- GEOLOGICAL and DIAMOND DRILLING ASSESSMENT REPORT on the SOUTH SLESSE LIMESTONE QUARRY

CHILLIWACK RIVER - SLESSE CREEK AREA NEW WESTMINSTER MINING DIVISION SOUTHWESTERN

Longitude- 12 1”42’3VW/Latitude 49”04’35”N NTS 92H/4E - Permit No. NAN-97-07001 10-94, MX-7-114

Prepared for . Machine 86Fibers Ltd. 600-42nd Avenue, S.E. P.O. Box 1325 ? Calgary, Alberta T2P 2L2 *\ ‘/ ‘ ;T<’ Phone: 403-265--6022, Fax: 403-266-264 A ‘.>.a L“: ;” cz! Prepared by ~.,q ,*y ;:cj ‘2. i:ilic;;y>,&_pi J. T. SHEARER, M.Sc., P.Geo. ,..~,, ,- 3 ,;;> “-.> HOMEGGLD RESOURCES LTD. .#:,~,. ~;;1::%,,i g 2; 2 i” ,, % , $ “3 ,“: #5-2330 Tyner St. “.*_&F s” :;22 Port Coquitlam, B.C. “5r;5 v3c 221 ‘“”,:& (5 - ? Phone/Fax: 604-944-6 102 *” .,.I ix “‘2 %i July 15, 1998 P%e ,$ Fieldwork completed between October 4 8e November 25, 1997 ;z 86 March 24 - June 30,199s 1: P

TABLE OF CONTENTS

!3fs . . LIST OF FIGURES and TABLES ...... SUMMARY ...... iii _ INTRODUCTION ...... 1

LOCATION and ACCESS ...... 2 CLAIM STATUS ...... 4 _ REGIONAL GEOLOGY...... 5

PROPERTY GEOLOGY and CaC03 RESOURCES ...... 8

, DIAMOND DRILLING ...... 11 GEOPHYSICS ...... 13 CONCLUSIONS and RECOMMENDATIONS ...... 14

COST ESTIMATE for FUTURE WORK ...... 15

. , REFERENCES ...... 16 APPENDICES Appendix I Statement of Qufications ...... 17 Appendix II Statement of Costs ...... 18 Appendix III Assay Certificates, Chemex Labs ...... 19 Appendix IV Grinding Report, B.C. Research ...... 20 Appendix V Diamond DriII Logs ...... 21

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LIST OF ILLUSTRATIONS and TABLES

ILLUSTRATIONS Fonowing PW?X?

FIGURE 1 Location Map ...... 1

FIGURE 2 Topographic & Geological Map, 1:50,000 ...... 2 FIGURE 3 Claim Map, 1:50,000 ...... 4

FIGURE 4 Regional Geology, 1:250,006 ...... 5 P FIGURE 5 Interpretation of Major Structures in the Slesse Creek Area ...... 6

FIGURE 6 Local Geology, 1:50,000 ...... 7

FIGURE 7 Detail Geology of Slesse Limestone Quarry, 1:4,000 ...... in pocket FIGURE 8 Cross Section Through Limestone Deposit DrilIhole 8898-2, 1:4,000 ...... 8 c FIGURE 9 Cross Section Through Limestone Deposit DrilIhole 8898-1, 1:4,000...... 9

FIGURE 10 Cross Section Through Limestone Deposit Drillhole 5598-3, 1:4,000...... 10

FIGURE 11 Longitudinal Section through Limestone Deposit, 1:4,000 ...... 11 FIGURE 12 Airborne Magnetometer Survey, 1:63.360 ...... 13

TABLES E!?e TABLE I List of Claims ...... 4

,-, TABLE II Results of 1997 Sampling, Major Oxides ...... 9 . TABLE III 1998 Diamond DrilIing Program ...... 11

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ii SUMMARY

1, Acquisition and a preliminary evaluation of the Slesse Limestone Quarry was undertaken between July and October 1997 for LG. Machine & Fibers Ltd. The CaCO3 resource at / Slesse Creek is the source for the tiller requirements of the new manufacturing plant operated by IKO Pacific in Sumas, . c 2. A 120 metre thick Lower Permian sequence of grey, recrystaIIized limestone with complexly folded and interbedded greywacke, chert and sxgillite of the Devonian to Permian Group, is exposed for about 700 metres along the northwest flank of a northeast trending knoll immediately southwest of the junction of Slesse Creek and Chilliwack River. 3. The area is covered by Selesse 1-l 1 Mineral Claims, totalIing 11 units. The northeast end of the limestone unit is held as a Special Use Permit by the Ministry of Transportation and Highways amounting to about 5 acres. 4. Total estimated tonnage produced f?om this Highways qusny is approximately 400,000 tons between the late 1970’s and the present. This quarry has most recently produced coarse rip-rap for flood control along the Chilliwack River in 1996 which is normally required in the late Fall and early spring high water. 5. The general carbonate section has been described in the past as consisting of an upper 60 metre thick limestone member separated from a lower 30 metre thick limestone member by approximately 30 metres of cherty argillite and greywacke. 6. A chip sample in 1947 across the top 30 metres of the upper limestone member analyzed: 43.6% CaO, 2.5% MgO, 15.1% insolubles, 0.47% l&03,0.42% Fe203, 0.05% MnO, 0.03% PzO5, 0.06% S and 37.8% LOI (loss on ignition) (EMPR Bulletin 40 page 41). 7. A sample collected Tom the Large rip-rap material in 1997 analyzed: 50.59% CaO, 0.91% MgO, 8.04% SiO2,0.15% S, 0.67% AlzOa, 0.50% Fe203, 0.12% KZO, 0.07% Na20 and 38.89% LOI. 8. A total of 367.9m. (1207ft) of diamond driUing was completed in late March and early April 1998. This drilling indicated that the limestone section is over 180m thick at the centre of the edge-knoll. Assaying and physical tests are ongoing at the company’s research facility in Brampton, Ontario. , 9. The thickness of the upper limestone unit (>lOOm) has the potential over a 600m strike length and width of 2 10m to contain in an initial open cut =A” approximately 14 million tons of relatively siliceous carbonate material. There is also potential to define several times this amount by deeper diamond drill&. Further mining in Open Cut B, C & D are estimated based on preliminary results to contain “B+C” 16.4 million tonnes and “D” 3 1.7 milIion tonnes. Therefore an ultimate resource to the 308m elevation has the potential to contain 6 1 million tonnes of limestone. 10. A program of diamond drilling on a 150m square grid of 1OOmholes along the top of the ridge is recommended to confirm the uniformity of the CaC Encouraging results from the diamond drilIing could lead t continuation to the south of Bench 5.

m

. onsulting Geologist

L INTRODUCTION

The Selesse 1 - 11 mineral claims cover the limestone (CaCos) resources immediately southwest of the Slesse Qusrry of the Ministry of Highways. Acquisition and preliminary evaluation of the steep sided knoll on which two main limestone units are exposed was completed in July and October 1997. The general carbonate section consists of an approximately 60m thick Permian limestone member separated from a lower 30 metre thick limestone member by about 30 mews of cherty argillite and greywacke. Sampling in 1997 and previously indicate that the upper carbonate unit assays up to 50.59% CaO with very low impurities except for around 7-S% SiOa. The silica content is mainly from ameboid shaped chert nodules and chert lenses in the Upper Limestone member. Sorting in the pit of run of mine material may be able to reduce the silica content and leave the oversize for rip rap applications.

