GM 61415 GROUND MAGNETIC SURVEYING, SURFACE SAMPLING AND CORE RELOGGING AND SAMPLING AT THE ST. CHARLES MAGNETITE DEPOSIT NTS 2.2 D 11

GROUND MAGNETIC SURVEYING, SURFACE SAMPLING AND CORE RELOGGING AND SAMPLING AT THE ST. CHARLES MAGNETITE DEPOSIT, BOURGET TOWNSHIP,

Company Name: Micrex Development Corporation Claim Group: CL-5206689 (A), CL-5206688 (A), CL-5206687 (A), CL- 5206686(A) Nature of Report: Property Evaluation: sampling, re-logging of core Work Conducted During: January 20 to February 2, 2003 Work Conducted By: APEX Geoscience Ltd. Location of Claims: Lots 44, 45, 46, 47, Range I, Bourget Township Lat.-Long.: 71°27W, 48°31N Author of Report: Andrew Turner, B. Sc., P. Geol. Date: April 21, 2004

REÇU AU MRN

MRNF-GÉOINFORMATION 2005 9 JUIN 2004 GM 61415 CENTRE DE SERVICES DES MINES

APEX Geoscience Ltd.

Apr 121, 2004 Andrew Turner, B.Sc., P. Geol. GROUND MAGNETIC SURVEYING, SURFACE SAMPLING AND CORE RELOGGING AND SAMPLING AT THE ST. CHARLES MAGNETITE DEPOSIT, BOURGET TOWNSHIP, QUEBEC

TABLE OF CONTENTS

INTRODUCTION 1

PROPERTY DESCRIPTION AND TERMS OF REFERENCE 1

LOCATION, ACCESS AND PHYSIOGRAPHY 4

PREVIOUS EXPLORATION WORK 4

GENERAL GEOLOGY 7

EXPLORATION 2003 7

1. Ground Magnetic Geophysical Surveying 9 2. Core Relogging and Sampling 9 3. Surface Sampling 17

CONCLUSIONS AND RECOMMENDATIONS 20

REFERENCES 23

CERTIFICATION 24

TABLES

TABLE PAGE

1 Permit Numbers

FIGURES

FIGURE PAGE

1 Project Location Map 2 2 Property (Claim) Map .3 3 Regional Geology .6 4 Property Geology .8 FIGURE PAGE

5 Total Field Ground Magnetic Profiles .10 6 DDH 99-01: Geology, Mag Susc. and Sample Locations 11 7 DDH 99-02: Geology, Mag Susc. and Sample Locations 13 8 DDH 99-03: Geology, Mag Susc. and Sample Locations 14 9 DDH 99-04: Geology, Mag Susc. and Sample Locations 15 10 DDH 99-06: Geology, Mag Susc. and Sample Locations 16 11 Surface Sample Locations (Relative to Total Field Ground Magnetics) .18 12 Sample Collection from the North Magnetite Zone .19 13 Sample Collection from the South Magnetite Zone 19 14 Proposed Drill Holes with Ground Magnetic Profiles 21

APPENDICIES

APPENDIX PAGE

1 List of Personnel AT END 2 Analytical Reports AT' END GROUND MAGNETIC SURVEYING, SURFACE SAMPLING AND CORE RELOGGING AND SAMPLING AT THE ST. CHARLES MAGNETITE DEPOSIT BOURGET TOWNSHIP, QUEBEC

Introduction

The St. Charles magnetite deposit is more accurately a series of magnetite/ilmenite (+/- apatite) occurrences that represent ultra-mafic pods contained within a large a.northosite intrusion. The occurrences are located along the north shore of the Saguenay approximately 22km west northwest of Jonquiere, Quebec (Figure 1). The magnetite occurrences have been investigated on numerous occasions in the past but have not yet been the focus of a systematic exploration program. As a result, the size of resources, although described and surmised in many historical reports, is not properly understood. However, given the mapped extent of the magnetite-bearing rocks, the resource potential is significant.

The intent of the exploration work conducted by APEX Geoscience Ltd., on behalf of Micrex Development Corporation, was to examine the property and the nature of the magnetite occurrences and recommend an exploration program that would result in a proper assessment of the resource potential of the property. The 2003 exploration program comprised geophysical surveying (ground magnetics) and a re-examination of core from a previous exploration program. Between January 20 and Februar:y 2, 2003, APEX completed 14.4 line-km of ground magnetics and re-logged approximately 369.7m of core in 5 holes drilled on the property in 1999. A total of 88 samples of core: were collected by splitting of the old core (1999). In addition, 10 large grab samples comprising at least one 5-gallon pail each of rock were collected from outcrops of the magnetite unit on the property.

Property Description and Terms of Reference

The property is owned by Mr. Roch Cormier and comprises 4 lots (44, 45, 46 and 47) within Range I of the Bourget Township (Table 1) located approximately 22km west northwest of Jonquiere, Quebec. Figure 2 illustrates the location of the lots that: comprise the property relative to Rural Road 1, the Saguenay River, and other topographic features.

Micrex has agreed to purchase the property for a total amount of $2,500,000, the payment terms of which are as follows: $5000 in cash and $90,000 in shares of the Company were paid when the Agreement was signed. The balance of the purchase price will be paid in yearly minimum payments of $45,000 in cash or shares of the Company beginning in December 2003. The Vendor shall reserve from all production from the Claims a royalty based on finished tonnes of products shipped of $0.25 per tonne or 1% of the actual price received for the product (less GST and any Provincial or Federal royalty, tax or payment) whichever is higher. This royalty survives the sale, assignment or transfer of the Claims by Micrex.

N unaNut • N IvLgivik +Salluit ~~ ;,R,. - ~V~` ~ • Akulivik Qu~~g•

~ ♦ ° i~ Pwûngnituk Kangigsuk• Port Burodell '4 d ~ o - ~ ".... -Aupaluk• Labrador Sea Q • Int~guak .,7 ~ Tasiujag• ~ *Kuujjuaq ( _ ° Quebec ~~ Hudson B ~ ' ,. ~ ~ ~,,~- CANAD • 9 ~ _; r

