GEOLOGICAL, GEOPHYSICAL REPORT

\ ON THE

KALUM NO. 1, KEN NO. 1 AND KEN NO. 2 CLAIMS

RECORD NOS. - 3553(9); 31042; 31043

SKEENA MINING DIVISION

NTS 103 1/15 E,W

Lat: 54O 47" Long: 1280 WW W-6

Owner: FRED LOUTITT, CLARENCE PRATT

Opera tor: CANNON EXPLORATION LTD

Report By: EL LAMBERT BOX= MSC.

and

J.C. STEPHEN J.C. STEPHEN EXPLORATIONS LTD

Work Done: August 26 - Oct 31, 1986

Report Submrnit ted: November 17, 1986

-- I FILMED I

D E C 1 9 1986

TABLE OF CONTENTS

I NT ROD U C T I0 N CLAIMS, LOCATION, ACCESSIBILITY

HISTORY AND PREVIOUS WORK

SECTION I GEOLOGY

Regional Geology

Local Geology S t r u c t u r e IMineralization and Assay Resul t 5

Conclusions and Recommendat ions

Rock Sample Descr ipt ions

Refe rences

SECTION I1 GEOPHYSICS

Geophysics

Magne tomete r Survey

VLF-EM Survey

VLF-EM Survey

I.P. Survey

Conclusions and Recommendat ions

Page 1 3

5

6 7

8

11

14

18

20

21

22 23

24

26

29

30

34

APPENDIX I S t a t e m e n t of Qual i f icat ions APPENDIX I1 Sample Records

LIST OF ILLUSTRATIONS

Maps in Pockets of Report

Title

Geology; 1:2,000 Shorel ine Geology; 1:500

Magnet ic Contours; 1:2,000

VLF-EM Profi les , Cut le r ; 1:2,000

VLF-EM Contours , Cut le r ; 1:2,000

VLF-EM Profi les , S e a t t l e 1:2,000

IP Res is t iv i ty Plan n-1; 1:2000

IP Resis t ivi ty Plan n-2; 1:2,000

It’ Chargeabi l i ty Plan n-I; 1:2,000

IP Chargeabi l i ty Plan n-2; 1:2,000

IP Pseudosect ions Lines OE-250E

IP Pseudosect ions Lines 300E-550E

IP Pseudosect ions Lines 600E-800E

Figures

1. Index m a p T e r r a c e a r e a

2. Cla im m a p Kalum Group

Map

I I1

I11

IV

V VI

VII VIII

IX X

XI

XI I

XI11

Page

2

4

r

- 1 -

INTRODUCTION

During Septernber 1 t o Septernber 29 detailed geologic mapping and sampling was

carr ied out on t h e Kalum claim, s i tuated on t h e northeast corner of Kitsumkalum

Lake, 35 kin north of Terrace. The Terrace-Stewart highway t raverses t h e claim

group and numerous rock exposures occur along t h e highway c u t as well as along t h e

lake-shore. A s tad ia survey was conducted along these exposures for mapping at a scale of 1500, while a grid was c u t at 50 m spacings for mapping a t a scale of 1:ZOOO

in t h e forested region east of t h e highway.

Kock types exposed on t h e property consist of a package of sandstones, shales,

conglomerates and t u f f s with interbedded andesit ic flows, all deformed and

metamorphosed to quartzi tes , argillites, schists, gneisses and greenstones. The beds

generally s t r ike northeasterly to easterly, dip to t h e north and show a pronounced

foliation nearly parallel to bedding.

Mineralimtion, in t h e form of inalnchi te, chalcopyrite, pyrite dnd bornite occurs

within small quar tz veins , as f rac ture fillings and along foliation planes within a number of t h e rock units. All significant mineralization, as well as several barren

quar tz veins and massive epidote zones (occurring in both t h e sedimentary and

andesite units), were sampled.

The purpose of this report is to describe in detai l t h e geology, mode of occurrence of

mineralization and assay results of t h e Kaluin property.

Concurrently with t h e geological mapping prograrn a grid of lines was c u t at 50 m e t r e

intervals south from a base line near t h e north boundary of Kalum 1.These lines were

used to assist geological mapping in this largely overburden covered area and to provide control for a magnetometer survey, a VLF-EM survey and a n IP survey which

were intended to help interpret t h e geological s t ruc ture and to outline areas favourable for mineral exploration.

The second section of this report describes tlw various geophysical survey methods and

t h e results achieved.

SCAL E : I cm = 8 7 k m

1 Cannon €xp/or ation L t d .

LOCAT/ON MAP

Kdum Property

Skeeno Mining Division

NTS: /03 1 / / 5

- 3 -

CLAIM, LOCATION, ACCESSIBILITY

The Kalum No. 1 claim is a 15 unit block located on t h e northeast corner of Kitsumkalum Lake, approximately 35 km north of Ter race on t h e Terrace-Stewart highway (Figures 1 and 2). T h e property, owned by Mr. Fred Loutit t , consists of 5

units wes t by 3 units south (of which 2x3 units extend into t h e lake; see Figure 21, and is within t h e a r e a of NTS Quadrangle 1031/15, in t h e Skeena Mining Division, B.C.

Within t h e Kalum No. 1 claim a r e two pre-existing 2 post claim, t h e KEN 1 and KEN 2, owned by Cecil C. Prat t . The Kalum No. 1 and KEN 1 and 2 claims have been optioned by Cannon Exploration Ltd. by agreement dated August 1, 1986.

CLAIM STATUS AS AT JULY 31, 1986

Claim Name Record Number Expiry Date Recorded Owner Ken No. 1 3 1042 May 4, 1988 Cecil Clarence P r a t t Ken No. 2 31043 M a y 4, 1987 Cecil Clarence Ptatt Kalum No. 1 3553 (9) Sept 21, 1987 Fred Lout i t t

(15 Units)

The Terrace-Stewart highway (now paved) passes through t h e c e n t e r of t h e Kalum No. 1 claim and is maintained year round, allowing excellent access to t h e property. Active logging east of t h e highway h a s produced a number of d i r t roads which permi t access to t h e eas te rn edge of t h e property.

Elevation of t h e claim a r e a ranges from lake level (approximately 150 m above sea level) to 600 m above sea level along t h e eas te rn boundary of t h e claim. Slopes a r e generally s t e e p and outcrops a r e numerous along t h e road and lake, becoming sparse fur ther east. Overburden consists of soil and glacial debris ranging in depth from a few cent imeters to several meters. The property is forested with both deciduous and coni f e r ou s t imber .

I ,

2.0km I. 0 LO 0.5 0

Scafe I - 5 0 , O O O 9 4

1 * Cannon €xp/oration Lta! 1

CLAIM MAP

Ka/um Cluim Group

N r s : 103 W ~ E , w

November, /986 Flguro 2

- 5 -

HISTORY AND PREVIOUS WORK

T h e Kalum No 1 clairn o c c u r s in a region t h a t h a s been of economic i n t e r e s t s ince

1914, when f r e e gold and copper/gold showings were found in q u a r t z veins and

s t r inge r s and surrounding sch is tose rocks. T h e proper ty was t h e n known as t h e

Treadwel l No. 2 and Juneau claims; i t l a t e r was s t a k e d under t h e n a m e s Maloya a n d

L a k e Shore c l a i m s in 1931, t h e Belway and R e x c l a i m s in 1937 a n d f inal ly t h e Ken and

Kalum clairns of today. Early deve lopment work on t h e proper ty , a round t h e t u r n of

t h e century , cons is ted of a shal low sha f t , t w o shor t a d i t s drid seve ra l open cuts . More

recent ly , minor rock and soil sampling a round known minera l ized occur rences was

conduc ted by Si lver S tanda rd Mines, Ltd. (1981) and Weyrnark Engineering, Ltd. (1981).

