, NWANDA EXPLORAIl

FltE NO: I

GEOLOGICAL and GEOCHEMICAL REPORT

on the

RED BLUFF PROPERTY

N.T.S. 103 P/llW SKEENA MINING DIVISION

NORANDA EXPLORATION COMPANY, LIMITED (no personal liability)

(,E()L,OGICAL BRANCH -k REPORT BY: MIKE SAVELEA S SE S S M E N T R E p $$JER, 1992

TAELE OF CONTENTS

1.0 SUMMARY ..................... 3 2.0 INTRODUCTION

2.1 GENERAL REMARKS .. : : : : : : : : : ..... 4 ..... 4

2.2 LOCATION, ACCESS & PHYSIOGRAPHY ........ 4 2.3 CLAIM DATA 2.4 PREVIOUS WORK : : : : : : : :

........ 4

........ 4 3.0 GEOLOGY

3.1 REGIONAL'GEOLOGY' ..............

............... 5 5

3.2 PROPERTY GEOLOGY .............. 5 4.0 GEOCHEMISTRY ................... 7 5.0 CONCLUSIONS 8 6.0 RECOMMENDATIONS- . : : : : : : : : : : : : : : : : : 8

APPENDICES

APPENDIX I Statement of Qualifications ATPENDIX II Statement of Costs APPENDIX III Analytical Procedure APPENDIX IV Certificates of Analysis APPENDIX V Rock Sample Descriptions

MAPS

Figure 1 Location Map 1:8,000,000 Figure 2 Claim Map 1:50,000 Figure 3 Geology and Sample Locations ::10,000 Figure 4 Cu Geochemistry - Soils 1:10,000 Figure 5 As Geochemistry - Soils 1:10,000

1.0 SUMMARY

The Red Bluff Property is located approximately 20 km north of Kitsault in northwestern B.C. Hemlo Gold Mines Inc. currently have an option to acquire a 100% interest in the claims from Mr. M. Boyle of Vancouver, B.C. This report documents a geological and geochemical survey undertaken by Noranda Exploration on behalf of Hemlo Gold Mines Inc. from June 27 to July 14, 1992.

The property lies at the western edge of the Intermontane Belt near its contact with the Coast Range Intrusives. It is underlain by sedimentary, volcanic and associated intrusive rocks of the Jurassic Hazleton Group. These are considered to have formed in an island arc environment.

Hydrothermal alteration accompanied the emplacement of a long dyke-like diorite body which transects the property north to south. The most intense alteration occurs within and peripheral to the diorite and is most commonly a pervasive quartz-sericite- pyrite assemblage. Pervasive pyrite mineralization is found in all hydrothermally altered rocks on the property. Copper mineralization was observed at several locations along the length of the diorite and surrounding altered rocks. At the Red Bluff adit chalcopyrite occurs with pyrite over an area of about 10 by 20 meters and a chip sample returned a value of 2214 ppm Cu and 265 ppb Au over 20 meters. The San Diego occurrence, where drilling and trenching in 1916 reportedly returned up to 2.6% Cu and 0.9 g/t Au over 14 meters was located at 10750N lI325E.

There is a strong correlation between anomalous Cu, Au, and As values in soils with the area mapped as altered intrusive. Values as high as 1461 ppm Cu, 21000 ppb Au and 1749 ppm As were detected in this area. The geochemistry may be reflecting large areas of low grade Cu and Au mineralization with local high grade zones.

The intensity and extent of alteration and widespread sulphide mineralization indicate good potential for hosting a bulk tonnage, low grade Cu-Au deposit. Further work is required to evaluate the property.

3

. I

. 4 \

N.W.T.

.

f

REVISED LOCAT\ DN MAP

2.0 INTRODUCTION

2.1 General Remarks

The Red Bluff ProperLy is located approximately 20 km north of Kitsault Fn northwestern B.C. Hem10 Gold Mines Inc. currently have an option to acquire a 100% interest in the claims from Mr. M, Boyle of Vancouver, B.C. Previous operators identified an extensive zone of hydrothermal alteration which hosts a large amount of pyrite mineralization and undetermined copper mineralization with associated gold values. This report documents a geological and geochsmical survey undertaken by Noranda Exploration on behalf of Hemlo Gold Mines Inc. from June 27 to July 14, 1992.