.--r-.. ---,) ^`~ ~ sPost~dé=la B~leine (~

Fort Schefferville • George adisson — -•Sakam i LABRADOR • Keyano

/ ` ~ / C_l ~1EBEC Brandor• •Nemiscau FolFortRupertert Rup Gagnon• Havre- Harrington Sept-Iles St.P* rre sNatashquan • Matagami **Moisie Harbor La Sarre islets _ i Chibougamalr Caribou Port Cartier Ile D' Anticosti osm ♦St -Anne-des-Monts Rouyn • quIere ~ Gaspe St.-Féliden• ' •Rimouski Alma ■ Charxiler Val d% Chic . . 1 i 1 Baie-St.-Paul• :RUNSWICK Quebec City TmLs-Rivieres %L.eUis PRINCE Jolliette •~orel • EI -D IS Saint Jerome • metfrn.d-Mines _ Laval~•Longuevil NOVA S : i ONTARIO Montreal *Sherbrooke

t-rttomas- ~Alqa . 1 Bégin fque ~ 1 n 3vi(-r4e-ralarciaU Aare ~e on :inri . rmaldin ÿ~ 169; f Leon a '4--...,-v 'N 1373 . . .K -.<• - ,Deflsle ' . St-Honoré N.; .. ~ouapé -..." -,. . St-Ambrol seS , ;i_[:Llqçncr ~~~~...M,i e ü7 tv,4 ,. ` ," ~/.lit.. ~0 km ;LL~ Tremblay ~ Ammon . ~:~, ~ ~_ _ .;r r _~:, ,::, Shipshaw La Dore ..: IIE,,,_ l4 tana '; Jonquière La ,;z St-Félicien ~ s, C ~:., - Kccoc ,,, r aa ie St-Prime - ~ ~ ., , ~ Saguenay- ~ ~,` Roberva: ~Pr ~ ; JC,, Io11T . 7 c.. Lac-St-Jean ~ Liiterrière 9te•Hedwdge , abod ictvile) -"D2541'n5 ::411---'' . Var-Janei I J- IE -GrOiX Ferlanù . Angoulème 1 ~ 1381.1

MICREX DEVELOPMENT CORP.

St. Charles Magnetite Deposit Bourget Twp., Quebec PROJECT LOCATION

0 100 200 300 Scale Kilometres APEX Geoscience Ltd. Edmonton, AB March, 2004 Figure 1. 2 Roads w

Powerlines

/"\- Topographic Contour (10m interval) /Z Hydrology

Quebec Grid - 22 D 11-200-0101

MICREX DEVELOPMENT CORP.

St Charles de Bourget Magnetite Property

Property (Claim) Map 0 1km I ' ' I scale 1 : 25,000

APEX Geoscience Ltd. Edmonton, AB March, 2004 Figure 2

Micrex retained the services of APEX Geoscience Ltd. (APEX) in January of 2003 in order to conduct the following property evaluation.

Table 1. Permit Numbers Lot Area (ha) Permit Numbers Owner 44 50 5206686 Roch Cormier 45 50 5206687 Roch Cormier 46 44 5206688 Roch Cormier 47 44 5206689 Roch Cormier 188 total

Location, Access and Physiography

The property is located approximately 5km west of the community of St. Charles de Bourget, in Bourget Township, approximately 221cm west northwest of Jonquiere, Quebec (Figure 1). The property was accessed from Jonquiere daily by crossing the Saguenay River utilizing the bridge on the Rue Price and then following the Route de St. Leonard to the west. This road eventually turns into Range Road 1, from which the property is then actually accessed by turning to the south onto either the Chemin Bressard or the Chemin Cloutier.

The majority of the property comprises rolling topography with hills that have a maximum topographic relief of approximately 30m (Figure 2). The property is bounded to the north by powerlines and a strip of private property along the Chemin de St. Leonard. Just south of the powerlines, and running roughly parallel to them, is a broad swampy valley through which runs the Ruisseau Tremblay-Maltais. The major topographic feature on the property is a large central hill that rises to an elevation of 187m and lies south of the Ruisseau Tremblay-Maltais. The property then drops dramatically to the south towards the Riviere Saguenay (Elevation —70m).

The creek valleys contain dense thickets of alders and swamp spruce while the elevated areas on the property contain fairly dense growths of mixed deciduous and coniferous trees. The fieldwork described in this report was conducted in the month of January and was conducted with the assistance of snowshoes due to the 1-1.5m of snow present. Temperatures were fairly cold but seasonable with daytime highs in the range of —20 to — 3VC.

Previous exploration work

The first report on titaniferous magnetite was made by Abbe Lablamme, who described exposures along the north shore of Saguenay river. In 1912 Mr. E. Dilieux, a well known Mining Engineer from Paris, France, concluded that the "St. Charles property may contain a tonnage in excess of 5,000,000 tons", and "could be economically worked by quarrying methods." Further studies and mapping were conducted in 1924-1926 by Mr. W.A.H. Robinson, who provided detailed descriptions of ore bodies, and estimated

4 reserves as "quite possibly run well into millions of tons" (Robinson, 1926). Waddington (1944) completed a dip-needle survey over a considerable area of the St. Charles deposit and created a map, which also incorporated data from the Robinson survey. Osborne (1944) described the mineralogy of some of the occurrences. In 1946 A. W. Joliffe mapped and sampled northern part of the St. Charles deposit for Quebec Metallurgical Industries. 14 bulk samples were collected and analyzed for Fe, TiO2 and P2O5. In 1947 Department of Mines and Resources of run concentration tests on St. Charles ores.

In 1948 American Metal Company Ltd. conducted flotation tests on samples of an ilmenite-apatite ore. In the summer of 1948 R.F. Jooste conducted an investigation of the area for the Quebec Department of Mines and created a map on a scale of 1":400'. At this time both the northern and southern parts were surveyed. Prior to 1954 Canadian Javelin Foundries and Machine Works Limited drilled 15 diamond drillholes totaling some 8000 feet. In 1959 detailed geological survey and magnetometer survey were carried out by J.M. Allen and T.R. Gledhill for Grand Saguenay Mines and Minerals Limited. hi 1966 D. Raicevic of Department of Energy, Mines and Resources reports on investigation of the production of iron, titanium and phosphorus concentrates and gives a negative assessment of the recovery potential.

In 1963-1977 Grand Saguenay Mines and Minerals conducted several exploration programs including drilling. At least 15 drillholes were completed and at least 7 of them analyzed using a whole-rock analysis. However, no report was available for this work.

In a 972 further magnetometer survey was conducted by B.C. Fulcher of International Mines Services Ltd. in order to outline more conclusively the extent of mineable bodies of magnetic ore. In 1973 a very comprehensive evaluation of metallurgical possibilities and saleable products for St. Charles Deposit was conducted by Research and Productivity Council for Mr. J. Tindale of International Mines Services (Robert, 1973). In 1987 a rock sampling survey was conducted on the property to evaluate its potential for a phosphate and rare earth element mine, a total of 9 rock samples and 1 soil sample were collected and analyzed of P2O5 and Y content. In 1988 further tests for concentration of apatite from iron-titanium ore were conducted for Canhorn Mining Corporation by Division des Mineraux industriels et Metaux precieux (Cotnoir, Delisle, 1988). Canhorn Mining Corporation differentiates between St. Charles and Javeline deposits. In 1999 Marmot Research Inc. drilled 7 drillholes on St. Charles de Bourget property, however, a comprehensive report on this program could not be located.