I.G. Machine 86 Fibers Ltd. requires CaCo3 for fXer applications in manufacture of specialty roofing shingles. The relatively high silica content and resulting abrasion does not appear to be a factor in this process. Mining and trucking costs are more important considerations. The possibility of larger truck loads f?om Canada being accepted into the USA under Free Trade is one of the positive facets.

Geological mapping and diamond drilling were completed in 1998. The longest drillhole (SS98-3) was a vertical hole over 183m (600 feet) in length which encountered limestone along it’s entire length. The expected shaly horizon was not observed, suggesting that the recumbent folding in the area is more complex than the initisl interpretation of previous mapping. A legal survey was completed on the Selesse #l Mineral Claim and a mining lease is in the tinal stages of application.

LOCATION and ACCESS

~eS&l;;&-11 y eral clsims are situated on a steep sided knoll rising to an elevation m $ &t) above the Chilliwack River immediately west of the mouth of Slesse Creek. this point is about 20.9 km (13.1 miles) by road easterly from Vedder Crossing bridge and about 26 km from the railway at Ssrdis.

The claims are covered by second growth forest which hss been thinned and may be ready for harvesting again in 20 or 30 years. The Forestry road that passes south along the limestone outcrops switches at higher elevations to the headwaters of Borden Creek.

A road log Tom the Tram Canada Highway near the IKO plant is as follows:

Road Log

Distance Remarks

OkIll Csnada- Exit 92 at Abbotsford, Intersection of B.C. Highway 11 and the Tram Canada Highway # 1 Freeway 13 km Freeway Exit 104 Exit to Cultus lake, Yarrow, No. 3 Road, Follow No. 3 Rd to Yarrow Central Road. 18.5 km Yarrow Central Road Yarrow Townsite 20.7 km Vedder Mountain Road 26.1 km turn off to Cultus Lake 26.8 km Chilliwack River at Vedder and turn onto Chilliwack Lake Road, Paved Road, Crossing 80 km/lx speed limit, (north side of river). 29.1 km “On The Way Cafe 34.05 km Pointa Vista Cafe & Garage Public Phone available. 35.9 km end of Housing Developments 36.5 km Selesse Park turn off small Provincial Campground 37.3 km Bridge across Chilliwack south side of river - 10.5 km from turnoff River 43.5 km Corrections Facilities 44.5 km Mount Thurston Forest Service Recreation Campsite 45.9 km Borden Creek Bridge 46.65 km Old Logging Road up west side of claims 47.7 km Selesse Creek Bridge and Location of Ministry of Highways Rip-rap Quarry 20.9 km from turn off.

Points along West Selesse Creek (& upper Borden Creek) Forestrv Road

OkIll Chilliwack Lake Road Forestry Road in very good shape even though logging has apparently not taken place for some years. 0.8 km Road to Upper Levels of Highways Limestone Quarry, Selesse Pit, District. Phone 604-795-8363 for District Highwsys Manager. 0.85 km Bridge over major tributary of Selesse Creek & old road leading to the east side of Selesse Creek (Bridge out) at steep sided Limestone canyon (This east side Forestry Road leads south up towards the headwaters of Selesse Creek) 1.05 km llunsign 2.1 km 2kmsign 2.7 km LCP for Selesse # 1 claim is 1OOm north of this point 4.8 km Junction of road to southeast

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4.9 km Upper Bridge over major tributary 5.8 km Initial post for Selesse # 10, 15m south of road at this point 6.0 km 6kmsign 6.1 km Major dry gully & road closed sign 6.3 km final post of Selesse # 10 and Initial post of Selesse # 11, 1OOm north of road on steep side slope beyond 6.3 km the road continues west to the upper reaches of Borden Creek.

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CLAIM STATUS

The principal area of interest is covered by the Selesse l- 11 mineral claims staked under the two-post and Modified Grid Systems end registered in the name of J.T. Shearer. A Bill-of-Sale Absolute was executed and fled in the name of LG. Machine 86 Fiber Ltd., 1600-42nd Avenue, S.E. PO Box 1325, Calgary, Alberta, T2P 2L2. Figure 3 shows the record claim block The claims are located within the New Westminster Mining Division.

T+iBLE 1

* with application of assessment work documented in this report. -l- Selesse #l Claim was reduced to 4 units on May 27, 1998 and a Mining Lease has been applied for having a term of 25 years

Under the present status of mineral claims in British Columbia, the consideration of industrial minerals requires careful designation of the product’s end use. An industrial mineral is a rock of naturally occur&g substance that can be mined and processed for its unique qualities and used for industrial purposes (as detined in the Mineral Tenure AcQ. It does not include “Quarry Resources”. Quarry Resources includes earth, soil, marl, peat, send and gravel, and rock, rip-rap and stone products that are used for construction purposes (as defined in the Land Act). Construction means the use of rock or other natural substances for roads, buildings, berms, breakwaters, runways, rip-rap and fills and includes crushed rock. Dimension stone means any rock or stone product that is cut or split on two or more sides, but does not include crushed rock.

The apparent expected end use of the CaCO3 resource (that of supporting a rooting plant raw materials end tillers) from the Selesse Project of LG. Machine & Fiber Ltd. comes within the Industrial Use definition and therefore can be considered under the Mineral Tenure Act. Claims require $100 of assessment work per unit (or cash-in-lieu) each of the first three years and $200 per unit each year after.

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REGIONAL GEOLOGY

The Lower Pennsylvanian to Lower Permian ChiJliwack Group (unit 2) consists of weakly metamorphosed pelite, sandstone and minor conglomerate, pyroclastic rock, altered basic volcanic rock known as greenstone, limestone and minor chert. The group was named by Daly in 1912 from the extensive outcrop of these rocks around the ChiUiwack 7- Vslley. Other rocks belonging to this group are exposed east of the southern part of Harrison Lake, near Agsssiz and on the south side of the Fraser Valley near Cheam View Station (Daly, 1912; Cairnes, 1944; Monger, 1966).

There are five stratigraphic and lithologic divisions in the group in the Chilliwack Valley west of the fault zone that runs approximately north-south and crosses the valley seven miles below Chilliwack Lake. The oldest division (2a) consists of pelite, siltstone and fine-grained sandstone whose stratigraphic base is nowhere exposed in the map area. Its apparent thickness ranges from 1,000 to 2,500 feet. Overlying this division with a gradational contact is Lower Pennsylvanian limestone (2b) that is commonly about 100 feet thick and locally absent. Disconfommbly (?) above this is a elastic division (2~) of pelite, sandstone, and minor conglomerate and tuE, ranging in thickness from 450 to 800 feet. This division is conformably overlain by Lower Permian limestone 12d) whose thickness is generally 200 to 300 feet, but locslly may be as much as 2,000 feet. The uppermost division (2e) consists of greenstone, pyroclastic rock and minor chert that in places conformably overlies the Lower Pennsylvanian limestone and elsewhere is stratigraphically equivalent to it. Thickness of this unit ranges f!rom 200 to 2,000 feet.

Pelite is most abundant in the lowest division (2a) but comprises the major part of the clsstic sequence (2~) overlying the Lower Pennsylvanian limestone. It is hard, locslly siliceous, dark grey to black and is either massive or thinly bedded.

Sandstone is prominent in the elastic division (2~) where it is typically coarse or medium grained and occurs in massive beds. In the lowest division (2a) it is 6ne grained, grades to siltstone and forms thin, graded beds within the predominant pelite. The sandstone is typically tan weathering, grey or grey-green, poorly sorted and composed of angular fragments derived mainly from volcanic rocks and plsgioclase feldspar that may be wholly or partly altered to carbonate or clay minerals. These are associated with chert clssts and pelite chips. Quartz is notably rare or absent. Sandstone near the top of unit 2c contains shards and pumice fragments and is gradational with lithic tuE

Conglomerate, in unit 2c, forms massive beds typically a few feet thick but locally up to 100 feet thick. It consists of we&rounded cobbles of volcanic rock, chert and locally limestone in a matrix of sandstone similar to that described above.

