CONFIDENTIAL
INITIAL GEOLOGICAL REPORT
ON THE
DA-AN PROPERTY, FUJIAN PROVINCE,
PEOPLE'S REPUBLIC OF CHINA
Detailing Initial Data Collection and Field Work Completed
May 29 - June 5, 2004
For:
Sparta Holding Corp.
P.O. Box 1686
Westhampton Beach, NY 11978 USA
Author:
Linus T. Keating, D.Sc.
Arizona Registered Geologist #40815
AIPG Certified Professional Geologist #10742
Effective Date: July 3, 2004
Table of Contents
1.0 SUMMARY...................................................................3
2.0 INTRODUCTION AND TERMS OF REFERENCE.......................................4
3.0 DISCLAIMER................................................................5
4.0 PROPERTY DESCRIPTION AND LOCATION.........................................5
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY.6
5.1 MAP DATUM / COORDINATE SYSTEMS.........................................8
6.0 HISTORY...................................................................8
7.0 GEOLOGICAL SETTING.......................................................10
7.1 REGIONAL SETTING......................................................10
7.2 PROPERTY GEOLOGY......................................................11
8.0 DEPOSIT TYPES............................................................12
9.0 MINERALIZATION...........................................................13
10.0 EXPLORATION.............................................................16
11.0 DRILLING................................................................17
12.0 SAMPLING METHOD AND APPROACH............................................17
13.0 SAMPLE PREPARATION, ANALYSIS, AND SECURITY..............................18
14.0 DATA VERIFICATION.......................................................19
15.0 ADJACENT PROPERTIES.....................................................19
16.0 MINERAL PROCESSING AND METALURGICAL TESTING.............................20
17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTSIMATES.........................20
18.0 OTHER RELEVANT DATA AND INFORMATION.....................................20
19.0 INTERPRETATION AND CONCLUSIONS..........................................20
20.0 RECOMMENDATIONS.........................................................21
21.0 REFERENCES..............................................................24
21.1 INVENTORY OF FTMC MAPS AND REPORTS IN SPARTA'S POSSESSION............25
LIST OF FIGURES...............................................................27
LIST OF TABLES................................................................27
LIST OF APPENDICES............................................................27
LIST OF PLATES................................................................27
APPENDICES....................................................................28
INITIAL GEOLOGICAL REPORT
ON THE DA-AN PROPERTY, FUJIAN PROVINCE,
PEOPLE'S REPUBLIC OF CHINA
1.0 SUMMARY
The Da-an property is located in northern Ning De County, Fujian Province,
eastern People's Republic of China. Da-an is not a mere property - it is
actually an ancient mining district that has remained virtually unexplored for
more than 100 years. It consists of 81 square kilometres in a region that boasts
a history of gold and silver mining stretching back at least to the Ming Dynasty
450 years ago. Mineralization consists of high-grade cordilleran-style silver
(+/- gold), lead, zinc veins hosted in a Jurassic-Cretaceous age calc-alkaline
volcanic complex. Sample 420401 taken by the author assayed 334.9g/mt (9.78opt)
silver with 7.3% lead and 8.6% zinc; samples as high as 16,000g/mt (467opt)
silver have been reported by other reliable workers. Another sample, 420413,
taken by the author from an unrelated structure in a roadcut 3km south of sample
401 assayed 15.2g/mt (0.44opt) gold and 437.1g/mt (12.76 opt) silver. At least
98 ancient mined-out stopes have been identified across the property, all that
remains of the surface expression of their veins. The author suggests that
excellent potential remains to discover further mineralization at shallow depths
below the limit of stoping or in undiscovered structural "traps" elsewhere in
the district.
Several active mines operate in the province presently and gold dredging is
active in many of the major rivers of the region. The Zinjinshan deposit 400 km
(245 miles) southeast of Da-an is a major Cu-Au porphyry deposit reporting
1.6Mmt (3.5 billion lbs) of copper and 15mt (480,000 tr oz) gold discovered
since 1988 (So, et. al., 1998). 230 km (143 miles) east-northeast of Da-an is
the very large (but reserves unavailable) Lenshuikeng Ag, Pb, Zn vein and
replacement deposit (Yu, 1996). The Yongpi porphyry copper deposit located 185
km (115 miles) northeast of Da-an is said to contain 144Mmt (159Mst) at 0.72%
copper (Wang, 2003). Other smaller Pb-Zn and Mo prospects surround the Da-an
district (Shuhe, 1992).
The property is controlled by the Fujian Tiancheng Mining Industry Corporation,
Ltd. (FTCM) through two Mine Prospecting Rights. Sparta has proposed to acquire
all the stock of FTCM and towards that end entered into a Letter of Intent
agreement with FTCM in May 2004.
Modern exploration to date consists of mapping and sampling conducted by the
Fujian Province Geological Survey (the Brigade) primarily focused on discreet
clusters of ancient mine workings. Only one hole has been drilled, parallel to a
vein, and it encountered no ore-grade values. The Brigade also carried out
stream sediment and panned con surveys in the District, but the methods have met
with limited success and large areas of the property remain unsurveyed. In terms
of modern exploration, Da-an remains a "virgin" mining district notwithstanding
indications of a highly productive past. No mine development has occurred and
there are no active operations.
This report documents a recently completed three-day initial visit to the
property by the author on behalf of Sparta Holding Corp. ("Sparta"). Field
observations from this trip are integrated with previous data generated by
others and with the geological setting and mineral deposits of the region. The
report has been written in compliance with the specifications as outlined in
Canada National Instrument 43-101, and is intended to provide technical
information on the Da-an project in support of securities related filings.
The author concludes that Da-an is an extremely fertile and promising area to
conduct exploration for high-grade silver veins. It is strongly recommended that
Sparta undertake an intensive program of geologic mapping and sampling across
the entire district in order to clearly define drill targets. A proposed work
program and budget are included with this report.
2.0 INTRODUCTION AND TERMS OF REFERENCE
This report has been prepared at the request of Sparta Holding Corp. ("Sparta")
to provide a scientific and technical data summary of the mineral exploration
potential of the Da-an property. It should be noted that the Da-an property does
not contain any known body of commercial ore and any exploration programs
thereon are early stage and exploratory in nature.
The author personally visited a number of sites on the Da-an property June 1st
through June 5th, 2004 as part of a cursory initial examination. He was
accompanied by Mr. Yuan Shou Hua, Deputy General Manager in charge of the Da-an
project for Fujian Tiancheng Mining Co. Ltd. (hereinafter "FTCM"), Ms Maggie Li,
interpreter retained by FTCM from an agency in Shang Hai, Mr. Wu Jin Shun
engineer from the 4th Brigade - Fujian Geological Survey who worked on the
project for FTCM, and a driver. In this report, the term "New Data" refers only
to observations by the author, geological data and geochemical samples, together
with the corresponding laboratory results, collected from the Da-an property
during the period May 30 - June 5, 2004.
The background geological data contained and cited in this report is taken from
the various published and unpublished technical reports as listed in Section
21.0: "References", as well as from the author's personal knowledge of the
geological setting of the region. For the purposes of this report, data
generated from work completed prior to May 2004 are termed "Old Data". Old Data
has been copied from proprietary documents provided by FTCM. Mr. Yuan Shou Hua,
Deputy General Manager of FTCM, facilitated access to these documents and
provided copies of documents for Sparta's files. Since originals of all such
documents are in Mandarin Chinese, translation into English by an independent
third party translator was required. As of the effective date of this report,
translation of the maps and cross-sections had been completed, however the three
reports relating to these maps had not yet been translated. Data contained in
these reports will most likely add significant information and could materially
effect the conclusions of this author when the English language versions are
completed. A fourth report, "Profile of the Project in Shouning" was provided to
Sparta by FTCM in translated English. These maps and other documents provided by
FTCM appear to be authentic and the authors have no reason to doubt their
validity or accuracy; copies of all proprietary documents may be found in
Sparta's files at their corporate office.
3.0 DISCLAIMER
The "Old Data" in the current report was collected previous to the New Data by
parties neither under the supervision of the author nor responsible to Sparta.
The author has met on the property with some of those responsible for the Old
Data and believes that the data was professionally collected and that the maps
and documents generated adequately portray the results. As the author's visit to
the property was cursory in nature, the Old Data forms the basis for many of the
impressions and conclusions expressed in this report. The New Data in this
report was collected directly by the author.
There are sections of the current report that combine Old and New Data. Such
combinations are clearly noted in the text and have only been attempted with
great care as regards differences between sampling and analytical methods,
statistical treatment, and interpretations. Although such combinations are
attempted only in situations for which the author's best judgment suggests they
are valid, it is conceivable that unforeseen factors could impact these
conclusions; the reader should treat such combinations with special care.
