Geophysical Self Potential Report on:

The Hilda #3 Mineral Claim and, Hilda Fr. (Part of the Hilda Group)

Texada Island British Columbia Nanaimo Mining District

Latitude 49 47’ 26” north Longitude 124 36’ 35”West

NTS : 92FA5E

Table of Contents

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Introduction Location and access History Property Description Regional Geology Property Geology Previous Work Mineralization Work done Geophysical Work Discussion of results Blubber Bay Quarry Environmental concerns Conclusions Proposals for further work Statement of Costs Certi6cate Bibliography

S.P. Dam Notes Echo Bay Mines diamond drilling summary

Location Map Claim Map 1:50,000 Plan of old underground workings Self-Potential Survey Map 1: 1,320

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(Appendix “A”) (Appendix “B”)

Fig #l Fig #2 Fig #3 (in po&-et) Fig #4 (ii pocket)

Introduction:

A work program was carried out under my direction during May and June 1998 on the Hilda Group of mineral claims on Texada Island B.C.. The program consisted of a Self-Potential geophysical survey and was undertaken between May 6’, and June 12”, 1998. The work follows a recommendation of A.B.L. Whittles, Ph.D. in his 1975 geophysical report on the property. It was felt that a closely spaced S.P. survey might be effective in locating small lenses of massive sulphide mineralization that previous wider spaced surveys may have not detected. The S.P. program was successml in locating detected several such targets. The survey went well and no unusual problems were encountered.

Diamond drilling by Echo Bay Mines in 1989 confirmed the existence of high-grade minemlizaton at various depths down to 350 meters. Knowing that, it was hoped that some of those intersected mineral shoots might outcrop on the surface under a cover of overburden, and be detectable with S.P.. A summary of the favourable drill intersections of the “Echo Bay Program” has been included for the benefit of the reader as Appendex B.

No mapping record appears to have existed for the underground workings on the claim group, so one day was spent doing that with belt chain & compass.

Location and Access

The Hilda Group is located at latitude 49’ 47’ 26” north and longitude 124’ 36’ 35” west in the Nanaimo Mining District of British Columbia. The property is located on Texada Island, some one hundred kilometers northwest of the City of Vancouver, in the Strait of Georgia. Access to the Island is by regularly scheduled air service from Vancouver to Gillies Bay, or by car ferry via B.C. Ferries from the town of Powell River. There is road access to the property from the village of Blubber Bay via 0.5 kilometers of paved road (B.C. Cement road). Hotel accommodations are available in Vananda and Gillies Bay.

Histoxy

Mining activity on Texada Island dates back to the turn of the century when several small mines were in operation in and around the town of Vananda near the north end of the Island. From these old producers, approximately 75,000 ounces of gold, 500,000 Ounces of silver and 19,000,OOO pounds of copper were recovered. The larger of these mines being The Marble Bay Mine, The Little Billie Mine, The Cornell Mine and The Copper Queen Mine. Several kilometers to the south, near the town of Gillies Bay, Texada Mines Ltd. operated a large underground and open pit mine at Welcome Bay between 1952 and 1976. Over 20 million tons of ore was mined yielding iron and copper concentrates and approximately 25,000 ounces of gold. At present there are three open pit limestone

quarries in operation at the north end of the Island. Metals Research Corporation of America has a 100 ton per day gravity mill on It’s nearby Bolivar gold property on

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Crescent Bay Road. The mill is not presently operational but I understand that with a limited amount of work it could be.

Prover@ Description

The Hilda Group consists of two 2 post mineral claims and one Fractional mineral claim. They are located at the head of Blubber Bay and extend from tidewater to an elevation of 100 meters. The surface tenure is held by Western Forest Products, however, the basemetals & industrial minerals are held by Ash Grove Cement West Inc. and Tilbury Cement. The precious metals are held by myself under the Mineral Tenure Act.

As the Ash Grove’s “Blubber Bay Quarry expands eastward, the Hilda Fraction is destined to become part of that quarry within the next ten years. In fact, at the time of this report, Ash Grove has commenced a diamond drilling program to prove up limestone reserves on the Hilda Group.

Also located on the Hilda Fraction are the workings of the old “Paris Mine”. These workings include four shallow shafts and one adit which provides access to a limited amount of drifting. The adit is assessable and does not pose any obvious hazards.