Limestone in the ChilIiwack Group is mainly recrystslIi.zed. The Lower Pennsylvanian limestone (2b) is medium to dzk grey, argillaceous, and where the primary texture is preserved, is a calcarenite. Most characteristic of this limestone are large crinoid columnals commonly an inch or more in diameter. The Lower Permian limestone (2d) is generally light grey, massive, locally dolomitic and contains large, dark grey chert nodules. Preserved textures indicate that the original rock was an aphanitic or cslcarenitic limestone. The uppermost part is locally tuffaceous and contains numerous fusulinids and crinoid columnals.

Volcanic rock is of two main types, altered basalt or andesitic basalt, known as greenstone, and pyroclastic rock, some which is dacitic. It comprises division 2e, although a few tuff beds occur just below the lower Permian limestone (division 2d).

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The greenstone is grey-green, massive and typically structureless, although pillows occur in a few places. It is commonly very tie grained and consists of randomly oriented, interlocking laths of altered plagioclase feldspar, making up 80 to 90 per cent of the rock, scattered intergranular or phenocrystic clinopyroxene grains, forming 10 to 20 per cent, and interstitial chlorite and opaque minerals. The feldspar is typically saussuritized and the composition of any plagioclase remaining is albite. The pyroxene is mainly fresh and may be highly fractured, and in many examples is in ophitic or subophitic relationship with the feldspar. Chlorite is common interstitial, fills veins and vesicles and in some rocks is associated with pumpellyite. Calcite occurs in vesicles or rarely, as patches in the groundmass. Skeletal ihnentite displaying all stages of alteration to leucoxene and finely granular sphene is ubiquitous and may make up to 10 per cent of the rock. Some brownish grey or maroon varieties contain fine-grained hematite. Although no chemical analyses are available for these rocks, texturally and mineralogically they have more in common with basalts than andesites (Monger, 1966). Mineralogical assemblages are those of spilites, but typically this appears to be due to saussuritic alteration of the anorthite part of the plagioclase, leaving albite pseudomorphs containing saussurite, rather than to any excess of sodium in the rock.

The most prominent pyroclastic rock is hard, massive, unsorted pale green to olive- green, quartz-bearing aystal-vitric dacite tufX This rock consists of 40 to 60 per cent pale green altered euhedml to subhedral feldspar, 5 to 10 per cent euhedral, bipyramidal, embayed quartz and a variable but subordinate amount of lithic and vitic fragments, in a fine-grained matrix. It grades with decreasing grain size into pale green silicified tuff resembling chert. Other pyroclastic rock contains lithic clasts up to 6 inches in diameter, together with altered vitric clasts. Pale grey, green, white and maroon thin-bedded chert with argillaceous partings is locally interbedded with these volcanic rocks, but is never abundant.

Elsewhere in the area the CbiIliwack Group has not been subdivided. Rocks east of the fault crossing the eastern end of Chilliwack Valley are amphibolites, some of which contain relict volcanic textures, cherty pelites and some limestone pods, in part contact metamorphosed by the . Structures in a hornfelsed rock of this sequence near the contact with the Chilliwack Batholith on Williams Peak and to the south, closely resemble altered Permian fusulinids. Volcanic rocks and limestone outcrop southwest of Agassiz (Mathews, 1947, p. 507), an association that suggests that these rocks are correlative with Permian limestone and volcanic rocks (division Id, lc) exposed on the south side of the Fraser River, south of Agassiz. Limestone interbeds in cherty pelite on Bear Mountain at the south end of Harrison Lake contain large crinoid columnals and are probably of Pennsylvanian age (Criclonay, 1930a p. 38). Phyllites and basaltic rocks outcropping on the south side of Fraser River near Cheam View Station and rocks exposed on the east side of the southern part of Harrison Lake, called Slollicum Series by Crickmay in 1925, are tentatively correlated with the Chilliwack Group on the basis of lithological similarities.

The ChilIiwack Group in Chilliwack Valley is highly deformed, having undergone at least two episodes of deformation. It was initially folded, together with Mesozoic rocks, and thrust to the northwest on at least two or possibly three major thrust faults. Folds related to this episode are tight and isaclinal and overturned to the northwest or recumbent, with fold axes trending northeasterly. A penetrative axial plane cleavage was developed in all elastic rocks during this episode. These structures were refolded and faulted during the later, minor deformational episode, which caused the common

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northeast plunge of early fold axes, and the northeasterly dip of bedding and planar ,. structures produced during the first episode (figure 5). Minor folds produced during the second episode are conjugate or chevron folds with northwest-trending axes, and major structures are large asymmetric a&forms and reverse faults with northeast-dipping fault planes.

,- These rocks belong to the lowest part of the greens&i& f&es, perhaps transitional to the glaucophane schist facies reported from south of the map area by Misch (1966, p. 109). Feldspars in volcanic rocks are saussuritized, pyroxenes little altered, chlorite ubiquitous and pumpellyite present in association with lawsonite, a mineral that characterizes the glaucophane schist facies (Monger, 1966).

,- Textural alteration, mainly in elastic rocks, is due to the early deformational episode, and becomes more intense from west to east. A penetrative fracture cleavage parallel to the axial plane of early folds is developed in pelitic and tuffaceous rocks west of the thrust fault that crosses Tamihi Creek, whereas coarser sandstones are little altered. East of and above this thrust the pelitic rocks have a slaty or phyllitic axial plane cleavage and grains in coarser elastic rocks are flattened, producing a crude foliation.

Exceptions to this regional metamorphism occur along the contact with the Chilliwack Batholith, where rocks are converted to cordierite-biotite hornfels. In addition, greenstones near the contact are fine grained ampbibolites although this change may be due mainly to regional rather than the contact metamorphism.

The ChiUiwack Group is overlain disconformably by Upper Triassic rocks of the Cultus Formation. Bedding on both sides of the contact is parallel and both Mesozoic and Paleozoic rocks appear to have undergone two deformational phases and the same degree or metamorphism. The basal contact of the group is not known from the map area, as the oldest rocks in the formation overlie younger rocks on a thrust fault.

Fossils occur in all divisions of the Chilliwack Group but are rarely abundant. Of these only fusulinids in the Lower Pennsylvanian and Lower Permian limestone give precise stratigraphic ages.

The fusulinid faunas allow f&Iy precise correlation with other units in the Western Cordillera. Lower Pennsylvanian limestone outcrops extensively in northwestern Washington, southwest of the map area. Limestone of the Cache Creek Group at Harper Ranch, east of Kamloops, British Columbia and the Coffee Creek Formation of Suplee, Oregon are of the same age. Lower Permian limestone outcrops southwest of the map

‘- area and contains similar fusulinids to those in division 2d. Lithologically the Chilliwack Group is somewhat similar to the Hozameen Group (unit l), although it .~ contains more elastic material.

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- PROPERTY GEOLOGY and CaC03 RESOURCES

Geological mapping on the South Slesse LimeStOne project iIIdiCateS that a single recumbent fold plunging -6O towards 192’ is the do minant structure in the existing Highways quarry. This fold accounts for the “double” thickness of the upper limestone tit in the quarry. I am confident that this structure continues south onto the Selesse Claims and similar conditions can be expected although the fold binge will be lower in elevation the farther south it is encountered.

