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NI 43-101 Report

Technical Report on the Lac Guéret Graphite Project

Roche's Ref.: 101846.001-300

Submitted to:

Mason Graphite Corp.

Prepared by:

Edward Lyons, P. Geo. Tekhne Research

Guy Saucier, Eng. Roche Ltd, Consulting Group

Martin Magnan, Eng.

Roche Ltd, Consulting Group

Issue Date: July 3, 2012

Mason Graphite Technical Report on the Lac Guéret Project – i – Report July 2012

Table of Contents

1.0 EXECUTIVE SUMMARY ........................................................................................................................ 1

1.1 Introduction ................................................................................................................................................................ 1

1.2 Property Location ........................................................................................................................................................ 1

1.3 Issuer’s Interest ........................................................................................................................................................... 1

1.4 Accessibility ................................................................................................................................................................. 2

1.5 Climate ........................................................................................................................................................................ 2

1.6 Local Resources and Infrastructure ............................................................................................................................. 2

1.7 History ......................................................................................................................................................................... 2

1.8 Geology ....................................................................................................................................................................... 3

1.9 Mineralisation ............................................................................................................................................................. 4

1.10 Mineral Resource Estimation ...................................................................................................................................... 4

1.11 Environmental Studies, Permitting, Social or Community Impacts ............................................................................. 6

1.12 Recommendations ...................................................................................................................................................... 6

2.0 INTRODUCTION AND TERMS OF REFERENCE ........................................................................................ 8

2.1 General - Terms of Reference...................................................................................................................................... 8

2.2 Qualified Persons and Site Visits ................................................................................................................................. 9

2.3 Use of the Report ........................................................................................................................................................ 9

2.4 Units and Abbreviation ................................................................................................................................................ 9

2.5 Notice ........................................................................................................................................................................ 10

3.0 RELIANCE ON OTHER EXPERTS ........................................................................................................... 11

4.0 PROPERTY DESCRIPTION AND LOCATION .......................................................................................... 12

4.1 Property Description ................................................................................................................................................. 12

4.2 Property Location ...................................................................................................................................................... 12

4.3 Claim Titles ................................................................................................................................................................ 13

4.4 Issuers Interest .......................................................................................................................................................... 20

4.5 Legal Survey ............................................................................................................................................................... 20

4.6 Environmental Liabilities ........................................................................................................................................... 20

4.7 Significant Factors and Risks ...................................................................................................................................... 21

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY .................... 22

5.1 Accessibility ............................................................................................................................................................... 22

5.2 Climate ...................................................................................................................................................................... 22

5.3 Local Resources and Infrastructure ........................................................................................................................... 22

5.4 Physiography ............................................................................................................................................................. 22

6.0 HISTORY ............................................................................................................................................ 23

6.1 General Overview ...................................................................................................................................................... 23

6.1.1 PRIOR OWNERSHIP .......................................................................................................................................... 23 6.1.2 HISTORICAL EXPLORATION WORK ....................................................................................................................... 23

6.2 Historical Mineral Resources ..................................................................................................................................... 24

7.0 GEOLOGICAL SETTING AND MINERALISATION ................................................................................... 25

7.1 Regional Geology ....................................................................................................................................................... 25

Table of Contents (cont'd)

Mason Graphite Corp. Technical Report on the Lac Guéret Project – ii – Report July 2012

7.2 Local Geology ............................................................................................................................................................ 29

7.2.1 STRATIGRAPHY................................................................................................................................................ 29 7.2.2 STRUCTURE .................................................................................................................................................... 30

7.3 Mineralization ........................................................................................................................................................... 34

8.0 DEPOSIT TYPE .................................................................................................................................... 35

9.0 EXPLORATION ................................................................................................................................... 36

9.1 Exploration Work....................................................................................................................................................... 36

10.0 DRILLING ........................................................................................................................................... 37

10.1 Reliability of Work ..................................................................................................................................................... 38

11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY ............................................................................ 39

11.1 Sample Collection ...................................................................................................................................................... 39

11.1.1 SAMPLING APPROACH AND METHODOLOGY .......................................................................................................... 39

11.2 Sample Preparation ................................................................................................................................................... 39

11.2.1 RELATION OF ISSUER TO SAMPLE ANALYSIS............................................................................................................ 39 11.2.2 SAMPLE PREPARATION, ASSAYING, AND ANALYTICAL PROCEDURES ............................................................................. 39

11.3 Quality Assurance and Quality Control ..................................................................................................................... 41

11.4 Security ...................................................................................................................................................................... 41

12.0 DATA VERIFICATION .......................................................................................................................... 42

12.1 Field Verification ....................................................................................................................................................... 42

12.2 Database Verification ................................................................................................................................................ 42

13.0 MINERAL PROCESSING AND METALLURGICAL TESTING ..................................................................... 43

14.0 MINERAL RESOURCE ESTIMATE ......................................................................................................... 44

14.1 Introduction .............................................................................................................................................................. 44

14.2 Previous Mineral Resource Estimates ....................................................................................................................... 44

14.3 Exploration Database ................................................................................................................................................ 44

14.3.1 DENSITY ........................................................................................................................................................ 45 14.3.2 SAMPLE DISTRIBUTION ..................................................................................................................................... 47 14.3.3 GEOLOGICAL SECTION AND GEOLOGICAL INTERPRETATION ........................................................................................ 49 14.3.4 GEOLOGICAL INTERPRETATION AND DIGITISING ...................................................................................................... 50

14.4 Statistics .................................................................................................................................................................... 51

14.4.1 LENGTH ........................................................................................................................................................ 51 14.4.2 DISTRIBUTION ................................................................................................................................................ 52 14.4.3 COMPOSITE ................................................................................................................................................... 53 14.4.4 SPATIAL ANALYSIS: VARIOGRAPHY....................................................................................................................... 53 14.4.5 BLOCK MODEL ............................................................................................................................................... 55 14.4.6 GRADE INTERPOLATION .................................................................................................................................... 56 14.4.7 MINERAL RESOURCE CLASSIFICATION ................................................................................................................... 59

14.5 Mineral Resource Estimation .................................................................................................................................... 62

14.5.1 GLOBAL MINERAL RESOURCE ESTIMATES .............................................................................................................. 62 14.5.2 IN-PIT MINERAL RESOURCE ............................................................................................................................... 63 14.5.3 POTENTIAL LIABILITIES AFFECTING MINERAL RESOURCE ESTIMATION ........................................................................... 63

15.0 MINERAL RESERVES ESTIMATES ........................................................................................................ 64

16.0 MINING METHODS ............................................................................................................................ 65


Mason Graphite Corp. Technical Report on the Lac Guéret Project – iii – Report July 2012

17.0 RECOVERY METHODS ........................................................................................................................ 66

18.0 PROJECT INFRASTRUCTURE ............................................................................................................... 67

19.0 MARKET STUDIES AND CONTRACTS ................................................................................................... 68

20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT ............................. 70

20.1 Environmental Baseline Study (EBS) .......................................................................................................................... 70

20.2 Ore, Waste and Tailings Characterization ................................................................................................................. 70

20.3 Regulatory Framework .............................................................................................................................................. 70

20.3.1 PROVINCIAL GOVERNMENT (QUÉBEC).................................................................................................................. 70 20.3.2 FEDERAL GOVERNMENT .................................................................................................................................... 73

20.4 Territorial Claims and Regional Relations .................................................................................................................. 73

21.0 CAPITAL AND OPERATING COSTS....................................................................................................... 75

22.0 ECONOMIC ANALYSIS ........................................................................................................................ 76

23.0 ADJACENT PROPERTIES ..................................................................................................................... 77

24.0 OTHER RELEVANT DATA AND INFORMATION .................................................................................... 78

25.0 INTERPRETATIONS AND CONCLUSIONS ............................................................................................. 79

25.1 Interpretations .......................................................................................................................................................... 79

25.2 Conclusions ............................................................................................................................................................... 79

26.0 RECOMMENDATIONS ........................................................................................................................ 80

27.0 REFERENCES ...................................................................................................................................... 83


Mason Graphite Corp. Technical Report on the Lac Guéret Project – iv – Report July 2012

LIST OF FIGURES

Figure 4.1 - Location Map ............................................................................................................................................................... 12

Figure 4.2 - Claims Map .................................................................................................................................................................. 13

Figure 7.1 - Regional Geology ......................................................................................................................................................... 28

Figure 7.2 – Mason Graphite Property Geology ............................................................................................................................. 32

Figure 7.3 – GC-GR Graphite Zones Compilation ............................................................................................................................ 33

Figure 14.1 - % Cgr vs. Density ........................................................................................................................................................ 46

Figure 14.2 - % S (tot) vs. Density ................................................................................................................................................... 47

Figure 14.3 - Normal Histogram -% Cgr in All Samples Used in Model ........................................................................................... 48

Figure 14.4 - Cumulative Frequency - % Cgr in All Samples Used in Model .................................................................................... 48

Figure 14.5 - Drill Grid Location ...................................................................................................................................................... 50

Figure 14.6 - Distribution of Sample Lengths .................................................................................................................................. 52

Figure 14.7 - Cumulative Probability Plot ....................................................................................................................................... 52

Figure 14.8 - Major Axis Semi-Variogram ....................................................................................................................................... 54

Figure 14.9 - Semi-Minor Axis Semi-Variogram .............................................................................................................................. 55

Figure 14.10 –Vertical Section 1000NE of the Interpolated Grade Looking N40E .......................................................................... 57

Figure 14.11 - Plan View of the Interpolated Grade (-40m from the Surface) ................................................................................ 58

Figure 14.12 - Vertical Section 1100 NE of the Categories Looking N40E ....................................................................................... 60

Figure 14.13 - Plan View of the Categories (at the Surface) ........................................................................................................... 61

Figure 23.1 - Adjacent Claims to Lac Guéret Property .................................................................................................................... 77

Figure 26.1 – Drilling Program Map ................................................................................................................................................ 82

LIST OF TABLES

Table 1.1 - Mineral Resource Estimates Summary NE GC Zone, Lac Guéret Property effective at June 22, 2012 ............................ 5

Table 2.1 - Persons Who Prepared or Contributed to this Technical Report .................................................................................... 9

Table 2.2 - Frequently Used Acronyms and Abbreviations ............................................................................................................... 9

Table 4.1 - Mineral Claim Titles ...................................................................................................................................................... 14

Table 6.1 – Summary of Exploration Work on the Lac Guéret Property by Quinto ........................................................................ 23

Table 7.1 – Regional Stratigraphic Column ..................................................................................................................................... 25

Table 7.2 – Property Stratigraphic Column (Youngest to Oldest) ................................................................................................... 29

Table 10.1 – Drillholes Details ......................................................................................................................................................... 37

Table 14.1 - Density ........................................................................................................................................................................ 45

Table 14.2 - Drill Core Samples – Statistics ..................................................................................................................................... 47

Table 14.3 - Geological Units Definition.......................................................................................................................................... 51

Table 14.4 - Downhole Composites vs. Raw Assay Data ................................................................................................................. 53

Table 14.5 - Semi-Variogram Parameters ....................................................................................................................................... 54

Table 14.6 – Mineral Resource Estimate (4% Cgr Cut-Off) ............................................................................................................. 62

Mason Graphite Corp. Technical Report on the Lac Guéret Project Report July 2012

DATE AND SIGNATURE PAGE

This Report is effective as of the 22

nd of June 2012, which is the cut-off date for all scientific and technical

information included in the Technical Report.

This Report entitled" Technical Report on the Lac Guéret Graphite Project”, issue date July 3, 2012 was prepared and signed by the following authors:

“Signed and Sealed”

Edward Lyons, P. Geo. July 3, 2012 Toronto, Ontario OGQ # 701


Guy Saucier, Eng. July 3, 2012 Montréal, Québec OIQ # 37711


Martin Magnan, Eng. July 3, 2012 Québec, Québec OIQ # 126033


CERTIFICATE OF AUTHOR

I, Edward Lyons, P.Geo., as an author of the technical report entitled ‘’Technical Report on the Lac Guéret Property’’ dated July 3, 2012 prepared for Mason Graphite Corp. (‘’Mason Graphite’’) do hereby certify that:

1) I am currently employed as a Geological Consultant and Director of Tekhne Research Inc. with the office at 1067 Portage Road, Victoria, BC V8Z 1L1.

2) I graduated with a Bachelor of Science (Honours) degree in Geology from the University of Missouri at Rolla in 1970.

3) I am a Professional Geoscientist enrolled with the Association of Professional Engineers and Geoscientists of British Columbia (APEGBC) (Member # 122136) and a géologue enrolled with the Ordre des géologues du Quebec (OGQ) (Member # 701) .

4) I have worked as a geologist for a total of 41 years since my graduation from university.

5) I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that, by reason of my education, affiliation with a professional association as defined in NI 43-101 and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

6) I am responsible for all the sections except section 20 of the technical report titled “Technical Report on the Lac Guéret Property” dated July 3, 2012 (the “Technical Report”) relating to the Lac Guéret Property. I visited the Lac Guéret Property for one day on 11 May 2012 for this report.. In the period September 2007-to October 2009 I visited the property various times, as well as having four campaigns of direct field experience on the property between August 2002 and to the end of May2006.

7) I have prior involvement with the property that is the subject of the Technical Report. From August 2002 to June 2006, I developed the project for Quinto Mining Corp., including writing four NI 43-101 Technical Reports on the exploration results. Between 28 September – 9 October 2007, I relogged the core drilled in 2006 and conducted supplementary mapping for Quinto; on 7 October 2009, I visited the property for Quinto Mining as a subsidiary of Consolidated Thompson Iron Mines with potential project participants and subsequently wrote an in-house, unpublished version of this report for them.

8) As of the date of the certificate Technical Report, to the best of my knowledge, information, and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

9) I am independent of Mason Graphite Corp. applying all the tests in section 1.5 of the NI 43-101.

10) I have read NI 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.

Dated this July 3, 2012

"Edward Lyons"

Edward Lyons, P.Geo.

OGQ #701



I, Guy Saucier, Eng., as an author of the technical report entitled ‘’Technical Report on the Lac Guéret Property’’ dated July 3, 2012 prepared for Mason Graphite Corp. (‘’Mason Graphite’’) do hereby certify that:

1) I am Vice President, Mining and Mineral Processing and carried out this assignment as author/reviewer of Roche Ltd, Consulting-Group, Suite 1500, 630, René-Lévesque West, Montréal, QC, Canada, H3B 1S6.

2) I am a graduate of École Polytechnique, University of Montréal, located in Montréal with a B. Ing in Geological Engineering in 1983;

3) I am a Senior Geological Engineer, Member of the Ordre des Ingénieurs du Québec (#37711), and a member of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), PDAC and SME;

4) I have worked as a geological engineer in the mineral industry for 28 years. My technical expertise includes resources evaluation, projects evaluation, mine design, and mine planning. I have been involved in several scoping studies and feasibility studies. I have participated in worldwide projects in gold, base metals, iron, coal, bauxite and industrial minerals;

5) I have read the definition of "qualified person" set out in National Instrument 43-101 (‘’NI 43-101’’) and certify that by reason of my education, affiliation with a professional association (as defined by NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101;

6) I have supervised the preparation of the entire technical report titled “Technical Report on the Lac Guéret Property” dated July 3, 2012 (the “Technical Report”) relating to the Lac Guéret Property;

7) I have not visited the site;

8) I have had no prior involvement with the properties that are the subject of this Technical Report.

9) I am independent of Mason Graphite Corp. as defined in section 1.5 of NI 43-101.


