GM 44321 REPORT ON MACHO RIVER AREA PROPERTY REPORT ON SHARE MINES & OILS LTD. MACHO RIVER AREA PROPERTY

BARRY AND SOUART TOWNSHIPS ABITIBI-EAST COUNTRY, CANADA

N.T.S. REFERENCE 32-B-13

filnIzare de l'Eragle et des Ressources Service de la Géoinformation Date 8 AVR. 1987 No am.: 44321

Toronto, Ontario, Canada June 3, 1986 Melvill1 14' Rennick, P.Eng. Consulting Geologist TABLE OF CONTENTS

Page No.

SUMMARY 1

INTRODUCTION 2

SOURCES OF INFORMATION 3 PROPERTY DESCRIPTION, LOCATION, ACCESSIBILITY 4

HISTORY 6 REGIONAL GEOLOGY

(i) General 7 (ii) Structure 7 (iii) Mineralization 8 THE MACHO RIVER AREA PROPERTY (i) Geology 9 (ii) Previous Work 9 CONCLUSIONS 10 RECOMMENDATIONS 11

ESTIMATE OF RECOMMENDED PROGRAMME COSTS 12 CERTIFICATE 13

LIST OF FIGURES

1. PROPERTY LOCATION MAP

2. CLAIMS LOCATION MAP 3. GENERAL GEOLOGICAL MAP 1.

SUMMARY

The Macho River Area property of Share Mines & Oils Ltd. is located in Souart and Barry townships, Abitibi-East county, Quebec, Canada. It is comprised of 40 contiguous, unpatented mining claims which cover 1,600 acres, more or less. The claims are underlain by a complex series of sedimentary, volcanic, and intrusive rocks of Archean age. These rocks host several occurrences of base and precious metals mineralization, although, at the present time, none is known to exist on the Macho River Area property.

Because access to the area is difficult, it has not been intensely explored for minerals. However, interest in the region has recently increased to the point where it is being aggressively explored utilizing modern technology and new concepts. Oasis Resources Inc. is currently con- ducting detailed exploration of the old Nubar gold property located some 3.5 miles south of the Share ground and several other precious and base metals minerals occurrences are being examined north and east of the property.

It is concluded that exploration of the Share Mines & Oils Ltd. property is warranted at this time.

It is recommended that a staged programme of explora- tion be carried out on the property at a minimum estimated cost of $50,000.00 and a maximum cost of $100,000.00. 2.

INTRODUCTION

On May 26, 1986 Mr. Ross E. Munro, President, Share Mines & Oils Ltd., 181 University Avenue, Box 16, Toronto, Ontario M5H 3M7 commissioned the author to prepare a report on the company's Macho River Area property.

The scope of this report is to document the history of mineral exploration and development in. the Macho River Area and to compile vital information pertinent to an assessment of the economic potential of the company's holdings which are located in Barry and Souart townships.

Because of a paucity of outcropping rock and the fact that, at the present time, no occurrences of economic minerals are known to exist on the claims, no examination of the property was carried out. However, the author conducted a review of published geological maps and reports, compiled geophysical data, diamond drill core and logs produced by Oasis Resources Inc. from current work on the old Nubar gold prospect 3.5 miles south of the Share claims, and other relevant data from the area which are believed to be authentic and reliable. These data provide a reasonable view of the economic potential of the Share Mines & Oils Ltd. property.

Conclusions and recommendations presented in this report are based on library research, personal knowledge of the geology and mineral potential of the Macho River Area gained from active participation in other exploration projects in the district, and a sound understanding of the exploration techniques employed in the region. 3.

SOURCES OF INFORMATION

Graham, R. Bruce Wetetnagami Lake Map-Area, Abitibi-East County, Quebec Dept. Mines, Quebec. Geological Report No. 29, 1947 Ingham, W.N. Report On Gold Bearing Mineralization, Thirty Claims Mining Property, Souart Township, Abitibi-East County, Quebec, 1980. Quebec Dept. Mines File No. GM37200 Larouche, Claude Report On The Gold Property Of Oasis Resources Inc. In Souart Township, Province Of Quebec, Canada, 1983. Commission Des Valeurs Mobilieres Du Quebec, 1985 Milner, R.L. Area, Abitibi-East County, Quebec. Quebec Dept. Mines, Geological Report No. 14, 1943 Government Du Catalogue Des Gites Mineraux Du Quebec, Quebec DPV-744,1981. Map Nos. M-307 and M-310. Scale - 1:250,000 Cart Lithostratigraphique De La Sous-Province De L'Abitibi, DV 83-16. Scale 1:500,000 Department of Mines and Technical Surveys, Canada Geophysics Map 1811G, Lac Mesplet, 1964. Scale 1:63,360 Geophysics Map 1812G, Lac Picquet, 1964. Scale 1:63,360 CH I BOUGAMAU

