GEOPHYSICAL REPORT FOR

MELKIOR RESOURCES INC. ON THE

AEM PROJECT BRISTOL AND CARSCALLEN TOWNSHIP

PORCUPINE MINING DIVISION NORTHEASTERN, ONTARIO

2. 56073

Prepared by: !dm June 2015

PROVINCIAL RECORD:N. OFFICE - SUDBURY

RECEIVED

JUN 2 6 20 15

A.M.

TABLE OF CONTENTS

Page

1

1

1

2

2

2, 3

3

3

4

INTRODUCTION

PROPERTY LOCATION AND ACCESS

CLAIM BLOCK

PERSONNEL

GROUND PROGRAM

MAGNETIC SURVEY

HLEM SURVEY

SURVEY RESULTS

CONCLUSIONS AND RECOMMENDATIONS.

CERTIFICATE

LIST OF FIGURES: FIGURE 1, LOCATION MAP FIGURE 2, PROPERTY LOCATION MAP FIGURE 3, CLAIM MAP/GRID SKETCH

APPENDICES:

POCKET MAPS:

A: APEX PARAMETRICS MAXMIN II SYSTEM B: SCINTREX ENVI MAG SYSTEM

HLEM PROFILE MAPS, 1 EACH OF 1777HZ AND 444 HZ FREQUENCIES, 1:2500 SACLE PLAN BASE MAP OF THE MAGNETICS WITH HLEM CONDUCTOR AXIS, 1:2500

Page 1

INTRODUCTION:

The services of Exsics Exploration Limited were retained by Jens Hansen, on behalf of the Company, Melkior Resources Inc., to cut and survey 3 lines of Magnetics and Horizontal Loop Electromagnetic, (HLEM) surveys over a portion of their claim holdings located in the northwest section of Bristol Township and the northeast section of Carscallen Township of the Porcupine Mining Division in northeastern Ontario.

The grid was done to cover several Airborne EM targets that lie at the northern section of Melkior's Big Marsh Lake Project.

The Big Marsh Lake Project area is to the immediate northwest of the Lake Shore Gold Mine operation. The deposit is open both at depth and along strike and is being mined from a surface ramp and an underground operation. The resource at Lake Shore has been expanded lately into what is called the Gap Zone which has added significant ounces to the operation.

PROPERTY LOCATION AND ACCESS:

The AEM Project is situated approximately 25 kilometers west-northwest of the City of Timmins. The entire claim block is situated in the northwest section of Bristol Township and the northeast section of Carscallen Township of the Porcupine Mining Division, Northeastern, Ontario. Refer to Figures 1 and 2 of this report.

More specifically the grid straddles the Township line between Bristol and Carscallen and lies about 800 meters south of the four corner post of Carscallen, Bristol, Godfrey and Turnbull Townships.

Access to the grid during the survey period is by way of Highway 101 west from Timmins to a good gravel road, locally called the Mallette access road, which runs northwest then west from Highway 101 and eventually runs west along the Township line between Godfrey and Turnbull to the north and Bristol and Carscallen to the south. A second gravel road allowed for 4 wheel drive access to the grid area. Traveling time from Timmins to the grid is about 1.5 hours.

CLAIM BLOCK:

The claim numbers that represent the Carscallen project can be found as Figure 3 of this report. Those claims covered by the geophysical survey are listed below.

4224651 4 units 4224652 4 units 4224653 4 units

Refer to Figure 3 copied from MNDM Plan Map of G-3040, Carscallen Township and Bristol Township, G-3998, for the positioning of the grid and the claim numbers within the Township.

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CLIENT:

EXSICS EXPLORATION LTD. P.O. Bo! 1880. NH-WI Suite 13. Hollinger Bldg. Timmins Ont. Telephone: 705-287-4151. 287-2424

MELKIOR RESOURCES INC PROPERTY. P.E3i PROJECT TITLE BRISTOL AND CARSCALLEi TOWNSHIP

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CLIENT-

1LELKIOR RESOURCES INC

NAD 83 5 degree grid

PROPERTY: AEM PROJECT TITLE: BRISTOL AND CARSCALLEN TOWNSHIP

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Page 2

PERSONNEL:

The field crew directly responsible for the collection of all the raw data were as follows.