As a re su l t of road cons t ruc t ion in May 1983, a new showing was uncovered on t h e

p rope r ty and G. Belik and Associates , Ltd. ( for G e r l e Gold, Ltd.) t r e n c h e d wi th a bul ldozer and sampled it. Geologic mapping, rock sampling a n d a p ro ton magne t i c

survey in t h e vicini ty of t h e showings was also pe r fo rmed by Belik. Geochemica l soil

sampling was c a r r i e d o u t by Cominco, Ltd. (1984) on a n overburden-covered area immedia t e ly east of known mineral izat ion. Known showings, and new showings

r ecen t ly uncovered by t h e owners , w e r e ver i f ied by Dr. Tom Richards (April, 1985); and minor drilling (wi th a prospector 's drill) and rock and soil sampling w e r e conduc ted

by t h e c l a i m owners in 1985.

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S E C T I O N I

GEOLOGY

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REGIONAL GEOLOGY

T h e Kalum I clairn is loca ted in t h e t rans i t ion zone b e t w e e n t h e In t e rmon tane Be l t t o

t h e east and t h e Coast Plu tonic Complex to t h e west. Here, t h e Rowser L a k e Group,

a middle to upper Ju ras s i c mar ine and nonrnarine clclstic sequence , underl ies much of

w e s t c e n t r a l B.C. and is over la in by mar ine and nonmar ine clastics of t h e Early

C r e t a c e o u s Skeena Group (Woodsworth, et al., 1983). L a t e C r e t a c e o u s to E o c e n e

plutons of t h e Coast Plu tonic Complex c u t t h e Bowser L a k e Group, resul t ing in local c o n t a c t rncstarnorphisrn along pluton boundaries. Tlw inclin s t r u c t u r a l e l e m e n t in t h e

T e r r d c e region is block faul t ing which ha\ r e w l t c d III il topogrdphy of rnountdin blocks

se spa ra t ed by wide l inear valleys. T h e fau l t ing may h a v e begun in mid to Late C r e t a c e o u s t i m e a n d cont inued to Eocene t ime. A broad t r ench extending nor thwes t

of T e r r a c e and as f a r south as Ki t i tna t is underlclin by t h e Skeena Group, wi th Rowser

L a k e Group s t r a t a exposed on e i t h e r side. Skeend Group rocks d r e exposed on high

peaks to t h e east of t h e t r e n c h which ind ica t e a throw of a b o u t 2000 m e t r e s a long t h e

east-bounding f a u l t s of t h e t rench.

Evidence for r e c e n t tectonis in in t h e t r ench is t h e 250-year old lava flow nea r

Aiyansh, 60 km nor th of Terrace . T h e flow e rup ted f rom a ven t on t h e east s ide of t h e

t rench. O t h e r ev idence is t h e p re sence of hotspr ings 30 km sou th of T e r r a c e a n d of o t h e r hotspr ings a long Douglas Channel.

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LOCAL GEOLOGY

T h e geology of t h e Kalum c la im cons is t s of a package of sed imen ta ry a n d tu f f aceous

rocks wi th in te rbedded bas ic f lows of Ju ras s i c age belonging to t h e Bowser Group.

Bedding genera l ly s t r i k e s nor theas te r ly to e a s t e r l y and dips to t h e north. T h e rocks

have been modera te ly to s t rongly de fo rmed and metamorphosed to quar tz i tes ,

argi l l i tes , schis ts , gne isses and grcenstoncs. A prorninent fol ia t ion subpara l le l to

bedding is pervas ive in t h e sedirnentary rocks and less so in t h e bas ic volcanics. Small-

sca le , t i gh t folding and loca l r ecumben t folds c a n be seen at mos t ou tc rops of

sed imen ta ry lithology.

Sed imen ta ry rocks p redomina te a long t h e northern, sou the rn a n d e a s t e r n e d g e s of t h e

p rope r ty wi th t h e in te rbedded basic f lows and t u f f s c o n c e n t r a t e d in t h e middle-

wes tern a r e a (Maps I and 11). Basic and ac id dykes c u t through bo th sed imen ta ry a n d

volcanic units.

Rock Uni ts

Sed imen ta ry L i thologies:

W:

A:

C:

Black a rg i l l i t e - s t rongly fo l i a t ed wi th conspicuous bedding t h a t wea the r s to a buff co lor wi th rusty s ta ins; minu te specks of pyr i t e and pyr rhot i te ; dense.

In te rbedded sands tone a n d s i l t s tone rnetarnorphosed to q u a r t z i t e s a n d hornfels.

Wea the r s to a n orange-brown color wi th rus ty stains. O n f r e sh s u r f a c e s t h e color is medium to da rk g r a y wi th a s l igh t purplish hue, and s m a l l specks of mica,

p y r i t e and py r rho t i t e c a n be seen. A s l igh t sheen exists on foliation planes. This

un i t i s c u t by acid a n d bas ic dykes and conformably over l ies un i t C.

In te rbedded sandstones, sil t s tones, shales , conglo inera tes and possibly

volcanic las t ics rnetamorphosesd to qua r t z i t e s , s e r i c i t e and c h l o r i t e s ch i s t s and

hornfe ls wi th wel l deve loped foliations. T h e mos t prorninent rock t y p e is a s e r i c i t e s ch i s t w i th a pronounced s i lver sheen o n c l e a v e d faces. I t is locally porphyroblast ic wi th s inal l (2 mm) to la rge (1.5 c m ) anda lus i t e (?) c r y s t a l s t h a t

a r e uniformly medium g ray and which produce a k n o t t e d tex ture .

- 9 -

Metaconglomerates consist of extremely f la t tened, silicified pebbles of uniform

gray color in a ser ic i te schist matrix. Metasiltstones a r e light to medium gray or green with a slight sheen on foliation planes and a r e generally dense and hard. Throughout unit C there has been local epidote replacement along selected beds

t h a t have since been deformed, producing isolated pods and folded stringers of

epidote 2 quartz. The pods a r e s zoned with act inol i te concentrated along t h e boundaries and al ternat ing concentr ic zones of epidote, quar tz and hemat i te extending to t h e middle. In places whole beds (up to 2 m thick) of metasil tstone

have been replaced producing both massive beds of epidote and thinly bedded

zones of al ternat ing epidote and siltstone. Minor garne t was seen in some of t h e

sediment at- y beds.

N: Graywacke (?) metamorphosed to a chlorite-rich rock consisting of feldspar

porphyroclasts in a chlorite-rich matr ix with a strongly developed schistose

fabric. Unit N is interbedded with sedirnents and andesit ic flows and tuffs.

R: Graphite phyllite - fine grained, shiny dark gray to black phyllite with srnall conspicuus burnps on cleaved surfaces. Composition of minerals causing t h e bumps is unknown. Strongly foliated and interbedded with andesi te and tuffs.

Volcanic Lithologies:

F: Intermediate to basic t u f f s rnetainorphosed to chlor i te schists and gneisses,

character ized by dark green chlorite-rich bands intermixed with gray silica-rich bands, both containing biot i te and disseminated euhedral magnetite. In places

t h e unit has a gneissic tex ture consisting of f ine layers (less than 1 m m thick) of epidote, actinoli te, quartz(?) + biot i te and magnetite. Unit F is interbedded with andesi te flows of unit G and sediments of unit C.

G : Andesite flows metamorphosed to greenstones. Medium to dark green o r gray,

very fine grained, basic flow rocks with local vesicks and amygdules (filled with

epidote and quartz) and minor pillow structure. The degree of foliation

development varies f rom very slight to strong, defined by f la t tened amygdules

and small f la t tened c lo ts of chlor i te within t h e groundmass. Unit C is moderately magnet ic and is o f t e n replaced by epidote in irregular masses to 1 m in diameter. I t also contains local concentrat ions of chlorite/actinolite, specular

- 10 -

hemat i te and magnetite. A t several locali t ies a chaot ic tex ture can b e seen in

t h e andesite which is presumed to b e flow-top hrecciation.