MATA GA MI

DESMARAIVILLE

PROPERTY LOCATION

AMOS

SENNETERRE

NORANDA MALARTIC

ROUYN VAL D'OR

HEMLO 540 miles

MONTREAL

OTTAWA

Figure I SHARE MINES a OILS LIMITED MACHO RIVER AREA PROPERTY PROERTY LOCATION MAP * SOUART AND BARRY TOWNSHIPS ABITIBI-EAST COUNTY, QUEBEC 50 M.RENNICK 9 25 MAY 1986 Miles 4.

PROPERTY DESCRIPTION, LOCATION, ACCESSIBILITY

The Share Mines & Oils Ltd. Macho River Area property consists of 40 contiguous, unpatented mining claims comprising 1,600 acres, more or less. It straddles the boundary between Barry and Souart townships. Parts of the north boundaries of the townships form the north boundary of the property. The claims were staked during the period January 24 to February 3, 1986 and will remain in good standing for one year from the dates of staking by which time the statutory requirements for the maintenance of unpatented mining claims must be fulfilled. The following is a complete list of claim numbers and staking dates:

Certificate No. Claim No(s). No. of Claims Date of Staking

442919 1 & 5 2 27/01/86 442920 1 to 5 5 28/01/86 442921 1 to 5 5 29/01/86 442922 1 to 5 5 30/01/86 442923 1 to 5 5 31/01/86 442924 1 to 5 5 01/02/86 442925 1 to 5 5 02/02/86 442926 1 to 5 5 03/02/86 jj 442858 1 to 3 3 24/01/8 !, ,,,~ Total Number of Claims 40

Barry and Souart townships are located in Abitibi- East county and lie approximately midway between the communities of Chibougamau and in the northwest part of the province of Quebec, Canada. The approximate centre of the Share property is at 49° 00' North latitude and 75° 49' West longitude.

URBAN TWP.

CARPIOUET TWP.

ryg\g I rygryO I~ g p1 1 L~ ry re 9ryry ' gryg I gryy \ L I aa ♦. a- ab ' aa p Mpry ry Ibpry ry Lati —ry\ 0~ —gry 0 ~ g ryry7 gryy I gryh .. ' b aa:+, I p"~ \ I b°ry h a.pryg ry Ii—gry\h pry ' pry i ~ryb 9ry0 114.41>t. î rygryry rygryh I aary \ aary\ryah a ap, I hp O • 1! •• --~--~-- 1.6 'le D.,'" "I, aprygb ~ ppryg ( PO' orp gP Iao,' ry~\ ye ~ r ~ ryb " r‘')1"' .01" haL g .co' I g I ry - 0'0 „,b T gryh r yry~6 ahryry aary ry I ahry ry ( h,Y-g - ~---1-- 1p SHARE MINES OILS gryb phry ♦ ahry Aj I ahry \ airy M~^ - — ryy r -ry5 1 rye LIMITED ~ aaryg° I aa'4y ~ pa'L"y

SOUART TWP.

BARRY TWP.

Lac

aux OASIS SOUART PROPERTY ..~ - Loutres •1

Figure 2 SHARE MINES a OILS LIMITED o MACHO RIVER AREA PROPERTY CLAIMS LOCATION MAP

SOUART AND BARRY TOWNSHIPS

ABITIBI - EAST COUNTY, QUEBEC

M. RiENNICK SCALE : I :50 000 MAY 1986 5.

Access to the claims group is difficult. It is most easily afforded by rotary-winged aircraft operating out of the town of Val D'Or or Chibougamau over distances of 105 and 100 air miles respectively. A small lake, approximately one mile south of the south property boundary, provides access for float (summer) or ski-equipped (winter) aircraft operating out of the town of Senneterre 75 air miles to the southwest. Also, during the winter months, snowmobiles and other track-equipped vehicles can reach the property via a network of lumber roads and trails extending from a main highway to within two miles of it.

