BANLUNG CONCESSIONS, CAMBODIA, Semi Annual Exploration ...

BANLUNG CONCESSIONS, CAMBODIA, Semi Annual Exploration Report

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_____________________________________________________________________________ Adrian Mann Page 1 of 12 10 February 2011

RESULTS OF OPERATIONS Semi Annual Exploration Report

BANLUNG AND BANLUNG NORTH CONCESSIONS, CAMBODIA, FOR THE PERIOD 2010:07:01 TO 2010:12:31

INTRODUCTION The period has been one of sporadic activity, commencing in July. PROPERTY DESCRIPTIONS AND LOCATION Figure 1 depicts the location of the concessions in Cambodia.

The Projects are located 450 km northeast of the national capital city of Phnom Penh in the Province of Rotanakiri, the Provincial capital of which in Banlung. The concessions are irregular in shape, and collectively constitute two contiguous blocks to the south and west of the town of Banlung. The table below details the constituent concessions:

Concession Type Area km2 Issue Date BANLUNG Exploration Concession 328 2007-04-04

BANLUNG NORTH Exploration Concession 240 2006-03-16


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As the company has done no excavating, or ground disturbance beyond trenching and preparing drilling pads, very little environmental liability has been incurred. A liability to rehabilitate is incurred once ground disturbance commences, for example by pitting, trenching or diamond drilling. The company has initiated a strict internal policy of site rehabilitation. Such trenching as was done has been back filled, once logging and sampling was completed. PREVIOUS WORK Reference should be made to previous semi-annual and annual reports by Prairie Pacific Mining Corporation and Liberty Mining International to the Ministry of Mines and Energy for the regional and local geology, geophysical framework and geochemical surveys on which the current programs are based. A copy of the recently completed NI 43-101 compliant Technical Report on each of the concessions accompanies this report.


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PROGRAM OF WORK Overview In the centre of the Banlung concession is a gabbroic intrusion with a strong magnetic signature intruding the Jurassic sediments. An eastern ridge of hornfelsed micaceous sediment marks the eastern extremity of the gabbro. The geology of Banlung & Banlung North can be summarized therefore as predominantly:

• Gently folded Permian sediments and andesitic volcanics with complex subvolcanic centres • Intruded by Triassic granodiorite, diorite and gabbro stocks with related hornfelsed margins • Numerous cross-cutting felsic to mafic dykes • Remnants of thin, horizontally dipping Jurassic sandstone and Quaternary basalt • Gold occurrences related to volcanic centres • Artisanal gold workings

The following are the numeric statistics for the two tenements for this semester: Banlung Project Drilling 74m Number of holes 2 Drill samples 256 Trenching 32m Trench Samples 32 Rock Samples 0 Banlung North Project Gridding 35.5 line km Geological mapping 57.5 line km

Auger samples 2019 Rock samples 23 CURRENT OPERATIONS Banlung License Okalla Prospect This is the southeast of the southern Banlung concession. In previous work, two quite separate stream sediment geochemical anomalies occur in the area, the larger, in the northeast is designated the Okalla prospect. Previous IP work by Liberty Mining International outlined a number of strong chargeability anomalies. These were the principal focus of the first diamond drilling program this semester. In addition, several trenches were cut, and detailed free traverse mapping was also done.


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The map above depicts copper values in the multi-element soil geochemical anomaly of Okalla prospect. The anomaly is more than 400m across, and disappears beneath basalts to the north. A short scouting diamond drill hole (BL10-021) into the feature shows strong alteration and mineralization suggestive of the outer halo of a Cu-Au-Mo porphyry, with 0.23 g/t Au, 790ppm Cu over 100.5m.