Finally, D.T. Sheddon conducted additional magnetometer survey, and interpreted earlier data from B.C. Fulcher and calculated a total ore reserve as 41 million tonnes of ore — including Inferred, Indicated and Measured Minerals Resource.

5 e

Anorthositic Suite

;41/1ig.2 Charnockitic suite Paleozoic Platform suite Orthogneiss, paragneiss, amphibolites

MICREX DEVELOPMENT CORP. St. Charles Magnetite Deposit Bourget Twp., Quebec REGIONAL GEOLOGY

0 100 200 300 Scale Kilometres APEX Geoscience Ltd. Edmonton, AB March, 2004 6 Figure 3 General Geology

The area of the St. Charles magnetite occurrences is located in the Proterozoic Grenville geological Province, and within the Lac-Saint-Jean Anorthositic Suite (Figure 3) of intrusive rocks. The poly-phase, labradorite-type Lac-Saint-Jean Anorthositic Suite has an age of 1160-1140 Ma and is exceptional in that it extends over an area of approximately 20,OOOkm2. The emplacement of the anorthosite mass was followed by mafic and felsic magmatic events dated at 1050-1045 Ma and 1030-1020 Ma, respectively. The last magmatic event in the area was the emplacement of 990-980 Ma alkalic granites in Lac-Saint-Jean Anorthositic Suite (Hebert et al, 2003).

The anorthositic suite was emplaced along a regional NE-SW thrust and strike slip shear zones, developing in association with several NNE-SSW strike slip faults. These structures continued to be active throughout Grenvillian orogeny and are responsible for deformational and metamorphic textures (Hebert et al, 2003).

The St. Charles titaniferous magnetite bodies occur as irregular, lenticular bodies within a large mass of anorthosite and gabbroic anorthosite. Bodies of up to 200 feet are elongated in north-south direction, at small angle to regional foliation (Jooste (1948), Allen (1959)). Foliation and banding in the anorthosite strikes north and dips are generally vertical, although dips of 60° were recorded. Jooste and Allen describe a contact between anorthosite and magnetite ore as intrusive, and note, that where contact is exposed, it is sharp and with no obvious alteration. Allen (1959) notes close genetic connection of magnetite ore with gabbro-diorite and pegmatitic anorthosite, and suggests that magnetite ore may be a late stage differentiate of anorthosite magma.

Phosphatic titaniferous magnetite ores show considerable variation in grain size and mineral content. Ores are typically made up of medium grained aggregates of magnetite and apatite, surrounding larger crystals or masses of olivine (Jooste, 1948).

On the basis of chemical analysis two main ore types are differentiated: high-phosphorus type with 5-30% apatite by volume and low phosphorus type with less that 5% apatite. Jooste (1948) notes that there does not seem to be any genetic differences between these two types — one kind may grade directly into the other by depending of apatite content. High-phosphorus titaniferous magnetite ores mainly occur in the northern part of the area, on Lot 46 and adjacent lots, whereas phosphorus-poor type occurrences are concentrated in the southern part of the area on lots 44 and 45 (Figure 4).

Exploration 2003

Exploration conducted by APEX Geoscience Ltd., on behalf of Micrex Development Corporation Inc. on the St. Charles magnetite property, comprised geophysical surveying (ground magnetics) and a re-examination of core from a previous exploration. program. Between January 20 and February 2, 2003, APEX completed 14.4 line-km of ground magnetics and re-logged approximately 369.7m of core in 5 holes drilled on the property

7 Anorthositic Rocks Apatite-rich titaniferous magnetite rock Apatite-poor titaniferous magnetite rock

Property Boundary

00 Roads

Powerlines

Topographic Contour (10m Interval) Hydrology

Quebec Grid - 22 D 11-200-0101

MICREX DEVELOPMENT CORP. St Charles de Bourget Magnetite Property Property Geology (after Jooste, 1948) 0 1km teE l scale 1 : 25,000 APEX Geoscience Ltd. Edmonton, AB March, 2004 Figure 4 in 1999. A total of 88 samples of core were collected by splitting of the old core (1999). In addition, 10 large grab samples comprising at least one 5-gallon pail each of rock were collected from outcrops of the magnetite unit on the property.

1. Ground Magnetic Geophysical Survey

A grid was established on the property using a combination of optical and GPS surveying. The origin of the grid was set at 20000N and 5000E on the we:st side of Chemin Cloutier beneath a power pole located at the top of the hill where excavations had previously been conducted in order to expose the magnetite unit. The baseline was extended northward approximately parallel to UTM north, and followed the road for approximately 200m before heading off into the woods. The baseline was completed using a differential GPS instrument 800m north and 900m south of the origin. Cross lines were run at 100m intervals along the baseline and stations were placed every 25m. The grid was laid out on a computer and was downloaded to the GPS datalogger, which was then used to place the grid in the field. Magnetometer readings were taken at half station intervals (12.5m) along the lines.

The grid was surveyed for total field and gradiometer magnetics. Unfortunately, the intensity of the magnetic field generated by the magnetite-apatite units, particularly in contrast to that of the surrounding mafrc-poor Anorthosite, often overwhelmed the magnetometer and resulted in spurious data. However, it can be concluded that the presence of "noisy" magnetic data is a direct result of the presence of magnetite-apatite units. Figure 5 shows a magnetic profile plot of the grid area, which illustrates the location of two main areas of magnetite mineralization, which corresponds with the previous mapping by Jooste (see Figure 4). The first occurs in the area of the laid origin and appears to be composed of parallel units that in turn parallel the Chemin Cloutier. The second main occurrence of the magnetite unit occurs in the southeast corner of the grid area between the Chemin Brossard and the baseline south of line 19600N. Pods of the :magnetite unit can be seen along the road cut at the end of Chemin Brossard adjacent to the Saguenay River.

t. Core Relogging and Sampling

The property was drilled by Marmot Research Inc. in 1999 resulting in a total of 7 holes. The core was retrieved from storage by the author from a workshop belonging to Gerard Cloutier and located at Lot 46, Range 1, St.Charles de Bourget. The core was returned to this location following the completion of the re-logging and sampling. The core was taken for examination and sampling by APEX to the garage of the Motel Princesse in Jonquiere. The core from holes 99-1 to 99-4 and 99-6 was examined and logged, measurements of magnetic susceptibility were collected generally every half meter along the core, and the magnetite units were sampled (were not previously sampled). Holes 99- 5 and 99-7 were not re-examined as they had been sampled previously. Drillhole locations are illustrated in Figure 5, while drillhole profiles showing geology, sample

9 1 1 1

RU`-R oed Pri veto 1 (2 2k'n to ✓ ono,d . ~ Prop ~ â ) m ~

BIM

Approximate ~ Property - 0o Boundary: z Lots 44-47, St. Charles de Bourget Twp.