Intrusive Dykes and Si lk

8:

S:

K:

E:

Hornblende porphyry dyke consisting of euhedral hornblende phenocrysts (up to

1 c m in length) in a dark green, very f ine grained groundmass with trace amounts of pyrite. Unit D cuts unit A.

Strongly foliated intermediate dyke consisting of f la t tened feldspars and aligned

hornblende phenocrysts in a mediurn gray groundmass of similar composition.

Very slightly magnetic. lJnit S cuts u n i t A.

Moderately foliated intermediate sill/dyke consisting of feldspar phenocrysts and

aligned biot i te crystals in a medium grayish-green groundmass of similar

Composition. Moderately magnetic. lJnit I< c u t s both scdirnentary and volcanic

lit hologies.

Diorite dyke character ized by medium grained, equigranular hornblende and

feldspar, t h e hornblende locally a l te red to actinollite. Unit E c u t s unit C.

Quartz veins:

Quartz veins occur in all rock types and range in width f rom a few mill imeters to

2 m. They follow foliation planes as well as cross-cutting metamorphic fabr ics

as f r a c t u r e fillings and in association with shear zones. Chlorite, epidote,

h e m a t i t e and magnet i te occur locally within quar tz veins.

- 11 -

STRUCTURE

The overall s t ruc ture of t h e Kalum property consists of gently to steeply dipping sedimentary beds and basic flows t h a t have been moderately deformed. The beds

generally s t r ike northeasterly and dip northwesterly from 100 to 550. A strong, penetrative foliation exis ts nearly parallel to bedding and is easily seen at most

outcrops. Foliation a t t i tudes range from 08O to 1 7 7 O and dip from loo to 55O

northwesterly to easter ly with t h e most prominent a t t i t u d e being about 5 5 O s t r ike and

3 5 O NW dip. Movement along foliation planes is evident by offset of quartz veins. Minor warps can be seen on outcrop faces in three dimensions, with t ight folding visible on northwest- and southeast-facing f r a c t u r e surfaces. Many quar tz veins and epidote seams a r e iso-clinally folded in t h e less competent schistose units, and only

slightly disturbed in t h e more competent quar tz i te and andesi te units. At t i tudes of fold noses consistently plunge gently to t h e northeast . Several small-scale, t ight, recumbent folds (open to t h e south) are visible in inetasil tstone outcrops on westerly

facing f rac ture surfaces, and changes in foliation a t t i tudes from outcrop to outcrop

point to t h e exis tence of larger folds. An axial-plane cleavage is visible at some locali t ies and at one small outcrop a foliation parallel to t h e fold and cut by t h e axial-

plane cleavage was seen, indicating at least two major episodes of deformation

occurred. I t is t h e author's opinion t h a t t h e prominent foliation subparallel to bedding

was developed prior to o r during t h e early stages of emplacement of t h e grani te

batholith occurring south of the property, but t h a t t h e gent le warping and t ight

recumbent folds developed as a result of t h e emplacement of t h e batholith.

Several fau l t s a r e evident on t h e property. Two faul ts occur in t h e quartzi te unit (unit

A) at t h e north e n d of t h e property along t h e road cuts. They a r e high-angle and seem to parallel bedding: beds on either side of t h e faul ts are parallel but have been dragged upwards to b e steeply dipping to t h e northwest. Minor fault gouge and slickensides can be seen between the two sedimentary units on e i ther side of t h e faults. Another faul t may exis t on grid line 2+50 E around s ta t ion 12+00 N between unit C to t h e north and unit A to t h e south. Foliation a t t i t u d e s a r e discordant across the poorly exposed contact , and t h e sequence is opposite to what was observed along

t h e highway. Two other faults exist between metasediments and andesite, visible along t h e lake shore. Foliations in t h e sediments a r e sharply discordant with foliations

- 12 -

in andesite (perhaps a result of dragging along t h e fault), and boulders of massive rnagnetite a r e found in this region, possibly coming from t h e faul t zone. Degree and

direction of displacement along all these faul ts is very difficult to ascertain. A broad,

linear, drainage gully occurs in t h e forested region east of t h e highway. In t h e area of

t h e grid i t t rends northeasterly, extending from about L8+00E, 13+60N to L1+50E, 1+65N. Sparse outcrops of black argil l i te (unit W) occur in t h e vicinity of t h e gully and

on t h e s t e e p slopes to t h e east. The sediment-andesite package, outcropping along t h e

highway and shoreline, is not evident east of grid L2+50E. The gully may represent a major northeast-trending faul t or shear zone t h a t sesparates t h e sediment-andesite

package to t h e west from black argil l i te to t h e east.

Several local shear zones a r e present on t h e property, t h r e e being worthy of note. One

exis ts at t h e southern ad i t and is character ized by a strong warp in t h e contact between graphi te phyllite and andesite, accompanied by a crumbly tex ture to t h e outcrop and a white/yellow powdery film coating t h e rocks. The andesite has a pronounced rod and mullion s t ruc ture developed in this vicinity and t h e r e is a n

abundance of quar tz veins, mainly paralleling foliation planes. Another shear zone occurs along t h e highway jus t nor theast of t h e south-adit shear. Here exis ts a zone of

highly fr iable rock approximately 18 m in width t h a t crumbles easily and appears to b e composed of a chlorite-sericite schist with act inol i te needles visible on f r a c t u r e

partings. At t i tude of t h e shear zone could not b e adequately determined. Northeast

of this shear zone, between grid L0+50E and L1+00E, from station 8+75N to 9+00N,

another shear zone is believed to exist. Rod and mullion s t ruc ture is developed in andesite here; t h e andesite is very strongly foliated and quartz veins, s t re tched

epidote c l o t s and f la t tened amygdules parallel t h e s t ructural trend. These t h r e e shear

zones, if associated, may define a major northeast-trending shear zone on t h e

property. In addition to these three shear zones several small shears exis t in outcrops throughout t h e property t h a t a r e character ized by slightly f r iable rocks and quar tz

veining.

Joint surfaces occur at nearly all outcrops with three directions being most

prominent: southeast s t r ike with nearly vertical dip to t h e west, north s t r i k e with moderate dips to t h e west, and southeast s t r ike with shallow dips e i ther to t h e

northeast or southwest. T h e l a t t e r a r e commonly filled with quar tz whereas t h e o thers a r e usually filled with epidote quartz.

I

- 13 -

I t is t h e opinion of t h e author t h a t t h e joint surfaces a r e a much younger f e a t u r e than

t h e folding and foliation development. The jointing is presumably related to regional

block faulting responsible for formation of t h e Kitsumkalum Valley. Major north-

northwest / south-southwest joint faces occur on many of t h e outcrops along t h e

highway as well as outcrops in t h e forested region to t h e east: a te r raced effect exis ts

between outcrops here, with outcrops to t h e west "stepped down" from outcrops to t h e

east suggesting faulting along normal faults oriented north-south. Another 1 .arge north-south fau l t re la ted to block fault ing possibly exis ts where t h e Terrace-Stewart

highway runs, separating outcrops along t h e shoreline from those along t h e highway. Several dist inct rock units exposed along t h e lake cannot b e t raced to adjacent highway outcrops; foliation a t t i tudes a r e fairly consistent along highway outcrops and a r e moderately discordant with a t t i tudes in lake outcrops; and t h e bulk of

mineralization is found along t h e lake with only sparse representation in road cuts. These discontinuities may indicate t h e exis tence of a major s t ructural break along t h e highway.