All original Old Data is in the Mandarin Chinese language. An ATA-certified
technical translator independent of both Sparta and FTCM was employed to render
Old Data into English under the supervision of the author. Although the author
believes that the translator's best effort was applied, it is still possible
that translation errors could result in misinterpretation of the data. Every
effort has been made to insure against this possibility. Original versions of
all Old Data together with the translated equivalents are available for
inspection at Sparta's offices.
Analyses taken from Old Data were reportedly determined at the Fujian Provincial
Laboratories and are derived by the author from old reports. No certificates of
assay have been seen and it is doubtful that these analyses can be independently
verified. They are presented here only as part of the historical summary of the
District.
Information regarding land status, tenure, current agreements, mining legal
requirements, and business environment was supplied by Sparta and has not been
independently verified by the author.
Information such as drill results and ore reserves quoted from surrounding
projects in the region has been taken from published information, believed by
the authors to be accurate.
4.0 PROPERTY DESCRIPTION AND LOCATION
As shown in Figure 1, the Da-an Property is located in the northern-most corner
of Fujian Province, 160 air-kilometers due north of the city of Fuzhou, capital
of the province. Fujian province lies on the eastern seaboard of the Peoples
Republic of China, across the straits from Taiwan. The center of the Da-an
property, given in latitude / longitude, is approximately: 27d 31' 54.42"N, 119d
33' 03.18"E.
The property consists of 8100Ha (20,015.10 acres) of contiguous land. This land
is held under two "Mine Prospecting Rights" issued by the Fujian Province
Department of Land Resources pursuant to regulations promulgated by the Ministry
of Land Resources of the People's Republic of China to Fujian Tiancheng Mining
Industry Corporation, Ltd. (FTCM). The spatial relationship between known
mineralized areas and the property boundary is presented in Plate 1; Appendix 2
documents size, type, ownership, and payments required on each claim. Sparta is
presently acquiring 100% of the stock of Fujian Tiancheng Mining Industry Corp.,
Ltd. at which time FTCM will become a wholly owned subsidiary of Sparta.
The author is not aware of any environmental studies of any kind that have been
carried out on the property. Sparta has advised the author that it is "not aware
of any environmental liabilities and as part of our agreement with FTCM they
will indemnify Sparta as part of the agreement to acquire them." As with any old
mining district, some hazards and / or potential liabilities are present but
these appear to be of small-scale and manageable. Potential hazards include open
vertical and horizontal workings of considerable age, and waste "dump" piles
from small artisanal mining operations proximal to drainages and existing rice
paddies.
Work conducted on the property to date by FTCM was done under the auspices of
the Mine Prospecting Rights that include an Annual Business Plan detailing
proposed work. Research needs to be done to ascertain the specific provincial
and federal permitting and reclamation requirements applicable to exploration in
general. FTCM officials have indicated that permits are required to proceed with
exploration activities such as vegetation clearing, road building and drilling.
The author was assured that permitting for these sorts of activities could be
facilitated through FTCM with 30-day lead-time. To the author's knowledge, no
such permits currently apply to the property. Care needs to be taken to insure
that any exploration activity would be conducted in an entirely legal fashion as
determined by due diligence.
5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY
The Da-an prospect area presents moderate to steep mountainous sub-tropical
terrain at elevations varying from 740m to 1000m above sea level (2420' - 3300'
a.s.l.). During June, the heart of the rainy season, some 20cm (7.8") of rain
will saturate the area; yearly rainfall totals some 150cm (55"). During the
summer season, temperatures can reach 26.7dC (80dF) with very high humidity; the
rest of the year temperatures are moderate with only rare snow in the winter. It
is not thought that climate will impact in any way a well-designed year-round
underground operation.
Physiographically, the property comprises steep vegetation-covered slopes, with
a moderate to thick soil profile typical of the tropics, dissected by deep
valleys. Year-round creeks occupy most valleys. These wet areas are generally
cultivated as rice paddies and can be quite boggy - mosquitoes are a problem at
dusk and around dawn. Chest-high tropical vegetation is thick throughout the
area except at the higher elevations on the ridges. Sporadic bamboo and cedar
forests occur at the middle elevations. Except in the main valley of Da-an
village, and outward to the smaller villages, no roads are present; access is
limited to an extensive network of footpaths. Off the footpaths outcrops are
present but can be challenging to find. No animals were seen, however several
varieties of poisonous snakes are reported in the area; they are generally never
seen, but can be more common mid-May through mid September and particularly in
mid-June during the wheat harvest.
The property is accessible by road year-round from Fuzhou, capital of the
province, site of a large international airport, and home to 6.8 million people.
A 4X4 vehicle is not required except perhaps during the rainy season; a high
clearance vehicle is a good idea however. To reach the center of the property
from Fuzhou, drive north-northwest 110km to Ningde city; thence 230 km north to
Shouning via modern highways in good condition. Shouning is home to 30,000
people and is a modern city with full emergency and support services; services
not available in Shouning can be procured in Ningde. Located approximately 30
minutes north of Shouning, the town of Da-an can be reached by good paved
two-lane mountain highway. From Da-an town a 40-minute drive on local access
#944, a maintained dirt road, brings one to the center of the property. The
complete journey from Fuzhou to the center of the property requires about 4
hours driving. During the most recent field campaign the author stayed in good
accommodations in Shouning.
The project area hosts perhaps 10 small villages including Da-an village. These
are all primitive, rural communities with a combined population of perhaps 300
people. There is a high-tension electric line across the project area and most
villages have electricity though few of the people can afford to use it. Several
towns have one phone line but these are seldom used. Only the most primitive of
supplies and support services can be found in these communities. The proximity
of Shouning with its good quality hotels, restaurants, and infrastructure make
it an ideal staging site.
The people of the Da-an region are quite amiable and are aware of their mining
heritage. The profoundly impoverished nature of the area and some comments from
locals (through an interpreter) suggest that they are quite amenable to a modern
mining project. Small tombs are occasionally found on the hillsides throughout
the project area, but the author's hosts assured him upon repeated questioning
that these features are not an impediment to development; with government
assistance, families would be willing to relocate any remains for a relatively
small compensation.
As with any indigenous population, it will be quite important to establish and
maintain a close personal relationship with all the communities involved from
the beginning of any work. To date it appears that the representatives of the
FTCM and the 4th Brigade have done a good job in this regard and are respected
and well received by the locals. Figure 3 is a topographic map of the project
area showing locations of roads and villages on the property.
5.1 Map Datum / Coordinate Systems
Maps provided by FTCM appear to utilize at least two different datum /
coordinate system combinations, depending upon when the map was made. Direct
comparison between different generations of maps is therefore very difficult.
The author has determined that many of the more recent maps were made using the
Gauss-Kruger (zone 20) coordinate system with the WGS 1984 datum, in accordance
with modern China map-making policy. These maps have eastings prefixed by "207".
Other maps however have easting prefixes of "404" and grids which do not
coincide with the G-K maps - it has been confirmed by the author that the 404
grid is not Universal Transverse Mercator (UTM). For the purpose of data
analysis in this report, these maps have been merged to the G-K grid, however
currently there are insufficient ground control points to confirm positively
that either grid is in the correct position. Correcting this situation is a top
priority if work at Da-an is to continue (see Section 20 - Recommendations).
From this point on in this report all coordinates including those on maps,
sample locations, and other information will be in Gauss-Kruger (China) - WGS
`84 coordinates unless specifically indicated otherwise.
6.0 HISTORY
The property has a long history of silver mining, dating back at least 450 years
to the Ming Dynasty. It is said that back then an Imperial eunuch supervised
prisoners who worked the mines. Numerous old mine workings dot the countryside,
most of which do not appear to have been touched in many years. There are no
mines currently producing on the property. No mining or development
infrastructure exists at the present time. To the author's knowledge, no
reliable reserve or resource estimates have been put forward.
Insert "Prior Ownership of Property and Ownership Changes" here...
Work to date has been performed by the Fujian Provincial Geological Research and
Investigation Institute (formerly the Fujian Geological Survey 4th Brigade)
presently under the direction of Mr. Li Changze, Brigade Chief Engineer. The
Brigade is a provincial government entity that conducted this work under
contract to FTCM. A report "Profile of the Project in Shouning" (FTCM Report #1
- - author unknown) apparently written in year 2000(?) summarizes early
exploration work.
The first visit by Brigade engineers was in 1972 and focused on the Guan Tian
Chang zone 2.5km northeast of Da-an village. According to the summary report,
two high-grade samples collected from old workings on that visit yielded silver
values ranging from 16,000 ppm to 17,000 ppm (515 - 547 troy ounces / ton). Mr.
