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:

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:

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.