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MINERALIZATION AND ASSAY RESULTS

Mineralization on t h e Kalum 1 and Ken 1 and 2 claims consists of malachite,

chalcopyrite, bornite and pyrite (rare) associated with quartz , epidote, chlorite, specular hemat i te , specular magnet i te and rarely a z u r i t e a n c chrysocolla. Earliest

reports about t h e mineralized occurrences appearing on t h e claims state t h e exis tence of f r e e gold, some "the size of pin heads", visible in quar tz and quar tz + epidote

veinlets f rom t h e shaf t site (now caved in) and t h e south ad i t (also caved in) (MMAR,

1914; MMAR, 1919). Cominco, Ltd. (1984) reported seeing visible gold in f loa t samples around t h e showings and t h e owners have several rock samples containing visible gold

they claim c o m e from boulders on t h e property.

The most common form of mineralization is malachite - + quartz occurring along

foliation planes in metasedimentary and metaandesi te units, less commonly as coatings

on joint surfaces in a l l rock types and rarely along bedding planes, small fau l t s and

shears. Malachite, bornite and/or chalcopyrite mineralization is found a5sociated with

quartz - + epidote as thin seams, veins, pods and disseminations t h a t parallel foliation

t rends in schist , metaandesi te and meta tuf f host rocks; i t rarely occurs in fractures oriented perpendicular to foliations. Veins vary in thickness f rom less than 1 c m up to

60 cm.

Malachite staining is found at sca t te red highway and lake shore outcrops along t h e

en t i re length of t h e property but was only found a t one locality in t h e forested region east of t h e highway. Bornite 5 chalcopyrite mineralization is more restr ic ted in its ex ten t , occurring sporadically in a narrow (approximately 50 m), linear zone oriented roughly 160° and extending from t h e lake shore due west of grid s ta t ion 10+25N to

road outcrops d u e wes t of 5+OON. Another isolated mineral showing occurs at t h e

southernmost road c u t approximately 200 m south-southwest of t h e 5+00N road

outcrop. No significant mineralization was found east of t h e highway.

Fourteen mineralized occurrences on t h e property were sampled and assayed for

silver, gold and copper, e ight of which will be described in some de ta i l here.

- 15 -

Shaft and North Adit:

Old reports indicate a shaft, located "a few metres from the lake edge", assayed 0.42

oz/t gold and 0.5 oz/t silver across 8 feet (MMAR, 1914). Mineralization was

described as free gold in quartz veinlets parallel to cleavage planes in schist. The

shaft i s presently caved in and i s diff icult to locate as there are two circular areas of

which either one could be a caved-in shaft (Maps I and 11). Both sites w i l l be under

water during spring runoff. A chip sample across a 4 cm wide rusty quartz vein in the

northwest shaft site assayed 0.36 oz/t Ag, 0.233 oz/t Au and 0.75% Cu. A grab sample

of mineralized metaandesite boulders (malachite + bornite) found in the vicinity of the

southeast shaft site assayed 1.75 oz/t Ag, 1.054 oz/t Au and 9.47% Cu. These boulders

could have come frorn the shaft or possibly were blasted away from a nearby outcrop

face during road construction around the turn of the century (MMAR, 1914). Eight

inetres east of this site a thin seam of quartz, malachite, and bornite parallel to the

foliation plane was found along with rnineralized boulders (recently dug up by the

property owner). A grab sample of these boulders assayed 0.74 oz/t Ag, 0.256 oz/t Au

and 1.64% Cu. An adit (north adit), containing a shallow winze 4 m from the entrance,

i s located 23 m east of the southeast shaft site; it i s 13 m long and bears 162O. No

mineralization was found in the adit or i t s dump.

South Adit and Dump:

110 m south-southeast of the north adit is another adit (south adit) that i s presently

nearly caved in. No

mineralization was seen at the adit entrance; there i s an abundance of barren quartz

veins paralleling the foliation and a shear is developed here trending 7 8 O and dipping

2 8 O N W along which the adit was driven.

It bears 70° and appears to be approxitnately 14 m in length.

A dump of mineralized boulders occurs on the beach due west of the south adit. The

rocks are strongly magnetic, finely banded rnetatuf fs with laminations of epidote,

quartz and biotite, and magnetite as fine disseminations and layers. Mineralization, in

the form of malachite, bornite and minor chalcopyrite, occurs as irregular blebs and

streaks throughout the metatuff and in epidote-rich pods. A grab sample of this rock

type assayed 0.85 oz/t Ag, 0.296 oz/t Au and 1.05% Cu. I t i s not known where these

mineralized boulders came from as they do not resemble rock types in the immediate

- 16 -

vicinity of t h e south adit. Kindal (19371, however, makes re ference to a 30-inch wide

shear zone in Ifgrey, micaceous quartzite", containing epidote and bornite, along which

t h e south ad i t was driven. The dump mater ia l may instead represent t h e original

mineralized zone occurring immediately west of the a d i t entrance.

In addition to t h e mineralized boulders at t h e dump a rusty zone in metaandesi te (?)

14 m south of t h e ad i t en t rance was found to contain malachite and minor

chalcopyrite. A chip sample across 17 c m assayed 0.67 oz/t Ag, 0.176 oz/t Au and 0.39% Cu.

Road Show:

An important mineralized showing, uncovered during construction of t h e Terrace-

Stewart highway in 1983, is no longer visible as a result of paving but is described in Belik's (1983) repor t as t h e "road show": bornite and minor chalcopyrite associated

with quartz , epidote and specular hemat i te occur in a "hard, dark grey, magnetite-rich

silicified gneiss; epidote bands and laminations locally a r e prevalent". He describes the mineralized zone as being 1.0 to 1.2 rn in width, paralleling bedding (which s t r ikes east-northeast and dips 20° to t h e north) and having a n average grade of 0.07 oz/t Au.

Mineralized boulders f rom t h e road show can be found on t h e s t e e p slope between t h e

highway and lake, immediately west of t h e road show s i te (Maps I and 11). They are meta tuf fs similar to rocks of t h e south ad i t dump, and contain malachite, bornite and

ra re azuri te . A grab sample assayed 0.96 oz / t Ag, 0.224 oz/t Ru and 1.22% Cu.

Approximately 42 m south-southwest of t h e road show si te is a n outcrop of gray

metasil tstone with malachite, bornite, chalcopyrite and associated azur i te and chrysocolla concentrated along foliation planes. A chip across 6 c m width assayed

0.37 oz/t Ag, 0.198 oz/t Au and 0.84% Cu.

Southern Ditch:

Approximately 200 m south of t h e road show a small outcrop of interbedded

inetasedimentary and meta tuf f beds is exposed e a s t of t h e highway. I t is cut by a quar tz vein (approximately 15 e m wide) containing malachite, bornite, chlorite,

epidote and actinoli te, t h e vein being segmented in to three "boudins". A composite

- 17 -

samples of there segments assayed 0.23 oz/t Ag, 0.028 oz/t Au and 0.34% Cu. 200 m

further south a rusty quar tz vein occurs in t h e e a s t ditch and on a n adjacent rock face in metasediments. Foliation a t t i tudes and small-scale folds indicate t h e presence of a

large recumbant fold open to t h e south. The quartz vein in t h e d i tch corresponds to the lower limb of t h e fold and t h e one on t h e rock face to t h e upper limb. The vein is

mineralized with malachite, abundant chalcopyrite, t r a c e bornite and local massive

pyri te o r magnetite. Thickness of t h e vein on t h e upper limb is 60 c m but pinches out far ther up t h e rock face. A chip sample across t h e width of t h e vein assayed 0.18 oz/t Ag, 0.060 oz/t Au and 0.24% CII, but a grab sample of mineralized q u a r t z boulders

lying directly below t h e vein assayed 0.31 g/t Ag, 0.100 oz/t Au and 0.50% Cu. The q u a r t z vein exposed in t h e di tch is nearly flush with t h e ground but a chip sample at leas t 15 c m in width assayed 0.20 oz/t Ag, 0.036 oz/t Au and 0.39% Cu.