Forest cover in the predominantly flat swampy area covered by the claims is mainly black spruce and alders. Slightly higher and drier knolls or ridges support a mixed growth including poplar, birch and alders. Small streams and ponds on the property will provide sufficient water for exploration requirements. 6.

HISTORY

Because of relatively difficult access and heavy overburden, the Macho River Area was avoided by prospectors until some interest in it was created with the publication of reports by Milner (1943) and Graham (1947).

In 1949, a gold-bearing outcrop was discovered in the east-central part of Souart township and for the next several years a considerable amount of prospecting was carried out in the area. Roybar Uranium and Gold Ltd. acquired the original gold discovery. Subsequently, the name of the company was changed to Nubar Mines Ltd. Nubar put a shaft down 144 feet and carried out some development work on the 125-foot level before abandoning the project. At this time, two zones had been tested. Each is reported to be 200 feet long with average widths of 9.4 feet and 4.9 feet, grading approximately 0.13 ounce and 0.32 ounce of gold per ton, respectively.

Oasis Resources Inc. acquired the Nubar prospect in 1983 and since that time has been conducting a detailed investigation of the property. At the same time interest in the entire area has revived and exploration activity is intense. 7.

REGIONAL GEOLOGY

(i) General

Barry and Souart townships are located near the east end of a broad belt of folded and faulted, steeply dipping volcanic and sedimentary rocks which extends from the Grenville Front 60 miles south of the town of Chibougamau, westward into Ontario, a distance of some 280 miles. The volcanic and sedimentary rocks have been invaded by sills, dikes, stocks, and bosses of batholithic proportions, of ultrabasic composition, gabbro, granite, granodiorite, diorite and quartz porphyry, all of which, with the exception of younger diabase dikes, are Archean in age. Most of the rocks are in the greenschist facies. This belt of rocks is part of the Abitibi Subprovince of the Superior structural province.

A preponderance of the region is covered by thick deposits of till, sand, gravel, clay, and lacustrine material.

(ii) Structure A paucity of geological data, as the result of heavy overburden cover throughout the region, has resulted in the development of only a broad, nebulous understanding of structural complexities except in the immediate vicinity of producing mines or other major mineral occurrences. The main trend of the volcanic and sedimentary rocks is westerly but local divergencies occur around some of the larger intrusive bodies. 8.

(iii) Mineralization

Base metals are won from massive and disseminated concentrations of sulphides associated with rhyolite and pyroclastic rocks. The deposits contain one or more of the following minerals: pyrrhotite, pyrite, chalcopyrite, bornite, sphalerite, galena, magnetite, ankerite, calcite and quartz. Small amounts of gold and silver may be present.

Gold deposits occur in quartz/injected clastic sedimentary and volcaniclastic rocks, which may be locally graphitic, with intercalary volcanic flows and pyroclastics. Much gold is present in the free state but it is also intimately associated with one or more of the following minerals: chalcopyrite, pyrite, arsenopyrite, pyrrhotite, sphalerite, galena, molybdenite, calaverite, ankerite, calcite and tourmaline.

Large tonnages of low-grade, magnetite-specularite iron-formation occur in the region but none has been found to be economic. LEGEND

G Granitic Rocks (granite gneisses, felsic rocks)

Figure 3 M Mafic Rocks SHARE MINES 8 OILS LIMITED s Sedimentary or Pyroclastic Rocks MACHO RIVER AREA PROPERTY

V Volcanic Rocks (mafic lavas) RTGIONAL GEOLOGY

• Mineralized Showing, Au,Cu,Mo, SOUART AND BARRY TOWNSHIPS ABITIBI - EAST COUNTY, QUEBEC

M. RENNICK SCALE: I"= 4 MILES MAY 986 9.

THE MACHO RIVER AREA PROPERTY

(i) Geology

The property is partially underlain by Keewatin-type volcanic rocks which cross Barry and Souart townships. This belt of rocks is four to six miles wide, strikes northeast and dips from near vertical to 40 degrees southeast. The volcanics range in composition from basalt to rhyolite and are interbedded with tuffs, agglomerates, and narrow bands of Temiscaming-type sedimentary rocks. Large bodies of intruded granitic rocks border the volcanic- sedimentary belt on both the northwest and the southeast.

All rocks in the area are affected by a regional foliation related to the Grenville Front. This major, northeast-southwest-trending, fault-metamorphic feature truncates the easterly extension of the Superior province approximately 30 miles east of the property. Front-related deformation is manifest by shear zones which may be reflected by topographic features such as lakes and rivers.

