddhs (122-6, 122-7 - 467.5m). |
1992 | 474197 | BM&S Corporation Ltd. (Maritime Mining Property) | 1 ddh (105-3 -1557 ft. [474.6m]), Pulse EM (ddh 105-3). |
1996 | 474737 | BM&S Corporation Ltd. (Brunswick Group) | Line cutting, geological mapping, trenching (1180m), 16 pits, 15 ddhs (217-5 to 217-15 - 4529m); (GB-94-16 to GB-94-20 - 3650.6m). |
1998 |
| BM&S Corporation Ltd. (Brunswick Group) | Line cutting and Mag survey 33.3 Km , Soil Geochemistry (690), Trenching (23 trench 3185m) , Diamond Drilling (36 ddh, 9664.5m), 3D borehole pulse over 9 ddh, EM, Time Domain Electromagnetic Surveying, Pionjar Survey (161) and till sampling (115), Assay Analyses and Whole Rock Lithogeochemistry |
Heath Steele Area
The Heath Steele property is situated approximately 65 kilometres southwest of the City of Bathurst, and 50 kilometres northwest of the town of Miramichi, and is accessible via Highway Route 430 (Figure 6). The property hosts a number of volcanogenic massive sulphide deposits with varying volumes and shapes, from which a total of approximately 22.3 million tonnes of ore was mined. The largest single zone was the Heath B Zone, which produced approximately 19.7 million tonnes, with an average grade of 1.75% lead, 4.76% zinc, 0.98% copper, and 65 grams per tonne silver. This constituted the ore grade portion of nearly 70 million tonnes of accumulated sulphides. The sulphide bearing horizon has a strike length of 1,500 metres, down dip extent of 800 metres and thickness up to 60 metres.
The ore minerals were extracted from several different sites with occasional brief closures from 1957 to 1958, 1962 to 1983, and 1989 to October 1999. Production ceased in 1999 and the site was permanently closed. The site is currently under rehabilitation, with most of the mine and mill buildings removed.
This area has been withdrawn from the agreement due to the on going reclamation and environmental liabilities except for the six following properties that surround the Heath Steele-Stratmat area:
Otter Brook
Block 1301
Heath East
Block 1522
56
South Little River Lake
Block 4437
Heath Steele West
Block 4796
California Lake
Block 4870
California Lake
Block 4873
McCormack East - MOD Unique Record Number 1135
The following property history is excerpted from BM&S assessment report 474079 by G. Frotten (1991).
“In 1955, Lake Expanse Gold Mines (assessment report 471421) held a large block of ground that included this occurrence. They conducted drilling (5 holes LE-1 thru 5) but only one of these (LE-5) is on the present BM&S property, north of the occurrence, and intersected 83 m of gabbro. In 1974, Heath Steele Mines (assessment report 471404) staked ground north of the present BM&S group on what is now BM&S' Moon Lake Group. The land was staked on the basis of anomalous soil and rock samples. They also outlined anomalies with TURAM-EM and Mag. In 1976, (assessment report 472148) BM&S carried out extensive IP, EM, Mag and gravity surveys and outlined 7 IP anomalies. In 1978, (assessment report 472239) Cominco flew airbourne Dighem II EM and Mag surveys over a large area including the western part of the BM&S block. In 1980, Cominco (assessment report 472650) drilled 1 hole RL-1 on the west shore of Roger Lake . In 1988, BM&S (assessment report 473598) established a grid and conducted soil geochemistry, Mag. VLF-EM and HLEM surveys. This work showed two VLF targets and several Mag anomalies. This property is referred to as McCormack East project # 4235. In 1988-89, BM&S (assessment report 473886) conducted additional soil geochemistry, Mag, VLF-EM and HLEM surveys on the property. As a result, several trenches were excavated.
One of these uncovered a 3 m exposure of massive sulphides with grab samples assaying 9.24% Pb, 10.73% Zn, 0.11% Cu, 223.51 g/tonne Ag and 0.55 g/tonne Au. The trenching was followed up by three drill holes (4235-89-1, -2, -3). The best composite assay from these was from hole 4235-89-2 and yielded 1.48% Pb, 2.65% Zn, 0.18% Cu, 20.88 g/tonne Ag and 0.15 g/tonne Au over 2.71 m. In 1990, BM&S (assessment report 474079) conducted work over the original property and the west extension. This work included pionjar sampling, VLF-EM, and Mag surveys, trenching and diamond drilling two holes (4260-90-4 and -5). Hole 90-4 was drilled to test the McCormack showing with disappointing results 0.005% Cu, 0.89% Pb, 1.26% Zn 4.1 g/t
FIGURE 6 HEATH STEELE AREA
57
Ag and 0.032 g/t over 0.63 m. Hole 90-5 was drilled to test the Barrett showing but gave disappointing results.” The following is a list of DNR assessment reports that cover the McCormick East occurrence: 470965, 471358, 471363, 471404, 471420, 471421, 471459, 471509, 471529, 472148, 472233, 472239, 472650, 472679, 473385, 473598, 473767, 473886 and 474079
Halfmile Lake Area
Half Mile Lake Area is located along the western edge of the Bathurst Mining Camp (Figure 7). Other than the Half Mile Lake deposits which are excluded from the Xstrata – El Nino Option Agreement, the only known mineral occurrence is Venning Mountain (URN 1158).
Venning Mountain – MOD Unique Record Number - 1158
The Venning Mountain occurrence is a minor occurrence consisting of pyrite-chalcopyrite stringer mineralization within chloritic sediments spatial associated with altered quartz feldspar porphyry believed to be Nepisiguit Falls Formation felsic volcanics. The initial discovery was by Texasgulf Sulphur Co in 1960 (assessment file 472153) who drilled one hole. D.N.R. database states, “Sulphides occur as streaks & disseminations in chloritic sediments & associated with quartz veins”.
Mount Fronsac Area
This area is host to five (4) significant massive to disseminated sulphide deposits that can be divided into two groups (Figure 8). By property they are the Devils Elbow deposit, TV Tower and the Mount Fronsac deposits. Their descriptions are as included below.
Devils Elbow – MOD Unique Record Number 0285
Surveys performed on the property consist of airbourne electromagnetic (Input and MegaTEM I) and magnetometer geophysical surveys, line cutting, horizontal loop electromagnetic, VLF-EM, induced polarization/resistivity, self potential, magnetometer, gravity, radiometric surveys, stream silt geochemistry, soil geochemistry, till geochemistry, lithogeochemistry, geological mapping and trenching and diamond drilling. Down hole pulse-EM and resistivity surveys were completed on several drill holes. Core sample assaying and whole rock geochemistry was undertaken to determine metal grade and thickness of anomalous intervals. Geoscientific compilations have been completed to model the geological environment and the mineral potential of the area. A summary the various historical data files are presented in chronological order in Tables IX to XII below:
Table IX Summary of Historical Surveys – Devils Elbow Regional
Year | Reference | Company | Type of Survey |
2000 | Confidential | Noranda Inc. | MegaTEM airbourne survey |
1996 |
| NBDNR | 96-8A apparent conductivity, 96-8B residual total field Mag., 96-D equivalent Th/K, 96-E Potassium. Mutli-parameter airbourne geophysical survey. |
1995 | MP 95-6A | NBDNR | Devil’s Elbow Brook area 21 O/08e - geology. |
1990 | GSC-OF 2236 | GSC | Till geochemistry |
1990 | 473918 | Falconbridge | Aerodat AEM and Mag |
1988 | OFR-89-23, 24, 28, 29 | NBDNR | Geocompilation reports and maps |
1981 | OF-81-6 | NBDNR | Stream Sediment Geochemistry (Cu, Pb, Zn, Mn, Fe, Mo, Ag, U) |
1978-79 |
| Conwest | AEM and Mag. |
1976 | 471658 | T.W. Riordon | Input AEM and Mag. |
1968 | 471648 | Red Rock Mines | Airborne Mag and EM |
1967 | 471572 | Devil’s Elbow Mines | AEM and Mag. |
1955 | 471616 | Middle River Mining | Airborne Mag |
58
FIGURE 7 HALFMILE LAKE AREA
FIGURE 8 MOUNT FRONSAC AREA
59
Table X Summary of Historical Surveys – Devil’s Elbow Main Zone
Year | Reference | Company | Type of Survey |
1981-83 | 472908 | Brunswick Mining & Smelting | Soil geochemistry, Mag, HLEM, gravity, trenching, diamond drilling (5 holes), lithogeochemistry. |
1973-74 | 471584 | Hanna Mining | Two diamond drill holes (73-1, 73-2) |
1973-74 | 471583 | Hanna Mining | EM-25 (Comp. of earlier IP) |
1967 | 471571 | Devil’s Elbow Mines | Gravity (4N-12S), IP (73S-91S), EM. |
1966 | 471570 | Devil’s Elbow Mines | Soil geochemistry, geology, DDH sections 48S and 60S; IP 20N to 20S, 48, 56, 60S; ddh’s 1-65 to 8-65. |
1962 | 471555 | Cominco | Soil and silt geochemistry, one diamond drill hole (DE-1). |
1956-57 | 471534 | American Metals Co. Ltd. | Geological, geochemical and geophysical surveys (gravity, Mag, VLF-EM, drill hole EM); 5,362 meters of diamond drilling in 39 holes. |
Table XI Summary of Historical Surveys – Devil’s Elbow East Zone and East Elbow
Year | Reference | Company | Type of Survey |
2000 | Confidential | Noranda Inc. | One drill hole, DE00-1 |
1981-83 | 472708 | Brunswick Mining and Smelting | Soil geochemistry, Mag, HLEM, gravity. |
1979 | 472411 | Conwest | HLEM, Mag, trenching. |
1976 | 471684 | UMEX | Chief’s Plateau area DDH’s LE 1 to LE 5. |
1969 | 471649 | Red Rock Mines | Soil geochemistry (Chief’s Plateau), EM and Mag. |
1968 | 471572 | Devil’s Elbow Mines | EM survey (Chief’s Plateau), geology, gravity (Chief’s Plateau). |
1967 | 471645 | Red Rock Mines | DDH’s 4-66, 7-66; geology. |
1967 | 471571 | Devil’s Elbow Mines | IP, DDH’s 1-66 to 9-66, EM, soil geochemistry (Chief’s Plateau area). |
1966 | 471570 | Devil’s Elbow Mines | Soil geochemistry, IP, DDH’s 1-65 to 8-65. |
1962 | 471555 | Cominco | Soil and silt geochemistry. |
Table XII Summary of Historical Surveys – Devil’s Elbow, TV Tower & Central Zone
Year | Reference | Company | Type of Survey |
2000 | Confidential | Noranda Inc. | Line cutting, HLEM, VLF EM, Mag |
1999 | Confidential | Noranda Inc. | Line cutting, HLEM, VLF EM, Mag, Gravity, Trench |
1997 | 475022 | Noranda Mining & | VLF, Mag, soil geochemistry (Cu, Pb, Zn, Ag) |
|
| Exploration Inc. |
|
1981-83 | 472908 | Brunswick Mining & Smelting | HLEM, Mag, soil geochemistry |
1979 | 472411 | Conwest | HLEM, Mag, trenching. |
1968 | 471581 | Hanna Mining (Kitchen Claims) | Mag and EM, gravity. |
1967 | 471645, 471646, 471647 | Red Rock Mines | Soil geochemistry, geology. |
1967 | 471598 | Herbert Kitchen (Hanna Mining Co.) | Geological, soil geochemistry, IP (chargeability and resistivity), one diamond drill hole 10-66. |
1961-62 | 471626 | New Jersey Zinc | Soil geochemistry, HLEM, Mag, VLF-EM, SP, two ddh’s TV-1-61 and TV-2-61. |
60
The Devils Elbow deposit was discovered by the American Metals Company Ltd. in 1956-1957 (assessment report # 471534). This work was undertaken to follow-up an airbourne geophysical anomaly and included gravity, magnetometer, very low frequency electromagnetic, down-hole electromagnetic surveys. The anomalies detected as a result of these surveys were tested with 39 diamond holes for a total 5,362 metres. The American Metals Company reported the discovery in 1956 of the Devils Elbow Main Zone deposit. This was the result of ground exploration to investigate an airbourne geophysical anomaly. Approximately 5,362 metres of drilling in thirty-nine (39) holes was completed and several zones of disseminated to massive sulphides were outlined. Tonnage estimates reported by A. Williams of the New Brunswick Department of Natural Resources in 1974 place the historical resource estimate at 362,880 tonnes of massiv e sulphide with an average grade of 1.2% copper and an historical resource estimate of 154,224 tonnes of disseminated sulphide with an average grade of 0.7% copper (Carroll, B., 1984). The exact methodology used in the tonnage calculations is not presented in the article. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reseves. Tonnage calculations are pre-NI 43-101 and should be considered NI 43-101 non-compliant.
In 1962 Cominco drilled a single hole.
A drill program undertaken by Devil’s Elbow Mines in 1965 encountered a second mineralized horizon approximately 300 meters east of the Main Zone. Devil’s Elbow Mines completed a total of five (5) diamond drill holes on the “East zone”. Unlike the Main Zone, the East Zone was found to contain significant sub-economic lead-zinc mineralization.
In 1983 Brunswick Mining and Smelting completed an additional five diamond drill holes on the Main Zone.
The central part of the Devils Elbow Claim Group has not been the focus of any detailed exploration. The last company to examine this ground was the Hanna Mining Company in 1967. At that time it was found that numerous Pb-Zn soil anomalies as well as several broad induced polarization / resistivity anomalies are present. A single vertical diamond drill hole used to test a resistivity low encountered disseminated base metal mineralization throughout.
Conwest (1978) conducted airbourne electromagnetic and magnetometer surveys, geological mapping and soil geochemical surveys, and horizontal loop electromagnetic, induced polarization / resistivity, and mise-a-la-masse surveys; trenching and three (3) diamond drill holes (79-1, -2,-3) totaling 407.1 metres. All of the drilling was completed on the "North Zone".
Brunswick Mining and Smelting conducted work on the property in 1980 and 1981. This work included magnetometer, horizontal loop electromagnetic (Max-Min II), and gravity geophysical surveys, soil geochemistry, trenching, and diamond drilling five (5) diamond drill holes (DE 801 to DE 80-5) totaling 1,283.5 metres. The results are reported in assessment reports 472686 and 472908 respectively. Drill holes DE 80-1 to De 80-5 are stored at the Madran core storage facility owned and operated by the New Brunswick Department of Natural Resources.
Falconbridge worked the property between 1990 and 1991. They carried out trenching, litho-geochemistry, horizontal loop electromagnetics (Max-Min II), VLF electromagnetics, and magnetometer surveys as well as diamond drilling (3 holes; DE91-1 to DE91-3). The results of this work are presented in assessment reports 474063 and 474195. The drill core is stored at Madran. Falconbridge also conducted some drilling and trenching south of the deposit and on the west bank of Devils Elbow Brook on their Nepisiguit River Property (assessment file 474196); DDH's NR-91-1, -2 and trenches 7 and 8.
In 1997, Noranda Mining & Exploration Inc. cut a coarse grid (lines 200 metres apart), collected and analyzed (Cu, Pb, Zn, Ag) soils at 25-meter stations, conducted magnetometer, very low frequency electromagnetic surveys and reconnaissance mapping. Noranda Inc. carried out further work in 1998 including geophysical surveys, soil surveys and trenching.
61
The 2001 program was comprised of one drill hole, DE01-2 completed to a depth of 193.24 metres. This drill hole was targeted on a Max Min II horizontal loop electromagnetic anomaly that was outlined during the 2000 work program. This previous work program was carried out to locate an airbourne conductive trend highlighted by a MegaTEM airbourne survey as well as the Extech II airbourne survey. Drill hole DE01-2 encountered the Nepisiguit Falls quartz feldspar porphyry with intercalated mudstones. The rock displays variable but weak chlorite and sericite alteration. No significant sulphide mineralization occurs and a nearby hydrothermal system is not indicated. Shearing in the upper part of the sequence could account for the weak conductivity picked up by the HLEM survey.
TV Tower Group – MOD Unique Record Number 0284
The TV Tower mineral occurrence first discovered by New Jersey Zinc in 1961 is located near the north boundary of the property. The occurrence is characterized by several weak airbourne electromagnetic and magnetic anomalies. These anomalies have been located through establishing an exploration grid and conducting ground geophysical surveys and two vertical holes tested these targets. The mineralization encountered in these holes and in three subsequent holes by Conwest Explorations in 1979 can best be described as stringer and disseminated copper/zinc mineralization.
Mount Fronsac North – MOD Unique Record Number 1418
Mount Fronsac North (MFN) is the most recently discovered volcanogenic massive sulphide deposit in the Bathurst Mining Camp, where a near surface discovery had been all but discounted. It is located 65 kilometres southwest of Bathurst, New Brunswick. There is good access provided by logging roads. The deposit subcrops on ground optioned from Landore Resources and dips east onto Noranda’s Fly Tent claims.
The MFN deposit occurs within Nepisiguit Falls Formation very near the top at the contact with Flat Landing Brook Formation. It strikes north-south and dips to the east at 45°. The massive sulfides, consisting of pyrite, sphalerite, galena and chalcopyrite, are generally 2 to 20 metres thick and are enveloped by a 25 to 100 metre thick unit of altered tuff with 10% to 30% pyrite. The low copper grade and lack of pyrrhotite indicate that it probably formed in a vent distal setting. The following is a list of the best intercepts recorded for Mount Fronsac North:
Table XIII Mount Fronsac North – Best Intercepts
Hole ID | From (m) | To (m) | Width (m) | Cu % | Pb % | Zn % | Ag g/t | Au g/t |
MF00-29 | 377.42 | 383.82 | 6.40 | 0.02 | 4.41 | 5.05 | 51.99 | 0.07 |
MF00-31 | 382.35 | 389.72 | 7.37 | 0.04 | 2.38 | 9.51 | 41.97 | 0.44 |
MF00-14 | 204.20 | 205.71 | 1.51 | 0.09 | 6.18 | 12.13 | 115.02 | 0.40 |
MF00-13 | 187.36 | 188.00 | 0.64 | 0.24 | 3.31 | 12.32 | 106.06 | 0.73 |
MF00-17 | 200.44 | 201.30 | 0.86 | 1.05 | 1.09 | 10.20 | 25.89 | 0.76 |
MF00-25 | 175.10 | 175.25 | 0.15 | 0.01 | 5.32 | 12.24 | 65.00 | 0.08 |
MF00-26 | 399.00 | 408.20 | 9.20 | 1.52 | 0.04 | 0.14 | 11.12 | 0.05 |
There is an estimated geological resource of 14 million tonnes of sub-economic sulphides. This sulphide accumulation includes a geological resource of 1.26 million tonnes zone grading 7.65% zinc, 2.18% lead, 0.14% copper, 40.3 grams per tonne silver and 0.40 grams per tonne gold (Walker and Graves, 2006, in press). Twenty drill holes have cut the massive sulphides with 100 to 200 metres between intercepts and have defined it over a strike length of 600 metres and to a vertical depth of 500 metres where it is cut off. Results of the block model are presented below. A density of 4.1 was used for the tonnage calculation based on a limited number of specific gravity readings from two drill holes.
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Table XIV Mount Fronsac North – Results of the Block Model
Grade group % Zn | Volume m3 | Tonnage *1,00,0000 | Cu % | Pb % | Zn % | Ag g/t | Au g/t |
0.01 - 1.0 | 1954.01 | 8.011 | 0.16 | 0.09 | 0.27 | 5.89 | 0.18 |
1 - 5 | 1129.36 | 4.630 | 0.17 | 0.58 | 1.80 | 14.27 | 0.21 |
5 - 8 | 179.68 | 0.737 | 0.18 | 1.94 | 6.87 | 37.28 | 0.39 |
8 -12 | 128.92 | 0.528 | 0.08 | 2.52 | 8.73 | 44.53 | 0.41 |
Total | 3391.98 | 13.906 | 0.16 | 0.44 | 1.45 | 11.81 | 0.21 |
Noranda initiated the most recent exploration program in this area in 1995 to follow-up airbourne electromagnetic (AEM) anomalies in the area of the Devils Elbow and Mount Fronsac (south) deposits. MFN, the largest volcanogenic massive sulphide deposit discovered in this area since Half Mile Lake, was found by prospecting soil anomalies that led to the discovery of fericrete boulders. The associated AEM anomaly is distinct but low to moderately conductive with a very weak coincident magnetic anomaly. Future exploration should be directed toward the contact of the Nepisiguit Falls Formation with the overlying Flat Landing Brook Formation along strike from the Mount Fronsac North deposit and along this contact at depth to the east. The potential for this horizon to host additional large tonnage VMS deposits along strike and at depth is considered good. Regional mapping indicates the horizon may be near surface due to folding and f aulting over large areas.
Airborne magnetic surveys have highlighted the pyrrhotite component of widespread hydrothermal alteration within the exposed Nepisiguit Falls rocks west of MFN. These surveys also suggest that the alteration extends to the east and north of MFN within the Nepisiguit Falls rocks overlain by Flat Landing Brook Formation. Some of the stronger magnetic anomalies could represent the vents associated with the distal style MFN deposit, with potential to host much larger associated stratiform VMS lenses of higher grade closer to source.
The Time Series Distributed Acquisition System (TSDAS) currently under joint development by Quantec and Noranda Inc. represents the next generation of ground-based IP-MT system. This system was tested at Half Mile Lake because of 1) the amount of information we have on the known VMS deposits, which dip at approximately 45° and extend down dip from surface to a vertical depth of 1000 metres 2) the high resistivity contrast of the host rocks surrounding the mineralization. Initial results are very encouraging, with the system accurately detecting the deposit to a vertical depth of 500 metres. Further data processing may produce models outlining the known deposits to greater depth. This electrically quiet environment extends throughout much of the west part of the Bathurst Mining Camp including the Mount Fronsac Area. Titan-24 would appear to be a prime tool to screen the area for targeting exploration drill holes. Stratigraph ic drilling without Titan-24 targeting is also an option, with hole positions based on regional mapping of the FLB / NF contact and structural features (fold configuration) as well as regional airbourne magnetic anomalies that could represent pyrrhotite rich mineralization.
Mt. Fronsac – MOD Unique Record Number 0408
The Mt. Fronsac (South) sulphide deposit(s) were discovered by Texasgulf Sulphur in 1957. The discovery was attributed to an airbourne electromagnetic survey that outlined several conductors in the vicinity of the mineralization. Texasgulf completed a total of 19 drill holes on the zone. At least three stratiform lenses were outlined by the drilling but grades were sub-economic (best intersection was 11.4 metres grading 1.7% Pb+Zn) and Texasgulf discontinued its efforts. In 1963 Lemieux Copper explored the north half of the original mining license. Geophysical surveys including magnetometer, VLF electromagnetic, horizontal loop electromagnetic and self potential surveys were carried out as well as a soil geochemistry survey. In 1969 Lemieux drilled a single hole in this area but failed to explain a moderately strong copper-lead-zinc soil anomaly. In 1970 Lemtex Development completed three (3) diamond drill holes on the deposit but logs for these holes are lost and the location of only two of the holes is known.
In 1974 UMEX completed VLF electromagnetic and magnetometer surveys on the property and proceeded to drill seven (7) holes. The best intersection reported from this program was in hole FRO-2 which intersected 20 feet of massive sulphide grading 2.5% combined lead and zinc and 20 feet of disseminated mineralization grading 1.3% combined lead and zinc.
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In 1979 Conwest Exploration Company completed a number of geophysical surveys on the property including an induced polarization, Mise-a-la-Masse, horizontal loop electromagnetic (Max-Min II), magnetometer surveys, and a three line gravity surveys. Soil geochemistry was also completed. These surveys were followed up with trenching and four (4) diamond drill holes.
In 1980 Brunswick Mining and Smelting (BMS) completed a series of surveys including gravity
(4.7 miles) and induced polarization (4 miles). Four diamond drill holes (totaling 908.61m) were also completed in close proximity to known mineralized zones.
From 1981 to 1983 BMS covered most of the mining license with VLF electromagnetic, magnetometer, and horizontal loop electromagnetic (Max-Min II) surveys. An additional 1.5 miles of gravity was completed as well as a soil geochemistry survey. The south half of the mining license was mapped and three additional holes (F-1-83 to F-3-83) were drilled to test the main mineralized zone. In 1990 Falconbridge Limited flew an airbourne electromagnetic, VLF and magnetometer survey of the Halfmile Lake-Mount Fronsac-Devils Elbow area. In 1991 Falconbridge cut a small grid over the Mt. Fronsac sulphide deposits. Surveys carried out over the grid included Max-Min II, VLF-EM and magnetometer. Falconbridge completed five surface trenches and two diamond drill holes in 1991.
In 1997 Noranda Mining & Exploration drilled one hole, MF-97-1, on the south end of the Mount Fronsac (South) deposit. During 1998, a small new grid with both north-south and east-west picket lines was established east of the Mt. Fronsac deposit to test for a possible change in strike direction (i.e. from N-S to E-W) of the favourable stratigraphy which hosts the Mt. Fronsac deposit. The grid was used as a control for geophysical (VLF and magnetometer) and soil geochemical surveys. Two lines of gravity surveying (lines 3200S & 3600S were done to re-confirm an anomaly identified by an earlier survey. Drill hole MF-97-1 drilled in 1997, was extended from 323.0 metres to 403.86 metres to test this confirmed gravity anomaly. Also, in 1998 one short trench (Trench #16) was dug in the north end of the claim group to test a VLF anomaly. A transient electromagnetic survey was done along four lines in the northwest corner of the property.
New Brunswick Department of Natural Resources GEOSCAN assessment reports are referenced in Table XVI below.