R. Bradshaw J. Francoeur A. Chamberlain D.J. Gibson J. Hamelin

Timmins, Ontario Timmins, Ontario Timmins, Ontario Timmins, Ontario Timmins, Ontario

The work was completed under the direct supervision of J. C. Grant of Exsics.

GROUND PROGRAM:

The ground program was completed in two phases. The first phase was to cut three metric grid lines across a portion of the claim block that would also cover the strongest portion of the airborne targets. The grid lines were cut perpendicular to a base line that was first cut at an azimuth of 160 degrees from 450MN to 550MS. The three lines were spaced 100 meters apart and were labelled line 0+00 to 200MS. Each line was then cut and chained from tie line 400MW to 600ME using 25 meter station intervals. Upon the completion of the cutting the grid was then covered by a total field magnetic survey as well as the HLEM survey. The magnetic survey was done using the Scintrex Envi mag system and specifications can be found as Appendix A of this report. The HLEM survey was completed using the Apex Parametrics MaxMin II system that can be found as Appendix B of this report.

All of the cut grid was covered by the magnetic survey but only the three cross lines were covered by the HLEM survey.

In all, a total of 4.4 kilometers were cut and surveyed between November 20th and

December 4th 2014.

MAGNETIC SURVEYS:

The following parameters were kept constant throughout the survey procedure.

Line spacing Station spacing Reading intervals Diurnal monitoring Base record intervals Reference field Base removed Unit accuracy

100 meters 25 meters

12.5 meters base station monitor 30 seconds 56,000 nT 55,500 nT +1- 0.05 gamma

Page 3

Once the data was collected it was then merged with the base station date, levelled, corrected and then plotted onto a base map at 1:2500 and then contoured at 50Nt where ever possible. A copy of this colored contoured plan map is included in the back pocket of this report.

HLEM SURVEY:

The following parameters were kept constant throughout the survey procedure.

Line spacing Station spacing Reading intervals Coil separation Theoretical search depth Frequency recorded Parameters plotted

100 meters 25 meters 25 meters 150 meters 75-85 meters vertical 1777Hz and 444Hz frequencies In phase and quadrature components of the secondary field.

Once the data was collected it was then plotted directly onto base maps, 1 base map for each frequency recorded, and then profiled at 1 cm= +/- 10 %. Any and all conductor axis were then interpreted and added to the plan maps. Copies of these profiled plan maps are included in the back pocket of this report.

SURVEY RESULTS:

The HLEM survey outlined a good legitimated bedrock conductor that generally coincides with the center south section of the airborne target. The zone appears to be at a depth of 45 to 50 meters and it has a conductivity of 27 to 30 Mhos. The zone appears to dip near vertical to slightly grid west. It correlates with a modest magnetic low that lies between two magnetic highs. The zone does not continue to line 0+00 but does continue off of the grid to the south.

The magnetic survey suggest the low associated with the conductor may strike a bit to the northeast or it may suggest that the narrow magnetic high coming into the grid from the south has pushed into the low. The narrow high may represent a dike like feature similar to the narrow magnetic high found at the eastern edges of all three grid lines.

The high magnetic unit that covers the western edge of the grid lines may be indicative of an ultramafic unit and or more dike like units. Additional coverage of the high would be needed to better define the unit.

Page 4

CONCLUSIONS AND RECOMMENDATIONS:

The limited ground program was successful in locating and outlining a good bedrock Conductor that appears to coincide with the central south section of the Airborne conductor. The zone is open to the south and appears to dip near vertical to slightly grid west. It appears to coincide with a broad magnetic low feature that is either cut off by narrow magnetic highs around the zone or that the magnetic high pushing into the grid from the south and to the east of the conductor actually causes the low mag unit to wrap around the narrow high.

Further coverage of the zone to the south would help in better defining the conductor and its strike length and direction. HLEM and magnetic surveys appear to work well in defining the source of the airborne zone. Diamond drilling of the zone should also be considered after the results of the extended ground program.

Respectfully submitted

?at 91

J. C. Grant June 2015

CERTIFICATION

1, John Charles Grant, of 108 Kay Crescent, in the City of Timmins, Province of Ontario, hereby certify that:

1).1 am a graduate of Cambrian Colleve of Applied Arts and Technology, 1975, Sudbury Ontario Campus, with a 3 year Honors Diploma in Geological and Geophysical Technology.