Logging has taken place on the property intermittently over the past century. At present there is very little marketable timber on the property due to recent selective and clear-cut logging programs. A network of old logging “skid-roads” allows for easy access to most parts of the claim group.

Ash Grove Cement utilizes the area for cat&rent of surface water for use in their mill and townsite.

Regional Geolow

Texada Island hosts the same geological units as central Vancouver Island. Karmutsen volcanics, consisting of flows of porphyrytic to amygdaloidal basalt and andesite, and Quatsino limestone, all of Triassic Age, underlay most of the Island. Highly altered andesite, tuff, limestone and pyroclastics of the Sicker Croup outcrop at the southern end of the Island. These rocks, of Permian Age, are the oldest on the Island. The volcanic and sedimentary units at the north end of the Island have been intruded by a number of diorite and quartz diorite stocks and dykes. it is in the area of these intrusions that economical mineral deposits have been located and mined in the past.

Regional faulting is strongly developed on the island. Northwesterly trending faults dominate the structural setting. These large faults (some being traced for 10 to 15 kilometers) parallel the island’s axis, Malaspina Strait, and Georgia Strait. Lesser east- west trending faults cross-cut the predominate northwesterly faults in all regions of the Island.

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Proaertv Geologv:

The Claim Group is underlain almost exclusively by Upper Triassic Quatsino limestone of the Vancouver group. Inevitably, at some depth there will exist a basaltic or plutonic floor to the limestone, as is the case elsewhere on Texada Island. Intrusive activity is evident in the form of two diorite stocks and a well developed system of north-south diorite dykes. A predominate feature appears to be a solitary east-west trending quartz porphory dyke which cross-cuts the island from shore to shore. Bedding planes are evident on the eastern portion of the Hilda Fraction. Written reports from previous operators indicate that the property may have been host to a large geo-synclonic event. Recrystalization of the limestone and the limited extent of bedding planes exposure make confirmation of this difficult.

Previous Work

Underground exploration work is believed to have commenced around 1901. The property hosts four shallow shafts and one adit. The adit and subsequent drifting totals approximately 80 meters of tunneling. The underground workings accessible from the adit are on one level only and do not connect to the shafts above! No raises, winzes or stopes

are present underground. A very limited amount of drifting is present at the bottom of the “main shaft” ( less than 10 meters ). The southernmost shaft has a small stockpile of high- grade copper ore ( 100 tons? ) piled up nearby. In addition to the shafts there are several surface pits and trenches, all appearing to have been excavated about the same time as the shafts. There is no record of any commercial production. Recent exploration programs are listed as follows:

1970 Bellex Mines Ltd. 1973 Longbar Minerals 1976 Aquarius Resources Ltd. 1981 Aquarius Resources Ltd. 1985 Rbyolite Resources Inc. 1989 Echo Bay Mines Ltd.

E.M. survey Ground magnetometer and VLF-EM surveys Diamond Drilling ( no report available ) 1.P & Magnetometer surveys and Soil geochem. Magnetometer survey and Soil geochem. Airborne & Ground magnetometer surveys Rock & Soil geochem; I.P. Survey; Diamond drilling Geological mapping

Mineralization

Chalcopyrite, pyrrhotite, pyrite, sphalerite, magnatite, and native gold occur as massive sulfides in a metasomatic skam deposit at the contact of Quatsino limestone and two diorite stocks. Mineralization occurs in a gangue of garnet, epidote, pyroxene, actinolite, amphibole and wooiastinite. Some, but not all, of the north-south trending diorite dykes contain pyrite, pyrrhotite and minor chalcopyrite as fractire fillings and dissiminations.

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Work Done

The 1989 grid of Echo Bay Mines was remarked with fresh flagging, in the areas of the Hilda Fraction and the Hilda #3 mineral claim. Additional lines were flagged at 25 meter intervals. In total, 12.8 line/Km were flagged. A Self-Potential survey was undertaken on the Hilda Fraction and the Hida #3 mineral claim. One day was spent mapping and sampling the underground workings of the “Paris Mine” ( fig. 3, in pocket ).