Table V Historical Surveys – Fly Tent Brook & Mount Fronsac Claim Area
Year | GEOSCAN # | Company | Description |
1956 | 471555, 471549 | Conlagas Mines Ltd. | Ground EM |
1956 | 471616, 471619, 471117 | Middle River Mining Company | Geological, geochemical and geophysical surveys, airbourne Mag and diamond drilling. |
1956 | 471667 | Texas Gulf Sulphur | Geology, EM, soils, SP, gravity, regional drilling |
1957 | 471538 | Arista Mines | EM Survey |
1957 | 471624 | Monpre Uranium | Geophysical (EM, VLF-EM) surveys and diamond drilling (3 holes) |
1957 | 471602 | Leitch Gold Mines | Geological mapping, EM surveys, diamond drilling (4 holes) |
1957 | 471561 | Cominco – Hartt’s Lake | Geological and geochemical surveys. |
1957 | 471654 | Rio Canex (Stan Noel Option) | EM and Mag surveys. |
1965-68 | 471571, 471570, 471572 | Devil’s Elbow Mines Ltd. | Geological mapping, soil geochemistry, diamond drilling |
1966-67 | 471645 | Red Rock Mines | Geological mapping, Mag surveys, soil geochemistry, diamond drilling (2 holes) |
1967 | 471639 | Norpoint Explorations | Soil geochemistry and ground EM. |
1967 | 471544 | Cannon Mines - Hartt’s Lake | Vertical loop EM and Mag,. |
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Year | GEOSCAN # | Company | Description |
1967 | 471545 | C.G. Cheriton (Lemieux Copper Exploration) | Mag, EM, self potential |
1968 | 471674 | Tripoint Mines | EM, soils, geology, SP, drilling |
1968 | 471648 | Red Rock Mines (& Hanna) | AEM Survey |
1963-68 | 471561, 471555 | Cominco | Geological mapping, soil geochemistry |
1969 | 471649 | Red Rock Mines (Hanna) | Soils, mag, EM, geology |
1968-69 | 471582 | Hanna Mining Co. | Soil geochemistry, geological mapping. |
1970 | 471603 | Lemtex Development | Geology, soils, EM, drilling |
1970 | 471627 | New Jersey Zinc Expl. | Geological and geochemical surveys, ground EM. |
1971 | 471593, 471592 | Imperial Oil Enterprises | Soil geochemistry, mapping |
1973 | 471587 | Heath Steele | Rock & Soil geochemistry |
1974 | 471680 | UMEX | Ground magnetics, drilling |
1974 | 471679 | UMEX | Line cutting, silt & soil geochemistry, mag, EM |
1975 | 471681 | UMEX | Vertical loop EM, mag, geology |
1976 | 471638 | Noranda Exploration - Hartt’s Lake | Silt and soil geochemistry. |
1976 | 471638 | Noranda Exploration | Soil geochemistry |
1976-77 | 471684 | UMEX | Geological mapping, geophysical surveys (VLF-EM and Mag), diamond drilling (9 holes). |
1977 | 472223 | K.J. McDonough ( Long Pond group) | Soil sampling |
1978-79 | 472509 | Conwest - Devil’s Elbow | Airborne EM and Mag, geological, geochemical (soil) and geophysical (HLEM, Mag, and IP surveys). |
1979 | 472410 | Conwest | Geology, mag, EM, IP, Mise a la Masse |
1979 | 472411 | Conwest | HLEM, drilling, trenching, mag, IP, regional geology |
1980 | 472510 | Conwest | Diamond drilling |
1981 | 472708 | Brunswick Mining and Smelting | Compilation, mag, Max-Min, gravity |
1981 | 472687 | Brunswick Mining and Smelting | Gravity, IP |
1981-83 | 472686, 472708 | Brunswick Mining and Smelting | Geophysical (Mag, HLEM, gravity) and geochemical (soil and rock) surveys. |
1984 | 473048 | Brunswick Mining and Smelting | VLF, Mag, Max-Min, soils, compilation, drilling |
1985 | 473207 | Brunswick Mining and Smelting - Hilltop Grp. | Geophysical (VLF-EM and mag). |
1988 | 473553 | UMEX Corp. Inc. - Hartt’s Lake | Geophysical (Max-Min, VLF-EM, Mag) |
1990-92 | 474064, 474088, 474196, 473918 | Falconbridge Ltd. | Airborne EM/VLF/Mag., geological mapping, trenching, lithogeochemistry, soil geochemistry, HLEM and Mag surveys, diamond drilling. |
1990-92 | 473911, 474068, 474158 | Brunswick Mining and Smelting - Mt. Moses | Geological mapping, soil/silt geochemistry, Mag, VLF-EM and HLEM surveys, trenching and diamond drilling (1 hole). |
1991 | 474062 | Falconbridge | Mapping & lithogeochemistry |
1991 | 474171, 474051 | Brunswick Mining & Smelting Three Corner Lake | Prospecting, geophysical (VLF-EM), Mag.) geological, geochemical (soil), trenching. |
1991-93 | 474120, 474279, 474403 | Major General Resources - Hartt’s Lake | Geophysical (VLF-EM, Mag, Max-Min); geochemical (silt, soil), trenching, diamond drilling, geological |
1992 | 474206 | Teck Explorations - Long Pond | Geochemical (stream, whole rock) |
1992 | 474194 | Falconbridge | Line cutting, VLF, HLEM, trenching, drilling, lithogeochemistry |
1992 | 474196 | Falconbridge | Line cutting, mag, VLF, HLEM, trenching, drilling, lithogeochemistry |
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Year | GEOSCAN # | Company | Description |
1995 | 474637 | BM&S (Noranda) | VLF, soil geochemistry, geology |
1996 | 474681 | Northeast Exploration - Hartt’s Lake | Line cutting and IP survey |
1997 | 474888 | Noranda Mining & Exploration Inc. | Geophysical surveys (TDEM), prospecting, soil geochemistry, trenching. |
1998 | 475021 | Brancote Canada (Mt Fronsac) | VLF, mag, HLEM, gravity, trenching |
1998 | 475020 | Noranda Inc. | Line cutting, HLEM, VLF, Mag, soils, trenching, drilling |
Camel Back Area
The Camel Back area is situated south of Caribou Mines and north of Indian Lake and consists of three claim blocks; Camel Back Terry (Block 4640), California Lake (Block 4871) and Indian Lake (Block 1883) Figure 9.
Camel Back Mountain – MOD Unique Record Number 1383
The Camel Back Pb-Zn-Cu deposit was discovered in 1996. It is a small VMS deposit occurring within the Tetagouche Group in the central part of the BMC. It is hosted by a sequence of intercalated tuffaceous sedimentary rocks that overlie quartz feldspar porphyry tuff lava of the Nepisiguit Falls Formation. The stratiform part of the deposit contains massive sulphides, mainly pyrite with sphalerite and galena occurring as subordinate phases concentrated at the base of the lens. Gold contents in the massive sulphide are low but tend to be enriched in the massive pyrite near the top of the lens. The massive sulphide lenses are underlain by moderately to intensely chloritized fine grained tuffaceous sedimentary rocks that locally contain significant chalcopyrite-pyrite veins that are interpreted to represent feeder zone mineralization. Oxide facies iron formation, generally rare in the west part of the BMC, is spatially associated with the massive sulphides and has been traced up to 1,300 metres along strike to the east. The present morphology of the deposit is probably a function of primary stacked lenses rather than structural repetition. Following are the best intercepts through two lenses:
Table XVI Camel Back – Best Intercepts
DDH | Interval | Metres | Pb % | Zn % | Cu % | Ag ppm |
ILN-96-6 | 107.40-111.00 | 3.60 | 1.53 | 4.60 | 0.49 | 28.01 |
ILN-96-6 | 118.70-123.80 | 5.10 | 3.40 | 7.81 | 0.07 | 36.04 |
ILN-97-7 | 159.57-164.71 | 5.14 | 1.01 | 4.02 | 0.40 | 21.64 |
ILN-97-10 | 108.75-110.53 | 1.78 | 2.76 | 10.61 | 0.27 | 41.53 |
ILN-97-10 | 115.87-121.00 | 5.13 | 2.25 | 8.86 | 0.33 | 23.9 |
Future exploration should focus on the Camel Back horizon, which has been traced 2.4 kilometres to the east by geological mapping as well as oxide iron formation and strong chloritic alteration in diamond drill hole intercepts. The horizon may be folded and extend a further 3.5 kilometres to the Camel Back South occurrence where drilling cut stringer pyrite pyrrhotite mineralization associated with strong chlorite alteration. Airborne magnetic surveys also map this horizon and positive magnetic anomalies may be associated with iron formation and/or hydrothermal centres. Recent geophysical surveys failed to highlight near surface conductivity east of the Camel Back deposit. Titan-24 surveying is recommended to screen the established horizon at depth for conductive targets.
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FIGURE 9 CAMEL BACK AREA
Recent work by Noranda Mining & Exploration is described in three reports written by Jeffrey Carroll - North Indian Lake (Block 2933), November 1997; 40-Mile Steady (Block 3015), January 1998; and Camel Back East (Block 3014), March 1998. Garth Graves filed the latest report of work in November 1999 on both the Indian Lake and Camel Back East claim blocks. The current work program on the Camel Back East property consists of follow-up of previously located chlorite/sericite alteration with stringer Po/Py mineralization on the Camel Back South grid. Work includes grid establishment, magnetometer, TDEM and VLFEM geophysical surveys. The surveys highlight the coincident magnetic and electromagnetic anomalies that the previous drilling was based on. The TDEM survey indicates the anomaly plunges to the north and strengthens at depth. One diamond drill hole was put in at Camel Back South to follow-up the results of the geophysical surveys.
Two small overlapping grids were established on the Indian Lake property in the F4 area where previous drilling had intersected iron formation east of and along strike from the Camel Back deposit. TDEM surveys were carried out on the grids to search for an associated conductor at depth.
Drilling on the Camel Back South grid intersected a similar sequence of rocks as the two previous drill holes. The geophysical anomaly was explained by disseminated and stringer pyrite and pyrrhotite in altered cherty felsic tuff and tuff breccia. No base metal mineralization was noted other than trace chalcopyrite.
TDEM surveys on the F4 East and F4 West grids did not locate any EM conductors. Future exploration programs will have to be based on stratigraphic drilling of the favourable horizon hosting the Camel Back deposit or utilize a deep search geophysical method.
Carboniferous Area
Taken for the Bathurst Mining Camp Data Book provided by Xstrata Zinc
Falconbridge currently controls 4 contiguous claim groups (Blocks 1694, 4841, Permit 1 and Permit 2) totaling 51,030 hectares underlain primarily by Carboniferous sediments in the eastern part of the Bathurst camp. The area is centred approximately 20 km due south of the city of Bathurst, and 18 km east-southeast of Brunswick Mine (Figure 10). The block is accessible via Route 360 which crosses through the central part of the property, and numerous logging roads which branch off the highway.
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Recognition of the fact that the Carboniferous sandstones unconformably overlie the older prospective volcanic terrain came early in the exploration of the Bathurst Mining Camp. Although the Carboniferous sediments thicken very gradually to the east, drill hole BSR-90-1 drilled 9.0 kilometres east of the unconformable contact with Carboniferous sediments intersected 232 metres of sandstones, prior to cutting Paleozoic stratigraphy. The Carboniferous cover is much more conductive that the underlying Paleozoic rocks, making previous electromagnetic targeting virtually impossible. As a result, the bulk of the work to date has focused on drilling magnetic and/or gravity anomalies, and most of this was carried out in proximity to the old Key Anacon deposit.
Historical drilling by both Noranda Inc. and subsidiary Brunswick Mining and Smelting has confirmed the presence of Tetagouche and Flat Landing Brook Group stratigraphy beneath the Carboniferous cover. These programs have also yielded interesting but sub-economic base metal intersections on each of the Cold Brook, Red Pine Brook, and Bruce Siding claim groups, summarized below.
FIGURE 10 CARBONIFEROUS AREA
Bruce Siding Area
Drilling to date on the property has confirmed the very gentle dip of the Carboniferous stratigraphy, which increases in thickness at a rate of approximately 28 metres vertical for every1.0 kilometre as one moves east from the surface expression of the contact. As such, Carboniferous sandstones are expected to be between 80 and 270 metres thick on the property, which has been confirmed by drilling.
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A total of 7 holes, BS-98-1 to 7 totaling 5,676 metres have been drilled on the property. Two (2) of these holes are located in the south-western part of the claim group, and 5 are located along the eastern boundary. All have been drilled to test magnetic anomalies, or in the case of BS-98-4 and 5 to follow-up mineralized intersections in hole BS-98-3. The best mineralization intersected to date on the property was cut in hole BS-98-3, and consisted of 3 stockwork sulphide zones from 530.57 metres to 587.65 metres, 636.42 metres to 703.48 metres, and 744.0 metres to 752.25 metres. All of the intersections contain pyrrhotite, pyrite, chalcopyrite, sphalerite and galena stringers within a felsic tuff-sediment package tentatively identified as Nepisiguit Falls (Brunswick No. 12 host) stratigraphy. These zones all returned anomalous base metal assays. Follow-up drilling in holes BS-98-4 and 5 dr illed 200 metres to the east and west of BS-98-3 also cut stringer mineralization, although over shorter intervals, and of a less intense nature. The best assay from the 2 follow-up holes was 0.63 metres with a 3.62% zinc, 0.46% copper, 0.21% lead, and 5.4 grams per tonne silver from hole BS-98-4 at a depth of 563.67 metres.
Red Pine Brook – MOD Unique Record Number 1408
The Red Pine Brook property lies immediately west of and adjacent to the Bruce Siding group, and is underlain by Carboniferous sediments to depths of between 40 metres and 170 metres. To date Noranda has drilled 3 holes on the property, testing magnetic anomalies under the Carboniferous cover. The best hole to date, KH-97-4 intersected a 235 metre (drill intersection length) thickness of Ordovician conglomerates, with abundant pyrrhotite and pyrite, which is thought to be an adequate explanation for the elevated magnetic signature. A localized chalcopyrite rich zone of mineralization was intersected between 299.0 metres and 299.65 metres, which returned a value of 6.00% copper over the 0.65 metre interval. The abundance of chloritic alteration in the host lithology, and the copper mineralization, prompted the drilling of 2 follow-up holes, neither of which intersected significant base metals.
Cold Branch Brook – MOD Unique Record Number 0206
The Cold Brook property straddles the surface trace of the Carboniferous / Ordovician contact, and as such has no Carboniferous cover in the northwestern part of the property, and up to 100 metres thickness in the southeastern part. It is adjacent to the west of the Red Pine Brook group, discussed above. This property has received considerably more work than either Red Pine Brook or Bruce Siding, due to the much shallower sandstone cover, and its proximity to the Key Anacon deposit, and the obvious (from EXTECH airbourne magnetic data) extension of the Key Anacon stratigraphy under the carboniferous cover. Significant drilling results to date include: 1) a 2.1 metre intersection of 5.01% zinc encountered in hole BR-94-7, located north of the Key Anacon property, and just west of the Carboniferous contact, and 2) BL-1 and BL-2 located 2.8 kilometres east of Key Anacon. Both of these drill holes intersected up to 60 metres of iron formation, and felsic crystal tuff resembling Nepisiguit Falls Formation (host to Brunswick No. 12 mine) rocks.
All of the above described properties have been combined into the Cold Brook Property. The New Brunswick Department of Natural Resources on line Geoscience Database shows one assessment file (1997 - 475001).
GEOLOGICAL SETTING
Regional Geology
The Bathurst Joint Properties overlie part of the Cambro-Ordovician Miramichi Terrane, a northeast trending massif that extends from west-central to northeastern New Brunswick. The Miramichi Terrane comprises two litho-tectonic subdivisions, the Gander and Dunnage Zones. The Gander Zone is interpreted as an elastic wedge deposited along the northwest margin of the Avalon Terrane, and the Dunnage Zone is interpreted as the telescoped remnants of volcanism and sedimentation that occurred within the Iapetus oceanic tact (Wilson, 1993).
The Dunnage Zone in the northern part of the Miramichi Terrane can be divided into the Armstrong Brook and Bathurst Subzones, based on the oceanic and continental geochemical signatures, and the major structural break that separates them. The geochemical variations are interpreted to reflect contrasting paleotectonic settings during the opening of a back-arc basin; specifically the Bathurst Subzone rocks were emplaced on continental crust during the early stages of back-arc rifting. The Armstrong Brook Subzone structurally overlies the Bathurst Subzone. This juxtaposition is interpreted to be the result of thrusting related to the closure of the back-arc oceanic basin, probably in Ordovician time.
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The Tetagouche Group rocks include the volcanic and sedimentary units that comprise the Bathurst Subzone. The Bathurst Subzone includes sedimentary and bimodal volcanic and subvolcanic intrusive geological units that host the polymetallic volcanogenic massive sulphide deposits of the world-class Bathurst Mining Camp. These deposits include Brunswick No. 12, Brunswick No. 6, Heath Steele, Caribou, Wedge and Restigouche.
This area is host to six former producing volcanogenic massive sulphide zinc-lead-silver-copper mines (Figure 11). The operating Brunswick No. 12 mine of Falconbridge has processed in excess of 100,000,000 tonnes of base metal sulphide ore since the early 1960's. This mine processes approximately 10,000 tonnes per day of zinc, lead and silver ores.
FIGURE 11 PRODUCERS & PAST PRODUCING MINES
Bathurst Camp Geology
The Bathurst Mining Camp, located in northern New Brunswick, is a world-class base metal mining district that hosts over thirty volcanogenic massive sulphide (VMS) deposits, as well as dozens of lesser showings. The total sulphide production from the camp to the end of 1994 was 110,307,600 tonnes grading 3.01% Pb, 7.62% Zn, 0.49% Cu and 86.1 g/t Ag. The potential for economic sulphide mineralization was first recognized in 1952 when ore-grade mineralization was intersected in drilling at the Brunswick No. 6 deposit during follow-up work on a ground electromagnetic anomaly. Most of the known deposits in the Bathurst Mining Camp were discovered during the initial staking rush of the 1950's, including the giant Brunswick No. 12 deposit that contained a geological resource in excess of 170 million tonnes of massive sulphides. Many of the deposits were discovered during follow-up work on airbourne electro magnetic surveys (Thomas et al, 2000). The volcanic and sedimentary rocks of the camp have been metamorphosed to greenschist grade and subjected to polyphase deformation. This report uses protolith or assumed protolith names rather than metamorphic rock names as do most authors working in the Camp (Thomas et al, 2000).
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The Bathurst Mining Camp consists of a Middle Ordovician felsic volcanic sequence overlain by interbedded Middle to Upper Ordovician mafic volcanic and sedimentary rocks. Structurally the camp is made up of a number of nappes that repeat stratigraphy. The lower (felsic) volcanic pile ranges in composition from dacite to rhyolite, whereas the upper (mafic) mafic volcanic pile comprises alkalic to tholeiitic basalt. This volcanic pile was erupted onto a basement sequence of clastic sedimentary rocks (Miramichi Group) on the Gondwanan continental margin. In both lower and upper piles, sedimentary rocks are intercalated with the volcanic rocks. There is a distinctive post-volcanic sedimentary succession known as the Tomogonops Formation (Thomas et al, 2000).
The rocks in the Bathurst Mining Camp occur within part of the northern Miramichi Highlands. The rocks in the area are classified into four groups, Tetagouche, Fournier, California Lake and Sheephouse Brook groups. The four groups represent the Dunnage Zone in this area. The Gander Zone is represented by the Miramichi Group in this part of the Miramichi Highlands (Thomas et al, 2000). To follow is a brief description of each Group comprising the Gander Zone and the Dunnage zone taken from Thomas et al 2000, roughly in stratigraphic order:
Miramichi Group
The Miramichi Group, comprises a thick sequence of quartzwacke and shale of unknown thickness. These sediments were deposited in an environment similar to a flysch apron on the Avalon continental margin during the Cambrian and Lower Ordovician. The group underlies the Sheephouse Brook and Tetagouche groups. The Miramichi Group comprises three formations known as, in ascending stratigraphic order; Chain of Rocks, Knights Brook and Patrick Brook formations.
Chain of Rocks Formation
The Chain of Rocks Formation comprises fine- to coarse-grained, light greenish grey, quartzose sandstone with interbedded greenish grey shale. Sandstone beds range from a few centimetres to greater than 1 metre thickness. The shale beds range up to 10 cm thick.
Knights Brook Formation
The Knights Brook Formation is a unit of interbedded quartzose sandstone, siltstone, shale and quartzose wacke. Commonly pyritic and, in places graphitic, the shale has well developed cleavage. Shale and graphite increase in the upper part of this formation.
Patrick Brook Formation
The Patrick Brook Formation consists of dark grey to black shale and dark grey volcaniclastic wacke commonly with clear quartz and/or plagioclase phenoclasts.
Tetagouche Group
The Tetagouche Group although locally conformably, unconformably overlies the Miramichi Group. The Tetagouche Group hosts most of the Bathurst Camp deposits and comprises four formations that, in ascending stratigraphic order, are referred to as the Nepisiguit Falls, Flat Landing Brook, Little River and Tomogonops formations. The Tetagouche Group is structurally overlain by the California Lake Group.
Nepisiguit Falls Formation
The Nepisiguit Falls Formation comprises massive, quartz-feldspar porphyritic tuff and lava intercalated with medium- to coarse-grained granular, quartz-feldspar-rich volcaniclastic rocks and minor ash tuff. The volcaniclastic rocks become finer-grained near the top of the formation and are interlayered with greenish grey, chloritic mudstone. Where iron rich, this mudstone is described as a chloritic iron formation and referred to asthe "Brunswick Horizon". From U-Pb zircon geochemistry, this unit is dated at age of 469 +/- 2 Ma. The basal contact of the Nepisiguit Falls Formation is locally conformable with the underlying Knights Brook Formation.
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North and east of the Camel-Back part of the camp, three other units that are also assigned to the Nepisiguit Falls Formation. These include the Lucky Lake, Little Falls and Vallee Lourdes members. The Lucky Lake unit comprises felsic ash tuff, lapilli tuff and minor quartz-phyric tuff. An age of approximately 470 Ma is reported from U-Pb zircon dating.
The Little Falls member consists of greenish grey ash tuff and fine- to medium-grained, quartz-feldspar-phyric volcaniclastic rocks interbedded with dark greenish grey to black shale. The Vallee Lourdes member comprises a thin nodular to siliciclastic limestone, calcareous sandstone and siltstone and disconformably overlies the Miramichi Group. Brachiopods and conodonts from this unit indicate middle Arenigian to early Llanvirnian age, confirming that the overlying felsic volcanic pile is mainly Llanvirnian, as elsewhere supported by U-Pb geochronology.
Flat Landing Brook Formation
The Flat Landing Brook Formation comprises aphyric to feldspar-phyric (+/- quartz) rhyolite flows, hyaloclastite, pyroclastic rocks with minor sedimentary rocks, including iron formation. Small feldspar +/- quartz phenocrysts comprise less than 10% of the rocks in a cryptocrystalline matrix. An age of 466 +/- 2 Ma derived from U-Pb zircon dating is reported from this unit.
Three other units assigned to the Flat Landing Brook Formation do not occur in the type area. These include the Roger Brook, Forty Mile Brook and Moody Brook members in the Camel-Back and Half-Mile areas. The Roger Brook member comprises felsic-crystal lithic tuff and minor rhyolite. These rocks appear to conformably overlie the Nepisiguit Falls Formation and locally constitute the lower part of the Flat Landing Brook Formation. The Forty Mile Brook member consists of tholeiitic pillowed basalt flows and associated diabase and gabbro.
The Moody Brook member consists of fragmental rocks of pyroclastic origin with felsic clasts in a greenish grey to greenish black matrix of more mafic composition. The fragmental rocks grade upward into mafic lavas of tholeiitic composition, comprising part of the "Otter Brook tholeiite”. These rocks occur near the top of the Flat Landing Brook Formation and may occupy the same stratigraphic position as the Brunswick Mines Member of the Little River Formation described below.
Little River Formation
The Little River Formation comprises mafic volcanic and associated sedimentary rocks that conformably overlie the Flat Landing Brook Formation. The Little River rocks include shale interstratified with siltstone and volcaniclastic sandstone. Two mafic volcanic rock units known as the Beresford and Brunswick Mines members are assigned to the Little River Formation but do not occur in the type area. The Beresford member comprises alkalic basalt interlayered with black shale. The Brunswick Mines member consists of massive to pillowed basalt, breccia, hyaloclastite and interflow sedimentary rocks, including chert and red metaliferous shale.
Tomogonops Formation
The Tomogonops Formation is a post-volcanic, upward-coarsening sequence that comprises light grey, thinly bedded, commonly calcareous siltstone (+/- limestone) and fine-grained sandstone. Toward the top, this unit grades into thick-bedded, non-calcareous, coarse-grained wacke and conglomerate. The Tomogonops Formation overlies early Caradocian shale and chert that mark the end of Ordovician volcanism in the Tetagouche Group.
California Lake Group
The California Lake Group is approximately coeval with the Tetagouche Group, but occurs in a different structural nappe. The stratigraphic between the two groups is unclear. Four formations known as the Canoe Landing Lake, Mount Brittain, Spruce Lake and Boucher Brook formations comprise the California Lake Group. The first three appear to be contemporaneous since each is overlain by the Boucher Brook Formation.
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Canoe Landing Lake Formation
The Canoe Landing Lake Formation consists of interbedded black to grey shale and siltstone overlain by an upper member of high-chromium alkali basalt with intercalated red shale, chert and rare felsic volcanic rocks. A U-Pb zircon age of 472 +/- 4 Ma has been reported for this unit.
The Nine Mile Brook, Orvan Brook and Spruce Lake members are also assigned to the Canoe Landing Lake Formation but do not occur in the type area. The Nine Mile Brook unit is composed of tholeiitic pillow basalt with intercalated alkali basalt, red shale and chert. The contact between Canoe Landing Lake alkalic basalts and the Nine Mile Brook Member is marked by a broad zone of mélange. The Nine Mile Brook Member is overlain by sedimentary rocks of the Boucher Brook Formation.
The Orvan Brook member comprises basalts transitional between the alkalic and tholeiitic types. The Spruce Lake unit comprises feldspar-phyric, locally amygdaloidal rhyolite.
Mount Brittain Formation
The Mount Brittain Formation comprises feldspar crystal-lithic felsic tuff that overlies aphyric to sparsely feldspar-phyric dacitic lava. Quartz microphenocrysts (0.3 - 0.4 mm) are visible in thin sections, but are not obvious in the field. The Mount Brittain Formation conformably overlies the Patrick Brook Formation and is overlain by sedimentary and mafic volcanic rocks of the Boucher Brook Formation. A U-Pb zircon age of 468 +/- 2 Ma was reported.
The Charlotte Brook Member, although not present in the type area, has been assigned to the Mount Brittain Formation. This unit comprises a sedimentary sequence of shale and siltstone with a few thin tuff beds. These rocks are transitional between the underlying Patrick Brook Formation and the overlying volcanic pile.
Spruce Lake Formation
The Spruce Lake Formation comprises feldspar-phyric felsic lavas, autobrecciated lavas and pyroclastic rocks, including polymictic fragmental rocks and crystal tuff, with minor mafic volcanic rocks. This formation occurs in the Tetagouche Antiform and Nine Mile Synform. Characteristic K-feldspar phenocrysts, up to 1 cm in size, constitute up to 20%, but can be virtually absent locally. From dating by U-Pb zircon geochemistry, this formation is approximately coeval to slightly older than the Nepisiguit Falls Formation. The basal contact of the Spruce Lake Formation with other units is tectonic. The upper contact is conformable with the Boucher Brook Formation. Rocks of the Spruce Lake Formation host the Caribou massive sulphide deposit.
The Canoe Landing Lake and Shellalah Hill Brook members are assigned to the Spruce Lake Formation but do not occur in the type area. The Shellalah Hill Brook unit comprises quartz-feldspar-phyric rhyolite and crystal tuff at the base of the Spruce Lake Formation. The Canoe Landing Lake Member comprises alkalic and tholeiitic mafic volcanic rocks.
Boucher Brook Formation
The Boucher Brook Formation consists of a lower part dominated by sedimentary rocks, and an upper part dominated by mafic volcanic rocks. The lower sedimentary rocks include shale and siltstone resting conformably on felsic volcanic rocks of the Spruce Lake Formation. In some areas the sediments overlie, but are separated from, mafic volcanic rocks by a high-strain zone. The Boucher Brook rocks are spatially associated with the Spruce Lake Formation. Most of the rocks originally included in the Boucher Brook Formation are now assigned to the Little River Formation (Tetagouche Group). The Boucher Brook sediments comprise thinly bedded, bluish grey siltstone and greenish black shale with minor amounts of fine-grained to medium-grained quartz wacke. This wacke contains small lithoclasts of white-weathering rhyolite. Stratigraphic relationships suggest that the base of the lower Boucher Brook Formation is earliest Middle Ordovician.
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The Camel Back member is comprised of an alkalic basalt suite with a lower part consisting of massive and pillowed alkali basalt and comendite, and an upper part containing shale and minor limestone. Caradocian age fossils occur in the limestone.
Sheephouse Brook Group
The Sheephouse Brook Group is a suite of volcanic and associated sedimentary rocks occurring south of the Half Mile and Heath Steele areas. It is comprised of three formations referred to, in ascending stratigraphic order, as the Clearwater Stream, Sevogle River and Slacks Lake formations.
Clearwater Stream Formation
The Clearwater Stream Formation consists of medium to dark greenish grey, plagioclase phyric, felsic to intermediate volcanic rocks that overlie the Patrick Brook Formation. Intense deformation and biotite-grade metamorphism have generally destroyed primary textures. Carbonate porphyroblasts are a characteristic feature.
Sevogle River Formation
The Sevogle River Formation comprises schistose to massive felsic lavas containing up to 15% alkali feldspar phenocrysts ranging in size from 0.2 to 2.0 mm. The contact with the overlying Slacks Lake Formation is locally marked by a layer of cherty ironstone.
Slacks Lake Formation
The Slacks Lake Formation comprises alkalic to tholeiitic basalts and interbedded sedimentary rocks. It includes dark grey, locally graphitic shale, and red and green chert as well as minor comendite.
Fournier Group
The Fournier Group is divided into the Sormany and Millstream formations of Middle to Late Ordovician age. The Fournier Group is allochthonous upon the California Lake Group. The contact between these groups is a zone of high strain, representing a ductile thrust characterized by blueschist.
Sormany Formation
The Sormany Formation comprises primitive tholeiite basalt with pillow structures and minor gabbro. The basalt geochemistry is typical of a back-arc oceanic depositional setting.