Wu Jiangshe, currently an engineer with the Brigade who conducted much of the
later work on the property, has stated that he visited this sample locality some
years ago but failed to find similar material. He suggests that the first
sampler trimmed all the available material off the wall of a stope and there was
no more to be had. With the help of Mr. Wu the author attempted to reach this
sample locality but the precise location could not be found due to dense jungle
overgrowth.
In 1979, the Brigade conducted exploration over the entire district,
"investigating all the old holes systematically". Ninety-eight workings "with
larger scale" were found. Sampling of mineralized or altered zones at that time
assayed from 39 ppm to 800ppm silver (1.2 - 25.7 tr opt).
From 1989 - 1992, the 4th Brigade finished surveying the Guan Tian Chang,
Wailou, Fuji, Tanchatou, Zhaiping, Wenyang, Tanshan, and Da-an zones. A report
detailing their findings (FTCM Report #2 - author unknown) is in Sparta
possession but had not been translated into English at the date of this writing.
Soil, stream sediment, heavy cons, and rock chip sampling was conducted
erratically throughout this period. Maps from this work showing sample locations
and some detailed geology have been translated into English and are in Sparta's
possession. In 1993, the Zhaibaojian zone was examined and geologic mapping and
sampling was conducted in the area from Dushu to Houxixi.
Follow-up of stream sediment and panned concentrate gold anomalies led to
discovery in 1999 of a gold anomalous area near the Da-an Mine area and from
Tanshan to Laocuo. Later in 1999, one 111.6m vertical core hole was drilled
adjacent to old stopes at Guantianchang but failed to cut ore grade
mineralization or intersect key structures. A map and cross-section summarizing
the results of drilling have been translated and are in Sparta's possession - no
formal report addressing the drilling has yet come to light. Core from this hole
is stored in Da-an village and is available for examination.
Two other reports in Sparta possession (not yet translated), FTCM Report #3
(2000) and FTCM Report #4 (2002) focus on further geochemical sampling and
detail mapping conducted over small portions of the District. The 2002 report
describes work in the Shan-Ji-Keng area that discovered a high-grade gold-silver
zone in a road cut - this area is particularly interesting and will be discussed
below. Maps related to this work have been translated and are in Sparta's
possession.
FTCM Report #1 attempts to estimate a "reserve" based upon the size of old
workings, geochemical results surrounding these workings, and using "1/2 the ore
body depth as the ore body slope depth" (perhaps meaning that twice the depth of
each mine opening was assumed to be ore body depth???). The report suggests that
1081 m-tonnes (1191 st) of silver are present at Da-an. This estimate is not
based on any meaningful underground data and does not meet any western
government standard for reserve calculations.
Historic production from the District is difficult to estimate however the
Brigade estimated the volume of each major working in FTMC Report #1. Based on
their figures and using a tonnage factor of 3.5 metric tonnes / cubic meter for
volcanic sulfide ore, some 32,400 metric tonnes were mined previously. The
author's limited examination of some workings indicates that mined widths are
smaller than those used by the Brigade; a more conservative figure might fall in
the range of 10,000 metric tonnes. Historic production might be extrapolated
using the more conservative 10,000mt volume estimate and grade figures ranging
from 200g/t to 16,000 g/t, at 2,000,000 to 160,000,000 grams (58,400 to
4,672,000 troy ounces) of silver produced. Whatever the actual production was,
there can be no doubt that the District has seen substantial silver production
in the past. A complete listing of all maps, drawings, and reports in Sparta
possession can be found in Section 21 - References.
7.0 GEOLOGICAL SETTING
7.1 Regional Setting
Located on the southeastern margin of the Eurasian plate and adjacent to the
Pacific plate along the circum-Pacific "Ring of Fire" magmatic zone, Fujian
province has a long history of collision, deformation, and sedimentation
(Unknown, 1998). To this day, it remains a center of tectonic controversy. The
province lies within the South China Mobile Belt (see Figures 2 and 2a), a zone
of accommodation wedged between the continental Yangtze Landmass to the north
and east, and an old continental mass "Cathaysia" partially consumed within the
Pacific subduction zone (Chen, 1999). On Figure 2 the east-west trending gray
line just north of the Yongpi porphyry district, and only 150km north of Da-an,
roughly traces a deep-seated tectonic fault boundary between the continent and
adjacent mobile orogenic zone (Hongfei, 1996).
Northeast trending synform / antiform pairs on a regional scale parallel the
major South China Suture Zone (Chen, 1999) which runs from Guanzhou to Shanghai.
Consistent with the strongly folded fabric, southeast verging thrusting and
folding dominate the structural fabric. Shortening on the order of 45% has been
suggested for the region due primarily to middle Jurassic compression.
Basement consists of meso-Proterozoic (1100 - 1400Ma (Unknown, 1998))
greenschist facies mica-quartz to plagioclase-amphibole schists from
intermediate acidic volcanic protoliths intermingled with dirty sediments
(Longheixi Formation near Da-an - Figure 2). Regionally (but not in the
immediate Da-an area), a thick sequence of Cambrian to Ordovician age pelagic
rocks overlie basement and may represent a "thick accretionary wedge built up on
the northwestern active margin of Cathaysia" (Chen, 1999). A transgressive
platform sequence evolved in the late Devonian and progressed to deeper water
sediments through the early Triassic. Terrestrial sediments mark the upper
Triassic above an unconformity with the missing middle Triassic. Early to middle
Jurassic red clastic foreland basin rocks conformably or disconformably overlie
the Triassic. Chen (1999) suggests these represent syn-tectonic molasse
deposits.
The late Jurassic to early Cretaceous marked a major deviation in tectonics and
rock types. This period is dominated by acid volcanic rocks probably attributed
to the west verging subduction of the Pacific plate. At Da-an these rocks are
represented by the Jurassic Changlin Formation, the dominant country rock in the
project area, composed of tuffs, sandstones, conglomerates and siltites (units
J2 & J3 on Figure 2). The Jurassic - Cretaceous transition around Da-an is
marked by the Xiaoxi Formation dominantly grayish tuffs, siltites and tuffaceous
conglomerates. Red dacites, dacitic ignimbrites, and basalt represent the lower
Cretaceous Huangkeng Formation. Late Cretaceous sediments were deposited in rift
valleys, suggesting a major deviation in stress direction and style. The Shaxian
Formation consisting of purple-red siltites, mudstones, and sand conglomerates
occupies the upper Cretaceous around Da-an.
Stress regime changes in and around the Jurassic - Cretaceous boundary at Da-an
and elsewhere in Fujian may be critical to the formation of mineralized
districts. A east-northeast to east-west compressional regime related to
subduction seems to have dominated the late Jurassic (Shuhe, 1992). The early
Cretaceous however witnessed a major change from compressional to extensional
stress with structural directions oriented more north-northeast concomitant with
a tremendous increase in back-arc style extensional magmatism (Xu, 1999). Fujian
thus became one of the largest calc-alkaline intrusive regions in the world.
Adjacent to the Da-an prospect, the early Cretaceous Makeng medium to
fine-grained red "moyite" (granite?) was emplaced, followed by the late
Cretaceous Shipaiqian light-red granite porphyry.
7.2 Property Geology
Plate 2 of this report, based on a map created by the Brigade (1992, 1999), is a
geologic map of the prospect. Symbols and abbreviations in this report can be
found on the map legend. The country rock across the property is the
Jurassic-Cretaceous Nan Yuan Formation, a unit that is part of the widespread
Mesozoic volcanic belt that covers much of northeastern Fujian (J2 & J3 on the
regional map, Figure 2) and the neighboring provinces of Guangdong and Zhejiang.
The Nan Yuan is subdivided into three entities called, from oldest to youngest
J3nb, J3nc, and J3nd. J3nb is primarily rhyolitic crystal tuff and sand
conglomerate; dacite crystal tuff, conglomerate and crystal tuff typify J3nc.
J3nd can be characterized by rhyolitic tuff flows and welded flows at the base,
an intermediate member of tuffaceous siltstone, carbonaceous shale, and
volcaniclastic tuffs (called J3nd2); topped by upper intercalated rhyolite
crystal tuff and welded tuff. J3nd2 as mapped by the Brigade is a very
interesting marker unit that helps define the structural style of the district
and therefore is marked in green hatch on Plate 2.
Three kilometers northeast of the center of the property, a late-Yanshanian
(70-195Ma) age granite intrudes the Mesozoic volcanics. This red colored granite
is medium-grained and extensive in outcrop with a hornfelsed zone extending at
least 200m into the enclosing volcanics. Several other intrusive phases,
probably post-granite in age, are found in the project area; these include
quartz monzonite porphyry, quartz trachyte, syenite, quartz porphyry, and
diabase. Engineer Wu suggests that a molybdenum porphyry may exist at depth.