-. Geophysical Work

For many years naturally occurring negative electrical ground potentials have been known to exist above some sulfide ore deposits. Several theories as to why this phenomenon occurs have been proposed. The most widely accepted theory seems to be that of Sato and Mooney 1960. They theorised that two electrochemical reactions take place within the ore body: one which is cathodic, above the water table, and one that is anodic, below the water table. The difference in oxidation potential between the two reactions determines the overall magnitude of this Self Potential (SP) effect. Anomolies greater than 200 millivolts (mv) are generally considered good anomolies. Chalcopyrite, pyrite, galena, pyrrhotite, sphalerite, and graphite are all known to produce SP anomolies. Other factors not related to mineralization, but known to sometimes cause an SP effect are bioelectrical activity in plants, water movement in the soil, and contamination of equipment.

The survey objectives were to expand the area of known mineralization into nearby areas where bedrock had been obscured by overburden and to perhaps iden@ new areas where massive sulphide mineralization might be exposed on surface.

The SP survey was carried out during a period of warm spring weather. Several conditions had to be met to ensure that the results would be meaningtul and the margin of error kept to a minimum. Continuous wsrm weather ensured continuity in climatic conditions and reduced the chance of body voltages from the operator being transferred to the instrument. Equipment was checked every morning to ensure trouble free operation, check readings were taken of several of the previous day’s readings to ensure continuity At every station three readings were taken within a 1 meter circle and averaged out to give a final reading. Tbis helped to reduce possible error caused by biological sources, Differences in these readings varied from 0 - 18 mv per station (usually <8 mv). A base electrode station was set up at 35+65N, lo+12 E on the Hilda Fraction. All readings were taken, relative to that stationary point.

A Micronta brand multimeter (model 22-185A) was used. This is a digital meter with a 10 mega-ohm input impedance, This was sufficiently high enough that an external compensating device to balance off variations in natural ground resistance was not necessary. Ground resistance throughout the survey varied from 5,000 ohms to 25,000 ohms. Nonpolarizing CuSO4 electrodes were used.

The data presented in this report reflects the voltage values as 15 m&volts higher than actually recorded in the field. It was felt, based on the levels of background readings , that the base station was probably located in a spot 15 mv higher than reasonable background. The anomalous results have been plotted on Fig #4 (in pocket) and all of the data is listed at the end of this report. The survey went well and no unusual problems were encountered.

Discussion of results:

Field readings ranged Tom +169mv to -213mv. Readings in excess of -50 millivolts were deemed to be anomalous. The margin of error is estimated to be +/- 5mv. Values were contoured by hand at 25 mv. increments starting at -25 mv. A positive anomaly is contoured at the north end of the grid. The “0” contour and those above 1OOMv have purposefully omited. The survey was successful in locating several significant anomalies within the work area:

Paris Mine anomaly: This anomaly measures 200meters long and 40 meters wide. It covers the main showings of the Paris Mine. The anomaly is bisected by the solitary east west trending quartz porphoty dyke mentioned earlier in this report. The anomaly narrows slightly at that point and that is expected, as the dyke is barren.

Cluster anomaly: This is a series of 5 small anomolies all “clustered” around the base line between Line 33+25N and Line 35+50N. Each averaging in size, about fifty meters across. However, the fact that they are so coincidentally close to one another and that they average about IOOmv, is significant.

Other anomalies: A small but significant anomaly was found centered on Line 37+75N at 12+75E and a very unusual high-positive anomaly was located on Line 39+5ON at 9+85E.

Several other small and isolated anomalies were found during the survey but they are either too small in size, or too low in SP expression to be of concern at this time. A couple of small anomalies are possibly off of the claim group.

No S.P. effect was found to exist in the vicinity of the north shaft at 37+25N, 10+75E and that is puzzling. Massive chalcopyrite is exposed as a $11 in the wall of the shaft. This is

just the type of mineralization where one would expect to get very high S.P. results.

The Blubber Bav Ouarrv:

On May lo*, 1998 I met with Mr. Ted Thompson, manager of the Blubber Bay Quarry, at the Quarry office. Mr. Thompson indicated to me that as early as five years from now, the expanding limestone quarry could begin consuming the “Paris Mine” portion of the Hilda Fraction. It is very possible that selective removal of ore from the Hilda Fraction could take place in a very cost effective way, as part of the quarrying process, with a sharing of the profits between the mineral title holders. With the Blubber Bay Quarry holding the limestone and base metal rights under “freehold”, and the Hilda Fraction

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holding precious metal rights under the Mineral Tenure Act, an ideal situation may exist to mine ore. Mr. Thompson indicated that his company would be willing to participate in such a venture, and that is very encouraging.