2). I have worked subsequently as an Exploration Geophysicist for Teck Exploration Limited, (5 years, 1975 to 1980), and currently as Exploration Manager and Chief Geophysicist for Exsics Exploration Limited, since May, .1980.

3). 1 am a member in good standing ofthe Certified Engineering Technologist Association, (CET), since 1984.

4). I am in aood standing as a Fellow of the Geological Association of Canada, (FGAC), since 1986.

5). I have been actively engaged in my profession since the 15th day of May, 1975, in all aspects of ground exploration programs including the planning and execution of field programs, project supervision, data compilation, interpretations and reports.

6). I have no specific or special interest nor do I expect to receive any such interest in the herein described property. I have been retained by the property holders and or their Agents as a Geological and Geoply Or'Co ultant and Contract Manager.

John Charles Grant, CET., FGAC.

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Five frequencies: 222, 444, 1388, 1777 and 3555 Hz. Maximum coupled (horizontal-loop) operation with reference cable. Minimum coupled operation with reference cable. Vertical-loop operation without reference cable. Coil separations: 25, BO, 1013 , 150 3 200 and 250 m (with cable) or 100,200,300,400,600 and 800 ft.

Reliable data from depths of up to leOm C600 ft3. Built-in voice communication circuitry with cable. Tilt meters to control coil orientation.

f-1 o iF lc AT CAIN

222, 444, 6E3B, 1777 and 3555 Hz .

MAX: Transmitter coil plane and re-ceiver coil plane horizontal (Max-coupled; Horizontal-loop mode). Used with refer. cable .

MIN: Transmitter coil plane horizon-tal and receiver coil plane ver-tical (Min-coupled mode). Used with reference cable.

V. L. : Transmitter coil plane verti-cal and receiver coil plane hori-zontal (Vertical-loop mode). Used without reference cable , in parallel lines.

5.3,11par:a Jns: or 100, 200, 300, 400,600 and 25.50,100,150,200 & 250m (MMII)

800 ft. CMMICF). Coil separations in V.L.mode not re-stricted to fixed values.

;:j ran-;:z. Read: - In-Phase and Guadrature compo- nents of the secondary field in MAX and MIN modes.

- Tilt-angle of the total field in V.L. mode .

±0.25 % to ± 1 % normally, depending on conditions, frequencies and coil separation used.

, - 222Hz : 220 Atm2 - 444Hz : 200 Atm2 - 8813 Hz : 12O Atm2 - 1777 Hz : 60 Atm2 - 3555Hz : 30 Atm2

9V trans radio type batteries (4) Life: approx. 35 hrs. continuous du ty (alkaline , 0.5 Ah ), less in cold weather.

Transmitter aatteries: 12V 6 Ah Gel- type rechargeable

battery. (Charger supplied)

laf-arence Cabie : Light weight 2-conductor teflor c cable for minimum friction. Unshield ed. All reference cables optional at extra cost. Please specify

Voice Link: Built-in intercom system for voice communication between re ceiver and transmitter operators in MAX and MIN modes, via re ference cable .

- Automatic, direct readout on 90mm (3.5 ") edgewise meters in MAX and MIN modes. No null-ing or compensation necessary .

indicator Litjilts: Built-in signal and reference warn ing lights to indicate erroneous readings .

- Tilt angle and null in 90mm wise meters in V.L.mode .

edge- 7,-mpratur,,, -40°C to +60°C (-40°F to+140°F)

6kg (13 lbs.)

Transmitter 13kg (29 lbs.)

n g - Typically 60kg (135 lbs.), depend ing on quantities of reference cable and batteries included Shipped in two field/shipping cases

Spec cat.- ,ons suois.c7. to emar,ge •■■/•.7.!-o,t nOtifiCacicn

In-Phase: 1:20% =100% by push-button switch .

Ousdrature:±20%.±100% by push-button switch .

Tilt: ±75% slope . Null CVLJ: Sensitivity adjustable

by separation switch.

In-Phase and Ouadrature : 0.25 % to 0.5 % ; Tilt: 1% .

P . 1 C 200 STEELCASE RD. E., MARKHAM ,

L 171 ITE ONT., CANADA , L3R 132

Telex : 06-966773 NOROVIK TOR Phone: C416) 495-1612 Cables: APEXPARA TORONTO

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Locating Buried Drums and Tanks?