Mineralization appears to be post-granite in age. At sample site 420404 (Plate
2) on the eastern edge of the property, a quartz dacite was observed intruding
the margin of the granite; it contained fresh black biotite along with scattered
blebs of pyrite and chalcopyrite and overall looked very similar to some of the
dykes seen around the property that are closely associated with alteration and
mineralization.
Geologic structure, based on the author's cursory examination and the Brigade
maps, is very complex. A series of small synforms and antiforms can be defined
by tracing the outcrop of unit J3nd2 across the property (green hatch, Plate 2).
A larger synform can be postulated trending similar to the J3nd2 folding,
northeast to southwest, plunging southwest; on the basis of Mesozoic volcanic
stratigraphy younging from northwest to southeast and older units enclosing
younger ones to the east and west. J3nd2 folding is dissected by a series of
roughly northeast trending, northwest dipping thrust (?) faults. Figure 3 is a
cartoon sketch of the possible structural scenario in the District. This sort of
situation fits well with the regional tectonics described above.
The majority of mineralized zones in the District (outlined in red on Plate 2)
trend slightly oblique to the postulated fold axis; a few zones can be found
perpendicular to the axis. Furthermore, there seems to be a crude periodicity to
the mineralized zones, each separated by three kilometers moving from west to
east across the property. It seems very likely that a combination of folding and
thrusting controls mineralization, however much more fieldwork is needed to
fully understand this relationship and use it to design drill holes. "Flower
structures" and zones of pressure relief might be outstanding targets for major
mineralization.
Although the author feels that mapping by the Brigade is of very high quality,
it seems to have focused more on detail work around the mineralized zones,
neglecting somewhat the district as a whole. More intensive district-wide
mapping is recommended to help place known zones into a better perspective and
help predict less obvious, but highly prospective targets not yet defined.
8.0 DEPOSIT TYPES
High-grade silver +/- gold, lead, zinc cordilleran vein type deposits (Guilbert
& Park, 1986) are the most reasonable model for this property. This type of vein
is world renowned for its richness and productivity; they are found at such
places as Ouray, Colorado and Couer d' Alene, Idaho as well as numerous other
locations around the Pacific Rim and the world. Such veins typically occur on
convergent margins in zones of abundant calc-alkaline magmatism. Silicious
volcanic rocks frequently host such veins. They are emplaced at relatively
shallow depths and tend to be sulfide-rich fault, fracture, or breccia fillings
in zones where open spaces are structurally developed. Not uncommonly they may
be spatially associated with porphyry copper or molybdenum bodies within a few
miles of the veins. The Da-an area meets all of these criteria.
Using cordilleran veins as a model, exploration can be focused on certain key
aspects of these systems. Structure plays a huge role in these deposits -
understanding the structural setting of the old stopes at Da-an can give
tremendous insight into the trends and plunge of undeveloped workings below
them, and facilitate modeling of potential ore "traps" applicable to the rest of
the district. By extension, careful mapping of the district as a whole can help
predict additional new zones that may not have surface outcrop. Studying
district metal zoning and alteration zoning in and around the old stopes and
other structural zones will also provide valuable vectors to mineralization.
Stream sediment and perhaps soil geochemistry can be used to zero in on key
areas. In some cases, geophysics can be used to seek out sulfides along key
structures.
To begin with, exploration at Da-an should focus on geologic mapping and
geochemical sampling. The work previously done by the Brigade locating and
detailing old workings is particularly valuable and will form an excellent basis
upon which to build some target concepts. Sampling and mapping combined with the
detail work already done should produce a model of local mineralization that
defines optimum structural settings. When combined with district-wide mapping
and more detailed district-wide geochemistry, target areas will emerge. Detail
soil geochemistry and/or ground geophysics (such as CSAMT) can then be applied
if needed to further tie down targets. Angled diamond core drill holes can then
be sited either on the basis of geologic mapping or on more detailed geochemical
/ geophysical work. See "Section XX - Recommendations" for more details.
9.0 MINERALIZATION
During the recent brief visit by the author, several mineralized zones around
the district were examined cursorily. Areas visited included (see Plate 1): Guan
Tian, Tan Shan, Wai Lou, and Wen Yang Tin. The author's impressions and
observations for each of these areas follow below. Note that all mention below
of "stream sed" or "panned con" samples refers to Old Data generated by FTCM -
see "Section 12 - Sampling Method" for more information.
The only site visited that displayed obvious polymetallic silver mineralization
was the northern part of the Tan Shan zone. Here an adit was driven 101m N20E
sinuously following a series of veins. The adit is flooded and was not entered;
however some good high-grade material was found near the entrance on the dump
(sample 420401 - Appendix 3). The rock is a silica-flooded dacite cut by white
milky quartz veins and multi-episode veinlets of dark pyrite, galena,
sphalerite, +/- chalcopyrite. Assay indicated 0.32 g/mt (.0093 opt) gold, 334.9
g/mt (9.78 opt) silver, 7.3% lead, 8.6% zinc and 0.1% copper. Engineer Wu stated
that silver almost always occurs with lead - he also reported that the tunnel
was mapped and sampled by the Brigade; Sparta does not yet have a copy of this
data.
Although jungle vegetation and soil obscured alteration immediately around the
adit, there appears to be pronounced alteration up to at least 30m or more
perpendicular to the vein system in the hanging wall. Weak silicification of the
volcanics extends for 10 or so meters to the west, then gives way to a
moderately strong pyrite / argillic stockwork which continues away from the vein
for another 20 meters or more. Craggy cliffs up some of the nearby canyons
paralleling the vein strike suggest that there may be multiple silicified zones
in this area. This is an easily accessible and important zone definitely worthy
of detailed examination.
The Tan-Shan alteration zone itself extends approximately 1.3km along a
northerly trend. Only two of four stream sed samples taken from the area showed
anomalous values; of nine panned con samples collected, none reported unusual
values. Notwithstanding this poor geochemical showing, the area is riddled with
extensive old workings. To the south on the opposite side of a major drainage
two panned con samples found gold grains - this area has not been investigated.
An area of two anomalous stream sed samples to the west also has not yet been
followed up. Another major mining area, the Wai-Lou zone occurs on the southern
end of Tan-Shan - it too is riddled with old workings. Numerous panned con
samples on the north end of Wai Lou found gold grains.
The Shan Ji Keng zone (Plate 1), site of sample number 420413 (Plate 2), was
very interesting. Here a roadcut slices through a 35m wide zone of strong
silicification and pyritization. A sample of dark gray clay gouge taken from a
1m wide fault zone assayed an impressive 15.2g/mt (0.44 opt) gold, 437.1g/mt
(12.7 opt) silver, and 400ppm (0.04%) molybdenum. Both lead and zinc were very
low. These results coincide well with sampling done by the Brigade in year 2000.
The immediate area has been detail mapped by the Brigade; they suggest that this
structural zone extends at least 350m to the west-northwest, but limited
sampling along the zone yielded only trace levels of gold and silver. To the
east the gouge zone is cut by north trending quartz trachyte and diabase dykes
but an extension is certainly possible. Translated, detail maps of this zone are
in Sparta possession. A soil survey was conducted in the area, methodology and
results of which remain unclear. No stream sed or panned con samples have been
collected in this area; this entire zone deserves intensive follow-up.
The Wen Yang Tin area on the eastern side of the district consists of several
interesting areas and is the closest to the granite intrusive. Sample 420404 was
taken from a quartz dacite intrusive dyke that cuts the edge of the granite. The
sample assayed 1.0ppm (0.029opt) silver, 125ppm zinc, and 903ppm barium - the
highest barium assay seen. Surprisingly, molybdenum was not elevated at all.
Although not ore-grade, the assays suggest that this sort of dyke is related to
the overall precious metal distribution in the district. No stream sed or panned
con work has been done in the area.
Adjacent to Wen Yang Tan, the Pan Di road proved to be very interesting. Driving
west from the village of Pan Di, several good looking roadcuts were encountered,
both exhibiting silicified, pyritized volcanics cut by east-trending quartz and
sulfide veinlets; neither cut had been sampled previously. Samples 420405 and 06
were collected from the same roadcut, approximately 3m apart. Sample 405 assayed
0.09g/mt (0.0026opt) gold, 11g/mt (0.32opt) silver, 174ppm copper, 110 ppm zinc,
103 ppm moly, and 192 ppm barium. Sample 406 assayed 0.18g/mt (0.005opt) gold,
42.8g/mt (1.25opt) silver, 75ppm moly, and 288ppm barium; both samples reported
elevated antimony as well. The elevated barium and antimony, together with
depressed lead and zinc suggests that this area is "higher" in the mineralizing
system than other areas to the west. These roadcuts are very exciting because
they represent the relatively underexplored nature of the district as a whole,
as well as an additional exploration target. This area too has not been
subjected to stream sed or panned con sampling.