Millstream Formation
The Millstream Formation consists of lithic and feldspathic wacke and shale with minor intercalated limestone and basalt. The Millstream Formation conformably overlies the Sormany Formation.
Structural Geology
The structural geology of the Bathurst Camp reflects an interference pattern produced by up to five phases of polyphase deformation. The earliest deformational event is represented by steeply inclined to recumbent folds with an axial-planar, layer-parallel transposition foliation and a stretching lineation. During the second phase of deformation bedding attitudes were re-oriented to near-vertical by tight to isoclinal folds. This event occurred in the Early Silurian (Gower, S.J., and McCutcheon, S.R., 1997).
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Thrust zones formed during the later stages of the second deformational event bound the major nappes and are commonly marked by zones of tectonic mélange. These structures are refolded by open to tight, recumbent F3 folds that are probably related to extensional collapse which occurred in the Late Silurian. Later F4 and F5 folds range in scale up to kilometres, and produce dome and basin structures. These structures include the Pabineau Synform and Pabineau Antiform, the Nine Mile Synform and the Tetagouche Antiform and define the geometry and shape of the Bathurst Camp (Gower, S.J., and McCutcheon, S.R., 1997).
DEPOSIT TYPES
The Bathurst Joint Venture is based upon exploration for Volcanogenic Massive Sulphide deposits such as the Brunswick 6, 12, Heath Steele and Caribou deposits. These deposits range in size up to 125 million tonnes in the Bathurst Mining Camp. These deposits all have electromagnetic, magnetic and gravity signatures that can be detected by electromagnetic and gravity airbourne systems.
Accumulation of the majority of polymetallic volcanogenic massive sulphide deposits in the Bathurst Mining Camp are associated with hydrothermal solutions venting along extensional planes in the back-arc basin. These can be deposited as 1) brine pool and 2) proximal mound type deposits. The larger deposits in the Bathurst Camp including Brunswick, Heath Steele, and Caribou are believed to be the brine pool type (Lyndon, 1988). The chimney type may be more closely related to the Stratmat and CNE type deposits. The trap for this type of sulphide accumulation is typically layers of porous ash to lapilli tuff to agglomerate or breccia (possibly debris flow) overlying the venting chimney structures. These fragmental rocks have long been associated with massive sulphide deposits.
The brine pool deposit accumulations are formed from high density ore solutions. Turner and Gustafson (1978) described situations where initially buoyant plumes that are discharged into a submarine depression may pool below a picnocline. This pooling prevents the dispersion of the hydrothermal effluent including the plume particulates and insulates them from the oxidizing effects of normal seawater. Sulphide accumulation under these conditions is typically more efficient than the proximal mound type deposit.
Most of the massive sulphide deposits are described as having a footwall stockwork zone proximal to VMS typically lying on or within breccias or brecciated rock. The fragmental rock may have a magmatic, phreatic or hydrothermal origin or be part of a talus accumulation, or debris flow. Of these processes, the most probable origin of the porous capping debris is by explosive discharge of the ore-forming hydrothermal system. Once initiated, the mound itself acts as a porous layer over the vent to promote diffuse hydrothermal discharge. A low permeability crust that forms over the mound acts to contain and allow accumulation of the metals being expelled. Deposits formed by these processes would in all probability be conical in shape. The alteration assemblages within these deposits may show the following characteristics:
a)
alteration assemblage immediately below the massive ore is dominantly a sericitic facies composed of sericite-chlorite-quartz. Quartz-sericite is dominant below the Kuroko deposits.
b)
chlorite can be ubiquitous in the footwall rocks.
c)
a chlorite to sericite zonation is consistent with the zonation of a Cu-rich core to Zn-rich margins. This pattern is indicative of an outward decreasing thermal gradient.
d)
immediately below the deposit ubiquitous chlorite and/or sericite alteration may be supplanted or superimposed by hydrothermal mineral assemblages with varying amounts of siliceous, aluminous, carbonate, talcose and ferruginous oxide minerals.
Some of the iron oxide in ferruginous units immediately below the massive sulphide lens may have originated with early build up of oxidized plume fall-out prior to the establishment of anoxic bottom conditions. Talc may have occurred at the sea floor during initial discharge of silica saturated hydrothermal fluids into magnesium bearing seawater. Boiling of the hydrothermal fluids, causing cooling of the ore solutions without dilution of seawater, would lead to the precipitation of silica. When the solutions contain CO2 other minerals may also be precipitated. Adiabatic cooling and high acidity
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created by oxidation of sulphurous ore solutions could give rise to aluminous mineral assemblages. The deposits that accumulated within the Nepisiguit Falls Formation share the following common characteristics (McCutcheon, Walker and McClenaghan, 2001):
a)
The massive sulphides area underlain by chloritic mudstones and/or very fine-grained volcaniclastic rocks, which generally have an area extent equal to or larger that the deposit.
b)
Most are capped by and/or have a laterally equivalent oxide iron formation that is interbedded with and passes into chloritic (silicate) iron formation along strike.
c)
Various alteration facies can be recognized in the footwall volcanic rocks, including proximal silicic Fe-chloritic, Fe-chloritic (+/-sericitic), Fe-Mg chloritic sericitic, distal sericitic Mg-chloritic, and least altered (regional metamorphic).
d)
Large-scale mineralogical and/or chemical zonation may be present, both vertically and laterally, in the deposits. For example, vertical zonation in the Brunswick No. 12 (excluded property) deposit comprises four (4) zones, from the footwall to the hanging wall: 1) massive to crudely layered pyrite, with variable amounts of pyrrhotite and chalcopyrite; 2) banded pyrite, sphalerite and galena, with minor amounts of chalcopyrite and pyrrhotite; 3) massive pyrite with this discontinuous layers or lenses of sphalerite and galena, and 4) iron formation (all phases except hematite).
e)
Sulphide textures include massive, banded, fragmental, nodular, mosaic, and stringer types.
The deposits that accumulated within the Flat Landing Brook Formation share the following common characteristics (McCutcheon, Walker and McClenaghan, 2001):
a)
Most of the deposits are hosted by a “cherty tuff” and/or fragmental rocks rather than mudstone.
b)
Oxide iron formation is absent, except at the Louvicourt Deposit where red and green magnetic shales of the Little River Formation overlie the barite-sulphide exhalite.
c)
The main footwall alteration is sericitic and silicic; Fe-chloritic alteration is much less voluminous than it is in the Nepisiguit Falls Formation host rocks. In some deposits, talc is a significant constituent. Alteration extends into the hanging wall in at least one deposit.
d)
Metal zoning is generally absent.
e)
Sulphide textures include disseminated, stringer, semi-massive and banded types.
MINERALIZATION
Table XVII Mineral Occurrences with Geological Resources
| MINERAL OCURRENCES WITH GEOLOGICAL RESOURCES |
| |||||
Name | URN | Cu % | Pb % | Zn % | Ag g/t | Au g/t | tonnes |
Flat Landing Brook | 0046 | 0.03 | 1.27 | 5.62 | 23 |
| 1,270,100 |
Devils Elbow | 0285 | 1.20 |
|
|
|
| 362,880 |
Louvicourt | 0147 | 0.42 | 1.23 | 1.00 | 91 |
| 136,000 |
Mount Fronsac North | 1418 | 0.14 | 2.18 | 7.65 | 40.3 | 0.40 | 1,260,000 |
All information in the above table except Mount Fronsac North is taken from “Economic Geology Monograph 11, Massive Sulphide Deposits of the Bathurst Mining Camp, New Brunswick, and Northern Maine; W.D. Goodfellow, S.R. McCutcheon, and J.M. Peter, 2003” page 20, Table 1, compiled by W.M. Luff.
All the grade and tonnage calculations reported in Table I should be consider as Inferred Mineral Resources as defined in the CIM Definitions Standards, November 2005.
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The Flat Landing Brook deposit tonnage calculations were originally completed by Sabina Industries Ltd in 1975. The tonnage calculations were re-calculated in 1982 by New Brunswick Government geologists and published in DNRE Information Circular 83-2. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The methodology and cut-off grades are not discussed in either publication and should be considered NI 43-101 non-compliant.
The Devil’s Elbow deposit tonnage calculations were originally completed by American Metals Co in 1957. The tonnage calculations were re-calculated in 1982 by New Brunswick Government geologists and published in DNRE Information Circular 84-1. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The methodology and cut-off grades are not discussed in either publication and should be considered NI 43-101 non-compliant.
The Louvicourt deposit tonnage calculations were originally completed by L. Gray et al in 1964. The tonnage calculations were re-calculated in 1976 by Sabina Industries from information taken from drill results in assessment report 471255 submitted by Sabina title “Report of Work by P.K. Gummer, Nine Mile Brook Property, Sabina Industries Ltd and Essex Minerals Co, March 1976”. A qualified person has not done sufficient work to classify the historical estimate as current resources or mineral reserves. The methodology and cut-off grades are not discussed and should be considered NI 43-101 non-compliant.
Geological Resource calculations for Mount Fronsac North of taken from a paper co-authored by J.A. Walker and G. Graves titled “The Mount Fronsac North VMS deposit: A recent discovery in the Bathurst Mining Camp, New Brunswick”, 2006 in press. Tonnages and grade calculation methodology are not discussed in the paper and should be considered an inferred mineral resource and is NI 43-101 non-compliant.
Data from Technical and Assessment Reports provided by Falconbridge Inc. and available at the New Brunswick Department of Natural Resources, Minerals Division, Assessment Files.
Indian Lake
A chlorite/base metal alteration zone is located on the fold hinge of the Tetagouche Antiform (F5), the major structural feature on the property. This alteration zone is hosted by interbedded tuffaceous metasediments, rhyolites and quartz feldspar porphyry. The sulphide mineralization in the alteration zone consists of pyrite, pyrrhotite, sphalerite, galena and chalcopyrite, which occur as stringers and finely disseminated crystals. The alteration zone continues to the west and south of the fold hinge. To the west, the zone contains strong sericite and minor copper mineralization. The alteration zone is a member of the same stratigraphic package that hosts the Strachens Lake deposit to the south.
This mineralization is interpreted to be the northern strike extension of the Strachens Lake Main sulphide deposit, and is hosted by quartz-feldspar augen schists, tuffaceous rhyolites, feldspar phyric and aphyric rhyolites and metasediments. The sulphide mineralization typically consists of pyrite, pyrrhotite, sphalerite, galena and minor chalcopyrite which occur as narrow stringers and finely disseminated crystals.
Three of the nine drill holes intersected ore grade base metal values but over narrow widths. The system appears to be open to depth.
Camel Back
Intense chloritization with heavily disseminated and stringer pyrite and chalcopyrite mineralization extends to a depth of 150 metres below and laterally 400 metres east and 100 metres west of the deposit. Narrow widths of discontinuous oxide facies iron formation are intimately associated with the massive sulphide mineralization. The massive sulphide mineralization is characterized by fine grained, red-brown to tan sphalerite with local galena in a pyrite matrix. Chalcopyrite occurs only locally within the massive sulphides as fine, late fracture fillings. The higher grade zones are typically banded in texture while the pyritic zones are massive and commonly finer grained. DDH ILN-96-6 intersected 3.6 metres and 5.1 metres of massive sulphide grading 0.5% Cu, 1.5% Pb, 4.6% Zn, 28.0 g/t Ag and 0.07% Cu, 3.4% Pb, 7.8% Zn, 36.0 g/t Ag respectively. A total of 23 metres of chloritized, footwall mineralization was intersected returning a 12.2 metre interval grading 2.1% Cu, 0.1% Pb, 0.09% Zn and 11.2 g/t Ag. DDH ILN-97-10 intersected 1.8 metres and 5.1 metres of massive sulphide grading 0.3% Cu, 2.8% Pb, 10.6% Zn, 41.5 g/t Ag and 0.3% Cu, 2.3% Pb, 8.9% Zn, 30.7 g/t Ag respectively. A total of 17 metres of chloritized, footwall alteration with discontinuous copper mineralization was intersected, returning a best composite value of 1.2% Cu over 3.8 metres.
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Devils Elbow Deposit
The Devil’s Elbow deposit (Main Zone) consists of disseminated to massive sulphide dominated by copper mineralization. Tonnage estimates by the New Brunswick Department of Natural Resources place the possible reserves at 362,880 tons of 1.2% Cu and 154,224 tons of 0.7% Cu.
The drill program by Devil’s Elbow Mines in 1965 encountered a second mineralized horizon approximately 300 meters east of the Main Zone and referred to as the “East zone”. Unlike the main zone, the east zone was found to contain significant, albeit, sub-economic lead-zinc mineralization.
Mount Fronsac North
Diamond drilling on the Mount Fronsac North deposit has traced the zone over a strike length of more than 1.2 kilometres and more than 700 metres down dip (500 metres vertically below surface). Massive pyrite lenses up to 45 metres thick with sub-economic to economic grade zinc and lead mineralization occurs within the horizon of chlorite and sericite altered, pyritic felsic tuff, tuffaceous sediments and chert. The mineralized horizon is overlain by rhyolite to dacite flows and lapilli tuff. Massive rhyolite underlies the horizon as well as fine quartz-feldspar crystal tuff in some of the deeper holes. Intersections of ore grade Zn-Pb-Ag mineralization were found over widths ranging from 8 centimetres to 7.37 metres. The best grade-width intercept to date assays 9.51% Zn, 2.38% Pb and 42 g/t Ag over 7.37 metres which is included within a 16.65 metre section in hole MF00-31 which grades 1.64% Pb, 6.1 6% Zn, 28.2 g/t Ag, 267 ppb Au. Chalcopyrite zones, with grades up to 2% copper over 7 meters were found with some of the massive pyrite intersections (e.g. MF00-26). These may represent stringer zones. Drill holes MF00-40 and MF00-41 terminate the zone at depth to the south. It is cut off to the north as well, but the strongly pyritic horizon remains open down the plunge on the north end below the 650 metre vertical level. The base metal parts of the massive sulphide lenses appear to have been cut off at this level.
EXPLORATION
Starting in January 2004 a number of large scale geophysical survey were completed over the area of influence by a number of contractors. This work was initiated as part of the Noranda – Slam Exploration Bathurst Joint Venture. Specific detailed results are available from the Xstrata database but will not be discussed in this report. Most of the work has been filed in various assessment reports and the majority remains confidential as per the Department of Natural Resources protocol for assessment reports. The geophysical surveys are discussed below along. All of these surveys were completed before the Xstrata Zinc – El Nino Ventures Option Agreement.
Air-FTG Gravity Survey
Between January 22nd and February 2nd 2004 Bell Geospace Inc. of 2 Northpoint Drive, Houston, Texas 77060 completed an initial test survey for Air-FTG Gravity. This survey was flown with 100 metre spaced, east-west trending flight lines. A total of 467 line kilometres were completed. As a follow-up to the original test survey, a 15,630 kilometre camp scale survey was completed between February 11th and May 17th 2004. Flight lines were oriented north-south and spaced 100 metres apart (Figure 12). Details and specifications for this survey are presented in an internal report “Air-FTGTM Acquisition for Bathurst Mine Area” available from the Xstrata’s database.
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FIGURE 12 AIR-FTG GRAVITY SURVEY
Magnetic & MegaTEM II Survey
Between January 18th and April 12th 2004 Fugro Airborne Surveys of 2060 Walkley Road, Ottawa, Ontario K1G 3P5 completed a camp scale airbourne magnetic and MegaTEM II surveys totaling 22,343 line kilometres as 7 separate flight blocks (Figure 13). Traverse line spacing was 200 metres. Details and specifications for this survey are presented in a report called “Logistics and Processing Report Airborne Magnetic and MegaTEM Survey” available from Falconbridge’s database or from the Department of Natural Resources Geological Surveys Branch in Bathurst.
FIGURE 13 MAGNETIC & MEGATEM II SURVEY BLOCKS
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VTEM Survey Phase I
Between April 5th and April 17th 2004 a total of 574 line kilometres of VTEM Helicopter-borne Time Domain Electromagnetic survey were completed by Geotech Ltd., 30 Industrial Parkway South, Aurora, Ontario, L4G 3W2 for Noranda Inc. and Slam Exploration Ltd. of the Bathurst Joint Venture. This survey consisted of 34 separate target blocks. Line spacing for each target block varied from 50 to100 metres (Figure 14). Details and specifications for this survey are presented in the “Report On A Helicopter-Borne Time Domain Electromagnetic Geophysical Survey” available from Falconbridge’s database.
VTEM Survey Phase II
Between October 20th and October 26th 2004 a total of 430.6 line kilometres of VTEM Helicopter-borne Time Domain Electromagnetic survey were completed by Geotech Ltd., 30 Industrial Parkway South, Aurora, Ontario, L4G 3W2 for Noranda Inc. and Slam Exploration Ltd. of the Bathurst Joint Venture. This survey consisted of 25 separate target blocks. Line spacing for each target block varied from 50 to 100 metres (Figure 15). Details and specifications for this survey are presented in the “Report On A Helicopter-Borne Time Domain Electromagnetic Geophysical Survey” available from Falconbridge’s database.
FIGURE 14 VTEM SURVEY PHASE I
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FIGURE 15 VTEM SURVEY PHASE II
VTEM Survey Phase III
On February 7th 2005 a total of 584 line kilometres of VTEM Helicopter-borne Time Domain Electromagnetic survey was completed by Geotech Ltd., 30 Industrial Parkway South, Aurora, Ontario, L4G 3W2 for Noranda Inc. and Slam Exploration Ltd. of the Bathurst Joint Venture. This survey consisted of 19 separate target blocks (Figure 16). Line spacing for each target block varied from 50 to 100 metres. Details and specifications for this survey are presented in the “Report On A Helicopter-Borne Time Domain Electromagnetic Geophysical Survey” available from Falconbridge’s database.
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FIGURE 16 VTEM SURVEY PHASE III
IP/MT (Titan-24) Survey
Between October 6th and Nov 11th 2004, 60.5 line kilometres of Titan-24 was completed by Quantec Geoscience Inc., of 116 Spadina Avenue, Suite 400, Toronto, Ontario M1V 2K6 over an area north of Stratmat along the McCormack trend (Figure 17). Line spacing was 800 metres. Details and specifications for this survey are available from Falconbridge’s database.
THEM Survey
Between August 15th and September 16th 2004 a total of 666.7 line kilometres of THEM Time-domain Helicopter Electromagnetic and Magnetic survey was completed by McPhar Geosurveys Ltd. of 1256 B Kerrisdale Boulevard, Newmarket, Ontario, L3Y 8Z9 for Noranda Inc. and Slam Exploration Ltd. of the Bathurst Joint Venture. This survey consisted of 35 separate survey areas.
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FIGURE 17 IP/MT (TITAN-24) SURVEY
FIGURE 18 THEM SURVEY
Flight line spacing was 50 metres (Figure 18). Details and specifications for this survey are presented in the “Final Report on a Helicopter-Borne Time-Domain Electromagnetic (THEM) Survey Selected Areas, Northern New Brunswick” available from Falconbridge’s database.
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VTEM Survey Phase IV
Between January 15th and February 8th 2006, a total of 310 line kilometres of VTEM Helicopter-borne Time Domain Electromagnetic survey was completed by Geotech Ltd., 30 Industrial Parkway South, Aurora, Ontario, L4G 3W2 for Noranda Inc. and Slam Exploration Ltd. of the Bathurst Joint Venture. This survey consisted of 8 separate target blocks (Figure 19). Line spacing for each target block varied from 50 to 100 metres. Details and specifications for this survey are presented in the “Report On A Helicopter-Borne Time Domain Electromagnetic Geophysical Survey” available from Falconbridge’s database.
FIGURE 19 VTEM SURVEY PHASE IV
TEM Survey
During the course of the 2004 to 2006 exploration program, Falconbridge contracted Eastern Geophysics Ltd. of 819 Hwy 335, P.O. BOX 119, West Pubnico, N.S., B0W 3S0 to conduct 7 separate surface loop TEM surveys on three different properties summarized as follows: 5 loops with 66 line kilometres over Fronsac; 1 loop with 21.3 line kilometres over Camel Back and 1 loop with 2.95 line kilometres over Grant’s Lake (Figure 20). Details and specifications for these surveys are available from the Xstrata database presented in Eastern Geophysics logistic reports.
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FIGURE 20 TEM SURVEYS
DRILLING
Diamond Drilling
Between January 2004 and March 2006, a total of 92 diamond drills have been completed over the area of influence for Noranda (Falconbridge and then Xstrata Zinc) by Lantech Drilling Services of Dieppe, New Brunswick. Variably 1 to 5 drills were contracted to drill either BTW or NQ size drill core. Drill hole lengths varied from 112.5 metres to 931.0 metres and varied in dip from 45° to 90°. All drill core was collected from the drills each day and returned to the exploration core shack on the Brunswick #12 mine site for logging and sampling. Any samples collected were sawn in half with a diamond saw, one half of the core remaining in the core box while the other half of the sample was numbered and deposited in sturdy plastic sample bags. All samples for assay were sent to the mine site assay laboratory along with periodic sample blanks and standards (detailed information on assaying protoco l is presented below in the section titled “SAMPLE PREPARATION, ANALYSES AND SECURITY”). Care was taken to ensure no samples were cross contaminated and no sample was collected across geological contacts. Maximum sample lengths were 1.6 metres, minimum sample length were not smaller than 0.3 metres. Core recovery rates for the sampling were 100% core recovery.
Bathurst Joint Venture Drilling
Between January and March 2004, 64 BQ Thin Wall (BTW) size diamond drill holes, totaling 22,782.8 metres, were drilled during the Noranda – Slam Exploration Bathurst Joint Venture. Up to three drills were used with holes located throughout the Bathurst Camp (Figure 21). Drill hole information is summarized in Table XIX. Detailed drill logs are available from the Xstrata database.