The rusty stain on the upper benches of the Highways Quarry is due to the oxidation of thin, pyritic, black argillite interbeds which appear to be slightly thicker along the hinge region of the recumbent fold structure.

Since the limestone unit is exposed on the Selesse Claims as a cliiTface running along 500x11 on the southwest part of the quarry knoll, it is unlikely that the limestone unit suddenly disappears at depth. However, from a geological perspective diamond drill hole control will help to define:

A) depth of overburden to the south B) thickness and frequency of pyritic argillite interbeds C) uniformity and composition of the Limestone unit D) location of chert beds and chert nodule horizons

The cliff on the southwest side of the lmoll exposes at least 60m thickness of the upper limestone unit. On precipitous slopes lower on the knoll a lower limestone unit at least 30m thick is also exposed but is almost inaccessible. A belt of greywacke and argillite separates the two exposures of limestone whether the two exposures of limestone are parts of one body repeated by faulting or are two separate bodies remains uncertain. The limestone here strikes 050° dipping 10 to 35O southeast. Chert beds, especially in the upper limestone unit are present.

Three major tectonic units an separated by thrust and reverse faults in the belt south of Fraser River. The lowest unit is believed to be autochthonous and consists mainly of Mesozoic rocks with minor fault across which a narrow sliver of probable pm-Devonian basement (unit Bd) has been brought up, and on the south and east by a thrust fault. Minor folds in this unit are tight, overturned to the northwest and have axial planes that dip southeast at moderate angles. Paleozoic rocks overlying the Mesozoic rocks on Church Mountain are believed to be part of this unit as the degree of alteration and development of planar structures is identical to that in the Mesozoic rock below. The Paleozoic rocks may comprise the lower limb of an over turned fold and as such should be called parauthochthonous (Monger, 1966). Above this unit are allochthonous rocks that overlie a major thrust correlated with the (American) Church Mountain thrust of Misch (1966). Within the allochtbonous rocks a thick lower sequence of Permian volcanic rocks (unit 2c) is separated by an assumed thrust from overlying Pennsylvanian and Permian strata (units 2a, 2b, 2c, 2d and 2e) and Mesozoic rocks (unit 4). Permian limestone (unit 2d) on Mount McGuire and the north side of Chilliwack Valley outlines a major recumbent fold overturned to the northwest. This plunges gently to the northeast, probably as the result of later deformation. The lower limb of the fold is replaced by a thrust, below which is the thick sequence of Permian volcanic rocks. The thrust appears to be genetically related to the recumbent folding. Minor folds in these rocks mirror the geometry of the major structure. Planar structures in the sllochtbonous rocks are far better developed than those in the autochthon. An axial- plane slaty or phyllitic cleavage is found on both Paleozoic and Mesozoic pelitic rocks and the grains in coarser elastic rocks are flattened, producing a crude foliation.

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Paleozoic rocks on Cheam Peak, and those that form a klippe to the south of it, appear to be a structurally bigher thrust sheet as they overlie Mesozoic rocks. The easternmost tectonic unit includes Paleozoic rocks (unit 2), probable basement rocks (unit Bd) and minor ultramafic rocks (units Aa, AC), and is separated from rocks to the west by a north-south trending fault zone that dips easterly at about 70” where well-exposed near Mount Pierce. This fault appears to truncate structures to the west. Rocks east of the fault probably form the northerly continuation of the zone of imbricated Paleozoic rocks and basement slices below the main Shuksan Thrust of Misch (1966) that is well exposed west of Slesse Creek just south of the International Boundary.

Samples taken in by Mathews (1947) and during the current program are shown in table.

* from Mathews 1947 p. 48 ‘? from EMPR Bulletin 40 pg. 41 & 42

Note: RzO3 = Aluminum oxides + TiO, ZrO, BeO, CrO, As, V, for most limestones R203 is essentially Aluminum oxide. CaO contains 7 1.47% Ca by weight, ( 1% CaO = 1.78% CaOa) Ins01 = Acid insoluble matter, chiefly silicates.

The thickness of the upper limestone.unit of 60 metres has the potential, based on surface exposures over a 5001~ strike length and width of 150 metres to contain in excess of 14 million tons of relatively siliceous (>8%) carbonate material that may be accessible by open cut mining immediately south of the existing Highways quarry. There is also potential to define several times this amount by deeper diamond dnlling or from known limestone exposures in the general area.

Cross sections and a longitudinal section are plotted as Figures 8 to 11. Using the Fustrum Method of calculating cross sectional volumes of geological potential for limestone based on the 3 initial diamond drillholes)the following formula was used:

lH. SG = tonnes 3 Where A = Area in square metres of Section A Where B = Area in square metres of Section B Where H = Perpendicular distance between Sections in metres. Where SG = Specitic Gravity (2.4 for Limestone.)

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The total length tkxn Cross Section A to the south end of the deposit is 600 metres. The foIlowing results were calculated: r Quarry A = 13.98 Million tonnes (initiaI open cut) Quarry B = 16.4 MiIlion tonnes Qumy D = 3 1.7 Million tonnes

Controlled grinding tests, refer to Appendix IV, were completed with a timl particle size, determined by wet screen assaying, was:

150 micron 99.8% passing 74 micron 93.7% passing 38 micron 77.7% passing

The filler grade &ding specifications requirement by IKO is as follows:

Filler (Beachville) Filler (Madoc) Talc % smaller than % smaller than % smaller than 150micron - 100 20 Tyler # mesh 0 20 Tyler # mesh 0 74 micron - 73.6 28 Tyler # mesh O-O.8 40 Tyler # mesh 7-8 45 micron - 67.2 35 Tyler # mesh o-3 70 Tyler # mesh 22-24 20 micron - 46.0 48Tyler # mesh 9-15 100 Tyler # mesh 11-12 10 micron - 30.0 65 Tyler # mesh 12-18 200 tiler # mesh 22-24 5 micron - 8.5 100 Tyler # mesh IO-25 Plus 200 Tyler # mesh 30-38 1 micron - 2.15 200 Tyler # mesh IS-30 PAN 20-50

150 micron = 100 mesh (Tyler #) 75 micron = 200 mesh (Tyler #)

Further testing on actual tiller in production rooting products at the IKO Research Centre in Brampton, Ontario apparently gave favourable results on the ground Slesse caco3.

r-

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10

DIAMOND DRILLING

Three diamond drillholes were completed between March 24 and April 15, 1998. The location of the holes are shown in Table III and plotted on Figure 7. Detailed drill logs are contained in Appendix V.

TABLE III

II 1998 Diamond Drilling Program II Hole # Location Dip knsth Elevation ., E N SSQS-01 1424 2726 -90 92.96m (3057 411m SSQS-02 1350 2679 -90 183.18m (6011 429m SSQS-03 1433 2811 -90 91.74m (3011 390m 367.9m (12077

As surveyed by S. Nickel, BCLS,CLS Note Elevations based on WRB BM #744 Brass Cap Elev. 227.505m Re: M.O.T.H. Plan. ,- Geological cross sections are plotted on Figures 8-l 1 and the geological mapping is presented as Figure 7 (in pocket).

Hole SSQS-1 was positioned as the middle hole to test the continuity and variation in limestone lithology along the ridge crest with the following summary of rocks encountered:

0.00-8.52 Dark grey; finely crystalline limestone 8.52-14.92 Dark grey limestone with thin shaly partings 14.92-17.56 Light grey limestone 17.56-29.46 Dark grey laminated fossiliferous limestone 29.46-31.41 Recrystallized limestone 31.41-40.11 Medium grey line grained 40.1 l-52.53 Spany white calcite breccia 52.53-83.81 Medium grey, medium crystalline limestone 83.81-89.20 Vuggy, spany white calcite, solution breccia 89.20-90.55 Medium grey, medium crystalline limestone 90.55-92.96 Sparry white calcite in light grey limestone, solution breccia . E.O.H. Fault zones are common 36.85-40.70m. ? Fossils are dominated by crinoid sections and large fusulinids.