11) As of the date of the Technical Report, to the best of my information, knowledge and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Montreal, July 3, 2012

"Guy Saucier"

Guy Saucier, Eng. OIQ # 37711



I, Martin Magnan, Eng., as an author of the technical report entitled "Technical Report on the Lac Guéret Property’’ dated July 3, 2012 prepared for Mason Graphite Corp. ("Mason Graphite") do hereby certify that:

1) I am currently employed as Project Manager – Environment Division of Roche Ltd, Consulting Group, 3567 Neilson, Québec (Canada), G1W 4Z9 ;

2) I graduate from Laval University of Québec, Canada with a B. Sc. A. in Geological Engineering in 1990 and from Université du Québec à Chicoutimi of Québec, Canada with a M. Sc. A in Geology in 1994. I have practiced my profession continuously since my graduation;

3) I am a registered member of the Ordre des Ingénieurs du Québec (#126033);

4) I am a specialist in environment sciences since 12 years with a 10 years previous experience in exploration geology. My expertise includes environmental site assessment study, environmental impact assessment and rehabilitation plan. I have also been involved in scoping studies and feasibility studies. I have participated in gold, base metals and industrial minerals projects;

5) I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101;

6) I am responsible for Section 20.0 of the technical report entitled “Technical Report on the Lac Guéret Property” dated July 3, 2012 (the “Technical Report”) relating to the Lac Guéret Property;

7) I have not visited the site;

8) I have had no prior involvement with the properties that are the subject of this Technical Report.

9) I am an independent of Mason Graphite Corp. as defined in section 1.5 of NI 43-101.


11) As of the date of the Technical Report, to the best of my information, knowledge and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Montreal, July 3, 2012

"Martin Magnan"

Martin Magnan, Eng. Environmental Projects Manager

OIQ # 126033

Mason Graphite Corp. Technical Report on the Lac Guéret Project – 1 – Report July 2012

1.0 EXECUTIVE SUMMARY

1.1 Introduction

Mason Graphite Corp. ("Mason") retained Roche Ltd. Consulting Group ("Roche") to prepare a technical report to

derive a Mineral Resource Estimation from unpublished drilling data developed by Quinto Mining Corp. ("Quinto")

in 2006 with subsequent analyses. Mason owns 100% unencumbered interest in the Lac Guéret Property, subject

to a hypothec granted to Quinto. Change of ownership was registered on June 20, 2012 on GESTIM (QC).

The resource estimation presented in this report is based on information provided by Quinto to Roche and

includes geological models developed by Ed Lyons, a qualified person ("Lyons") in 2009 for Quinto. The model was

prepared by Lyons working with Geospark Consulting Ltd. ("Geospark"), simplified from the 2009 version. The data

and revised model were reviewed and adjusted by Roche.

1.2 Property Location

The Lac Guéret Property is located in the Côte-Nord-Nouveau-Québec region in northeastern Québec on the

southwestern shore of the Manicouagan Reservoir. It is centered at 51°07’N and 69°05’W. The property is named

Lac Guéret, located in the south-central part of the group. No other named topographic features on NTS

topographic sheet 22N/03 (1:50,000 scale) occurs on the property. It consists of 215 CDC claims covering 11,630.34

hectares, all of which are 100% in the interest of Mason Graphite Corp. with the claims in good standing until 17

July 2013. Previous option and joint venture agreements have been successfully completed. No mineral royalty,

net smelter return, or any other residual interests are recorded.

1.3 Issuer’s Interest

Mason and Quinto entered a purchase agreement whereby the Issuer acquired a 100% interest in the Lac Guéret

Property. The total purchase price for the acquisition was US$15,000,000 in cash, payable in instalments based on

the achievement of certain milestones over a five year period and the issuance of 2,041,571 warrants to Quinto,

each warrant being exercisable for Mason Shares at an exercise price of CAD $0.75 until April 5, 2014. An

aggregate of $7,500,000 was paid on closing, with US$2,500,000 due following the completion of a feasibility study

and US$5,000,000 due on achievement of commercial production (as defined below). If the feasibility study is not

completed by April 5, 2015, Mason Graphite is required to pay (a) US$1,250,000 on April 5, 2015, and (b)

US$1,250,000 on the earlier of (i) the fifth business day following the day on which a feasibility study is completed;

and (ii) October 5, 2015. If commercial production is not achieved by October 5, 2016, Mason Graphite is required

to pay (a) US$2,500,000 on October 5, 2016; and (b) US$2,500,000 on the earlier of (i) the fifth business day

following the day on which commercial production is achieved; and (ii) April 5, 2017.

“Commercial Production” means the first 10,000 metric tonnes of graphite that has been mined, sold and shipped

from the Lac Guéret Property.

Mason Graphite Corp. Technical Report on the Lac Guéret Project - 2 - Report July 2012

1.4 Accessibility

Access is by the all-weather Highway 389, 211 km north of Baie-Comeau, Québec, to the logging road turnoff at

the Manic-5 camp. Good gravel logging roads lead another 76 km northwest to the property. An old main logging

road crosses the graphite zones under review

1.5 Climate

The climate is typical boreal forest, with summer temperatures 15-30°C and winter to -50°C. The spring and

autumn are short with changeable weather. Precipitation occurs as rain in the summer and snow in the winter,

while spring and autumn are often mixtures of both.

1.6 Local Resources and Infrastructure

The property is located 300 kilometres by road north-northwest of Baie-Comeau, Québec, the nearest major

population and service centre. The northeast corner of the claim block lies on the southwestern shore of the

Manicouagan Reservoir, commonly known as the Manic 5 dam, owned by Hydro Québec. The hydroelectric dam is

about 85 km southeast of the centre of the property.

Logging operations created access into the area. The main logging roads, designed for 100-tonne logging haul

trucks; give good access throughout the claims. Logging ceased in 2006 and the roads have not been maintained

but remain in good condition overall as of May 2012.

1.7 History

Historical work consists of exploration for iron in the late 1950s by Québec Cartier Mines Ltd. Quinto Mining Corp.

has conducted exploration programs since 2002 focusing on the zones under review. No resource estimation has

been published on either the graphite deposit(s) or on the iron deposits. Quinto has explored only on the graphite

stratigraphy, since the iron deposits are appear to be too small to be economic in this region.

Following several exploration campaigns, Quinto conducted a drill program on the northeast part of the

GC Graphite Zone to define a tonnage and grade of the graphite in order to continue studies towards initiating an

open pit mine. Twenty-four (24) NQ drillholes totalling 2,149 metres were drilled at 50-m spacing on a grid 250 x

250 metres The grid was superimposed on four existing trenches (2004); an existing drillhole, LG07 (2003), was

also used. All drilling was done for Quinto.

The 2006 drill program included 24 inclined NQ holes totalling 2,146 m of core; one hole from 2003 located in the

centre of the grid, was also used for this study. The sites were located along four established trenches which ahs

channel samples cut in 2004. Casing was pulled and the sites marked with wooden 1x2”stakes with the hole

number inscribed on aluminum tags stapled to the stakes. Ed Lyons observed eight of these sites on his visit in May

2012. After the 2006 program, the core from the 2003 and 2006 programs was moved into a locked warehouse

near Baie-Comeau, Québec, Ed Lyons logged the 2006 core in the storage warehouse in 2007. Sample rejects and

pulps are stored at the PRA warehouse in Richmond, BC.

In the 2006 program, the typical core handling procedures were followed. The drill core was logged on site, and

sampled at intervals from 3.0-m maximum to 0.5-m, with the average sample length of 2.35- m. Of the 2,284 m of

core used for this study, 908 samples representing 2,135 m or 93.5% of the total core drilled was sampled. Samples

were saw-cut, bagged in plastic bags with numbered tags then packed into 20-L plastic pails with secured closures.

No blanks or standards were added in the field. The pails were sent in four shipments by truck from Baie-Comeau,


Québec to Process Research Associates (PRA) in Richmond, BC for preparation and analysis by IPL Labs of

Richmond, BC. Samples from the 2003, 2004, and 2006 exploration programs were all analysed at PRA.

Samples were received, logged in per the routine method at PRA, weighed and dried in a specially made low-

temperature oven to reduce potential volatilisation of carbon in the samples. They were crushed and prepared for

analysis using the standard LECO furnace method. For graphite samples over 35%, PRA developed an alternative

test technique A check on the values of high-grade (>35% Cgr) was tested on all 2006 samples using a differential

loss on ignition (DLOI) method to compare with the standard LECO techniques. They concluded that the LECO

method at high concentrations tended to overstate the % Cgr values somewhat. All the high-grade graphite

samples used in the resource model, except those in DDH LG-07, were analysed by the DLOI method. Sulphur

analyses were done on 124 samples using the standard LECO furnace method.

Standards were used by PRA as blind check samples in the sample stream sent to IPL. In 2004 samples were (in %

Cgr with + precision): 12.96% (+0.59%), 15.64% (+0.44%), 19.62% (+0.57%), 32.36 % (+0.86%), and 89.44%

(+1.90%). In 2006, a new standard, Composite-3, was prepared by the lab from samples selected by Michel Robert

for the trenches TR27, TR62, TR67, and TR68 in the drill grid. The purpose was to add a mid-range reference

material. PRA conducted round-robin assays by IPL, ACME labs (Vancouver, BC) and COREM (QC). The value was

24.1% Cgr.

In Lyons’ opinion, the field handling, sampling and analytical procedures were properly followed to industry

standard practice.

1.8 Geology

The regional geology includes the most southwesterly of several elongate anticlinoria of Gagnon Group

metasediments that include the traditional iron formation stratigraphy of the Wabush-Mont- Reed iron district.

These units are metamorphosed equivalents of the Labrador Trough (New Québec Orogen) sediments that occur

around Schefferville, Québec and north. The Southwest Manicouagan Anticlinorium shows a core of Denault Fm

dolomitic marble which lies beneath the Sokoman iron formation level on a platform of Katsao Fm pelitic

metasediments. Quartz-rich non/low oxide, iron-oxide, and iron-silicate facies of the Sokoman Fm form infolded

synclines and anticlines. The Sokoman Fm quartzite non-oxide facies overlies the iron oxide-bearing facies. The

upper portion has a diachronous, transitional contact with the overlying Menihek pelitic sediments. The basal part

of the Menihek Formation unit, also called the “Upper Gneiss” by Clarke (1977), forms the informal member, here

named Lac Guéret Member of the Menihek Fm. Both the Katsao and Menihek Fm gneisses have significant

potassium feldspar, whereas the paragneiss and schist of the Gagnon Group are deficient in K₂O.

Graphitic metasediments are concentrated in the Lac Guéret Member above and separated from the Sokoman Fm

iron deposits. Graphite also occurs in minor amounts in the adjoining formations near the contact, but most of the

potentially economical graphite lies within the Member. This relationship is common in the district with examples

at Lac Knife (QC) and Kami iron deposit (Labrador City, NL). Graphite formed as beds within clastic sedimentary

basinal deposition under anoxic conditions that preserved the organic carbon and precipitated primary sulphides,

mainly pyrrhotite intimately intermixed with the graphite. Sulphides are limited to this depositional regime and do

not occur in the host rocks outside of the deposits. Upper amphibolite (kyanite facies) metamorphism affected all

the rocks.

The conformation of the formations, including the graphite and iron oxide deposits, was modified by upward of

five periods of Grenville-related deformations. The second and third events most strongly control the placement of

the deposits into belts aligned northeast and dipping moderately to steeply southeast. Gentle cross-folding created

interference fold patterns that affected the foliation dips. The deposits are essentially foliation-parallel. Late


extension caused local recrystallisation of host rocks, but with no significant remobilisation of minerals. At this

time, pyrite was formed from some of the original pyrrhotite.

1.9 Mineralisation

Graphite occurs as lenses and beds up to 2000 m long and 10-80m thick deposited in the original sedimentary

rocks at the start of basinal deposition at ~1.75 billion years (Ga), based on age-dating (Clark and Wares 2004).

They have been folded and metamorphosed during the Grenville Orogeny ~1.12 Ga. Graphite grades range from

minor to 53.50% Cgr (carbon-as-graphite). Carbonate was not observed in the gangue. Two general types of

graphite were observed. In samples grading below ~25% Cgr, the flakes are discrete medium to coarse groups and

crystals to 3-mm in crystalline quartz-rich feldspar-biotite gneiss (QFB_GN) matrix. It is not known if the flakes

show a consistent size range relative to the Cgr grade. These were called Units 1 and 2 in the resource estimation

below. Above ~25% Cgr, the graphite changes its character to include a significant portion of very fine-grained

graphite that appears to not have recrystallised during the high metamorphism. This has been described in several

deposits and arises from an abundance of potential recrystallisation centres with diffuse attraction gradients

(Marshall, et al., 2000). This unit, called Unit 3 in the estimation, often shows a distinct crush or cataclastic breccia

texture where large clasts of fine-grained graphite schist up to 35-cm long have their foliations rotated. The

“matrix” is very coarsely recrystallised pure graphite flake-books to 8-mm long growing more or less perpendicular

from the clast margins. The economic potential of this unit is likely the extraction of the “matrix” graphite. The

origin of the breccia, which is only found in this high-graphite rock, is likely the rheological weakness of the unit

due to graphite that permits early ductile failure during deformation. It forms a distinctive steep axial plunge

atypical of the deformations in the other rocks.

1.10 Mineral Resource Estimation

The Mineral Resource estimation for the NE GC Zone graphite drill grid on the Lac Guéret Property is summarised

in the table below with a 4% cut-off. The geological interpretation and model included eight units (four units with

two subdivisions): Unit 1 is defined by % Cgr between 4-10%; Unit 2 has 10-27% Cgr, while Unit 3 contains 27% Cgr

or more. Waste has less than 4% Cgr. The calculated amount of sulphides below and above 20% nominal total

sulphides (pyrrhotite + pyrite) formed the two subdivisions to account for density differences. The units sensibly

interlayer, and since there may be metallurgical difference among them, it seemed prudent to carry the complexity

through the model. The reported units are the weighted averages of the low- and high-sulphide units. Hence, Unit

1 includes Units 1a and 1 b, etc.


Table 1.1 - Mineral Resource Estimates Summary NE GC Zone, Lac Guéret Property effective at June 22, 2012

Resource Estimate (4% Cgr cut-off)

Categories Unit Tonnes Grade

( % Cgr)

Measured (M)

Unit 1 (4 to 10% Cgr) 31,200 7.82

Unit 2 (10 to 27% Cgr) 122,800 14.85

Unit 3 ( > 27 % Cgr) 144,900 36.72

All units 298,900 24.39

Indicated (I)

Unit 1 (4 to 10% Cgr) 2,672,500 8.09

Unit 2 (10 to 27% Cgr) 2,089,200 16.83

Unit 3 ( > 27 % Cgr) 2,535,300 36.20

All units 7,297,000 20.24

M + I

Unit 1 (4 to 10% Cgr) 2,703,700 8.67

Unit 2 (10 to 27% Cgr) 2,212,000 18.30

Unit 3 ( > 27 % Cgr) 2,680,200 36.96

All units 7,595,900 20.40

Inferred

Unit 1 (4 to 10% Cgr) 1,272,600 7.56

Unit 2 (10 to 27% Cgr) 714,200 17.54

Unit 3 ( > 27 % Cgr) 771,500 33.10

All units 2,758,300 17.29

Notes:

1) Effective as of June 22, 2012

2) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

3) Numbers may not add up due to rounding.

The percentage of sulphides was not included in the resource data since only 13.6% of the samples were analysed

for total sulphur.

The lower cut-off grade of 4% Cgr was used to start the Unit 1; upper grade cap cut-off was applied to graphite

over 46% Cgr. Internal waste is defined as % Cgr below 4% and is calculated only for blocks internal to the block

model. Units 1 and 2 appear similar in texture, but may have some differences with increased graphite grade. Unit

3 is a distinctive type with bimodal graphite flake size and visual limitations for coarse flake recovery.

The blocks were kept small (3 x 3 x 3 m) to constrain the model to the geological interpretation as much as

possible. The search ellipsoid was defined in a plane that parallels the average bedding trend. The search ellipse

has a principal azimuth of 165, a principal dip of -20 deg and intermediate azimuth of 150 deg. Anisotropy was

interpreted with the semi variogram and set to 60 metres along the x axis, 40 metres along the y and 50 metres.

The Mineral Resource estimates were prepared following the CIM definitions with the exception that, for industrial

minerals, the information regarding metallurgy and market acceptability has not been completed by the Issuer at

this time.