MICREX DEVELOPMENT CORP. 71114 rivate *At St. Charles de Bourget Project Total Field Ground Magnetic Profiles (Ver. Scale:1 mm = 5000nT) Riviere Saguenay 50 0 100 200m IIIII ~ (Hon Scale 1 : 10 000) 4600 E 4800 E 5000 E 5200 E 5400 E 1 Edmonton, AB March, 2004 I 1 1 10 Figure 5 99-01 0 0 DHOB

SPMT 990101

PPMT 990102 APMT 990103 -

EOH 14.75m 0 200 400 600 800 1000 Magnetic Susceptibility

MICREX DEVELOPMENT CORP. St. Charles de Bourget Property

DDH 99-01: Geology, LEGEND Mag Susc. and Sample Locations SPMT - "salt 'n pepper' textured apatite-poor magnetite rock APMT - normally very coarse apatite-rich magnetite rock 0 2 4 6 8 10 ANOR - anorthosite, normally very coarse grained MFDK - fine grained, dark green-black, mafic dyke metres APEX Geoscience Ltd. Edmonton, AB March 2004 11 Figure 6 locations, and magnetic susceptibility for the holes examined (99-01, 02, 03, 04 and 06) are presented in Figures 6 through 10.

DDH99-01 Drill hole 99-01 was collared at UTM coordinates 317940E/5376830N (5100E/19850N grid) east of Chemin Cloutier. Hole 1 was vertical and intersected only 3.95m of the magnetite unit between 1.5m (overburden depth) and 5.45m (Figure 6). The remainder of the hole to 14.75m was composed of very coarse-grained anorthosite (ANOR). The magnetite unit, although thin, showed a large amount of textural variation with massive medium grained magnetite with finely disseminated apatite at the top (salt and pepper magnetite — SPMT), fine grained magnetite with very little apatite in the center (PPMT), and medium grained magnetite with abundant coarse apatite at the bottom of the interval (apatite magnetite rock — APMT). The magnetic susceptibility data illustrates the decrease in the abundance of magnetite in this lower apatite-rich unit. A single sample of each of the three magnetite-apatite textures above was collected (3 samples total).

DDH99-02 Drill hole 99-02 was collared at the same location as hole 1, but was drilled at 45° to the NW. Hole 2 intersected the magnetite-apatite unit from the collar, beneath 2.75m of overburden, to a depth of 13.75m (Figure 7). Unlike hole 1, the magnetite-apatite unit contained several inclusions of anorthosite. A thin transitional unit was encountered immediately below the magnetite unit to a depth of 16.4m and comprised anorthosite with mafic inclusions (non-magnetic). The remainder of the hole, from 16.4m to 44.85m, intersected anorthosite. As well as containing anorthosite inclusions, the magnetite- apatite unit in hole 2 differed from that encountered in hole 1 in that it was comprised entirely of the salt and pepper textured unit (fine-grained apatite disseminated in coarser grained magnetite). A total of 6 samples was collected from the upper 13.75m of core from hole 99-02.

DDH99-03 Drill hole 99-03 was collared at UTM coordinates 318070E/5376695N (5100E/19850N grid) west of Chemin Cloutier on the edge of that had previously been cleared to expose the magnetite unit. Hole 3 was vertical and intersected salt and pepper textured apatite- magnetite unit (fine-grained apatite disseminated in coarser grained magnetite) from the collar to 27.7m (Figure 8). The remainder of the hole, from 27.7m to 33.05m, intersected anorthosite. It should be noted that a box of core was missing representing the interval from 18.75m to 24.4m. The box was said to contain magnetite unit, which is likely as there was no evidence of other rock types at either the end of the preceding box or the start: of the following box. No samples were collected from hole 99-03, which had been previously split and sampled.

DDH99-04 Drill hole 99-04 was collared at the same location as hole 1, but was drilled at 45° to the NW. Hole 4 intersected the magnetite-apatite unit from the collar to 103.95m (Figure 9). The remainder of the hole, from 103.95m to 105.15m, intersected anorthosite. It should be noted that a box of core was missing representing the interval from 95.6m to 101.6m.

12 99-02 a DHOB

990201 SPMT 990202-5

ANOR 990203

990204 -10 SPMT -10 990205

ANOR 990206 SPMT

-15 ANOR

-20

-25 -251

I LEGEND DHOB - overburden SPMT - "salt 'n pepper" textured apatite-poor magnetite rock -30 -30-~ ANOR APMT - normally very coarse apatite-rich magnetite rock ANOR - anorthosite, normally very coarse grained MFDK - fine grained, dark green-black, mafic dyke

-35

MICREX DEVELOPMENT CORP. -40 0 St. Charles de Bourget Property

® DDH 99-02: Geology, Mag Susc. and Sample Locations ® 0 2 4 6 8 10 0 200 400 600 800 1000 metre's EOH 44.85m Magnetic Susceptibility APEX Geoscience Ltd. Edmonton, AB March 2004 13 Figure 7

99-03 0 i I I ~ old data - sampled previously (not sampled by APEX

-5-

-10- SPMT -10

-15- -15

-20- -20-

DHLC missing core (box 4) -25- SPMT

-30- ANOR -30- � ~

a I I I I EOH 33.05m 0 200 400 600 800 1000 Magnetic Susceptibility MICREX DEVELOPMENT CORP. St. Charles de Bourget Property LEGEND DHOB - overburden DDH 99-03: Geology, DHLC - lost or missing core SPMT - "salt `n pepper" textured apatite-poor magnetite rock Mag Susc. and Sample Locations APMT - normally very coarse apatite-rich magnetite rock 0 2 4 6 8 10 ANOR - anorthosite, normally very coarse grained MFDK - fine grained, dark green-black, mafic dyke metres APEX Geoscience Ltd. Edmonton, AB March 2004 14 Figure 8