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Banlung North License Katieng This is located in the centre-east of the license area, pinpointed by the previous stream sediment concentrate survey done by Liberty Mining International. The focus of current work has been detailed mapping over the grid, which was positioned to cover an aeromag high which coincides with the anomalous gold values, and to avoid the recent flood basalts that would otherwise obscure the soil geochemistry. Geochemical soil sampling assay results from this program were reported in the previous semi-annual report, and are detailed in the Independent Technical NI43-101 compliant reports that accompany this. The geology of the occurrence is depicted below:

The fact mapping was compared to magnetic data and soil geochemistry to compile a basic geological interpretation for the prospect area. This has further strengthened the


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hypothesis that mineralisation is associated with intrusives with strong magnetic signatures. This is more typically the more intermediate intrusives (granodiorite/diorite) rather than “purer” granites. There appear to be two distinctly different intrusive in the Katieng area; one associated with strong magnetism, the other not magnetically distinctive from background levels. Mineralisation appears to be associated with the edges of the more magnetic intrusive as well as a strong structure leading off this body towards the northwest. Kunmum prospect In the extreme northwest of the concession, this is a strong stream sediment geochemical anomaly, coinciding with a shear which controls the location of the creek. It also coincides with the hornfels aureole surrounding the western granodiorite batholith, but to date no vein or lode features have been located. Detailed Mapping The 200m x 20m on 1km x 2km grid was mapped. Float and outcrop were grab sampled on an ad hoc basis. Geochemical Surveys Samples were collected by hand auger down to full resistance, a depth generally ranging from 1.5 to 3.0m. The bottom-most 50cm sample was collected, seived to -80 mesh and submitted for multi-element ICP-MS analysis. This bottom-hole sample was regarded as the 'C' horizon. Geochemical soil sampling assay results from this program are now to hand.

In the map above, granitic rocks are coloured red, mafic volcanics, probably basalts, are coloured green, and deflated laterite is brown. The relative size of the yellow circles depict relative values of gold in the stream sediment concentrates, Arsenic. Elevated numbers are clustered in the southeast with a broad isolated high also occurring along 1512800N between 692500E and 692800E. There is a suggestion of a wide higher ridge extending across the entire survey area west to east, south of a


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line between 691200E/1513800N and 693600E/1513400N, and north of a line between 691200E/1513200N and 692400E/1512600N. There is a 300m strike trending 090o along 1512800N between 692500E and 692800E that contains several highs well above the traditionally determined anomaly threshold of 125ppm As.

Figure 8b: Kunmum Soil Geochemistry - As

Gold: Almost all detectable gold values are concentrated in the southeast quarter of the surveyed area. There is a real gold anomaly here. There is a suggestion of linearity along 125o for a distance of about 800m between 691360E/1512800N and 692900E/1513300N. This is then sharply offset to the southwest by some 400m, then the suggestion of linearity follows the same direction for about 500m from 692650E/1513000N to 692300E/1513400N.

Figure 8c: Kunmum Soil Geochemistry - Au


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Bismuth: The 2-3 anomalous highs describe a discontinuous ridge trending 120o from 691200E/1514000N to 693500E/1512600N. Although roughly parallel to the gold trend, closer examination shows that the two lineaments do not coincide. The general trend of the bismuth distribution reflects also the Cu and As trends.

Figure 8d: Kunmum Soil Geochemistry - Bi

Copper: Higher values are mainly in the east, with the primary concentration reflecting that of gold. The same broad east-west trending ridge of higher values as occurs in the arsenic distribution across the centre of the survey area is reflected in copper distribution. There are a half dozen values concentrated on the eastern boundary of the survey area, except for a bull's-eye at 692800E/1513260N and another at 691760E/1513400N.

Figure 8e: Kunmum Soil Geochemistry - Cu


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Mercury: There are no values of interest, all being below real (if not quoted) detection limits.

Molybdenum: There is a small anomalous population clustered along the southern boundary of the survey area, and with the exception of two bull's-eye highs at 692000E/1513000N and 693200E/1513140N, all upper population values occur within the main body of the lower population values, and the anomalous values are also contained therein. No linear trends are apparent.

Figure 8f: Kunmum Soil Geochemistry - Mo

Lead: Values form a very similar pattern to the distribution of zinc (q.v. below), with a ridge of values trending roughly 080oT between 691200E and 69220E and between 1513000N and 1513400N. The anomalous values are all centred within other elevated values, which indicates that the high may be worth further investigation.