- 17 -

samples of these segments assayed 0.23 oz/t Ag, 0.028 oz/t Au and 0.34% Cu. 200 m

fur ther south a rusty quartz vein occurs in t h e east ditch and on a n adjacent rock face in metasediments. Foliation a t t i tudes and small-scale folds indicate t h e presence of a large recumbant fold open to t h e south. The quartz vein in t h e di tch corresponds to t h e lower limb of t h e fold and t h e o n e on t h e rock face to t h e upper limb. The vein is mineralized with malachite, abundant chalcopyrite, t r a c e bornite and local massive pyr i te o r magnetite. Thickness of t h e vein on t h e upper limb is 60 c m but pinches out

fa r ther up the rock face. A chip sample across t h e width of t h e vein assayed 0.18 oz/t Ag, 0.060 oz/t Au and 0.24% Cu, and a g r a b sample of mineralized quartz boulders lying directly below t h e vein assayed 0.31 oz/t Ag, 0.100 oz/t Au and 0.50% Cu. The q u a r t z vein exposed in t h e ditch is nearly flush with t h e ground but a chip sample at least 15 c m in width assayed 0.20 oz/t Ag, 0.036 oz/t Au and 0.39% Cu.

- 18-

CONCLUSIONS AND RECOMMENDATIONS

Gold, silver and copper mineralization occurs on t h e Kalum claims in t h e form of

malachite, bornite and chalcopyrite associated with quartz and/or epidote and more rarely with magnet i te and specular hemati te . Mineralization is mainly concentrated

along foliation planes in metamorphosed sedimentary, tuf faceous and andesi te rocks of

probable Jurassic age.

Although malachite staining is found at rnost exposed outcrops along t h e lake and highway, bornite and/or chalcopyrite and associated gold appear to b e restr ic ted to a

narrow zone (approximately 50 m wide) trending roughly 160° as defined by sample location 07783, caved in shaf t (4 , south adi t (dump), road show, and sample locations

07781 and 07791. If these occurrences a r e assumed to represent a mineralized zone, their t rend of 1600 corresponds exact ly with t h e most prominant joint faces seen bounding rnany outcrops across t h e en t i re property. Mineralized boulders of the south ad i t dump and in t h e vicinity of t h e shaf t may have had a n abrupt termination along a 160° joint face explaining t h e lack of mineralization in both adits, whose locations

then would be just east of the mineralized zone. The t rend could extend

northwestward into t h e lake and farther southeast into t h e overburden-covered area e a s t of t h e highway, lining up with two of Cominco wil anomalies (Line OE, 350s and

line 150E, 650s). The mineralized occurrence in t h e south di tch may b e a n additional

mineralized t rend paralleling t h e o n e to t h e north; projection of this t rend from t h e

south d i tch in te rsec ts two more Cominco soil anomalies. (line OE, 600s and line 150E, 950s) and a magnet ic high at line OE, 0+25N of this report.

If t h e 160° trend was a zone of faulting which a c t e d as a conduit for mineralized fluids, weakened foliation planes and favorable host rocks may have been responsible

for locally concentrat ing the fluids. The most favorable host rocks appear to be metaandesi te and t h e highly banded metatuf f , whereas mineralization in

metasedimentary rocks seems restricted t o foliation planes. It is suggested t h a t

further exploration work on t h e Kalum 1 claim be targeted along north-northwest

/south-southeast t rends in favorable host rocks. The following program is therefore recommended:

- 1 9 -

I ) Both t h e metaandesite and highly banded metatuff a r e moderately to strongly magnetic. A magnetic high extends nor theas terly from known mineralized,

metaandesi te /metatuf f outcrops and may therefore represent additional host

rocks for mineralization. Several north-trending hollows occur across this

magnetic high, one between t h e highway and large outcrop on line OE, and two

between line 50E and 150E. There is a concentration of Cominco soil anomalies

in this region. A soil survey covering t h e magnet ic high in t h e vicinity of these

hollows is therefore recommended.

2) The 160° trend defined by mineralization along the lake, t h e road show and

samples 07781 and 07791 may extend fa r ther southeast into t h e grid area. A soil

survey centered over t h e possible extension of this trend is suggested.

3) The south-ditch mineralization with associated massive magnet i te may extend

southeasterly and correspond with t h e magnetic high at line OE, 0+25N. A soil survey along this t race and extending a t least to Cominco's soil anomaly of 88

ppb Au is recommended.

~ ~~ ~~~~~ ~~

- 20 -

ROCK SAMPLE DESCRIPTIONS

Type Description

metadaci te dyke and faul t

Width Sample No.

07 7 80

07781

chip

chip

30 c m

16 c m metasediment; malachite, bornite, chalcopyrite.

07782

07783

grab

chip

chlorite schist; malachite, chalcopyrite. - 2 c m quar tz vein in metasediment; malachite,

bornite.

07784

07785

07786

07787

07788

07789

07790

07791

chip 4 c m quar tz vein in metaandesite; possible old shaf t site; rust and malachite.

old shaf t site(?); rnalachites and bornite in metaandesite.

g rab

g r a b another possible old shaf t si te; malachite and bornite in metaandesite.

8 m e a s t of 2nd old shaf t site; malachite and bornite in metaandesite.

g rab

grab south-adit dump; malachite, bornite, chalcopyrite in metatuff .

chip 15 c m 14 m south of south adit ; malachite and chalcopyr i te in rnetaandesi te(?).

g rab road show float; malachi te and bornite in metatuf f.

-

15 c m 200 m south of road show, east of highway; quar tz veins with malachi te + bornite in metasediments and metatuff.

chip

07792 grab rusty quar tz vein in road c u t 400 m south of road show; malachite, bornite, chalacopyri te.

07793 chip

07794 chip

15 c m

60 c m

same as 07792; quar t vein in ditch.

same as 07792; quartz vein in m e tasediments.

- 2 1 -

REFERENCES

1. B.C. Minister of Mines Annual Report, 1914 (pg. K105, k107)

2. B.C. Minister of Mines Annual Report , 1919 (pg. K49)

3. Belik, G., "Geological and Geochernical Report on t h e Kalum Group'l, 1983

4. Cominco, Ltd., "Assessment Repor t on Geochemical Soil Sampling on t h e Kalum Property", 1984

5. Kindal, G.S.C. Memoir 202, 1937 (pg. 13-15)

6 . Richards, T., unpublished report, 1985

7. Silver Standard Mines, Ltd., unpublished, 1981

8. Weymark Engineering, Ltd., "Kalum Mineral Claims Group - Examination Report", 1981

9. Woodsworth, G. J.; Crawford, M.L. and Hollister, L.S., "metamorphism and St ruc ture of t h e Coast Plutonic Complex and Adjacent Belts, Pr ince Rupert and Ter race Areas, British Columbia"; G.A.C., M.A.C. and C.G.U. Joint Annual meeting, Field Trip No. 14, 1983

- 22 -

S E C T I O N I 1

GEOPHYSICS

- 2 3 -

GEOPHYSICS

The mineralization observed near t h e lake shore and along road cuts appears to be associated with a l te ra t ion zones in mixed volcanic and sedimentary rocks which have undergone s t rong al terat ion and isoclinal folding on a small scsale. The small scale folding presumably forms par t of a system of larger scale folding. The mineralization itself consisted, most prominantly, of hemat i te , magnetite, bornite and chalcopyrite. These mineral assemblages a r e of ten associated with banded epidote a l terat ion which conforms to bedding in t h e host rocks.

The geophysical prograrn described below included VLF-EM surveying, which was intended to outline t h e larger s t ructural features , and magnetometer surveying which was intended to outline t h e more magnet ic volcanic rocks and to pinpoint a r e a s of magnet i te - hemat i te mineralization. An IP survey was used, with 25 m e t r e spacing, to outll ine a r e a s of sulphide mineralization or, possibly, graphitic horizons.

