“IOCG-type mineralization is closely related to deep-seated igneous activity and deposits can be found in a wide variety of rock types. Host rocks must be structurally and chemically prepared to create a well-developed fracture system, and a suitable environment permitting access of hydrothermal fluids sufficiently long to form an economic deposit. Favorable host rock types will be competent (brittle), which, under faulting stresses, are more likely to form through-going upward-branching open fractures. Less competent rocks under similar stresses tend to form stockworks. The introduction of silica, as host rock replacement and as quartz gangue in vein and breccia fillings, is an important ground preparation event enhancing the host rock's ability to fracture and maintain open fissures. Disseminated-style mineralization is more likely in rocks that are naturally porous or have been made porous by chemical means such as alteration and removal of primary minerals.

Some general observations can be made concerning IOCG-type mineralization:

·         Polymetallic IOCG-type mineralization tends to occur in Proterozoic rocks
(between 1.1 and 1.8 billion years old);

·         Deposits are generally located in cratonic or continental margin environments associated with extensional tectonics and major structural zones;

·         Mineralization is generally dominated by the iron oxides magnetite and/or hematite.   Calcium carbonate is common.   The IOCG geochemical signature can   include   copper,   gold,   silver,   uranium,   cerium,   lanthanum,   cobalt, phosphorus, fluorine, and barium; and

·         Alteration type generally varies upward from sodic at depth, to potassic, then to sericitic alteration and silicification at very shallow levels.

The following statements are consistent with the above observations:

·         Dyke formation on the Magnum vein is thought to have been episodic and the magmatic source was active for, or reactivated over, a period of time;

·         In   Nevada,   deep-seated   hydrothermal   systems   responsible for quartz-vein deposits such as the Midas mine (a low-sulfidation epithermal gold-silver deposit reportedly containing over 2 million ounces of gold) tend to contain selenium. Values greater than 10 ppm selenium are significant.  Sampling on the Sox claim returned selenium values ranging from 1 ppm up to 17 ppm.   Gold (<0.001 to 0.421 g/t) and silver (0.05 to 32.5 g/t) values associated with the significant selenium values were the highest returned in the 2005 rock sampling.  These results   suggest   that   selenium,   gold,   and   silver   are   linked   hydrothermal components   and,   as   results   over a   substantial   distance   are   linked,   the hydrothermal system is extensive.

·         Assay values for the rare earth elements cerium and lanthanum were only slightly elevated on the project claims, and uranium values were not significant;

·         Project area Middle Proterozoic age rocks (between 1.1 - 1.6 Ga old) and are shallow- to deep-deposited marine sediments formed along the cratonic margin;

·         Rocks of the project area have been subjected to extensional tectonics forming the northwest-trending Muskwa Anticlinorium;

·         Interpreted geological cross-sections of the project area show a regional-scale steeply dipping reactivated fault and numerous, generally parallel, thrust faults;

·         Laramide Orogony thrusting in the Rocky Mountains, although very much younger than the rock assemblage which hosts mineralization within the project area, is interpreted to follow older zones of structural weakness, suggesting that the area has been tectonically active over a long period of time, and that a possible plumbing system for the transport of hydrothermal fluids may exist; and

·         Cobalt mineralization, a pathfinder element in IOCG-type deposits, has been reported on the Key property, the Magnum vein, and the John [Sox property] and Meindl claims [Talus property]. Rock sampling in 2005 returned anomalous cobalt values ranging from 2.7 ppm to 2,200 ppm from the Sox (John) and Talus (Meindl) claims.

IOCG-type deposits generally show large positive gravity and magnetic anomalies due to the presence of iron oxides. Radiometric anomalies (results from an airborne gamma-ray spectrometer survey) are common due to uranium and/or potassium content in polymetallic deposits.

Claims comprising the project are intermediate-level mineral prospects. What work has been done indicates copper mineralization occurs in quartz-carbonate veins closely associated with mafic dikes both spatially and in time. IOCG-type signature elements, such as copper, gold, silver, phosphorus, and cobalt, are present in the hydrothermal system or systems affecting the project area.

The project area is considered to have good potential to host an economic vein-type copper deposit and possibly an economic IOCG-type deposit because:

·         the project area exhibits long-term possibly episodic tectonic activity;

·         rock sampling  indicates that copper,  gold,  silver,  cobalt,  and  rare earth elements were present in the area's hydrothermal mineralizing system;

·         Churchill  Copper's past producing  mine,  and the surrounding developed prospects such as the Key and Lucky Lady, demonstrate that the mineralizing system in the area carries economic grades and quantities of copper; one of the signature elements in a IOCG-type deposit;

·         The project area comprises a suite of Proterozoic age rocks similar in age to the host rocks of the Olympic Dam type deposit; and

·         Northwest trending faults that could be the plumbing source(s) of mineralizing fluids are interpreted to cut the project area.”