Commander Ridge, located about a kilometer west-northwest of the Pan Di road
area, is exciting because it may represent a high-level (near-surface) exposure
of a large vein system. The top of the ridge consists of weathering-resistant
rock "ribs" that stretch at least 2kms west across a major canyon and up the
next ridge. Rock here is acid-leached, vuggy quartz latite that displays quartz
finger and red limonite veinlets. The vuggy texture probably formed from acid
leaching of phenocrysts; many vugs have an interior lining of secondary silica
and perhaps alunite (?). Two samples collected here 420410 and 411 assayed nil
gold, 0.6g/mt (0.0176opt) silver in 410, strongly elevated arsenic, antimony and
molybdenum. This is one of the only areas sampled where arsenic was found;
arsenic and antimony, again with low lead and zinc, are suggestive of "high"
level veins. Silver and gold might not be found at such higher levels.
Sample 420412 illustrates very well the vein elevation concept of Commander
Ridge. It was collected from an old stope exposed along a trail some 50m (160')
perhaps below the top of the ridge. Alteration appeared similar to that seen
along the Pan Di road: quartz latite cut by strong milky quartz veins with
margins of black sulfides and some sympathetic sulfide veinlets. The sample
assayed weakly anomalous gold, 11.5g/mt (0.33opt) silver, 177ppm zinc, moderate
arsenic, moderately elevated moly, and 211ppm barium. The series of rock "ribs"
which cut Commander Ridge and continue for at least another mile put forward
another very interesting target, a possible series of parallel veins with good
widths and extensive strike lengths. No stream sed or panned con work has been
done in this zone or along the trend.
The Guan Tian Chang Mine located near the center of the district is a complex of
old stopes and workings with a mapped strike length of 90m (295') trending
roughly north-south. Sample 420414 was collected along the wall of an old stope
located 10m above diamond core drill hole ZX-0001. This sample was taken from a
greenish, silicified latite tuff cut by white quartz veins with black sulfide
selvages, in turn cut by red limonite veinlets. Curiously these veinlets trend
N20-50E, roughly perpendicular to the old stope. The assay returned 0.22g/mt
(0.0064opt) gold, 13.6g/mt (0.40 opt) silver, 108ppm lead, 169ppm zinc, and
moderately anomalous moly.
The author was told that the famous 16,000g/mt (467opt) silver sample taken
around 1992 came from a stope uphill and slightly east of the drill hole stope.
Some time was spent working through the dense vegetation in that area, but the
working could not be found.
Sample 420415, taken from another old stope 30m below 414, was collected from an
oxidized fault gouge zone where the stope pinched out. It contained fragments of
white quartz vein material and oxidized material with some quartz-limonite
veinlets. Assay indicates the sample contains traces of gold, 20.5g/mt (0.60opt)
silver, weak moly and 112ppm barium; lead, zinc, arsenic and antimony were very
low.
Core hole ZK-0001 was drilled S70E at -85 degrees just below the stope of sample
414 in an attempt to cut vein material at depth. The stope above trends N15E and
dips 87 degrees south, so the drill hole closely paralleled the stope rather
than cutting it. Unfortunately an angle hole could not be drilled since no such
rig was to be had at the time. The hole intersected several broken zones of
"mineralization" in volcanic rocks varying from 2-8m apparent width, together
with spotty pyritized zones and increasing silicification / pyrophylitization
towards the bottom at 111.6m. Silver was weakly anomalous from 95m downward; the
high silver assay obtained was 30g/mt (0.88opt) from two approximately 1m
intervals. The high gold value was 0.21g/mt (0.006opt) obtained from a 1.12m
interval near the bottom of the hole. In addition to the orientation of the
hole, the failure to cut significant ore may also be attributed to the
observation from sample 414 that the quartz veinlets of the stope seem to be
running perpendicular to it, and thus parallel to the core hole. Nevertheless,
the hole is interesting in that it proves that there is significant width (10's
of meters or more) of alteration away from the stope. Core from the hole is said
to be stored in the village immediately adjacent. A graphic log and assay
results can be found in map D-8, translated and in Sparta possession.
Two other samples were taken from inside an old stope on the south end of the
Guan Tian Chang Mine area. Samples 420416 & 417 assayed 209 and 384ppm barium
respectively but only trace amounts of silver and no lead or zinc. Similarly,
stream sed and panned con sampling around the zone has not been useful. Overall
Guan Tian is a large area of ancient mining activity and deserves a thorough
inspection. Careful siting of several drill holes in this area may be warranted.
In conclusion, a few useful observations come from this data. Arsenic and / or
antimony appear to mark higher level altered zones. Barium seems to be more
characteristic of slightly lower levels below arsenic and antimony. Ore grade
silver +/- gold with strong lead and zinc tend to occur below the barium level.
Molybdenum is anomalous across the project area and may not be a useful
pathfinder for ore. Of course these observations are based on only a few samples
collected from disparate locales across a large district and so should be used
with care.
Finally, it is not clear from the author's work to date whether there is a clear
structural "trend" to mineralization. Although most of the old workings trend
roughly north-northeast, several developed and undeveloped anomalous zones
appear to be nearly perpendicular to that trend. In particular, the very high
grade gold zone at sample 420413, the white quartz/sulfide selvage veinlets at
Guan Tian, and the altered "ribs" of Commander Ridge all suggest that
mineralization can deviate from the established north-northeast direction.
10.0 EXPLORATION
To date, exploration conducted by Sparta consists only of the cursory
introductory visit by the author. No systematic surveys or investigations have
been conducted. The purpose of this visit was to gather as much information
regarding the property as possible, both on the ground and from the owners, in
order to lay the groundwork for a more comprehensive exploration program leading
to target drilling. In the short time span available for his visit, the author
personally inspected a number of different locations on and adjacent to the
property. Notes were recorded, photographs taken, and 19 outcrop grab samples
were collected.
During his visit, the author met with representatives of FTCM and the 4th
Brigade. Twenty-five maps and cross-sections together with three reports were
obtained from FTCM (see "Section 21.1 - References"). These show detailed
geologic mapping, locations of other detail work, and local / regional sampling.
Many, but by no means all, of the locations documented in the maps and sections
were visited in the field. Numerous rock chip sample sites were verified and
sampling methodology confirmed.
The author's work has confirmed that there is good potential to discover at
least one high-grade polymetallic silver +/- gold, lead, zinc vein on the
property and that further exploration is warranted. The Da-an property is a rare
opportunity to acquire a large part of a very old district that has not been
subjected to in-depth modern exploration methods. A better understanding of the
potential size and geological nature of the property has been achieved. Local
geology has been placed into a regional perspective to demonstrate its
affinities with other nearby districts. Concepts likely to be helpful to
continued exploration have been developed including a structural scenario, basic
metallogenic model, and geochemical zoning patterns. Finally logistical details
have been clarified and positive initial contacts made with key participants.
The stage is set for intensive exploration of the area.
The author is an independent contractor employed by the Issuer. Mr. Fred R.
Schmid, President of Sparta, retained the author's services for Sparta and
directed the work to be done.
Data collected by the author during the recent campaign is considered to be
reliable within the constraints of any conscientiously managed early-stage
exploration program. Uncertainty exists in that the entire property has not yet
been examined and much data from FTCM remains to be assembled and integrated
into a coherent district-wide picture.
11.0 DRILLING
Sparta has not conducted any drilling on the property to date. The Brigade
drilled one diamond core hole ZK-0001 at coordinates 20750612E, 3048482N in the
Guan Tian Chang Mine area. Details for this hole are given in "Section 9.0 -
Mineralization" above. Core is stored in an unsecured location at an adjacent
village and was not examined by the author. No other drilling to the author's
knowledge has been conducted in the district.
12.0 SAMPLING METHOD AND APPROACH
The nineteen samples collected to date were collected as part of a preliminary
reconnaissance program. Eighteen of the samples collected during the most recent
campaign at Da-an were grab samples of rock from outcrop; one sample was of mine
dump material focused on high-grade material. Samples were collected at sites
that, in the judgment of the author, appeared to be well mineralized. Each
sample was intended to be representative of the site from which it was
collected. Samples were not collected to represent "true widths" but only to
ascertain potential tenor of ore-grade material. High-grade material was found
to be sulfide-rich, commonly with quartz veinlets and dark veinlets of galena
+/- sphalerite. This rock sampling is considered to be reliable within the
normal constraints of a reconnaissance exploration program. A summary list of
the author's samples can be found in Appendix 3.