Hole SSQS-2 was the farthest south hole on the very top of the knoll and encountered the following sequences:

0.00-14.81 Very fossiliferous, dark grey, laminated, 6ne grained limestone 14.81-20.66 Bleached zone (in fossiliferous limestone) -, 20.66-22.54 Fossiliferous dark grey, laminated, iine grained limestone _ 22.54-32.56 Dark grey, tine to medium crystalline limestone 32.56-34.63 Chert nodule zone 34.63-37.13 Dark grey medium crystaIline limestone 37.13-37.74 Chert nodule zone 37.74-55.41 Dark grey, medium crystalline limestone

11

:

55.41-57.21 White span-y calcite within dark grey medium crystalline limestone. 57.21-81.24 Dark grey, medium crystalline limestone 81.24-88.89 Moderate, light grey brecciated, medium crystalline limestone 88.89-102.85 Dark to medium grey, medium crystalline limestone 102.85-I 19.80 Recrystallized, alternatjng white coarse crystalline and medium crystalline limestone 119.80-138.38 Fine to medium crystalline dark to medium coloured limestone 138.38-141.83 White sparry calcite dominant solution breccia limestone zone 141.83-158.78 Brecciated % recrystallized, medium grey limestone Dark grey, relatively uniform, fine to medium crystalline ., 158.78-173.63 limestone 173.63-174.66 Cherty-silica rich section 174.66-178.54 Slightly sheared, medium crystalline, uniform grey limestone 178.54-179.51 White spany solution breccia zone 179.51-183.18 Slightly mottled, moderate grey, medium crystalline limestone E.O.H. Hole #2 was characterized by an abundance of solution breccia zones and other solution features such as well developed networks of stylolites.

Hole SS98-3 was drilled to the north, closer to the Highways Quarry. Hole #3 encountered the following sequence: 0.00-5.25 Dark grey medium crystalline limestone 5.25-6.40 White highly silicified zone 6.40-24.21 Dark grey, medium to finely crystalline limestone 24.21-25.32 Cherty, medium crystalline, grey limestone 25.32-30.45 Slightly sheared, medium crystalline, grey limestone 30.45-32.54 Chew, medium crystalline, grey limestone 32.54-34.47 Slightly sheared, medium crystalline, grey limestone 34.47-65.14 Medium crystalline, medium grey, solution brecciate limestone 65.12-91.74 Medium crystalline, medium grey, relatively uniform limestone (with pronounced mottling in places) E.O.H. . Since the shaly unit was not encounterd during the diamond drill program it appears that the recumbent folding and thrust faulting is much more complex in nature than anticipated.

,-

12 GEOPHYSICS

- An aeromagnetic survey around the Slesse Creek area f?om Map 8537G. The Slesse limestone quarry is characterized by a relatively gentle magnetic gradient around the 56, 950 g-a contour which reflects the general non-magnetic signature of the Chilliwack Group rocks.

A more variable and steep magnetic pattern occurs to the east around Mount Pierce and . This reflects the active magnetic background of the Chilliwack Batholith which, on the western portions, consists of tonal&e (quartz diorite) and Rexford quartz monzonite of Late Tertiary age. c

?

.~

13 i

? CONCLUSIONS and RECOMMENDATIONS

Acquisition and preliminary evaluation of the Slesse Limestone Qusny was undertaken in July and October 1997 for LG. Machine & Fiber Ltd. The C&O3 resource at Slesse Creek is a possible source for the tiller requirements of the new manufactuxing plant operated by IKO Industries Ltd. iu Sumas, Washington. A 120x11thick Lower Permian sequence of grey, recrystallized limestone with interbedded greywacke, chert and argillite of the Devonian to Permian Chilhwack Group is exposed for 700 metres along the northwest flank of a knoll immediately southwest of the junction of Slesse Creek and the Chilliwack River.

Geological mapping on the South Slesse Limestone Project indicates that a single recumbent fold plunging -6” towards 192O is the do minant structure in the existing Highways quarry. This fold accounts for the “double” thickness of the upper limestone unit in the quarry. I am contident that this structure continues south onto the IKO -_ Claims and similar conditions can be expected although the fold hinge will be lower in elevation the farther south it is encountered.

The rusty stain on the upper benches of the Highways Quarry is due to the oxidation of thin, pyritic, black argihite interbeds which appear to be slightly thicker along the hinge region of the recumbent fold structure.

Since the limestone unit is exposed on the Selesse Claims as a cliff face running along the southwest part of the quarry knoll for over 500m , it is unlikely that the limestone unit suddenly disappears at depth. However, f?om a geological perspective, without some diamond drilI hole control, the project rum the risk of not detining:

A) depth of overburden to the south B) thickness and frequency of pyritic argillite interbeds C) uniformity and composition of the Limestone unit D) location of chert beds and chert nodule horizons

Diamond drilling completed in early 1998 indicates that the limestone section is over 1801~ thick at the centre of the ridge-knoll. Assaying and physical tests are ongoing at the company’s research facility in Brampton, Ontario. This anomalous thickness of limestone is due in part to complex recumbent isoclinal folding. The thickness of the “upper limestone” (>lOOm) has the potential over a 500m strike length and width of 150m to contain in excess of 10 milhon tons of relatively siliceous carbonate material that appears to be accessible by open cut mining.

The permitting process to obtain full scale production permits beyond the one time 10,000 ton bulk sample permit requires that application should be made as soon as possible to receive permits for full scale production to meet the plants needs.

.T. (Jo) Shearer, MSc., P.Geo. onsultiug Geologist COST ESTIMATE for FUTURE WORK

The drillkg project will require minor road building. The diamond driUing contractor needs some sort of road access to the ridge crest from the existing quarry. To proceed with the 10,000 ton bulk sample, getting approval to put in a tote trail (300-400 metres) for drill access should not be a problem. Receiving this approval wiIl require a further application with Forestry for a License to Cut.

Geological Mapping 86 Drill Supervision

Senior Geologist, 8 days @ $350 $ 2,800.OO

Core Splitter/Assistant, 8 days @ $200 1,600.OO - GST 308.00 ., Subtotal $ 4,708.OO

Diamond DriIling of 3 Holes @ 200’ Depth Each:

Footage price $19.50 x 600’ $11,700.00

Mobfdemob 1,800.OO

Standby/machine time (if required) Field costs zero

MOVillg Field costs 3,ooo.oo or less

Meals/Accommodations At Contractor’s Expense

set up Field costs 3,ooo.oo or less

Subtotal $19,500.00

I Dozer time in moves/road access

Road-8hrs@$85 $ 680.00 Moves - 6 hrs @ $85 510.00

Diamond DrilIing Subtotal $20,690.00

Environmental Survey & Report $ 5,ooo.oo Application & Reparation of required reports & documents for Mine Development Certiiicate 6.000.00

Tote Road Preparation 10,000.00

Bulk Sample Mining & Crushing 10,000 tons 45,ooo.oo

Trucking Sample to IKO Plant 35,ooo.oo

Final Report Reparation 4.000.00 TOTAL $130,398.00

15 REFERENCES

Bleek, J. A. and Sherar, R. L., 1991: Calcium Carbonate in Paper. Conference Proceedings, 10th Industrial Minerals International congress, 199 1.

