EAST LEITCH

The 1990 program consisted of a diamond drill program totalling 5,328 linear feet to evaluate the eastern extension of the Main Zone, and test the jasperoid iron formation and depth extension of the Main Zone. Tables 6 and 7 give the statistics on the drilling with the best gold intersections respectively.

The exploration programs have concentrated on three distinct zones. These zones are the Main Zone, the Eastern Extension of the Main Zone and the Jasperoid Iron Formation. A major shear zone 330 feet north of the Eastern Extension of the Main Zone has also been intersected in drilling and may represent a highly favourable structure for gold deposition in the Beardmore mining camp.

i) Main Zone

The Main Zone, which is approximately 350' east of the Roxmark/Leitch claim group, consists of two distinct subparallel quartz and quartz carbonate veins and veinlet systems which are located within a 33 foot-wide shear zone (oriented 110 degrees and dipping 80 degrees south). The shear zone foliation varies from parallel to its strike to north 45 degrees east with a dip of 65 to 80 degrees north. The shear zone crosscuts stratigraphy and exhibits a dextral sense of movement. The host rocks range from intermediate to mafic tuff and lapilli tuffs. The alteration within the shear zone is carbonate (calcite and ankerite), sericite, chlorite and an apple green micaceous mineral. The white quartz veins or veinlets exhibit brecciation or crack and seal texture with tourmaline, pyrite (1-10%), arsenopyrite (1-6%), tetrahedrite (<1%) and locally visible gold. Moderate hematization is present within veins and wall rock.

Veins and veinlets vary in width and length but are dominantly divided into two sections, a north and south vein set approximately 30 feet apart.

Surface stripping and diamond drilling have delineated the extent of the veins to be plunging lenses or rods of up to 100 feet long but generally three feet wide with an unknown down plunge length. The southern vein seems to be the more consistent and higher grade, with assays as high as 0.74 ounces gold per ton over 28.1 feet (true width 9.3 feet) in hole AEL-87-20 (see Figures 4 and 6) and is very encouraging for additional exploration at depth. The results of the sampling carried out on the trenched areas are presented on Figure 3. These results (Table 5) were very encouraging.

The western portion of the main vein at surface averaged 0.124 ounces of gold per ton over an average width of 3.7 feet for a distance of 70.5 feet. The central portion of the vein assayed 0.835 ounces of gold per ton over an average width of 5.4 feet for a distance of 55.8 feet. The central portion of the vein will provide a bulk sample for test work. The quartz is generally white in colour but where the best assays were obtained there is a second generation of grey quartz cementing the brecciated white quartz. This grey quartz seems to carry the pyrite mineralization and coarse visible gold was encountered. Staining of malachite is also omnipresent with the coarse visible gold.

There is evidence of a change in dip to the north at depth (see Figure 5) which conforms with dips encountered in the Leitch and Sand River vein systems to the west.

The East Leitch Property is underlain by the eastern extension of a well known auriferous structure. The Sand River and Leitch Gold Mines adjoin the East Leitch Property and are located approximately one mile to the west. Theses two mines produced more than a million tons of ore grading 0.83 ounces gold per ton from the western portion of this structure. Structurally and mineralogically, the three properties are very similar.

i) Leitch Gold Mine

Gold mineralization occurs in two vertical sets of quartz veins within a folded unit of sheared greywacke. One vein set is parallel and the other perpendicular to the axial plane of folding.

Gold mineralization is associated with chlorite and sericite in quartz vein systems displaying "crack and seal" textures. Accessory minerals include pyrite, arsenopyrite, scheelite, tetrahedrite, sphalerite and ankerite. Chlorite and sericite alteration of the wall rocks is extensive.

The Leitch Mine produced 860,648 ounces of gold from 906,400 tons of ore at a recovered grade of 0.92 ounces gold per ton from 1937 to 1965.

ii) Sand River Gold Mine

Gold mineralization on this property occurs in two distinct environments.

A vein system mineralogically and structurally similar to the Leitch veins was the site of production on this property. One hundred and fifty-eight thousand tons of ore produced 50,560 ounces of gold at a recovered grade of 0.32 ounces gold per ton was produced between 1937 and 1942.

An altered zone within quartz-diorite also exists and contains numerous quartz stringers. Mineralization within this zone includes pyrite, arsenopyrite and ankerite with erratic assays in the 0.2 ounces gold per ton range.

Gold was first discovered on the East Leitch Property in the 1930s as a result of investigating the eastern extension of the Sand River and Leitch gold bearing structure. On the Leitch property, some 300 feet from the boundary with the East Leitch claims, San Paulo intersected in hole SP-108 6.34oz.Au over a horizontal width of 1.54 feet for a strike length of 100 feet and is most encouraging. Follow-up drilling is required here at a future date. Subsequent exploration on the East Leitch Property confirmed a gold bearing structure as well as several other gold bearing vein systems and a gold bearing sulfide zone intersected within diorite. Reports suggest that gold has also been obtained by panning rusty material from gossened outcrops.