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Table XVIII Bathurst Joint Venture (BJV) Drill Hole Summary
| UTM NAD 83 |
|
|
| |||
Hole # | Easting | Northing | Zone | Length | Dip | Azimuth | BHEM |
BJV-04-001 | 702,777 | 5,235,028 | Zone 19 | 251.5 | -60 | 215 | No |
BJV-04-002 | 702,692 | 5,233,842 | Zone 19 | 290.6 | -50 | 035 | No |
BJV-04-003 | 714,089 | 5,232,460 | Zone 19 | 274.5 | -50 | 180 | Yes |
BJV-04-004 | 709,060 | 5,263,030 | Zone 19 | 223.5 | -60 | 300 | Yes |
BJV-04-005 | 713,645 | 5,261,235 | Zone 19 | 112.5 | -60 | 292 | No |
BJV-04-006 | 714,267 | 5,260,992 | Zone 19 | 175.5 | -50 | 112 | No |
BJV-04-007 | 710,547 | 5,259,312 | Zone 19 | 103.5 | -65 | 270 | No |
BJV-04-008 | 710,308 | 5,260,073 | Zone 19 | 169.5 | -50 | 290 | Yes |
BJV-04-009 | 711,901 | 5,258,396 | Zone 19 | 160.5 | -50 | 270 | No |
BJV-04-010 | 710,511 | 5,256,843 | Zone 19 | 199.5 | -60 | 248 | No |
BJV-04-011 | 711,407 | 5,259,984 | Zone 19 | 212.1 | -50 | 260 | Yes |
BJV-04-012 | 282,857 | 5,255,392 | Zone 20 | 193.5 | -60 | 024 | Yes |
BJV-04-013 | 687,007 | 5,259,699 | Zone 19 | 335.0 | -55 | 120 | Yes |
BJV-04-014 | 700,827 | 5,253,442 | Zone 19 | 727.0 | -65 | 268 | Yes |
BJV-04-015 | 279,776 | 5,256,858 | Zone 20 | 160.5 | -60 | 050 | Yes |
BJV-04-016 | 279,792 | 5,256,676 | Zone 20 | 423.5 | -85 | 050 | Yes |
BJV-04-017 | 280,520 | 5,258,297 | Zone 20 | 370.0 | -45 | 178 | No |
BJV-04-018 | 692,009 | 5,264,509 | Zone 19 | 236.0 | -60 | 150 | No |
BJV-04-019 | 691,972 | 5,265,073 | Zone 19 | 206.0 | -60 | 155 | No |
BJV-04-020 | 694,797 | 5,236,885 | Zone 19 | 277.0 | -60 | 238 | No |
BJV-04-021 | 690,994 | 5,265,609 | Zone 19 | 287.0 | -50 | 145 | No |
BJV-04-022 | 707,295 | 5,231,621 | Zone 19 | 191.0 | -75 | 360 | No |
BJV-04-023 | 700,370 | 5,253,450 | Zone 19 | 648.5 | -75 | 270 | Yes |
BJV-04-023 ext | 700,370 | 5,253,450 | Zone 19 | 468.5 | -75 | 270 | Blocked |
BJV-04-024 | 702,471 | 5,233,913 | Zone 19 | 419.0 | -50 | 040 | Yes |
BJV-04-025 | 715,849 | 5,253,303 | Zone 19 | 342.0 | -60 | 215 | Yes |
BJV-04-026 | 725,529 | 5,253,955 | Zone 19 | 259.5 | -60 | 280 | No |
BJV-04-027 | 707,167 | 5,248,943 | Zone 19 | 222.0 | -60 | 239 | Blocked |
BJV-04-028 | 720,819 | 5,258,158 | Zone 19 | 221.5 | -60 | 330 | No |
BJV-04-029 | 686,729 | 5,257,658 | Zone 19 | 208.5 | -50 | 185 | No |
BJV-04-030 | 687,125 | 5,258,158 | Zone 19 | 211.5 | -50 | 185 | No |
BJV-04-031 | 722,656 | 5,223,592 | Zone 19 | 323.0 | -60 | 179 | No |
BJV-04-032 | 684,303 | 5,261,738 | Zone 19 | 208.5 | -60 | 135 | No |
BJV-04-033 | 712,670 | 5,216,871 | Zone 19 | 167.0 | -60 | 042 | No |
BJV-04-034 | 705,759 | 5,238,935 | Zone 19 | 329.0 | -60 | 230 | No |
BJV-04-035 | 695,200 | 5,248,350 | Zone 19 | 191.5 | -50 | 240 | No |
BJV-04-036 | 696,593 | 5,245,660 | Zone 19 | 277.0 | -45 | 245 | Yes |
BJV-04-037 | 718,447 | 5,265,646 | Zone 19 | 215.5 | -60 | 300 | No |
BJV-04-038 | 717,340 | 5,250,266 | Zone 19 | 120.0 | -60 | 360 | No |
BJV-04-039 | 715,219 | 5,251,481 | Zone 19 | 271.5 | -60 | 215 | Yes |
BJV-04-040 | 715,097 | 5,252,283 | Zone 19 | 422.0 | -60 | 215 | No |
BJV-04-041 | 709,285 | 5,246,079 | Zone 19 | 515.0 | -50 | 034 | No |
BJV-04-042 | 708,412 | 5,246,793 | Zone 19 | 205.0 | -50 | 062 | No |
BJV-04-043 | 708,181 | 5,245,310 | Zone 19 | 266.0 | -50 | 062 | No |
BJV-04-044 | 285,996 | 5,246,192 | Zone 20 | 611.0 | -50 | 090 | Blocked |
BJV-04-045 | 279,612 | 5,252,081 | Zone 20 | 183.0 | -60 | 250 | No |
BJV-04-046 | 279,738 | 5,251,802 | Zone 20 | 204.0 | -60 | 070 | No |
BJV-04-047 | 687,501 | 5,259,592 | Zone 19 | 520.0 | -45 | 285 | No |
BJV-05-048 | 707,101 | 5,263,120 | Zone 19 | 617.3 | -55 | 115 | Yes |
BJV-05-049 | 718,759 | 5,247,272 | Zone 19 | 590.0 | -60 | 156 | Yes |
BJV-05-050 | 301,597 | 5,259,880 | Zone 20 | 633.0 | -55 | 235 | Yes |
BJV-05-051 | 711,422 | 5,277,267 | Zone 19 | 359.0 | -55 | 345 | No |
BJV-05-052 | 718,970 | 5,246,688 | Zone 19 | 444.0 | -60 | 156 | Yes |
BJV-05-053 | 305,862 | 5,257,100 | Zone 20 | 668.0 | -60 | 216 | Yes |
BJV-05-054 | 279,530 | 5,255,066 | Zone 20 | 204.0 | -45 | 155 | No |
86
| UTM NAD 83 |
|
|
| |||
Hole # | Easting | Northing | Zone | Length | Dip | Azimuth | BHEM |
BJV-05-055 | 281,140 | 5,251,578 | Zone 20 | 357.0 | -45 | 360 | No |
BJV-05-056 | 302,041 | 5,258,624 | Zone 20 | 780.0 | -60 | 230 | Yes |
BJV-05-057 | 718,960 | 5,244,572 | Zone 19 | 481.0 | -55 | 315 | Yes |
BJV-05-058 | 305,312 | 5,257,866 | Zone 20 | 799.3 | -55 | 215 | Yes |
BJV-05-059 | 718,700 | 5,244,542 | Zone 19 | 227.0 | -75 | 315 | Yes |
BJV-05-060 | 715,560 | 5,247,420 | Zone 19 | 531.0 | -60 | 155 | Yes |
BJV-05-061 | 303,396 | 5,257,014 | Zone 20 | 409.5 | -60 | 240 | No |
BJV-05-062 | 718,704 | 5,247,463 | Zone 19 | 931.0 | -63 | 156 | Yes |
BJV-05-063 | 300,118 | 5,256,842 | Zone 20 | 286.0 | -45 | 249 | No |
BJV-05-064 | 318,900 | 5,267,750 | Zone 20 | 856.0 | -70 | 180 | No |
FIGURE 21 BATHURST JOINT VENTURE DRILLING
Summary of Results BJV Drilling
Table XIX Summary of Results BJV Drilling
Hole # | Results |
BJV 04-001 | No significant results. Target 53, coincident EM and magnetic anomaly, is due to pyrrhotite stringers. This is confirmed by a peak in magnetic susceptibility at 175m. |
BJV 04-002 | No significant results. First conductor is graphitic schist at the top of the hole. The EM target was explained by a thick graphitic unit including up to 5% Po from 209 to 253m. |
87
Hole # | Results |
BJV 04-003 | Target 61, coincident EM, magnetic anomaly with partly coincident gravity anomaly. Rhyolite, felsic tuff with alteration and wispy bands of pyrite occurs over 7m near the expected target. A BHPEM survey confirmed the in-hole sulfide target. No off-hole targets detected. Assays returned 0.2% to 0.5% Pb+Zn / 3m. |
BJV 04-004 | No significant results. Target 14, coincident EM, magnetic and gravity anomaly. Predominantly felsic crystal tuff with interbedded graphitic sediments with minor disseminated pyrrhotite. Several 2m gabbro zones. Trace sphalerite occurs with disseminated pyrite from 145.5 to190. BHPEM survey - no significant results. |
BJV 04-005 | No significant results. Target 162, coincident EM and magnetic anomaly. DDH intersected basalt overlying strongly graphitic argillite with up to 10% pyrite as 0.5cm thick bands. |
BJV 04-006 | No significant results. Target 161, coincident EM and magnetic anomaly, short strike length. DDH intersected altered quartz, feldspar porphyry (felsic tuff) with disseminated pyrite overlying graphitic argillite |
BJV 04-007 | No significant results. Target 79, coincident weak MegaTEM/VTEM EM and magnetic anomaly, short strike length. DDH intersected gabbro, basalt, argillite and 38m of graphitic argillite at the target. |
BJV 04-008 | No significant results. The target is a very weak MegaTEM EM anomaly (high frequency Max Min) with positive gravity anomaly was not explained. Feldspar crystal tuff is the only rock type in the hole. |
BJV 04-009 | No significant results The target is a MegaTEM and Max Min EM anomaly with positive magnetic anomaly. Sheared graphitic argillite, locally with minor pyrite. |
BJV 04-010 | No significant results The target is a MegaTEM and Max Min EM anomaly with positive magnetic anomaly. DDH cut graphitic argillite and basalt. |
BJV 04-011 | Felsic tuff and rhyolite, strongly sheared, locally with pyrite; overlying graphitic argillite. Felsic tuff with strong chlorite / sericite alteration and disseminated, minor (up to 10% locally) stringers pyrite, sphalerite and galena. |
BJV 04-013 | No significant results. Quartz feldspar porphyry and ash tuff. Minor pyrrhotite with trace sphalerite associated with quartz veins locally developed from 43.0 to 72.2. Pyrrhotite stringers at 154 - 159 and pyrite (2%) at 178.6 - 180.4. Trace sphalerite |
BJV 04-012 | No significant results. Felsic tuff with minor argillite to 96.6 m. Strongly altered with 2% to 20% pyrite at the base from 85.3 to 96.6m. Argillite and graphitic argillite to 193.5. Felsic dyke with 15 to 20% pyrite from 115 to 125. Zone of graphitic fault gouge. |
BJV 04-014 | Stopped due to drill capacity; current depth 727m. Intercalated Rhyolite, Fragmental Rhyolite and Felsic Tuff to 671 metres. Moderate to strong chloritic alteration from 619 to current depth. Interbedded chloritized, felsic tuff and argillite from 671 to 720 metres, locally carrying stringer pyrite, pyrrhotite (~ 1-2%) and local trace chalcopyrite and sphalerite. The hole was temporarily terminated due to insufficient drill power, will be continued with a bigger drill rig when available. BHPEM defined off-hole anomaly below the EOH. |
BJV 04-015 | Intersected mineralized Felsic Tuff from 95 to 98 metres (1 – 10mm semi-massive pyrite bands, ~ 10% of the unit). Assays show base-metal content is trace to slightly elevated. |
88
Hole # | Results |
BJV 04-016 | No significant results. Tested east extension of mineralized zone encountered in BJV-04-15. |
BJV 04-017 | No significant results. Basalt from casing to 146m followed by Feldspar Crystal tuff with minor py stringers, and rhyolite ash tuff with diss. py. from 195 to 259m. MeagTEM explained Py stringers section (195 to 259m) which is also weakly magnetic. |
BJV 04-018 | Testing MegaTEM anomaly. Graphitic phyllite from 196 - 236m that explains MegaTEM anomaly. No significant mineralization. |
BJV 04-019 | No significant results. Testing MegaTEM anomaly. Graphitic phyllite / stringer pyrite from 118 - 184.7m that explains MegaTEM anomaly. |
BJV 04-020 | No significant results. Intersected basalt/sediment suite, including graphitic sediments carrying stringer pyrite, pyrrhotite and minor chalcopyrite. |
BJV 04-021 | No significant results. Intersected graphitic sediments (Miramichi Group) below 100m and magnetic mafic dyke from 271 to 281m. |
BJV 04-022 | No significant results. Intersected "thrusted" and mylonitic package of interbedded graphitic argillite and crystal tuffs with graphitic/pyritic zones up to 40m thick. |
BJV 04-023 | Intersected tuffaceous rhyolite and rhyolite with a siltstone/tuffaceous sediment unit from 169 m to 271m (1 -3% stringer pyrite and trace sphalerite). Increasing chloritic alteration over the bottom 30m. The hole is being deepened to test the TEM target (see extension below). |
BJV 04-024 | No significant results. Calc-silicate altered Basalts and associated graphitic sediment with minor pyrite and pyrrhotite. Trace sphalerite noted in felsic tuffs at 285m and 315m. Initial depth is 287, extended to test BHPEM off end of hole. |
BJV04-025 | No significant results. Rhyolite from 11m to 30m overlying grey argillite with local pyrite / pyrrhotite / chalcopyrite. |
BJV04-026 | No significant results. Intersected basalt and graphitic and sulphidic (pyritic) sediments. |
BJV04-027 | Intersected rhyolite and 33m (177 - 210) meters of altered sediments with up to 20% pyrite. This indicates a significant, favourable horizon. Major fault at 210 to 222, DDH abandoned. Assays - no significant results. |
BJV04-028 | No significant results. Intersected basalt and graphitic argillite with trace pyrite. |
BJV04-29 | No significant results. Intersected pelitic sediment with minor local pyrrhotite and strongly graphitic sections. Probably older sediments underlying BMC. |
BJV04-30 | No significant results. Hole consists of tuffacous siltstones and pelites with narrow graphitic argillite intervals and trace pyrite and pyrrhotite throughout. |
BJV04-31 | No significant results. Intersected older sediments including graphitic argillite with pyrite. |
BJV04-032 | No significant results. Intersected older sediments including graphitic argillite, trace Py. |
BJV04-033 | No significant results. Intersected siltstone and 0.3m massive pyrrhotite. |
BJV04-034 | No significant results. Intersected rhyolite and a thick zone of fault gouge. |
BJV04-035 | No significant results. Intersected sediments with disseminated pyrite, pyrrhotite and a fault zone. |
BJV04-036 | No significant results. Intersected felsic tuff and tuffaceous sediments locally with 10 % pyrite and pyrrhotite and trace chalcopyrite and sphalerite in the expected target area. 0.65% Pb+Zn from 178m to 182m. |
89
Hole # | Results |
BJV04-037 | No significant results. Intersected graphitic argillite bed within rhyolite and felsic crystal tuff. |
BJV04-038 | No significant results. Intersected graphitic sediments at the Brunswick horizon and magnetite iron formation underlain by altered felsic tuff, no sulfides. |
BJV04-039 | Intersected gabbro, cherty tuffaceous sediments and rhyolite with a 1.5m semi massive to massive pyrrhotite sulfide zone within altered rhyolite breccia with stringer py, po. Results of BHPEM confirm a variable dip of the sulfide zone resulting in the deeper intercept. 0.33% Zn / 1m. |
BJV04-040 | No significant results. Intersected rhyolite and graphitic argillite. |
BJV04-041 | No significant results, intersected rhyolite and quartz feldspar crystal tuff with minor mafic volcanics. Chloritic alteration with minor pyrite. Fault and shear zones may be the cause of the weak conductivity. |
BJV04-042 | No significant results, intersected faulted rhyolite and graphitic rhyolite and siliceous sediment. |
BJV04-043 | Felsic tuff and tuffaceous sediment are interbedded with massive and brecciated rhyolite. Three tuffaceous sediment intervals up to 51.5m thick have sericite +/- chlorite alteration and contain sections with 15% pyrite, 2% chalcopyrite and trace amounts of galena and sphalerite over 5m widths. Up to 0.33% Cu and 0.34% Zn over several 1m intervals. |
BJV04-044 | Mafic flows with graphitic sediments overlie Flat Landing Brook rhyolite, QFP with stringer pyrrhotite, pyrite, chalcopyrite and chloritic sediments / felsic tuff. This is the Gilmore South stratigraphic sequence which hosts Brunswick grade massive sulphides located 2 km south of BJV04-44 |
BJV04-045 | No significant results. Intersected quartz feldspar crystal tuff with two thin graphitic fault zones. |
BJV04-046 | No significant results. Intersected basalt overlying quartz feldspar crystal tuff with minor pyrrhotite, pyrite and trace chalcopyrite disseminated and on fractures |
BJV04-047 | No significant results. Quartz feldspar porphyry of the Nepisiguit Falls Formation. Trace pyrite and pyrrhotite |
BJV04-023 extended | Intersected tuffaceous rhyolite and rhyolite with a siltstone/tuffaceous sediment unit from 169 m to 271m (1 -3% stringer pyrite and trace sphalerite). Increasing chloritic alteration over the bottom 30m to 648m. Deepened to test the TEM target Altered argillite / cherty rhyolite tuff with 5% to 10% pyrite and pyrrhotite and trace Cp. 30 % sulfides over 5m from 773.5 to 778.5 Py/Po stringers 1 cm to 5 cm thick occur from 900m to 1100m. 1000 to 3000 ppm Cu, Pb, Zn over 1m to 3m intervals. |
BJV05-048 | Intersected tuffaceous sediment, sediment and quartz feldspar porphyry of the Nepisiguit Falls Formation. 250m to the end of the hole consisted of massive coarse QFP, unaltered. Hole was stopped because of excessive flattening - went over the top of the target. The probe results indicate that the TEM anomaly is below the hole and will have to be tested from another setup. |
90
Hole # | Results |
BJV05-049 | Intercalated fine grained felsic crystal tuff, cherty tuff and less laminated argillite and chert. 397 to 416 tuffaceous rhyolite, chlorite alteration with disseminated and stringer pyrrhotite, minor pyrite, trace Sp and Gn. 416 to 527 argillite with one to eight meter sections intense chlorite, 10% to 15% stringer and disseminated Po, less Py very minor Sp stringers. Up to 10% arsenopyrite locally. 527 to 551 is rhyolite tuff, quartz flooding, 5% Po/Py stringers. Ended in silicified felsic tuff, minor pyrite. Initial results for BHPEM show inhole and better off-hole at sulphide intercept. Also strong off-hole at bottom. |
BJV05-050 | No significant results. Carboniferous cover to 105m. Intercalated felsic tuff and rhyolite to 436.5m with trace amounts of Po and Cpy. Miramichi sediments from 436.5 to 633. Heavy Po stringers from 465 to 466 is confirmed by the BHPEM to be the EM target and is located within Miramichi sediments. |
BJV05-051 | No significant results. Cut weakly graphitic shale at conductor depth. Interbedded with altered QFP and argillite with minor disseminated pyrite and very minor sphalerite laminations. |
BJV05-052 | 115m of gabbro at the top of the hole overlying intercalated felsic tuff and argillite with variable chlorite/sericite alteration. 332m to 360m up to 20% pyrite disseminated and as semi-massive bands over up to 5m lengths. PHPEM preliminary results show no strong anomalies. |
BJV05-053 | Carboniferous cover to 239.4. Interbedded felsic tuff and argillite to 557.2m. 344m to 464m the tuff and argillite contain pyrite/pyrrhotite stringers with trace chalcopyrite, sphalerite and galena. The best interval is 0.6m with 40% pyrite stringers and minor chalcopyrite. A magnetic gabbro dyke from 332m to 345m. Magnetic anomaly is more likely due to Po stringers. Graphitic argillite, locally with Po stringers from 557.2m to 668m. Two BHPEM anomalies correspond to stringer sulphide and graphite intercepts. Best assay 0.53% Zn / 1m. |
BJV05-054 | Intersected rhyolite tuff and graphitic fault zone with 5% pyrite at the target depth. Very minor sphalerite in rhyolite explains the soil geochemical anomaly. Top of FLB - Louvicourt horizon. Best assay 1.13% Pb + Zn / 0.4m. |
BJV05-055 | Intersected felsic tuff and cherty tuff, strongly deformed with trace pyrite. 10% pyrite stringers from 152m to 153.5m. Significant Py/Po/trace Cp stringer zone from 177.3 to 232m. Best interval 15m with 5% to 10% sulfide. 232m to 357, cherty tuff and argillite. BHPEM is not possible due to condition of hole. No significant assays. |
BJV05-056 | Carboniferous sediments to 116.4. Ordovician - grey argillite with minor felsic tuff intervals. Minor pyrite stringers to 10% locally and chloritic alteration is generally associated with the felsic tuff. Trace chalcopyrite with chlorite alteration in the sediment. 302m to 354 Po, Py and Cp stringers, locally with 2% Cp. Rhyolite from 463 to 488, with quartz flooding and up to 3% arsenopyrite from 463 to 475. Felsic tuff, less argillite, minor gabbro to 625m. Locally strong chlorite alteration. 2% pyrite from 531m to 596m. Gabbro from 596 to 602. Felsic tuff with weak sericite alteration and 5% Py down to EOH. Faulted between 727m and 753m. BHPEM results pending. Assays return elevated copper over narrow widths, best assay 0.75% Cu / 1m. |
91
Hole # | Results |
BJV05-057 | Fine grained felsic tuff and crystal tuff. Variable chlorite alteration with minor pyrite. Semi-massive and massive pyrite with up to 7% sphalerite occurs from 249.3 to 250.07 and 251.05 to 251.67. This probably is the main zone. Altered tuff locally with up to 15% pyrite and strong chlorite alteration from 251.67 to 350.7. Zone of pyrite / chlorite alteration from 262.7 to 264.7 is probably S2. Gabbro from 251.7 to EOH. BHPEM defined a strong off-hole anomaly west of the main zone intercept. |
BJV05-058 | Carboniferous sandstone to 225.9m. Ordovician - green argillite from 225.9m to 410m, becoming grey with up to 1% pyrite, disseminated and stringers from 363m to 410m. Gabbro 410 to 453m. Green, locally chloritic argillite intercalated with less rhyolite and felsic tuff. Po/Py/Cp stringers (40% sulphides, 0.5% Cp) from 476.8 to 477.2. Up to 10% Po stringers from 468.1 to 653.2m with 0.5% Cp locally, in felsic tuff and cherty tuff. 60% Po, 2% Cp at the contact from 653.2 to 653.5 overlying graphitic argillite to 670.1.Felsic tuff and argillite to 745m. Graphitic argillite to EOH. BHPEM anomalies are explained by core results. Assays - elevated copper to 0.27% Cu / 1m. |
BJV05-059 | Felsic crystal lithic tuff with 1% pyrite. Moderate sericite and strong chlorite alteration locally developed. 102.2m to 102.5m massive pyrite with chalcopyrite stringer. 102.5 to 210m gabbro, carbonate alteration and 5% to 10% pyrite. BHPEM survey detected an off-hole anomaly located to the east (Main Zone). |
BJV05-060 | Rhyolite (Flat Landing Brook Fm.) to 164m Badly broken core with two narrow zones of fault gouge. Feldspar Crystal tuff from 164 to 245m. Sericitic, cherty sediment from 245m to 275m with locally up to 30% disseminated and stringer Py, Po trace Sp, Gn. Dark argillite and cherty sediment with 10% Py (Po), trace Cp from 275m to 285m. Felsic crystal tuff from 285m to 431.2m. Chloritic / sericitic sediment and semi-massive pyrite, locally minor sphalerite from 431.2 to 512.7. Core angles near 0 and the semi-massive sulphide zones are interpreted to be the same horizon. Feldspar crystal tuff, chloritic alteration from 512.7m to 531m. BHPEM indicates build-up off the EOH. |
BJV05-061 | No significant results. South-east end of KH trend. Carboniferous sediments to 176m. Siltstone to 192m. Graphitic schist to the end of the hole at 409.5 with one gabbro and one felsite dyke. Major fault zone from 263m to 270m may explain the strong EM response. |
BJV05-062 | Testing off-hole anomaly recorded in BJV05-049 coincident with Titan 24 resistivity and MT. Rhyolite crystal lithic tuff and massive rhyolite. Chloritic argillite units between at 558m to 574m, 630m to 679m. Pyrite 1% to 5% from 580 to end of hole. Seven sections 0.5m to 4.0m of 10% to 30% pyrite from 739m to 779m. Mainly unaltered from 787m to 931m. |
BJV05-063 | Carboniferous sediments to 91m. Ordovician basement - basalt (61m) overlies 44m of cherty magnetite iron formation (Boucher Brook) which overlies interbedded graphitic argillite, siltstone, grey sandstone intercalated with two felsic tuff units from 219m to 223m and 234m to 241m. Up to 10% disseminated and stringer pyrite occur in the felsic tuff and graphitic argillite. |
BJV05-064 | Carboniferous sediments to 451.3m. Brown-grey fine grained sandstone, red mudstone and siltstone with rare mm scale coal seams and pyrite, basal conglomerate. Ordovician basement consists of mafic tuff and flows with interbedded graphitic schist. Pyrite and pyrrhotite occurs locally disseminated, thin bands and rare stringers. Fine to medium grained sandstone increases towards bottom. |
92
Table XX BJV Borehole EM Results
Hole # | Borehole EM Results |
BJV-04-003 | Hole BJV-04-003 (P-61), which intersected minor pyrite at 241m was surveyed. The results indicate a 1.6 S conductor was intersected at 250m. The target was a 2S conductor. |
BJV 04-004 | Hole BJV-04-004 (P-14), which intersected 10% disseminated pyrite with minor sphalerite in prospective stratigraphy. Results indicate an early time in-hole anomaly that is an off-hole anomaly at late time. No follow-up is recommended because graphite was intersected at this depth. |
BJV 04-008 | BHEM response is a very weak conductor that appears to be surficial. Probably a bog or wet area. The borehole log does not indicate a conductor in the hole. |
BJV 04-011 | There are several responses down the profile. Modeling was attempted but a good fit was not found. The BHEM profile suggests that there are two in hole anomalies located at 40 m (plate 1) and 60 m (plate 2) followed by an off hole anomaly centered at approximately 125m (plate 3). The geologic section was compared with the BHEM profile. Through this comparison, the in hole anomalies appear to be dipping to the east. The in-hole at 40m and 60m correlate with minor pyrite zones within graphitic argillites. The off-hole at 125m correlates with a fault zone in a graphitic sediment. The purpose of surveying the hole was to search for conductors associated with a strong alteration system underlying the sedimentary unit. No anomalies are seen in the lower part of the hole |
BJV 04-012 | Response was modeled as one off hole conductor with a strike of 180 degrees and a dip of 66 degrees. |
BJV 04-013 | Hole BJV-04-013 (target 72) was surveyed. The results located an off-time in-hole response with no S1 response. The anomaly is centered at 160m and correlates with pyrrhotite stringers intersected in the hole. No off-hole responses were detected. The target was intersected close to its upper and eastern edge, so if further work is warranted based on geology, the follow-up hole should intersect a point 50m below and 50m grid west of the present intersection point. |
BJV 04-014 | BJV-04-014 (Mount Fronsac). No change from the preliminary data (building response to bottom of hole, interpreted to be 50m off end of end hole). |
BJV 04-015 | Hole BJV-04-015 (Target 133) was surveyed. The graphite zone intersected at 65m corresponds to an in-hole anomaly and an off-hole response at 95m corresponds 20% pyrite intersected in the hole. The nearest edge of the off-hole conductor is located 10m away below and west of the hole, in the direction of follow-up hole BJV-04-016. Note that the time constant of the in-hole is 0.2ms and the off-hole is 0.6ms. |
BJV 04-016 | Hole BJV-04-016 (Target 133) showed no off-hole anomalies. In-hole responses corresponding to graphite zones were located at 135m and 245m, with tau values of 0.2ms and 0.6ms respectively. A third response, located at 160m is an off-hole response located very close to the hole, and corresponds to pyrite stringers in the hole. It is the best conductor, but a time constant is impossible to calculate because of the multiple responses. |
BJV 04-023 | Through observation of the Z component data in both holes, it was evident that there was a build up in amplitude moving down the profile that had an in hole polarity. This was indicative of a large conductor located below the hole. After BJV-04-023 was extended the conductor was found to be associated with stringer pyrite/pyrrhotite with some minor chalcopyrite and trace sphalerite and galena. The stringers were located within an altered argillite and cherty tuff. |
BJV 04-024 | Modeled general shape of response however several discrepancies are apparent. Four anomalies were apparent in the hole from the BHEM survey, however a small in hole at 230 m was not included. All conductors were seen to at least channel 16. The shallowest of which was an off hole that was modeled to dip against geology. Many of the conductors flipped in the later channels. |
BJV 04-025 | Hole BJV-04-025 (target 280) was surveyed. The results indicate an off-hole response at 295m, located below (east of) the hole. The conductor was modeled to have a conductance of 5S. |
BJV 04-036 | Hole BJV-04-036 was surveyed. The results located an off-hole anomaly at 140m. The source is located down-dip, extremely close to the close and has a modeled conductance of 30S. There is no in-hole response |
93
Hole # | Borehole EM Results |
BJV 04-039 | Hole BJV-04-039 was surveyed. The expected depth of intersection was 80m. The only conductive material in the hole was intersected at 235m. The VTEM data had indicated that dip changed from east to west as one moved north, and it was suspected that the dip also varied in the vertical sense. At 80m, there is a crossover on the z component, indicating a conductor parallel to the hole. At 235m, there is a very conductive in –hole. Strong deflections are seen in the PP. Step response has not been received. |
BJV-05-048 | Hole BJV-05-048, reported blocked last week, was re-opened and surveyed through 300m of rods. The results are consistent with the surface data, with a shallow dipping conductor below the hole |
BJV-05-049 | The results from hole BJV-05-049 show significant deviations in the PP, indicating three distinct anomalies between 425m and 505m; both in-hole and off-hole polarities exist. In addition to these anomalies, there is a late time off-hole anomaly at the bottom of the hole. Off-time data indicates a source north of the hole, where there is a resistivity low in both the IP and MT data. Final interpretation is pending receipt of the step data. |
BJV-05-050 | BJV-05-050 (Target 309). An off-hole response was located at the depth where a pyrrhotite stringer was intersected, but its small size and close proximity to the hole do not warrant a follow-up hole. |
BJV-05-052 | Results from hole BJV-05-052 show no late time anomalies. However, the S1 data indicates a small but highly conductive area was intersected between 270m and 280m. A long wavelength low amplitude S1 anomaly in all components is attributed to geometry. |
BJV-05-053 | Hole BJV-05-053, surveyed with borehole EM last week. The strongest anomaly is a 50% in-hole response corresponding to graphite with Po stringers. A 5% S1 off-hole at 495m correlates to felsic tuffs intersected in the hole. The nearest edge of the source is located 30m away, down-dip of the intersection (northeast of the hole). |
BJV-05-056 | Step data was received for hole BJV-056, surveyed last week. The off-time results showed high amplitude in-hole and off-hole responses between 325m and 450m, and a near-hole off-hole at 560m. The step processing indicates a 20% S1 in-hole at 390m and a 20% off-hole S1 response at 430m. Off-time data is dominated by in-hole responses. This indicates that an excellent conductor exists to the southeast of the hole, in the direction of previous drilling. The off-time response at 560m has only a 1% S1 response. |
BJV-05-057 | The results from the borehole EM survey of hole BJV-05-057 showed a 20 channel off-hole anomaly centered at 220m down the hole. The source is modeled as a large poor conductor (10S) located west of the hole, with a higher conductivity core located both west and up-dip. |
BJV-05-058 | Hole BJV-05-058 was surveyed from 270m to 445m. The lower part (460m to 760m) was surveyed earlier in the month. There are no significant responses seen in the upper portion of the hole. As reported last week, several late-time anomalies were seen in the off-time data, at 480m, 495m, 660, 680m, as well as anomalous readings at the bottom of the hole. Step response data shows S1 off-hole responses at 620m, 660m and 680m, with the strongest at 660m (20%). All are very close to the hole (<10m away). |
BJV-05-059 | Hole BJV-05-059 was also surveyed through rods. There is an 18 channel off-hole anomaly centered at 110m. The source is located to the east, and is consistent with the near surface conductor seen in the results from BJV-05-057, ST-235 and ST-237. |
BJV-05-060 | Hole BJV-05-060 was surveyed. The axial component data shows a building in-hole polarity response to the bottom of the hole, seen to channel 8. No response is seen where sulphides were intersected, except for a short wavelength 4 channel in-hole response at 270m. |
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Hole # | Borehole EM Results |
BJV-05-062 | Hole BJV-05-062, was surveyed to 750m while the drill was on standby. There are three responses in the hole, a 5% S1 only off-hole anomaly at 625m, located behind the hole, a 15 channel off-hole response at 620m, also located behind the hole and a strong in-hole polarity build-up toward the bottom of the hole seen in PP data as well as the late time off-time results. Modeling of results has confirmed that the hole is drilling down-dip in the lower part of the hole. The hole was extended to 931m, and the bottom of the hole surveyed through 700m of rods. The build-up to the bottom is defined as the shoulder of an off-hole response centered at 805m. This is also a PP anomaly. The source is located behind the hole, i.e. the hole has passed over the south end of the conductor. There is no early time in-hole anomaly c orresponding to the sulphides intersected in the hole. The lower part of Hole BJV-05-062, was surveyed from 815m to 930m. The bad data was confirmed to be the result of rods left in the hole. No additional anomalies were detected in the lower part of the hole. A final model was made using results from Holes BJV-05-049 and BJV-05-062 |
Bathurst Exploration (BE) Drilling
Between June and October 2006, 27 BQ Thin Wall (BTW) size diamond drill holes, totaling 11,866.6 metres, were drilled by Falconbridge during there Bathurst Exploration program. Up to five drills were used with holes located predominantly throughout the Carboniferous Project area (Figure 22). Drill hole information is summarized in Table XX below. Detailed drill logs are available from the Xstrata database.