The ENVI-MAG is the solution to this environmental problem. ENVI-MAG is an inexpensive, lightweight, portable "WALKMAG" which enables you to survey large areas quickly and accurately.

ENVI-MAG is a portable, proton precession magnetometer and/or gradiometer, for geotechnical, archaeological and environ-mental applications where high produc-tion, fast count rate and high sensitivity are required. It may also be used for other applications, such as mineral exploration, and may be configured as a total-field magnetometer, a vertical gradiometer or as a base station.

The ENVT-MAG

• easily detects buried drums to depths of 10 feet or more

• more sensitive to the steel of a buried drum than EM or radar

• much less expensive than EM or radar

• survey productivity much higher than with EM or radar

Features and Benefits

"WALKMAG" Magnstometer/G radiometer

The "WALKMAG" mode of operation (sometimes known as "Walking Mag") is user-selectable from the keyboard. In this mode, data is acquired and recorded at the rate of 2 readings per second as the operator walks at a steady pace along a line. At desired intervals, the operator "triggers" an event marker by a single key stroke, assigning coordinates to the recorded data. True Simultaneous Gradicrnetar

An optional upgrade kit is available to configure ENVI-MAG as a gradiometer to make true, simultaneous gradiometer measurements. Gradiometry is useful for geotechnical and archaeological surveys where small near surface magnetic targets are the object of the survey.

Selectable Sampling Rate

0.5 second, 1 second and 2 second reading rates user selectable from the keyboard.

Main features Include!

• select sampling rates as fast as 2 times per second

• "WALKMAG" mode for rapid acquisition of data

• large internal, expandable memory

• easy to read, large LCD screen displays data both numerically and graphically

• ENVIMAP software for processing and mapping data

ENVI-MAG comprises several basic modules; a lightweight console with a large screen alphanumeric display nd high capacity memory, a staff mounted sensor and sensor cable, rechargeable battery and battery charger, RS-232 cable and ENVIMAP processing and mapping software. For gradiometry applications an upgrade kit is available, comprising an additional processor module for installation in the console, and a second sensor with a staff extender.

Large-Kay Keypad

The large-key keypad allows easy access for gloved-hands in cold-weather opera-tions. Each key has a multi-purpose function.

Front panel of ENVI-MAG showing a graphic profile of data and large-key keypad

Large Capacity Memory

ENVI-MAG with standard memory stores up to 28,000 readings of total field meas-urements, 21,000 readings of gradiometry data or 151,000 readings as a base station. An expanded memory option is available which increases this standard capacity by a factor of 5.

ENVl-MAG Proton Magnetometer in operation

For base station applications a Base Station Accessory Kit is available so that the sensor and staff may be converted into a base station sensor.

Easy ReIew of Data

For quality of data and for a rapid analysis of the magnetic characteristics of the survey line, several modes of review are possible. These include the measure-ments at the last four stations, the ability to scroll through any or all previous readings in memory, and a graphic display of the previous data as profiles, line by line. This feature is very useful for environ-mental and archaeological surveys.

Highly Productive

The "WALKMAG" mode of operation acquires data rapidly at close station intervals, ensuring high-definition results. This increases survey productivity by a factor of 5 when compared to a conven-tional magnetometer survey.

"Da t acheck" Quality Control of Data

"Datacheck" provides a feature wherein at the end of each survey line, data may be reviewed as a profile on ENVI-MAG's screen. Datacheck confirms that the instrument is functioning correctly and

allows the user to note the magnetic relief (anomaly) on the line.

Largi Scra-y1 "Super-Twist" 64 x 240 dot (8 lines x 40 characters), LCD graphic screen provides good visibility in all light conditions. A display heater is optionally available for low-temperature operations below 0°C.

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Close-up of the ENVI-MAG screen showing data presented after each reading

Interactive Menus The set-up of ENVI-MAG is menu-driven, and minimizes the operator's learning time, and on-going tasks.

