Technical Report October 2002
Transcription
Technical Report October 2002
TECHNICAL REPORT ON THE DRAYTON GOLD PROPERTY DRAYTON TWP., PATRICIA MINING DIVISION ONTARIO FOR RIO FORTUNA EXPLORATION CORP. October 8, 2002 Toronto, Ontario, Canada MPH Consulting Limited Howard J. Coates, M. Sc., P.Geo. MPH Reference: C-1915 DRAYTON GOLD PROPERTY, ONTARIO TABLE OF CONTENTS SUMMARY ..................................................................................................................................... i 1.0 INTRODUCTION.............................................................................................................. 1-1 1.1. 1.2. 1.3. 1.4. 1.5. Introduction and Terms of Reference.......................................................................... 1-1 Disclaimer ....................................................................................................................... 1-1 Property and Agreements ............................................................................................. 1-1 Accessibility, Local Resources and Infrastructure ..................................................... 1-5 Physiography and Climate ............................................................................................ 1-6 2.0 HISTORY ........................................................................................................................... 2-1 2.1. The Sioux Lookout Region............................................................................................ 2-1 2.2. The Drayton Gold Property.......................................................................................... 2-2 2.2.1 The ‘FP61’ Prospect .............................................................................................. 2-2 2.2.2 The ‘WG16’ Prospect ............................................................................................ 2-3 2.2.3 The Shaft Prospect................................................................................................. 2-3 3.0 GEOLOGY AND GOLD DEPOSITS.............................................................................. 3-1 3.1. Tectonic Setting.............................................................................................................. 3-1 3.2. Regional Geology ........................................................................................................... 3-1 3.2.1 The Neepawa Group .............................................................................................. 3-4 3.2.2 The Minnitaki Group ............................................................................................ 3-4 3.2.3 Late Intrusive Rocks.............................................................................................. 3-4 3.3. Gold Deposits.................................................................................................................. 3-5 3.4. Geology and Gold Occurrences of the Drayton Gold Property ................................ 3-5 3.4.1 The Shaft Area ....................................................................................................... 3-7 3.4.2 The ‘WG16’ Area................................................................................................... 3-7 4.0 EXPLORATION................................................................................................................ 4-1 4.1. Nature and Extent of Work .......................................................................................... 4-1 4.2. Geological Mapping and Geophysical Surveys:.......................................................... 4-1 4.2.1 The Shaft Area ....................................................................................................... 4-1 4.2.2 The ‘WG16’ Area................................................................................................... 4-1 4.2.3 The ‘FP61’ Area..................................................................................................... 4-2 4.3. Drilling and Trenching.................................................................................................. 4-2 4.3.1 The Shaft Area ....................................................................................................... 4-2 4.3.2 The ‘WG16’ Area: ................................................................................................. 4-4 4.3.3 The ‘FP61’ Area..................................................................................................... 4-5 4.4. Logging/Sampling Method and Approach .................................................................. 4-5 4.5. Sample Preparation, Analyses and Security ............................................................... 4-6 4.6. Data Verification............................................................................................................ 4-6 4.7. Underground Workings ................................................................................................ 4-8 4.8. Exploration Potential..................................................................................................... 4-8 5.0 CONCLUSIONS AND RECOMMENDATIONS........................................................... 5-1 REFERENCES MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO CERTIFICATE LIST OF TABLES Table 1: Drayton Gold Property, List of Mining Rights........................................................ 1-4 Table 2: Drayton Gold Project-Vendor Samples, Shaft Area Trenches............................... 4-3 Table 3: Verification Samples by the Optionor and MPH Consulting................................. 4-8 LIST OF FIGURES Figure 1: Location Map............................................................................................................. 1-2 Figure 2: Property Map............................................................................................................. 1-3 Figure 3: Regional Geology....................................................................................................... 3-2 Figure 4: Sioux Lookout Area Geology ................................................................................... 3-3 Figure 5: Property Geology, Drayton Gold Property............................................................. 3-6 Figure 6: Shaft Area Trench, Showing MPH Sample Locations........................................... 4-7 Appendix 1 MPH Grab Samples and Analytical Certificates MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO i SUMMARY Introduction At the request of Mr Robert Swenarchuk, Senior Vice President, Corporate Development of Rio Fortuna Exploration Corp. (“the Company”), MPH Consulting Limited (MPH), has completed an independent report on the Company’s optioned Drayton Gold Property. This report is formally an Independent Technical Report prepared to Canadian National Instrument 43-101 standards. The report is based on information provided by and discussions with Company personnel and the property vendor, Mr. Joe Riives, together with a field examination of the property. The Drayton Gold Property is located in Drayton Township, Patricia Mining Division, Ontario some 10 kms east-southeast of the town of Sioux Lookout. The area over which the Company has mineral rights include six mining claims, comprising 87 units, covering an unsurveyed area of some 1400 hectares. The claims are 100% owned by 1179785 Ontario Ltd. (“the Optionor”) and are subject to an option to purchase agreement whereby the Company can earn a 100% interest in the property, subject to a 2.5% Net Smelter Return Royalty (“NSR”) payable to the Optionor, by making cash payments totalling $180,000, issuing 200,000 of its shares to the Optionor, and carrying out a work commitment totalling $400,000. The Company has the right to purchase 1.5 percentage units of the 2.5% NSR by paying the Optionor the amount of $1,500,000 cash for the first 1.0 units, and by paying $1,500,000 for the second 0.5 units, leaving the Optionor with a residual 1.0% NSR. Access to the property is very good. The area is easily reached by road from the town of Sioux Lookout. The total road distance to the property is approximately 20 kilometres. The property is also readily accessible by boat or snowmobile on Lake Minnitaki depending on the season. The various showings on the property may be easily reached by a combination of light truck, small boat and/or light ATV. History The Sioux Lookout district has been intermittently explored for gold and other mineral deposits since it was made reasonably accessible by the Canadian National Railway (“CNR”) in the latter part of the 19th Century. The earliest known mineral production in the area was from the North Pines Mines Limited underground pyrite mine located in Drayton Township some 12 kilometres west of Sioux Lookout. This operation produced approximately 500,000 tonnes of pyrite between 1909 and 1921. The only gold significant production in the region came from the Goldlund Deposit located about 42 kilometres southwest of Sioux Lookout in Echo and McAree Townships. Discovered in 1941, Goldlund Mines Limited began processing stockpiled and underground auriferous material in a 200 ton per day (180 t/day) pilot mill in 1982. An open pit commenced production in January 1983. Approximately 100,000 tons (90,000 t) of material averaging about 0.15 oz Au/T (5.14 g Au/t) was processed by Goldlund. The property was acquired by Camreco Inc. in December 1986. Resources described as “drill indicated and probable reserves 442,600 tons (401,400 tonnes) averaging 0.18 oz Au/T (6.17 g Au/t) plus 400,000 tons (363,000 t) averaging 0.16 oz Au/T (5.48 g Au/t) in several areas” are reported. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO ii There are three known mineral prospects on the Drayton Gold Property that have seen previous work. These are termed the ‘FP61’, ‘WG16’ and ‘Shaft Area’ locations by the current Property holders. The ‘FP61’ Area Cu-Au-Mo prospect, also known as the McCombe Occurrence on Island FP61, Minnitaki Lake, was originally staked in 1951 and optioned, firstly to Noranda Mines Limited, and then to Rio Tinto Canadian Exploration, between 1957 and 1961. Norlode Resources Inc. reacquired the prospect in the late 1980’s. The various companies conducted geophysics, trenching and drilling programs. The ‘WG16’ Area prospect, also known as the Wright-Hargreaves occurrence, located on the north shore of East Bay, Lake Minnitaki was originally staked in the late 1940’s and subsequently optioned to Wright-Hargreaves Mines Limited in 1951. Wright-Hargreaves undertook a geological mapping and extensive sampling program before dropping the option. In 1991 and 1992, Teck Exploration Limited conducted a substantial systematic exploration program on the showing and 2 kilometres along its possible eastward extension. The program consisted of ground geophysics including magnetic, VLF electromagnetic and Induced Polarization surveys followed by trenching and diamond drilling. The Shaft Prospect was rediscovered in June 1998, when Glen Seim, former MNDM Resident Geologist-Sioux Lookout unexpectedly located an old shaft on former Mining Location K171. Shortly thereafter the current Property vendors staked the area. The vendors conducted prospecting, geophysics, trenching and sampling programs in 1998 and1999. Geology and Gold Deposits The Drayton Gold Property lies within the Superior Province of the Canadian Shield, the world’s largest Archean craton and host to a variety of mineral deposits. The western Superior Province is well endowed with mineral riches including: the major gold mining districts of Rice Lake, Red Lake, Pickle Crow, Long Lac and Hemlo; base metal massive sulphide (“VMS”) deposits including Geco, Sturgeon Lake and Winston Lake; magmatic Ni-Cu and PGE deposits including Shebandowan and Lac des Iles; and other miscellaneous commodities such as iron ore, rare metal pegmatites and dimension stone. The subprovince assemblages of the western Superior are usually juxtaposed along major structural breaks or deformation zones. These breaks and their offshoots are high strain zones characterized by widespread alteration features of various types, and the emplacement of quartz veins that are often auriferous. All of the major gold producing areas of the western Superior Province are associated with such tectonic zones. The Sioux Lookout Lake area is located within the western Wabigoon Subprovince, a greenstone belt terrane over 300 kilometres in length that stretches from Savant Lake in the east to beyond Lake of the Woods in the west. The supracrustal rocks in the Sioux Lookout area include mafic and felsic metavolcanic rocks, metasediments and related intrusive rocks that have been intruded by Archean granitoid stocks. The lithological assemblages have been subdivided into five zones from north to south including the Northern Volcanic Belt, the Northern Sedimentary Belt (Abram Group), the Central Volcanic Belt (Neepawa Group), the Southern Sedimentary Belt MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO iii (Minnitaki Group) and the Southern Volcanic Group (Turner and Walker, 1973). The Drayton Gold Property contains portions of the Neepawa Group, the Minnitaki Group and part of the Northeast Bay Stock which ranges in composition from trondhjemite to quartz diorite. Gold occurrences in the Sioux Lookout area are of two styles including lode type deposits associated with quartz +/- carbonate veins and stockworks in or near tectonic zones and a high sulphidation feldspar porphyry related copper-gold-molybdenum type. . • Auriferous Quartz Veins and Stockworks: The most common and widespread style of gold mineralization in the area, auriferous quartz veins occur in a variety of orientations and lithologic units including the various volcanic and volcaniclastic units as well as epizonal plutons including quartz and quartz-feldspar porphyry dykes, and metadiorite and metadiabase intrusions. Typical auriferous quartz +/- iron carbonate veins may contain disseminated or blotchy sulphides, chiefly pyrite with minor chalcopyrite, sphalerite and galena together with calcite, +/- ilmenite, +/- tourmaline and fuchite, with local native gold and telluride minerals. The various host rocks adjacent to the veins may be sheared, carbonatized, silicified and sulphide mineralized. • Porphyry Related Cu-Au-Mo Mineralization: This type of mineralization occurs on the current property on Island FP61 in Northeast Bay of Minnitaki Lakewhere where a northeast trending hybrid contact zone between quartz porphyry and diorite intrusive rocks contains disseminations, blotches and stringers of chalcopyrite, pyrrhotite and pyrite with rare specks of molybdenite. The mineralization is frequently associated with randomly oriented quartzcarbonate veinlets and stringers and with nests of tourmaline needles. The contact zone consists of brecciated mafic volcanics, dioritic rocks and granitoid material. The host rocks of the mineralization are variably altered by silicification, sericitization and chloritization. The best results to date from 13 diamond drill holes is 0.47% Cu and 0.018 oz Au/T (0.62 g Au/t) over a core length of 70 feet (21.34 m). As mentioned above the Drayton Gold Property contains portions of the Neepawa Group, the Minnitaki Group and part of the Northeast Bay Stock. The Neepawa Group rocks comprise northeast trending steeply dipping mafic to intermediate lavas and pillow lavas. The volcanic rocks are juxtaposed with Minnitaki Group sediments along the Ruby Island Fault which cuts through the southeastern corner of the claim group. On the property the Minnitaki Group comprises a succession of northeast trending, steeply dipping, northwest younging slates, argillites and graywackes. The Northeast Bay Stock outcrops on several islands in Northeast Bay, Minnitaki Lake and on the mainland near the entrance to Alcona Bay. The outer zone of this stock has compositions of diorite and syenodiorite while the inner core ranges from trondhjemite to quartz diorite. A series of east-northeasterly to northeasterly trending steeply dipping faults or shear zones have been mapped on the property. These structures are known to contain lode style gold mineralization located in two areas on the property. Exploration Exploration work on the Drayton Gold Property includes early work in the 1940’s and 1950’s, or perhaps earlier, in the three known showing areas, for which there are no known detailed records. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO iv In the latter half of the 20th century, the ‘FP61’, ‘WG16’ and Shaft Areas have all been tested to some degree by the localized use of modern techniques including geology, geophysics, trenching, and surface sampling, while diamond drilling has been done at ‘FP61’ and ‘WG16’. The current property was obtained in 1998, primarily to explore the long forgotten Shaft Area which has not been systematically explored by modern methods. The current property vendors have conducted some basic geophysical surveys and trenching in the Shaft Area and other interested parties including the Optionor and MPH have examined the property and collected grab samples. The exploration done to date outside of the ‘WG16’ and the ‘FP61’ areas is rudimentary in nature and is mostly limited to prospecting and trenching. A large part of the property, to the knowledge of MPH, has never been tested by modern systematic integrated exploration methods. To date there are no known records of modern multidisciplinary exploration work in the Shaft Area. Even the showings unearthed by the vendors could be further opened up and more systematically sampled by more rigorous channel rather than chip and grab sampling. It is therefore apparent that the Drayton Gold Project has significant untested exploration potential that may be readily evaluated by as yet untried modern methods. The favorable location of the property vis a vis accessibility and exploration expertise should allow such work to be completed inexpensively by Canadian standards. MPH ranks this as a high priority target. The ‘WG16’ Area is intriguing because of its structural setting and widespread gold mineralization. However the full extent of previous modern exploration does not appear to be known to the Company at present. The Company should attempt to acquire the full Teck database and reassess the target area in the light of more complete knowledge. The ‘FP61’ Area target has not been tested to any degree away from the showing area. The mineralization indicated so far is low grade so only a large-tonnage open-pit situation would be of potential commercial interest. Even if this situation were present, the physiographic location in a major drainage system would likely preclude development. MPH ranks this as a low priority target. Conclusions and Recommendations MPH concludes that the Drayton Gold Property of the Company represents a good opportunity to explore for gold in an area containing several known showings. At least one of the three main showings and the intervening areas between them have not been explored by state of the art methods. It is concluded that the application of such methods is fully warranted and justified. A two phase program for exploration of the property by means of geological mapping, prospecting, geophysics, trenching and drilling is recommended. The first phase is designed to establish specific targets for drilling and mechanized trenching with an allowance for a limited amount of trenching, while the second is a provisional phase to adequately test such targets by diamond drilling and/or trenching. The initial phase 1 work will be a compilation of previous exploration completed on or near the claim group. This will include a detailed compilation of previous work throughout the property, especially that done by Teck Exploration in the early 1990’s in the ‘WG16’ Area. A grid will be MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO v established for control and to tie in the trench areas at the Shaft Area. The grid will cover the northeastern half of the claim group and should tie into the Teck grid if possible and practical. Magnetics will be completed on the entire new grid and IP will be completed on selected lines in the Shaft Area to determine if IP or resistivity features associated with the gold mineralization can be detected. The claim group geology will be mapped utilizing the grid. The trenches and showings will be mapped and sampled systematically where needed. It is anticipated that a minor amount of trenching and sampling will need to be completed to firm up drill targets. A budget of approximately $92,000 is required to complete the phase 1 work. The second phase is conditional upon a successful first phase. However it is considered reasonable to make provision for some ongoing work such as additional IP, trenching and a limited diamond drilling program to test the known mineralized areas and possible geophysical targets. An unallocated amount of approximately $300,000 is recommended for this purpose. The grand total required to adequately complete the two phase exploration program on the Drayton Gold Property is approximately $392,000. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 1-1 1.0 INTRODUCTION 1.1. Introduction and Terms of Reference At the request of Mr Robert Swenarchuk, Senior Vice President, Corporate Development of Rio Fortuna Exploration Corp. (“the Company”), Suite 1550, 1185 West Georgia Street, Vancouver, British Columbia, MPH Consulting Limited (MPH), of Suite 615, 133 Richmond Street West, Toronto, has completed an independent report on the Company’s optioned Drayton Gold Property. This report is formally an Independent Technical Report prepared to Canadian National Instrument 43-101 (“NI 43-101”), Form 43-101F1, Technical Report and Companion Policy 43-101CP standards. The purpose of the exercise is to critically review and complement in-house due diligence work carried out by and on behalf of the Company and to prepare a document that may be filed under Canadian securities legislation. The report is based on information provided by and discussions with Company personnel and the property vendor, Mr. Joe Riives, together with a field examination of the property. The Drayton Gold Property was visited by the undersigned on September 13 and 14, 2002 in the company of Mr. Riives, a resident of Dryden, Ontario. The report was prepared in Toronto, Canada in October, 2002. MPH acknowledges the assistance of the Company, Joe Riives, and John Wakeford of the Optionor in making information available to complete this study. 1.2. Disclaimer In preparing this report, MPH has relied on files provided by the Company, published papers and government documents, that are listed in the References section at the conclusion of this document. Draft copies of the Report have been reviewed by the Company for factual errors. Any changes made as a result of these reviews did not involve any alteration to the conclusions made. Hence, the statement and opinions expressed in this Report are given in good faith and in the belief that such statements and opinions are not false and misleading at the date of this assignment. 1.3. Property and Agreements The Drayton Gold Property is located in Drayton Township, Patricia Mining Division, Ontario some 10 kms east-southeast of the town of Sioux Lookout (Figure 1). The area over which the Company has mineral rights include six mining claims, comprising 87 units, covering an unsurveyed area of some 1400 hectares (Figure 2). A summary of mineral rights is provided in Table 1. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO MPH Consulting Limited 50 km Sioux Lookout . Thunder Bay Pickle Lake Rio Fortuna Exploration Corp. Drayton Gold Property Drayton Gold Property .Kenora Figure 1: Location Map 1-2 DRAYTON GOLD PROPERTY, ONTARIO MPH Consulting Limited 1162939** 1199272** 1162940** DRAYTON GOLD PROPERTY, ONTARIO Drayton Gold Property Rio Fortuna Exploration Corp. ** claims have been added to MNDM plan, recently staked but accepted but not entered on MNDM maps 1167088** DRAYTON TOWNSHIP CLAIM LOCATION MAP DRAYTON GOLD PROPERTY Figure 2: Property Map 1-3 UNITS 12 16 12 16 16 15 87 CLAIM NUMBER PA-1216505 PA-1199271 MPH Consulting Limited PA-1167088 PA-1162939 PA-1199272 PA-1162940 TOTAL 1409 243 259 259 194 259 194 SIZE (Hectares) Hectares July 2, 2002 May 13, 2002 May 13,2002 May 7, 2002 April 30, 2002 June 26, 1998 RECORDING DATE July 2, 2004 May 13, 2004 May 13, 2004 May 7, 2004 April 30, 2004 June 26, 2006 WORK DUE DATE Table 1: Drayton Gold Property, List of Mining Rights 1179785 Ontario Limited (100%) OWNERSHIP 4 yr. period, plus provision of 200,000 free trading shares of the optionee, plus a 2.5% NSR royalty w. partial buy out provision, plus a $400,000 work commitment over 4 years. payments totaling $180,000 over Rio Fortuna Exploration Corp. holds option to earn 100% int. by making series of cash AGREEMENTS 2.5% NSR, w. buy out of first 1% for $1.5 mil., and 2nd 0.5% for $1.5 mil., retained 1% ROYALTIES 1-4 DRAYTON GOLD PROPERTY, ONTARIO 1-5 The claims are 100% owned by Ontario 1179785 Ontario Ltd. (“the Optionor”) and are subject to an option to purchase agreement whereby the Company can earn a 100% interest in the property, subject to a 2.5% Net Smelter Return Royalty (“NSR”) payable to the Optionor, by making cash payments totalling $180,000, issuing shares to the Optionor, and carrying out a work commitment as follows: • $10,000 cash payment on signing of the Option Agreement • $10,000 cash on or before March 31, 2003 • $25,000 cash on or before January 3, 2004 • $35,000 cash on or before January 3, 2005 • $100,000 cash on or before January 3, 2006 The Company will also issue the Optionor, 200,000 of its shares in accordance with the following schedule, subject to regulatory approval: • 50,000 shares upon initial exchange approval • 50,000 shares on completion of the phase 1 program • 100,000 shares on completion of the phase 2 program The Company will also be responsible for carrying out a work commitment totaling $400,000 on the property as follows: • $50,000 in expenditures before October 1, 2003 • $100,000 in expenditures before October 1, 2004 • $100,000 in expenditures before October 1, 2005 • $150,000 in expenditures before October 1, 2003 The Company has the right to purchase 1.5 percentage units of the 2.5% NSR by paying the Optionor the amount of $1,500,000 cash for the first 1.0 units, and by paying $1,500,000 for the second 0.5 units, leaving the Optionor with a residual 1.0% NSR. The status of the mineral rights, surface rights and details of agreements have not been certified by MPH Consulting Linited. 1.4. Accessibility, Local Resources and Infrastructure Access to the property is very good. The area is reached from the town of Sioux Lookout, by proceeding easterly on paved Highway 642 to Superior Junction and the hamlet of Alcona. From Alcona, the Alcona Bay secondary road leads westward to the property and a private boat landing (permission required) on Alcona Bay, Minnitaki Lake. The total road distance to the property is approximately 20 kilometres. The property is also readily accessible by boat or snowmobile on Lake Minnitaki depending on the season. The various showings on the property may be easily reached by a combination of light truck, small boat and/or light ATV. The Canadian National Railway crosses Highway 642 at Superior Junction, the closest railhead, located some 8 kilometres north-northeast of the property. There is a small municipal airport at Sioux Lookout as well as a float plane base. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 1-6 Sioux Lookout is a regional centre for the forestry and tourism industry in northern Ontario. Sioux Lookout can provide modern housing as well as educational, medical, recreational and shopping facilities. Labour, industrial supplies and services for mining and exploration activities are readily available in the region. The property has no on site permanent facilities. Other facilities and services such as telephone lines, adequate electrical energy for a mining/ milling operation and an adequate fresh water supply are all situated within several kilometres of the Property. 