Magnetic Susceptibility 99-04 200 400 600 800 1000 0 990401 LEGEND 990402 DHOB - overburden 990403 DHLC - lost or missing core APMT 990404 -10 -10 SPMT - "salt 'n pepper" textured 990405 apatite-poor magnetite rock 990406 APMT - normally very coarse SPMT 990407 ❖❖❖❖❖ ❖::.;.;.;.;.;.;.;:;.;.;.;.:._.-.--- . apatite-rich magnetite rock .•...•..o•o.~.~.:.•...•:::::::: ...... - APMT 990408 ;o...... ~...... o...-... . - ANOR - anorthosite, normally very 990409 ...... ,....•..•❖ ....s•..•oo....❖ ❖ - -20 -20 :,•. .•o...... •o. . .s•oo.o ~...>c o. coarse-grained SPMT 990410 oo❖o.•000.•0000. o.o:: •...... o.•.....•.. o..•....•...... ~ o...•.o•.: .-.... _ MFDK - mafic dyke; fine grained, 990411 ...... :•::...... ~ -...... _,.... .❖ .--._ ._.--- > dark green-black 990412 ...•.-:•..=-- ❖ :•::•::•::..•❖:•::•:: so❖:.-.-❖.., , 990413 .o•....❖.o❖❖.•...o❖.o•..~. ~ ~ 990414 .;.;...oso.•❖.❖ so~.❖.. ~. -30 -30 .•....•..•.;.~. .•. ~ • 990415 .....-..0000.•.•.:.__❖.❖.~ : , 990416 ...... -...... --❖ APMT ❖.•.O.•.o..o.,,.•. ~, o,....i...--~ > 990417 .;.;.;.,;;.:•:e.:¢.~.~..~.~;..•..s•oo...... :... o..• . ~ :-=--- > (Minor ANOR) 990418 ; _... 990419 -40 -40 990420 990421 990422 SPMT 990423 990424 -50 APMT -50 APMT/ANOR 990425 APMT 990426 APMT/ANOR 990427 990428 990429 -60 -60 990430 990431 APMT/SPMT 990432 990433 990434 -70 -70 990435 990436 990437 990438 no samples 39/40 -80 ANOR -8 990441 990442 990443 990444 SPMT 990445 -90 -90 990446 990447 990448 MICREX DEVELOPMENT CORP.

DHMC missing core St. Charles de Bourget Property -100 (box 17) -100- SPMT 990449 „ DDH 99-04: Geology, ANOR 1 1 1 1 Mag Susc. and Sample Locations EOH 105.15m 200 400 600 80 0 2 4 6 8 10

metres APEX Geoscience Ltd. Edmonton, AB March 2004

15 Figure 9 99-06 i i i i 0 1 990601 990602 APMT 990603 i 990604 -10 MADK -10 ANOR/APMT 990605 990606 990607 APMT 990608 -20 990609 -20 990610 MADK 990611 -30 -30 990612 ANOR 990613 990614 990616 -40 990617 -40 990618 990619 SPMT 990620 990621 -50 990622 -50 ANOR 990623 990624 -60 990625 -60 990626 APMT 990627 990628 990629 -70 990630 -70 990631 missing core DHLC (box 13)

-80 APMT 990632 _80 ANOR i i i EOH 82.7m 200 400 600 800 1000 Magnetic Susceptibility

MICREX DEVELOPMENT CORP. St. Charles de Bourget Property LEGEND DHOB - overburden DDH 99-06: Geology, DHLC - lost or missing core SPMT - "salt 'n pepper" textured apatite-poor magnetite rock Mag Susc. and Sample Locations APMT - normally very coarse apatite-rich magnetite rock 0 2 4 6 8 10 ANOR - anorthosite, normally very coarse grained MFDK - fine grained, dark green-black, mafic dyke metres APEX Geoscience Ltd. Edmonton, AB March 2004 16 Fiaure 10 The box was said to contain magnetite unit, which is likely as there was no evidence of anorthosite at either the end of the preceding box or the start of the following box. However, somewhere in the missing interval is a transition from apatite-rich to apatite- poor magnetite unit. Overall, the magnetite-apatite unit was found to contain <10% anorthositic inclusions. Of significance was the observation that, unlike hole 3, the majority of the magnetite unit intersected in hole 4 was comprised of the apatite-rich magnetite unit with approximately 20-50% very coarse grained (2-5cm) apatite; clots and megacrysts. A total of 47 samples were collected from hole 99-04.

DDH99-06 Drill hole 99-06 was collared at the same location as hole 3, but was drilled at 45° to the SW. Hole 6 intersected the magnetite-apatite unit from the collar to a depth of 80.5m (Figure 10). The remainder of the hole, from 80.5m to 82.7m, intersected anorthosite. It should be noted that a box of core was missing representing the interval from 72.65m to 78.3m. The box was said to contain magnetite unit, which is likely as these was no evidence of anorthosite at either the end of the preceding box or the start of the following box. The magnetite interval included 2 distinct anorthositic intervals between 27.6m and 38.65m, and 51.8m and 55.6m. Also, the magnetite interval contained 2 thin mafic dykes between 9.4m and 11.3m, and 23.1m and 27.6m. As with hole 4 and unlike hole 3, the majority of the magnetite unit intersected in hole 6 was comprised of the apatite-rich magnetite unit with approximately 20-50% very coarse grained (2-5cm) apatite; clots and megacrysts. A total of 32 samples were collected from hole 99-06.

All drill core samples were shipped to Edmonton, Alberta for assaying and results are still pending.

3. Surface Sampling

On January 30, 2003, the author visited the property with the property owner, Roch Cormier, in order to collect several large samples that could be sent for geochemical and metallurgical processing. Sample locations are illustrated in Figure 11. Figures l.2 and 13 show the collection of samples from the north zone, along the Chemin Cloutier, and from the south zone from outcrops along the Chemin Bressard, respectively. Sufficient material to fill a 5-gallon pail was collected for each sample. Samples 03ATG001-006 were collected along Chemin Bressard from the south magnetite zone, while samples 03A.TG007a and b were collected from the north magnetite zone beside Chemin Cloutier. Samples 03ATG008 and 9 were collected from a previously excavated test pit located approximately 600m southeast of samples 7a and b. All drill core samples were shipped to Edmonton, Alberta for assaying and results are still pending.

Both the north and the south zones appear to comprise a mixture of anorthosite and magnetite rock with upwards of 40-50% magnetite. However, the unit to the north appears to contain a larger percentage of magacrystic olivine (?), which occurs as 2-5cm patches. Elsewhere, particularly in the south, apatite occurs as fine-grained disseminations, which often appears as a "salt and pepper" texture.

17 . PrivateRural Road ~~JOn9vie`re PrOpeny, â ) N (UTM)

N coO O O Z

Z MUM

~ AO

~ CO — O MAI 0 Z /11111 03ATG00819 Approximate Property -P• / - 0o Boundary: z Lots 44-47, St. Charles de Bourget Twp.

"11111‘1111111111 MICREX DEVELOPMENT CORP. e proper h, St. Charles de Bourget Project ~ ------Surface Sample Locations (Relative to Total Field Ground Magnetics) Riviere Saguenay 9:4s 50 0 100 200m

4600 E 4800 E 5000 E 5200 E 5400 E (Hor. Scale 1 : 10 000) Edmonton, AB March, 2004 1 1 1 1 18 Figure 11 Figure 12. Sample collection from the north magnetite zone in a cleared area along the east side of Chemin Cloutier, St. Charles de Bourget property, January 2003.

Figure 13. Sample collection from the south magnetite zone along the north side of Chemin Bressard, St. Charles de Bourget property, January 2003.