(ii) Previous Work The author knows of no previous work that was carried out on the claims although undoubtedly some prospecting was done during the late 1940's and early 1950's when several mineral occurrences were being examined south and northeast of the present property. 10.

CONCLUSIONS

The Macho River Area property of Share Mines & Oils Ltd. is situated in a geological environment which may host economically exploitable concentrations of precious or base metals mineralization although, at the present time, none is known to exist on the property.

The author is not aware of any ground geophysical work having been done over the claims area and extensive overburden has precluded thorough surface evaluation of the property in the past.

A review of published maps and reports, and other relevant data, indicates that the property is an attractive precious and base metals exploration prospect and that an exploration programme to evaluate its economic potential is warranted at this time. 11.

RECOMMENDATIONS

It is recommended that Share Mines & Oils Ltd. provide sufficient funds to conduct the following, staged programme of exploration on its Macho River Area property with the decision to proceed with Stage II dependent on results from Stage I.

Stage I

Establish a northwest-southeast oriented picket-line grid over the entire property. Lines should be spaced 400 feet apart and stations established at 100-foot intervals along all lines.

Carry out detailed geological mapping, magnetic and V.L.F. electromagnetic surveys along all lines. Magnetic and electromagnetic readings should be taken at maximum intervals of 50 feet and should be closer spaced if warranted.

The magnetic survey should be conducted with a proton precision-type magnetometer and the V.L.F. electromagnetic data should be collected utilizing a Geonics Model EM-16 receiver.

Stage II

Stage II will consist of 1,000 feet of diamond drilling if required, based on the results of Stage I.

All of which is respectfully submitted for your information and consideration.

/",✓% Toronto, Ontario, Canada i..f~.~..i~..~... . June 3, 1986 Melville Wi ialR Rennick, P.Eng. Consulting Geologist

12.

ESTIMATE OF RECOMMENDED PROGRAMME COSTS

STAGE I Linecutting: including mobilization and demobilization - 40 miles @ $325.00/mile $ 13,000.00 Geological Mapping: including mobilization and demobilization, data collection, compilation, and final report presentation - 40 miles @ $175.00/mile 7,000.00 Magnetic & V.L.F. Electromagnetic Surveys: including mobilization and demobilization, data collection, compilation, interpretation and final report presentation - 40 miles @ $500.00/mile 20,000.00 Project Supervision: including travel, subsistence, and general consulting 7,500.00 Contingencies 2,500.00 TOTAL ESTIMATED COST OF STAGE I $ 50,000.00

STAGE II (if required) Diamond Drilling: all costs including mobilization, demobilization, project supervision & assaying - 1,000 feet of BQ @ $50.00/foot $ 50,000.00 TOTAL ESTIMATED COST OF STAGE II $ 50,000.00

Summary of Cost Estimates ESTIMATED COST OF STAGE I $ 50,000.00 ESTIMATED COST OF STAGE II 50,000.00 TOTAL ESTIMATED PROGRAMME COST $100,000.00

Toronto, Ontario, Canada June 3, 1986 Melville Wi Rennick, P.Eng. Consulting Geologist 13.

CERTIFICATE

I, Melville William Rennick, of the Borough of East York, Province of Ontario, Canada, do hereby declare:

1. That I am a Consulting Geologist residing at 234 Donlea Drive, Toronto, Ontario M4G 2N2.

2. That I am a graduate of the Provincial Institute of Mining, Haileybury, Ontario, in 1955 and have been continuously engaged as a practising geologist since that time, and that I am a registered Professional Engineer in the Province of Ontario.

3. That the foregoing report is based on a review of maps, reports, and other relevant data which are believed to be authentic and reliable.

4. That, although no examination of the subject property was carried out for reasons stated in the report, I have a sound working knowledge of the general geology, mineral potential, and exploration techniques employed in the region.

5. That I have no interest, direct or indirect, nor do I expect to acquire any such interest, in Share Mines & Oils Ltd. or any of its properties.

Toronto, Ontario, Canada June 3, 1986 Melvi = ►tilliàm Rennick, P.Eng. Consulting Geologist 234 Donlea Drive Toronto, Ontario M4G 2N2

November 17, 1986

The 3oard of Directors Share Mines & Oils Ltd. 181 University Avenue P.O. Box 16, Suite 1204 Toronto, Ontario M5H 3M7

Attn: Mr. Ross E. Munro, President

GentLemen:

An examination of your property located in Barry and Souart Townships, County of Abitibi-East, Quebec was conducted by the writer at your request. This letter describes and discusses the results of that examination and constitutes an addendum to my report dated June 3, 1986 and entitled "Report on Share Mines & Oils Ltd. Macho River Area Property, Barry And Souart Townships, Abitibi-East County, Quebec, Canada". Please note that a copy of this document should be appended to each and every copy of that report.