1.11 Environmental Studies, Permitting, Social or Community Impacts

Only basic water quality sampling was done for Quinto in 2003-04. No existing environmental studies have been

undertaken to date. Studies will need to include flora and fauna censuses, water samples, and studies of the

physical and social impacts of the proposed development. Studies of the elements, acid-base balances and static

leaching tests will need to be conducted on representative mining materials, ore and waste, since the graphite

contains disseminated sulphides.

Mason has applied for permits for exploration work and early stage development with the MNRF. Future

development will require the environmental impacts reviews at the Federal and Provincial levels.

On April 18, 2012, Mason received consent from the Pessamit Innu First Nation to proceed with the exploration

program.

This is a complex process governed by existing treaty and non-treaty rights. A large step to the project’s success

depends on thoughtful engagement. This will lead to an Impact Benefits Agreement.

1.12 Recommendations

Development of the proximal mineralisation should follow a tripartite plan of drill-testing the known

mineralisation, establish the metallurgical parameters of the ore materials in some detail to learn the range of

graphite products that can be derived, and develop markets and a market presence for the Lac Guéret graphite in

world graphite markets. The program would include:

1. Initiate dialogue and agreements with the Pessamit Innu First Nation with active rights to the area of the

properties (see Section 20.0).

2. Initiate environmental baseline studies in early stages of field work. Attention can be placed on existing

trenches to test the development of any issues, since the dates of these activities are known.

3. Drill across known zones on initial 100-m line spacing using large diameter drill core (HQ) to test

continuity and grade distribution as well as collecting materials for metallurgical testwork that can be

composited to statistically reflect the deposit(s). Two sections should be drilled to the northeast and 11

sections to the southwest to extend the known resource with 4-6 inclined holes per section with lengths

to 150 m. (See Figure 26.1)

a) 120 holes @ 150 m = 18,000 meters on the GC zone only in two phases.

b) The Phase 1 core will be NQ size.

c) Hole azimuth will be 320° and dip will be 45° as determined by the geology results.

d) Combined Phases 1 and 2 with 40 holes to the northeast of the existing drilled grid; and

e) Combined Phases 1 and 2 with 80 holes towards the southwest of the existing drilled grid;

f) Phase 1 consists of 5-6 holes per section spaced 50 m apart on sections 100 m apart.

g) Phase 2 consists of infill drilling with large-diameter core on 50-m centres between the Phase 1

lines or closer as the deposit characteristics are better known.

4. Initiate metallurgical testwork with attention to graphite liberation sizes, sulphide liberation, and other

factors.


5. Develop an exploration program to define other targets on the properties as well as detail the GC and GR

geological limits and host rock relationships. Much of the bedrock is covered by a modest layer of glacial

debris, so many details remain unknown at present.

6. Develop commercial market presence to support the Feasibility Study.

7. Assess the infrastructural demands of the project.

The program budget is conceived as operating simultaneously on several fronts:

1) Environmental Baseline Studies $450,000

2) Drilling (100-m and 50-m spacing) 18,000 m @ $300/m $5,400,000

3) Initial Metallurgical Studies $ 75,000

4) Preliminary Economic Assessment including Testwork $440,000

5) Office, Management, and First Nations Relations $100,000

TOTAL $6,465,000


2.0 INTRODUCTION AND TERMS OF REFERENCE

2.1 General - Terms of Reference

Mason Graphite Corp. (Mason) contracted Roche Ltd. Consulting Group (‘’Roche’’), in May 2012, to evaluate the

graphite resources based on the data derived from the diamond drilling campaign in July-August, 2006 on the Lac

Guéret Property.

The purpose of the study was for the assessment of the graphite potential in the subject area. Therefore the

following conditions apply:

This report was prepared for the use of Mason Graphite Corp. by Roche Consulting Group. The quality of

information, conclusions, and estimates contained herein is based information available at the time of preparation,

data supplied by outside sources, and the assumptions, conditions, and qualifications set out in this report. This

report is intended for use by Mason subject to the terms and conditions of its contract with Roche. That contract

permits Mason to file this report as a Technical Report with Canadian Securities Regulators pursuant to provincial

securities legislation. Except for the purposes legislated under provincial securities law, any other use of this report

by any third party’s is at that party’s sole risk.

The mineral resource estimation is based on CIM standards, and the report is NI 43-101-compliant. Market studies

for acceptability of the concentrate also have not been done.

This technical report details the results of the Phase 5 program, conducted in 2006. Besides the fieldwork, the

report cites published geological maps and reports as well as assessment reports available from the Ministère de

Ressources Naturelles et Faune (‘’MRNF’’).

Lyons, a Qualified Person, has worked on the Lac Guéret graphite property since 2002 as the QP until June 2006.

He published three NI 43-101 reports (Lyons 2002, Lyons, 2004a, Lyons 2004b) detailing the results of Phases 1-4

exploration works. Daniel Lapointe, géo (QC), supervised the diamond drilling program, but did not produce any

report. Analytical work was directed by Michel Robert, then VP-Mining for Quinto Mining Corp., as part of his

metallurgical testing of graphite materials. Ed Lyons consulted for Quinto in 2007 for specific studies related to the

project, including the initial attempt at modeling the deposit in early 2007, relogging the 2006 core and visiting the

drill site in May 2007, and conducting a site tour in October 2009. In February 2008, Ed Lyons, operating under

Tekhne Research Inc., was contracted as Chief Geologist by Quinto for a two-year period.

Neither Quinto nor Mason, have done any field work on the site since the end of the 2006 drilling program.


2.2 Qualified Persons and Site Visits

The names and details of persons who prepared, or on whom the Qualified Persons have relied in the preparation

of this Technical Reported are listed in Table 2.1. The Qualified Persons meet the requirements of independence as

defined in NI 43-101.

Table 2.1 - Persons Who Prepared or Contributed to this Technical Report

Qualified Persons responsible for the preparation of this Technical Report

Qualified Person Position and Employer

Professional Designation

Independent of Mason Graphite

Date of Last Site Visit

Sections of Report

Edward Lyons, P.Geo Tekhne Research

P. Geo. Yes 14 May 2012 All sections of the Report, except Section 20

Guy Saucier, Eng. Vice-President, Mining and Mineral Processing Roche Ltd. Consulting Group

Eng. Yes None Supervision of the report

Martin Magnan, Eng Roche Ltd. Consulting Group

Eng. Yes None Section 20.0 of the Report

2.3 Use of the Report

This report is intended to be used by Mason Graphite Corp. subject to the terms and conditions of its agreement

with Roche. Mason Graphite may file this report as an NI 43-101 Technical Report with the Canadian Securities

Administrators (CSA) pursuant to provincial securities legislation. Except for the purposes legislated under

provincial securities laws, any other use of this report, by any third party, is at that party’s sole risk.

2.4 Units and Abbreviation

All measurements in this report are presented in metres (m), metric tonnes (tonnes), and grams per tonne (g/t)

unless mentioned otherwise. Monetary units are in Canadian dollars ($CAD) unless when specified in United States

dollars ($USD). Abbreviations used in this report are listed in Table 2.1.

Table 2.2 - Frequently Used Acronyms and Abbreviations

Abbreviations Description

Cgr Carbon as graphite

ft Feet

g Grams

g/t Grams/tonne

ha Hectares

in Inches

kg Kilograms

km Kilometres

m Metres

m³ Cubic metres

NSR Net Smelter Return


Abbreviations Description

ppm, ppb Parts per million, parts per billion

S Sulphur

Tonnes or t Metric tonnes

tpd Tonnes per day

2.5 Notice

This Report has been prepared by Roche at the request of Mason Graphite. The report may be used by Mason in

connection with the Lac Guéret Property and shall not be used nor relied upon by any other party without the

written consent of Roche. The contract made with Roche permits Mason to file this report as a Technical Report

with Canadian Securities Regulators pursuant to provincial securities legislation. Except for the purposes legislated

under provincial securities law, any other use of this report by any third party’s is at that party’s sole risk.

It should be understood that the information, conclusions, opinions and estimates contained are based on

preliminary information available to Roche at the time of preparation of this report which will change once

additional information will be available.

It should be understood that the Mineral Resources, which are not Mineral Reserves, do not have demonstrated

economic viability. The Mineral Resources presented in this Technical Report are estimates based on available

sampling and on assumptions and parameters available to the authors. The comments in this Technical Report

reflect Roche’s best judgement in light of the information available.


3.0 RELIANCE ON OTHER EXPERTS

Roche has prepared this study using the resource materials, reports and documents as noted in the text and

“References” at the end of this report.

Although, the authors have made every effort to accurately convey the content of those reports, they cannot

guarantee either the accuracy or the validity of the work described within the report.

Roche has not verified the title to the Property, nor has it verified the status of Mason Graphite’s property

agreements, but has relied on the information supplied by the Company in this regard. Roche has no reason to

doubt the title situation is other than what is reported by the Company.


4.0 PROPERTY DESCRIPTION AND LOCATION

4.1 Property Description

The property covers a total of 11,630.34 hectares in 215 CDC claims on NTS topographic map sheets 22K14 and

22N03.

4.2 Property Location

The claim group is in the Côte-Nord-Nouveau-Québec region in northeastern Québec approximately 260 km north

of Baie-Comeau, QC on the southwestern shore of Reservoir Manicouagan. It is centered at 51°07’N and 69°05’W.

The property is named for Lac Guéret, located in the south-central part of the group. No other named topographic

features on NTS map 22N03 (1:50,000 scale) occurs on the property.

Figure 4.1 - Location Map



4.3 Claim Titles

Table 4.1 lists the details of the registered claims, based on information from the MRNF’s Gestim website updated

as of 22 June 2012. Figure 4.2 shows the location of individual claims within the registered claim group. The claims

were consolidated into groups with common anniversary dates in 2007. Quinto has maintained them in good

standing by payment of taxes and payment in lieu of work. The assessment report for the 2006 drilling and related

expenditures was not been filed with MRNF for assessment credit. On June 20, 2012, the claims were registered in

the name of Mason Graphite Corp.

Mason provided Roche with the Opinion of Title by Heenan Blaikie dated 4 April 2012.

Mason is the registered holder of a 100% interest in the claims which comprise the Lac Guéret Property with no

registered encumbrances or royalties.

Figure 4.2 shows the claims and the claim numbers.

Figure 4.2 - Claims Map


Table 4.1 - Mineral Claim Titles


4.4 Issuers Interest

Mason and Quinto entered a purchase agreement whereby the Issuer acquired a 100% interest in the Lac Guéret

Property. The total purchase price for the acquisition was US$15,000,000 in cash, payable in instalments based on

the achievement of certain milestones over a five year period and the issuance of 2,041,571 warrants to Quinto,

each warrant being exercisable for Mason Shares at an exercise price of CAD $0.75 until April 5, 2014. An

aggregate of $7,500,000 was paid on closing, with US$2,500,000 due following the completion of a feasibility study

and US$5,000,000 due on achievement of commercial production (as defined below). If the feasibility study is not

completed by April 5, 2015, Mason Graphite is required to pay (a) US$1,250,000 on April 5, 2015, and (b)

US$1,250,000 on the earlier of (i) the fifth business day following the day on which a feasibility study is completed;

and (ii) October 5, 2015. If commercial production is not achieved by October 5, 2016, Mason Graphite is required

to pay (a) US$2,500,000 on October 5, 2016; and (b) US$2,500,000 on the earlier of (i) the fifth business day

following the day on which commercial production is achieved; and (ii) April 5, 2017.

“Commercial Production” means the first 10,000 metric tonnes of graphite that has been mined, sold and shipped

from the Lac Guéret Property.

4.5 Legal Survey

The claims have not had any legal surveys.

4.6 Environmental Liabilities

Environmental liabilities related to exploration activities are limited to reclamation of trenches as necessary. No

mining activity has occurred in this area. Limited surface excavation for road materials occurs in several locations

on the property; they are each less than 0.5 ha and are the responsibilities of the registered claim owner, such as

Kruger Forestry for dolomite and road gravel. Reclamation costs are the responsibility of Kruger, while the

dolomite pits are the responsibility of Mason.

The ownership of surface rights over the Property was not ascertained by Roche nor provided by Mason. Historical

forestry permits were actively used through 2007 by Kruger Forestry over the Lac Guéret Property. The current

status is not known.

11,630.34 ha


4.7 Significant Factors and Risks

There are no other significant factors and risks other than as disclosed herein that may affect access, title, or the

right or ability to perform work on the property.

Mason has requested the usual permit from the MRNF and the SOPFEU.

There are no known legal or title risks which may affect access, or the right or ability to perform work on the

property.

The known socio-economic risks which may affect access can affect the ability to perform work on the property is

the obligation to reach agreements with Pessamit Innu First Nation. On April 18, 2012, Mason received consent

from the Pessamit Innu First Nation to proceed with the exploration program.


5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY

5.1 Accessibility

Access to the property is via the paved all-weather Route 389 from Baie-Comeau, Québec to Wabush, Labrador. At

Km 200.5, south of the Manicouagan 5 Dam, a main-haul gravel logging road turns northwest from the paved road.

It continues about 95 km north-northwest from the highway toward the southwest shore of Lac Manicouagan. The

Lac Guéret property is located in a system of logging roads that are not maintained at this time, but were in sound

condition in May 2012. Numerous logging roads cross and around the property and give good access to the claim

block.

5.2 Climate

The northern boreal forest region receives an extreme range of weather conditions throughout the year. Summers

are short, from June to September with variably dry to wet with local storms, which may give heavy rainfall.

Humidity ranges from very dry to quite humid. Lightning from thunderstorms is a frequent cause of forest fires,

which are a normal hazard in any 10-year period. Autumn is quite changeable with abrupt shifts from almost

summery conditions to frost and back in 48 hours. As the autumn progresses, colder days are more frequent, and

snow may start as early as late September, but more commonly, snow stays on the ground after mid-November.

Winter is cold with very short days and temperatures to -40°C. Snow may come in storms with 30 cm snowfalls.

Spring is the opposite of autumn in the variability of daily temperatures and precipitation. It lasts from April to

June. However, frost may occur in any month of the year as well as above freezing temperatures. The weather

affects exploration work by restricting the mapping and trenching and other activities where access to the soil

surface is required to summer and fall. Drilling and geophysical surveys can be conducted year-round.

5.3 Local Resources and Infrastructure

The property is located 300 kilometres by road north-northwest of Baie-Comeau, Québec, the nearest major

population and service centre. The northeast corner of the claim block lies on the southwestern shore of Reservoir

Manicouagan, a large circular lake impounded by Barrage Daniel Johnson, more commonly known as the Manic 5

dam, owned by Hydro Québec. The hydroelectric dam is about 85 km southeast of the centre of the property.

Logging operations between 1998 and 2006 created access into the area. The resulting logging roads, designed for

100-tonne logging haul trucks, created new outcrops and give good access throughout the claims. Logging ceased

in 2006 and the roads have not been maintained but remain in good condition overall as of May 2012.

5.4 Physiography

Elevations range from 1175 m on the reservoir to just over 2150 m on a ridge some 10.5 km southwest of the

lakeshore. The topography is mainly undulating glacial landforms, which thinly cover the outcrop surface. Glacial

outwash plains and kame deposits are common. The glaciers moved from the north and scoured the pre-existing

north- and northeast-trending structures to create linear valleys now filled with streams, lakes, bogs, and glacial

materials. Locally, linear low rounded cliffs occur.

The boreal forest covers the area. The two dominant plant communities, typified by the black spruce – fir and

black birch – hemlock association, are common through the region. The understory plants for both communities

are several rhododendron species called labrador tea, tag alder, ash, pin cherry, and various types of berry bushes,

of which blueberry is ubiquitous. Forest fire is part of the boreal forest ecology. In the early 1990s, a particularly

dry summer led to numerous natural fires. About 30% of the forest on the property was burned in various degrees.