19 Initial results of geochemical and metallurgical test work are currently available for samples 03AT007a and 03AT008, which were sent to International Metallurgical and Environmental Inc. in Kelowna B.C. Sample A report summarizing the results of geochemical analyses (ICP and whole rock) as well as grinding and magnetic separation tests is appended to this report (Appendix 2). Sample 03AT007a was collected from the cleared area adjacent to Chemin Cloutier and comprised what has been referred to in the past as "apatite-rich magnetite", while sample 03AT008 comprised what has been referred to in the past as "apatite-rich magnetite". These samples are differentiated in the appended analytical report as weathered and not weathered, respectively. However, the differences in the chemical and metallurgical properties of the samples are more likely the result of compositional variations rather than the degree of weathering. Sample 03A.T007a contained 48.11wt% Fe2O3 and 03AT008 contained 65.32wt% Fe2O3, The concentrates derived from magnetic separation of a pulverized portion of each sample mimicked the production of heavy media used by the coal industry. The magnetic concentrates produced using a Davis Tube for each sample contained similar amounts of iron and were determined to be of a high quality with 03AT007a containing 82.83wt% Fe2O3 and sample 03AT008 containing 84.55wt% Fe2O3. However, the concentrate yield for 03AT007a was only 30.8wt% while that of 03AT008 was 61.5%. The reduced yield in sample 03A007a was assumed in the report to be the result of the presence of non- magnetic iron oxides resulting from excessive weathering. However, ,given the mineralogical content of the sample, the more likely explanation is that the sample contained a significant amount of iron in the form of megacrystic olivines that would not report to the magnetic concentrate.

Conclusions and Recommendations

Although chemical analyses have not yet been received on all of the samples of outcrops and drill core resulting from the exploration work described above, it was apparent that there is potential for a significant Fe-Ti (+/-P2O5) resource to exist on the St. Charles property. The magnetic survey outlined a zone of magnetite bodies occurring over an area that is approximately 1.5km long (north-south) by 200-400m in width (east-west). The limited analytical data that has been received to date (magnetic separations) for two samples that were collected in 2003 yielded magnetite concentrates of sufficient duality to be saleable as a heavy media for use in the coal production process (Austin, 2004). Titanium values are high and could represent a significant value. Further metallurgical test work is recommended in order to investigate the liberation of titaniu=m-bearing minerals. Also, further analytical work is required to assess the phosphate potential of the ultramafic bodies.

The key to developing this resource will be to demonstrate the true size of the resource and to gain a better understanding of the distribution of the main commodities (magnetite, titanium and phosphorus). To this end, a sizeable exploration/delineation drill program is recommended. A systematic approach is recommended such that the strike length and depth extent of the magnetite body/bodies can be determined in order to facilitate resource estimation in accordance with the guidelines set out in National Instrument: 43-

20 1 1 1 I 1

0N N - ~ (NTM) z

Approximate Property Boundary: Lots 44-47, St. Charles de Bourget Twp.

MICREX DEVELOPMENT CORP. St. Charles de Bourget Project Proposed Drill Holes with Ground Magnetic Profiles Riviere Saguenay 50 0 100 200m MIll ~ 4600 E 4800 E 5000 E 5200 E 5400 E (Hor. Scale 1 : 10 000) Edmonton, AS March, 2004 1 I 1 I 21 Figure 14 101. It is recommended that the magnetite unit be drilled with a minimum 50m grid spacing between intercepts. As an example, the northern magnetite occurrence wiles roughly north-south for approximately 500m and appears to average approximately 200m in thickness, a minimum program of 17 drill holes, preferably inclined and drilled to a depth of 100m along fences is recommended (approx total of 2400m, see Fige 14). Drill spacing could be increased to reduce costs if constancy in grade and widths can be demonstrated between sections.

APEX GEbSCIENCE

Andrew J. Turner, B.Sc., P.Geol. Senior Geologist

April 21, 2004

22 References:

JNI. Allen (1959) Report of Detailed Geological Mapping - Grand Saguenay Mines and Minerals Limited December 4`h, Toronto, Ontario

D. Cotnoir, G. Delisle (1988) Concentration of Apatite from Iron-Titanium ore of Canhorn Mining Corporation.

B.C. Fulcher (1972) A Report on a Ground Magnetometer Survey, Bourget Township, Quebec for Grand Saguenay Miner and Minerals Ltd.

T. R. Gledhill (1959) Magnetic Survey of Titaniferous Magnetite Deposit:;, Bourget Township, Quebec for Grand Saguenay Mines and Minerals Limited.

C. Hebert, Anne-Marie Cadieux and Otto van Breemen (2003) Proterozoic Magmatic Events (1510-985 Ma) and Ilmenite-Apatite Mineralisations in the Central Grenville Province, Quebec, Canada.

A.W. Joliffe (1946) Preliminary Report on the St. Charles Titaniferous Magnetite Deposits, Chicoutimi County, Quebec

R.F. Jooste 1948 Extract from Geology of the Bourget Area. The Si.. Charles Titaniferous Magnetite Deposits.

F.F. Osborne (1944) Rapport special sur les microtextures de certain mineral;; de fer du Quebec. Q.D.M. R.P. #186

D. Raicevic (1966) Concentration Tests on a Titaniferous ore from Titanium Products Corporation, St. Charles, Bourget Township, Quebec.

W.A.H. Robinson (1926) Titaniferous magnetite deposits of Bourget Township, Chicoutimi District, P.Q. — Investigation of Mineral Resources and Mining; Industry 1924

Michel Robert (1973) Evaluation of the Metallurgical Possibilities for the St. Charles Deposit for Mr. J. Tindale International Mines Services Ltd.

Quebec Department of Mines (1947) Concentration Tests on a Titaniferous Magnetite- Apatite Ore from St. Charles, Saguenay River District, Quebec.

D.T. Sneddon (2002) Letter to Roch Cormier, September 11, 2002.

G.W. Waddington (1944) Report on the St. Charles Titaniferous Magnetite: De:posits Bourget and Tache Townships Chicoutimi County.

23 CERTIFICATION

I, A.J. TURNER OF 4550 TURNER SQUARE, EDMONTON, ALBERTA, CERTIFY AND DECLARE THAT I AM A GRADUATE OF THE UNIVERSITY OF ALBERTA WITH A B.SC. DEGREE IN GEOLOGY (1989). I AM REGISTERED AS A PROFESSIONAL GEOLOGIST WITH THE ASSOCIATION OF PROFESSIONAL ENGINEERS, GEOLOGISTS AND GEOPHYSICISTS OF ALBERTA.