Figure 8g: Kunmum Soil Geochemistry - Pb


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Zinc: Some higher values are concentrated along the eastern border of the grid, but most form a broad 070o trending block in the southwest, coinciding quite neatly with the western lead concentration. With the exception of an isolated high at 692420E/1513000N, the anomalous highs are all surrounded by other elevated zinc values, suggesting that the concentration of values along the 1513200N line, particularly between 691400E and 691600E is worthy of further investigation.

Figure 8h: Kunmum Soil Geochemistry – Zn

These geochemical results are best summarized in the diagram below, depicting a synoptic view of the polymetallic anomalies superimposed on the geology.


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Interpretation And Recommendations

There are 2 basic features that stand out and are worth follow-up:

1. Gold: The gold concentration in the southeast of the survey area is probably real. The zone of interest needs to be better defined, which can be readily done by closing the sampling intervals from 200m lines at 20m sample intervals to 100m lines, sampled at the same intervals. This should be done only over the area 692200E to 693600E between 1512600N and 1513600N. Because the zone of concentration extends out of the survey area, it is also recommended that the grid be extended east from 693600E to at least 694000E. It is noted that soil depths in the anomalous gold area are generally less than 1.5m, so hand trenching is probably the best follow-up method once the closer sampling has been done. With an indicated strike length in excess of 800m, trenching should initially be concentrated over the bulls-eyes at 693400E/1512920N; 692400E/1513240N; and 693000E/1513260N. Initial trenches should be about 25m in length, centred on the anomalous high, and cut along azimuth 040o. Success, whether by virtue of hitting veining or on simple assay return, should be followed by cutting shorter trenches (5-10m length) at 5 or 10m intervals so as to investigate the strike.

2. Lead-Zinc: The coincident lead and zinc concentrations in the centre west

of the survey area are probably real and well worth follow up. The coincidence of the zinc high with the lead high in this location reinforces that focus. A short diamond drill hole (100m) into the bulls-eye at 691500E/1513200N would be worth trying. There is no way to establish strike and dip orientations prior to this drilling.

General All work is being preceded by UXO clearance teams. EXPENDITURES

BANLUNG EXPENDITURES JULY TO DECEMBER 2010

USD

Salaries and Wages $28,150 Administration and General $75,830 Geological $163,785 Drilling $25,105 UXO & Earthworks $2,300 Assaying $25,454 Field Supplies $55,227 Accommodation, Meals, $24,162 Vehicles, Transport, Fuel $42,134 Overheads $27,308

TOTAL: $469,455


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PROGRAM FOR THE NEXT SEMESTER Banlung License

Okalla Northwest Cu-Au o Program

Gridding is currently ongoing, due for completion at end February. Auger sampling will commence shortly, due for completion by end March, and assays can be expected to be fully returned by end April. Some 4000 to 5000 samples will be collected. Drilling of 2 x 300m holes at 60o inclination towards azimuth 270o from pads 20 and 21 will commence in March.

The 2 holes should be complete by Khmer New Year break. An independent geophysicist will be hired to assess the technique

most suited to defining drill targets at depth in the environment expected. The resulting survey should be completed by end April.

Further drilling would commence in May, and an initial program of 5000m is envisaged.

Kunmum o Program

The previously developed program will mean some 250m of trenching done concurrent with extending the grid to the west. Some 1000 auger samples will be collected. Follow-up drilling of some 350m will probe the targets indicated

BUDGET FOR THE NEXT SEMESTER

o Banlung Grid and soil geochemistry $ 75,000

Geophysics (guesstimate) $ 60,000 Drilling (2 x 300m) $115,000 Drilling (8 x 400m DDH) $640,000

(8 x 100m RC) $110,000 Total $1,000,000

o Banlung North Grid and sample collection $ 40,000 Assays $ 25,000 Drilling $ 65,000

Total $130,000 Dr Adrian Mann, Ph.D., M.B.A., B.Sc. (Hons), B.Sc. (Spec) (Hons), P. Geol., Vice President, Exploration

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