1.5. Physiography and Climate The Drayton Gold Property has low to moderate relief and undulating terrain with elevations to approximately 365 metres above sea level. The main drainage feature in the area is Minnitaki Lake which is part of the major English River drainage system. Most of the property is covered by a combination of glacial overburden and water, although fairly abundant outcrop is found along the Lake Minnitaki shoreline and in scattered places inland. The overburden is predominantly sand and gravel, with a few low-lying swampy areas. Climatic conditions are typical of northwestern Ontario. Mean total precipitation for Sioux Lookout is 716.1 millimetres including 517.2 mm of rainfall and 204.0 cm of snowfall. Mean July daily temperature is 18.6o C while mean January daily temperature is –18.6o C (SourceMeteorological Service of Canada). MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 2-1 2.0 HISTORY 2.1. The Sioux Lookout Region The Sioux Lookout district has been intermittently explored for gold and other mineral deposits since it was made reasonably accessible by the Canadian National Railway (“CNR”) in the latter part of the 19th Century. The earliest known mineral production in the area was from the North Pines Mines Limited underground pyrite mine located in Drayton Township some 12 kilometres west of Sioux Lookout. This operation produced approximately 500,000 tonnes of pyrite between 1909 and 1921 (Johnston, 1972). The only gold significant production in the region came from the Goldlund Deposit located about 42 kilometres southwest of Sioux Lookout in Echo and McAree Townships. Discovered in 1941 the deposit was tested by extensive surface stripping, trenching and diamond drilling by Lunward Gold Mines Limited between 1941 and 1948. Newlund Mines Limited continued this work between 1949 and 1952 by sinking a 825 foot (251 m) vertical shaft with extensive lateral development and underground diamond drilling (Ferguson, et. al., 1971). In July 1982, after a long dormant period, Goldlund Mines Limited began processing stockpiled and underground auriferous material in a 200 ton per day (180 t/day) pilot mill. An open pit commenced production in January 1983. The test mining operation ceased in March 1985 after the company declared bankruptcy. Approximately 100,000 tons (90,000 t) of material averaging about 0.15 oz Au/T (5.14 g Au/t) was processed by Goldlund. The property was acquired by Camreco Inc. in December 1986. Resources described as “drill indicated and probable reserves 442,600 tons (401,400 t) averaging 0.18 oz Au/T (6.17 g Au/t) plus 400,000 tons (363,000 t) averaging 0.16 oz Au/T (5.48 g Au/t) in several areas” are reported (Canadian Mines Handbook, 1988-1989). The NI 43-101 classification of this material is undetermined. Three gold prospects are known outside the Drayton Gold Property along the same geological trend along an approximate strike length of 35 kilometres. These include the Burnthut Island and Neepawa Island occurrences (Johnston, 1972) located west of the Property and the Alcona Mine prospect (ODM, 1937) to the east-northeast. MPH has not conducted an exhaustive search for reports of work outside of the current Property. The Burnthut Island prospect, located at the entrance to Lyons and Troutfish Bays, Minnitaki Lake, is one of the oldest known gold occurrences in the Sioux Lookout area. It was explored by a group called the Harvey Syndicate that sunk a 50 foot (15 m) shaft in 1897-98 (Ferguson, et. al., 1971). The property was reactivated by Ourgold Mining Company Limited in 1947-48 and work including 21 diamond drill holes totaling 5,028 feet (1533 m) was completed. The same company completed another 2,300 feet (700 m) of drilling between 1961-62. No reports of gold resource estimations are known to MPH. The Neepawa Island gold occurrences were found about 3 kilometres west-southwest of the current Property in 1950 (Johnston, 1972). Central Manitoba Mines Limited drilled 24 holes totalling 3940 feet (1201 m) on the west side of the island during 1950 and 1951. Another company, Neepawa Island Gold Mines Limited, drilled 18 short holes totalling 665 feet (203 m) MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 2-2 on the east side of the island in 1950. No reports of gold resource estimations are known to MPH. The Alcona Mine prospect, located some 7 kilometres east-northeast of the property, was first staked in October 1929 by George and Stanley Michaud of the nearby hamlet of Alcona on the former CNR branch line leading southward to Thunder Bay from Superior Junction. A group of companies including firstly, Consolidated Mining and Smelting Company of Canada Limited, then Atlas Exploration Company Limited, followed by Alcona Gold Mines and Alcona Mines Limited conducted work on the prospect between 1929 and 1937 (ODM, 1937). The early work, from 1930 to 1933, consisted of extensive trenching, test pitting and 5 diamond drill holes totaling 1,960 feet (597 m) on three vein systems (Veins 1, 2 and 3). From September 1936 to May 1937 Alcona Mines Limited sunk a 3-compartment vertical shaft to a depth of 325 feet (99 m) with levels at 180 and 305 feet (55 and 93 m). The Alcona Mine area was included in the Alcona-Split Lake property of Cream Silver Mines Limited, comprising 31 staked mining claims acquired in 1988. The property was subsequently optioned to Valerie Gold Resources Limited. Between 1988 and 1991 the two companies completed exploration work in Alcona Mine area including geological mapping, ground geophysics including magnetic and VLF electromagnetic surveys, trenching/washing/channel sampling activities and six diamond drill holes totalling 1075 feet (328 m). No reports of gold resource estimations are known to MPH. 2.2. The Drayton Gold Property There are three known mineral prospects on the Drayton Gold Property that have seen previous work. These are termed the ‘FP61’, ‘WG16’ and ‘Shaft Area’ locations by the current Property holders. See Figure 5 in Section 3.4 following for locations of these prospects. 2.2.1 The ‘FP61’ Prospect This Cu-Au-Mo prospect, originally known as the McCombe Occurrence on Island FP61, Minnitaki Lake, was originally staked in 1951, but allowed to lapse, by J. Donnelly of Port Arthur (Johnston, 1972). R. J. McCombe of Sioux Lookout restaked the claims and optioned them, firstly to Noranda Mines Limited, and then to Rio Tinto Canadian Exploration, between 1957 and 1961. Noranda reportedly conducted an electromagnetic survey before dropping its option while Rio Tinto completed an Induced Polarization survey, did some trenching, and drilled 5 holes totalling 1,659 feet (506 m) before doing likewise. The best reported drill intersection was in hole M-1 from 247.0 to 291.5 feet (75 to 89 m), a 44.5 foot (14 m) core length averaging 0.57% Cu and 0.04 oz Au/T (1.37 g Au/t), including a 12 foot (3.66 m) section averaging 1.20% Cu and 0.065 oz Au/T (2.23 g Au/t). The same hole also intersected 0.25% Cu and 0.22 oz Au/T (7.54 g Au/t) over 5 feet (1.52 m) between 205.0 and 210.0 feet (62.48 and 64.0 m). Norlode Resources Inc. reacquired the prospect in the late 1980’s and drilled 7 shallow AX (1 3/8”) holes totalling 1,403 feet (428m) from three locations in essentially the same area as tested previously by Rio Tinto. Norlode encountered similar grades and core MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 2-3 lengths as before, with its best drill intersection from DDH 88-3, between 65.0 and 135 feet (19.81 to 41.15 m), a core length of 70 feet (21.34 m) assaying 0.47% Cu and 0.018 oz Au/T (0.62 g Au/t) including a 6.0 foot (1.83 m) section assaying 1.61% Cu and 0.093 oz Au/T (3.19 g Au/t). 2.2.2 The ‘WG16’ Prospect This prospect, also known as the Wright-Hargreaves occurrence, located on the north shore of East Bay, Lake Minnitaki was originally staked in the late 1940’s by R. J. McCombe of Sioux Lookout, who conducted trenching and limited x-ray drilling in 1948 before optioning his property to Wright-Hargreaves Mines Limited in 1951 (Johnston, 1972). Wright-Hargreaves undertook a geological mapping and extensive sampling program before dropping the option. The prospect was visited in the summer of 1980 by A. A. Speed of the Ontario Geological Survey (Speed, 1980). A few old trenches and a small amount of x-ray core were observed in the area. In 1991 and 1992, Teck Exploration Limited conducted a substantial systematic exploration program on the showing and 2 kilometres along its possible eastward extension (Janzen, 1992). The program consisted of ground geophysics including magnetic, VLF electromagnetic and Induced Polarization surveys followed by trenching and diamond drilling. In all the program included 35 km of magnetic and VLF-EM surveying, 9.3 km of time domain dipole-dipole IP/resistivity surveying, 6 backhoe trenches and 9 diamond drill holes totalling 1029m were completed. The work traced a mineralized silica-carbonate altered contact zone over a distance of 1,100 metres but only found anomalous sub-economic gold grades so the property was relinquished. 2.2.3 The Shaft Prospect During the course of mapping the Abram Lake Sheet, Map 2243, F. J. Johnston observed some old trenching and one diamond drill location near the southeastern corner of Mining Location K171 one of three former patented claims in the area (Johnston, 1972). There is no known public record of this work. In June 1998, Glen Seim, former MNDM Resident Geologist-Sioux Lookout unexpectedly located an old shaft on former Mining Location K171 and shortly thereafter the current Property vendors staked the area (Riives, 2000). In 1998 prospectors I. J. Riives and A. Glatz secured the shaft collar by stringing heavy steel wire around it and also measured its length (25 metres minimum) by depth sounding with a fishing line and weight. Also in 1998, the prospectors installed a flagged grid on which they conducted 3.4 line kilometres of magnetic and VLF-EM surveying. Manual and limited backhoe trenching was done in the shaft area at this time. Several grab samples from the trenches and old muck pile beside the shaft returned interesting gold values including two samples exceeding 1 oz Au/T (34.28 g Au/t). MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 2-4 In 1999 the prospectors secured funding to conduct further work under the Ontario Prospector Assistance Program (OPAP 99-396). Six new backhoe trenches were dug, washed where possible and sampled (approximately 30 samples) mostly by grab samples, with a few chip and sawed channel samples. Again some samples returned interesting gold values. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 3-1 3.0 GEOLOGY AND GOLD DEPOSITS 3.1. Tectonic Setting The Drayton Gold Property lies within the Superior Province of the Canadian Shield, the world’s largest Archean craton and host to a variety of mineral deposits. The western Superior Province is well endowed with mineral riches including: the major gold mining districts of Rice Lake, Red Lake, Pickle Crow, Long Lac and Hemlo; base metal massive sulphide (“VMS”) deposits including Geco, Sturgeon Lake and Winston Lake; magmatic Ni-Cu and PGE deposits including Shebandowan and Lac des Iles; and other miscellaneous commodities such as iron ore, rare metal pegmatites and dimension stone (Franklin and Schneiders, 1990). The western Superior Province is divided into subprovinces each with distinctive lithological and structural/metamorphic characteristics (Card and Ciesielski, 1986). These are broadly classified as volcano-plutonic (greenstone belts), metasedimentary, and plutonic/high grade gneiss terranes. From north to south the western Superior Province is divided into the Sachigo (greenstone), Berens River (plutonic/gneissic), Uchi (greenstone), English River (metasedimentary), Winnipeg River (plutonic/gneissic), Wabigoon (greenstone) and Quetico (metasedimentary) Subprovinces. The supracrustal rocks of the various subprovinces are of Archean age within a temporal range from approximately 3,000 Ma to 2,700 Ma. The subprovince assemblages of the western Superior are usually juxtaposed along major structural breaks or deformation zones. Similar major breaks occur inside subprovinces such as the Cochenor-Gullrock Lake, East Bay and Post Narrows and other deformation zones at Red Lake in the Uchi Subprovince (Andrews, et. al., 1986) and the Cameron Lake and Monte Cristo shear zones in the Wabigoon Subprovince (Melling, et. al., 1986). These breaks and their offshoots are high strain zones characterized by widespread alteration features of various types, and the emplacement of quartz veins that are often auriferous. All of the major gold producing areas of the western Superior Province are associated with such tectonic zones. 3.2. Regional Geology The Sioux Lookout Lake area is located within the western Wabigoon Subprovince, the greenstone belt terrane over 300 kilometres in length that stretches from Savant Lake in the east to beyond Lake of the Woods in the west (Figure 3). The supracrustal rocks in the Sioux Lookout area include mafic and felsic metavolcanic rocks, metasediments and related intrusive rocks that have been intruded by Archean granitoid stocks (Figure 4). The lithological assemblages have been subdivided into five zones from north to south including the Northern Volcanic Belt, the Northern Sedimentary Belt (Abram Group), the Central Volcanic Belt (Neepawa Group), the Southern Sedimentary Belt (Minnitaki Group) and the Southern Volcanic Group (Turner and Walker, 1973). The Drayton Gold Property contains portions of the Neepawa Group, the Minnitaki Group and part of the Northeast Bay Stock which ranges in composition from trondhjemite to quartz diorite. The remainder of this section will deal exclusively with the latter assemblage. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO MPH Consulting Limited Drayton Gold Property Rio Fortuna Exploration Corp. Regional Geology Figure 3: 3-2 DRAYTON GOLD PROPERTY, ONTARIO MPH Consulting Limited % Drayton Gold Property % % HWY 17 SIOUX LOOKOUT % % MAFIC VOLCANICS METASEDIMENTS MAFIC/ ULTRAMAFIC INTRUSIVE ROCKS FELSIC INTRUSIVE ROCKS LEGEND – SIMPLIFIED GEOLOGY 25 km % DRAYTON GOLD PROPERTY Rio Fortuna Exploration Corp. Figure 4; Sioux Lookout Area Geology 3-3 DRAYTON GOLD PROPERTY, ONTARIO 3-4 3.2.1 The Neepawa Group The Neepawa Group southeast of Sioux Lookout is juxtaposed with the Abram Group to the north along the Abram Lake/Little Vermillion Fault system and with the Minitaki Group to the south along the Ruby Island and related faults (Johnston, 1972). The volcanic belt comprises two volcanic/volcaniclastic sequences with the first including basaltic to andesitic lavas, pillow lavas and variolitic lavas together with basaltic to dacitic volcaniclastic and epiclastic units ranging from tuffs to agglomerate and breccia. Minor iron formation and quartzite is also present in this sequence. The second sequence is rhyolitic to dacitic in composition including rhyolite, porphyritic rhyolite and dacite flows plus felsic tuffs and agglomerate. The volcanic units are locally intruded by early quartz porphyry, felsite and trachyte dykes and late granitic, syenodiorite, diorite and gabbro plutons. Most younging determinations in the Central Volcanic Belt indicate a sub-vertical northeast-trending southerly-facing succession, although local deviations may occur adjacent to intrusive rocks. As noted above the belt is bounded on both sides by prominent northeasterly-trending sub-vertical strike fault systems. Widespread lesser faults and shear zones with a variety of orientations are present throughout the belt. A number of gold occurrences are associated with some of these structural features. 3.2.2 The Minnitaki Group The Minnitaki Group or Southern Metasedimentary Belt contains deep water sediments including slates, and periodic turbidite cycles ranging from graded slates, graded arkoses and graywackes, to polymictic conglomerates. The conglomerates contain rounded pebbles and boulders of quartz and quartz-feldspar porphyry with minor felsic and mafic volcanic and granitic fragments. Angular slate and laminated slate fragments are locally common in the conglomerates (Johnston, 1972). The sedimentary rocks are structurally complex in the East Bay, Minnitaki Lake area. Three major strike faults, (Ruby Island, East Bay and Twinflower Faults) and several lesser breaks disrupt the succession, while a series of upright anticlinal and synclinal folds further complicate the picture. 3.2.3 Late Intrusive Rocks The Neepawa Group volcanic rocks in the northeastern Minnitaki Lake area are intruded by two zoned stocks, the David-Allan Lakes Stock and the Northeast Bay Stock. These oval shaped bodies are characterized by outer zones including gabbro, hornblende diorite diorite and syenodiorite and inner cores ranging from quartz-‘eye’ trondhjemite to quartz diorite (Johnston, 1972). MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 3-5 3.3. Gold Deposits Gold occurrences in the Sioux Lookout area are of two styles including lode type deposits associated with quartz +/- carbonate veins and stockwork in or near tectonic zones and a high sulphidation feldspar porphyry related copper-gold-molybdenum type. . • Auriferous Quartz Veins and Stockworks: The most common and widespread style of gold mineralization in the area, auriferous quartz veins occur in a variety of orientations and lithologic units including the various volcanic and volcaniclastic units as well as epizonal plutons including quartz and quartz-feldspar porphyry dykes, and metadiorite and metadiabase intrusions. Examples of this type of mineralization can be found at the Goldlund Mine 42 kilometres southwest of Sioux Lookout, the Shaft Area on the current property, the Alcona Mine area, and the Neepawa Island and Burnthut Island occurrences at Minnitaki Lake. Typical auriferous quartz +/- iron carbonate veins may contain disseminated or blotchy sulphides, chiefly pyrite with minor chalcopyrite, sphalerite and galena together with calcite, +/- ilmenite, +/- tourmaline and fuchite, with local native gold and telluride minerals. The various host rocks adjacent to the veins may be sheared, carbonatized, silicified and sulphide mineralized. • Porphyry Related Cu-Au-Mo Mineralization: This type of mineralization occurs on the current property on Island FP61 in Northeast Bay of Minnitaki Lakewhere where a northeast trending hybrid contact zone between quartz porphyry and diorite intrusive rocks contains disseminations, blotches and stringers of chalcopyrite, pyrrhotite and pyrite with rare specks of molybdenite. The mineralization is frequently associated with randomly oriented quartzcarbonate veinlets and stringers and with nests of tourmaline needles. The contact zone consists of brecciated mafic volcanics, dioritic rocks and granitoid material (Johnston, 1972). The host rocks of the mineralization are variably altered by silicification, sericitization and chloritization. The best results to date from 13 diamond drill holes (5 by Rio Tinto Canadian Exploration in 1961 and 8 by Norlode Resources Inc, in 1988) is from DDH 88-3 which assayed 0.47% Cu and 0.018 oz Au/T (0.62 g Au/t) over a core length of 70 feet (21.34m) (Dowhaluk, 1988). 3.4. Geology and Gold Occurrences of the Drayton Gold Property As mentioned above the Drayton Gold Property contains portions of the Neepawa Group, the Minnitaki Group and part of the Northeast Bay Stock (Figure 5). The Neepawa Group rocks comprise northeast trending steeply dipping mafic to intermediate lavas and pillow lavas. The volcanic rocks are juxtaposed with Minnitaki Group sediments along the Ruby Island Fault which cuts through the southeastern corner of the claim group. On the property the Minnitaki Group comprises a succession of northeast trending, steeply dipping, northwest younging slates, argillites and graywackes (Johnston, 1972). The Northeast Bay Stock outcrops on several islands in Northeast Bay, Minnitaki Lake and on the mainland near the entrance to Alcona Bay. The outer zone of this stock has compositions of diorite and syenodiorite while the inner core ranges from trondhjemite to quartz diorite. The trondhjemite facies is a quartz-‘eye’ porphyritic granitoid unit containing 10 to 50% quartz, up to 80% sodic plagioclase (oligoclase) and 0 to 10% alkali feldspar with minor chlorite, biotite, sericite and apatite. (Johnston, 1972) MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO MPH Consulting Limited WG 16 Drayton Gold Property G8423 FP61 G8418 Ontario Division of Mines Map 2243 Published 1967 0.5 miles 800 m MPH Grab Sample Rio Fortuna Exploration Corp. G8419 SHAFT AREA Figure 5: Property Geology DRAYTON GOLD PROPERTY 3-6 DRAYTON GOLD PROPERTY, ONTARIO 3-7 A series of east-northeasterly to northeasterly trending steeply dipping faults or shear zones have been mapped on the property. These structures are known to contain lode style gold mineralization located in two areas on the property including the Shaft and ‘WG16’ areas. The other type of mineralization found on the property in the ‘FP61’ area was previously described in Section 3.3 above. 