MY EXPERIENCE INCLUDES EMPLOYMENT SINCE GRADUATION WITH A VARIETY OF MINING AND EXPLORATION COMPANIES, CONSULTING FIRMS AND GEOLOGICAL SURVEYS CONDUCTING MINERAL PROPERTY EVALUATIONS AND EXPLORATION WORK IN CANADA, THE UNITED STATES, MEXICO AND CHILE.

1 HAVE NO INTEREST, DIRECT OR INDIRECT, IN THE PROPERTIES THAT ARE THE SUBJECT OF THIS REPORT OR IN MICREX DEVELOPMENT CORPORATION.

MY REPORT ENTITLED "GROUND MAGNETIC SURVEYING, SURFACE SAMPLING AND CORE RELOGGING AND SAMPLING AT THE ST. CHARLES MAGNETITE DEPOSIT, BOURGET TOWNSHIP, QUEBEC" IS BASED UPON THE STUDY OF PUBLISHED AND UNPUBLISHED DATA AND FIRI D EXANIINATIONS CONDUCTED THEREON. I CONDUCTED ,AND/OR SUPERVISED IN THE FIELD ALL ASPECTS OF THE EXPLORATION WORK HEREIN DESCRIBED BETWEEN JANUARY 20 AND FEBRUARY 2, 2003.

1 HEREBY GRANT MICREX DEVELOPMENT CORPORATION, OF EDMONTON, ALBERTA, CANADA, PERMISSION DS USE THIS REPORT.- ° ,

PERS T TO PRACTICE APEX Geoscience Ltd. Siona;ure Date

PERMIT NUMBER: •-5824 The Association of Professional Engineers, Geologists and Geophysicists of Alberta A.J:-TURNER, B.SC., :P:GEOL.

APRIL 21, 2004 EDMONTON, ALBERTA

24 Appendix 1 List of Personnel Appendix 1 List Of Personnel Geolgist/Field Chief Dates In The Field Man-Days

Andrew Turner, B.Sc., P.Geol. Jan 20 - Feb 2, 2003 14 Senior Geologist APEX Geoscience Ltd. 200, 9797-45 Ave. Edmonton, AB T6E 5V8

Geologist/Assistant

Kris Raffle, 13.Sc. Jan 20 - Feb 2, 2003 14 Geologist APEX Geoscience Ltd. 200, 9797-45 Ave. Edmonton, AB T6E 5V8

Assistant

Byron Wallis Jan 20 - Feb 2, 2003 14 Geological Technician APEX Geoscience Ltd. 200, 9797-45 Ave. Edmonton, AB T6E 5V8 total 42 Appendix 2 Analytical Reports International Metallurgical and Environmental Inc. #13-2550 Acland Road, Kelowna, B.C., Canada, V1X 7L4, Telephone: (250) 491-1722, Facsimile: (250) 491-1723

March 24, 2004

Mr. Stan Marshall - President Micrex Development Corporation 156 Laurier Drive T5R 5P9

Dear Stan,

This report will outline the results of metallurgical test work completed on two surface samples of material obtained from your Quebec claims. Samples were received as two samples of coarse rock, the largest pieces approximately 15 centimeters in size.

Of the two samples of coarse rock received, one is a massive mafic rock with little oxidation being evident (03AT0008) and the other is a severely weathered sample (03ATG007A) There was no core included with the sample materials. The feed analysis of the two samples is summarized in Table 1 shown below and more detail is contained in Appendix 1.

Table 1 Sample Analysis Summary — As Received Material

Sample Specific Gravity Fe203 Ti 02 P;)05 g/cc "/°

03AT0008 4.80 65.32 17.49 1.78 03ATG007A 4.20 48.11 9.01 5.61

Separation test work was conducted using both samples in order to produce iron concentrates that would have characteristics suitable for sale as a heavy media concentrate. This test work was conducted at the University of British Columbia within the Mining and Mineral Process Engineering Department under my supervision.

The samples were crushed using a standard laboratory jaw and cone crusher to produce material approximately 2 mm and finer. A 200 gram sample of crushed material was riffle split from the sample mass and pulverized and submitted for analysis. Feed sample analysis is contained in Appendix 1 and key details are shown in Table 1 above. Analysis of the samples indicates, that the materials are very high grade in terms of iron-bearing minerals, titanium minerals and also carry significant phosphate mineralization.

Magnetic concentrates were produced from the two samples to mimic the production of heavy media, commonly used in the coal industry. Results are summarized below and detailed results are contained in Appendix 2. This work was conducted using a Davis Tube Separator„ which is an industry standard tool for the determination of magnetic content of geological materials. International Metallurgical and Environmental Inc. #13-2550 Acland Road, Kelowna, B.C., Canada, V1X 7L4, Telephone: (250) 491-1722, Facsimile: (250) 491-1723

Table 2 Summary of Concentrate Production

Sample Specific Gravity Concentrate Yield g/cc Weight %

IVlag. Conc. 03ATG008 5.10 61.5 Mag. Conc. 03ATG007A 4.90 30.8

A larger sample of 10 kilograms was prepared from sample 03ATO008 for use in a small six -inch wide SALA wet magnetic drum separator. This material was ground to approximately 90 percent minus 325 mesh in a laboratory rod mill. This particle size distribution was selected as it mimics that used in heavy media facilities. A summary of the yield of concentrate from the mini-pilot plant test is shown below in Table 3. The SALA drum separator has a slightly higher field strength than the Davis Tube separator, 900 gauss versus 700 gauss and this higher field strength may be contributing to a higher yield in the SALA drum separator test and also a higher grade of TiO2 in the concentrate.

Table 3. Various Yields obtained Separation Tests and Titanium Grades

Sample Mag. Field St. Conc. Yield TiO2 Fe3O4 Gauss Weight %

03 ATG 008(Davis Tube) 700 61.5 11.87 84.55 03 ATG 007A(Davis Tube) 700 30.8 12.24 82.83

03 ATG 008(Sala Wet Drum) 900 67.6 13.89 78.42

The conclusions of this work indicate that the two samples are significantly different in terrns of their response to magnetic separation. Both were very capable of producing a heavy media concentrate of excellent quality, while iron recoveries for these two samples were significantly different. The oxide material 03 ATG 007A had an iron recovery of only 51 percent of the available iron and it is assumed that the iron losses were due to iron being present as hematite or goethite minerals owing to surface oxidation processes.

Titanium values in these materials are very high and represent significant value, possibly higher values than the magnetite values. Titanium values were rejected more effectively frorn the un- oxidized sample 03 ATG 008 than from the oxidized sample. Having said that, both materials produced concentrates containing 83 to 85 percent Fe2O3 and approximately 12 percent TiO2. It is recommended that mineralogical work be completed on the concentrates to evaluate the degree of liberation of iron and titanium minerals. The titanium may be present in the magnetic concentrate for two reasons, either non-liberation from magnetic iron minerals or, the titanium may be iron bearing itself and have a ferro-magnetic response in a magnetic separator.