Close-up of display of ENVI-MAG showing interactive set-up menu

Specifications Total Field Operating Range 20,000 to 100,000 nT (gammas)

Total Field Absolute Accuracy

▪ 1nT

Sensitivity 0.1 nT at 2 second sampling rate

Tuning Fully solid state. Manual or automatic, key- board selectable

Cycling (Reading) Rates 0.5, 1 or 2 seconds, up to 9999 seconds for base station applications, keyboard selectable

Gradiometer Option Includes a second sensor, 20 inch (1/2m) staff extender and processor module

"WALKMAG" Mode 0.5 second for walking surveys, variable rates for hilly terrain

Digital Display LCD "Super Twist", 240 x 64 dots graphics, 8 line x 40 characters alphanumerics

Display Heater Thermostatically controlled, for cold weather operations

Keyboard Input 17 keys, dual function, membrane type

Notebook Function 32 characters, 5 user-defined MACRO's for quick entry

Rechargeable Battery and Battery Charger

An "off-the-shelf" lead-acid battery and charger are provided as standard. The low-cost "Camcorder" type battery is available from electronic parts distributors everywhere.

HELP-Line Available

Purchasers of ENVI-MAG are provided with a HELP-Line telephone number to call in the event assistance is needed with an application or instrumentation problem.

ENVIMAP Processing and Mapping Software

Supplied with ENVI-MAG, and custom designed for this purpose, is easy-to-use, very user-friendly, menu driven data processing and mapping software called ENVIMAP. This unique software appears to the user to be a single program, but is in fact a sequence of separate programs, each performing a specific task. Under the menu system, there are separate programs to do the following: a) read the ENVI-MAG data and reformat it into

a standard compatible with the ENVIMAP software

b) grid the data into a standard grid format

c) create a vector file of posted values

Standard Memory Total Field Measurements: 28,000 readings Gradiometer Measurements: 21,000 readings Base Station Measurements: 151,000 readings

Expanded Memory Total Field Measurements: 140,000 readings Gradiometer Measurements: 109,000 readings Base Station Measurements: 750,000 readings

Real-Time Clock Records full date, hours, minutes and seconds with 1 second resolution, +/- 1 second stability over 12 hours

Digital Data Output RS-232C interface, 600 to 57,600 Baud, 7 or 8 data bits, 1 start, 1 stop bit, no parity format. Selectable carriage return delay (0-999 ms) to accommodate slow peripherals. Handshaking is done by X-on/X-off

Analog Output 0 - 999 mV full scale output voltage with keyboard selectable range of 1, 10, 100, 1,000 or 10,000 nT full scale

Power Supply Rechargeable "Camcorder" type, 2.3 Ah, Lead-acid battery. 12 Volts at 0.65 Amp for magnetometer, 1.2 Amp for gradiometer,

External 12 Volt input for base station operations

Optional external battery pouch for cold weather operations

Battery Charger 110 Volt - 230 Volt, 50/60 Hz

with line and baseline identification that allows the user to add some title information and build a suitable surround

d) contour the gridded data

e) autoscale the combined results of the posting/surround step and the contouring step to fit on a standard 8.5 ins. wide dot-matrix printer

f) rasterize and output the results of step e) to the printer

ENVIMAP is designed to be as simple as possible. The user is required to answer a few basic questions asked by ENVIMAP, and then simply toggles "GO" to let ENVIMAP provide default parameters for the making of the contour map. The user can modify certain characteristics of the output plot. ENVIMAP'S menu system is both keyboard and mouse operable. HELP screens are integrated with the menu system so that HELP is displayed when-ever the user requests it.

Options Available

• True simultaneous gradiometer upgrade

• Base station upgrade • Display heater for low

temperature operations • External battery pouch

Operating Temperature Range

Standard 0° to 60°C Optional -40°C to 60°C

Dimensions Console - 10 x 6 x 2.25 inches

(250 mm x 152 mm x 55 mm)

T.F. sensor - 2.75 inches dia. x 7 inches (70 mm x 175 mm)

Grad. sensor and staff extender - 2.75 inches dia. x 26.5 inches (70 mm x 675 mm)

T.F. staff - 1 inch dia. x 76 inches (25 mm x 2 m)

Weight Console - 5.4 lbs (2.45 kg)

with rechargeable battery T. F. sensor - 2.2 lbs (1.15 kg)

Grad. sensor - 2.5 lbs (1.15 kg)

Staff - 1.75 lbs (0.8 kg)

Head Office 222 Snidercroft Road Concord, Ontario, Canada L4K 1B5 Telephone: (905) 669-2280 Fax: (905) 669-6403 or 669-5132 Telex: 06-964570

In the USA: Scintrex Inc. 85 River Rock Drive Unit 202 Buffalo, NY 14207 Telephone. (716) 298-1219 Fax: (716) 298-1317