Bristow, C. M., 1992: An Introduction to the evaluation of Mineral Filler Deposits. Industrial Minerals Magazine, June 1992.

Caimes, C. E., 1923: Lucky Four Mining Property, Cheam Range, B.C. Geological Survey of Canada, b Summary Report, 1922, Part A, Page 127-138.

Ionides, G., 1991: Opportunities for High Value-added papamaking mineral pigments in Western , In Conference Proceedings, Industrial Minerals Forum 1991, page 99-102.

McDougall, J. J., 1984: Report on the Pop and Pop1 Mineral Claims, Bridal Falls - Cheam Peak Area, Private Report for Saturn Energy and Resources Ltd., Jan. 9, 1984, 1 lpp.

Mathews, W. H., 1947: Calcareous Deposits of the Georgia Straight Area B.C. Dept. of Mines, Bulletin 23, 113 pp.

Monger, J. W. H., 1970: Hope Map Area, West Half, Geological Survey of Canada, paper 69-47,75 pp.

Ray, G. E., 1982: The Nagy Gold Occurrences, B.C. Department of Mines Paper 1983- 1, Geological Fieldwork 1982.

Richards, T. A. and McTaggert, C. C., 1976: Granitic Rocks of the Southern Coast Plutonic Complex and Northern Cascades of British Columbia Geological Society of America Bulletin 87, p. 935-953.

Shearer, J. T., 1984: Assessment Report on the Hunter Group, Hunter Creek Area Assessment Report, 1984, 12 pp.

1990: Assessment Geological and Prospecting Report on the POP# 1 Mineral Claim, Bridal Falls - Cheam peak Area, Private Report for New Global Resources Ltd., May 25, 1990, 10 pp.

1995: Geological and Prospecting Report on the W&leach l- 11 Mineral Claims, (including the Popkum Limestone Quarry) Bridal Falls - Cheam peak Area, Private Report for Steelhead Aggregates Ltd., May 15, 1995, 10 pp.

1998: Mining Permit Application Summary on the South Slesse Limestone Quarry, MX7- 114, for I.G. Machine & Fibers Ltd., Dated January 10, 1998, 23 pages.

16 r

APPENDIX I

STATEMENT OF QUALIFICATIONS

J. T. SHEARER, M.Sc., P.Geo.

P

\ r*

July 15, 1998

P

/

, t

L Appendix I STATEMENT OF QUALIFICATIONS

I, JOHAN T. SHEARER, of 1817 Greenmount Avenue, in the City of Port Coquitlam, in the Province of British Columbia, do hereby certify: j 1. I am agraduate of the University of British Columbia (BSc., 1973) in Honours Geology, and the University of London, Imperial CoIlege (M.Sc., 1977).

2. I have over 25 years experience in exploration for base and precious metals and industrial mineral commodities in the Cordillera of Western North America with such companies as - McIntyre Mines Ltd., J.C. Stephen Explorations Ltd., Carolin Mines Ltd. and TRM Engineering Ltd. ., 3. I am a fellow in good standing of the Geological Association of Canada (Fellow No. F439) and I am a member in good standing with the Association of Professional Engineers and Geoscientists of British Columbia (Member No. 19,279).

4. I am an independent consulting geologist employed since December 1986 by Homegold Resources Ltd. at #S-2330 T’yner St., Port Coquitlam, B.C.

5. I am the author of a report entitled “Geological and Diamond Drilling Assessment Report on the South Slesse Limestone Quarry, ChilIiwack River-Slesse Creek Area, British Columbia” dated July 15, 1998.

6. I have visited the property in July 1997, October 4-16, November 24 8625, 1997, March 15 - April 8, 1998, June l-20, 1998 and numerous times in previous years. I have carried out mapping and sample collection and am familiar with the regional geology and geology of nearby properties. I have become familiar with the previous work conducted on the Slesse claims by examinin g in detail the available reports and maps and have discussed previous work with persons knowledgeable of the area

7. I have no interest in the securities of I.G. Machine & Fibers Ltd. or any subsidiary company, nor do I expect to receive any interest in the Selesse Claims. I consent to Machine & Fibers Ltd. using this report for any corporate purpose.

Dated at , British Columbia, this 15th

L !

(’ :J.T.SZ=~~,M.S~.,F.G.A.C.,P.G~~.

17 APPENDIX II

STATEMENT OF COSTS

July 15, 1998 APPENDIX II Statement of Costs Slesse 1997 wages ad Benefits J.T. Shearer, M.Sc.,. P.Geo. $6,406.75

17.5 days at $350 per day (plus GST) Oct. 4,6,7,8, 1997,

Nov. 24 & 25, 1997 & March 24 - April 8, 1998

Transportation

18 days truck rental at $53.50 per day 963.00 GaX&lIe 342.00

Meals 176.00

Analytical (Chemex Labs Invoice 19734102) 49.86

Drafting and basemap to 1:5,000 in AutoCAD (Invoice 13647,0905788 & 40755, SRK Robinson) 698.58

Grinding 86Testing at B.C. Research 749.00

Contract Diamond Drilling Mob 86 demob 2400.00 Footage cost, $18.50 x 1207’ 22,329.50 Bulldozer cost 800.00

Report Preparation 2,ooo.oo

Word Processing and Reproduction 362.00

GRAND TOTAL $37,276.69

Note: 7 units @ $100 per unit for 3 years = $2,100 (7 units @ $2OO/unit for 7 years = $9,800 total $11 ,,900 Fees $1,190 plus notice to Group $10 = $1,200 in good standing until 2008 Selesse # 1 (4 units reduced now a Mining Lease) = $400?

18 APPENDIX III

ASSAY CERTIFICATES

CHEMEX LABS

July 15, 1998

August 13,1997 Project No: Z-21-900

Mr. J.T. Shearer Homegold Resources Ltd. Unit 5,233O Tyner St. Port Coquitlam, B.C. V3C 221

Dear Mr. Shearer:

Subject: Sample Grinding

~ - As discussed, 24 kg of limestone rock was milled to best approximate the specifications ! you supplied. The final particle size, determined by wet screen assaying was: 150 micron 99.8% passing 74 micron 93.7% passing 38 micron 77.7% passing

The grind was finer than desired although the 150 micron size criteria was met. Exact

. grinding to specific sizes is impossible unless screening is conducted during the grind. Grinding was conducted in a rod mill using 8.2 kg batches of cone crushed limestone and 3.9 L of water for a duration of 30 minutes. Our invoice including GST for $750.00 is attached.

Sincerely, BCRI .

.

./” Tim O’Hearn, P.Eng. Mine Waste & Drainage Environmental Services & Technology _

,

j

- LG. MACHINE & FIBER LTD. South Slesse Limestone Project

. sEcTxolv: Hole 1 Diamond DrIII Log DDI-IX: SS98-I

Northing: 2726 Drill Hole survey Property: south Slesse / Eating: 1424 Method: Acid Test Limestone Elevation: 411 NTS: 92H/4E ‘- Azimuth: 090 claim: Slesse 1

IdinatiOIX -90” Date Started: March 24.1998 Grid: N/A Date Completed: March 26, 1998 _ Length (In): 92.96m 1305 feet) Logged by: J.T.Shearer. core size: BO M.Sc..P.Geo. Contractor: F. Boisvenu Drill Type: Prospector (new drill)

.S: 1 To test continuity and variation in Limestone Litholoa along the ridge crest. (Broken outcrop at drill site) -

Description from/ to width cao -0 a 0%. 0.00 1.22 CASING: Broken outcrop at drillsite. Water lost at casing. Rubbly core of medium crystalline dark grey limestone. 1.22 3.52 DARK GRRY, FIAELY CRYSTALLINE LRUESTOIiE: Minor buff weathering fractures. Calcite cleavage grains average to Imm in length up to 3mm in length. Occasional irregular lenses of white to light grey, slightly coarser recrystallized white calcite. Thin white calcite veinlet 2mm wide @ 55” to CA. at 2.87~1. White calcite gash veinlets subparallel up to 12’ to CA. at 3.15m. Vague pelletoidal appearance below 3.00m due to rounded dark pellets (?) up to 2mm in diameter. Natural buff weathering fracture at 3.44111at 43” to CA. White veinlet at 5.36.5.39m coarser crystalline at 34’ to C.A., 16mm wide. White gash veining at 6.49m @ 20” to C.A. associated with and cut by horizontal stylolites. Slightly weathered fractures at 6.71m @ 15”” to C.A., black limy shale 1Omm wide at 7.11.7.21m. End box 1 at 7.21m Minor shaly partings usually less than 3mm wide at 64’ to CA. between 8.23m and 11.28m.