The liberation of phosphate materials is very good within these two samples and was very efficiently rejected in the magnetic sepatation test work. The phosphate grades are probably not high enough to effectively complete with other phosphate operations and a paper outlining Canada's largest phophate operation is contained in Appendix 4. Ores mined at Kapuskasing International Metallurgical and Environmental Inc. #13-2550 Acland Road, Kelowna, B.C., Canada, V1X 7L4, Telephone: (250) 491-1722, Facsimile: (250) 491-1723 have a grade of 20 to 25 percent P2O5, which is about 4 times that seen in these iron and titanium samples.

It is also recommended that drill core be used in any additional test work to better represent the overall available resources. Geological work should be done to provide some indication of the significance of the oxide zone represented by sample 03 ATG 007A.

Please call with any questions.

Yours truly,

Jeffrey B. Austin, P.Eng. — President International Metallurgical and Environmental Inc. International Metallurgical and Environmental Inc. #13-2550 Acland Road, Kelowna, B.C., Canada, V1X 7L4, Telephone: (250) 491-1722, Facsimile: (250) 491-1723

APPENDIX 1 Feed Sample Analysis WR

WHOLE ROCK ANALYSIS

INTERNATIONAL METALLURGICAL AND ENVIRONMENTAL INC. #13-2550 Acland Road Kelowna, BC V1X 7Z4

Note: Values expressed in percent 0

No. Sample Ba0 P205 Si02 Mn0 Fe203 Mg0 A1203 Ca0 TiO2 Na20 K20

1 03ATG 007A Feed 0.01 5.61 12.74 0.45 48.11 9.29 2.07 12.70 9.01 0.19 <0.01 2 03ATG 007A Mag. Conc. <0.01 0.22 0.78 0.42 82.83 1.87 2.36 0.74 12.24 0.03 <0.01 3 03ATG 007A Non-magnetics 0.02 6.69 19.4 0.49 34.84 13.47 1.85 15.41 7.63 0.21 <0.01 4 03ATG 800 Feed 0.02 1.78 1.68 0.40 65.32 4.28 4.53 4.61 17.49 0.11 <0.01 5 03ATG 008 Mag. Conc. 0.03 0.01 0.23 0.33 84.55 2.07 2.58 0.25 11.87 0.07 <0.01 6 03ATG 008 Non-magnetics 0.03 3.23 5.39 0.51 38.97 6.97 7.93 9.03 27.87 0.23 <0.01 7 Magnetic conc. Product - Sala 0.02 0.43 0.49 0.36 78.42 2.86 3.18 1.39 13.89 0.05 <0.01

Page 1 18-Mar-04 ICP ANALYSIS INTERNATIONAL METALLURGICAL AND ENVIRONMENTAL INC #13-2550 Acland Road Kelowna, BC V1X 7Z4

Values in ppm unless otherwise reported (Note: Ng in ppb)

No. Sample Ag Al As Ba Bi Ca Cd Co Cr Cu Fe La Mg Mn Mo Na Ni P Pb Sb Sn Sr Ti U V W Y Zn Hg PPm % PPm PPm PPm % PPm PPm PPm PPm % PPm % PPm PPm % PPm PPm PPm PPm PPm PPm % PPm PPm PPm PPm PPm PPb

1 03ATG 007A Feed <0.2 0.43 <5 <5 <5 8.70 1 85 104 194 >10 100 5.39 1868 <1 0.05 50 >10000 <2 <5 80 143 0.32 <10 283 <10 117 112 15 2 03ATG 007A Magnetics <0.2 0.58 <5 <5 25 0.54 2 99 184 100 >10 40 0.94 836 <1 0.02 26 1920 <2 <5 180 9 1.63 20 837 <10 32 89 15 3 03ATG 007A Non-magnetics <0.2 0.17 <5 <5 <5 10.00 <1 82 70 166 >10 100 7.98 2436 <1 0.05 58 >10000 <2 <5 40 158 0.29 <10 28 <10 129 94 10 4 03ATG 800 Feed <0.2 0.57 <5 <5 <5 2.99 1 74 214 237 >10 50 1.65 493 <1 0.04 42 9180 <2 <5 140 51 0.56 <10 753 <10 43 84 5 5 03ATG 008 Magnetics <0.2 0.62 <5 <5 30 0.18 3 116 363 100 >10 40 0.86 725 <1 0.02 43 510 <2 <5 240 4 1.77 20 1100 <10 29 79 5 6 03ATG 008 Non-magnetics <0.2 0.37 <5 <5 <5 5.38 <1 43 49 312 >10 40 2.25 600 <1 0.09 68 >10000 4 <5 <20 78 0.16 <10 79 <10 63 74 15 7 Magnetic conc. Product <0.2 0.56 <5 <5 25 0.97 4 96 282 46 >10 40 1.08 447 <1 0.02 47 3100 <2 <5 200 15 1.23 20 1011 <10 29 112 5

Page 1 International Metallurgical and Environmental Inc. #13-2550 Acland Road, Kelowna, B.C., Canada, V1X 7L4, Telephone: (250) 491-1722, Facsimile: (250) 491-1723

APPENDIX 2 Magnetic Separation Test Details International rvietaiiurgicai and Environmental Inc.

Magnetic Separation Test

Sample: 03 ATG 007A

Assays Distributions

Sample Wt Percent Fe3O4 TiO2 P2O5 Fe3O4 TiO2 P2O5 % % % % % % %

Magnetic Conc. 30.75 82.83 12.24 0.22 51.4 41.6 1.4

Magnetic Tails 69.25 34.84 7.63 6.69 48.6 58.4 98.6

Calculated Feed 100 49.60 9.05 4.70 Assayed Feed 48.11 9.01 5.61 International Metallurgical and Environmental Inc.

Magnetic Separation Test

Sample: 03 ATG 008

Assays Distributions

Sample Wt Percent Fe3O4 TiO2 P2O5 Fe3O4 TiO2 P2O5 % % % % % % %

Magnetic Conc. 61.5 84.55 11.87 0.01 77.6 40.5 0.5

Magnetic Tails 38.5 38.97 27.87 3.23 22.4 59.5 99.5

Calculated Feed 100 67.00 18.03 1.25 Assayed Feed 65.32 17.49 1.78 International Metallurgical and Environmental Inc. #13-2550 Acland Road, Kelowna, B.C., Canada, V1X 7L4, Telephone: (250) 491-1722, Facsimile: (250) 491-1723

APPENDIX 3 Analysis of Magnetic Separation Test Products International Metallurgical and Environmental Inc. #1:3-2550 Acland Road, Kelowna, B.C., Canada, V1X 7L4, Telephone: (250) 491-1722, Facsimile: (250) 491-1723

APPENDIX 4 Technical Paper on Phosphate Operations