2.2 Location, Access and Physiography

Access is currently by helicopter. A cat road constructed in 1966 crosses the property arid could be upgtaded to provide a link to tidewater at Alice Arm at reasonable costs. The property lies within the rugged Boundary ranges of the Coast Mountains. Elevations on the property range from about 500 to 3500 feet and most of the property can be traversed fair-ly easily. Vegetation consists of: mature hemlock and balsam with numerous windfalls and a few dress of thick coastal undergrowth.

2.3 Claim Data

The property cumyrisas 115 contiguous units of modified grid claims as shown in figure 2 and listed below. The Hem claims were staked in 1992 for Hemlo Gold Mirlrs and a~-e not part of the Hemlo-Boyle agreement. A statement of costs is provided in Appendix II for each uf. the two claim groupings.

Cl-aim Data

game Star 3

Units Record # Record Date Expiry Date 15 251519 - 09/26/86 09/26/93

Star 4 10 251520 OP/26/86 09/26/93 Dak 11 20 253639 03/01/90 08/22/93 Dak 13 10 253641 03/01/90 03/01/94 MB 2 20 251516 09/26/06 09/26/93 Devil's Club 1 251507 09/19/86 09/19/97 Red Bluff 1 251508 09/19/86 09/19/9? Albion 1 251509 09/19/86 os/r9/97 Sunbeam 1 251510 09/19/86 09/19/97 Sub-Collector 1 253809 03/22/90 03/22/90 Hem 1 20 310613 06/24/92 06/24/94 Hem 2 15 310614 06/24/92 06/24/94

The expiry dates ah listed above will be in effect upon approval of this work.

3.0 GEOLOGY

3.1 Regional Geology

The property lies at the western edge of the Intermontane Belt near its contact with the Coast Range Intrusives. It is underiain by sedimentary, volcanic and associated intrusive rocks of the Jurassic Hazleton Group. These are considered to have formed in an island arc environment.

3.2 Property Geology

Litholoqies

Unit 1: Black to dark grey, massive to finely laminated argiilites and siltstones (la) and dark grey, vaguely bedded, massive greywackes with angular argillite clasts, grits and conglomerates with sediment and volcanic clasts (lb).

Unit 2: Massive, blocky weathering, dull grey-green, finely hornblende phyric andesite flows and tuffs.

Unit 3: Massive, blocky and rusty weathering, dull grey- green to pale bluish grey, finely hornblende and lesser feldspar porphyritic microdiorite (3a). Disseminated and fracture filling pyrite is ubiquitous and alteration is generally strong and pervasive. very similar to unit 2 and is considered to have the same magmatic source. Subunit 3b is similar except that feldspar phenocrysts dominate.

Unit 4: A black, feldspar phyric diabasic rock, occurring in narrow dykes trending at about 020 degrees and dipping steeply east. These are believed to be Tertiary and unrelated to the hydrothermal alteration.

Structure _____

There are two major fracture sets which cut the Hazleton Group rocks and these strike at approximately 020 and 135 degrees. These are manifested by abrupt changes in layering attitudes and strong topographic lineaments. The 020 set was the preferred host of the later diabasic dykes. Fracturing in the diorite intrusive and andesite favours these trends, although directions in intensely fractured zones appear random.

Alteration

Hydrothermal alterat ion accompanied the emp lacement of the

5

long dyke-like diorite body and narrow peripheral dykes which transect the northern two-thirds of the property north to south. The most intense alteration occurs within and peripheral to the diorite and 1s most commonly a pervasive quartz-sericite-pyrite asserhlage which had bleached and almost totally obliterated the

. origlna! texture. Pyrite occurs as fine disseminations and fracture fillings and comprises from 5 to 20% of the rock. Chalcopyrite occurs at several localities generally near the edge of the intrusive body (see below). The country rocks are typically strongly bleached, silicified and pyritic within 10 to 50 meters of the diorite. Alteration in the surrounding andesites at the north end of the intrusive is generally weaker though over a much wider area, in the order of several hundred meters. Fracturing and associated pyrite and epidote mineralization is also much more prevalent in the andesites than in the sediments. The distinction between altered andesites and altered microdiorite is difficult as they look very much alike in oxidized, fractured outcrops.