Environmental Concerns

There does not appear to be any significant environmental concern regarding the development of this property. It is destined to become a part of the existing limestone quarry, as the quarry expands anyway. There is no old growth forest on the property and there appears to be no cultural or aboriginal historical sites.

Conclusions:

The survey was successful in outlining the main Paris Mine showings, and also in locating several other anomalies favorable for prospecting.

1. The Cluster anomaly remains the most encouraging area of the survey mainly due to the large number of S.P. highs in such a localized area.

2. It is not clear why the area of the Paris north shaft did not produce a predicted SP effect. from the sulfide source known to exist there.

3. The strong positive anomaly on Line 39+5ON, 9+85E is also puzzling. It occurrs near an area once used as a townsite for quarry workers and their families so it is possible that it may be the result of buried domestic debris.

4. Commercial production of ore from the old “Paris Mine” site may eventually be possible by open pit means, as the Blubber Bay Quarry expands to overtake it in five to ten years.

Proposals for further work:

1. It is recommended that trenching be undertaken in the following areas:

Line 39+5ONat 9+85E Line 37+75N at 12+75E Line 35+25N at 11+50E Line 34+5ON at 10+88E Line 34+25N at 11+38E Line 33+75N at 10+38E Line 33+5ON at 11+50E

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STATEMENT OF COSTS

Field Crew : Robert Perry ( Project Manager ) Lisa Hull (Laborer) 4116 Marine Ave. General Delivery Powell River, BC., VSA 2J3 Vananda, BC VON 3K0 Salary:. $207 I day Wages $100 /day.

Robert Miner (laborer) Edwin Jobanson (Loborer) General Delivery P.O. Box 4 Gillies Bay, BC., VON Vananda, BC, VON 3K0. Wages $100 /day Wages $100 /day

Field work: Mav6, 1998 to June 12, 1998

Mav 6 to Mav23: Establishing control grid.

Mav 27: Mapping and sampling “Paris Mine”

Mav 29 to June 12 S.P. Field Program

June 22 to June 24 Report Preparation:

Lisa Hull ( 4 days in the field )

Robert Miner ( 4 days in the field )

Edwin Johanson (1 day in the field

Robert Perry ( 14 days in the field )

Robert Perry ( 3 days preparing report )

Feny tolls.. _. _. _. _.

Field supplies.. _. _. _.

Office.

Total Cost of program

............. 73.00

............. 65.00

............. 12.00

(6 man days)

(2 man days)

(16 man days)

(3 man days)

400.00

400,oo

100.00

2,691.OO

621.00

$4,362.00

I Robert A Perry do certify that:

1. I have been actively prospecting for mineral ores in the Province of British Columbia since 1975.

2. 1 am experienced in the theory and fieldwork of the Self Potential Geophysical Survey and the interpretation of it’s data as a tool for prospecting.

3. All of the work included in this report was done by me, or under my direction.

4. 1 have a 50% interest in this property.

5. 1 assume full responsibility for the quality of all fieldwork done, and the accuracy of this report and the data contained in it.

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Bibliosaphy

B.C.D.M

McConnell, R. G.,

B.C.D.M

Muller & Carsen,

Boissoneault, J. R.

Boissoneault, J. R.

Whittles, A. B. L.

Giroux, G. H.

Dasler, P. G.

Sarjeant, P. Nighswader, M

1901 AnnualReport page 1113

1914 Memoir 58. Texada Island B.C.

1916 AnnualReport page K357

1968 Geological Survey of Canada, Paper 68-50

1970 Report on the Loyal and Paris Claims, Asses. Report #2918

1970 EM survey, Loyal and Paris Claims, Asses. Report #2919

1975 Geophysical Report, Cortez Group, Asses. Report #5763

1981 Geological, Geochemical & Geophysical Report on the Texada Property, Asses. Report #9419

1986 1981 Geological, Geochemical & Geophysical Report on the Bolivar-Cortez Group, Pat Group, Maude Adams & Texada Crown Grants, Asses. Report #14827

1989 Diamond drilling, Geological, Geochemical & Geophysical Report on the Cortez Group, Texada Island, Asses. Report #18672

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