Old Data stream sediment and panned concentrate samples were collected by FTCM.
The sample locations can be found on Plate 2, but no serious analysis has been
attempted due to the lack of substantive information regarding sampling
methodology and sample medium. It is notable that in several of the large old
mining areas (such as Guan-Tian), said sampling failed to indicate an anomaly of
any kind. Soil sampling was carried out at Shan-Ji-Keng, but again precise
details on methodology and medium have not been found. Lacking background
information, results of these Old Data sampling methods are only commented on in
the text and have not been compiled in any rigorous way.
13.0 SAMPLE PREPARATION, ANALYSIS, AND SECURITY
Samples collected by Sparta during the recent fieldwork were bagged in new,
clean plastic bags, wrapped in clean canvas bags and shipped to the
International Plasma Laboratory (iPL) prep lab at Kunming, Yunnan Province,
China. Samples were prepped at Kunming and then shipped by iPL directly to
Vancouver for analysis. Rejects remain in Kunming, while pulps reside in
Vancouver. iPL is an internationally accepted laboratory that is ISO 9001:2000
Certified for the "provision of assay and geochemical analytical services," as
defined by KPMG Quality Registrars, and is a certified assayer in British
Columbia.
Rock samples were dried and then crushed to 70% passing minus 10-mesh, split to
250gms, then pulverized to 90% passing minus 150-mesh. Coarse rejects were
saved. Gold and silver were determined using a 30-gram fire assay with AAS
(atomic absorption spectroscopy) finish with a detection limit of 0.01g/mt. A
standard multi-acid digestion 30-element ICP package that includes silver was
also run - silver lower detection limit 0.10ppm. The pulps are currently still
available at the laboratory in Vancouver, should any additional analytical work
or check assaying be required.
A weakness in the sample handling process arose in the shipping of samples from
the author in Fuzhou, China to the prep facility in Kunming. FTCM, the owner of
the property, arranged the shipping and handling of the samples and had the
samples in their possession for a short time, out of the author's presence,
while arranging shipment. Absolutely no tampering with the samples is suspected.
iPL confirmed with the author that the samples arrived in intact condition.
Careful analysis by the author confirms that the sample results conform well to
field observations. As planning continues for the next phase of exploration, a
well-conceived plan for sample shipping must be implemented to assure that
samples are shipped in a completely secure fashion minimizing opportunities for
tampering. It is recommended that samples be shipped from the hands of Sparta
personnel directly to the lab using an established and reliable common carrier
such as UPS.
All work conducted by Sparta on the project was carried out under the direct
supervision of the author. At no time did an employee, officer or director of
Sparta have any involvement with the sample preparation or analysis process. In
the opinion of the author, the security and integrity of this sampling is
believed to have been adequate for such early stage reconnaissance work, except
as noted in the paragraph above.
14.0 DATA VERIFICATION
During the recent field campaign, the author personally conducted all field
operations.
Due to the small number of samples collected during this work, the laboratories
own quality control standards were deemed sufficient and no special measures on
the part of the Issuer were used. As silver was the primary element of concern,
determinations were done by both FA/AAS and by multi-acid digestion ICP. In
general silver assays using FA/AAS agreed very well with ICP results - within
15%. Gold assays over 1g/mt and silver assays over 100ppm were re-assayed using
FA/AAS. iPL included one lab "blank", one lab standard and one lab "repeat" -
all of which checked out well (see lab results - Appendix 3). As a further
check, high Sparta assays collected from known areas of high values recorded
previously by FTCM have been correlated and are within reasonable limits.
The author has verified the data used in this report and feels confident that
the conclusions drawn therefrom are valid. As the next stage of exploration is
planned, a consistent program of assay checks should be put into place and the
prep lab in Kunming should be inspected personally.
15.0 ADJACENT PROPERTIES
Although published information on adjacent properties (particularly precise
locations, grade & tonnage) is difficult to obtain. Three properties deserve
mention in relation to Da-an: Zijinshan, Yongpi, and Lenshuikeng (Figure 4).
Zijinshan, the best known of the three, is located about 360km southwest of
Da-an. An acid-sulfate porphyry-copper related system, "reserves" are quoted at
1.6 million metric tonnes copper and 15 metric tonnes gold (So, 1998). Note that
no documentation is available concerning the nature or manner of calculation of
these "reserves". Copper - gold mineralization occurs around a dacitic volcanic
pipe in the central part of a Cretaceous age dacite dome complex. The dome
intruded a late Jurassic granite. At depth the dacite grades into potassic
altered granodiorite porphyry. Similarities to Da-an include: Cretaceous age
dacitic volcanics, dacite intruding late Jurassic granite, and alteration
consisting of dickite, zunyite, alunite - analogs of pyrophyllite found at
Da-an. However, Zijinshan is centered on an anticlinorium rather than a synform
and regional basement consists of a thick sequence of Paleozoic sedimentary
rocks.
The Yongpi porphyry copper mine is located 185kms northwest of Da-an. Little is
know about it except the deposit is said to contain 144Mmt at 0.72% copper
(Wang, 2003). No documentation is available concerning the nature or manner of
calculation of these "reserves". It too is surrounded by Paleozoic sediments but
is adjacent to late Jurassic granite similar to that of Da-an.
The most interesting of the deposits near Da-an is Lenshuikeng, located about
210kms west-northwest of the project area. This district is reported as a very
large silver producer, but precise numbers could not be found. Shiqing (1996)
reports the deposit is mainly a silver polymetallic deposit with associated
lead, zinc, cadmium, gold and copper. "Porphyry type and stratabound
superimposition type" is found here; some 70% of the silver is associated with
the "porphyry" type. In reviewing the description, it appears that "porphyry"
might better be termed "dyke" - superimposition might be the equivalent of
"strataform". Faults are often filled with rhyolite porphyry and high-grade vein
material. Strataform mineralization appears to be replacing an iron-manganese
rich dolomite sandwiched within the volcanics. Reading between the lines,
Mesozoic folding deformed by thrusting is the dominant structural theme, quite
reminiscent of Da-an. A visit to this district could be very valuable towards
understanding ore controls at Da-an.
The author has no interest or relationship whatsoever to the above-mentioned
three occurrences. This information is compiled from published sources and the
author has been unable to verify this published data. Information provided in
this Section 15 is not necessarily indicative of the mineralization at Da-an.
16.0 MINERAL PROCESSING AND METALURGICAL TESTING
Neither mineral processing nor metallurgical testing has been carried out on
samples from the property.
17.0 MINERAL RESOURCE AND MINERAL RESERVE ESTSIMATES
No mineral resource or mineral reserve has been estimated for the Da-an
property.
18.0 OTHER RELEVANT DATA AND INFORMATION
Appended to this report is the author's Statement of Qualifications (Appendix
5).
19.0 INTERPRETATION AND CONCLUSIONS
Based on his professional experience, it is the conclusion of the author that
the Da-an prospect represents a significant exploration opportunity of unusual
quality. Potential for discovery of a major high-grade silver (+/- gold), lead,
zinc cordilleran vein system is very high. This conclusion is based upon the
author's brief visit to the property, rock samples collected by the author at a
variety of different sites across the property, and data assembled by FTCM.
The widespread distribution of ancient workings (particularly high-angle stopes)
across some 70 square kilometres of the property is reminiscent of some of the
world's great mining districts - Rio Tinto, Spain and Kuroko, Japan are just two
instances. The intrusive history of the area is very similar to the important
Lenshuikeng silver deposits to the east of the district, and to many similar
deposit localities around the world. Da-an exhibits classic calc-alkaline
volcanism and hypabyssal intrusives of the type and age that have proven
productive throughout east China and the Pacific Rim. Tectonic history of Da-an
and the region records strong shortening and compression followed by release
through extension at just the geologic time when volcanism was active and other
large deposits were forming. Structure of the prospect lends itself well to
large-scale structural traps such as "flower structures", stacked thrusts, and
fold / thrust intersections of sufficient size to host significantly large
orebodies. Strongly anomalous geochemical samples collected by FTCM and by the
author confirm the potential for high-grade mineralization intensity.
Furthermore they help to establish a possible vertical and perhaps horizontal
zonation across the district that may be a vital exploration clue. Finally
relatively dense jungle vegetation and a lack of any publications have kept the
district a well-hidden secret for many years. The Da-an prospect represents a
rare opportunity to explore a "virgin" mining district of potentially
world-class scale.