6.0 HISTORY

6.1 General Overview

6.1.1 PRIOR OWNERSHIP

Prior to the access developed by logging companies in the region in the late 1990s, the geographical isolation of

this area has hindered exploration. The author researched the Québec Ministry of Natural Resources website for

assessment files. The only assessment reports on claims situated near or on the Lac Guéret claims were filed by

Québec Cartier Mining Co. in 1962. They had two claim blocks totalling 100 quarter-mile claims in the area of the

property from 1959 until at least 1971. Roche does not know when these claims expired. They were acquired

based on regional airborne magnetometer mapping that picked up anomalies indicating significant iron formation

in geology similar to the Mt. Reed – Mt. Wright iron deposits about 150 km to the northeast. Québec Cartier

maintained their interest to at least 1971. The Lac Guéret claim group covers their former holdings. No other

assessment reports filed with the Ministry of Natural Resources Québec are available for the property area since at

least 1935.

6.1.2 HISTORICAL EXPLORATION WORK

Québec Cartier conducted their major work in 1962 (Ferreira 1962a, 1962b). Baselines were cut on three grids-

cutting with lines turned at 300 ft intervals for a total of 61 (98.5 km). Geological mapping and dip-needle

magnetometer surveys were carried out at 1:2400 scale on the grids. Six inclined AX-size diamond drill holes were

drilled for a total of 2,301 ft. (701.3 m). Most of the footage (1,820 ft. or 554.7 m) was drilled in five holes around

“Iron” and “Barrage” Lakes. Québec Cartier reported a global average of all samples at 36% Fe. The individual

samples range from 12.9% to 40.5% Fe in mainly magnetite and lesser specular hematite iron oxide facies

formation. Intervals range from 138 ft. (42.1 m) to 420 ft. (128.0 m). No further work appears to have been done

after 1962.

Following the discovery of graphite at the GR (graphite road) showing on a logging road by Phil Boudrias, Quinto

optioned a block of claims that forms the core of the present Lac Guéret Property from Exploration Esbec (Sept-

Îles, QC) in 2002 and added claims on its own account to cover the favourable stratigraphy around the iron

formation as well as the iron formation core itself.

Table 6.1 – Summary of Exploration Work on the Lac Guéret Property by Quinto

Year Works Trench (m) Drilling (m)

2002 Initial evaluation, discovery of GC Zone, prospecting, 17 line-km grid; 12 line-km VLF-mag ground survey

7 (643 m)

2003 Trench mapping, property reconnaissance 50 (4,409 m) w/1,023

channel samples

10 NQ DDH (1,206m w/421

samples)

2004 Joint Venture with SOQUEM; airborne EM-mag survey; Field verification of anomalies; detailed stripping and trenching with detailed geological mapping

18 trenches & stripping (2087 m) 1584 m

channel-sampled w/ 407 samples

2005 Property mapping (assessment work)

2006 Drilling 24 NQ DDH (2,149 m); w/901 samples

2007 Technical studies: met testwork, resource model started; studies incomplete


The 2006 exploration program included trenching two trenches northeast of TR68, named TR69 and TR70, and a

diamond drill program of 24 NQ holes totalling 2148.6 metres. Three holes totaling 235.8 m were also drilled in the

graphite stratigraphy outside of the GC-GR area for assessment purposes, but are not discussed herein. The

trenches were channel sampled using a concrete saw, but no records are available of the number of samples,

where they were taken are available, nor the analytical results. Lyons observed the trenches in May 2007 and

noted that they extended the TR68 geology to the NE some 80 metres.

6.2 Historical Mineral Resources

Québec Cartier Mining Co. included an in-house “resource estimation” for iron oxides which occur in the centre of

the current property in their assessment reports (Ferreira 1962a, 1962b). These were based on six AX drill holes

scattered over several kilometres. These estimates are not cited here as they are not within the CIM guidelines for

resources nor do these reports discuss graphite mineralisation.


7.0 GEOLOGICAL SETTING AND MINERALISATION

7.1 Regional Geology

The results of the 2004 field campaign (Lyons 2004b) and the 2006 drilling (not reported) improved our

understanding of the regional, as well as property geology. In addition, the lithotectonic synthesis of the Labrador

Trough by Clark and Wares (2004) revised the standard stratigraphy of the Labrador Trough, which is the protolith

of the Gagnon Group on the property. The synthesis also changes some fundamental perspectives and

interpretations applicable to the subject property.

The regional geology is shown in compilation maps by the Geological Survey of Canada (Davidson, 1996) and the

Québec Ministry of Natural Resources (Marcoux and Avramtchev, 1990) and is summarised by Hocq (1994). The

regional stratigraphic section around the property, shown on fig. 7.1 with the Québec government regional

mapping codes, is (from youngest to oldest)

Table 7.1 – Regional Stratigraphic Column

CENOZOIC

Quaternary

Q Pleistocene glacial deposits, unconsolidated

MESOZOIC

Triassic

Mcc Manicouagan impact crater complex (monzonite, latite, breccia)

MIDDLE PROTEROZOIC

G16 Shabogamo mafic intrusives

G15 Monzonite – granodiorite intrusives (? klippes)

G14 Gabbro (nappé – klippes?)

PALEOPROTEROZOIC – ARCHEAN

Gagnon Group

HBG_GN Hornblende-garnet gneiss – basalt sill-dyke complex coeval with Menihek Fm (small scale)

G12 Menihek Fm. (quartzofeldspathic gneiss) also called Upper Paragneiss (Clarke, 1977)

G12a Lac Guéret Member (informal) of Menihek Fm (graphite-quartz schist and graphite- quartz-feldspar-biotite-(garnet) gneiss)

------------------- diachronous contact -------------------------------

G11a Sokoman Fm. non-Fe oxide member (quartzite-rich sediments )

G11 Sokoman Fm. (iron formation) Age 1885 – 1878 Ma

------------------- unconformity -----------------------------------------

G9 Denault Fm. (dolomitic marble with calcsilicates + quartz) Age < 2060 Ma

------------------- unconformity -----------------------------------------

G8 Katsao Fm. (granite gneiss, minor amphibolite) Age 2170 - 2140 Ma


The Grenville Province rocks characteristically have been subjected to medium to high metamorphism and multiple

periods of deformation. Metamorphism in the region is the upper amphibolite facies (kyanite subfacies).

Pre-Grenville and possibly early-Grenville deformation appears to have been destroyed by intense middle-

Grenville orogenies. Dr. Réal Daigneault (Daigneault, 2004) made a structural field study on the graphite area on

the property while Ed Lyons was mapping the area. He noted that the central two periods of deformation (D2 and

D3) control the present distribution of the lithology, but there is evidence for one prior and at least two later

deformation events, as well.

The property covers most of the most southwesterly exposures of the Gagnon Group stratigraphy related to the

Sokoman iron formation in the Gagnon Terrane. The Gagnon Terrane on the property includes most of the broad

anticlinorium elongated north-northeast. The oval shaped structure is compressed from the southeast to its

present form.

The core of the anticlinorium is mainly Denault Fm crystalline dolomitic marble. The typical footwall to the

Sokoman Fm, the Wishart Fm quartzite, appears not to be present as a mappable unit. The Sokoman Fm iron

formation outcrops mainly in both the centre and edges, where they occur as linear, doubly folded (interference

folds) anticlines and synclines on the scale of 0.5 to 2.5 km. Silicate facies of the Wabush were recognized in

recently logged areas in the southern part of the anticlinorium, but have not been mapped historically. The

quartzite mapped near the graphite zones appears to be the upper, non-oxide, facies of the Sokoman Fm, not the

Wishart quartzite.

The Sokoman Fm quartzite and the overlying Menihek Fm contact can be traced around the margins of the

anticlinorium by airborne EM conductors with variable magnetic signatures. Little mapping has been done in the

northwest. Foliations are steep SE-dipping to vertical in the northwest, while on the southeastern margin,

foliations dip from steep to more commonly moderate to shallow toward the SE. The major D2 deformation was

caused by collision from the southeast, as is common throughout the Gagnon Terrane, leading to overturned folds

and thrust faults dipping SE. The anticlinorium generally occupies a low plateau delimited by steep flanks to the SE

and NW in particular.

The Lac Guéret Nord sector property covers most of the outlier of iron formation Gagnon Group as a plateau

described above. Work by SOQUEM Inc. in 2003-04 on the southern block of the Lac Guéret Property shows folded

bands of silicate-rich iron formation with minor Fe-oxide and sulphide facies probably interbedded with other non-

iron formation metasediments, but not the dolomitic marble. The graphitic horizon is present as linear bands to

10-m wide. The folds are dominantly strike E-W to WNW with steep south dips. The two zones, distinct in regional

detailed aeromagnetic survey (SOQUEM, 2002), appear to be the most southwesterly outlier of Gagnon Group. It

appears to be separated by erosion from the core Gagnon Group package on the Lac Guéret Nord property. The

southern units mark the south limit of the Gagnon Terrane where the Allochthonous Boundary Thrust Fault (ABT)

that marks the Parautochthon – Polycyclic Allochthon boundary.

Post-Grenville folding and extensional brittle faulting occurred with mainly modest vertical offsets. This pattern has

been noticed by Ed Lyons in the iron belt between Mont-Reed and Wabush. These are shown as thrust faults in

Figure 7.1.

The Middle Proterozoic units in the region are shown by Marcoux and Avramtchev (1990) as a group of basic to

intermediate intrusives. However, Hocq (1994) shows them as regional-scale (tens of kilometres) klippes

transported by subhorizontal nappé folding and thrust displacement on decollément planes.

The most significant known geological event in the area since the end of the Grenville event was the impact of a

large (~ 5-km diameter) bolide 214 + 1 million years ago in the Triassic Period (Monastersky, 1998). The impact

created the Manicouagan Crater with a floor diameter of 55 km and final rim diameter of 86-95 km (Grieve, 1983).


Part of the eroded annular ring of collapsed impact crater walls is now filled by the Reservoir Manicouagan. The

base of the impacted centre underlies Île Réne-Levasseur. The current floor is estimated at 230 m deep by 55 km

diameter (Morris et al., 1993). The shock ring outside the crater probably extends several to ten kilometres outside

of the crater. This would affect much of the rocks underlying the Lac Guéret Property, including the graphite zone,

although no shocked quartz has been noted in the graphite zones in thin section. This transient, high-speed event

likely did not affect the graphite flake size.

The last geological event was the Pleistocene glaciation and deglaciation. Where outcrops of softer graphite-biotite

schist trend north to northeast, the glaciers cut cliffs and cross-cut the schistosity. The melting of the ice formed

sandy outwash plains with isolated large erratics, kames, drumlins, and a few eskers. Moraine development in the

area of the property seems minor.

The economic geology in the Gagnon Group historically lies in the Gagnon Group metasediments. They host the

Sokoman iron formation mined at Mt. Reed – Lac Jeannine – Mt. Wright area near Fermont, as well as the deposits

at Wabush. The graphite deposits occur in the basal part of the Menihek Fm pelitic schist and gneiss overlying the

Sokoman Formation and can be considered as marking the final deposition in the Sokoman. This stratigraphy also

hosts the Lac Knife graphite deposit as well as graphitic paragneiss units south and west of the Fire Lake iron mine;

the basal graphite lenses also occur above the Kami deposit in Labrador City, NL.


Figure 7.1 - Regional Geology

Mason Graphite Corp. Mason Graphite Corp.


7.2 Local Geology

7.2.1 STRATIGRAPHY

The stratigraphy of the GC and GR graphite zones is shown schematically in Table 7.2.

Table 7.2 – Property Stratigraphic Column (Youngest to Oldest)

Map Code Paleoproterozoic Gagnon Group

G12 Menihek Fm. (quartzofeldspathic gneiss and schist)

G12a Lac Guéret Member (informal) of Menihek Fm

(graphite-feldspar- biotite schist, biotite-quartz gneiss)

G11a Non-Oxide member of Sokoman Fm. (dirty quartzite)

G11 Sokoman Fm. (iron oxide-Fe carbonate-Fe silicate facies)

Cycle 2

Cycle 1

G9 Denault Fm. (dolomitic marble & chert quartzite)

G8 Katsao Fm. (granitic and amphibolite gneisses)

The Denault and Sokoman Formations in the core of the synclinorium are overlain by the non-oxide facies of the

Sokoman noted elsewhere in the Gagnon Terrane near the iron mines. The quartzite is thin to thick bedded with

locally well-preserved bedding features, including rare graded beds. Thin beds also include 1-10% magnetite

crystals at a stratigraphic level only slightly below the start of the major graphite deposition. The quartzite locally

has interbeds of white coarsely crystalline diopside (calc-silicate) and white tremolite as well as pale green

amphibole and red-brown garnet (species unknown). Diopside, identified by MRNFP geologists by XRD, occurs in

monomineralic lenses to two metres thick. Graphite occurs as rare isolated flakes and thin beds in quartzite (not in

the marble) near the top of the unit. The quartzite is up to 140 m true thickness but often is less, especially with

the iron formations near the core of the synclinorium. The Sokoman quartzite complex forms the footwall of the

major graphite intervals in the GC and GR zones.

The informally named Lac Guéret Member (G11a) of the Menihek Fm is the basal facies of the Nault paragneiss

(the Upper Paragneiss of Clarke (1977)). The Member is quartz-rich towards the base and gradually increases in

plagioclase, biotite, muscovite, and garnet up section. Clarke (1977) reported graphite occurring sporadically

through the Nault (Upper Paragneiss). On the property, it is concentrated towards the base, although graphite also

occurs in minor amounts (< 1% Cgr) throughout the Menihek. In the Lac Guéret Member, graphite more typically

occurs as beds and bands of 4% to 51% Cg over widths of 2 to 200 metres. This is discussed in more detail under

Mineralisation. Graphite can also occur as isolated narrow beds in the quartzite proper. Overall, the Member

appears to represent a transitional depositional environment from dominantly chemical Sokoman to dominantly

clastic Menihek sediments. The diachronous contact shows the interlayering of quartzite-rich and micaeous rocks

typical of a contemporaneous change in deposition styles


Hornblende-garnet-amphibole coronitic gneiss is another distinct rock type that is localised in the Lac Guéret

Member. Clarke (1977) noted this unit, named Hornblende-Biotite Garnet Gneiss (HBG-GN) as occurring at the

base of his the Upper Paragneiss unit and remarks that it appears to be formational at the transition from quartzite

to paragneiss near Mt-Reed and Mt Wright iron mines. At Lac Guéret, It forms thin continuous bands and domal

dykes in the GC graphite zone. In core, the mafic and sedimentary beds at interbanded on the decimeter scale

locally; the mafic contains no graphite. The lateral extent is usually several hundred metres. Ed Lyons interprets

these as metamorphosed basalt or andesite sill-dyke complexes that intruded the metasediments. The same

pattern is common near the Kami iron deposit at Labrador City, NL.

The Menihek Fm paragneiss hangingwall is variable with leucosomic and melanosomic bands that typically contain

medium to coarse quartz, plagioclase, cinnamon-coloured biotite, muscovite, garnet, and dark green amphibole.

Occasionally, sillimanite needles were noted, marking the upper amphibolite facies. The coarse banding and biotite

colour are typical in the examples shown by Clarke (1977) for his Upper Paragneiss near Gagnon, QC. The unit also

includes minor bands of bright dark to medium green amphibolite with dark cinnamon garnet and/or black-brown

biotite. Minor graphite + biotite-rich bands occur throughout the unit. Other units observed but not mapped

include light-coloured, iron-deficient quartzofeldspathic gneiss with muscovite and pale rose garnets, and

hornblende-biotite amphibolite bands.

7.2.2 STRUCTURE

The Labrador Trough protolith had two and possibly three tectonic events before the Grenville deformation. These

were probably destroyed or severely modified beyond recognition during the Grenville orogeny. Locally, some

remnant features may survive in isolated outcrops. At least four periods of deformation during the Grenville

affected the property. The first deformation, D1 with rare examples of preserved as tubular folds (Daigneault,

2004).