The surveys were conducted on a grid of lines c u t at 50 m e t r e intervals from a base line designated 14+00N which is located approximately 100 met res south of t h e north boundary of t h e KALUM No. 1 claim. Chainage pickets were placed at 25 m e t r e intervals on these lines.

- 24 -

MAGNETOMETER SURVEY

Magnetometer readings were taken at 12.5 m e t r e spacing on lines at 50 m e t r e

intervals trending south from t h e 14+00N base line. A Scintrex MP-2 proton precession magnetometer was used to read to t h e nearest 1 gamma. Readings were adjusted to base line s ta t ions which had been t ied into a base s ta t ion established at t h e

c a m p site. Results are plotted on Map I11 with 50,000 gammas having been deducted

from t h e to ta l field readings.

Result5 a r e contoured at 200 gamma intervals f rom 6600 to 7600 gammas, 400 gammas to 8,000 and 1,000 gammas to 9,000. The resulting pa t te rn shows strongly anomalous,

intr icate pa t te rns in t h e north west portion of the grid, local magnetic lows in t h e

e x t r e m e southwest corner and a relatively smooth, f l a t appearance over t h e remainder of t h e grid. The location of the anomalous fea tures shown on VLF-EM Map IV a r e

superimposed on t h e magnet ic results.

The strongly anomalous magnetic readings in t h e northwest portion of t h e grid are generally terminated along t h e VLF-EM ZONE A although t h e general northeast t rend

of t h e magnet ic contours continues with a very subdued profile. The area of strong anomalies corresponds generally with t h e area of outcrop. The subdued profile to t h e

east is not likely due only to normal overburden conditions since i t would takes a very

sub5tantial increase in over burden depth to mask t h e strongly positive magnetic anomalies. Examination of IP and VLF-EM profiles shows coincident anomalies within

this region and i t is presumed, therefore t h a t these changes in magnet ic pa t te rn are due to bedrock structure.

In t h e northwest portion of t h e grid t h e largest magnet ic anomalies over 7,600 gammas

occur directly east of t h e north and south a d i t sites. These anomalies a r e apparently terminated, or at leas t strongly a f f e c t e d , by VLF-EM ZONE A. These magnetic highs

appear to be zones of high priority for fur ther exploration as these anomalies would

indicate relatively high magnet i te (hematite?) content in a1 tered volcanics.

To t h e nor th of t h e magnet ic highs outcrops within t h e grid area consist mainly of

ser ic i t ic a l te red sediments and t h e magnet ic pa t te rn varies f rom 6,400 to 7,400 gammas. Within this apparently folded zone a local magnet ic high of 8,000 gammas coincides closely with a mapped outcrop of unit E, diorite.

- 25 -

A t 13N on lines OE to l+OOE rnagnet ic values aga in r i se to t h e 8,000 gamma range

al though t h e mapped geology d o e s n o t provide a n explanation. This z o n e should be

invest igated.

Weaker magne t i c f e a t u r e s in o t h e r por t ions of t h e gr id area cor respond approximate ly with VLF-EM f e a t u r e s as follows:-

VLF ZONE B coinc ides wi th a weak magne t i c high of 200 gammas .

VLF ZONE C a n d crossover f8 correspond to a m a g n e t i c low of about 200 gammas.

- 26 -

VLF-EM SURVEY

A Geonics EM-16 instrument was w e d to t a k e dip angle and quadrature readings at 12.5 metre spacing on lines 50 met res apar t . Two transmit ter s ta t ions were used,

Sea t t le and Cutler, Maine, to produce two sets of survey information. The following is a review of t h e survey procedure used with t h e EM-16 instrument.

Principles of Operation

The VLF-transmitting stations operating for communication with submarines have a vertical antenna. The Antenna cur ren t is thus vertical , creat ing a concentr ic horizontal magnet ic field around them. When these magnetic fields m e e t conductive bodies in t h e ground, there will b e secondary fields radiating from these bodies. This

equipment measures t h e ver t ical components of these secondary fields.

The EM16 is simply a sensitive receiver covering t h e frequency band of t h e VLF- transmitt ing s ta t ions with means of measuring t h e vertical field components.

The receiver h a s two inputs, with two receiving coils built in to t h e instrument. One coil has normally ver t ical axis and the other is horizontal.

The signal from o n e of t h e coils (vertical axis) is f i rs t minimized by tilting t h e

instrument. The tilt-angle is calibrated in percentage. The remaining signal in this

coil is finally balanced out by a measured percentage of a signal f rom t h e o t h e r coil, a f t e r being shifted by 900. This coil is a normally parallel to t h e primary field.

Thus, if t h e secondary signals a r e small compared to the primary horizontal field, t h e

mechanical tilt-angle is an a c c u r a t e measure of the ver t ical real-component, and t h e compensation / 2-signal from t h e horizontal coil is a measure of the quadrature

vertical Fignal.

The magnet ic field lines f rom t h e s ta t ion a r e at right angles to t h e direction of t h e

station. Always se lec t a s ta t ion which gives t h e field approximately at right angles to t h e main s t r ike of t h e o r e bodies o r geological s t ruc ture of t h e a r e a you a r e presently working on. In other words, t h e s t r ike of geology should point to t h e t ransmit ter . Of

- 27 -

course, 450 variations are tolerable in practice.

Tuning of the EM16 to the proper transmitting station i s done by means of plug-in

units inside the receiver. The instrument takes two selector-units simultaneously. A

switch is provided for quick switching between these two stations.

VLF-EM Survey Results - Cutler Maine Transmitter.

In phase dip angle and quadrature percentage readings are plotted and profiled on Map

IV in the pocket of th is report. The dip angle readings have been processed using the

"Fraser Filter" method to produce contourable values which are plotted on Map V.

Examination of the dip angle and quadrature values on Map IV reveals two main

features:-

I ) there are no strong "cross-over" anomalies which might be due to relatively

steeply dipping conductive sources;

there is a broad zone of negative dip angle readings trending from OOE 3N to 6E, 14N. Smaller zones of similar readings occur at 6E, 2N to 7+5OE, 2N and h 7E, 9+75N to 8E, I IN. These zones are designated A,B and C on this map and this

designation i s also used on other survey maps where these features exist.

2)

In addition to the two main features several small zones of "anomalous" readings

occur. These are:-

1) zones of positive dip angle readings with no associated cross-overs located a t

2+5OE, 3N; 7+50E, 4+50N and 6+50E, 11N. These zones are designated zones a, b

and c respectively.

2) conventional cross-over anomalies designated 1 to 10. These are conventional in that positive dip angle readings "cross-over" to negative readings indicating

weak, east trending conductive zones. These are the anomalies usually best

illustrated by use of the Fraser Filter to produce contourable results.

- 2 8 -

There is practically no outcrop in these anomalous a r e a s and their source can only b e

assumed from comparison of these resul ts with results of other surveys.

Map V depicts t h e Fraser Fil ter results obtained from t r e a t m e n t of d ip angle readings plotted on Map IV. These values were contoured and indicate easter ly trending

conductive zones of generally low intensity. The east t rend of these zones may b e more apparent than real due to t h e low intensity of t h e values.

Of t h e zones designated on Map IV Zone A appears on Map V as a ser ies of east

trending anomalies s tacked along t h e trend of the zone. Examination of t h e map suggests a similar "stacking" through Zone a to Zone C. This t rend is outlined but no t

named.

Zone B occurs on this map as a north east trending zone contoured to correspond to Map IV but lacking sufficient reading5 to produce rea l definition.

Zone b occurs as only a weak southwest trending a r m of conductor 6 but with no rea l

definition.

Zone c occurs generally within t h e t rend of t h e Zone C - Zone a linear "stack".