Data developed by FTCM appears to be reliable and professionally developed, but
is limiting in the sense that it tends to focus only on small, discreet areas of
known mineralization rather than treating the district as a whole. Data density
therefore may be sufficient for these studied zones, but is insufficient when
used to seek larger targets. As a result, large areas of uncertainty represented
by zones of very little or no mapping, and insufficient sampling, exist across
the district.
The original objectives of the author's visit to Da-an have been accomplished.
From a situation in which there was no detailed information of any kind, the
project has progressed to a stage where good concepts are beginning to form and
an exploration program should, and can, be proposed. Key professional
relationships have been established and infrastructure characterized. Thanks to
the helpfulness and professionalism of both the FTCM staff and the Fujian
Geological Survey 4th Brigade, a wealth of new information can now be integrated
into a coherent district-wide conceptualization. Much work remains to be done
before drill targets can be reasonably proposed, but a good groundwork has been
laid and a path towards discovery can now be envisioned. The recommendations
that follow have been uniquely designed for Da-an and are meant to minimize
uncertainty while efficiently developing new targets.
20.0 RECOMMENDATIONS
The Da-an prospect is uncommon in that it represents a large cordilleran vein
system that is relatively unexplored in this century. Good potential exists to
discover high-grade silver +/- gold deposits. In the opinion of the authors, the
character of mineralization observed on the Da-an Property is of sufficient
merit to justify the following exploration steps:
1) Acquire a digital topographic basemap at 1:10,000 scale and
insure that its coordinate grid is properly registered to conform
to current Chinese legal and to international standards.
2) Finish compilation of FTCM data and transfer data to one map with
overlays for old workings, sample locations of various types,
geology and structure, and infrastructure.
3) On the ground, establish verifiable control points that
correspond accurately to the topo map grid and register
accurately on any global positioning system (GPS) devices
employed. Confirm that all roads are located correctly on the
map.
4) Sparta should employ a translator for field and office use,
independent of translators or agencies used by FTCM.
5) Begin hunting for a drilling contractor with angle hole diamond
core capability; insure that good mud/cement support is available
for bad drilling / watery conditions.
6) Discuss with a qualified geochemist stream sediment and soil
sampling possibilities for this particular terrain. Conduct a
small stream sediment sample control test to determine best
methodology of stream sampling; do the same for soil sampling.
7) Contract one additional geologist and one assistant geologist to
assist with mapping / sampling / core logging duties.
8) Hire five or six local fellows to assist with vegetation clearing
and act as guides.
9) Conduct a surprise visit to the iPL prep lab in Kunming, inspect
the facilities and meet key personnel. Design a system for secure
transportation of reconnaissance samples to the laboratory and
place into effect a system of random assay checks on duplicate
pulps at a second laboratory in Vancouver.
10) Acquire government permits if required to allow basic clearing of
vegetation (by machete?) over key portions of the district.
11) Visit all areas of FTCM's previous detailed mapping and sampling
to confirm locations and trends of old workings, to sample
alteration / mineralization, and further refine geology.
12) Conduct reconnaissance geologic mapping at scale of 1:10,000
along all key drainages and ridgetops of the district to better
constrain local geology and structure and confirm that all old
workings have been found and cataloged; collect rock chip and
stream sediment samples at the same time. Confirm on the ground
the location of the Jn3d2 horizon across the district. Follow
major structures (such as the Commander Ridge "ribs") across the
district, mapping alteration, trends, and taking rock samples as
necessary.
13) Compile all new data in the office, establish mineralization
models, derive drill targets if appropriate and / or design
geophysical surveys if needed.
14) Discuss structural concepts with a qualified structural
geologist. *** Decision Point ***
15) Acquire appropriate permits for geophysical surveys (if
required), roadbuilding for drill access and pad construction,
and drilling.
16) Rent sufficient secure space in Shouning or Da-an as a drill
staging / core storage & splitting facility;
17) Build road / trail access to pads; sample and map road outcrop
whenever possible.
18) Drill 10 - 20 angle core holes with average depths of 100 to
300m.
19) Assay core, await results, plot geology and alteration logs.
***Decision Point***
20) Make second-stage recommendations.
It is the opinion of the author that the character of the property is of
sufficient merit to justify the above-detailed exploration program. A proposed
budget for the Recommendations is attached as Appendix 4.
This report is effective as of midnight July 3rd, 2004.
Respectfully Submitted,
- -----------------------------------
Linus T. Keating, D.Sc.
21.0 REFERENCES
Chen, A. (1999): Mirror-Image Thrusting in the South China Orogenic Belt:
Tectonic Evidence from Western Fujian, Southeastern China; in Tectonophysics v.
305, p. 497-519.
Cheng, Y.C. (1990): Geological Map of China 1:5,000,000 scale w/ explanatory
notes; Ministry of Geology & Mineral Resources, People's Republic of China -
Geological Publishing House, Beijing.
Guilbert, John and Charles F. Park (1986): The Geology of Ore Deposits; W.H.
Freeman Company, New York.
Harper, Damian et. al. (2002): China; Lonely Planet Publications, 8th ed.,
Melbourne.
Ishihara, Shunso & Sukune Takenouchi (1980): Granitic Magmatism and Related
Mineralization; Mining Geology Special Issue #8: Society of Mining Geologists of
Japan.
Shuhe, Song (1992): Metallic Mineral Resources Map of China 1:5,000,000 scale,
part of "Mineral Resources Maps of China" series with explanatory notes; Chinese
Institute of Geology & Mineral Resources Information - Geological Publishing
House, Beijing.
So, Chil-Sup, De-Quan Zhang, Seong-Taek Yun, and Da-Xing Li (1998):
Alteration-Mineralization Zoning and Fluid Inclusions of the High Sulfidation
Epithermal Cu-Au Mineralization at Zijinshan, Fujian Province, China; Economic
Geology: v. 93, #7, p. 961.
Unknown (1998): Geological Map of Fujian Province 1;500,000 Scale; with English
Abstract.
Wang, Jingbin (2003): "Chinese Copper Mine Resources and New Exploration"; paper
presented at 16th International Copper Conference hosted by the Metal Bulletin.
Paper available on their website. --------------
Xu, Xisheng; Chuanwan Dong, Wuxian Li, & Xinmin Zhou (1999): Late Mesozoic
Intrusive Complexes in the Coastal Area of Fujian, SE China: the Significance of
the Gabbro-Diorite-Granite Association; in Lithos v. 46, p. 299-315.
Yu, Shiqing, Li Fang, and Fan Chuanbi (1996): Geology of U, Au, Ag Ore Deposits
Related to Mesozoic Volcanism in Jiangxi Province; in Field Trip Guide Volume 4
- - 30th International Geological Congress: Geological Publishing House, Beijing,
China.
21.1 Inventory of FTMC Maps and Reports in Sparta's Possession
The following table summarizes all information received to date from FTCM.
Copies of all these documents may be found at Sparta's offices. Items with (**)
have not yet been translated to English. Items with an "R" in the Sparta # are
written reports - all other items are maps or cross-sections. "n/a" indicates
"not applicable".
Table #1: FTCM Data in Sparta's Possession
- -------------------- ------------------------------------------------------------- ---------- ------------
Sparta Map # Title (translated) Scale Date
- -------------------- ------------------------------------------------------------- ---------- ------------
D-1 Topographic / Geological Map of Silver Mine in Da-an ... 1:10,000 11/20/92
- -------------------- ------------------------------------------------------------- ---------- ------------
D-2 Topographic / Geological Map of Wai Lou Ag Ore Site... 1:2,000 11/15/92
- -------------------- ------------------------------------------------------------- ---------- ------------
D-3 Engineering Sampling Map of Wai Lou Ag Ore Site... 1:1,000 9/3/92
- -------------------- ------------------------------------------------------------- ---------- ------------
D-4 Analysis of Ag, Mo, As, Sb Anomalies in Soil at...Shan Ji 1:5,000 8/5/01
Keng...
- -------------------- ------------------------------------------------------------- ---------- ------------
D-5 Geological Profile of Line 7 in Guan Tian Chang Ag, Au 1:500 9/5/00
Multi-metal Anomaly...
- -------------------- ------------------------------------------------------------- ---------- ------------
D-6 Pit Engineering and Sampling Map of Wai Lou Au, Ag ... 1:1,000 1/5/00
- -------------------- ------------------------------------------------------------- ---------- ------------
D-7 Map of Sampling and Engineering in Shan-Ji-Keng Ag, Au 1:2,000 12/18/00
Multi-Metal...