The second deformation, D2 was the formation of the foliation F1 It is the most prominent and likely earliest folding

related to the Grenville Orogeny. The regional lineation axis is oriented 055°. Plunges are variable from flat to

shallow (< 20°) to the southwest. The plunges change in several domains of approximately 400-m length. From the

northeast to southwest, the graphite zone from L22+50N to L17+50N plunges shallowly SW. From L13+50N to

L17+50 N, it is flat plunging. The shallow plunge continues from L13+50N through L8+00N where trenching ends.

D3 deformation folded the F1 schistosity into tight subvertical to moderately dipping isoclinal folds striking

northeast to east-northeast and dipping southeast. This is the major control of the conformation of the graphite

beds. A number of late, small-scale pegmatite dykes, previously thought to be migmatite, in graphite schist have

been folded and transposed by this event

Within the graphite zones, the “high grade” beds (HiG type in previous reports) with >25% graphite appears to

form crushed or cataclastic breccias in local bands. Fragments of the host generally form 80-90% of the unit with

rotation of foliated clasts subparallel with the main trend. The “matrix” is recrystallised graphite flakes up to 8-mm

length approximately perpendicular to the clast margins with no associated minerals. It also shows an unusual

deformation, here called D3. The foliation strikes parallel with F1 but shows a steep plunge to the southwest. Lyons

interprets this feature as the result of rheologically weak ductile high-grade graphite bands that absorbed most of

the compression and transpression associated with the D2 and D3 events. This deformation is restricted to the HiG

graphite bands in the GC and GR zones.

The fourth major deformation, D4, folded of the D3 structures. It is aligned around a ~308° axis with a steep

southeast plunge. It is expressed as shallow crenulations on tight D3 folds, as a kink of the quartzite-graphite

contact on L13N, and the open flexure on L16N that changes the trend of the GC graphite zone form NE to ENE


across the 2006 drill grid. It also accounts for the more northerly flexure on the GR Zone. It forms the interference

folds of the Sokoman Fm package in the centre of the synclinorium on the scale of 1-km.

A key element of the anticlinorium model is that it is relatively shallow, probably less than 250 metres. The exact

depth is unknown. Drilling by QCM (Ferriera 1962a) showed that the anticline tested by drill holes on both flanks

changed from tight to open folding in 120-m depth. The style of folding and the limited drill results on the GC Zone

indicates that the graphite beds continue down beyond 100-m depth with some flattening (see sections in 2006

drill program).


Figure 7.2 – Mason Graphite Property Geology



Figure 7.3 – GC-GR Graphite Zones Compilation



7.3 Mineralization

Graphite of Unit 1 (4-10% Cgr) and Unit 2 (10-25% Cgr) forms fine to coarse crystal flakes (<0.01 to >4-mm

diameter) in quartz and quartzofeldspathic gneiss and schist. The in-situ organic material was concentrated during

post-Labrador Trough deposition and recrystallised during the Grenville orogeny. It does not appear to have been

enriched by tectonics or hydrothermal remobilisation.

Unit 3 (+25% Cgr) is characterised by a distinct pattern in flake distribution. The tendency is for clasts or non-

recrystallised centres of the original very fine to amorphous pre-metamorphic graphite schist to be enveloped by

recrystallised very coarse (2 to -+8-mm length) and pure graphite flakes as a result of ductile brecciation. The

coarse flake graphite visually forms 7-12% of the total rock and constitutes the potentially economically viable

product. The rest of the HiG material may have more amorphous graphite.

Sulphides are present mainly as pyrrhotite and less frequently as pyrite. Pyrrhotite occurs commonly with graphite,

especially at grades greater than 10% Cg, as 3-5% fine-grained, disseminated to blebs and patches 0.3- to 4-mm

long aligned parallel with the schistosity. It is visible in drill core, but less so in outcrop. Outcrops rarely show

significant iron oxidation when trenched and show minor white ferric sulfate efflorescence on fresh surfaces.

Pyrite occurs locally as coarse recrystallisation of associated with late northwesterly extensional gashes seen in

several trenches and in drill core in the GC Zone. It is not associated with other hydrothermal minerals such as

quartz or calcite in the late open-space veinlets. In core, pyrite crystals occur adjacent to finer-grained pyrrhotite

blebs with sharply defined crystal margins for the pyrite and no local change in crystallinity in the pyrrhotite.

Chalcopyrite, sphalerite, and molybdenite have been observed in thin section (Rioux, 2008). The first two occur as

late and fairly clean sulphide grains interstitial to pyrrhotite and pyrite. Molybdenite occurs locally within graphite

flakes with the lamellae aligned with the basal planes of both minerals; the molybdenite was formed during the

genesis of graphite and predates micro-folding of graphite. No other sulphide minerals have been noted. ICP

chemical analyses of 120 samples in 2004 showed no geochemically significant amounts of metals associated with

the graphite.

The depth of the mineralisation is uncertain, as was mentioned under Structure above. It is probable that the

folded graphite bands are constrained within a broad vertical envelope. This envelope is the actual outline of the

deposit.

Interpretation of the sections for the Mineral Resource shows the effects of structure on localising the graphite

deposits. The general trend shows the ~20° SW plunge. The continuity of the structures between 50 metre sections

shows rapid changes particularly in the Unit 3 (HiG) type. This is interpreted as the result of the focusing of

compression on the higher graphite beds which have a predilection for ductile folding and sliding. The graphite can

glide readily, thus moving but with little fault brecciation. The HiG units observed to the SW in cleaned outcrops

show intense isoclinal folds with amplitudes often less than 5 metres, where the adjacent lower grade graphite

schist and quartz-rich sediment bands are folded in the scale of 10-100 m amplitudes. This ductility makes

interpreting the higher grade units more difficult.


8.0 DEPOSIT TYPE

The graphite beds form an integral part of the sediments of the informally named Lac Guéret Member of the

Menihek Formation. The graphite originated in part as carbon-rich sediments in arenaceous and pelitic turbidite

beds that were part of a marine basin of increasing depth relative to earlier deposition. The protolith in the

Labrador Trough has low levels of kerogen (sedimentary carbon) associated with a variety of lithologies, but none

are nearly as high in carbon as even the medium grade graphite at Lac Guéret (T. Clark, pers comm, 2004).

Graphite is chemically stable over a wide range of pressure and temperature conditions and is only very poorly

reactive with other common hydrothermal solutes. The potential for concentration of grade by plastic flow is

minimal since dry minerals do not flow plastically under the metamorphic high pressures and temperatures.

(Thickness can change due to sectional compression or attenuation.) Remobilisation of sulphides during

metamorphism is facilitated by local-scale hydrothermal solution and redeposition (Marshall, et al., 2000). Thus,

the most probable carbon concentration mechanisms occurred before the first level of metamorphism sealed the

rock porosity. Two possibilities may account for the graphite. One could be the result of exceptionally high initial

organic deposition concurrent with sedimentation. The second model derives the carbon from the movement of

hydrocarbons during diagenesis, when the rocks were being compressed and lithified. However, the origin of the

beds of abnormally rich graphite (locally over 50% Cg) cannot be derived from simple bio-organic sediments, even

if they are 100% biological materials. It is possible that a paleo-petroleum process during diagenesis may have

upgraded the carbon content. One model that was proposed involved reduction of carbonate to graphite.

Dolomite and calcite contain 13% and 12% carbon, so they could be potential carbon sources for deposits generally

12% Cgr or less assuming total carbon transformation of a fixed amount to carbonate. However, most of the Lac

Guéret graphite grades tend to exceed that limit.

The value of a graphite deposit depends only partly on the graphite grade. More important is the quality and purity

of the graphite crystal (flake) that can be extracted. A potentially economic graphite deposit must demonstrate

that the degree of recrystallisation is high. The recrystallisation dynamics of graphite is poorly understood. When

carbon/graphite levels are over ~20%, the graphite apparently resists recrystallisation (B. Marshall, pers. comm.

2004). In the high-grade material (HiG) at Lac Guéret, zones of fine-grained graphite, interpreted locally as crushed

or cataclastic breccia clasts, are surrounded by recrystallised coarse flake graphite. Where graphite grades are less

than 25%, recrystallisation is more complete. Thus, the apparently lower grade, non-HiG material may have an

economic value similar to richer grade material. Metallurgical testing is needed to verify these factors.

The same conditions that controlled the carbon deposit also controlled sedimentary or diagenetic iron sulphide.

The original sulphide was probably pyrrhotite deposited as fine grains with the carbon and in lenses with quartz

and negligible carbon. Both occur in the same horizon but probably in a semi-independent relationship. Sulphides

known to date on the property are located within the graphite horizons, not isolated in hangingwall/footwall

stratigraphy. One area on the horizon several kilometres north of the drill grid shows sulphide in high-quartz gneiss

with only minor graphite. Thus, the reductive sedimentary basin environment appears to show a range of sulphur-

carbon relationships.


9.0 EXPLORATION

9.1 Exploration Work

Mason has not conducted any exploration work on the Lac Guéret Property.


10.0 DRILLING

Table 10.1 lists the drillhole data for the 2006 holes plus LG-07 (2003) which form the basis of the Mineral

Resources estimation.

Table 10.1 – Drillholes Details

Hole ID Zone Length (m) Azi Dip UTM N UTM E Elev Drill Dates Section

LG-07 GC 136.00 326 -45 5663785.4 495766.97 530.9 24-27/09/03 1050

LG-11 GC 120.20 320 -60 5663738 495818 524 12-13/07/06 1050

LG-12 GC 129.10 320 -45 5663720 495822 536 16-16/07/06 1050

LG-13 GC 74.60 320 -45 5663759 495796 525 14/07/06 1050

LG-14 GC 75.80 320 -45 5663707 495860 512 14/07/06 1050

LG-15 GC 81.00 320 -45 5663810 495730 546 16-19/07/06 1050

LG-16 GC 56.20 320 -45 5663836 495697 552 19/07/06 1050

LG-17 GC 141.00 320 -42.5 5663685 495808 509 20-22/07/06 1000

LG-18 GC 83.70 320 -48 5663716 495765 512 22-23/07/06 1000

LG-19 GC 140.20 320 -46 5663747 495731 535 23-24/07/06 1000

LG-20 GC 90.00 320 -44 5663784 495698 537 24-25/07/06 1000

LG-21 GC 75.00 320 -45 5663818 495662 546 19-20/07/06 1000

LG-22 GC 84.00 320 -44 5663794 495863 517 26/07/06 1100

LG-23 GC 132.40 320 -45 5663794 495822 544 27-29/07/06 1100

LG-24 GC 78.00 320 -45 5663826 495783 533 29-30/07/06 1100

LG-25 GC 85.20 320 -45 5663861 495749 541 30-31/07/06 1100

LG-26 GC 74.10 320 -45 5663730 495892 522 6-7/08/06 1100

LG-28 GC 139.50 320 -45 5663808 495895 511 1/08/06 1150

LG-29 GC 75.90 320 -45 5663877 495863 528 02/08/06 1150

LG-30 GC 74.30 320 -45 5663866 495823 538 2-3/08/06 1150

LG-31 GC 60.00 320 -45 5663866 495787 544 03/08/06 1150

LG-32 GC 57.00 320 -46 5663933 495752 548 3-4/08/06 1150

LG-34 GC 72.00 320 -44 5663819 495949 508 5-6/08/06 1200

LG-35 GC 74.40 320 -45 5663858 495914 519 05/08/06 1200

LG-37 GC 75.00 320 -45 5663925 495844 535 4-5/08/06 1200

24 DDH 2006 2,148.60 UTM = NAD83 Z19

1 DDH 2003 136.00

TOTAL 2,284.60

Of the 2,284.60 metres cored, 2,135.5 m were sampled and analysed (93.5% of the core). Recovery was very good

(+98%) with moderate to high RQD values typical of these rocks. 908 samples were taken with 2.35 m average

sample length. Cores were placed in wooden half-diameter trays used in the region; were covered with a second

tray and transported to the geology logging area. The length of the run was marked by wooden blocks typically

from run to run (3.0 metres)

Drilling was performed by Forages La Virole of Rimouski QC under the guidance of Daniel Lapointe, P.Geo.


10.1 Reliability of Work

Lyons, as a Qualified Person, has visited the project site at the start of the program in June 2006 as well as

subsequently in May 2007 and October 2009, and on 14 May 2012 for this report. In his opinion, after reviewing

the data results, the works were reliably executed as reported.


11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY

11.1 Sample Collection

11.1.1 SAMPLING APPROACH AND METHODOLOGY

Core sampling in 2003 (LG-07), done by Lyons, had maximum sample length of 2.0 and minimum of 0.75 m with

breaks at major lithological changes. Sample lengths in the 2006 program had the maximum length of 3.0 and

minimum of 0.5 m with less than 25 samples less than 1.0 m long.

Trench channel sampling of trenches TR27, TR62, TR67, and TR68 done in 2004 was done to match the width and

diameter of NQ diamond drill core (Lyons, 2004b). Lyons observed similar sample channels in TR69 and TR70 of

2006.

Samples were saw-cut parallel with the core axis. Three-part sample tags with unique numbers were used. One

part was stapled in the corebox at the start of the sample run. One half of the sample was placed into plastic bags

with a second tag. The third part, in the sample book, was preserved for the company’s records.

Samples were shipped in 20-litre sealed plastic pails in four shipments by truck from Baie-Comeau, QC to Process

Research Associates (Richmond, BC) for analysis.

Inspectorate Exploration and Mining Services Ltd. (Inspectorate) acquired in Sept. 2008 Process Research

Associates (PRA) Group; Vancouver, Canada which also included International Plasma Laboratories (IPL).

Inspectorate is ISO 9001 :2008 certified.

ALS Chemex is as well ISO 9001 :2008 certified.

The data from both core and trench samples were used in the geological and block model and in the resource

estimation.

11.2 Sample Preparation

11.2.1 RELATION OF ISSUER TO SAMPLE ANALYSIS

No one related to the Issuer, Mason as an employee, officer, director, or associate was involved with the samples

at any time during sampling, transportation, sample preparation, or assaying.

Mason has no relationship with Process Research Associates, International Plasma Laboratory Ltd., ALS Chemex, or

Assayers Canada Ltd and is totally independent of these companies.

11.2.2 SAMPLE PREPARATION, ASSAYING, AND ANALYTICAL PROCEDURES

The sampling crew brought the daily production of samples to the camp where they were stored in a trailer. The

samples were checked for agreement between the enclosed sample tags and the number written on the outside of

the bag; bag closures were also checked and repaired as needed. Samples were stored in a closed cube van rented

specifically for sample handling. Periodically, they packaged the samples for shipment in plastic 20-L pails. The

foreman and another worker prepared and double-checked a list of which listed sample numbers in each container

and their weights. The samples were driven in the locked van to Transport Thibodeau Inc. in Baie-Comeau, Québec

for shipment by truck to Process Research Associates in Vancouver.

Upon receipt at Process Research Associates (PRA) at 9145 Shaughnessy St, Vancouver, BC, the samples were

checked against the delivery documents, which included a detailed list of sample numbers in each bag, for


completion. PRA maintains a reception list with a description of each sample for integrity of packaging, largest

particle size, and moisture content. All documents are stored in the main contract file at PRA.

Samples preparation is initiated with an Instruction and Handling Sheet prepared by the laboratory manager.

Details, including sample identification, air-dried weight, and approximate riffled out weight, are recorded. Each

sample is first weighed and the weight recorded. It is then put into a steel pan for handling with an identification

tag attached. The sample is dried in a custom-made furnace at low temperatures specifically not to damage other

organics that might be associated with graphite.

The sample is crushed in a jaw crusher (and cone crusher, if required) set at 6 mesh (Taylor) or 3.3 mm. The

crusher(s) is thoroughly cleaned before and after each sample. The crushed sample is quartered with a 0.75 in

(1.91 cm) riffle and a subsample of 200 to 300 grams is placed into another clean steel pan with an identification

tag.