3.4.1 The Shaft Area The mineralization in this area consists of quartz veins containing sulphides and variable amounts of gold that have been intermittently traced by limited recent surface trenching over an approximately 450 metre strike length. The veins in this area are contained in mafic volcanic and quartz porphyry hosts that are sheared, silicified and carbonatized. The old shaft area has been partially trenched and stripped by the current property vendors to reveal a mineralized zone at the contact between altered volcanic rocks and porphyry. This zone is characterized by a discrete quartz vein at the contact and similar veinlets stringers and possible weathered sulphides in the adjacent porphyry. Anomalous to highly anomalous gold values have been reported by different sources in the veins and also in the porphyry. This area lies on a prominent structural feature, a splay or offshoot of the Ruby Island Fault which is part of the same system that hosts the ‘WG16’ prospect on the current Property (see below) as well as the Neepawa Island and Burnthut Island prospects located to the west. 3.4.2 The ‘WG16’ Area This area is located at the contact zone between the Neepawa Group volcanics to the north and the Minnitaki Group sediments to the south. The contact zone is carbonate (ankerite)-silica altered shear zone with quartz-carbonate veins and stringers, approximately 5 metres thick, with 3-5% pyrite and trace molybdenite mineralization (Janzen, 1992). The contact zone has a minimum strike length of 1100 metres that has been tested by outcrop sampling, surface trenching, geophysical surveys and 9 shallow diamond drill holes. On the basis of widespread sampling the distribution of gold mineralization within this contact zone is highly variable ranging from <5 ppb to 1.5 g Au/t across the whole approximately 5 metre section. The best drill sample was a 1.0 metre core length sample assaying 2.03 g Au/t. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-1 4.0 EXPLORATION 4.1. Nature and Extent of Work Exploration work on the Drayton Gold Property includes early work in the 1940’s and 1950’s, or perhaps earlier, in the three known showing areas, for which there are no known detailed records. In the latter half of the 20th century, the ‘FP61’, ‘WG16’ and Shaft Areas have all been tested to some degree by the localized use of modern techniques including geology, geophysics, trenching, and surface sampling, while diamond drilling has been done at ‘FP61’ and ‘WG16’. The current property was obtained in 1998, primarily to explore the long forgotten Shaft Area which has not been systematically explored by modern methods. The current property vendors have conducted some basic geophysical surveys and trenching in the Shaft Area and other interested parties including the Optionor and MPH have examined the property and collected grab samples. The exploration done to date outside of the ‘WG16’ and the ‘FP61’ areas is rudimentary in nature and is mostly limited to prospecting and trenching. A large part of the property, to the knowledge of MPH, has never been tested by modern systematic integrated exploration methods. 4.2. Geological Mapping and Geophysical Surveys: The Property is covered by excellent quality 1:31,680 scale (1” to ½ mile) geological mapping (ODM Map 2243) as well as ODM-GSC aeromagnetic coverage at 1:50,000 and 1:250,000 scales. 4.2.1 The Shaft Area Although there is a significant amount of outcrop and bedrock opened up by the 1998-99 trenches there is no detailed geological map of this area. The current property vendors installed a flagged baseline, 1800 metres in length, on a bearing of 060 degrees running through the old shaft location. Cross lines at 100 metre intervals from 200 metres west to 400 metres east of the shaft were tested by magnetic and VLF electromagnetic surveys. The VLF-EM survey produced an anomalous conductive response roughly coincident with the mineralized zone that was traceable the length of the survey. No more sophisticated surveys such as horizontal loop electromagnetic (HLEM) or Induced Polarization/resistivity (IP) surveys have been done in the area. 4.2.2 The ‘WG16’ Area There is no detailed geological map of this area currently available to MPH, although it seems likely that there should have been a surface plan with geology, trench and drill hole locations prepared by Teck Exploration Ltd.during its 1992 program. The Company should try to locate this and any other potential data that might be available. In its 1992 program Teck undertook ground geophysics including magnetic, VLF-EM and IP surveys (Janzen, 1992). Thirty-five line kilometres of magnetic and VLF-EM MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-2 were completed with readings at 25 metre stations along the lines using a Scintrex MP-2 magnetometer and a Geonics EM-16 VLF unit. Time domain dipole-dipole IP surveying (n=1 to 4), using a Phoenix IP V-4 Turbo receiver and a Phoenix IP T-1 TX transmitter, has been completed on selected lines along a 2 kilometre strike length of the NeepawaMinnitaki Groups contact, proceeding eastward from the ‘WG16’ showing. The only documentation of this work available to MPH is a 1:5,000 scale plan showing the IP interpretation. The current vendors have not conducted any work in this area. 4.2.3 The ‘FP61’ Area Detailed mapping of a very small area adjacent to the showing was conducted by Rio Tinto in 1961 (scale 1”=50’) and subsequently by Norlode Resources in 1988 (scale 1”=20’). These maps are both available to MPH. Geophysical surveys of unknown extent were reportedly carried out by Noranda (EM, 1957-58), Rio Tinto (IP, 1961) and Norlode (VLF-EM, 1988). No information about any of these surveys is currently available to MPH. The current vendors have prospected around the FP61 Island taking 3 grab samples containing moderate copper (0.21 to 1.5%) and low gold (38 to 168 ppb) values. 4.3. Drilling and Trenching Trenching/stripping activities have been undertaken in the Shaft Area by the Property vendors in 1998 and 1999. Both drilling and trenching has been done at various times in the other two areas, the ‘WG16’ and ‘FP61’ Areas. 4.3.1 The Shaft Area Some old trenches and a diamond drill hole location were noted in this area by F. J. Johnston while geological mapping in 1967-68 (Johnston, 1972). No information about this work is currently available. The vendors, I. J. Riives and A. Glatz, used a backhoe on August 28, 1998 to open up an approximately 150 by 20 metre area adjacent to the old shaft. A portable power fire pump was used to wash off the exposure prior to sampling. A total of 23 rock samples including 11 grab samples, 6 approximately 2 metre chip samples, and 6 grab muck samples from the shaft dump were collected at this time (Table 2). The grab sample analyses reportedly ranged from 0.21 to 56.81g Au/t, the chip samples from 0.19 to 14.30g Au/t and the muck samples from 0.14 to 318.17g Au/t. Due to the absence of analytical certificates this information cannot be verified by MPH. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-3 TABLE 2: Drayton Gold Project-Vendor Samples, Shaft Area Trenches General Location Trench # 1 (1999) Trench # 2 (1999) Shaft Location Trench # 3 (1999) Shaft Location 1998 Trench Trench # 4 (1999) Trench # 5 (1999) Trench # 6 (1999) MPH Consulting Limited Number 21084 21085 72812 27427 27439 27433 21059a 21059b 21060 27425 27426a 27426b 27428a 27428b 27429 27430 27431 27432 27434 5412 5413 5414 18831 18832 18836 18837 18838 18839 18840 18845 18846 18847 18848 18849 18850 18851 18852 18853 18854 18855 18856 18862 Sample Type Grab Grab Grab (VG) Channel Channel Grab Grab Check Chip Chip Chip Check Chip Check Channel Chip Chip Chip Grab Grab Muck Grab Muck Muck Grab Grab Grab Grab Grab Grab Grab Chip Chip Grab Chip Grab Chip Chip Chip Muck Muck Muck 21061 21062 27440 27441 27442 Chip Chip Chip Chip Chip Assay/Analysis Length (m) g Au/t oz Au/T 1.47 0.043 12.96 0.38 11.18 0.33 5.0 0.99 0.029 1.5 0.13 0.004 tr tr 11.69 0.34 11.45 0.33 1.0 2.54 0.074 2.3 1.06 0.031 6.38 0.19 0.6 0.6 6.17 0.18 1.0 9.94 0.29 12.17 0.36 1.0 2.5 0.11 0.003 2.5 0.33 0.010 2.3 0.61 0.018 2.5 0.18 0.005 0.21 0.006 4.90 0.14 85.17 2.48 13.89 0.41 1.06 0.031 0.14 0.004 1.37 0.040 0.52 0.015 56.81 1.66 0.72 0.021 0.23 0.007 5.86 0.17 1.50 0.044 2.0 0.93 0.027 2.0 14.30 0.42 0.21 0.006 2.0 0.19 0.006 0.21 0.006 2.1 1.30 0.038 6.31 0.18 2.0 2.0 2.02 0.059 10.94 0.32 13.51 0.39 318.17 9.28 No Bedrock No Bedrock 1.0 tr tr 1.0 0.279 0.01 1.0 tr tr 1.0 0.257 0.01 1.0 tr tr Certificate Available yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no no no no no no no no no no no no no no no no no no no yes yes yes yes yes DRAYTON GOLD PROPERTY, ONTARIO 4-4 Using OPAP funding assistance, the vendors dug 6 additional backhoe trenches in the area from September 30 to October 6, 1999, including 4 (Trenches # 1 to 4) along strike from the shaft area, and 2 (Trenches # 5 and 6) on a VLF conductor approximately 150 metres to the south. All of the vendors samples analytical results are presented in Table 2 above. Analytical certificates for the 1999 work are available and have been examined by MPH. Highlights of the 1999 trenching program are as follows: • Trench #1: Located about 250 metres east of the shaft this trench uncovered a strike area 83 metres long and up to 9 metres wide. The trenching revealed an area of altered and sheared volcanic rocks with a few narrow conformable and cross cutting quartz carbonate veins. Visible gold was seen locally in these veins. Five samples including three grab and two sawn channel samples were taken. The grab samples, including one with visible gold, ranged from 1.47 g Au/t to 12.96 g Au/t while the best channel sample assayed 0.99 g Au/t. • Trench #2: A cross cutting trench put in between Trench #1 and the shaft encountered a 15 metre wide alteration zone that could not be sampled due to water inflow. A single sample of unaltered rock from the north end of the trench contained only trace