Table XXI Bathurst Exploration (BE) Drill Hole Summary
| UTM NAD 83 |
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Hole # | Easting | Northing | Zone | Length | Dip | Azimuth | BHEM |
BE-06-065 | 290,502 | 5,240,785 | Zone 20 | 450.2 | -60 | 130 | Yes |
BE-06-066 | 292,154 | 5,243,870 | Zone 20 | 330.5 | -60 | 090 | No |
BE-06-067 | 308,819 | 5,256,996 | Zone 20 | 831.0 | -65 | 180 | Yes |
BE-06-068 | 295,955 | 5,247,495 | Zone 20 | 505.0 | -55 | 100 | Yes |
BE-06-069 | 294,162 | 5,246,143 | Zone 20 | 182.0 | -60 | 120 | No |
BE-06-070 | 297,280 | 5,251,578 | Zone 20 | 182.0 | -50 | 300 | No |
BE-06-071 | 299,510 | 5,253,678 | Zone 20 | 458.0 | -60 | 355 | Yes |
BE-06-072 | 304,763 | 5,262,878 | Zone 20 | 390.0 | -60 | 045 | Yes |
BE-06-073 | 295,490 | 5,245,161 | Zone 20 | 266.5 | -55 | 120 | Yes |
BE-06-074 | 289,124 | 5,236,009 | Zone 20 | 161.0 | -60 | 130 | No |
BE-06-075 | 313,198 | 5,266,100 | Zone 20 | 623.0 | -65 | 180 | Yes |
BE-06-076 | 306,971 | 5,265,064 | Zone 20 | 608.0 | -65 | 045 | Yes |
BE-06-077 | 290,535 | 5,238,403 | Zone 20 | 265.0 | -60 | 130 | No |
BE-06-078 | 311,934 | 5,250,750 | Zone 20 | 690.5 | -80 | 360 | Yes |
BE-06-079 | 290,631 | 5,238,032 | Zone 20 | 273.0 | -60 | 130 | No |
BE-06-080 | 302,967 | 5,253,585 | Zone 20 | 348.0 | -60 | 045 | No |
BE-06-081 | 299,372 | 5,256,275 | Zone 20 | 473.3 | -50 | 225 | Yes |
BE-06-082 | 291,439 | 5,238,531 | Zone 20 | 345.0 | -70 | 130 | No |
BE-06-083 | 298,150 | 5,256,928 | Zone 20 | 304.0 | -50 | 065 | No |
BE-06-084 | 295,311 | 5,240,588 | Zone 20 | 324.0 | -55 | 130 | No |
BE-06-085 | 289,733 | 5,240,439 | Zone 20 | 907.0 | -50 | 115 | Yes |
BE-06-086 | 299,544 | 5,256,473 | Zone 20 | 347.0 | -55 | 225 | Yes |
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| UTM NAD 83 |
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Hole # | Easting | Northing | Zone | Length | Dip | Azimuth | BHEM |
BE-06-087 | 312,929 | 5,257,559 | Zone 20 | 863.0 | -65 | 220 | Yes |
BE-06-088 | 311,238 | 5,254,637 | Zone 20 | 518.5 | -70 | 180 | Yes |
BE-06-089 | 299,174 | 5,254,373 | Zone 20 | 409.0 | -50 | 220 | Yes |
BE-06-090 | 294,054 | 5,244,238 | Zone 20 | 465.1 | -60 | 123 | Yes |
BE-06-091 | 291,838 | 5,242,341 | Zone 20 | 347.0 | -60 | 135 | No |
FIGURE 22 BATHURST EXPLORATION (BE) DRILLING
Summary of Results BE Drilling
Table XXII Summary of Results BE Drilling
Hole # | Results |
BE-06-065 | No significant results. The hole cut felsic crystal tuff with 1 meter of massive pyrite at the top of the formation, overlain by graphitic sediments. EM anomaly is due to graphitic sediments and possibly to the thin massive pyrite horizon. The magnetic anomaly is caused by pyrrhotite stringers in the graphitic sediments. |
BE-06-066 | No significant results. The hole encountered sediments. Geophysical target is due to graphitic sediments with 5% pyrrhotite stringers from 164m to 178m and 3% Po plus Py from 275m to 309m. |
BE-06-067 | OB to 19m, Carboniferous sediments to 318m. Felsic crystal tuff to 596 including chloritic argillite with 1% to 5 % Po, trace Cp from 430m to 448m. Predominantly felsic tuff to 712m. |
BE-06-068 | OB to 15m, Carboniferous sediment to 99m, feldspar and quartz/feldspar crystal tuff interbedded with tuffaceous siltstone to 505m. |
BE-06-069 | No significant results. OB to 6.5m, Carboniferous sediments to 51.7m, siltstone to 65.7m, graphitic argillite to 182m. |
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Hole # | Results |
BE-06-070 | No significant results. OB to 5m, Carboniferous sediments to 65.3m, siltstone to 80.2m and strongly graphitic sediments to 182m. Core angles are 30 degrees to CA (possibly down-dip). |
BE-06-071 | OB to 3m, Carboniferous sediments to 92m and pillowed basalt to 347m. This includes 3.3m of massive sulphide (Py, Po) from 178.4 to 181.7. Felsic tuff and cherty tuff to 352m. Black graphitic sediments with 10% Py and fine bands of tuff. Felsic and cherty tuff with 10 % Py from 395m to 406m and graphitic sediment to 458m. |
BE-06-072 | 9m of OB, Carboniferous sediments to 144m, phyllite to 194m. Andesite, weakly graphitic argillite and gabbro to 390m. |
BE-06-073 | OB to 6m, Carboniferous sediments to 106.6m, basalt to 126.7m and strongly graphitic sediments to 161m. |
BE-06-074 | OB to 10.5m, Carboniferous sediment to 36.4m, basalt and graphitic argillite to 161m. |
BE-06-075 | Carboniferous sediments to 366.4m, mafic volcanic, schistose, to 623m. BHPEM did not indicate any conductivity. |
BE-06-076 | Carboniferous sediments to 157m. Basalt to 608, weakly magnetic. BHPEM did not indicate significant conductivity, off-hole anomalies. |
BE-06-077 | No Carboniferous sediments. Grey, green and black argillite, black graphitic argillite. |
BE-06-078 | Carboniferous sediments to 325.5m. Graphitic argillite to 421. Rhyolite, carbonitized and biotized, intruded by gabbro, to 570. |
BE-06-079 | Carboniferous sediments to 19m, black graphitic argillite with up to 3% py stringers, interbedded with minor gritty sandstone, to 273m. |
BE-06-080 | Carboniferous sediment to 202m. Black argillite to 258m. Poor core angles (0 to 10 degrees to core axis). |
BE-06-081 | Carboniferous to 64m, basalt flows and tuff to 297m. |
BE-06-082 | Carboniferous to 26m. Massive and pillowed basalt with interbedded graphitic and cherty argillite to 345m. |
BE-06-083 | Carboniferous sediment to 15.3m. Siltstone and graphitic, pyritic argillite to 302m. |
BE-06-084 | Carboniferous sediment to 106m. Interbedded basalt and graphitic argillite to 293m. |
BE-06-085 | Rhyolite feldspar crystal tuff with minor interbedded chert to 707. Fine felsic tuff, altered with increasing Py, Po to 10%. Semi-massive and massive Po from 759.23 to 760.0m. Felsic crystal tuff to 857 with interbedded graphitic argillite from 770m to 777m. |
BE-06-086 | Carboniferous sediments to 72m.Siltstone and grey shale to 347m. |
BE-06-087 | Carboniferous sediments to 370m. Feldspar crystal tuff and rhyolite flows to 856m. BHPEM results did not indicate any conductivity. |
BE-06-088 | Carboniferous sediment to 309m. Foliated porphyritic rhyolite flows and tuff to 518.5m. BHPEM did not detect any conductivity. |
BE-06-089 | Carboniferous sediment to 85m. Green tuffaceous wacke and mafic tuff with two thin felsic tuff units to 378m. Quartz/feldspar crystal tuff to 409m. BHPEM did not detect any conductivity. |
BE-06-090 | Carboniferous sediment to 53m, felsic ash and feldspar crystal tuff to 377. Includes sericitic chert from 79m to 90m with 10 cm massive pyrite vein or stringer and argillite from 298m to 323m. Argillite and graphitic argillite from 377 to 398m. |
BE-06-091 | Carboniferous sediment to 40m, black variably graphitic argillite, siltstone and greywacke to EOH. |
Table XXIII BE Borehole EM Results
Hole # | Results |
BE-06-065 | Hole BE-06-065 was surveyed with borehole EM. Off-time data shows two anomalous areas. Multiple moderate conductivity anomalies (15-30S) occur between 160m and 190m, near the massive pyrite intersection, and a 20 channel off-hole anomaly occurs at 430m within moderately magnetic graphite. |
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Hole # | Results |
BE-06-067 | Hole BE-06-067 This hole intersected felsics and argillites throughout the hole. The off-time results are not discussed because the sources of the anomalies are extremely conductive and only the step data is interpreted. The most significant results are a strong in hole anomaly (140%) centered at 485m corresponding to po in argillite, a 40% off-hole at 520m (massive po with minor cpy in hole) and 90% off-hole at 590m (po in argillite in hole). All have extremely high conductance. The uppermost and lowermost anomalies are centered to the east, and the off-hole at 520m is located down-dip and to the west of the hole |
BE-06-068 | Hole BE-06-068 was surveyed because the hole intersected sulphides in felsic stratigraphy. Preliminary results indicate a strong in-hole build-up to the end of the hole. Modeling shows that the conductor lies very close (within 20m) beyond the end of the hole. This is a large high quality conductor. There is a mid-time short wavelength anomaly at 375m, where sulphides were intersected. This zone is small. |
BE-06-071 | Hole BE-06-071: Results of the borehole survey showed three anomalies. A small amplitude in-hole spike at 180m correlates to 3.3m of massive sulphides intersected in the hole. The second anomaly is a late channel in-hole centered at 380m. A positive PP anomaly suggests this will be an off-hole in the step processed data. Graphite with pyrite was intersected in the hole. The third anomaly is a long wavelength anomaly seen along the entire hole. The large conductor is located to the west of the hole, and strikes parallel to the hole. This large conductor dips steeply east and is seen in the MegaTEM data as a strong formational anomaly |
BE-06-072 | Hole BE-06-072: This hole was surveyed to ensure that the target was fully tested. Preliminary off-time results show a strong response from the Carboniferous cover, and a late time off-hole response at 310m, which corresponds to graphitic argillite intersected in the hole. There is also an in-hole response at 335m, corresponding to another unit of graphitic argillite |
BE-06-073 | Hole BE-06-073 was surveyed. This hole intersected graphite throughout most of the hole, and was surveyed for the purpose of better understanding the single peak VTEM anomaly. Preliminary results indicate there are several closely spaced in-hole anomalies, with the strongest responses at 200m and off the end of the hole (>265m). |
BE-06-075 | Hole BE-06-075: This hole targeted a magnetic anomaly. Survey results showed no EM responses except from the Carboniferous cover |
BE-06-076 | Hole BE-06-076: This hole also targeted a magnetic anomaly. Survey results showed no EM responses except from the Carboniferous cover. |
BE-06-078 | Hole BE-06-078: This hole intersected graphite, then gabbro and rhyolite. There were no anomalies located beneath the graphite, which was seen as a 20 channel in-hole response with a strong PP anomaly centered at 360m down the hole |
BE-06-081 | Hole BE-06-081: This hole targeted a magnetic anomaly. No conductor was intersected and the hole was surveyed to see if there was a conductor beyond the end of the hole. No anomalies were located beneath the conductive Carboniferous cover |
BE-06-085 | Hole BE-06-085: This hole should have intersected a good conductor at 400m. No conductor was intersected and the hole was surveyed to determine if the conductor lie in front of the hole or off the hole. The results show a subtle 20 channel build-up and the hole is presenting in progress. There is also a broad positive (in-hole) response centered at 350m. An x crossover is located at 420m and there is a y peak at 450m. This does not model as a discrete conductor |
BE-06-086 | Hole BE-06-086: This survey intersected minor amounts of graphite in several sections and the hole was surveyed to determine if this adequately explained the targeted conductor. The results showed a 16 channel in-hole anomaly at 205m and an 18 channel response at 255m seen primarily in the XY data |
BE-06-087 | Hole BE-06-087: This hole targeted a magnetic anomaly. The magnetic anomaly can be explained by locally higher susceptibilities in the hole, and the hole was surveyed because prospective rocks were intersected. No anomaly was detected below the Carboniferous cover |
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Hole # | Results |
BE-06-088 | Hole BE-06-088: This hole targeted a magnetic anomaly. The magnetic anomaly was explained by a mafic dike within rhyolite. The hole was surveyed to determine if conductive material occurred in the immediate vicinity of the hole. The results are dominated by a strong response from the Carboniferous sediments. There is also a second response at 370m seen only in the XY components and hidden within the response from the Carboniferous cover. The response is seen to channel 17. The model suggests a small source close to the hole. Given the response in combination with the geology in the hole, no follow-up is recommended |
BE-06-089 | Hole BE-06-089: This hole targeted an EM anomaly coincident with a magnetic anomaly. The hole failed to intersect a conductor and was surveyed to locate the conductor. There is a 20 channel off-hole anomaly located at 210m down the hole. The source is 110S and, with the near edge 40m away, located below the hole. Projecting up-dip, this anomaly correlates to po in a mafic unit. Early times show an off-hole anomaly at 115m with the source very close to the hole |
BE-06-090 | Hole BE-06-090: The results of the BHEM survey show an in-hole response centered at 390m. This corresponds to graphite intersected in the hole. No anomalies were seen in the felsic rocks |
Borehole Pulse EM Surveys
Where indicated, Falconbridge completed Borehole Pulse EM surveys on a number of the above drill holes (see Tables XXI & XXIV). Loop size and relative position of the loop to the drill hole varied from hole to hole depending on the depth of the hole and topography. Surveys where done by Eastern Geophysics Ltd. of 819 Hwy 335, P.O. BOX 119, West Pubnico, N.S., B0W 3S0. Details and specifications for these surveys are available from the Xstrata database presented in Eastern Geophysics logistic reports.
SAMPLING METHOD AND APPROACH
All diamond drill core for the Bathurst Joint Venture and the Bathurst Exploration phases of the previous drill programs was BQ Thin Wall size (BTW). The diameter of BTW core is approximately 4 centimetres (only slightly smaller than NQ). The core was placed in 1.5 metre long core boxes with wooden meterage markers placed every three metres down the hole. The core was secured at the drills and transported to the Brunswick No. 12 mine site for geological logging and sampling. Individual samples were sawn in core lengths ranging from 0.1 to 1.5 metre. Drill recovery was near 100% and would not impact the accuracy and reliability of the results. Drill-core samples were either split or sawn to provide representative samples with no apparent sample biases. All samples were assayed at the Brunswick No. 12 mine site.
SAMPLE PREPARATION, ANALYSES AND SECURITY
Following is the review of sample preparation, analyses, security and data verification of the Brunswick geological samples prepared and analyzed by Brunswick Mine. This report is devise in two sections: Sample Room and Assay Lab. The direction of these two departments is conducted by the Chief Chemist. The personnel are comprised of laboratory technicians.
Sample Preparation, Analyses and Security
The following section is the review of the sample preparation, analyses, security and data verification for the core samples prepared and analyzed by the assay laboratory of Brunswick Mine. The section has been mainly written by Lyne Côté, P. Chem, B.Sc., D. Env., Chief Chemist (member of the Ordre des Chimistes du Québec).
Sample Preparation Room
The sample preparation room is an enclosed area located in the basement of the concentrator building. One permanent technician is assigned to the sample preparation and the housekeeping of the workshop. To reduce the risk of sample contamination and provide a healthier work environment, the sample room is equipped with a proper dust control system in which crushing and grinding equipment is virtually completely enclosed. Only the drill core samples provided by the geology department of Brunswick Mine are processed in this room. Therefore, the samples are of the same matrix type, reducing the probability of contamination.
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The drill core samples are delivered from the core shack to the sample preparation room by the core shack sampler. Each core sample plastic bag was previously identified with a plastic bar code system tag by the sampler of the geology department. The plastic tag includes the sample number and the location of the sample (diamond drill hole number, from-to in meters). The samples are recorded in a logbook upon reception at the sample room. The weight of the sample is variable (5 to 10 kg) depending of the length of the core sample, its nature (massive sulphides, chloritic waste rocks,…) and depending if the core sample has been split in two.
Sample Reduction
All samples are crushed in a jaw crusher and reduced to approximately 4 mesh. Each sample is then transferred to a roll crusher and the materials reduced from 4 to 20 mesh. The material is separated in a riffle splitter to obtain a homogenous split. One portion of the sample is labeled with a bar code number, named "Reject" and is sent back to the core shack for storage. Rejects are normally saved for a period of 6 to 7 years.
The other portion of the sample is further reduced with a disc pulverizer to obtain a size of about 100 mesh. Depending on the sample hardness, typically 90 seconds for pulverization is sufficient. The discs are adjusted regularly to get a constant size. To minimize contamination during sequential sample preparation, the pulverizer is cleaned with a high-pressure air hose after passing each sample though the pulverizer. About 50 grams of rock powder ("the pulp") is then transferred to a previously labeled pulp bag. A record is kept of the sequence in which the samples are ground, and of the identity number of the container used for each sample. The labeled pulp samples are then sent to the mine assay laboratory for analysis.
Assay Laboratory
The laboratory building is located on the mine property and was erected in 1983. The laboratory is housed in 5,200 square feet on three floors. The basement is dedicated for the sample receiving, storage of samples, chemical products and supplies. On the second floor are located the X-Ray Spectroscopy section, the Atomic Absorption Spectroscopy section, the Fire-Assay room, the balance room, the wet laboratory and finally the environmental room. The laboratory is well-equipped with modern, state-of-the-art equipment.
The Brunswick Mine’s assay laboratory provides analytical services to the following departments: Geology, Concentrator, Metallurgical Research and Environment. Work is also done for external groups such as Exploration, Noranda Technology Center, McGill University, University of New Brunswick and the Matagami Mine.
The zinc, lead, copper and bulk concentrates produced by Brunswick Mine are sold in Canada, Europe and Japan. The assay laboratory is responsible for analysis and assay exchanges with all the customers. Therefore, the quality of the analysis is very important, to reduce the umpire costs and to maintain good relations with the customers. The assay laboratory department has acquired an excellent reputation on international markets for accurate analyses and low umpire costs.
Analyses
The diamond drill samples are assayed for the following elements: Pb, Zn, Cu and Ag. The gold is analyzed occasionally, when requested by the geologists. The analytical procedures are standard in sulphide minerals. All the samples are analyzed by flame atomic absorption spectroscopy (FAAS) for Pb, Zn, Cu and Ag.
For those samples which exceed the upper calibration limits, titrametric or gravimetric methods are used, as outlined below. These procedures from International System Organization (ISO) are recognized and standard in base metal industries.
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Pb > 10 %, Pb determined by EDTA titration (ISO Method 11441)
Zn > 20 %, Zn determined by EDTA Titration (ISO Method TC 183N 489E)
Cu > 3 %, Cu determined by Short Iodide Titration (ISO Method 10258)
Ag > 480 g/t, Ag assay fusion and cupellation (ISO/TC 183 N 490 E)
Au Preconcentration by Fire-Assay and completed by atomic absorption spectroscopy.
Determination of Metals by Flame Atomic Absorption Spectroscopy
Sample Digestion
The purpose of any sample dissolution technique is to provide a homogeneous solution of the elements of analytical interest. A 1 gram portion of sample is accurately weighed and digested in acid (HCl and HNO3) and analyzed by flame atomic absorption spectroscopy (FAAS). Calculations of results are based on calibration curves produced from in-house reference materials. Samples with concentration of the element greater than the upper limit of its calibration are analyzed by gravimetric or titrametric ISO methods as described above.
Calibration and Measurement of the Analyte
The atomic absorption spectrometer is calibrated with three in-house reference materials prepared as solutions in the same manner as that used for the samples. These reference materials have been prepared by Brunswick Laboratory technician and previously analyzed by external laboratories, along with titration or gravimetric ISO procedure. The material used for the preparation of these standards is ore from Brunswick Mine. The advantage of this procedure is that these standards include all the matrix effects, and therefore minimize the interferences. These reference materials are kept in a freezer to prevent oxidation. A small portion of reference material is transferred into a desiccators for current use.
Confidentiality of Data and Data Security
The results of any analysis generated by the assay laboratory are strictly confidential and the sole property of the client. Furthermore, all internal documents, reports, lists, files and methods may not be disclosed or photocopied without permission. Information stored in the computer system is available only to authorized staff and clients, all of whom have password-protected access to a drive.
The Zn (%), Pb (%), Cu (%) and Ag (oz/ s.t.) analysis results are recorded in an Excel spreadsheet (bmscore.xls) which is available to the geologists via the mine’s computer network. The results are then imported in the Gemcom drill hole database (Ag values are converted into g/t during the resource and reserve estimation).
Statement of Sample Preparation and Analytical Procedures
The sample preparation is the most critical part. The potential risk for contamination is greater in the sample preparation process than any other part of laboratory operations. For this particular reason, only samples from Brunswick Mine are processed in the sample preparation room, as previously mentioned.
The sample preparation facilities at Brunswick Mine use old equipment, particularly the disc pulverizers. Such equipment would not be considered to be acceptable for use in gold analysis. Gold is not assayed routinely at the mine since the ore contains only traces of gold (0.002 to 0.005 oz/ s.t. Au in average). However, Brunswick Mine’s sample preparation equipment is considered very acceptable when used to prepare massive sulphide samples from the mine for analysis of base metals.
Data Verification
Quality Assurance and Quality Control
The Quality Assurance and Quality Control (QA/QC) program was implemented in 1995 to provide quality chemical analyses. The quality of chemicals used is assessed in terms of accuracy, precision, traceability, and availability. This program includes a Standard Operating Procedures (SOP) Manual with data validation supported by a Statistic Process Control (SPC) program. The laboratory equipment is well maintained and properly calibrated with Certified Reference Materials and in-house reference materials. The analytical balances are verified annually by outside organizations who meet the ISO-9000 specification. To measure the performance of the laboratory, each year the Assay Lab participates in proficiency testing studies, or Round Robins. Occasionally, the laboratory is subjected to internal or external audits.
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The Quality Assurance and Quality Control program is followed seriously at Brunswick Mine’s assay laboratory and the quality of analysis have been demonstrated numerous times with assay exchanges on Zn, Pb, Cu and Bulk concentrates.
Quality Control and Data Validation
Certified Reference Materials and reagent blanks are used with each batch of sample decomposed. The Certified used for the geological samples is the MP-1A from CANMET. All data generated for the certified, the blank, and the duplicate are captured, sorted and retained in a separate database. The control charts are maintained to monitor the stability accuracy of the measurement. The data is plotted over time to establish a mean and standard deviation. Warning lines on the chart are set at ± 2 X standard deviation and analysts must scrutinize data carefully in this region. Control lines are set at ± 3 X standard deviation and data outside these lines is rejected and corrective action is mandated. If the problem cannot be ascertained, then all the samples in that particular block will be re-analyzed.
The data from analysis of duplicate pairs must meet established precision limits. Should any pair fail to meet these criteria, corrective action is taken as previously described. Duplicates are plotted in an X-Y fashion to visually assess the degree of correlation and to define precision as function of concentration.
ADJACENT PROPERTIES
Half Mile Lake
Half Mile Lake Area comprises three mineral claim groups, excluded from the option agreement, and the surrounding area. It contains the extensively drilled series of volcanogenic massive sulphide deposits known as the Halfmile Lake North, South and Deep (Figure 7). The properties are known as the Little Bald Mountain group (Block 1828), Moody Brook group (Block 1878) and the Northwest Miramichi group (Block 3770). These mineral claims cover parts of the nose of the Nine Mile Brook fold structure and include soil geochemical and electromagnetic anomalies that have not been adequately explained. Much of this stratigraphy lies at the same level as the Halfmile Lake sulphide deposits.
The Half Mile Lake zinc-lead deposit is a sheet-like, stratiform volcanogenic massive sulphide deposit that is exposed along a 2.5 kilometre strike length and drilled to a depth of 1,450 metres. Mineralization is hosted by volcanic and epiclastic rocks of the Nepisiguit Falls Formation in close proximity to the stratigraphic contact with the overlying mafic and felsic rocks of the Flat Landing Brook Formation. This stratigraphy shows excellent correlation with the sequences that host the Brunswick No. 6, No. 12 and Heath Steele ore bodies. A new mineralized zone (Halfmile Deep) was discovered in 1999 while drill testing 3D seismic survey reflector. The grade of this new zone was not sufficient to warrant further work due to the excessive depth. Halfmile Lake properties comprise on of the excluded areas.
TABLE XXIV CALCULATED MINERAL RESOURCES FOR THE HALFMILE LAKE VMS DEPOSITS
(Falconbridge Data Book)
Deposit | Metric Tonnes | Pb % | Zn % | Cu % | Ag ppm |
Upper Half Mile Lake | 1,010,000 | 2.54 | 7.59 | 0.44 | 48 |
Lower Half Mile Lake | 8,528,200 | 2.83 | 8.94 | 0.10 | 39 |
Half Mile Deep | 1,490,555 | 2.16 | 9.06 | 0.11 | 23 |
Half Mile Lake North | 1,179,000 | 0.85 | 4.51 | 0.47 | 9 |
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INTERPRETATION AND CONCLUSIONS
Systematic exploration programs that lead from airbourne and ground geophysical surveys through diamond drilling to discovery and development of economic mineral deposits are well documented in the Bathurst Mining Camp. Many previous discoveries came with the advent of new exploration technologies. The former producer, Heath Steele Mines was discovered in 1953 as a result of one of the first successful airbourne electromagnetic surveys in the world. The application of newly developed high technologies to this area could result in significant new discoveries.
The Xstrata – El Nino Option Agreement properties have an extensive database of previous exploration work. This work identifies a number of significant base metal occurrences in geological environments similar to the Brunswick No. 12 deposit and other deposits. Many of these occurrences are open for expansion at depth and for potential extensions and satellite deposits. Occurrences such as Fab, Flat Landing, Fronsac, Camel Back, Gilmour South and others have this potential.
Areas of favourable geology with Brunswick or Heath-Steele type stratigraphy combine with favourable footwall alteration assemblages are present in the Bathurst Mining Camp. Many such areas are under explored and been subject to only limited drill testing. Application of new survey techniques such as Titan-24 may provide high priority targets in such areas.
Due to complex folding and thrust faulting, there are hundreds of kilometres of favourable stratigraphy in the Bathurst Mining Camp. Previous workers tested this stratigraphy mainly where soil geochemical surveys coincide with geophysical anomalies. There are many kilometres of favourable stratigraphy that remain untested. The application of MegaTEM, airbourne gravity systems and Titan-24 surveys may provide high priority targets in these areas.
Some areas of the Bathurst Mining Camp are underlain by flat-lying younger stratigraphy may be covering favourable stratigraphy. A large area of favourable Brunswick horizon stratigraphy is overlain by a thin cover of Carboniferous sediments. Extensive till cover may be hiding favourable stratigraphy in some other areas. Combined MegaTEM and high resolution magnetic surveys along with Titan-24 surveys may provide high priority targets in these areas.
RECOMMENDATIONS
The Xstrata – El Nino Option Agreement properties have significant potential for discovery of economic base metal deposits in an established mining camp where well developed infrastructure could lead to early development opportunities. Based on this potential a two-phase program of exploration is recommended as outlined in the following table:
Table XXV Bathurst Option Agreement – Proposed Budget 2006
ACTIVITY | UNITS |
| COST |
Phase I |
|
|
|
Geology (Salaries & Compilation) |
|
| $476,000 |
Geophysics (Titan-24 & Borehole Surveys) |
|
| $2,140,000 |
Diamond Drilling | 23,700 m |
| $2,370,000 |
Geochemistry |
|
| $14,000 |
Total Budget |
|
| $5,000,000 |
The phase II budget is expected to be similar to the Phase I budget in relative costs for geophysics and drilling, etc.