The subsample is pulverised in a stainless steel rotary shatter box to 95% minus 74 microns. The shatter box is

cleaned with silica sand before and after each sample. The subsample is mixed and quartered again to about 50 gr

in a stainless steel riffler. Rejects are combined with the original sample.

The main sample is bagged in a polyethylene bag and stored in a covered 5-gallon plastic container. The contract

number and sample numbers are written on the sample bag and container. The 50-gr subsample is bagged in a

polyethylene bag and marked with the contract and identification numbers and is sealed.

PRA prepares a purchase order for the assayer, listing all samples. The information is kept in the client’s contract

file and is registered in PRA’s central purchase order ledger.

The assayer, International Plasma Laboratory Ltd. (IPL) at #200 – 11620 Horseshoe Way, Richmond, BC, picks up

the samples. Upon receipt, the samples are logged in their system with purchase order and list of sample numbers.

The 50-gr samples were analysed for graphite following the ASTM 1915-01 method with some modifications. The

method has two steps: one is the removal of all non-graphite carbon by heating and leaching with aqua regia; the

second is the complete combustion of the sample using a LECO CS-300 carbon-sulphur analyzer in an oxygen-rich

atmosphere with a catalyst to convert all carbon to CO2. The CO2 is detected with an infrared absorption

spectrometer and compared with standards to calculate the carbon content of the sample.

A check on the values of high-grade (>35% Cgr) was tested on all 2006 samples using a differential loss on ignition

(DLOI) method to compare with the standard LECO techniques. They concluded that the LECO method at high

concentrations tended to overstate the %Cgr values somewhat. All the high-grade graphite samples used in the

resource model, except those in DDH LG-07, were analysed by the DLOI method.

IPL reports the assay results to PRA email and by signed certificate. PRA evaluates the data with reference to their

standards and internal checks. Once PRA completes its review, it sends the results to the client.

Canadian Association of Environmental Analytical Laboratories and the BC Ministry of Environment Land and Parks

have certified international Plasma Laboratory Ltd. In 1997, IPL participated in the CANMET Proficiency Testing

Program for Mineral Analysis Laboratories. The laboratory is certified under ISO 9002.1994 and is audited on a

regular basis.

Michel Robert, P. Eng., the Qualified Person at Process Research Associates, stated that International Plasma

Laboratory Ltd., the primary assayer and ALS Chemex Canada Ltd. (AC), the referee laboratory, are independent of

Process Research Associates and offers their services on a commercial basis only.

Rejects and pulps are stored at the PRA warehouse on a continuing basis.


11.3 Quality Assurance and Quality Control

Quality control was done at two levels for the samples. Process Research Associates adds two duplicate samples

and two standards with non-indicative labels in each run of 20 samples for a total batch of 24 samples.

International Plasma Labs of Vancouver, BC, following the ISO 9002.1994 requirements, adds an internal standard

as the 21st

sample in a batch of 40 samples. Each 1st

and 20th

client samples are also duplicated. These are in

addition to the four unidentified standards and duplicates introduced into the batch by PRA. Every 10th

determination, defined as sample, duplicate, or standard, is a blank sample supplied by PRA.

In addition, PRA send one of the duplicate samples and one of the standard samples from each batch to Assayers

Canada Inc. for analysis as an independent check.

Blanks enter the sample stream when PRA sends the sample to IPL for analyses.

No blanks or standards were added in the sample stream in the field.

11.4 Security

The samples were close control from the drill to shipment. They were stored in the van used for transportation of

the shipments from the field to delivery to the shipper’s office in Baie-Comeau, QC. While it is remotely possible to

change the samples, in fact, during the period of sampling, no one, except the geologist, knew which material had

the higher grades. The visual estimates made by the geologist were only approximations of actual grades. I believe

that the potential for sample manipulation in the field to be very low.

Following the drill program in 2006, the drill core was moved from the field site to a secure warehouse at Baie-

Comeau, QC.

At present, no blank samples are included with the sample sent from the field to PRA. In order to increase the

quality control, this should be done in future programs.

In Lyons’ opinion, the sampling procedures and handling in the field, sample preparation, sample and data

security, and the analytical procedures were sufficient to maintain the integrity of the samples as representative of

the material sampled.


12.0 DATA VERIFICATION

12.1 Field Verification

Lyons directed the Lac Guéret exploration work in the field from 2002 through mid-2006 and helped establish the

2006 drill program executed by Daniel Lapointe, P. Geo. He relogged the 2006 core in May 2007 in the secure

storage site at Baie-Comeau, QC following which he visited the drill grid site. He also consulted with Quinto during

2006 and 2007 related to metallurgical issues and initial efforts to make a geological model in 2007. The 2006 drill

sites are marked with wooden stakes and the casing has been pulled out. Locations were made with a hand-held

GPS unit. He recommends that a Total Station survey be done of the drill grid to tie in the 2006 drill collars, which

should be marked more permanently and the trenches and roads.

Lyons knows of no known limitations regarding the field data besides the normal data ranges inherent in the

methods described.

12.2 Database Verification

Database verification is discussed in Section 14.0 Mineral Resource Estimates.

Lyons knows of no known limitations regarding the field data besides the normal data ranges inherent in the

methods described.


13.0 MINERAL PROCESSING AND METALLURGICAL TESTING

Metallurgical testwork was started by Quinto Mining Corp. under the direction of Michel Robert at Process

Research Laboratories (Richmond, BC) where the sample rejects were stored. The program was stopped before

completion by the management at the time when the company shifted its focus to iron exploration in 2007. No

records of the work were located in Quinto’s files at the time of this report.


14.0 MINERAL RESOURCE ESTIMATE

14.1 Introduction

The Mineral Resource estimation is based on the Quinto Mining Corp. exploration data and the geological model

provided by Lyons working with Geospark Consulting (Nanaimo, BC) based on a Quinto in-house study in 2009. The

current model was simplified by them to include three mineralized units and one waste unit defined by the

graphite content. All data provided by Geospark was imported in Gemcom (GEMS). Grade interpolation was done

with ordinary kriging in the GEMS mining software module.

Interpretation of the sections for the Mineral Resource shows the effects of structure on localising the graphite

deposits. The general trend shows the ~20° SW plunge. The continuity of the structures between 50 metre sections

shows rapid changes particularly in the Unit 3 (HiG) type. This is interpreted as the result of the focusing of

compression on the higher graphite beds which have a predilection for ductile folding and sliding. The graphite at

higher grades can glide readily, thus moving with little fault brecciation. The HiG units observed to the SW in

cleaned outcrops show intense isoclinal folds with amplitudes often less than 5 metres, where interlayered mafic

sills and the adjacent lower grade graphite schist and quartz-rich sediment bands are folded in the scale of 10-100

metres amplitudes. This anisotropic ductility makes interpreting the higher grade units more difficult.

14.2 Previous Mineral Resource Estimates

No previous mineral resource estimations were made on the graphite deposits.

14.3 Exploration Database

The database used for this resource estimation was provided by Geospark Consulting in a digital format. Following

the receipt of the database, Roche validated that all data was imported by cross-checking with Geospark. All

relevant data was imported in GEMS, the following files were imported in the GEMS database:

Assay.csv

DHColl.csv

DHsurvey.csv

Lith.csv

The database contained results from 24 diamond drill holes and four trenches. The following information was

extracted in GEMS from the files mentioned above:

DHColl: 24 diamond drillhole collars and 4 trench coordinates from DHColl. Easting, northing, elevation

and the maximum depth of each holes was the information extracted from this files

DHsurvey : 24 records associated to the drill holes were extracted from these files. The fields included

following information : hole identification, depth, azimuth, and dip.

Assay: 906 records of intervals inside drillholes or trenches for Cgr % were imported in GEMS database.

The database was built by Geospark for Quinto over several years in Access (2007-2009). It was imported to the

Minesight™ software workspace where multiple tables can be manipulated in one workspace.

Following measures were followed by Geospark to create the Roche database.


1. Comparing original electronic (PDF) copies of the signed analytical certificates for graphite, ICP element

analyses, sulphur, and density were compared with the existing database; Minor corrections and additions

were made.

2. Validation of overlaps between interval units in assay and geological intervals were done.

3. Checks of the drill collar coordinates, including elevations, inclinations, and azimuths, were done. Several

collars plotted in unexpected places; these were adjusted to fit the known field conditions and a separate

set of coordinates was kept in the database noting these adjustments.

4. Checking for inconsistencies in the geological codes as well as verifying minimum-maximum field values.

These were verified independently by Caroline Vallat of Geospark Consulting.

5. The assay data matched the database with the exception of two data entry errors that were corrected. The

sample interval checks encountered three examples arising from keypunch errors, which were amended.

6. Collar elevations of original collar coordinate data were based on hand-held GPS readings. No DGPS

surveying was done.

7. A digital contour map made in 2006 by GPR (Montréal, QC) for Quinto was contoured on 1-m intervals; the

elevations were interpolated from this topography and added to the database as corrected coordinate

information.

No other errors were discovered that would impact the Mineral Resource estimation.

14.3.1 DENSITY

Density data was compiled by Geospark. A fix value of density was attributing to each block for each unit. For the

block model, the average between low and high value was given to each bloc inside the units. The densities

assigned to the units are tabulated below (Table 14.1).

Table 14.1 - Density

Unit Density

Unit 1 2.675

Unit 2 2.575

Unit 3 2.5

Waste 2.725

Specific gravity measurements were taken on 40 samples of crushed core from the 2006 samples in March, 2007.

The immersion method was used on samples weighing 285 to 315 grams. Total sulphur analyses were done on 38

of the 40 samples by the LECO method at the same time. The original list of samples selected by AMEC, during the

initial resource estimation in 2007 for Quinto, included 60 samples. Many of the ones not tested included the

higher grade (>10% Cgr) that would have been useful; the reason for the change is unknown.

The measured density ranges from 2.37 to 3.03 kg/m2. The interplay of density between increasing graphite, which

ranges from 1 to 53.80% Cgr, and sulphur, which ranges from nil to 15.7%, affect the density used in the model

units.


Figure 14.1 shows the relation between %Cgr and density for the 40 measured samples. The populations for low

and high sulphide are distinct albeit close as would be expected, with a gradual decrease in SG as graphite

increases more rapidly than sulphide.

The 2009 model used both high- and low-sulphur variants as units yielding more complexity than was manageable.

The current model was simplified from that data and included both high- and low-sulphur variants as one unit. The

density of the present units was the simple average of the two sets.

Figure 14.1 - % Cgr vs. Density

Figure 14.2 shows the same parameters for % S (tot) and density for 38 sample pairs. The sulphur vs. density shows

a variable correlation with increasing % S (tot). The increase in density is due to the higher proportion of sulphides

% vs. Cgr% with lower graphite grades including more sulphides.

%Cgr vs. Density

0

0.5

1

1.5

2

2.5

3

3.5

0 10 20 30 40 50 60

% Cgr

De

ns

ity

(g

/cc

)

High sulfide = +20%

Low sulfide= < 20%

?

Unit 1b Unit 2b Unit 3b

N = 40 sample pairs

Figure 8

Unit 3a Unit 2a Unit 3a


Figure 14.2 - % S (tot) vs. Density

14.3.2 SAMPLE DISTRIBUTION

The statistics of the graphite samples used in the modeled volumes are shown in Table 14.2 and the grade

distribution is shown in Figures 14.3 (normal histogram) and 14.4 (cumulative frequency).

Table 14.2 - Drill Core Samples – Statistics

Sample Count

Min Max Mean Median Std Dev. Var.

Cgr% All Units 599 0.02 52.59 19.13 14.8 15.13 228.99

Cgr% Unit 1 143 0.15 24.47 7.50 6.12 4.88 23.86

Cgr% Unit 2 131 0.06 38.41 15.93 15.94 6.95 48.26

Cgr% Unit 3 228 5.25 52.59 35.00 36.89 10.16 103.18

Cgr% Waste 97 0.02 23.38 3.29 2.15 3.84 14.73

%S (tot) vs. Density

0

0.5

1

1.5

2

2.5

3

3.5

0 2 4 6 8 10 12 14 16 18

% S (tot)

De

ns

ity

(g

/cc

)N = 38 sample pairs

Figure 9


Figure 14.3 - Normal Histogram -% Cgr in All Samples Used in Model

Figure 14.4 - Cumulative Frequency - % Cgr in All Samples Used in Model

The samples plotted are not the statistical representation of the entire GC zone deposit, but, form only a subset

that was included within the NE GC model. Samples from the same drill holes that tested rocks outside the model

were not included.


The population appears to be two normally distributed groups: one from 0 to ~10% and the other above 10%,

based on the cumulative frequency plot. The histogram shows a small second population of +31% Cgr material in

Units 3a and 3b. The extent of this population is unknown outside the drill grid. Unit 3 rock elsewhere typically is

between 27% and 45% Cgr; the values above 45% Cgr are uncommon.

14.3.3 GEOLOGICAL SECTION AND GEOLOGICAL INTERPRETATION

Geological model was provided by Lyons and Geospark to Roche as four AutoCAD files (.dxf). The four units

included in that model are based on the graphite content. All units were imported as a triangulation in GEMS. No

errors which will affect the volume calculation were detected during the interpretation. Due to the complexity of

the deposit and the differences in ductility of the high-grade graphite Unit 3, the geological model shows a variable

continuity between sections. For estimation purpose, the different units in the geological model have been only

used for grade interpolation and not used for the geostatistics. Geostatistics have been performed in all units

together within the deposit envelope.

The geological modeling procedures included:

Geological interpretation and digitizing of lithological boundaries;

Creation of 3D TIN (triangulated irregular net) solids model;

Database manipulation;

Block and grade estimation;

Classification and reporting of Mineral Resources.


14.3.4 GEOLOGICAL INTERPRETATION AND DIGITISING

a) Section Definitions

The drilling was done on a grid aligned 310 , even though the holes themselves were oriented at 320 .

Five lines were spaced notionally 50 m apart and were actually drilled adjacent to or in trenches TR27,

TR62, and TR68. Two grid lines 1100NE and 1150 NE straddled TR67 to maintain the 50-m spacing. Holes

were spaced about 50-m notionally apart horizontally on section (Figure 14.5).

Figure 14.5 - Drill Grid Location

b) Geological Interpretation

Five vertical cross sections at 50-m spacing and four level plans at 50-m elevations were created by

Caroline Vallat with the drill traces, % Cgr, visual% pyrrhotite and pyrite as colour range bars and lith-

codes in text. The sections were in a ± 25-m depth from the section plane. The boundaries of the

geological and mineralised units were interpreted manually by Lyons. Vallat digitized them in Minesight ™

then created intermediate vertical cross sections at 10-m intervals, synthetic long sections at 25-m

spacing and level plans at 25-m spacing. After initial adjustments, Lyons and Vallat adjusted the model

together.


One of the persistent problems with using lithologies as controls distinct from mineralisation in this

deposit is that the graphite is an integral component of the host lithology. The beds are visually distinct,

but the boundaries are defined over some width by ranges of grade. The graphite host rock, a quartz-rich

quartz-feldspar-biotite gneiss, does not have any distinctive “key horizons” internal between the footwall

and hanging wall stratigraphy. These give good limits to the graphite stratigraphy overall, but don’t

necessarily resolve potential folds and/or fault displacements. The graphite lithologies tend to show more

folding than neighbouring rocks do, but there are few controls in the neighbouring rocks to demonstrate

folding in them, either, except at the centimetre- to meter-scale. Thus the interpretation depended

mainly on correlation of graphite rich units with interspersed internal waste bands (%Gr <4%). These

turned out to be relatively continuous and internally consistent in thickness and extent. Experience from

extensive trenching supports the confidence in the lateral continuity along strike. However, grades

perpendicular to the bedding planes change abruptly and the units can change rapidly in the dip-plane.

Six units with characteristics are tabulated below:

Table 14.3 - Geological Units Definition

Units 1-3 are based primarily on the range of %Cgr grade. The stratigraphic units are bounding units to the

graphite stratigraphy and only are included in the resource if the mineralisation is in the adjacent Units 1-

3. Waste is internal to the Units 1-3 boundaries.

c) Topographic Surface

The GPR topographic model, commissioned by Quinto in 2006, was used to limit the top of the model.