PROPERTY EXAMINATION

The property examination was conducted during the period November 11 to November 13, 1986 and was helicopter supported. The entire claims block was traversed by helicopter along closely spaced flight lines. Following this, traverses were run on the ground, across areas where it appeared from the air that outcrop might be present. The work was carried out during the middle of the "freeze-up" period but the area was only lightly covered by snow.

The examination revealed that approximately 75 percent of the property is overlain by wet, muskeg swamp which supports a light growth of scrubby black spruce and alders. The remaining 25 percent is covered by drumlin-like features which may represent bedrock "highs" but where, with only one possible exception, no bedrock was found. These higher areas support a heavy growth of mature black spruce or birch and alders. The ground traverses also indicated that the claims are properly located and that substantial compliance with the requirements governing the staking of mining claims in the province of Quebec has been observed.

The single rock exposure which was found on the property is located approximately 300 feet north of Post No. 1, Claim No. 2 of Certificate No. 442923. It is small (less than 10 square feet) and could be an exposure of bedrock. However, a search in the

Ministère de l'Énergie et des Ressources Service 8d ( ?information Data No G.M.: 44321 - 2 -

vicinity of this exposure revealed no others and this suggests it is a merely exposed portion of a large glacial erratic. The rock is massive, fine to medium grained, gray diorite composed of plagioclase, hornblende and pyroxene along with minor amounts of biotite and quartz.

DISCUSSION

Because only one exposure of rock was found and the field evidence indicates that this exposure is part of a large boulder or glacial erratic it is concluded that, for all practical purposes bedrock does not crop out on the property. This eliminates the possibility of developing any structural, lithological, mineralogical or alteration data specifically relative to the property. However, published regional geophysical (magnetic) data and mineral deposit and geological data clearly indicate that a substantial portion of the property is underlain by part of the northeast-trending belt of volcanic and sedimentary rocks illustrated in Figure 3 and referred to on Page 9 of my report. These data include the following: airborne magnetic maps 1811G, Lac Mesplet and 1812G, Lac Picquet, published in 1964 by the Geological Survey of Canada; mineral deposit and geolog- ical maps M-310, sheet and M-307, Chibougamau sheet, published in 1980 by the Quebec Ministry of Energy and Natural Resources The above data also clearly indicate the close, strike-related location of the Share property with what is generally considered to be a very significant concentration of auriferous mineralization on the Oasis Resources Inc. Souart township property to the southwest and several less well developed auriferous mineral occurrences to the northeast (see report Figure 3).

Mineralization on the Oasis property is generally associated with a band of intensely brecciated sediments where tourmalinization (50 to 80 percent tourmaline), silicification and sericitization are prevalent. The rock contains disseminated and locally, semi-massive sulphides including pyrite, pyrrhotite, sphalerite and galena. A network of quartz-calcite veilis and veinlets more or less coincides with the mineralized breccia zone. Auriferous sulphides and fine grains of gold are usually found within the quartz and calcite veins and four lenses of oregrade material have been defined along 3,000 feet of strike-length. Values of 0.49 oz. Au/ton over 13.45 feet and 0.142 oz. Au/ton over 21.02 feet have been recorded. The zone is concordant with the northeasterly trending volcanic-sedimentary series of rocks which host it. It was not detected by an airborne electromagnetic (INPUT) survey but does provide a very definite response when the ground VLF (very low frequency) electromagnetic system is employed over it. It is the type of deposit most likely to occur on the Share property.

As a result of previous research and field experience in the area, the author concluded that the Share property is an attractive exploration target, the detailed exploration of which is warranted. During the examination of the property and a subsequent re-evaluation of data relative to the area I observed nothing which would incline me to alter the conclusions stated in my report. Similarly, recom- - 3 - mend.ations for exploration of the property as set out in the report remain unchanged.

All of which is respectfully presented as an addendum to my report on the subject property, dated June 3, 1986.

Yours very- truly,

M.W. Rennick, P. Eng. Consulting Geologist

Toronto, Ontario, Canada November 17, 1986