El Nino’s share of these proposed expenditures is $2,500,000 in Phase I and $2,500,000 in Phase II for a total of $5,000,000. The Phase I activities are designed to generate high priority diamond drilling targets and to provide for drill-testing of the highest priority targets. At the end of Phase I, results will be evaluated to prioritize areasfor further work. Since a number of high priority areas are already identified, the Phase II budget is not considered contingent upon favourable results from Phase I. on Agreement Project has sufficient merit to justify the proposed expenditures described above.
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2006/2007 Exploration Program
The 2006-2007 Bathurst exploration program was structured to utilize new technologies to detect buried mineralization that traditional exploration surveys fail to locate. The exploration program proposed was mainly comprised of drill testing a few remaining first priority airborne targets, as well as testing the ground deep penetrating geophysical targets generated by the Titan 24 surveys.
To accomplish this task, a detailed data review of specific target areas was completed to identify any economic potential at depth or along strike of known mineralization horizons such as between Brunswick No. 12 and Brunswick No. 6, west and east of Heath Steele, near Camel Back, at Fronsac North, and within the Flat Landing Brook general area. Based on the compilation results, a series of follow-up work surveys using new technology (Titan 24) have been proposed to investigate these areas at depth.
The 2006/2007 program was completed on March 31, 2007. In summary, a total of 220 line km of Titan 24 ground geophysical survey was completed; 17,088 metres was drilled in 42 diamond drill holes and a Heli-GeoTEM survey was completed over 3 grids totaling 291 line km. Several soil geochemical surveys were completed collecting 1,097 samples. Up to 5 diamond drill rigs were in operation during the diamond drilling program during which a total of 42 holes were completed for a total of 17,088 metres. In addition 341 new claims were staked. Total expenditures for the 2006/2007 program amounted to $5,056,176.00.
The first year the exploration program returned encouraging results particularly those summarized below:
•Camel Back Area: Hole ELN‐06‐095 drilled west of the Camel Back Deposit returned 2.2 meters at 4.93% Zn and 0.71% Pb including 1.3 meter at 7.48% Zn and 1.02% Pb from a 7.20 meter massive sulphide intercept (Sept. 13, 2006)
•Mount Fronsac North Deposit: The drilling along the Titan 24 anomaly located at a vertical depth of 300 meters and up dip from high grade historical intersections returned the following significant assay results (Nov. 17, 2006):
DDH | From (m) | To (m) | Width (m) | Zn % | Pb % | Ag g/t |
ELN 06-097 | 306.85 | 309.85 | 3.0 | 5.68 | 1.93 | 39.0 |
ELN 06-101 | 269.9 | 272.9 | 3.0 | 5.04 | 0.28 | 11.4 |
ELN 06-100 | 322.1 | 327 | 4.9 | 1.15 | 0.22 | 5.4 |
•Devil’s Elbow Area:Hole ELN 06-105 drill tested a Titan 24 target located east of the Devil’s Elbow Deposit 300 meters below surface and returned a composite intersection of the massive sulphide horizon grading at 0.58% Cu, 0.03% Pb, 0.20% Zn and 6.05 g/t Ag over 5.9 meters including an intercept of 1.06 % Cu over 1.0 meters.
•Gilmour South Trend: Hole ELN 07-129 intersected 3.39% Zn, 2.86% Pb, 0.15% Cu and 8.36 g/t Ag over 2.80 meters including 1.10 meters at 6.63% Zn, 5.65% Pb, 0.29% Cu and 16.10 g/t Ag).
Drill hole ELN‐07‐129 intersected a horizon of massive to semi-massive sulphide mineralization interpreted to represent the up‐dip, near surface, extension of the Gilmour South mineralized trend. The sulphide zone was intersected between 163.70 and 166.60 meters down hole with combined assay results grading 3.39% Zn, 2.86% Pb, 0.15% Cu and 8.36 g/t Ag over 2.80 meters including an intercept of 1.10 meters at 6.63% Zn, 5.65% Pb, 0.29% Cu and 16.10 g/t Ag. The Gilmour mineralized trend was originally discovered in 1977. The southern extension of this trend, Gilmour South, was discovered in 1995 and subsequently drilled on a 200 meter spaced drill pattern, by Noranda Exploration between 1995 and 2000. The mineralized trend consists of intermittent massive to semi‐massive sulphide mineralization of varying grades and thickness ranging from 18.20% Zn and 11.20% Pb over 0.22 meters to 1.10% Zn over 23.70 meters. The zone is untested from surface down to the 200 meter mark below surface and along most of the 1400 meter strike length extension. The mineralized trend occurs along the Brunswick Horizon in a geological setting similar to the Brunswick No.12 and No.6 deposits.
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•Titan 24: During the program, 42 diamond drill holes were performed including 17 drill holes (40%) that targeted Titan 24 anomalies. Drilling on the Titan 24 targets has returned sulphide mineralization (massive, semi‐massive or disseminated) as the source of the anomaly in 8 holes which represents 47%. ELN News Release April 19 2007
Quality Control
Drill core is logged at the Brunswick No. 12 minesite exploration core shack and mineralized interval samples are taken from the drill core (NQ size) sawed in half with one half sent to the Brunswick No. 12 laboratory and the other half retained for future reference. A strict QA/QC program is followed which includes mineralization standards, blanks and field duplicates for each batch of samples.
2007/2008 Exploration Programs
The province of New Brunswick has committed funding for the second and final year of the exploration . The 2007/2008 exploration program, budgeted at $5 million started on April 1st, 2007, and will terminate on March 31st, 2008. The program will comprise ground geophysical surveys (Titan 24), a review of the airborne Mega TEM data, soil geochemical surveys, followed by a diamond drilling program. It is currently proposed to survey five main target areas with the Titan 24 ground geophysical survey system totaling approximately 135 line km. A diamond drilling program testing the Titan 24 targets as well as a series of various types of targets will consist of in excess of 25,000 meters in approximately 50-60 diamond drill holes. Field work is scheduled to resume in June 2007 with line cutting, ground geophysics and diamond drilling.
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
A.
Operating Results
This discussion should be read in conjunction with the audited financial statements of the Company and related notes thereto included herein.
Twelve Months Ended January 31, 2007 Compared to Twelve Months Ended January 31, 2006
Overview
El Nino is an exploration stage company engaged in the acquisitions, exploration and development of mineral properties of merit in Canada with the aim of developing them to a stage where they can be exploited at a profit or to arrange joint ventures whereby other companies provide funding for development and exploitation.
The year ended January 31, 2007 resulted in a net loss of $2,973,538, which compares with a loss of $240,864 for the same period in 2006. General and administrative expenses for the year ended January 31, 2007 were $1,148,715, an increase of $1,043,512 over the same period in 2006. Consulting fees of $275,937 were recorded as compared to $18,590 during the previous year as the Company became active with the financing of several exploration projects. The total fair value of stock options that vested using the Black-Scholes Option Pricing Model resulted in stock-based compensation expense of $132,568 for the period ended January 31, 2007 compared to $ Nil for the previous year. The stock compensation expense has been allocated by expense category on the income statements. All other general and administrative costs increased when compared to the previous year due to increased activity. Travel costs of $142,424 were incurred compared to $6,446 as the Company was actively working on new acquisitions and financing in Europe in order to raise funds for the Bathurst, New Brunswick project and working capital.
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During the year ended January 31, 2007, the Company incurred mineral property expenditures of $2,265,417. Of this amount, $10,000 was paid as cash option payments and a further 30,000 shares were issued at a value of $12,000 for its Bancroft, Ontario properties. A $125,000 cash payment and 275,000 shares valued at $261,250 of CanAm Uranium Corp. were received as the Company optioned its Bancroft properties. During the year ended January 31, 2007, the Company advanced $2,500,000 to Xstrata for the Bathurst, New Brunswick project and incurred $2,204,283 on the project. The balance of $457,547 plus the amount of $2,577,032 that is held in escrow is shown as project advances of $3,034,579 as at January 31, 2007. The expenditure amount was matched by the Government of New Brunswick.
Shareholder relations costs of $73,100 and promotional activities undertaken by the Company, which included attendance at various trade shows, promotional literature and expanding the website cost $162,051 as the Company increased awareness on its exploration projects and corporate objectives
Twelve Months Ended January 31, 2006 Compared to Twelve Months Ended January 31, 2005
Overview
El Nino is an exploration stage company engaged in the acquisitions, exploration and development of mineral properties of merit in Canada with the aim of developing them to a stage where they can be exploited at a profit or to arrange joint ventures whereby other companies provide funding for development and exploitation.
Results of operations
The year ended January 31, 2006 resulted in a net loss of $240,864, which compares with a loss of $152,881 for the same period in 2005. The loss for 2006 has been reduced by $17,050 which is the tax benefit associated with the renounciation of flow-through shares. Even though the full amount of $17,050 has been recorded as a future income tax recovery, the company will probably never realize this benefit. General and administrative expenses for the year ended January 31, 2006 were $104,552 an increase of $15,152 over the same period in 2005. The Company adopted the new recommendations of CICA Handbook Section 3870, “Stock-Based Compensation and Other Stock-Based Payments”, effective to all awards granted on or after January 1, 2003. The new standard requires that all stock-based awards be measured and recognized using a fair value based method. In years prior to 2003, stock-based compen sation expense was only recognized when stock-based compensation awards were made to non-employees, while pro-forma disclosure was acceptable for awards made to employees. No stock options were granted during the year or during the previous year. All other general and administrative costs were relatively the same when compared to the previous year.
During the year ended January 31, 2006, the Company incurred mineral property expenditures of $153,362. Of this amount, $5,000 was paid as cash option payments on its Bancroft, Ontario properties. A further 85,000 shares were issued at a value of $31,250. $117,112 was spent on the Canadian properties. During the year, the Company terminated the Anderson Lake Property in Ontario.
Minimal shareholder relations and promotional activities were undertaken by the company at a cost of $ 6,446.
Twelve Months Ended January 31, 2005 Compared to Twelve Months Ended January 31, 2004
Results of Operation
The year period ended January 31, 2005 resulted in a net loss of $152,881, which compares with a loss of $127,030 for the same period in 2004. General and administrative expenses for the year ended January 31, 2005 were $89,400 a decrease of $35,091 over the same period in 2004. During the prior year, the Company adopted the new recommendations of CICA Handbook Section 3870, stock-based compensation and other stock-based payments, effective to all awards granted on or after 1 January 2003. The new standard requires that all stock-based awards made to employees and non-employees be measured and recognized using a fair value based method. In prior years, stock-based compensation expense was only recognized when stock-based compensation awards were made to non-employees, while pro-forma disclosure was acceptable for awards made to employees.
106
No stock options were granted during the year however in the prior year $38,516 was reported. This amount was included in Consulting fees of $53,939 for the previous year. All other general and administrative costs were relatively the same when compared to the previous year.
During the year ended January 31, 2005, the Company entered into an agreement to acquire one mineral property in Ontario, Canada. A cash option payment of $10,000 has been paid. Subsequent to year end, the Company entered into agreements to acquire several additional mineral properties in Ontario and incurred $48,938 in staking costs. Subsequent to year end, the Company terminated the Sassy gold Property in Alaska for no further obligation under the agreement.
No shareholder relations and promotional activities were undertaken by the Company.
B.
Liquidity and Capital Resources
Twelve Months Ended January 31, 2007 Compared to Twelve Months Ended January 31, 2006
At January 31, 2007, the Company’s working capital, defined as current assets less project advances less current liabilities, was $223,322 compared with working capital of $266,621 at January 31, 2006. During the year, 9,916,907 shares were issued for gross proceeds of $6,255,909. A further 111,833 warrants were exercised for proceeds of $44,767 and 50,000 options were exercised for proceeds of $7,500. Subsequent to year-end, the Company closed two private placements for gross proceeds of $1,500,000. The private placements were non-flow-through unit offerings including one common share and one-half share purchase warrant. Each full warrant will allow the holder to acquire an additional common share are $0.55 for a period of one year. The Company paid issuance costs of $96,000 in commissions, finder’s fees of $22,720 and issued 240,000 broker warrants with the same terms as the unit warrants.
The Company has total issued and outstanding of 17,986,953 shares at January 31, 2007.
Twelve Months Ended January 31, 2006 Compared to Twelve Months Ended January 31, 2005
At January 31, 2006, the Company’s working capital, defined as current assets less current liabilities, was $266,621 compared with working capital of $71,230 at January 31, 2005. During the year, 416,667 shares were issued for gross proceeds of $150,000. A further 1,710,000 warrants were exercised for proceeds of $272,450 and 10,000 options were exercised for proceeds of $1,500. Subsequent to year-end, the Company closed a 1,600,000 unit private placement for gross proceeds of $400,000 and announced a 600,000 unit private placement for gross proceeds of $240,000.
The Company has total issued and outstanding of 7,878,213 shares at January 31, 2006.
Twelve Months Ended January 31, 2005 Compared to Twelve Months Ended January 31, 2004
At January 31, 2005, the Company’s working capital, defined as current assets less current liabilities, was $71,230 compared with working capital of $12,947 at January 31, 2004. During the year, 1,085,000 shares were issued for gross proceeds of $211,050. Subsequent to year end, the Company issued 250,000 shares at a price of $0.40 per share for gross proceeds of $100,000. Additional financing will be needed to continue operations.
C.
Research and Development, Patents and Licenses, etc.
As the Company is a mineral exploration company with no research and development, the information required by this section is inapplicable.
D.
Trend Information
As the Company is a mineral exploration company with no producing properties, the information required by this section is inapplicable.
E.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
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F.
Tabular Disclosure of Contractual Obligations
The Company is committed under an operating lease with a company for its office premises with the following lease payments to the expiration of the lease on November 30, 2011.
| 2008 | 2009 | 2010 | 2011 | 2012 | Thereafter |
Office lease | $38,029 | 38,029 | 38,029 | 38,029 | 31,691 | - |
Bathurst Project, Bathhurst, New Brunswick
By agreement dated May 26, 2006, the Company entered into an option agreement with Xstrata plc (“Xstrata”) formerly Falconbridge Limited to explore the Bathhurst Mining Camp in New Brunswick.
The Company will initially have the opportunity to earn a 50% interest in a large number of mineral claims and two permitted areas held by Xstrata occupying approximately 108,800 hectares. In order to vest with a 50% interest, the Company is required to spend $5.0 million on exploration by March 31, 2008 with a minimum expenditure of $2.5 million by March 31, 2007. As at January 31, 2007, the Company advanced the minimum $2.5 million as required to Xstrata and Xstrata had expended $2,042,453 on exploration. The balance of $457,547 plus the amount of $2,577,032 that is held in escrow is shown as project advances of $3,034,579 at January 31, 2007.
Subsequent to year end, the first $2.5 million has been spent and the remaining $2.5 million has been raised and is in escrow. The New Brunswick Government has contributed $2.5 million to March 2007 and a further $2.0 million has been committed to March 2008.
G.
Safe Harbour
The Annual Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward looking statements". Such st atements are included, among other places in this Annual Report, in the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Business" and "Description of Property". Forward-looking statements are based on expectations, estimated and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. These include, but are not limited to, the risks of mining industry (for example, operational risks of exploring for, developing and producing crude oil and natural gas, risks and uncertainties involving geology of mineral deposits, the uncertainty of reserve estimates and estimates relating to production volumes, cost and expense projections, potential cost overruns and health, safety and environmental risks), risks relating to the Company's properties (for example, lack of op erating history and transportation), fluctuations in mineral prices and exchange rates and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures (collectively "Cautionary Statements"). Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
The following terms have the meanings set out below:
Chief Executive Officer (“CEO”) means each individual who served as chief executive officer of your company or acted in a similar capacity during the most recently completed financial year.
Chief Financial Officer (“CFO”) means each individual who served as chief financial officer of your company or acted in a similar capacity during the most recently completed financial year.
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Long Term Incentive Plan (“LTIP”) means a plan providing compensation intended to motivate performance over a period greater than one financial year. LTIPs do not include option or SAR plans or plans for compensation through shares or units that are subject to restrictions on resale.
Named Executive Officers (“NEOs”) means the following individuals:
(a) each CEO; (b) each CFO; (c) each of the Company’s three most highly compensated executive officers, other than the CEO, who were serving as executive officers at the end of the most recently completed financial year and whose total salary and bonus exceeds $150,000; and (d) any additional individuals for whom disclosure would have been provided under (c) except that the individual was not serving as an officer of the Company at the end of the most recently completed financial year.
Stock Appreciation Rights (“SARs”) means a right, granted by a company or any of its subsidiaries as compensation for employment services or office to receive cash or an issue or transfer of securities based wholly or in part on changes in the trading price of publicly traded securities.
A.
Directors, Senior Management
The following table states the name, province or state, and country of residence of each of the directors and executive officers of the Company, the positions and offices presently held by them and the period or periods of time during which each has served as a director of the Company.
Name, Position in Company and Province or State and Country of Residence | Period(s) a Director/Officer of the Company |
Harry Barr Vancouver, BC, Canada Chairman, CEO & Director | Since 1999 |
Bernard Barlin Hampshire, UK Director | Since 2004 |
Michael Philpot Surrey, BC, Canada Director | Since 2004 |
Spiros Cacos Vancouver, BC, Canada Director | Since 2005 |
Jean Luc Roy Vancouver, BC, Canada Proposed Director | Nominated |
Morris Medd Ontario, Canada Proposed Director | Nominated |
John Royall West Vancouver, BC Proposed Director | Nominated |
Gordon Steblin Richmond, BC, Canada CFO | Since 2002 |
Taryn Downing North Vancouver, BC, Canada Corporate Secretary | Since 1999 |
109
Additional details including principal occupation for the past five years of the above directors or executive officers are as follows:
Harry Barr – Chairman, CEO, and Director
Mr. Barr has been involved in the mining industry for over 20 years and has an extensive background in business management, corporate finance, and marketing. Mr. Barr is currently President, CEO, & Director of Pacific North West Capital Corp. (1996–present); President, CEO, & Director of CanAlaska Uranium Ltd. (1985–2004); Chairman, COO & Director of CanAlaska Uranium Ltd. (2004 – present); President & Director of Freegold Ventures Limited (1999 – 2005); and Chairman & Director of Freegold Ventures Limited (2005–present); Chairman (2006-present), CEO and Director (1999-present) President and CEO (2003-2006) of El Nino Ventures Inc.
Bernard Barlin- Director
Mr. Barlin has over 40 years experience in the mining industry and has worked as a consulting metallurgist with Hudson Bay Mining and Smelter Company. He has a degree in Engineering from the University of Witwatersrand in Johannesburg, and is a registered professional engineer in Manitoba and the U.K. Mr. Barlin is currently a Director of CanAlaska Uranium Ltd. (1989-present); Pacific North West Capital Corp. (2000-present); El Nino Ventures Inc. (2004-present) and Freegold Ventures Limited. (1985-present).
Michael Philpot - Director
Mr. Philpot BSc, MBA, has been a director or executive officer of several public companies for over 25 years. He currently holds an executive position and directorship with CORO Mining Corp., a private mining company. He has been working in the mining industry since 1979 and has held various executive positions with several mining companies including First Quantum Minerals Ltd. Mr. Philpot obtained his BSc at the University of British Columbia in 1978 and his MBA from City University in 1985.
Spiros Cacos – Director
Mr. Cacos has extensive experience in Investor Relations and Corporate Finance, specializing in public mineral exploration companies. He brings valued experience to the Board in dealing with financial matters, public relations and corporate strategy. He has an extensive network of contacts with the financial community including fund managers, industry analysts and media throughout North America, the United Kingdom and continental Europe. He holds a Master of Arts degree in International Relations & Diplomacy from Paris, France and a Bachelor of Arts degree from Simon Fraser University.
Jean Luc Roy – President, COO and Proposed Director
Mr. Roy has over twenty years experience in the Mining Industry, mostly in Africa for companies such as International Gold Resources, Ashanti Goldfields Inc., Semafo, and First Quantum Minerals.
Morris Medd – Proposed Director
Mr. Medd is an independent businessman. He retired as President of the Redpath Group of Companies (1999-2004), world leaders in underground mine development. He has served on the board of the Ontario Mining Association.
John Royall – Proposed Director
Mr. Royall received a B.Sc.(Hons) degree from Leicester University, England in 1960 and a Diploma, University College, London University, England in 1961. He has over 40 years experience in mineral exploration in Canada, USA, Ireland, Chile, and Mexico including positions as Manager of Canadian Exploration for Union Carbide Exploration Corporation, and Director of Exploration, Precious Metals, Union Carbide Exploration Corporation from 1977-1983 and General Manager Exploration and Development, Westfield Minerals Limited from 1983-1990. He is primarily concerned with advising on the acquisition of nickel and platinum group metal mineral properties and liaising with the Company’s technical team.
110
Gordon Steblin – Chief Financial Officer
Mr. Steblin, B. Comm., CGA, is currently the CFO of Pacific North West Capital Corp., Freegold Ventures Limited, El Nino Ventures Inc. and CanAlaska Uranium Ltd. (2002-present) and accountant of Pacific North West Capital Corp. (1996-2002), Freegold Ventures Limited (1994-2002), CanAlaska Ventures Ltd. (1994-2002), and El Nino Ventures Inc. (1999-2002).
Taryn Downing – Corporate Secretary
Ms. Downing is currently an administrator with over 25 years experience in both the public and private sectors. Ms. Downing is currently the Corporate Secretary for Pacific North West Capital Corp. (1998-present), CanAlaska Uranium Ltd. and Freegold Ventures Limited (1995–present) and El Nino Ventures Inc. from (1999-present).
B.
Compensation
Directors of the Company do not receive fees or other cash compensation in their capacity as directors. The directors may be reimbursed for actual expenses reasonably incurred in connection with the performance of their duties as directors. Directors are also eligible to receive incentive stock options to purchase common shares of the Company.
The following table details the compensation paid to the persons who held the position of Chief Executive Officer and the next highest paid executive officer of the Company.
|
| Annual Compensation | Long Term Compensation | |||||
|
|
|
|
| Awards | Payouts |
| |
Name and Principal Position (a) | Year Ended (b) | Salary ($) (c) | Bonus(1) ($) (d) | Other Annual Compen-sation(1) ($) (e) | Securities Under Options/SARs Granted (#) (f) | Shares or Units Subject to Resale Restrictions ($) (g) | LTIP Payouts ($) (h) | All Other Compen-sation ($) (i) |
Jean Luc President & Harry Barr, Chairman & Gordon Steblin, CFO | 2007 2007 2006 2005 2007 2006 2005 | Nil Nil Nil Nil Nil Nil Nil | 10,000 16,922 Nil Nil 13,231 Nil Nil | 88,000 24,000 24,000 24,000 19,563 3,300 2,200 | 700,000(3) Nil Nil Nil Nil Nil Nil | Nil Nil Nil Nil Nil Nil Nil | Nil Nil Nil Nil Nil Nil Nil | Nil Nil Nil Nil Nil Nil Nil |
Notes
(1)
Fees paid through a service Company.
(2)
Mr. Jean Luc Roy was appointed President and COO of the Company on May 10, 2006.
(3)
These options are vested quarterly over a period of 36 months.
Compensation of Executive Officers
See above summary compensation table.
111
During the year ended January 31, 2007, there were 893,642 incentive stock options granted to Directors and Executive Officers during the Company’s most recently completed financial year.
The table below sets out the number of securities under option that are held by the Company’s Directors and Executive Officers and the number and value of unexercised options as at January 31, 2007.
Name of Director and/or Executive Officer | Securities Under Option | Exercise Price | Value of Unexercised in the Money Options at Jan 31, 2007(1) | Expiry Date |
Jean Luc Roy | 700,000 | $0.50 | Nil | Mar 29/11 |
Harry Barr Harry Barr | 79,500 28,642 | 0.15 0.50 | $23,055 Nil | Sept 10/08 Mar 29/11 |
Canadian Gravity Recovery Inc. (2) | 79,500 | 0.15 | $23,055 | Sept 10/08 |
Michael Philpot | 40,000 | $0.50 | Nil | Mar 29/11 |
Spiros Cacos | 30,000 | $0.50 | Nil | Mar 29/11 |
Bernard Barlin | 15,000 | $0.50 | Nil | Mar 29/11 |
Gordon Steblin | 40,000 40,000 | $0.15 $0.50 | Nil Nil | Sept 10/08 Mar 29/11 |
Taryn Downing | 40,000 40,000 | $0.15 $0.50 | Nil Nil | Sept 10/08 Mar 29/11 |
(1)
Value of Unexercised Options is equal to the difference between the closing price of the shares of the Company on the TSX Venture Exchange on January 31, 2007 of $0.44 and the exercise price of options outstanding, multiplied by the number of shares purchasable under such options.
(2)
A company wholly-owned by Harry Barr.
(3)
Mr. Roy was appointed President & COO May 10, 2006.
Aggregated Option/SAR Exercises During the Most Recently Completed Financial Year and Financial Year end Option/SARs Values
The table below sets out, on an aggregate basis, the number of shares of the Company acquired through stock options by the NEOs under the Company’s Stock Option Plan during the financial year ended January 31, 2007 and the number and value of unexercised options as at January 31, 2007.
Name (a) | No. of Shares Acquired on Exercise (#) (b) | Aggregate Value Realized(1) ($) (c) | No. of Unexercised Options (#) Exercisable/Unexercisable (d) | Value of Unexercised in-the-Money ($)(2) Exercisable/Unexercisable (e) |
Jean Luc Roy, President & COO | Nil | Nil | 116,666/583,334 | 0 |
Canadian Gravity Recovery Inc.(3) | Nil | Nil | 79,500/0 | $23,055/0 |
Harry Barr, Chairman & CEO | Nil | Nil | 89,047/19,095 | $23,055/0 |
Gordon Steblin, CFO | Nil | Nil | 53,333/26,667 | $11,600/0 |
(1)
Aggregate Value Realized is the difference between the market price of the Company’s shares on the date of exercise and the option exercise price, multiplied by the number of shares acquired.
(2)
Value of Unexercised Options is equal to the difference between the closing price of the shares of the Company on the TSX Venture Exchange on January 31, 2007 of $0.44 and the exercise price of options outstanding, multiplied by the number of shares purchasable under such options.
(3)
A corporation wholly-owned by Harry Barr.
(4)
Mr. Roy was appointed President & COO May 10, 2006.
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Option and SARs cancelled/expired to NEOs during the most recently completed financial year.
During the financial year ended January 31, 2007 no options to NEOs were cancelled or expired.
Option and SAR Repricings
During the financial year ended January 31, 2007 no options to NEOs were repriced.
Long Term Incentive Plans (LTIPs) – Awards in Most Recently Completed Financial Year
The Company currently has no LTIP, which would provide compensation intended to motivate performance over a period greater than one financial year.
Defined Benefit or Actuarial Plan Disclosure
The Company does not have defined benefit or actuarial plans.
Termination of Employment, Change in Responsibilities and Employment Contracts
There are no employment contracts between the Company and the NEOs. Refer to “Compensation to Directors” below for information on other compensation paid to the NEOs during the financial year ended January 31, 2007.
There is no compensatory plan or arrangement with respect to the NEOs resulting from the resignation, retirement or any other termination of employment of the officers’ employment or from a change of the NEOs responsibilities following a change in control.
Composition of the Compensation Committee
The Compensation Committee is comprised of Bernard Barlin, Michael Philpot, and Spiros Cacos. None of these directors are officers or employees of the Company nor have they formerly been officers or employees of the Company. Applying the definition set out in section 1.4 of MI 52-110, the three members of the Compensation Committee are independent.
The Compensation Committee reviews the compensation paid to directors, management, and employees based on such factors as time commitment, comparative fees paid by other companies in the industry in North America and level of responsibility and the Company’s current position as an exploration company with limited operating revenue.
Report on Executive Compensation
The Company’s executive compensation program is administered by the Board of Directors and is designed to provide incentives for the enhancement of shareholder value. The overall objectives are to attract and retain qualified executives critical to the success of the Company, to provide fair and competitive compensation, to align the interest of management with those of shareholders and to reward corporate and individual performance. The compensation package has been structured so as to link shareholder return, measured by the change in the share price, with executive compensation through the use of stock options as the primary element of variable compensation. The Company does not currently offer long-term incentive plans or pension plans to its executive officers.