- 8.52 14.92 DARK GREY FINELY CRYSTALLIAE LIMESTOIPE WITH THIN SI-IALY PARTIHGS - Calcareous shaly partings typically at 58” to CA. l-2mm wide at 10 to 15 cm apart. Fyritic shaly bed at 12.11-12.12m@ 59” to C.A., minor load cast features. End of box 2 at 12.8Om Shaly interval 14.33-14.51m @ 61” to C.A. bedding associated with slightly more siliceous zone 14.51.14.92m. 14.92 .7.56 LIGHT GREY LIBIESTOAE - Minor shaly partings relatively fine gained compared to upper sections. Minor calcareous shaly laminae at 59” to C.A. 17.56 !9.46 DARK GREY, LAMIAATED FOSSILIFEROUS LIMESTORE - Prominent recrystallized crinoid stem fragments up to 12mm in diameter. Laminations averaging 59’ to CA. appears to be relatively siliceous. LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: Hole 1 Page: 2 DDH#: SS98-1

froll Description width cao i (mu __@L % Slight change in bedding at 24.84m. Laminations at 51’ to C.A.. - Large crinoid segments up to 22mm in length, multisegments. Recrystallixd fusulinids. . Bedding at 26.56 is 49” to C.A. with fossil fragments creating loac casts in finer grained micrite. Abundant fossil debris. Bedding 48” to C.A. near lower contact. i 29.46 31.41 LIGHT GREY COARSER RECRYSTALLIZED LIMESTORE - containing abundant coarse white calcite patches and veinlets. Stylolites at 32” to CA. Small vugs common throughout. \. 31.41 36.85 DARK GREY LAMIRATED FOSSILIFEROUS LIMESTORE - Well bedded to laminated, abundant crinoid and fustilinid cross sections up to 5mm in diameter. . Bedding laminations at 33.18m @ 46’ to C.A. Bedding 34.40m is 54” to CA.. Small scale folding. - 36.85 37.12 FAULT BRECCIA and GREY GGUGE - 1Omm of Light Grey stickj gouge at 44’ to C.A., contorted laminations at 60” to C.A. Gouge zones mainly non-calcareous except for elongated lines of white calcite. 7 37.12 10.11 MEDIUM GREY FIRE to MEDIUM CRYSTALLIBE LI?dEgTOI?E - Minor brecciated sections, white calcite filled tension gash veinlets end patches c~mnmn throughout. More intense brecciation toward lower contact $0.70 FAULT ZOHE - Black gouge with shaly interbeds @ 62” to C.A. at 40.31.40.34m/ Convoluted laminations 40.52m. E?ad0fBox7=40.75m ; 40.70 52.53 MEDIIJBl GREY FIRE CRYSTALLINE LIMESTONE Poorly developed wispy bedding laminations up tc 68’ to C.A. and as low as 52’ to CA. rhis section has numerous Solution Breccia Features with each mne marked by up tc 50mm of sparry matrix breccia. End of Box 8 = 46.33m Short area have disseminated chert grains (precursor to chert nodules) at 42.76-42.82m, 46.82-46.83~11+ 49.10-49.33m. I’hese cherty areas are cut by tiny white calcite hairlines. Shaly bed 48.61.48.64m @ 52” to C.A., black but also calcareous. End of Box 9 = 52.81m 52.53 i3.45 SPARRY WHITE CALCITE BRECCIATIHG MEDIUM GREY WEDIUM CRYSTALLIRE LIMESTORE Section is approximately 50% white spany calcite. Stylolites and solution features are abundant throughout. 53.45 i3.81 EEDIUM GREY, FIRE TO BIEDIIJM CRYSTALLIRE LIMESTORE Roughly beddy by wispy laminations mainly at 64” to C.A. ,- I‘races of fractured black chert 56.04-56.14m. . End of Box 10 = 57.44m rension gash white calcite intilling camnon between 57.80- r 59.85m. Relatively uniform section down to 61.44m Sherty Section Highly fractured chert nodule 61.44.61.96m. snd 61.98-62.15m, chert cut by close spaced calcite hairlines. short cherty sections 62.31-62.32m, 62.53-62.56m and 62.92. j2.95m. End of Box 11 = 62.98m rraces of sparse, fractured chert at 63.09-63.13m and minor :hert between 64.62.65.06m. LG. MACHINE & FIBER LTD. South Slesse LimestoneProject

SECTION: Hole 1 Page: > DDH#: SS98-1

fron 1 Description from/ to width cao O/” ,., (ml J?a Recrystallized fossil pellets (?) up to 60mm in length, slump StrUCtUl-eS. End of Box 12 = 68.56m Minor shattered chat 69.53.69.71m. Solution breccia at 70.61-60.62m @ 51” to C.A., clack calcareous matrix of insolubles. Spanry calcite inffiling at 72” to C.A., Frequency of calcite patches increases slightly between 70.71.73.50m related to extent of solution textures. Traces of small 4mm in diameter fusulinids. End of Box 13 = 94.12m Very indistinct grain size changes (perhaps bedding) throughout box 13 at 80” to C.A. Last four boxes coated in a thin film of grease. Minor chert between 74.6%74.71m migration of silica toward incipient chert nodules. White calcite @ subparallel to C.A. @ 77.07-77.32m with up to 3mm wide outer layer of chlorite-calcite rim. Gradual increase in span-y white calcite (solution fractures) toward siliceous zone. . White calcite patches at 83.20-83.23m. 83.81 :4.43 WHITE WGGY HIGHLY SILICIFIED LIYESTO?IE - Light grey to white, exhibiting original limestone textures but only minor carbonate content, mostly silica. 84.43 19.26 SPARRY WHITE CALCITE IA MEDIUM TO LIGHT GREY LIMESTONE (3olution Breccia) - Much of the white sparry sections are vein-like in form at 10’ to CA. Brecciated cherty intervals 86.07.86.16m, 86.51-86.54m, 87.62. 87.68m and 87.84.87.90m. Stylolites common at 88.40m below a small fragment breccia with white calcite matrix. 89.26 ‘0.55 MEDIUM CRYSTALLINE, MEDIUM GREY LIMESTONE - Relatively uniform, some bedding convoluted roughly at 74” to CA. Absence of white sparry zones. 2.96 SPARRY WHITE CALCITE III MEDIUH TO LIGHT GREY :OH LIMESTOI#E SOLUTION (3olution Breccia) - Abundant white spany patches in veins to irregular zones. Core somewhat broken toward end of hole. Buff weathering fractures common. Rough bedding laminations at approx. 61’ to CA. at 92.80m.