amounts of gold. • Trench #3: This trench extends the western part of the original 1998 trench further to the west and north. Ten more samples were collected including two grab samples, 7 chip samples and 1 channel sample. The grab samples assayed 0.21 g Au/t and 11.69 g Au/t, the chip samples ranged from 0.18 to 12.17 g/t, and the channel sample assayed 0.11 g/t over 2.5 metres. • Trenches #4 and 5: Both trenches encountered deep overburden and did not reach bedrock. • Trench # 6: This trench was located on another structure 160 metres south of the shaft. Sheared silicified and pyritized volcaniclastic rocks in this areas were tested by 5 one metre chip samples with gold values ranging from trace to 0.28 g Au/t. A number of samples have been subsequently collected in this area by John Wakeford of Optionor (5 grab samples) and the undersigned (1grab and 1 chip sample). These samples all contained anomalous gold values ranging from 0.15 to 9.34 g Au/t. See section 4.6 below for more details. No modern drilling has been done in this area. 4.3.2 The ‘WG16’ Area: R. J. McCombe of Sioux Lookout reportedly conducted trenching and limited x-ray drilling in this area in 1948 (Johnston, 1972). No details of this work are currently available. Teck Exploration reportedly dug 6 trenches and drilled 9 BQ diamond drill holes totaling 1029 metres in 1992 (Janzen, 1992). A report summarizing the drilling and trenching program, with detailed maps of the trenches, has been acquired by the Company, although no drill logs or analytical certificates were available to MPH. A copy of an MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-5 earlier Teck trench map entitled ‘Main Trench’ dated August 1991 was also provided by the Company indicating that additional work was done by Teck for which MPH currently has no additional details. Teck concluded that the drilling, trenching and other work conducted in 1991 and 1992 effectively tested the volcanic-sedimentary contact target area and indicated that the gold mineralization there is sub-economic. Without having detailed information on this work program, MPH is unable to comment on the validity of this conclusion. This area was not visited by MPH due to high wind conditions on Lake Minnitaki. 4.3.3 The ‘FP61’ Area Two diamond drilling and trenching programs have been completed in this area, the first by Rio Tinto in 1961 and the second by Norlode Resources in 1988. Rio Tinto drilled 5 holes totaling 1,659 feet (506m), inside an approximately 300 by 300 foot (90 x 90m) area, on or near Island FP61. A surface plan showing simplified geology, two trenches and the drill hole surface projections is available as are the drill hole logs albeit without analytical certificates. These holes were drilled in 5 different directions including; north, southwesterly (2), northwest and northeast. Only two of the holes, ‘scissor-holes’ drilled in opposite directions beneath the showing, encountered significant mineralization including a 5 foot (1.52m) core length that assayed 0.22 oz Au/T (7.54 g Au/t) and 0.25% Cu and a 44.5 foot (14 m) core length averaging 0.04 oz Au/T (1.37 g Au/t) and 0.57% Cu both from DDH M-1. The other hole, DDH M-2 intersected 37.5 feet (11.4m) averaging 0.01 oz Au/T (0.34 g Au/t) and 0.28% Cu. Norlode Resources drilled 7 additional holes inside the same small area in 1988. The complete drilling database including analytical certificates is available for this program. This time the holes were oriented in a different pattern including; vertical, northwest (2), southeast (2), west and north-northeast. Three surface trenches but no sample sites are shown on the surface plan. Only one hole, DDH 88-3, collared about 50 feet (15m) south of the showing contained significant mineralization, a 70 foot (21.34m) core length averaging 0.018 oz Au/T (0.62 g Au/t) and 0.47% Cu. MPH visited the prospect in connection with this report and collected a relatively well mineralized grab sample from the trench beside Minnitaki Lake (Trench #1 from the Norlode surface plan). This sample assayed 1.18% cu and 0.55 g Au/t. 4.4. Logging/Sampling Method and Approach The Shaft Area trench exposures and outcrops have been examined and sampled by Property vendors, John Wakeford of the Optionor; and finally by the undersigned in connection with this report. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-6 As indicated above there are key parts of the databases missing from the previous drilling and trenching programs in the “WG16’ and ‘FP61’ Areas. In the absence of such items as detailed logs, analytical certificates etc. MPH is unable to comment on logging/sampling method and approach for these programs. The Shaft Area trenches were completed by the property vendors primarily under the Ontario Prospector Assistance Program (“OPAP”). While these have been extensively sampled they have not been geologically mapped in detail or systematically channel sampled. Mostly grab, several chip and a few channel samples have been collected from these trenches by the vendors and a few others. The vendors’ samples have been previously been tabulated in section 4.3.1 above. All of the 1999 program samples were submitted to Swastika Laboratories Ltd. in Swastika, Ontario for gold and other analyses. John Wakeford of the Optionor collected 5 more grab samples from the area in June 2002. These submitted to the ALS Chemex laboratory in Vancouver, British Columbia for gold analysis. Finally the undersigned collected 2 grab samples and 1 chip sample (across 5 metres) on September 13 and 14, 2002 in connection with the present report. The sample sites were located on property maps and by GPS. See Figure 5 above and Figure 6 for MPH sample locations. The sample records are kept in duplicate in a field note book and a numbered sample book. Two numbered tags were then placed inside the sample bags. These were submitted to the ALS Chemex Laboratory in Mississauga, Ontario for gold and other analyses. Two separate crushed material split analyses were requested for the chip sample. 4.5. Sample Preparation, Analyses and Security Sample preparation at the various laboratories was done according to standard industry practice by crushing, splitting and pulverizing the core or rock samples to obtain pulps for assay and/or geochemical analyses. Gold determinations were made for the most part using one assay ton portion fire assays with atomic absorption finish (“FA+AA”). A rigorous series of in-laboratory duplicate, reference and blank sample analyses were carried out. One MPH sample was tested for 34 elements by aqua-regia acid digestion and conventional ICP-AES analysis. MPH is unable to comment on sample security other than for those samples collected by the undersigned. The 3 samples were taken by MPH from outcrop, and were continuously in the possession of the undersigned from collection in the field until delivery to the laboratory. MPH was given full and unrestricted access to the property, and project database. 4.6. Data Verification The gold showings on the Drayton Gold Property have been sampled by three unrelated parties including the prospectors, the Optionor and MPH Consulting. In all instances there is general agreement between the sample sets with individual samples being obtained by all the parties that are anomalous to highly anomalous in gold content. The results of the sampling exercises by the the Optionor and MPH are presented in Table 3 while the vendors’ samples were previously MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-7 Figure 6: Shaft Area Trench, Showing MPH Sample Locations. (Photo by J. Wakeford) Shaft Volcanics G8419 Porphyry G8418 Drayton Gold Property Rio Fortuna Exploration Corp. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-8 presented in Table 2. Analytical certificates are currently available for all but the vendors’ 1998 samples. Table 3: Verification Samples by the Optionor and MPH Consulting General Location John Wakeford, Optionor Shaft Area-Trench #1 Shaft Area-1998 Trench Shaft Area-1998 Trench Shaft Area-1998 Trench Shaft Area-1998 Trench Howard Coates, MPH Shaft Area-1998 Trench Shaft Area-1998 Trench Shaft Area-1998 Trench ‘FP61’ Area Number Sample Type Length (m) Assay Grams Au/t Analysis Cu % 499488 499489 499490 499491 499492 Grab Muck Grab Grab Grab - 4.16 7.46 8.30 9.34 1.04 - G8418A G8418B G8419 G8423 Chip Chip Grab Grab 5.0 5.0 - 0.15 0.21 5.84 0.55 1.18 The single sample (G-8418) tested by MPH for 34 elements by aqua-regia acid digestion and conventional ICP-AES analysis returned no significant values for silver or toxic elements such as As or Hg. MPH has verified the existence of most aspects of the recent and early programs at the Shaft Area and the ‘FP61’ Area. In the Shaft Area the old shaft collar, muck dump, parts of the flagged grid, and the 1998 and 1999 trenches were inspected. In the ‘FP61’ Area the old trenches and several old drill collar locations were observed. As noted above the ‘WG16’ Area was not visited. 4.7. Underground Workings The old workings in the Shaft Area are currently flooded and inaccessible. There are no known records of the historic work available. No reports of gold resources or reserves have been found by MPH. Exploration Potential 4.8. The systematic exploration work completed to date on the Drayton Gold Property has been confined to the ‘WG16’ Area and to the immediate area of the ‘FP61’ Showing. The Shaft Area gold bearing zones, some substantial distance away from the above areas, have been found to contain significant gold values in quartz veins and also in altered host rocks. All of the gold showings also occur in association with extensive alteration phenomena that may be associated with substantial gold deposits. The target area of immediate interest is the Shaft Area where no modern systematic exploration has been conducted, while the information viewed to date by MPH from the ‘WG16’ area does not eliminate it as high potential target area. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 4-9 To date there are no known records of modern multidisciplinary exploration work in the Shaft Area. Even the showings unearthed by the vendors could be further opened up and more systematically sampled by more rigorous channel rather than chip and grab sampling. It is therefore apparent that the Drayton Gold Project has significant untested exploration potential that may be readily evaluated by as yet untried modern methods. The favorable location of the property vis a vis accessibility and exploration expertise should allow such work to be completed inexpensively by Canadian standards. MPH ranks this as a high priority target. The ‘WG16’ Area is intriguing because of its structural setting and widespread gold mineralization. However the full extent of previous modern exploration does not appear to be known to the Company at present. The Company should attempt to acquire the full Teck database and reassess the target area in the light of more complete knowledge. The ‘FP61’ Area target has not been tested to any degree away from the showing area. The mineralization indicated so far is low grade so only a large-tonnage open-pit situation would be of potential commercial interest. Even if this situation were present, the physiographic location in a major drainage system would likely preclude development. MPH ranks this as a low priority target. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 5-1 5.0 CONCLUSIONS AND RECOMMENDATIONS MPH concludes that the Drayton Gold Property of the Company represents a good opportunity to explore for gold in an area containing several known showings. At least one of the three main showings and the intervening areas between them have not been explored by state of the art methods. It is concluded that the application of such methods is fully warranted and justified. A two phase program for exploration of the property by means of geological mapping, prospecting, geophysics, trenching and drilling is recommended. The first phase is designed to establish specific targets for drilling and mechanized trenching with an allowance for a limited amount of trenching, while the second is a provisional phase to adequately test such targets by diamond drilling and/or trenching. The initial phase 1 work will be a compilation of previous exploration completed on or near the claim group. This will include a detailed compilation of previous work throughout the property, especially that done by Teck Exploration in the early 1990’s in the ‘WG16’ Area. A grid will be established for control and to tie in the trench areas at the Shaft Area. The grid will cover the northeastern half of the claim group and should tie into the Teck grid if possible and practical. Magnetics will be completed on the entire new grid and IP will be completed on selected lines in the Shaft Area to determine if IP or resistivity features associated with the gold mineralization can be detected. The claim group geology will be mapped utilizing the grid. The trenches and showings will be mapped and sampled systematically where needed. It is anticipated that a minor amount of trenching and sampling will need to be completed to firm up drill targets. Work program for first phase of target definition as follows: • Grid covering the Shaft Area and its southwest extension at 100m line spacing, total 30 km with baselines. • Magnetics on all gridlines • IP over showing areas, 10 x 1 km lines • Geological mapping of existing trenching and grid mapping. • Prospecting in areas between showings • Sampling of existing showing areas, estimated 150 samples • Research and compilation of the property with emphasis on the WG16 area • Reports and recommendations for next Phase including drill targets. • Contingency will likely be allocated to new trenching and stripping and/or saw channel sampling of stripped areas DRAYTON GOLD PROJECT Property Grids Magnetics IP Power Strip Drilling MPH Consulting Limited Total cost $9000 4500 8000 5000 0 DRAYTON GOLD PROPERTY, ONTARIO 5-2 Field equipment Compilation Sampling assays Field tech Field geologist Senior Geologist Accommodation Transport and Comm Drafting Demob Contingencies 5400 8000 5250 3300 6600 4000 5400 4050 5000 4000 6500 Subtotal Management 84000 8400 TOTALS Say 92400 $92,000 The second phase is conditional upon a successful first phase. However it is considered reasonable to make provision for some ongoing work such as additional IP, trenching and a limited diamond drilling program to test the known mineralized areas and possible geophysical targets. An unallocated amount of approximately $300,000 is recommended for this purpose. The grand total required to adequately complete the two phase exploration program on the Drayton Gold Property is approximately $392,000. Respectfully Submitted, MPH CONSULTING LIMITED (Signed H.J. Coates) Howard J. Coates, M.Sc., P. Geo. Vice President, MPH Consulting Limited October 8, 2002 MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 5-3 REFERENCES Andrews, A. J., Hugon, H., Durocher, M., Corfu, F and Lavigne, M.J., 1986. The Anatomy of a Gold-Bearing Greenstone Belt: Red Lake, Northwestern Ontario, Canada, in Macdonald, A. J. ed., Proceedings of Gold ’86, an International Symposium on the Geology of Gold: Toronto, 1986, pp. 3-22. Canadian Mines Handbook- 1988-89. P. 87. Card, K. D., and Ciesielski, A., 1986. DNAG No. 1. Subdivisions of the Superior Province of the Canadian Shield; Geoscience Canada, Vol. 13, pp. 5-13. Chorlton, L. B., 1987. Stratigraphy, Structural Development and Auriferous Mineralization in the Cross Echo-Troutfly Lake Area, Northern Wabigoon Greenstone Belt, Northwestern Ontario: pp. 72-83 in Summary of Field Work and Other Activities 1987, Ontario Geological Survey, Miscellaneous Paper 137. Dowhaluk, H., 1988. Drayton Township (Northeast) Project for Norlode Resources Inc. Unpublished company report. Ferguson, S. A., Groen, H. A., and Haynes, R., 1971. Gold Deposits of Ontario: Part I, Districts of Algoma, Cochrane, Kenora, Rainy River and Thunder Bay; Ontario Division of Mines, MRC13, 315p. (reprinted 1982). Franklin, J. M., and Schnieders, B. R., 1990. Mineral Resources of the Western Superior Province, Ontario: pp. 1-6 in Geological Survey of Canada, Open File 2164. Hood, W. C., 1990. Report on Alcona-Split Lake Property for Cream Silver Mines Ltd. Unpublished company report. Hood, W. C., 1991. Report on Geological Mapping and Drilling at the Alcona-Split Lake Property, Sioux Lookout Area, Northwestern Ontario for Valerie Gold Resources Ltd. Unpublished company report. Janzen, J., 1992. Report on 1992 Exploration Program, Minnitaki Property, Teck Exploration Ltd. Report-0131. Unpublished company report. Johnston, F. J., 1972. Geology of the Vermillion-Abram Lakes Area, District of Kenora, Ontario Division of Mines, Geological Report 101. Melling, D. R., Watkinson, D. H., Poulson, K. H., Chorlton, L. B., and Hunter, A. D., 1986. The Cameron Lake Gold Deposit, Northwestern Ontario, Canada: Geological Setting, Structure and Alteration, in Macdonald, A. J. ed., Proceedings of Gold ’86, an International Symposium on the Geology of Gold: Toronto, 1986, pp. 3-22. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 5-4 ODM, 1937. Superior Junction-Sturgeon Lake Area. Vol.ILVI, Part VI, 1937. Forty-sixth Annual Report ODM, Speed, A. A., 1980. Wright-Hargreaves Mines Limited (McCombe Group) Occurrence. Unpublished ODM site visit report. Riives, I. J., 2000. OPAP 99-396 Final report, Project #1, Drayton Twp Gold Prospect. Unpublished company report. Turner, C. C., and Walker, R. G., 1973. Sedimentology, Stratigraphy, and Crustal Evolution of the Archean Greenstone Belt near Sioux Lookout, Ontario. Can. J. Earth Sci., Vol. 10, pp 817845. Wakeford, J., 2002. Drayton Gold Property, Zarn Lake Area, Patricia Mining Division, Ontario for 1541386 Ontario Inc. Unpublished company report. MPH Consulting Limited DRAYTON GOLD PROPERTY, ONTARIO 5-5 CERTIFICATE OF QUALIFICATION I, H. J. Coates, of Mississauga, Ontario do hereby certify that: 1. I am a consulting geologist with an office at 615–133 Richmond Street West, Toronto, Ontario, Canada. 2. I am a graduate of Memorial University of Newfoundland in St. John’s, Newfoundland and hold a degree of Master of Science in Geology. 3. I am a member in good standing of the Association of Professional Engineers and Geoscientists of the Province of Newfoundland, as a Professional Geoscientist, Membership No. 03766. 4. I have practiced my profession continuously for a period of 32 years including substantial work on gold projects in the Superior Province, other parts of Canada and several overseas countries. 5. I have personally undertaken and/or assisted in the preparation of many independent technical reports for other clients in the past. 6. I have read National Instrument 43-101, Form 43-101F1 and Companion Policy 43-101CP and this report has been prepared in compliance with same. 7. As a result of my education, professional experience and professional qualifications, I am a Qualified Person as defined in NI 43-101 8. I have no present or anticipated interest, either directly or indirectly in the Drayton Gold Project or securities of 1179785 Ontario Ltd., Rio Fortuna Exploration Corp., or any related companies. 9. The statements made in this report are based on data made available to MPH Consulting Limited from Rio Fortuna Exploration Corp.’s files. The information is to the best of my knowledge correct, complete and not misleading. A site visit was made by the undersigned on September 13 and 14, 2002. 10. I consent to the use of this report dated October 8, 2002 for regulatory filing purposes of the company. Mississauga, Ontario October 8, 2002 MPH Consulting Limited (Signed H.J. Coates) Howard J. Coates, M.Sc., P. Geo. DRAYTON GOLD PROPERTY, ONTARIO