The relative emphasis of the Company on cash compensation and incentive stock options is variable. The Company’s cash compensation to named executive officers tends to remain more or less constant, while any options are left to the discretion of the Board of Directors and therefore may fluctuate from year to year.
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The Company takes into consideration the issuance of option grants made in previous years, the number of options that remain outstanding along with the number of options remaining issuable under the Company’s stock option plan.
The Company bases the compensation for the Company’s executive officers on the years of service with the Company, responsibilities of each officer and their duties in that position. The Company also bases compensation on the performance of each officer. The Company believes that stock options can create a strong incentive to the performance of each officer and they are intended to recognize extra contributions and achievements towards the goals of the Company.
The Company’s Board of Directors, when determining cash compensation to the CEO takes into consideration the extensive experience in the mining industry, responsibilities and duties as CEO, as well as personal risks and contributions to the Company’s success. The CEO receives a base cash compensation that the Company feels is in line with that paid by similar companies in North America; however no formal survey was completed by the Compensation Committee or the Board of Directors.
Compensation to Directors
Directors of the Company do not receive fees or other cash compensation in their capacity as directors. The Directors may be reimbursed for actual expenses reasonably incurred in connection with the performance of their duties as directors. Directors are also eligible to receive incentive stock options to purchase shares of the Company.
During the year ended January 31, 2007, Harry Barr received $40,922 for management services and bonus.
Indebtedness of Directors and Executive Officers
None of the current or former directors, executive officers or employees of the Company or persons who were directors, executive officers or employees of the Company at any time during the Company’s last completed financial year, none of the proposed nominees for election of directors of the Company and none of the associates or affiliates of such persons are or have been indebted to the Company (or its subsidiaries) at any time since the beginning of the last completed financial year ending January 31, 2007. Furthermore, none of such persons were indebted to a third party during such period where their indebtedness was the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company or its subsidiaries.
Interest of Management and Insiders in Material Transactions
None of the directors or executive officers of the Company, nor any proposed nominee for election as a Director of the Company, nor any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all outstanding shares of the Company, nor any associate or affiliate of the foregoing persons has any material interest, direct or indirect, in any transaction since the commencement of the Company's last completed financial year or in any proposed transaction which, in either case, has or will materially affect the Company, except as disclosed herein.
Management Contracts
No management functions of the Company or any subsidiary are to any substantial degree performed by a person other than the directors or executive officers of the Company or subsidiary, except as disclosed herein.
Appointment of Auditors
The Company’s auditors for the year ended January 31, 2006, Staley Okada & Partners entered into a transaction with PricewaterhouseCoopers LLP. The directors subsequently appointed PricewaterhouseCoopers LLP as the Company’s auditors for the year ending January 31, 2007. PricewaterhouseCoopers LLP will be nominated at the
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Company’s Annual General Meeting for election as the Company’s auditors for the ensuing year. Remuneration of PricewaterhouseCoopers LLP is to be determined by the Company’s Board of Directors.
C.
Board Practices
The Board is currently composed of four directors.
Statement Of Corporate Governance Practices
Corporate governance relates to activities of the Board, the members of which are elected by and are accountable to the shareholders, and takes into account the role of the individual members of management who are appointed by the Board and who are charged with the day to day management of the Company. The Board is committed to sound corporate governance practices which are both in the interest of its shareholders and contribute to effective and efficient decision making. National Instrument 58-101 –Disclosure of Corporate Governance Practices (“NI 58-101”) requires that each reporting company disclose its corporate governance practices on an annual basis. The Company’s general approach to corporate governance is summarized below.
Independence
Section 1.4 of Multilateral Instrument 52-110 –Audit Committees (“MI 52-110”) sets out the standard for director independence. Under MI 52-110, a director is independent if he has no direct or indirect material relationship with the Company. A material relationship is a relationship which could, in the view of the Board, be reasonably expected to interfere with the exercise of a director’s independent judgment. MI 52-110 also sets out certain situations where a director will automatically be considered to have a material relationship to the Company.
Applying the definition set out in section 1.4 of MI 52-110, three of the four members of the Board are independent. The members who are independent are Michael Philpot, Bernard Barlin. and Spiros Cacos. Harry Barr is not independent by virtue of the fact that he is an executive officer of the Company (Mr. Barr has been the President and CEO of the Company since June, 2003).
In order to facilitate its exercise of independent judgment in carrying out the responsibilities of the Board of Directors, the Board ensures that a majority of independent Directors sit on all Board committees.
Other Directorships
In addition to their positions on the Board, the following Directors also serve as Directors of the following reporting issuers or reporting issuer equivalents:
Name of Director | Reporting Issuer(s) or Equivalent(s) |
Harry Barr | CanAlaska Uranium Ltd. Pacific North West Capital Corp. Freegold Ventures Limited |
Bernard Barlin | CanAlaska Uranium Ltd. Pacific North West Capital Corp. Freegold Ventures Limited |
Orientation and Continuing Education
Board turnover is relatively rare and, accordingly, the Company has not adopted a formalized process of orientation for new Board members. Orientation of new directors is conducted on an ad hoc basis.
Directors are kept informed as to matters impacting, or which may impact, the Company’s operations through reports and presentations at the Board meetings. Directors are also provided the opportunity to meet with senior management and other employees, advisors and Directors, who can answer any questions that may arise.
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Ethical Business Conduct
The Board has adopted a Code of Business Conduct and Ethics, a copy of which is attached hereto as Exhibit 4.
Nomination of Directors
Board turnover is relatively rare and accordingly the Board does not have a nominating committee or a formal procedure with respect to the nomination of directors. The nominees are generally the result of recruitment efforts by the Board members, including both formal and informal discussions among Board members.
Board Committees
Committees of the Board are in integral part of the Company’s governance structure. There are three standing committees (the“Committees”), established to devote the necessary expertise and resources to particular areas, and to enhance the quality of discussion at Board meetings. The Committees facilitate effective Board decision-making by providing recommendations to the Board on matters within their respective responsibilities. The Board believes that the Committees assist in the effective functioning of the Board and that the composition of the Committees should ensure that the views of unrelated and independent directors are effectively represented.
A summary of the responsibilities and activities and the membership of each of the Committees is set out below:
Audit Committee
The Audit Committee is comprised of Michael Philpot, Chairman of the Audit Committee, Bernard Barlin and Spiros Cacos who are financially literate in accordance with Section 1.5 of MI 52-110 which states that an individual is financially literate if he or she has the ability to read and understand a set of financial statements that presents a range and level of complexity of accounting issues that are generally comparable to the range and complexity of the issues that can reasonably be expected to be raised by the issuer’s financial statements.
Each of the members of the Audit Committee are independent in accordance with the standards of director independence set out under MI 52-110.
Mr. Michael Philpot, BSc, MBA has been a director or executive officer of several public companies for over 25 years. He currently holds an executive position and directorship with CORO Mining Corp., a private mining company. He has been working in the mining industry since 1979 and has held various executive positions with several mining companies including First Quantum Minerals Ltd. Mr. Philpot obtained his BSc at the University of British Columbia in 1978 and his MBA from City University in 1985.
Mr. Bernard Barlin, B.Sc. (Eng.), P. Eng., C. Eng has been a director or executive officer of public companies for over 30 years. Mr. Barlin has over 40 years experience in the mining industry and worked as a consulting metallurgist with Hudson Bay Mining and Smelter Company. He has a degree in Engineering from the University of Witwatersrand in Johannesburg, and is a registered professional engineer in Manitoba and the U.K. Mr. Barlin is retired.
Mr. Spiros Cacos, MA has extensive experience in Investor Relations and Corporate Finance, specializing in public mineral exploration companies. He brings valued experience to the Board in dealing with financial matters, public relations and corporate strategy. He has an extensive network of contacts with the financial community including fund managers, industry analysts and media throughout North America, the United Kingdom and continental Europe. He holds a Master of Arts degree in International Relations & Diplomacy from Paris, France and a Bachelor of Arts degree from Simon Fraser University.
The Audit Committee reviews and recommends to the Board for approval the annual financial statements and the annual report of the Company. The quarterly financial statements of the Company are reviewed by the Audit Committee and the Board. In addition, the Audit Committee is charged with the responsibility of monitoring the integrity of the Company’s internal controls and management information systems. For the purposes of performing these duties, the members of the Audit Committee have the right, at all times, to inspect all of the books and financial records of the Company and to discuss with management and the auditors of the Company any accounts, records and matters relating to the financial statements of the Company.
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Audit Fees
The Audit Committee must pre-approve any engagement of the external auditors for any non-audit services to the Company in accordance with applicable law and policies and procedures to be approved by the Board. The engagement of non-audit services will be considered by the Company's Board of Directors on a case by case basis.
In the following table, “audit fees” are fees billed by the Company's external auditors for services provided in auditing the Company's annual financial statements for the subject year. “Audit-relatedfees” are fees not included in audit fees that are billed by the auditors for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements. “Tax fees” are fees billed by the auditors for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditors for products and services not included in the foregoing categories.
The fees paid by the Company to its auditors for each of the last two fiscal years, by category, are as follows:
Financial Year Ending | Audit Fees | Audit Related Fees | Tax Fees | All Other Fees |
January 31, 2007 | $9573 | NIL | $761 | NIL |
January 31, 2006 | $6,300 | NIL | $700 | NIL |
Compensation Committee
During the fiscal year ended January 31, 2007, the Board of Directors appointed a Compensation Committee composed of three directors: Michael Philpot, Bernard Barlin, and Spiros Cacos. Please see the section above entitled “Composition of the Compensation Committee” for further information on this Committee.
Corporate Governance Committee
During the fiscal year ended January 31, 2007, the Board of Directors appointed a Corporate Governance Committee composed of three directors: Michael Philpot, Bernard Barlin, and Spiros Cacos. The Corporate Governance Committee is responsible for reviewing matters relating to corporate governance and making recommendations to the Board with respect thereto.
The Company is relying on the exemption provided by section 6.1 of MI 52-110 which provides that the Company, as a venture issuer, is not required to comply with Part 5 (Reporting Obligations) of MI 52-110.
D.
Employees
During the fiscal year ended January 31, 2007, the Company had no employees and 6 consultants.
E.
Share Ownership
The following table sets forth the share ownership of those persons listed in subsection 6.B above and the consultants of the Company. The table below includes details of all options to purchase shares of the Company as at May 3, 2007.
Name | # of common shares held at May 3/07 | # of Options and/or Warrants held at May 3/07 | Date of Grant | Exercise Price | Expiry Date |
Jean Luc Roy(1) | 144,000 | 700,000 (option) 80,000 (warrant) | Mar 29/06 Apr 24/06 | $0.50 $.50 | Mar 29/11 Apr 24/08 |
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Harry Barr(2) | 2,668,049 | 159,000(option)(3) 28,642 (option) 15,000 (warrant) 6,240 (warrant) | Sept 10/03 Mar 29/06 Apr 24/06 Aug 29/07 | $0.15 $0.50 $0.50 $1.00 | Sept 10/08 Mar 29/11 Apr 24/08 Aug 29/07 |
Bernard Barlin | Nil | 15,000 (option) | Mar 29/06 | $0.50 | Mar 29/11 |
Michael Philpot | 132,500 | 40,000 (option) 20,000 (warrant) (4) | Mar 29/06 Apr 24/06 | $0.50 $0.50 | Mar 29/11 Apr 24/08 |
Taryn Downing | 153,500 | 40,000 (option) 40,000 (option) 30,000 (warrant) 3,000 (warrant) | Sept 10/03 Mar 29/06 Apr 24/06 Aug 29/06 | $0.15 $0.50 $0.50 $1.00 | Sept 10/08 Mar 29/11 Apr 24/08 Aug 29/07 |
Gordon Steblin | 115,500 | 40,000 (option) 40,000 (option) 30,000 (warrant) 3,000 (warrant) | Sept 10/03 Mar 29/06 Apr 24/06 Aug 29/06 | $0.15 $0.50 $0.50 $1.00 | Sept 10/08 Mar 29/11 Apr 24/08 Aug 29/07 |
Spiros Cacos | 55,000 | 30,000 (option) 15,000 (warrant) 7,500 (warrant) | Mar 29/06 Apr 24/06 Aug 29/06 | $0.50 $0.50 $1.00 | Mar 29/11 Apr 24/08 Aug 29/07 |
(1)
Mr. Jean Luc Roy was appointed President and COO of the Company May 10, 2006.
(2)
Of the 2,668,049 shares owned by Harry Barr, 745,511 shares are owned directly; 1,102,550 shares are owned by Canadian Gravity Recovery Inc., a corporation wholly owned by Mr. Barr; 249,988 shares are owned by 293020 BC Ltd., a corporation wholly owned by Mr. Barr; 140,000 shares are owned by 607767 BC Ltd. a corporation wholly owned by Mr. Barr; and 430,000 shares are owned by Evolution Gold Resources Inc. a corporation wholly owned by Mr. Barr.
(3)
Of the 159,000 stock options beneficially owned by Harry Barr, 79,500 are owned directly and 79,500 are owned indirectly.
(4)
These warrants are held by Protec Development Inc. a corporation wholly owned by Mr. Philpot.
Amendment to Stock Option Plan
Disinterested shareholders of the Company (being those shareholders who are not Insiders of the Company as that term is defined under the policies of the TSX Venture Exchange) will be asked to approve, by simple majority of the disinterested shareholders, the amendment to the Company’s Stock Option Plan (the “Plan”) to increase the maximum number of shares of the Company which may be allocated for issuance pursuant to incentive stock options under the Plan from 2,037,642 to 4,353,390 shares, representing 20% of the issued and outstanding shares of the Company. Upon receipt of disinterested shareholder approval to this amendment, the Company will seek approval to same from the TSX Venture Exchange. Both shareholder approval and TSX Venture Exchange approval are required before the amendment to the Plan may be implemented.
The Plan currently provides that the aggregate number of shares of the Company that may be issued under the Plan shall not exceed 2,037,642 shares. As of the Record Date 1,527,642 shares issuable under the Plan have been issued or reserved for issuance as follows:
Shares issued upon exercise of incentive stock options
60,000
Shares reserved for issuance pursuant to unexercised
incentive stock options
1,527,642
Unallocated shares available for future grants of
incentive stock options
450,000
Total:
2,037,642
The Company believes that awards under the Plan are an effective means of rewarding corporate and individual performance. To provide the Company with the continued flexibility of granting such awards under the Plan, the Company is seeking approval from disinterested shareholders at the Meeting to increase the number of shares of the Company issuable under the Plan to a maximum of 4,353,390 shares.
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Amendment to Previously Granted Incentive Stock Options
Disinterested shareholders of the Company (being those shareholders who are not Insiders of the Company as that term is defined under the policies of the TSX Venture Exchange) will be asked to approve, by simple majority of the disinterested shareholders, any amendments to incentive stock options granted to Insiders of the Company, including but not limited to, any changes in the exercise price or expiry date of such incentive stock options. Any such amendments will also require the prior approval of the TSX Venture Exchange before they may be implemented.
Performance Shares
Subject to regulatory approval and policies of the regulators and exchanges at the time, the Company requests the approval of the shareholders to permit the Company to issue up to 1,088,347 nominal value performance shares, which sum is equal to 5% of the Company’s current issued and outstanding shares as at the Record Date (being 21,766,953 shares), the issuance of which performance shares shall be, at the discretion of the Board, to such arm’s length parties as the Board considers desirable to attract to the Company for such purposes as management experience, operations experience, financial expertise, technical expertise, industry profile and other such characteristics in the discretion of the Board.
At the Company’s 2005 and 2006 Annual General Meeting, the shareholders approved the issuance of up to 807,487 nominal value performance shares (298,077 in 2005 and 509,410 in 2006). To date, none of these shares have been allotted or issued. At the time of shareholder approval in 2005, the 298,077 shares represented 5% of the Company’s then issued and outstanding shares. At the time of shareholder approval in 2006, the 509,410 represented 5% of the Company’s then issued and outstanding shares. If the shareholders approve the additional 1,088,347 performance shares, the Company will have authorization to issue up to a total of 1,895,834 shares as performance shares which as of Record Date represent 8.7% of the Company’s issued and outstanding shares.
Options and Other Rights to Purchase Shares
Options and Other Rights to Purchase Shares
The following table summarizes the issued and outstanding options as at January 31, 2007.
Number Outstanding 31 January 2006 | Granted | Exercised | Cancelled | Expired | Number Outstanding 31 January 2007 | Exercise Price Per Share | Expiry Date |
|
|
|
|
|
| ||
319,000 | - | (50,000) | - | - | 269,000 | $0.15 | 10 September 2008 |
- | 1,588,642 | - | (330,000) | - | 1,258,642 | $0.50 | 29 March 2011 |
319,000 | 1,588,642 | (50,000) | (330,000) | - | 1,527,642 |
|
|
During the year ended January 31, 2007 there were 1,588,642 options granted and 330,000 options cancelled or expired to directors, officers, consultants and employees pursuant to the Company’s 2006 Plan. As of January 31, 2007 there were 1,527,642 outstanding options issued under the Company’s 2006 Plan.
Optionee | Number of Shares Granted | Date of Grant | Exercise Price ($/Security) | Expiration Date |
Director/Officer Employee/Consultants | 893,642 695,999 | March 29, 2006 March 29, 2006 | $0.50 $0.50 | March 29, 2011 March 29, 2011 |
| 1,588,642 |
|
|
|
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The following table sets out the financial value of options exercised during the Company’s most recently completed financial year by directors, executive officers and others.
Optionee | Number of Shares Exercised | Date of Grant | Exercise Price ($/Security) | Expiration Date |
Consultant | 50,000 | September 10, 2003 | $0.15 | September 10, 2008 |
| 50,000 |
|
|
|
The following table sets out the options cancelled or expired during the Company’s most recently completed financial year to directors, executive officers and others.
Optionee | Number of Shares Cancelled/Expired | Date of Grant | Exercise Price ($/Security) | Expiration Date |
Employees / Consultants | 330,000 | March 29/06 | $0.50 | March 29/11 |
| 330,000 |
|
|
|
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major Shareholders
To the knowledge of the directors and executive officers of the Company, and based upon the Company’s review of the records maintained by Computershare Investor Services Inc. and insider reports filed with System for Electronic Disclosure by Insiders (“SEDI”), as at May 3, 2007, the following shareholders beneficially owned, directly or indirectly, or exercised control or direction over, shares carrying more than 5% of the voting rights attached to all outstanding shares of the Company:
Shareholder Name and Address | Number of Shares Held | Percentage of Issued Shares |
CDS & Company(1) 25Esplanade Box 1038, Station A Toronto, ON M5E 1W5 | 13,907,640(2) | 63.9% |
Canaccord Capital Corporation 2200 – 609 Granville Street Vancouver, BC V7Y 1H2 | 2,800,000 | 12.9% |
Harry Barr 2303 West 41st Avenue Vancouver, BC V6M 2A3 | 2,668,049(3) | 12.3% |
Notes
(1)
CDS & Co. is a depository, the Company has no knowledge as to the beneficial ownership of these shares.
(2)
The information as to the shares beneficially owned by CDS is not within the knowledge of the Company and has been extracted from the register of shareholders maintained by the registrar and transfer agent for the Company’s shares.
(3)
Of the 2,668,049 shares owned by Harry Barr, 745,511 shares are owned directly; 1,102,550 shares are owned by Canadian Gravity Recovery Inc., a corporation wholly owned by Mr. Barr; 249,988 shares are owned by 293020 BC Ltd., a corporation wholly owned by Mr. Barr; 140,000 shares are owned by 607767 BC Ltd. a corporation wholly owned by Mr. Barr; and 430,000 shares are owned by Evolution Gold Resources Inc. a corporation wholly owned by Mr. Barr.
B.
Related Party Transactions
There were no material transactions in the fiscal year ended January 31, 2007, or proposed material transactions between the Company or any of its subsidiaries, except of previously disclosed in the audited year-ended January 31, 2007 financial statements.
C.
Interests of Experts and Counsel
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
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ITEM 8.
FINANCIAL INFORMATION
A.
Consolidated Statements and Other Financial Information
This annual report contains the consolidated financial statements for the Company for the fiscal year ended January 31, 2007 which contains an Audit Report dated May 16, 2007 and the former auditors Audit Report dated April 20, 2006.
B.
Significant Changes
No significant change has occurred since the date of the annual financial statements included in this annual report.
ITEM 9.
THE OFFER AND LISTING
A.
Offer and Listing Details
The annual high and low market prices for the common shares of the Company on the TSX Venture Exchange for each of the last five full financial years are as follows:
January 31 | High (Cdn $) | Low (Cdn $) | Volume |
2007 | $0.95 | $0.38 | 5,592,358 |
2006 | $0.62 | $0.24 | 2,432,072 |
2005 | $0.50 | $0.14 | 844,061 |
2004 | $0.42 | $0.10 | 786,684 |
2003 | $0.33 | $0.11 | 374,134 |
2002 | $0.28 | $0.09 | 238,543 |
The high and low market prices for the common shares of the Company on the TSX Venture Exchange for each of the two most recently completed financial years for each quarter are as follows:
Quarter | High (Cdn $) | Low (Cdn $) | Volume |
2007 |
|
|
|
First Quarter | $0.80 | $0.38 | 1,463,629 |
Second Quarter | $0.95 | $0.72 | 1,165,980 |
Third Quarter | $0.83 | $0.40 | 1,052,098 |
Fourth Quarter | $0.94 | $0.41 | 1,910,651 |
2006 |
|
|
|
First Quarter | $0.62 | $0.35 | 1,133,454 |
Second Quarter | $0.39 | $0.24 | 398,098 |
Third Quarter | $0.35 | $0.245 | 356,363 |
Fourth Quarter | $0.45 | $0.245 | 544,157 |
The high and low market prices for the common shares of the Company on the TSX Venture Exchange for the six most recently completed months are as follows:
Month | High (Cdn $) | Low (Cdn $) | Volume |
April 2007 | $0.45 | $0.38 | 836,722 |
March 2007 | $0.47 | $0.36 | 873,295 |
February 2007 | $0.46 | $0.41 | 417,620 |
January 2007 | $0.49 | $0.42 | 607,663 |
December 2006 | $0.54 | $0.41 | 717,123 |
November 2006 | $0.52 | $0.41 | 585,865 |
On January 31, 2007 the closing price of the Common Shares of the Company on the TSX Venture Exchange was $0.44 per share.
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The following is the OTCBB trade history:
The annual high and low market prices for the common shares of the Company on the OTC Bulletin Board for each of the last five full financial years are as follows:
January 31 | High (US $) | Low (US $) | Volume |
2007 | 0.818 | 0.35 | 135,918 |
2006 | 0.325 | 0.188 | 4,589 |
2005 | 0.39 | 0.18 | 26,842 |
The high and low market prices for the common shares of the Company on the OTC Bulletin Board for each of the two most recently completed financial years for each quarter are as follows:
Quarter | High (US $) | Low (US $) | Volume |
2007 |
|
|
|
First Quarter | 0.57 | 0.35 | 64,034 |
Second Quarter | 0.81 | 0.60 | 32,934 |
Third Quarter | 0.64 | 0.44 | 2,500 |
Fourth Quarter | 0.43 | 0.38 | 36,450 |
2006 |
|
|
|
First Quarter | 0.325 | 0.325 | 2592 |
Second Quarter | 0.00 | 0.00 | 0 |
Third Quarter | 0.20 | 0.20 | 330 |
Fourth Quarter | 0.21 | 0.188 | 1667 |
The high and low market prices for the common shares of the Company on the OTC Bulletin Board for the six most recently completed months are as follows:
Month | High (US $) | Low (US $) | Volume |
April 2007 | 0.42 | 0.31 | 135,375 |
March 2007 | 0.39 | 0.32 | 62,500 |
February 2007 | 0.39 | 0.38 | 23,000 |
January 2007 | 0.43 | 0.43 | 750 |
December 2006 | 0 | 0 | 0 |
November 2006 | 0.43 | 0.38 | 35,700 |
On January 31, 2007 the closing price of the Common Shares of the Company on the OTC Bulletin Board was $0.43 per share.
The following table indicates the approximate number of record holders of shares at May 3, 2007, the number of record holders of shares with United States addresses and the portion and percentage of shares so held in the United States. On May 3, 2007, 21,766,953 shares were allotted and outstanding which are fully paid.
Total number of Registered Holders | Number of Registered US Holders | Number of Common Shares Held in the US | Percentage of Common Shares |
|
|
|
|
80 | 8 | 337,726 | 1.55% |
A substantial number of Common Shares are held in depositaries, brokerage firms and financial institutions in “street names”.
The computation of the number and percentage of Common Shares held in the United States is based on the number of Common Shares held by record holders with United States addresses. United States residents may beneficially own Common Shares held of record by non United States residents.
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B.
Plan of Distribution
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
C.
Markets
The Company’s common shares have traded on the TSX Venture Exchange since August, 1999 under the trading symbol “ELN” and on the NEX Board under the trading symbol “ELN.H” since October 14, 2003. During the year ended January 31, 2006, the Company met the requirements to be listed as a TSX Venture Tier 2 Company and therefore, effective September 1, 2005, the Company’s listing transferred from NEX to TSX Venture Exchange. Effective at opening on September 1, 2005, the Company’s trading symbol was changed from “ELN.H” to “ELN”. The Company is also listed on the OTCBB under the trading symbol ELNOF and on the Frankfurt Stock Exchange under the symbol “E7Q”.
D.
Selling Shareholders
This Form 20F is being filed as an annual report under the Exchange Act and as such, there is no requirement to provide any information under this section.
E.
Dilution
This Form 20F is being filed as an annual report under the Exchange Act as such, there is no requirement to provide any information under this section.
F.
Expenses of the Issue
This Form 20F is being filed as an annual report under the Exchange Act and as such, there is no requirement to provide any information under this section.
ITEM 10.
ADDITIONAL INFORMATION
A.
Share Capital
As of May 3, 2007, the Company has 21,766,953 shares without par value issued, allotted and outstanding which are fully paid.
B.
Memorandum and Articles of Association
The Company’s Articles of Association and Memorandum are registered with the British Columbia Registrar of Companies under corporation number 340917. A copy of these Articles of Association and Memorandum were filed as an exhibit with the Company’s initial registration statement on Form 20F.
In March 2004, the Company Act (British Columbia) (the “BCCA”) was replaced by the Business Corporations Act (British Columbia) (the “BCA”). All companies currently incorporated under the BCCA must complete a transition application to the BCA by March 29, 2006. The directors of the Company have already filed a transition application with the Registrar of Companies and hence the Company now subsists under the BCA.
Pursuant to the BCA the Company is permitted to have an unlimited number of shares as its authorized capital. The alteration of the capital of the Company required approval by a special resolution of the shareholders, being a resolution passed by a majority of not less than three-quarters of the votes cast by the shareholders who, being entitled to do so, voted in person or by proxy at the general meeting of the Company. The Company’s shareholders passed such a resolution at the Company’s Annual General Meeting held June 22, 2005.
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Under theBusiness Corporations Act (British Columbia) (“BCA”), every pre-existing company’ remained subject to certain “Pre-existing Company Provisions” contained in theCompany Act(British Columbia) (“BCCA”) unless such provisions are removed with the approval of the shareholders by way of special resolution
In order to take advantage of the flexibility offered by the BCA, the board of directors of the Company proposed to remove the Pre-existing Company Provisions in connection with the adoption by the Company of a new form of Articles that incorporates provisions permitted under the BCA. The removal of the Pre-existing Company Provisions required the affirmative vote of not less than three-quarters of the votes cast at the Meeting by shareholders of the Company, present in person or by proxy. The Company’s shareholders passed such a resolution at the Company’s Annual General Meeting held June 22, 2005.
C.
Material Contracts
During the year ended January 31, 2007 there were no material contracts entered into by the Company other than contracts entered into during the ordinary course of business.
D.
Exchange Controls
There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of Common Shares, other than withholding tax requirements.