Cross-over anomalies I to 8 and 10 and confirmed to some e x t e n t by t h e Fraser Filter contours although cross-overs I , 2, 6a a r e very weak. Cross-over 9 does not have a

Fraser Fil ter confirmation.

Cross-over 8 is t h e most intense of these srnall conductor type anomalies. Several

Fraser Fil ter zones a r e indicated in t h e vicinity of cross-over 7-7a and to t h e north.

These are produced by small variations in t h e dip angle readings and a r e too weak to

b e considered as significant in themselves.

VLF-EM SURVEY RESULTS

Seattle Transmit ter

The S e a t t l e s ta t ion readings a r e plotted on Map VI which shows extremely high dip angle percentage readings which a r e nearly all positive. Where negative dip angle

readings occur they a r e generally weak. The topography within t h e survey area is

generally very moderate and is not considered to b e t h e cause of these high readings.

Profiles have been plotted on several north-south lines at 100 metre intervals as well as along t h e east-west direction, again at 100 m e t r e intervals. The dip angle readings have not been t r e a t e d by t h e Fraser F i l te r method.

The east-west profiles show a high positive zone approximately along ZONE A but

weakening to t h e south-west. The east margin of this positive zone nearly approaches

a "cross-over" near t h e east side of ZONE A. On lines 8 N to 13 north these profiles do

produce cross-overs of a broad weak nature trending from 8N, 4+50E; to 13N 6+25E. This t rend very closely approxirnates t h e location of a gully occupied by a small drainage. This gully may b e t h e s i t e of a fau l t o r other s t ructural zone.

The north-south profiles were constructed along lines O+OOE, l E , 2E and 3E. No

negative dip angle percentage readings were recorded. Some values a r e extremely

high, up to 126, particularly on line O+OOE. Posit ive dip angle readings a r e generally

mirrored by negative quadrature readings. In general no useful interpretat ion has been

possible f rom these profiles.

~~ ~ ..

- 30 -

I.P. SURVEY

Introduction

Induced polarization and resistivity surveys were conducted over portions of t h e Kalum

Property, Ter race Area, B.C. on behalf of J.C. Stephen Explorations Ltd., in t h e period

September 26 to October 7, 1986. The work was performed by Alan Scott, Ceophy sicis t.

The pole dipole e lectrode a r ray at a n "a" spacing of 25 meters, and "n" separations of 1, 2, 3, 4, and 5 , was used on t h e induced polarization survey. The cur ren t e lectrode

was to the north of t h e receiving electrodes on a l l survey lines.

Survey Grid and Survey Coverage

A total of 22.05 line kilometers were surveyed over 17 lines on t h e Kalurn Property.

Instrumentation

A Scintrex IPR-1 I t i m e domain microprocessor based induced polarization receiver

and a Scintrex IPC-7 2.5 kw transmit ter were used on t h e survey. t h e IPR-11 opera tes

on a n al ternat ing square wave t ransmit ted current pulse train, and samples t h e decay

curve at ten semilogarithmically spaced t imes a f t e r cessation of e a c h pulse. A 2

second on/2 second off pulse was used on t h e survey. The d a t a is continually averaged until t h e operator is satisfied convergence has occurred, and is filed into solid state memory. The eight sl ice (from 690 to 1050 milliseconds a f t e r shutoff: midpoint a t 870 milliseconds) is t h e value t h a t has been plotted on t h e plans and pseudosections.

The survey d a t a was archived, processed, and plotted using a Corona PPC 400

microcomputer running t h e Scintrex Soft I1 and proprietory software. All decay curves were submitted to spectral analysis by a curve matching procedure.

- 31 -

Plan Maps depicting IP chargeabililty and Resistivity together with pseudosections of t h e s a m e parameters accompany this report . Features of these maps and sections a r e

discussed below.

Resistivity Maps VII, VIII

A broad zone of low resistivity ( 300 ohmmeter) t rends north easter ly through t h e

survey area. The western margin of this zone corresponds to t h e central ax is of ZONE A of t h e VLF-EM Survey. The eas te rn margin is n o t as well marked but corresponds well with ZONE C - Zone la1 linear "stack" noted under discussion of t h e VLF-EM results. On t h e pseudosections this low resistivity zone exhibits f la t contours for t h e most p a r t with only moderate increase in values at n-5. I t is suggested t h a t this is an a r e a of deep overburden flanked by different rock s t ruc ture on e i ther side. I t may, in

e f f e c t b e a narrow graben like structure.

In t h e north east corner of t h e grid a rea , along t h e east side, and across t h e south end

of the grid, t h e resistivity values range from about 1,000 ohmmeters to a high of 4,940. Because of t h e small outcrops of argil l i te (Unit W ) in t h e northeast corner and

near t h e south edge of t h e grid i t is presumed that , in general , well bedded argil l i tes

underlay this area.

The grid a r e a between t h e east margin of t h e supposed graben and t h e 1,000 ohmmeter

contour to t h e east (n-1 Map VII) may b e occupied by argil l i te covered by deeper

overburden, o r it may b e occupied by another rock type. Because several small

anomalies of in te res t occur in this region i t is supposed t h a t t h e subcrop formations a r e other than t h e exposed argillite.

To t h e west of ZONE A generally high resistivity values were obtained which re f lec t

t h e mixed volcanic and sedimentary rocks outcropping along t h e highway. The pa t te rn of t h e resistivity contours is relatively broad but four general zones of high values ( to

5,277 ohmmeters) occur.

- 32 -

Chargeabili ty Maps IX, X

The easter ly two thirds of t h e survey a r e a has a relatively high background value of about 10 milliseconds a t n-1 and a somewhat higher background at n-2. An overall,

apparently anomalous zone, with values up to 30.5 occurs in t h e north-east corner of t h e survey area. A second zone occurs a t about 11+75N 3+00E, while less well defined zones occur at about 5+00N, 4+00E and 1+25N, 5+50E. The north-east trending

"graben zone" is not well defined by t h e chargeabililty contours but is generally

apparent .

Anomalies

Several features , when considered together with result5 of the other surveys have been

termed anomalies. In assurned order of priority these are:-

I ) A chargeability and resistivity high occurs at about 11+75N, 3+00E. This zone lies on t h e west margin of t h e VLF-EM ZONE A within a possible folded

s t ructure as outlined by t h e magnetometer survey. There is no significant VLF- EM anomaly. The geology map shows a wedge of argillite in contact with

outcrop of Unit C serci te schist. There is a possibililty tha t t h e anomaly is

caused by t h e argil l i te but, on balance, this is judged n o t to b e t h e case since t h e

IP anomaly l ies as much over Unit C and somewhat east of t h e indicated Unit A

m e tasands tone and m e tasil t s tone (ar g il li te).

Although this anomaly does not exhibit high magnetic values, as would be

expected from much of t h e mineralization observed, it warrants investigation.

2) High IP resistivity anomalies with slight increases in chargeabili ty occur a t about 7+50N and 9+25N on line OOE. These lie east of t h e main showings area near t h e

lake shore and a r e priority a r e a s for investigation. The narrow high and low

magnet ic zones in this a rea should be particularly examined.

3) High IP resistivity but generally low chargeability values occur a t 12+5ON,

O+5OE. Magnetic pat terns a r e qui te complex here and t h e zone warrants close examination.

- 3 3 -

4) VLF-EM anomaly 8 occupies a local resistivity low at n-2 (Map VIII). A

corresponding chargeabili ty high also occurs on t h e n-2 Map X. This suggests a

zone of conductive mater ia l which does n o t reach surface and is not evident a t n-1.

5 ) VLF-EM anomaly 5a corresponds closely with a chargeabili ty anomaly which appears be t te r defined a t n-2 rather than n-1

- 34 -

CONCLUSIONS AND RECOMMENDATIONS

Significant gold values have been obtained over narrow widths in apparently

structurally controlled settings. The associated mineralization, bornite, chalcopyrite,

hemati te , magnetite, epidote lend themselves to Some e x t e n t to detect ion by

geophysical means.