14.4 Statistics

14.4.1 LENGTH

Basics statistics were run through the model for samples length. The histogram of Figure 14.6 showed the

distribution of the sample length. More than 85% of the samples have a length below 3 metres. The calculated

mean for the samples length is 2.35 metres.

Unit Name % Cgr Range Flake characteristic (visual) Lithologic Host

Unit 1 4-10 mainly coarse>200µ Qzt, QFB gneiss

Unit 2 >10-27 significant coarse>200µ Qzt, QFB gneiss

Unit 3 >27 very coarse in bands/veinlets; most Gr is very fine

QFB gneiss

Waste <4 isolated medium to coarse Qzt, QFB gneiss

FW – QZT variable generally medium to coarse Qzt±marble, calcsilicate, gneiss

HW – QFB_GN variable generally medium to coarse Variable gneiss w/cinnamon phlogopite


Figure 14.6 - Distribution of Sample Lengths

14.4.2 DISTRIBUTION

Cumulative plot were generated from the raw assays of the Lac Guéret database. A break in the trend at the Figure

14.7 is observed around 46 Cgr%. This value was used as the capping grade for the grade interpolation.

Figure 14.7 - Cumulative Probability Plot

0

0.2

0.4

0.6

0.8

1

1.2

0.01 0.1 1 10 100

Pro

bab

ilty

% Cgr

Cumulative Probability Plot : Raw Assays Data


14.4.3 COMPOSITE

Composites were calculated from top to bottom of the drillholes. The composites were calculated for a maximum

of 3 metres inside the modeled units .The units are based on Cgr grades. The composite database was generated

with the mining software GEMS. Composite were calculated from the raw Cgr assay value.

To avoid the creation of small composite interval inside the mineralized zone, a minimal value of 50% of the

composite size of 3 metres was needed to create the composite. As a result, all composites with a length value

under 1.50 metres were excluded from the database.

Table 14.4 shows the comparison of the basics statistics between raw assay and the 3 metres selected composite,

in both case only value inside the geological model were used.

Composite data were exported as a point value corresponding to the middle of the interval. A zero value was

attributed to interval with no data (no Cgr assay recorded in the database).

Table 14.4 - Downhole Composites vs. Raw Assay Data

Down Hole Composites vs. Raw Assays inside geological units

3 metres composites Raw assays

Number of samples 719 906

Minimum Value 0 0

Maximum Value 53.79 53.89

Average 19.65 18.66

Standard Deviation 14.66 14.81

14.4.4 SPATIAL ANALYSIS: VARIOGRAPHY

Variography was run on the composite and includes all units. Semi-variograms were created using the geostatstical

tools in GEMS. Due to the geology provided, different techniques were considered to analyse the variance of the

grade throughout the model. All composite data were analysed together. This was done to allowed the analysis to

take as much data available and this without the possible bias imposed by the units already base graphite content.

The variography study was performed on all composites. Variography was run in all directions with GEMS to find

the best semi-variograms. Search orientation of the ellipse was determined by the semi-variogram as a result of a

principal azimuth of 165, a principal dip of -20 deg and intermediate azimuth of 150 deg. Anisotropy was

interpreted with the semi variogram and set to 60 metres along the x axis, 40 metres along the y and 50 metres

along the z axis. To interpolate the search ellipse, a minimum of one octant with a maximum of three samples by

octant was used. This rule allowed the search ellipse to interpolate a maximum of blocks, these parameters was

taken to classify the resource later in the process. All relevant parameters of the search ellipse are in the table

14.5. Two methods were used: inverse distance (ID) and ordinary kriging (OK). The two methods gave the same

results with respects to resource categories, grade, and tonnes. The ordinary kriging method yielded a smoother

continuity that conformed better to Lyons’ geological experience with Lac Guéret and other graphite deposits in

the Gagnon Terrane.


Table 14.5 - Semi-Variogram Parameters

Semi-Variogram Parameters

Number of structures 1

Nugget 30

Sill 215

Range in X 60

Range in Y 40

Range in Z 50

Principal Azimut 165

Principal Dip -20

Intermediate Azimut 150

Figure 14.8 - Major Axis Semi-Variogram


Figure 14.9 - Semi-Minor Axis Semi-Variogram

14.4.5 BLOCK MODEL

A 3D block model was constructed in GEMS based on the exploration database and the geological domains

furnished by Geospark. The block model is aligned on the general trend of the geological units. Parameters of the

block models are listed below:

Origin: 49 53 25 E, 56 63 775 N, 700 Elev.;

Rotation: 40 degrees counter clockwise;

Number of blocks: 220 columns, 225 rows, 130 level;

Block size: 3 metres * 3 metres * 3 metres.

The following attributes are used in the block model: rock type, density, Cgr%, class, distance, drilling, octant,

samples. Rock type and density value were assigned during the block creation with the given geological units. An

air value with a density of 0 was attributed to all blocks above the rock surface. Rock type was used during the

interpolation as boundaries.


14.4.6 GRADE INTERPOLATION

The grade interpolation was completed by using the 3 metres composites for Cgr% in GEMS. Composites were

assigned a rock type corresponding to the unit. Only composites tagged with the rock type were used to

interpolate the same unit. All units were interpolated with the method of ordinary kriging. Interpolation was

restricted inside the search ellipse defined with the parameters of the variogram (see Table 14.5). All grade values

exceeding 46% Cgr were capped at 46% Cgr. A minimum of two samples and a maximum of 25 samples were used

to estimate the grade. Figures 14.10 and 14.11 show a typical vertical section and plan view of the interpolated

grade.


Figure 14.10 –Vertical Section 1000NE of the Interpolated Grade Looking N40E


Figure 14.11 - Plan View of the Interpolated Grade (-40m from the Surface)


14.4.7 MINERAL RESOURCE CLASSIFICATION

The mineral resource was classified inside the block model in GEMS. The Mineral Resource is classified under the

Measured, Indicated, and Inferred categories according to the CIM guidelines. Resource is classified according to

the confidence of the geological continuity. Following the recommendation of Lyons, the resource classification

inside GEMS was done following statistical information by blocks combined with field experience. All the following

attributes have been gives to each block during the interpolation: number of drillholes used to interpolated,

number of octants used for interpolate, number of composites used, and the distance of the composites used.

Relevant factors such as confidence in the density and topographic surface was considered as well during the

process. Figures 14.12 and 14.13 show a typical vertical section and plan view of the categories.

Mason Graphite Corp. Technical Report on the Lac Guéret Project Rep_LacGueret-000-20120822-Mst-Clean.docx – 60 – Report July 2012

Figure 14.12 - Vertical Section 1100 NE of the Categories Looking N40E


Figure 14.13 - Plan View of the Categories (at the Surface)

Mason Graphite Corp. Technical Report on the Lac Guéret Project Rep_LacGueret-000-20120822-Mst-Clean.docx - 62 - Report July 2012

14.5 Mineral Resource Estimation

14.5.1 GLOBAL MINERAL RESOURCE ESTIMATES

The mineral resource estimate presented in this report is effective as of 21 June 2012. The following classifications

were used: Measured, Indicated, and Inferred. Inferred, Indicated, and Measured categories of Mineral Resources

are recognized in order of increasing geological confidence. Mineral Resources are not equivalent to Mineral

Reserves as no economic viability has been demonstrated. In addition, there can be no assurance that Mineral

Resources in a lower category may be converted to a higher category, or that Mineral Resources may be converted

to Mineral Reserves.

All mineralised zones were used in this estimate. Table 14.6 shows the Mineral Resources estimated inside the

mineralised zones with a 4% cut-off.

Table 14.6 – Mineral Resource Estimate (4% Cgr Cut-Off)

Resource Estimate (4% Cgr cut-off)

Categories Unit Tonnes Grade

( % Cgr)

Measured (M)

Unit 1 (4 to 10% Cgr) 31,200 7.82

Unit 2 (10 to 27% Cgr) 122,800 14.85

Unit 3 ( > 27 % Cgr) 144,900 36.72

All units 298,900 24.39

Indicated (I)

Unit 1 (4 to 10% Cgr) 2,672,500 8.09

Unit 2 (10 to 27% Cgr) 2,089,200 16.83

Unit 3 ( > 27 % Cgr) 2,535,300 36.20

All units 7,297,000 20.24

M + I

Unit 1 (4 to 10% Cgr) 2,703,700 8.67

Unit 2 (10 to 27% Cgr) 2,212,000 18.30

Unit 3 ( > 27 % Cgr) 2,680,200 36.96

All units 7,595,900 20.40

Inferred

Unit 1 (4 to 10% Cgr) 1,272,600 7.56

Unit 2 (10 to 27% Cgr) 714,200 17.54

Unit 3 ( > 27 % Cgr) 771,500 33.10

All units 2,758,300 17.29

Notes:

1) Effective as of June 22, 2012.

2) Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

3) Numbers may not add up due to rounding.


14.5.2 IN-PIT MINERAL RESOURCE

To ensure a “reasonable prospect of economic extraction”, a Whittle optimized mining scenario was performed by

Roche assuming an overall pit slope of 45°, an operating cost of $36.75 US per tonne milled (including mining and

milling costs), a 95% mining recovery, a 5% mining dilution and a conservative selling price of $1,600 US/tonne of

graphite. This gave a strip ratio (W:O) of 0.6:1. By comparing this Whittle shell to the report Mineral Resource, less

than 0.2% of the Measured +indicated tonnage fell outside of the “Base Case” pit shell.

14.5.3 POTENTIAL LIABILITIES AFFECTING MINERAL RESOURCE ESTIMATION

There are no known environmental risks which can affect the Mineral Resource estimates.

There are no known permitting risks which can affect the Mineral Resource estimates.

There are no known legal risks which can affect the Mineral Resource estimates.

There are no known title risks which can affect the Mineral Resource estimates.

There are no known taxation risks which can affect the Mineral Resource estimates.

The known socio-economic risks which can affect the Mineral Resource estimates is the obligation to reach

agreements with Pessamit Innu First Nation.

The known marketing risks involve demonstration that the deposits and metallurgy can supply markets with

desired products.

There are no known political risks or other risk factors that can affect the Mineral Resource estimates.


15.0 MINERAL RESERVES ESTIMATES

No mineral reserves are declared in this Technical Report.


16.0 MINING METHODS

With the exception for the Whittle optimized mining scenario as described in Section 14.5.2 to ensure “a

reasonable prospect of economic extraction”, no mining methods or parameters have been developed in the

current resource estimation.


17.0 RECOVERY METHODS

This section is not used.


18.0 PROJECT INFRASTRUCTURE



19.0 MARKET STUDIES AND CONTRACTS

The market information below was derived from several sources, including the Industrial Minerals website.

Industrial Minerals magazine is the reference journal for the global industrial minerals sector. Neither metallurgy

nor market studies specific to the Lac Guéret Property have been done to date to establish the quality,

proportions, recovery, or operating parameters of the deposits. General market information may not necessarily

reflect the actual conditions of the project.

Natural graphite is used in various industrial applications due to its unique combinations of physical properties

such as its light weight, resistance to chemicals, high melting point as well as electrical and thermal conductivity.

Global consumption of natural graphite has doubled between 2000 and 2011 from 600,000 to 1,200,000 metric

tons, showing a growth rate of over 6% for that period.

Natural graphite comprises several different products that are sold based on purity, purity, shape, etc. Principal

end uses for graphite are:

Steel Manufacturing: Crucibles, electrodes, foundry additives and refractories;

Carbon brushes: Electrical contacts;

Batteries and Expanded graphite: Battery material, foil, heat sinks;

Castings and powder metallurgy;

Brakes;

Lubricants and Catalysts: Carbon additives, fibers, nuclear reactors;

Material Technology: Clothes, paints, plastic and resins.

Flake graphite can be subdivided in 3 categories: fine, medium and large. Steady growth of hybrid and electric

cars and mobile electronics is fueling the demand for natural flake graphite with forecast growth rate of

approximately 15% annually, rising from 125,000 to 500,000 metric tons. For the 2020 horizon, global demand for

natural graphite is expected to reach 2,000,000 metric tons per year.

Graphite production is highly segmented with numerous small producers, with China controlling roughly 75% of

global supply in 2011. Amorphous graphite still accounts for 60% of total production and flake graphite for

essentially the remaining 40%. Due to its numerous and wide applications, flake graphite is usually commanding

premiums for its large flake products. By 2020, increasing global consumption is projected to require an additional

800,000 metric tons of supply, 200,000 metric tons coming from expanded production of existing mines and

600,000 metric tons from new mines.

Graphite is not an openly traded commodity. Prices are negotiated between end users and producers for annual

and some multi-year contracts. Prices do vary according to different parameters such as carbon content (purity),

size (flake and amorphous), impurities and shape. Before 2006, prices were flat, with amorphous graphite sold at

an average of 150 $ per metric ton and at an average of $600 for flake. After 2006, prices rose steadily after China

experienced supply constraints (export tariffs, environmental regulations, etc.) and demand shifted towards high

end uses and products.

As of May 2012, as per Industrial Minerals magazine market surveys, prices were as follows:

Graphite, large flake, 94-97% Carbon, +80 mesh, $/ton 2,200 to 2,700

Graphite, medium flake, 94-97% Carbon, +100 -80 mesh, S/ton 1,875 to 2,200

Graphite, medium flake, 85-87% Carbon, +100 -80 mesh, S/ton 1,300 to 1,800


Graphite, medium flake, 90% Carbon, +100 -80 mesh, $/ton 1,300 to 1,800

Graphite, amorphous powder, 80-88% Carbon, $/ton 600 to 800

Off-take agreements are not a common practice and are very rare in the graphite industry.

Roche recommends that Mason initiate market studies in early stages of development in order to assess the

project economics.


20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

20.1 Environmental Baseline Study (EBS)

Little baseline information has been collected to date, except for surface water samples taken by Quinto in 2003-

04 by Genivar (Baie-Comeau, QC) for Quinto A preliminary environmental baseline study will be carry out in the

Lac Guéret mine area in summer 2012 in order to characterize the physical, biological and social-economic aspects

of the study area.

20.2 Ore, Waste and Tailings Characterization

An environmental characterization of ore, waste (and if possible tailings) must be carried out. This is particularly

important for the Lac Guéret project since sulphides are present in the ore and possibly the waste rocks.

The following tests must be performed:

Elements content by partial acid digestion (aqua regia);

Acid Generation Potential (Modified Acid Base Accounting) ;

Static leaching tests (TCLP-USEPA1311, SPLP-USEPA1312, Environment Canada CTEU-9) and

characterization of leachates.

Kinetic tests could be necessary to confirm the results of the static tests.

20.3 Regulatory Framework

20.3.1 PROVINCIAL GOVERNMENT (QUÉBEC)

This section presents the environmental laws and regulations that could apply to the Lac Guéret Project. Although

the project is only at a preliminary stage of design, the components that may trigger an environmental review

procedure requiring specific environmental authorizations or permits, or subject to norms, criteria or guidelines

have been identified and are presented in the current section.

20.3.1.1 Regulation falling under the Responsibility of the Ministry of Sustainable Development, Environment and Parks (MDDEP)

Environmental impact assessment and review procedure (BAPE procedure)

In the Province of Quebec, the environmental requirements are defined in the Environment Quality Act (Q-2),

which is under the responsibility of the Ministry of Sustainable Development, Environment and Parks (Ministère du

Développement durable, de l’Environnement et des Parcs, MDDEP). The major sections of the Environment Quality

Act relevant to the obtainment of certificates of authorization or environmental authorizations are sections 22

(general case), 31.1 (Environmental impact study), 32 (sewage treatment and waterworks), 48 (atmospheric

emission) and 54 (solid waste management system).

Section 2 of the Regulation respecting environmental impact assessment and review (Q-2, r.9) list the types of

projects that are subjected to the environmental impact assessment and review procedure (BAPE procedure) in

order to an authorization issued by the government in accordance with section 31.5 of the Act.