- -------------------- ------------------------------------------------------------- ---------- ------------
D-8 Geological Profile of Line Zero of Shan-Ji-Keng Ag, Au 1:500 12/6/01
Multi-Metal Anomaly
- -------------------- ------------------------------------------------------------- ---------- ------------
D-9 Topographic / Geological Map of Tan-Shan Ag, Au Multi-Metal 1:1,000 7/21/01
Ore Site...
- -------------------- ------------------------------------------------------------- ---------- ------------
D-10 Topographic / Geological Map of Shan-Ji-Keng Ag, Au 1:2,000 9/15/01
Multi-Metal Ore Site...
- -------------------- ------------------------------------------------------------- ---------- ------------
D-11 Sampling and Engineering Map of Feng-Yang-Ting Ag, Au 1:2,000 10/28/01
Multi-Metal Anomaly
- -------------------- ------------------------------------------------------------- ---------- ------------
D-12 Sampling and Engineering Map of Guan Tian Chang Ag, Au 1:2,000 11/30/01
Multi-Metal...
- -------------------- ------------------------------------------------------------- ---------- ------------
D-13 Geological Profile of Line Zero of Wai-Lou Ag Mining ... 1:500 8/31/92
- -------------------- ------------------------------------------------------------- ---------- ------------
D-14 Legend n/a ?
- -------------------- ------------------------------------------------------------- ---------- ------------
D-15 Vertically Projected Profile of Vein Zone #1-2 and 1-3 at 1:1,000 9/5/92
Guan Tian Chang Ag Mining Site...
- -------------------- ------------------------------------------------------------- ---------- ------------
D-16 Geological Profile of Line #8 at Guan-Tian-Chang Ag ... 1:500 9/20/92
- -------------------- ------------------------------------------------------------- ---------- ------------
D-17 Geological Profile of Line #0 at Guan-Tian-Chang Ag ... 1:500 8/30/92
- -------------------- ------------------------------------------------------------- ---------- ------------
D-18 Geological Profile of Line #7 at Wai-Lou Ag Mining Site 1:500 8/31/92
- -------------------- ------------------------------------------------------------- ---------- ------------
D-19 Vertically Projected Profile of Altered Zone III-1 at Wai 1:1,000 9/5/92
Lou
- -------------------- ------------------------------------------------------------- ---------- ------------
D-20 Map of Ag Element Anomalies in Deposits of Hydro... 1:25,000 3/14/01
- -------------------- ------------------------------------------------------------- ---------- ------------
D-21 Map of Pb, Zn Element Anomalies in Deposits of Hydro... 1:25,000 3/14/01
- -------------------- ------------------------------------------------------------- ---------- ------------
D-22 Map of Au Element Anomalies in Deposits of Hydro... 1:25,000 3/14/01
- -------------------- ------------------------------------------------------------- ---------- ------------
D-23 Composite Map of Ag, Au, Pb, Zn Anomalies in Deposits... 1:25,000 3/14/01
- -------------------- ------------------------------------------------------------- ---------- ------------
D-24 Geological Map of Results from Natural Heavy Sand... 1:10,000 11/10/99
- -------------------- ------------------------------------------------------------- ---------- ------------
D-25 Topographic / Geological Map of ShanJiKeng - Tan Shan.. 1:5000 9/21/01
- -------------------- ------------------------------------------------------------- ---------- ------------
D-R1 Profile of the Project in Shouning n/a 5/26/04
- -------------------- ------------------------------------------------------------- ---------- ------------
D-R2 (**) n/a
- -------------------- ------------------------------------------------------------- ---------- ------------
D-R3 (**) n/a
- -------------------- ------------------------------------------------------------- ---------- ------------
D-R4 (**) n/a
- -------------------- ------------------------------------------------------------- ---------- ------------
*** End of Table***
LIST OF FIGURES
Error! No table of figures entries found.
LIST OF TABLES
Table 1: FTCM Data in Sparta's Possession.....................................25
LIST OF APPENDICES
Appendix 1: GPS Programming and Da-an Control Points.. ......................40
Appendix 2: Land Status and Obligations ......................................69
Appendix 3: Geochemical Sample Summary........................................87
Appendix 4: Proposed Budget 2004 - 2005.......................................88
Appendix 5: Statement of Qualifications.......................................93
LIST OF ENCLOSED PLATES
Plate I: Da-an Property Map Showing Key Localities - 1:25,000
Plate II: Da-an Geologic Map & Sample Locations - 1:10,000
APPENDICES
APPENDIX I
GPS Programming and Da-an Control Points
All Global Positioning System (GPS) devices used during the current field
campaign were checked and double-checked to insure that the proper "Coordinate
System" and "Datum" were in place. Following are the settings used:
Coordinate System: User Grid
Projection: Transverse Mercator
Latitude of Origin: 00.00000N
Longitude of Origin: 117.00000E
Scale Factor: 1.0000000
Units to Meters Conversion: 1.0000000
False East at Origin: 20500000.0
False North at Origin: 0.0
Datum: WGS `84
Note: Not all GPS devices can be programmed as above; even those with "User
Grids" frequently do not allow enough decimal places to permit this level of
programming. GPS used on site was a Magellan Meridian.
Control Points Used for GPS Coordination
The following points were established on the ground to coordinate GPS with
topographic maps used on the project - these points are shown on the geologic
map (Plate 2).
"BRIDGE"
Gauss Kruger coordinates: 20750386E, 03049117N.
"SADDLE"
Gauss Kruger coordinates: 20749453E, 03046944N
Neither of these points coincided particularly well with the grids on the paper
maps, partially due to copier stretch; however they are considered to be sound
from a GPS standpoint. Gauss Kruger grids for the project maps were re-generated
to fit these control points.
APPENDIX 2
Land Status and Obligations
Claim Status, Da-an Project
- --------------------------------------------------------------------------------------------------------
Certificate Number Claim # Claim Name Claim Type Has. Owner Annual Work /
(Atlas#) Payments Required
- --------------------------------------------------------------------------------------------------------
3500000230216 G50E007013 Fengyang Mine 2800 FTMC*
Pavilion Prospecting
Right
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
Same as Above G50E003015 Liushu Fuji Mine 5300 FTMC*
Tanshan Prospecting
Right
- --------------------------------------------------------------------------------------------------------
* FTMC = Fujian Tiancheng Mining Industry Corporation, Ltd.
APPENDIX III
Geochemical Sampling by the Author
APPENDIX IV
Statement of Qualification
CERTIFICATE of AUTHOR
I, Linus T. Keating, D.Sc. do hereby certify that:
1. I am a self-employed Consulting Geologist with residence at 4325 East
Cooper Circle, Tucson, Arizona, USA 85711.
2. I am a graduate of the University of Arizona in Tucson, Arizona, USA with a
B.Sc. in Geological Engineering (Mining & Exploration Option): 1984; and of
the Vrije Universiteit Brussel, Brussels, Belgium with a D.Sc. (Doctor of
Science) - High Distinction in Geology: 1998.
3. I am a Registered Geologist in the State of Arizona, USA (Registration
#40815) and a Certified Professional Geologist (#10742) in the American
Institute of Professional Geologists (AIPG). I am a member of the Arizona
Geological Society.
4. Since graduation I have worked as a geologist for more than 19 years in the
USA, Mexico, Honduras, Chile, Argentina, Japan, and mainland China. I have
worked as a Consulting Geologist from 1998 through the present day for a
number of private and corporate clients in Chile, Argentina, and mainland
China. I was permanently employed by RTZ Mining and Exploration, Ltd. as
Principal Geologist - Argentina from 1996 through 1998, and previous to
that held a number of technical and management positions with Kennecott
Exploration Company (a wholly-owned subsidiary of RTZ) from 1984 through
1996. In 1983 through 1984 I held a number of junior positions with
Molycorp, Inc., SAGE Associates, and Jucevic Consulting.
5. I worked at the Da-an property as a Consultant for Sparta from May 29th
through June 6th, 2004.
6. I have no direct or indirect interest in the Da-an Property, nor in Sparta
Holding Corporation, nor do I expect to receive any.
7. I am not aware of any material fact or material change with respect to the
subject matter of this Technical Report that is not reflected in the
Technical Report, the omission to disclose which makes the Technical report
misleading.
8. I am independent of the issuer applying all the tests set out in Section
1.5 of N.I. 43-101.
9. I have read N.I.43-101, and this Technical Report has been prepared in
compliance with that instrument and Form 43-101F1.
10. I consent to the filing of this Technical Report with any stock exchange
and other regulatory authority and any publication by them, including
electronic publication in the public company files on their websites
accessible by the public.
Dated this 30th Day of June, 2004.
- ----------------------------------------------
Linus T. Keating, D.Sc.,
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