‘Yost of the exposures are highly oxidized and goasacous especially the striking "Red Bluff" cliffs at the northwest of the claims. An exception is the outcrop of the diorite in the Dak River between Gumas and Washout Creeks where unoxidized altered rocks are exposed. A pale pink-purplish hue observed in large patches here probably indicates potassic alteration. This is also the lowest exposure of the intrusive.

Overprinting the quartz-sericite-pyrite alteration is a weak thoi;gh fairly widespread quartz-Fe carbonate alteration that appears to be associated with the 020 degree trending fracture set. It is manifested as narrow quartz-ankerite veiniets and more rarely as a pervasive orange tinting.

. Mlnerallzation

Pervasive pyrite mineralization is found in all hydrothermally altered rocks on the property. Previous work indicates large areas of anomalous gold geochemistry which together with the large volumes of pyritic altered rocks suggests good potential for bulk tonnage low grade gold mineralization.

Copper mineralization was observed at severa! locations along the length of the diorite and surrounding altered rocks. At the Red Bluff adit chalcopyrite occurs with pyrite over an area of about 10 by 20 meters, and is estimated at between 0.1 and 0.4%. A similar occurrence was located about 500 meters to the south-southeast over about 4 meters and is open to the south. Weak chalcopyrite mineralization was also observed in small outcrops at L13900N 10350E, L13200N 10300E, and 12375N 10650E. Spotty chalcopyrite was observed in the outcrop of altered diorite in the Dak River, which is very close to sloughed trenches where widespread malachite staining had been reported

6

(Dak occurrence). The San Diego occurrence, where drilling and trenching in 1916 had returned favourable Cu and Au values over significant widths was located at 10750N 11325E. The main showing is apparently sloughed in but about 0.5% chalcopyrite was observed over a 6 meter section of silicified rocks adjacent to the main showing. Chalcopyrite was observed in a small outcrop of altered rocks at LlOlOON 11575E. Reported old trenches containing Cu mineralization northeast of the Red Bluff adit (Flynn showing) and between the Dak and San Diego occurrence could not be located and are probably sloughed in and grown over.

4.0 GEOCHEMISTRY

Soil sampling was completed on the grid shown on the accompanying map on lines 400 meters apart with stations every 50 meters. A total of 261 soil samples were collected. Gaps in the coverage are where sampling by previous operators is considered sufficient. The lowermost "B" or upper “C” horizon was sampled at depths of 30 to 90 centimeters. The soil is generally an orange-brown, dry sandy material. On slopes more than 35 degrees there is often evidence of slumping and transported horizons. Immediately downslope of outcrops there is much talus included in the soil.

Certificates of analysis are provided in Appendix XV. Grid plots of Cu and As results are shown on figures 4 and 5. There is a strong correlation between anomalous Cu, Au, and As values with the area mapped as altered intrusive. Values as high as 1461 ppm Cu, 21000 ppb Au and 1749 ppm As were detected in this area. The geochemistry may be reflecting large areas of low grade Cu and Au mineralization with local high grade zones.

Areas of anomalous Cu and Au soil geochemistry outlined by previous surveys were thoroughly prospected. Although outcrop is sparse, examination of angular boulders in small hand pits and under fallen trees suggest the highest geochemistry correlates with the altered diorite and altered host rocks.

A total of 80 rocks samples were collected and analyzed for ICP and Au geochemistry. Locations are plotted on figure 3, analytical results in Appendix IV and descriptions in Appendix V. The data indicates elevated Cu and Au values are associated with quartz-sericite-pyrite altered rocks. In the Red Bluff adit area a 20m wide zone returned a value of 2214 ppm Cu and 265 ppb Au. A grab sample from a 10m wide zone at 10480N, 10670E returned a value of 1500 ppb Au.

7

5.0 CONCLZSIONS

Extensive hydrothermal alteration at the Red Bluff property is associated with; a long dyke like body of m.icrodiorite which2 intrudes andesites of similar composition and black elastic sediments of the Eazleton Group. A very large volume of intrusive and host rocks has been silicified, sericitized and pyritized. A strong Cu-Au-As soil geochemical anomaly is associated with the altereation. Low grade chalcopyrite mineralization was observed at scattered locations along the entire length of the diorite across widths up to 15 meters across. It appears more common along its western contact. The intensity and extent of alteration and widespread sulphide mineralization indicate good potential for hosting a bulk tonnage, 10~ grade Cu-Au deposit. Further work is req;,ired to evaluate the property.