The list of relevant projects includes the following:

(n.8) The construction of an ore processing plant for:

Metalliferous ore or asbestos ore, where the processing capacity of the plant is 7,000 metric tons

or more per day;

Any other ore, where the processing capacity of the plant is 500 metric tons or more per day;

(p) The opening and operation of:

A metals mine or an asbestos mine that has a production capacity of 7,000 metric tons or more per

day;

Any other mine that has a production capacity of 500 metric tons or more per day.

Graphite production falls into the "other ore" classification. Therefore, if production rate is higher than 500 metric

tons or more per day, the Environmental and Social Impact Assessment and review procedure (BAPE) will apply to

the Lac Guéret project in accordance with Section 31.1 of the Environment Quality Act (EQA).

The main steps in the Environmental and Social Impact Assessment procedure are:

1. Tabling of project notification;

2. Issue of the directive (MDDEP);

3. Completion of the Environmental and Social Impact Assessment (ESIA);

4. Tabling of impact assessment;

5. Receipt of notice of acceptability of content of ESIA;

6. Public consultation of the ESIA;

7. Public hearings ;

8. Report of the Bureau d’audiences publiques sur l’environnement (BAPE);

9. Government decision.

The Project has a 15 month deadline set by these regulations. However, MDDEP aims to utilise only 12 months

instead of the 15, which is set by the regulation respecting environmental impact assessment and review (RREIAR).

This includes public hearings, if applicable, but does not include the time that the proponent requires to prepare

the impact assessment and to provide additional information as per the environmental department requests. By

experience, a period of approximately 24 months is expected between commencing to prepare the Project notice

and obtaining government permission.

Following positive issuance of the Government‟s decision, a Certificate of Authorisation, in accordance with

Section 22 of the EQA, must be obtained from the Regional Office of the MDDEP. The application for authorization

must include plans and project specifications, precise location, and the quantity or concentration of contaminants

expected to be emitted, deposited, issued or discharged into the environment.

Other specific Certificates of Authorisation must be obtained according to Section 32 (sewage treatment and

waterworks), Section 48 (equipment to control atmospheric emissions) and Section 54 (solid waste management

system).


20.3.1.2 Regulations Falling Under the Responsibility of the MRNF

A rehabilitation plan must be provided before the beginning of operation to conform to the Mining Act

requirements. The rehabilitation plan must include a description of the financial guarantee that will serve to

ensure completion of the work required by the plan. The amount of the financial guarantee corresponds to 70% of

the cost estimate for the rehabilitation work on the accumulation areas (i.e. tailings, waste dumps, and

overburden dumps). This amount is accumulated over several years following a defined schedule.

Condemnation studies must also be carried out to ensure that no mineral resource will be negatively affected by

the presence of a mill, overburden dumps, waste dumps and tailings area. To operate the mine, Mason Graphite

Corp. must also obtain a mining lease.

Further, in accordance with the Forest Act, a Forest Intervention Permit issued by the MRNF is required for Crown

forests, prior to any forest development activity, which implies wood or tree cutting. Forest development includes,

among other activities, cutting and harvesting work and the implementation and maintenance of infrastructures.

As the access road is on public domain lands, its construction or modification is not subject to the obtainment of

an authorization certificate pursuant to section 31.1 of the de la Environment Quality Act, except if the road

follows a watercourse at less than 60 metres for a distance of more than 300 metres or if a bridge must be built to

cross the road.

The obligation to obtain an authorization certificate for the construction of an electric power transmission line and

the transforming station is directly related to the voltage required for the project. If the voltage is greater than

120 kV and the length of the line is longer than 2 km, a specific authorization certificate shall be required under

Section 31.1 of the Environment Quality Act. Nonetheless, the construction of this power line will be assumed by

Hydro-Québec.


20.3.2 FEDERAL GOVERNMENT

Canadian Environmental Assessment Act

According to section 5 of the Canadian Environmental Assessment Act (CEAA), one of the following conditions is

required for the application of the federal procedure:

A federal authority is the proponent of the project;

A federal authority "has the administration of federal lands and sells, leases or otherwise disposes of those lands

or any interests in those lands", or;

A federal authority provides a financial support;

A federal authority issues a permit or licence, grants an approval or takes any other action for the purpose of

enabling the project to be carried out in whole or in part.

From our understanding of the project, the last condition is the only potential trigger. Regarding the Lac Guéret

project, the more important Act and Regulation is the Fisheries Act.

The section 35 of the Fisheries Act specifies:

(1) No person shall carry on any work or undertaking that results in the harmful alteration, disruption or

destruction of fish habitat. and

(2)No person contravenes subsection (1) by causing the alteration, disruption or destruction of fish habitat

by any means or under any conditions authorized by the Minister or under regulations made by the

Governor in Council under this Act.”

A targeted project is subject to a screening (non-extensive study) or to a comprehensive study (extensive). The list

of the project subject to a Comprehensive Environmental Study is presented in the CEAA. A Comprehensive

Environmental Study will be required, if the tonnage of the mine and the mill exceed 4 000 t/d.

The Metal Mining Effluent Regulations does not apply to graphite mine. Therefore, it is not possible to ask for

inclusion in Appendix 2 of the Regulations for disposal of mining waste in a fish habitat.

20.4 Territorial Claims and Regional Relations

The Project is located on the traditional territory of the Innu Nation. The Innu traditional territory is the Boreal

Forest, which covers all of the administrative regions of the Saguenay – Lac-Saint- Jean and North Shore (Côte-

Nord), and overlaps part of Northern Quebec (Nord-du-Québec) and the National Capital (Capitale-Nationale)

regions. The Innu mainly live within nine communities, located primarily along the Saint Lawrence River coastline

with the exception of the communities of Mashteuiatsh (Lac-Saint-Jean) and Matimekush-Lac John (Schefferville in

Northern Quebec, near the Labrador border).

A people of hunters and gatherers, the Innu, formerly known as the Montagnais, are nomads who have been

forced to settle. The Innu spend most of the year deep in the interior of Quebec Labrador; where until recently,

they lived as nomadic hunters, only visiting coastal trading posts for brief periods.

The Lac Guéret project is located on the historical territory of the Nitassinan of Pessamit. On their traditional

territory (Nitassinan), the Innu claim Uashaunnuat Indian title: aboriginal and treaty rights to the land and all its


natural resources. Two traplines overlap by this project, P-20 and P-23. We will be able to identify the owners

eventually also; our preliminary research found out that no patrimonial site will be affected by this project.

This project is located inside the area of the Manicouagan-Uapishka World Biosphere Reserve (RMBMU) where

sustainable development and dialogue hold top priority.

Important negotiations involving both the federal and provincial governments are currently underway with some

of the Innu communities of Quebec, which follows the signature of an Agreement-In-Principle (AIP), which was

entered into March 31, 2004. At this time, the Innu of Pessamit (west of Baie-Comeau), Uashat mak Mani-Utenam

(Sept-Îles) and Matimekush-Lac John (near Schefferville) are not part of any agreement, as they intend to settle

their own land claims directly with both levels of government. The communities of Uashat mak Mani-Utenam and

Matimekosh-Lac-John are part of the Ashuanipi Corporation, which has represented them in the comprehensive

territorial negotiations since 2006.

Furthermore, in 2008, Ekuanitshit, Matimekush-Lac John, Pessamit, Uashat mak Mani- Utenam and Unamen Shipu

founded the Alliance stratégique Innue (Innu Strategic Alliance), which consists of an Innu population of

approximately 12,000 and represents 70% of the total members of the Innu Nation living in Quebec. The mandate

of the alliance is to enable the parties to defend their rights, common interests, and to conduct joint initiatives to

achieve political, economic and judicial results in a cooperative manner.

Mason Graphite corp. will have to conduct consulting sessions directly with the local Innu First Nation to establish

sustainable relationships with all local and regional stakeholders.


21.0 CAPITAL AND OPERATING COSTS



22.0 ECONOMIC ANALYSIS



23.0 ADJACENT PROPERTIES

With the current interest in graphite, the Lac Guéret Property is completely surrounded by new claim-holders since

early 2012. The principal ones are: Focus Metals Inc. to the north and west; Global Graphite Inc. to the southeast;

the Griesbach-Ashto-9248-7792 Québec Inc. (25%-25%-50%) to the east and south are the principal neighbours.

Figure 23.1 - Adjacent Claims to Lac Guéret Property


24.0 OTHER RELEVANT DATA AND INFORMATION

There is no additional data or information to include.


25.0 INTERPRETATIONS AND CONCLUSIONS

25.1 Interpretations

The NE GC Zone Mineral Resource lies at the northwest end of the explored portion of the GC Zone and represents

250 metres strike length of the zone developed over 1,800 metres along trend to the southwest and open at both

ends. The fold patterns shown in the detailed 2006 drilling indicate tight, complex folding of the Lac Guéret

Graphite Member. The 25 to 100-m thick graphite unit is bounded with diachronous contacts above the dirty

quartzite of the upper non-oxide Sokoman Formation (iron formation) and the base of the Menihek Formation

pelitic schist and gneiss. It marks the end of the chemical deposition of the Sokoman Formation (iron formation)

and the start of clastic deep basinal sedimentation. The graphite is localised in disconnected basins and lenses in

the Menihek Fm at its lower base throughout the Gagnon Terrane from southwest of Lac Manicouagan (QC)

through Wabush (NL) over ~350 km strike length.

Folding and transposition in the graphite layers is more intense and tighter than the immediate adjacent units, and

the effect is most pronounced where the graphite grades increase over 25% Cgr, which is the most ductile

lithology. The rapid change from open to isoclinal folds makes correlations of specific layers more difficult, but

surface mapping in detail by Ed Lyons shows the units are indeed traceable in some detail.

Graphite on the main northern Lac Guéret area (Lac Guéret Nord) is known in some detail in two repeated en

echelon fold belts of the same unit, named the GC (Graphite Cliff) and GR (Graphite Road) zones. Reconnaissance

exploration pre-2005 noted the same units continuing to the north and southwest marking the top of the Sokoman

Fm, as shown on the airborne geophysical survey done by SOQUEM Inc in 2003 around the anticlinorium. In 2004,

trenching and drilling tested in several areas around the north and northwestern limit of the anticlinorium

demonstrating that the favourable geology continues. The property limits enclose those anomalies. Thus the most

favourable graphite-bearing stratigraphy lies on the Lac Guéret claims over ~30 km strike length.

The arcuate claim group of Lac Guéret Sud (South), 8 km south of Lac Guéret Nord, includes the most

southwesterly limit of the Gagnon Terrane and essentially is the Sokoman-Menihek contact repeated by folding.

Numerous parallel bands of graphite were prospected by SOQUEM in partnership with Quinto in 2003-2004. The

known mineralisation occurs in bands to 10 metres width, but other targets remain to be explored.

The graphite in the GC and GR zones shows a wide range of grades and visual appearance of flake size, ranging

from 5% to 60% Cgr. The coarser crystallinity is more dominant in material below 25% Cgr. The higher grade (+25%

Cgr) bands characteristically show very fine-grained graphite that appear to have only slightly recrystallised during

Grenville metamorphism; later movement opened conjugate extensional fractures now filled with pure, large (to 8

mm) graphite flakes growing perpendicular to the fracture margins.

The proximate targets for development lie on the GC and GR zones, where substantial surface indications of

graphite schist have already been uncovered. The extension of these around the anticlinorium needs systematic

testing.

25.2 Conclusions

The NE GC Zone Mineral Resource on the Lac Guéret Property demonstrates a significant near-surface graphite

resource with the opportunity to rapidly increase it. The claims cover the known potential graphite geological

horizons marking the outer limits of a domal anticlinorium centred on the traditional Labrador Trough stratigraphy.

The mineralised areas adjacent to the present resource as well as the horizon across the property warrant further

resource development and broad-scale exploration.


26.0 RECOMMENDATIONS

Development of the proximal mineralisation should follow a tripartite plan of drill-testing the known

mineralisation, establish the metallurgical parameters of the ore materials in some detail to learn the range of

graphite products that can be derived, and develop markets and a market presence for the Lac Guéret graphite in

world graphite markets. The program would include:

1. Initiate dialogue and agreements with the Pessamit Innu First Nation with active rights to the area of the

properties (see Section 20.0).

2. Initiate environmental baseline studies in early stages of field work. Attention can be placed on existing

trenches to test the development of any issues, since the dates of these activities are known.

3. Drill across known zones on initial 100-m line spacing using large diameter drill core (HQ) to test continuity

and grade distribution as well as collecting materials for metallurgical testwork that can be composited to

statistically reflect the deposit(s). Two sections should be drilled to the northeast and 11 sections to the

southwest to extend the known resource with 4-6 inclined holes per section with lengths to 150 m. (See

Figure 26.1)

a) 120 holes @ 150 m = 18,000 meters on the GC zone only in two phases.

b) The Phase 1 core will be NQ size.

c) Hole azimuth will be 320° and dip will be 45° as determined by the geology results.

d) Combined Phases 1 and 2 with 40 holes to the northeast of the existing drilled grid; and

e) Combined Phases 1 and 2 with 80 holes towards the southwest of the existing drilled grid;

f) Phase 1 consists of 5-6 holes per section spaced 50 m apart on sections 100 m apart.

g) Phase 2 consists of infill drilling with large-diameter core on 50-m centres between the Phase 1 lines

or closer as the deposit characteristics are better known.

4. Initiate metallurgical testwork with attention to graphite liberation sizes, sulphide liberation, and other

factors.

5. Develop an exploration program to define other targets on the properties as well as detail the GC and GR

geological limits and host rock relationships. Much of the bedrock is covered by a modest layer of glacial

debris, so many details remain unknown at present.

6. Develop commercial market presence to support the Feasibility Study.

7. Assess the infrastructural demands of the project.


The program budget is conceived as operating simultaneously on several fronts:

1. Environmental Baseline Studies $450,000

2. Drilling (100-m and 50-m spacing) 18,000 m @ $300/m $5,400,000

3. Initial Metallurgical Studies $ 75,000

4. Preliminary Economic Assessment including Testwork $440,000

5. Office, Management, and First Nations Relations $100,000

TOTAL $6,465,000


Lac Guéret Graphite Project

Manicouagan, Québec

Figure 26.1 – Drilling Program

UTM NAD83 Zone 19

Figure 26.1 – Drilling Program Map


27.0 REFERENCES

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Gouvernment de Québec, MM 94-10, p. 47-65.

Clark, T. and R. Wares, 2004. Lithotectonic synthesis and metallogeny of the New Québec Orogeny (Labrador

Trough), MRNFP, MM 2005-01, 180 p.

Clarke, P.J., 1977. Région de Gagnon, MRN-Geol Expln Serv. Rept RG-178, 89p.

Currie, K.L., 1972. Geology and petrology of the Manicouagan Resurgent Caldera, Québec, Geol. Surv. Can., Bull.

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Davidson, A., 1996. Geological Compilation of the Grenville Province, Geol. Surv. Can., Open File Rept. 3346.

Emslie, R. F. and P.A. Hunt, 1989. The Grenville event: magmatism and high grade metamorphism: in Current

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Ferreira, E.C., 1962a. Report on Geological, Drilling and Dip Needle Survey, Area 24A, Echo Lake, Québec: unpubl.

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Grieve, R.A.F., 1983. The Manicouagan Impact Structure: an analysis of its original dimensions and form, Jour.

Geophys. Res., B Suppl. (2), p. A807-A818. (Proc. of the 17th Lunar and Planetary Science Conf., Pt. 2, Mar. 15-19,

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GSC, 1968b. Lac Tétépisca, Geol. Surv. Can., Geophysical Series Maps 4945G.

GSC, 1968a. Lac Manicouagan, Geol. Surv. Can., Geophysical Series Maps 4980G.

Hoqc, M., 1994. Introduction and La Province de Grenville in: Géologie du Québec, Gouvernment de Québec, MM

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