There is no limitation imposed by Canadian law or by the constituent documents of the Company on the right of a non-resident to hold or vote Common Shares, other than are provided in the Investment Canada Act (Canada). The following summarizes the principal features of the Investment Canada Act (Canada).
The Investment Canada Act (Canada) requires certain "non-Canadian" individuals, governments, corporations or other entities who wish to acquire a "Canadian business" (as defined in the Investment Canada Act), or establish a "new Canadian business" (as defined in the Investment Canada Act) to file either a notification or an application for review with a governmental agency known as "Investment Canada". The Investment Canada Act requires that certain acquisitions of control by a Canadian business by a "non-Canadian" must be reviewed and approved by the Minister responsible for the Investment Canada Act on the basis that the Minister is satisfied that the acquisition is "likely to be of net benefit to Canada", having regard to criteria set forth in the Investment Canada Act. Only acquisitions of control are reviewable under the Investment Canada Act; however, the Investment Canada Act provides detailed rules for the determination of whether control has been acquired and, pursuant to those rules, the acquisition of one-third or more of the voting shares of a corporation may, in some circumstances, be considered to constitute an acquisition of control. Certain reviewable acquisitions of control may not be implemented before being approved by the Minister; if the Minister does not ultimately approve a reviewable acquisition which has been completed, the acquired Canadian business be divested. Failure to comply with the review provisions of the Investment Canada Act could result in, among other things, an injunction or a court order directing disposition of assets or shares.
E.
Taxation
Material United States Federal Income Tax Consequences
The following is a general discussion of certain possible United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of the Company. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences. (See “Canadian Federal Income Tax Consequences” below).
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The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial, of any recently proposed legislation, which, if enacted, could be applied, possibly on a retroactive basis, at any time. This discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Company and no opinion or representation with respect to United States federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares of the Company should consult their own tax advisors about the federal, state, local, and foreign tax consequences of purchasing, owning and disposing of common shares of the Company.
U.S. Holders
As used herein, a “U.S. Holder” means a holder of common shares of the Company who is a citizen or individual resident of the United States, a corporation or partnership created or organized in or under the laws of the United Sates or of any political subdivision thereof, an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described in Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such as tax-exempt organizations, qualified retirement plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, nonresi dent alien individuals, or foreign corporations whose ownership of common shares of the Company is not effectively connected with conduct on a trade or a business in the United States, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders who hold common shares as part of a straddle, hedging or a conversion transaction, and shareholders subject to the alternative minimum tax, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares.
Distribution on Common Shares of the Company
U.S. Holders receiving dividend distributions (including constructive dividends) with respect to shares of the Company are required to include in gross income for United States federal income tax purposes the gross amount of such distributions, equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Company has current or accumulated earnings or profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below.) To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder, which is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder, which is a corporation.
In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the requirement for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.
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Dividends paid on the common shares of the Company generally will not be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% (or 80%) deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below) if such U.S. Holder owns shares representing at least 10% (or 20%) of the voting power and value of the Company. The availability of this deduction is subject to several complex limitations that are beyond the scope of this discussion.
Information Reporting and Backup Withholding
Under current Treasury Regulations, dividends paid on the Company’s common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of the Company’s common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 31% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.
Foreign Tax Credit
A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his or its worldwi de taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as “passive income”, “high withholding tax interest”, “financial services income”, “shipping income,” and certain other classifications of income. Dividends distributed by the Company will generally constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these purposes. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific, and U.S. Holders of common shares of the Company should consult their own tax advisors regarding their individual circumstances.
Disposition of Common Shares of the Company
A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of the Company. Preferential tax rates apply to long-term capital gains of U.S. Holders which are individuals, estates or trusts. This gain or loss will be capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the common shares of the Company are held for more than one year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders who are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders which are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years from the loss year and carried forward five years from the loss year to be offset against capital.
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Currency Exchange Gains or Losses
U.S. Holders generally are required to calculate their taxable incomes in United States dollars. Accordingly, a U.S. Holder who purchases common shares of the Company with Canadian dollars will be required to determine the tax basis of such shares in United States dollars based on the exchange rate prevailing on the settlement date of the purchase (and may be required to recognize the unrealized gain or loss, if any, in the Canadian currency surrendered in the purchase transaction). Similarly, a U.S. Holder receiving dividends or sales proceeds from common shares of the Company in Canadian dollars will be required to compute the dividend income or the amount realized on the sale, as the case may be, in United States dollars based on the exchange rate prevailing at the time of receipt in the case of dividends and on the settlement date in the case of sales on an established securities exchange. Gain or loss, if any, recognized on a disposition of Canadian currency in connection with the described transaction generally will be treated as ordinary gain or loss.
Other Considerations
In the following circumstances, the above sections of this discussion may not describe the United States federal income tax consequences resulting from the holding and disposition of common shares:
Foreign Personal Holding Company
If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Company’s outstanding shares is owned, directly or indirectly, by five or fewer individuals who are citizens or residents of the United States and 60% or more of the Company’s gross income for such year was derived from certain passive sources (e.g., from dividends received from its subsidiaries), the Company may be treated as a “foreign personal holding company”. In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allocable portions of such passive income to the extent the Company does not actually distribute such income. The Company does not believe that it currently qualifies as a foreign personal holding company. However, there can be no assurance that the Company will not be considered a foreign personal holding company for the curre nt or any future taxable year.
Foreign Investment Company
If 50% or more of the combined voting power or total value of the Company’s outstanding shares are held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Company is found to be engaged primarily in the business of investing, reinvesting or trading in securities, commodities, or any interest therein, it is possible that the Company may be treated as a “foreign investment company” as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain. The Company does not believe that it currently qualifies as a foreign investment company. However, there can be no assurance that the Company will not be considered a f oreign investment company for the current or any future taxable year.
Passive Foreign Investment Company
The Code contains rules governing “passive foreign investment companies” (“PFIC”) which can have significant tax effects on U.S. Holders of foreign corporations. These rules do not apply to non-U.S. Holders. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States and, for any taxable year, either (i) 75% or more of its gross income is “passive income”, which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the Company is not publicly traded and either is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of “passive income” is 50% or more. The Company believes that it qualified as a PFIC for the fiscal year ended April 30,1997 and the fiscal years ended from April 30,1998 through April 30,2 002. There can be no assurance that the Company’s determination concerning its PFIC status will not be challenged by the IRS, or that it will be able to satisfy record keeping requirements which will be imposed on a qualified electing fund (“QEF”). Each U.S. Holder of the Company is urged to consult a tax advisor with respect to how the PFIC rules affect their tax situation.
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A U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to United States federal income taxation under one of two alternative tax regimes at the election of each such U.S. Holder. The following is a discussion of such two alternative tax regimes applied to such U.S. Holders of the Company. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled foreign corporation” (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of classes of stock entitled to vote of such foreign corporation (See more detailed discussion at “Controlled Foreign Corporation” below).
A U.S. Holder who elects in a timely manner to treat the Company as a QEF (an “Electing U.S. Holder”) will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year in which the Company qualifies as a PFIC on his pro rata share of the Company’s (i) “net capital gain” (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder and (ii) “ordinary earnings” (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case, for the shareholder’s taxable year in which (or with which) the Company’s taxable year ends, regardless of whether such amounts are actually distributed.
The effective QEF election also allows the Electing U.S. Holder to (i) generally treat any gain realized on the disposition of his Company common shares (or deemed to be realized on the pledge of his shares) as capital gain; (ii) treat his share of the Company’s net capital gain, if any, as long-term capital gain instead of ordinary income; and (iii) either avoid interest charges resulting from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of the Company’s annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the Electing U.S. Holder is not a corporation, such an interest charge would be treated as “personal interest” that is not deductible.
The procedure a U.S. Holder must comply with in making an effective QEF election will depend on whether the year of the election is the first year in the U.S. Holder’s holding period in which the Company is a PFIC. If the U.S. Holder makes a QEF election in such first year, i.e., a timely QEF election, then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files his tax return for such first year. If, however, the Company qualified as a PFIC in a prior year, then in addition to filing documents, the U.S. Holder must elect to recognize under the rules of Section 1291 of the Code (discussed herein), any gain that he would otherwise recognize if the U.S. Holder sold his stock on the qualification date or if the Company is a controlled foreign corporation, the U.S. Holder’s pro rata share of the Company’s post-1986 earnings and profits as of the qualification date. The qualification date is the first day of the Company’s first tax year in which the Company qualified as a QEF with respect to such U.S. Holder. The elections to recognize such gain or earnings and profits can only be made if such U.S. Holder’s holding period for the common shares of the Company includes the qualification date. By electing to recognize such gain or earnings and profits, the U.S. Holder will be deemed to have made a timely QEF election. A U.S. Holder who made elections to recognize gain or earnings and profits after May 1, 1992 and before January 27, 1997 may, under certain circumstances, elect to change such U.S. Holder’s qualification date to the first day of the first QEF year. U.S. Holders are urged to consult a tax advisor regarding the availability of and procedure for electing to recognize gain or earnings and profits under the foregoing rules. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled foreign corpor ation (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of classes of stock entitled to vote of such foreign corporation. (See more detailed discussion at “Controlled Foreign Corporation” below).
If the Company is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds Company common shares, then the Company will continue to be treated as a PFIC with respect to such Company common shares, even if it is no longer definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such Company common shares had been sold on the last day of the last taxable year for which it was a PFIC.
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Effective for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders who hold (actually or constructively) marketable stock of a foreign corporation that qualifies as a PFIC, may annually elect to mark such stock to the market (a “mark-to-market election”). If such an election is made, such U.S. Holder will not be subject to the special taxation rules of Section 1291 discussed above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning of the holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on and other amounts taxable with respect to the Company’s common shares. A U.S. Holder who makes the mark-to-market election will include in income for the taxable year for which the election was made an amount equal to the excess, if any, of the fair market value of the comm on shares of the Company as of the close of such tax year over such U.S. Holder’s adjusted basis in such common shares. In addition, the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax basis in common shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market gains for the common shares in the Company included by such U.S. Holder for prior tax years, including any amount which would have been included for any prior tax year but for the Section 1291 interest on tax deferral rules discussed above with respect to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holder’s adjusted tax basis in the common shares of the Company will be adjusted to reflect the amount included in or deducted from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in which the election is made and to each subsequent taxable year, unless the Company’s common shares cease to be marketable, as specifically defined, or the Secretary of the IRS consents to revocation of the election. Because the IRS has not established procedures for making a mark-to-market election, U.S. Holders should consult their tax advisor regarding the manner of making such an election.
Under Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases the basis of the Company common shares in the hands of the transferee and the basis of any property received in exchange for those common shares would be increased by the amount of gain recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. The transferee’s basis in this case will depend on the manner of transfer. In a transfer at death, for example, the transferee’s basis is equal to (i) the fair market valu e of the Electing U.S. Holder’s common shares reduced by the U.S. Holder’s adjusted basis in these common shares at death. The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares are transferred. Each U.S. Holder of the Company is urged to consult a tax advisor with respect to how the PFIC rules affect their tax situation.
Certain special, generally adverse, rules will apply with respect to the Company common shares while the Company is a PFIC whether or not it is treated as a QEF. For example, under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such shares.
If the Company is classified as a PFIC, U.S. Holders who do not make timely QEF Elections (as discussed above) will be subject to a number of special tax rules. For example, gains recognized on disposition of the Company stock or the receipt of an “excess distribution” from the Company is (i) treated as if it were ordinary income earned ratably on each day of the period the U.S. Holder owns shares of the Company at the highest marginal rate in effect during the period in which it was deemed included and (ii) subject to an interest charge as if the resulting tax had actually been due in such earlier year or years (An excess distribution is the amount of any distribution received by the U.S. Holder during the taxable year that exceeds 125% of the immediately preceding three year average of distributions received from the Company, subject to certain adjustments.) Proposed Regulations broadly define a disposition to include a ny transaction or event that constitutes an actual or deemed transfer of property for any purpose under the Code, including (but not limited to) a sale, exchange, gift, transfer at death, and the pledging of PFIC stock to secure a loan. If the tax described above is not imposed on transfer at death, the recipient of the PFIC stock receives a basis in the transferred stock equal to the lessor of the fair market value or the adjusted basis of the stock in the hands of the U.S. Holder immediately before death. Finally, the foregoing rules will continue to apply with respect to a U.S. Holder who held the stock of the Company while the Company met the definition of a PFIC even if the Company ceases to meet the definition of a PFIC.
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Controlled Foreign Corporation
If more than 50% of the total combined voting power of all classes of shares entitled to vote or the total value of the shares of the Company is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701 (a)(31), each of which own, actually or constructively, 10% or more of the total combined voting power of all classes of shares of the Company (“United States Shareholder”), the Company could be treated as a controlled foreign corporation (“CFC”) under Subpart F of the Code. This classification would effect many complex results, one of which is the inclusion of certain income of a CFC which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F in come of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFC’s Subpart F income and are also subject to current U.S. tax on their pro rata shares of the CFC’s earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Company which is or was a United States Shareholder at any time during the five-year period ending with the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company attributable to shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to United States shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders. Special rules apply to United States Shareholders who are subject to the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, a more detailed review of these rules is outside the scope of this discussion. The Company does not believe that it currently qualifies as a CFC. However, there can be no assurance that the Company will not be considered a CFC for the current or any future taxable year.
Material Canadian Federal Income Tax Consequences
The summary below is restricted to the case of a holder (a “Holder”) of one or more common shares who for the purposes of the Income Tax Act (Canada) (the “Act”) is a non-resident of Canada, holds his common shares as capital property and deals at arm’s length with the Company.
The following is a general discussion of certain possible Canadian federal income tax consequences, under current law, generally applicable to a non-resident of Canada (as hereinafter defined) of common shares of the Company. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of federal income tax law, such as those described above as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any provincial, local or foreign tax consequences.
Dividends
A Holder will be subject to Canadian withholding tax (“Part XIII Tax”) equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on his common shares. Under the 1995 Protocol amending the Canada-US Income Tax Convention (1980) (the “Treaty”) the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States is, if the Holder is a company that beneficially owns at least 10% of the voting stock of the Company, 5% and in any other case, 15% of the gross amount of the dividend. The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.
Capital Gains
A Holder who disposes of a common share, including by deemed disposition on death, will not be subject to Canadian tax on any capital gain (or capital loss) thereby realized unless the common share constituted “taxable Canadian property” as defined by the Act. Generally, a common share will not constitute taxable Canadian property of a Holder unless he held the common shares as capital property used by him carrying on a business (other than an insurance business) in Canada, or he or persons with whom he did not deal at arm’s-length alone or together held or held options to acquire, at any time within the five years preceding the disposition, 25% or more of the shares of any class of the capital stock of the Company.
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A Holder who is resident of the United States and realizes a capital gain on disposition of a common share that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the common share is derived from, or forms an interest in, Canadian real estate, including Canadian mineral resource properties, (b) the common share formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 months preceding disposition, or (c) the Holder (i) was a resident of Canada at any time within the ten years immediatelythe disposition and for a total of 120 months during the 20 years, preceding the disposition, and (ii) owned the common share when he ceased to be a resident of Canada.
A Holder who is subject to Canadian tax in respect of a capital gain on disposition of a common share must include one-half of the capital gain (taxable capital gain) in computing his taxable income earned in Canada. This Holder may, subject to certain limitations, deduct one half of any capital loss (allowable capital loss) arising on disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect of taxable Canadian property and, to the extent not so deductible, from such taxable capital gains of any of the three preceding years or any subsequent year.
F.
Dividends and Paying Agents
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
G.
Statements by Experts
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this section.
H.
Documents on Display
Any documents referred to in this annual report may be inspected at the head office of the Company, 2303 West 41st Avenue, Vancouver, British Columbia V6M 2A3, during normal business hours.
I.
Subsidiary Information
There is no information relating to the Company’s subsidiaries which must be provided in Canada and which is not otherwise called for by the body of generally accepted accounting principles used in preparing the financial statements. The Company does not have any subsidiaries.
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company anticipates its primary market risk, if any, to be related to fluctuations in exchange rates. Exchange rate risk may arise if the Company is required to use different currencies for various aspects of its operations. At present, the functional currency for the Company is the Canadian dollar. Based on the Company’s overall exchange rate risk as at January 31, 2007, the Company believes that a ten percent change in exchange rates would not have a material adverse effect on its financial position, results of operations, or changes in financial position. The Company intends to monitor its exchange rate risk and take reasonable steps to reduce its exposure. The Company does not intend to purchase or sell derivative instruments for speculative purposes.
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PART II
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
ITEM 13.
DEFAULTS, DIVIDEND ARREARS AND DELINQUENCIES
There has not been a material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within thirty days, relating to indebtedness of the Company or any of its significant subsidiaries. There are no payments of dividends by the Company in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Company.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
This Form 20F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
ITEM 15.
CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of January 31, 2007, being the date of the Company’s most recently completed fiscal year end. This evaluation was carried out under the supervision and the participation of the Company’s Chief Executive Officer, Harry Barr and the Company’s Chief Financial Officer, Gordon Steblin. Based upon the evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting management to material information relating to it required to be included in the Company’s period SEC filings. There have been no changes in the Company’s internal controls or in other fa ctors that significantly affected or could significantly affect internal controls subsequent to the date the Company carried out the evaluation.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
During the Company’s most recently completed financial year ended January 31, 2007, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to affect, its internal control over financial reporting.
The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
(a)
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
(b)
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
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expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
(c)
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the registrant’s assets that could have a material effect on the financial statements.
The Auditors did not test the effectiveness of nor rely on the internal controls of the Company for the fiscal years ended January 31, 2007 2006 and 2005.
ITEM 16.
[Reserved]
ITEM 16A.
AUDIT COMMITTEE FINANCIAL REPORT
Charter of the Audit Committee of the Board of Directors
1.
Purpose
The purpose of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of El Nino Ventures Inc. (“El Nino”) is to provide an open avenue of communication between El Nino’s management (“Management”), the independent Auditors (“Auditors”) and the Board and to assist the Board in its oversight of the following: integrity, adequacy and timeliness of El Nino’s financial reporting and disclosure practices; process for identifying the principal financial risks of El Nino and the control systems in place to monitor them; compliance with legal and regulatory requirements related to financial reporting; and independence and performance of El Nino’s Auditors.
The Committee shall also perform any other activities consistent with the Charter, El Nino’s by-laws and governing laws as the Committee or Board deems necessary or appropriate.
The Committee’s role is one of oversight. It is not the responsibility of the Committee to determine that El Nino’s financial statements are complete and accurate and in accordance with generally accepted accounting principles or to plan or conduct audits. The financial statements are the responsibility of Management. The Auditors are responsible for performing an audit and expressing an opinion on the fair presentation of El Nino’s financial statements in accordance with generally accepted accounting principles.
2.
Authority
The Committee has the authority to conduct any investigation appropriate to its responsibilities, and it may request the Auditors as well as any officer of El Nino, or El Nino’s outside counsel, to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall have unrestricted access to El Nino’s books and records and has the authority to retain, at El Nino’s expense, special legal, accounting, or other consultants or experts to assist in the performance of the Committee’s duties. Subject to Board approval, the Committee has the authority to set and pay the compensation of the advisors employed by the Committee. The Chairperson of the Committee (“Chairperson”) or other member of the Committee so designed by the Committee may represent the Committee to the extent permitted by applicable legal and listing requirements.
The Committee shall review and assess the adequacy of this Charter annually and submit any proposed revisions to the Board for approval.
3.
Composition of Meetings
a)
The Committee and its membership shall meet all applicable legal, regulatory and listing requirements.
b)
Members of the Committee and the Chairperson shall be appointed by the Board and may be removed by the Board in its discretion. The Committee will be elected annually at the first Board meeting following the annual general meeting.
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c)
The Committee shall be comprised of three or more directors, one of whom shall serve as Chairperson.
d)
Each member of the Committee shall be independent, non-executive director, free from any relationship that, in the opinion of the Board, could reasonably be expected to interfere with the exercise of his or her independence from management, El Nino, or the Auditors.
e)
All members of the Committee shall be, or promptly after appointment, shall become financially literate as determined by the Board. Preferably at least one member of the Committee shall have accounting or related financial management expertise as determined by the Board.
f)
The Committee shall meet, at the discretion of the Chairperson or a majority of its members, as circumstances dictate or as may be required by applicable legal or listing requirement, and a majority of the members of the Committee shall constitute a quorum.
g)
If and whenever a vacancy shall exist, the remaining members of the Committee may exercise all powers and responsibilities so long as quorum remains in office.
h)
Any matters to be determined by the Committee shall be decided by a majority of votes cast at a meeting of the Committee called for such purpose; actions of the Committee may be taken by an instrument or instruments in writing signed by all of the members of the Committee, and such actions shall be effective as though they had been decided by a majority of votes cast at a meeting of the Committee called for such purpose. In the case of a tie the Chairperson shall have a second or tie-breaking vote.
i)
The Committee shall maintain minutes of meetings and periodically report to the Board on significant results of the Committee’s activities.
j)
The Committee may invite such other persons to its meetings as it deems appropriate.
k)
The Auditors will have direct access to the Committee on their own initiative.
4.
Responsibilities
A.
With respect to the Interim and Annual Financial Statements, the MD&A, and the Annual Information Form
a)
The Committee shall review El Nino’s interim financial statements for approval of same prior to their being filed with the appropriate regulatory authorities. The Committee shall review El Nino’s annual audited financial statements and report thereon to prior to their being filed with the appropriate regulatory authorities. With respect to the annual audited financial statements, the Committee shall discuss significant issues regarding accounting principles, practices, and judgements of Management with Management and the Auditors and when the Committee deems it appropriate to do so.
b)
The Committee shall review Management’s Discussion and Analysis relating to annual and interim financial statements, the Annual Information Form and any other public disclosure documents that are required to be reviewed by the Committee under any applicable laws prior to their being filed with the appropriate regulatory authorities.
c)
The Committee shall review Management’s earnings releases relating to annual and interim financial statements and any other public disclosure documents that are required to be reviewed by the Committee under any applicable laws prior to their being filed with the appropriate regulatory authorities.
d)
The Committee shall review the post-audit or management letter containing the recommendations of the Auditors and Management’s response and subsequent follow-up to any identified weaknesses.
e)
The Committee shall review the evaluation of internal controls by the Auditors, together with Management’s response.
f)
The Committee shall meet no less frequently than annually separately with the Auditors and the Chief Financial Officer to review El Nino’s accounting practices, internal controls and such other matters as the Committee or Chief Financial Officer deems appropriate.
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B.
With Respect to the Auditors
The Auditors are ultimately accountable to the Board of Directors. The Board has the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the Auditors (or nominate the Auditors to be proposed for shareholder approval in any proxy statement).
a)
The Committee shall review the performance of the Auditors.
b)
The Committee shall annually recommend to the Board the appointment of the Auditor, or, as appropriate, the discharge or replacement of the Auditors when circumstances warrant. The Board will set the compensation for the Auditors.
c)
The Committee shall be responsible for ensuring that the Auditors submit on a periodic basis to the Committee a formal written statement delineating all relationships between the Auditors and El Nino. The Committee is responsible for discussing with the Auditors any disclosed relationships or services that may impact the objectivity and independence of the Auditors and for recommending that the Board take appropriate action in response to the Auditor’s report to satisfy itself of the Auditor’s independence.
d)
El Nino considers the core services provided by the Auditors to include the annual audit, tax planning and tax compliance. The Committee shall review any engagements for non-audit services beyond the core services proposed to be provided by the Auditors or any of their affiliates, together with estimated fees, and consider the impact on the independence of the Auditors.
e)
The Committee shall review the Auditor’s audit plan, including scope, procedures and timing of the audit.
Other Committee Responsibilities
The Committee shall perform any other activities consistent with the Charter and governing law, as the Committee or the Board deems necessary or appropriate including:
a)
Establishing and reviewing El Nino’s procedures for the receipt, retention and treatment of complaints regarding accounting, financial disclosure, internal controls or auditing matters.
b)
Establishing and reviewing El Nino’s procedures for confidential, anonymous submissions by employees regarding questionable accounting, auditing and financial reporting and disclosure matters.
c)
Conducting or authorizing investigations into any matters that the Committee believes is within the scope of its responsibilities.
d)
Making inquiries of management and the Auditors to identify significant business, political, financial and control risks and exposures and assess the steps management has taken to minimize such risk.
Composition of the Audit Committee
The following are members of the audit committee:
Michael Philpot, Spiros Cacos and Bernard Barlin.
Mr. Philpot is an independent member of the audit committee and is financially literate. With Mr. Philpot’s extensive work history working with private and public companies as a director, Mr. Philpot has an understanding of internal controls and procedures for financial reporting.
Mr. Cacos is an independent member of the audit committee and is financially literate. Mr. Cacos has an understanding of internal controls and procedures for financial reporting.
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Mr. Barlin is an independent member of the audit committee and is financially literate. With Mr. Barlin’s extensive work history working with private and public companies as a director, Mr. Barlin has an understanding of internal controls and procedures for financial reporting.
ITEM 16B:
CODE OF ETHICS
The Company has adopted a code of ethics that applies to the Company’s principal executive officer and principal financial officer and will provide to any person without charge, upon request by mail but may also be made by telephone, telecopier or other electronic means of communication, a copy of such code of ethics. The Board has adopted a Code of Business Conduct and Ethics, a copy of which is attached hereto as Exhibit 4.
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table discloses the aggregate fees billed for each of the last two financial years for professional services rendered by the Company’s audit firm for various services in Canadian Dollars.
Services | Year-ended January 31, 2007 | Year ended January 31, 2006 |
|
|
|
|
|
Audit Services | $9,573 | $6,300 |
|
Audit – and review – related services | $Nil | $ Nil |
|
Tax services | $761 | $700 |
|
All other services | $Nil | $ Nil |
|
| $10,334 | $7,000 |
|
From time to time, management of the Company recommends to and requests approval from the audit committee for non-audit services to be provided by the Company’s auditors. The audit committee routinely considers such requests at committee meetings, and if acceptable to a majority of the audit committee members, pre-approves such non-audit services by a resolution authorizing management to engage the Company’s auditors for such non-audit services, with set maximum dollar amount for each itemized service. During such deliberations, the audit committee assesses, among other factors, whether the services requested would be considered “prohibited services” as contemplated by the US Securities and Exchange Commission, and whether the services requested and the fees related to such services could impair the independence of the auditors.
As 2006 was the first year of the audit committee pre-approval process, only the audit and tax services rendered in the year ended January 31, 2006 were pre-approved by the audit committee.
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not Applicable
ITEM 16E.
PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
PART III
ITEM 17.
FINANCIAL STATEMENTS
See the Financial Statements and Exhibits listed in Item 19 hereof and filed as part of this Annual Report.
ITEM 18.
FINANCIAL STATEMENTS
Not applicable
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ITEM 19.
EXHIBITS
The following exhibits attached hereto are filed with this Form 20-F Annual Report for the year ended January 31, 2007
Exhibit 1:
Cover Sheet
Auditor’s Report dated May 16, 2007.
Former Auditor’s Report dated April 20, 2006
Balance Sheet as at January 31, 2007 and 2006
Statement of Operations for the years ended January 31, 2007, 2006 and 2005
Statement of Stockholders’ Equity (Deficiency) for the years ended January 31, 2007, 2006 and 2005
Statement of Cash Flows for the years ended January 31, 2007, 2006 and 2005
Schedule of Exploration Expenditures for the years ended January 31, 2007, 2006 and 2005
Notes to Consolidated Financial Statements
Exhibit 2:
Management Discussion and Analysis
Exhibit 3:
CEO Certification of Annual Filings
Exhibit 4:
CFO Certification of Annual Filings
Exhibit 5:
Certification of CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 6:
Exhibit 7:
Exhibit 8:
Code of Business Conduct and Ethics
Exhibit 9:
Certificate of Ethics for the Chief Executive Officer and the Chief Financial Officer
Exhibit 10:
Exhibit 11:
Exhibit 12:
Exhibit 13:
Exhibit 14:
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SIGNATURES
The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
El Nino Ventures Inc.
The Company
“Harry Barr”
Harry Barr, Chief Executive Officer
“Gordon Steblin”
Gordon Steblin, Chief Financial Officer
Date: May 30, 2007
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