6.0 RECOMXENDATIONS

The property should be surveyed with an airborne mag, EM, and radiometric system to better define the altered areas and isolate potential targets. These targets should be drill tested following ground checks including more geochem coverage and selected I.?. surveys if warranted.

8

APPENDIX I

STATEMENT OF QUALIFICATIONS

I, Michael Savell, of the City of Prince George, Province of British Columbia, do certify that:

1. I am a geologist residing at 3507 Rosia Road, Prince George, British Columbia.

2. I am a graduate of Dalhousie University, Halifax, Nova Scotia with a Bachelor's of Science (Honours) degree in Geology.

3. I am a member in good standing of the Geological Association of Canada, the Prospector's and Developer's Association and the B.C.-Yukon Chamber of Mines.

4. I presently hold the position of Sr. Project Geologist with Noranda Exploration Company, Limited and have been in their employ since 1980.

Michael Save11 Sr. Project Geologist Noranda Exploration Co., Ltd. (no personal liabililty)

APPENDIX II

STATEMENT OF COSTS

CLAIMS: STAR 3 + 4, DAK I1 + 13, HB 2, DEVIL'S CLU3, RE3 BLUFF, ALBIOK, SUNBEAM, SUB-COLLECTOR

REPORT TYPE: GEOLOGICAL, GEOCHEMICAL DATES: JUNE 27 - JULY 14, I.992

a)

b)

c)

d)

e)

WAGES: No. of Days - 2C Rate per day - $218.00 Dates from - 06/27/92 to 07/14/92 Total:

FOOD, ACCO_MMODATION AND SUPPLIES: No. of Days - 20 Rate per day - $SS.OC Dates from - 06/27/92 to 07/14/92 Total:

TRANSPORTATION: No. of Days - 20 Rate per day - $140.00 Dates from - 06/27/92 to 07/14/92 Total:

ANALYSIS: 188 soil samples for 28 element ICP and Au

@ $12.00 each 77 rock samples for 28 element ICP and An

@ $15.00 each

COST OF PREPARATION OF REPORT: Author $ 153.00 Drafting $ lOO.OC Typing Data Processing Total:

$ 4,360.OO

$ 1,100.00

$ 2,800.OO

s 2,256.OO

$ 1,155.oo

$ 540.00

$ 12,211.oo TOTAL COST:

9

STATEXENT OF COSTS

CLAIMS: HEM lt2 REPORT TYPE: GEOLOGICAL, GEOCHEMICAL DATES: JUNE 21 - JULY 14, 1992

a) WAGES: No. of Days - 6 Rate per day - $218.00 Dates from - 06/29/92 to 07/10/92 Total:

b) FOOD, ACCOMMODATION AND SUPPLIES: No. of Days - 6 Rate per day - $55.00 Dates from - 06/27/92 to 07/14/92 Total:

cl TRANSPORTATION: No. of Days - 6 Rate per day - $140.00 Dates from - 06/29/92 to 07/10/92 Total:

d) ANALYSIS: 73 soil samples for 23 element ICP and Au

@ $12.CO each $ 876.00 3 rock samples for 28 element ICP and Au

e $15. CO each $ 45.00

2) COST OF PREPARATION OF REPORT: Author 75.00 Drafting z so.oc

Typing 25.C:: Data Processing 76.00 Total:

$ :,308.00

S 330.00

$ 340.00

TOTAL COST:

$ 226.00

S 3,625.OO

10

APPENDIX III

ANALYTICAL PROCEDURES

11

ANALYTICAL PROCEDURE

Soils, Silts, Rocks

The samples are dried and screened to -80 mesh. Rock samples are pulverized to -120 mesh. A 0.2 gram sample is digested with 3 ml of HClO,/HNO, (4 to 1 ratio) at 203' C for four hours, and diluted to 11 ml with water. A Leeman PS 3000 is used to determine elemental contents by I.C.P. Note that the major oxide elements and Ba, Be, Ce, Ga, La and Li are rarely dissolved completely from geological materials with this acid dissolution method.

For Au analyses, a 10.0 gram sample of -80 mesh material is digested with aqua regia and determination made by A.A.

Heavy Mineral Concentrates

The entire concentrate is digested in aqua regia solution, and elemental concentrations of Au, Ag, Cu, Pb, and Zn are determined by A.A.

APPENDIX IV

CERTIFICATES OF ANALYSIS

12