Property Purchase Agreement
On April 26, 2005, we entered into a mineral purchase and sale agreement with
Margaret Loney of Sudbury, Ontario whereby she sold to us a 100% undivided right
title and interest in one mineral claim located in the Scadding Township,
Sudbury Mining Division, Ontario, Canada. We acquired this interest in the
Scadding West claim by paying Margaret Loney $7,500.
Description, Location and Access
The Scadding West claim is located approximately 33 kilometers northeast of the
city of Sudbury. The property is centered at approximately 46º39' north
latitude and 80º39' west longitude. The property is accessed by travelling west
from the Kukagami Lake road along several old trails and logging roads.
Alternatively, it can be accessed via the Wanapitei River which passes near the
southwest corner of the mining claim.
The region of the Scadding West property is considered to have a humid, high
cool temperate ecoclimate with an average mean annual temperature of 3.5º
Celsius. Average daily temperature range in the summer is from 11.8º to 23.1º
Celsius, while in winter, the average range is from -16.8º to -6.9º Celsius.
Average annual precipitation is 872 millimeters and snow cover is deepest in
January and February, with an average depth of 0.40 meters.
The land is dominated by a cover of mixed wood forest that includes sugar maple,
yellow birch, poplar, eastern hemlock, eastern white pine and red pine. Other
species found in wet regions include the red maple, black ash, white spruce,
tamarack and eastern white cedar. The area is well-glaciated, characterized by
ridged to hummocky rock outcrops that may be covered in whole or part by glacial
moraines and till.
Title to the Claim
The Scadding West property consists of one mineral claim comprising 192
hectares. A "mineral claim" refers to a specific section of land over which a
title holder owns rights to explore the ground and subsurface, and extract
minerals. The claim is registered with the Ontario government under claim
number S-998541. The claim expires on January 27, 2006. In order to extend
this expiry date on an annual basis, we must incur at least $2,400 in
exploration work on the claim prior to the expiry date. Otherwise, we will lose
our ownership of the claim comprising the Scadding West property.
Mineralization
Geologically, the most prominent feature in the area of the Scadding West claim
is an igneous complex of rocks that are best known for their content of gold,
nickel, copper, platinum and palladium. Igneous rocks are formed from molten
lava which has hardened on or below the surface of the earth. Minerals
contained in these rocks are dyke-related, that is, they are contained in a
tabular body of igneous rock that cuts across the structure of adjacent rocks,
and are hosted by quartz diorite, norite and gabbro rocks. Quartz diorite is a
medium-gray-colored, coarse-grained, igneous rock, often with a salt-and-pepper
appearance. Norite is a coarsely crystalline igneous rock containing the
mineral labradorite as the main component. Gabbro is a dark, coarse-textured,
heavy rock composed of calcium feldspar and augite with a small amount of
quartz.
Exploration History, infrastructure and Condition of the Property
No known exploration has been conducted on the Scadding West claim. As such,
the Scadding West claim does not contain any mineral workings. As well, there
is no equipment, power source or other infrastructure facilities located on the
property. We will use portable power generators if we require a power source
for exploration of claim. Proposed exploration will focus on a northwest
trending fault that cuts through the northern part of the claim.
Geology Report
We retained Dr. Scott Jobin-Bevans, a professional geoscientist, to complete an
evaluation of the Scadding West claim and to prepare a geology report on the
claim.
Based on his review, Dr. Jobin-Bevans concludes that the Scadding West claim
warrants further exploration due to its potential to contain economic quantities
of gold, copper, nickel, platinum and palladium.
Dr. Jobin-Bevans recommends an initial exploration program consisting of two
phases. The first phase would consist of a review of existing data concerning
the property, geological mapping and sampling. Geological mapping involves
plotting previous exploration data relating to a property on a map in order to
determine the best property locations to conduct subsequent exploration work.
Sampling involves gathering rock and soil samples from property areas with the
most potential to host economically significant mineralization. All samples
gathered are sent to a laboratory where they are crushed and analysed for metal
content.
The first phase is estimated to cost $5,000 and would consist of the following:
Geological Review $ 500
Geological Mapping and Sampling $ 2,500
Report writing/consulting $ 1,500
Operating Supplies $ 500
Total $ 5,000
The second phase would consist of geophysical surveying, as well as follow-up
mapping and sampling.
The second phase would cost approximately $10,000 and would consist of the
following:
Geological survey $ 6,250
Follow-up Mapping and Sampling $ 1,500
Report writing/consulting $ 1,500
Operating Supplies $ 750
Total $ 10,000
Compliance with Government Regulation
We will be required to conduct all mineral exploration activities in accordance
with the Mining Act of Ontario. While we do not require any authorization to
proceed with the initial two phases of
the recommended exploration program, we will be required to obtain work
permits from the Ontario Ministry of Northern Development and Mines for any
subsequent drilling program and any other exploration work that results in a
physical disturbance to the land if the program calls for the disturbance of
more than 10,000 square meters of the property surface, or such areas that would
total that amount when combined. A work permit is also required for the
erection of structures on the property. There is no charge to obtain a work
permit under the Mining Act.
When our exploration program proceeds to the drilling stage, we may be required
to post small bonds if the rights of a private land owner may be affected. We
anticipate that the cost of a bond for the phase three drilling program would
not exceed $5,000.
We may also be required to file statements of work with the Ministry of Northern
Development and Mines. Such statements would be filed following the completion
of the exploration and would cost approximately $500. The filing of statements
of work would not have any impact on the timing or completion of our exploration
program. We will also be required to undertake remediation work on any
exploration that results in physical disturbance to the land. The cost of
remediation work will vary according to the degree of physical disturbance.
We will not incur any regulatory compliance costs in the first two phases of
proposed exploration. The amount of these costs for subsequent exploration
phases is not known at this time as we do not know the extent of the exploration
program that will be undertaken beyond completion of the recommended exploration
programs. Because there is presently no information on the size, tenor, or
quality of any minerals or reserve at this time, it is impossible to assess the
impact of any capital expenditures on earnings or our competitive position.