T h e geophysical surveys conducted on t h e property have revealed several anomalies of distinctly different types which warrant c lose investigation. In addition to individual

anomalies these surveys appear to indicate a major north to north east trending s t ruc ture which may b e of importance in localizing mineralization depending on t h e age relationships.

I t is recommended that:- > .

1) Soil sampling be conducted with closely spaced sample sites over t h e areas of interest outlined by t h e geophysical surveys. This survey should b e carefully designed and controlled in view of t h e relatively low values obtained by t h e old Cominco survey. I t may b e necessary to t a k e t w o sets of samples - o n e or iented

toward irregularly spaced t r e e root s i tes where root act ion may have-brought

metall ic ions to surface and t h e o ther with an 'auger to t e s t ' t h e soil as close to

bedrock as possible.

2) Trenching, using a small backhoe be undertaken over several of t h e anomalous sect ions in t h e north-west portion of t h e grid area. This work would follow completion of t h e geochemical survey.

3) Specific anomalies, selected a f t e r t h e geochemical and trenching programs,

should b e tes ted by diamond drilling. I t is expected t h a t fur ther detailed

s t ructural mapping may accompany this phase of t h e work.

Respectfully submit ted J.C. STEPHEN EXPLORATIONS LTD.

I

%€. Stephe4 President 1'

,' i

A P P E N D I X I

STATEMENT OF QUALIFICATIONS

STATEMENT OF QUALIFICATIONS

I ELLEN E. LAMBERT, of Hazelton, British Columbia, hereby cer t i fy that:

1. I a m a Fellow of t h e Geological Association of Canada.

2. I have a Bachelor's Degree in Geology from t h e University of Washington (1979)

and a Master's Degree in Geology from t h e University of New Mexico (1983).

3. I have practiced off and on as a geologist since 1979:

- In Seatt le, Washington, f rom July 1979 to May 1980 with Colder Associates, Inc.

- In Newfoundland 'from June 1984 to September 1984 with t h e G.S.C.

- In British Columbia from June 1985 to t h e presesnt with Tom Richard's Prospecting, Beaty Geological and J.C. Stephen Exploratons, Ltd.

4. This repor t is based upon a study of a l l available da ta , published and unpublished,

on t h e Kalum claims, and detailed mapping by myself f rom September 1-29,

1986.

5. I have no interest , nor intent to acquire any interest , in t h e described claims.

Hazel ton, B.C. October 27, 1986 Ceoiogis t

A P P E N D I X I 1

SAMPLE RECORDS

1

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V7J 1 E 9 C R E S C E N T / < 4 a ~ ' NORTH V A N C O U V t R t f.3 .C 0 P.O. # : NONE

_cI

-_ CC: DR. P a A , C H R I S T O P H t R

- ~ _ _ _ _ _ - Sam61 e P r eE----- C u &--Opni Xu ppb

descr i p t I on code ppm Aqua K F A + A A 2 0 5 2 5 2 0 2 .3 3 2 5 2 0 5 >10000 3 3 . 0 1700

2 0 5 >10000 62.0 >10000 -- -- -- 205 274 0.4 550

-- -_ -- -- -* -- &' I , I n LO5 > l i ) O O O 54.0 > L O O 0 0 -- -- --

-- -- -- 1 K 8 6 9 2 5 - 1 K 8 6 9 2 5 - 2 K 8 6 9 2 5 - 3 K 8 6 9 2 5 - 4 , K 8 6 9 2 7 - 1 ' ' f i p :

Chemex Labs Ltd. 2 1 2 Brooksbank A v e . Nor th Vancouver , B . C . Canada V7J 2C1

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~ ~ ___- 1 -. ---d

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1 4 5 8 K C P E K T S T R E F T D A T E : 13-OCT-86 N O R T H V A K C C U V ~ Q T t3.C- P.C. # : k O N E V7J 1E9

INVCICE # : 1 8 6 1 9 1 3 9

a%-klL- ow - C C : P . A . C H R I ' j T O P H E R

Samp I c P r t?p A u FA descr i 0 t I o n c o d e 0 7 / T -- -- -- -- -- K86325-3 2 1 4 1 a 706

K 8 6 9 2 5 - 4 214 1 . 0 0 4 -- -- -- -- --

Chemex Labs Ltd. Arialyrical Cheiriists Geochemists - Registered Assayers

-~ -

I I

r0 : S T E P t i t K r J e C e F X P L f l h A T I U N L I M I T E D C E R T . fl

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V 7 J 1 H 9 N G R W V A N C O U V L R T LL

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1 4 5 8 R U P E R T S T R E E T G A T E : 1 6 - a c i - 8 6 NORTH V A N C O U V E R T 6 - C - P - C - 0 : NONE V7J 1E9 KALUH C L l I H S

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I

-Analytical Chemists .Geochemists

rooksbank Ave North Vancouver, RC. Canada V7J 2C1

Phone: (60 Telex:

O7780E 128 07781E 139 07792E 141 07783E 142D

07785E 151 07736E 152 07787E 153 07738E 154 07789E 155 O7790E L57 07791E 158 07792E 159 07793E It0 07794E 161

07784~ KO

1.92 4.0 15 ZOO (0.5 (2 0.77 10.5 14 0.79 GOO 3.31 11.0 20 230 (0.5 ~:2 1.82 (0.5 8 0.65 593 3.71 1.2 5 30 3.: i2 0.08 #:0,5 25 2.63 93R 1.69 29.0 15 10 (0.5 .2 0.45 (0.5 13 Gb i ' l Y Y Y :.I3 (IU U . U I (10 1.18 5%

2.84 5.2 20 20 C0.5 i 2 2.34 10.5 14 160 3626 2.31 10 0.17 (10 1.22 409 1.46 54.0 25 230 10.5 (2 1.10 1.5 16 78 ??99? 4.43 (10 0.19 (10 0.63 473 3.01 3 . 0 15 900 :0.5 2 2.12 (0.5 21 . 189 >9999 3.25 10 0.55 C10 1.57 790 1.2 3 . 0 15 % 8 . 5 ' . , 4 -, Ii..X 0.5, .l,&: / d h . : 9 9 1 2 2 .57 . (10 0.06 (10 0.32 579 1.24 22.0 10 40 .<0.5 0.5 '20 ' 150 3230 ' 4.37 .:I0 0.19 (10 0.85 734 1.31 32.0 15 SO ~:0.5 < ~ 2 1.15 .<0.5 26 171 ;9999 5.82 (10 0.14 (10 0.1.4 716 1.53 6.6 10 . 2 0 (0.5 (2 1.70 (0.5 6 13 3307 ' a" ln 0.0'1 (10 0.38 560 0.87 10.8 5 20 (0.5 (2 0.68 (0.5 7 11 4663 0.11 (10 0.23 756 1.02 6.4 5 20 <0.5 (2 0.51 (0.5 7 23 366C 0.07 (10 0.17 585

1.26 11.6 -5 90 io.5 ;: 0.62 (0.5 :i I:O 60.76 11.85 lo 0.0: (10 1.18 670

0.41 .:lo 0.56 a17

I

GEOCHEMCAL DATA S H E E T - ROCK GEOCHEM SAMPLING

-33 1/15 W. - . .. - . . .- __ J* c z g " , " , I O N S LTD.

t m r swLre Ellen Lambert

WTE Sept 2 9 , 1906 FPx;ECI Kzlm Claims

AIR P m T 5 He.

REMARKS

GEC?CHEMlCAL DATA Sh-,'T - ROCK GEOCHEM SAMPLlNG ii.- -

c STEi 1-3 / ?5 ::

3 T S . ~~

s EXPLORATIONS LTD.