END of HOLE 92.96 metrea (305 feet) LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: _ Hole 2 Diamond Drill LOS DDH%: 8898-2

Northing: 2679 Drill Hole survey Property: south Slesse Easting: 1350 M&hOd: Dwree Rule Limestone Elevation: 429 ” Azimuth: 000 Inclination: -90” Grid: N/A Length (m): 183.18 (601 ft) core size: BQ . Contractor: F. Boisvenu Drill Type: Prospector (new drill)

Flxpost 2: On very top of quarry knoll, to investigate thickness of suitable carbonate sequence. I

from Description from/ to width 5.0 ,_ 0 __@L -% 0.00 1.27 CASIAO: No core recovered _ 4.27 14.81 VERY FOSSILIFEROUS, DARK GREY, LAMIRATED, FISE GRAISED LIMESTORE: Alternating dark and lighter grey beds, 2.10mm thick. Lamination at 6.45 is 56’ to CA. Crinoid and Fusulinid cross sections distributed throughout entire section most about 2.3mm in diameter. Larger Fusulinids up to 16mm in diameter at 10.29m. Bedding lamination at 10.29 is 35” to C.A. End of box 1 is 10.36m Minor cherty section at 12.50-12.61m also cut by white calcite veinlets. 14.81 20.66 BLEACHED ZOIiE (in Fossiliferous Dark Grey Limestone): Light grey, abundant white sparry calcite veinlets, most of the sparry veinlets are at 45’ to C.A. End of box 2 is 16.25m, relict crinoid discs common. Abundant stylolites throughout section @ 70’ to C.A., the stylolites are truncated by the sparry veinlets. Buff brown weathering on fractures between 19.10-19.51m (watercourse) r 20.66 12.54 FOSSILIFEROUS. DARK GREY. LABIWATED. FIHE G&USED LIMESTORE: Lakhations m&Se 38’ to &A., crinoid discs average l-2mm in diameter. Endofbox3is21.86m. - 22.54 32.56 DARK GREY, FIRE to MEDIUM CRYSTALLIAE LIMESTOS-E: fossils relatively sparse, entire section relatively uniform. Numerous solution features, stylolites common. Cherty sections - chert nodules 25.31-25.48m, 25.55-25.71m and 25.92-26.01m. Endofbox4is27.69m Some black shaly laminations and sedimentary breccia at 28.60~11is 56” to C.A. Chert interval 29.47-29.65m. Wispy layering indistinct toward lower part of interval roughly 60” to C.A. ” 32.56 34.63 CHERT BODULE 2OSE: Fractured chert nodules at relatively I closely spaced from 32.56.32.68m, 32.93.33.03m, 33.34- 33.39m, 33.69-33.74m, 33.77-33.87m and 34.58-34.63m. Endofbox5is33.76m LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: Hole 2 Page: 2 DDH#: SS98-2

fron 1 Description from/ to width cao I (ml Jz?)_. % All of the nodules are bounded by stylolites OI- solution boundaries. i Matrix is relatively fme crystalline dark grey limestone. 34.63 37.13 DARK GRRY, MEDIUM CRYSTALLINE LIMESTORE: Fossils sparsely throughout and sedimentary rounded clasts up to 25mm in length. Minor sparry white calcite veinlets mainly at 47’ to CA. 37.13 37.74 CHERT AODULE ZOIiE: Black fractured chert 37.13-37.17~ 37.25.27.31m, 37.54-37.65m and disseminated chert grains between 37.68.37.74m. i Many of these nodules do not extend across the width of the core and perhaps were only intersected on an edge or perhaps these -, nodules have been fragmented or brecciated. 37.74 55.41 DARK GREY, MEDIUBl CRYSTALLINE LIMESTONE: Fossils sparsely throughout, one narrow recrystallized crinoid is 14mm long at 38.18 by 2mm wide, poorly developed bedding. Layering (bedding) at 38.18~11 is at 46” to C.A. White spany calcite veinlets at 38.80m is 34’ to C.A. Stylolites are abundant throughout cross cutting bedding at 38” to CA. End of box 7 is 45.42m Some white sparry veinlets are truncated at right angles by solution boundaries for example at 44.38 @ 28’ to C.A. Minor concentrations of fossils - mostly crinoid sections for 2.4cm wide, for example at 45.61-45.65m. Chert nodule 49.02-49.13 - fragment only on half of core. Close spaced white spany veinlets 50.28-51.32 @ 55” to CA. Shore chert nodule 50.67-50.73m also at 54’ to CA. fragmental. End of box 8 ti 51.37m Strong stylolite at 52.06m roughly 65-70” to C.A., somewhat xmvoluted. Chert nodule 53.32-53.46m, traces of linear vugs lined with tiny quartz crystals in siliceous cherty sections. 55.41 i7.21 WRITE SPARRY CALCITE WITHIN DARK GREY MEDIUM CRYSTALLIBE LIMESTORE: Wispy black lenses associated with ZZwxninated cherty grains 1.3mm in diameter between 55.80. 56.20m. Fossil fragment 19mmx6mm at 56.73m, lying at 60’ to C.A. associated with crinoid cross sections. 3edding at 56.80~11 is 53” to C.A. Gradual lessening of sparry veinlets and patches. e 57.21 11.24 DARK GREY, MEDIUM CRYSTALLINE LIMESTORE: Not well xdded although solution features are abundant. stylolites at 56.54 is at 52’ to CA. ?ossils (crinoid cross sections) distributed sparsely throughout. tiinor cherty sections, 60.156-60.18m, 60.20.60.26m, 61.22. j1.29m and 61.35.41.47m. ;everal generations of span-y white calcite, early - fmer grained in reinlets at 32” to C.A., sharply defmed later - patchy coarser alcite in indistinct lenses from 75.85O to C.A. End of box 10 is 62.18m ?hicker span-y white calcite typical between 64.80.65.80m, 75. 30” to C.A. up to 5 cm wide. LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: Hole Page: 2 DDH#: SS98-2

from Description from/ to width cao % i 0 .& x Cherty layers-nodules 66.93-66.97m, 67.05.67.19m and 67.25- 67,33m, sharply defined nodules at 58’ to CA. End of box 11 is 68.14m Relatively uniform throughout interval. Cherty section 69.72. 69.99m, vuggy, leached and brecciated appearance. White calcite stringers at 71.48m at 11’ to C.A. Siliceous interval (not black chert) 72.61.72.63m cut by numerous white calcite hairlines and stingers. End of box 12 is 73.6&n Solution stylolites at 73.41~11sub-parallel to CA. associated with minor disseminated chert. Stylolites sub-parallel with C.A. at 73.90m, black insolubles along edges of stylolites (perhaps carbonaceous). Prominent fractures at 74.02 at 32” to CA. Minor fractured cherty zones at 75.04-75.09m, fragments of chert nodules 75.15-75.20m. Indistinct crinoids (recrystallized) sparsely distributed down to 77.50m. Dark grey siliceous zone (not chat) 78.12-78.31~~1cut by numerous white sparry calcite veinlets at 60’ to C.A. Minor chert at 78.671x1- vuggy cavities. End of box 13 is 79.36m Friable, shattered chert nodule 79.86-80.02 appears to be associated with adjacent white calcite zone. 81.24 31.29 FAULT UIAE: Dark grey gouge at 51’ to CA., sharp contact. Limestone chips in gouge, cored well. - 81.29 38.89 t,lODERATELY LIGHT GREY, BRECCIATED, MEDIUM CRYSTALLINE LIMESTONE: Contorted layering common. Breccia fragments at 83.20m are at 58” to CA. _ Between short breccia zones the rock is relatively finely CryStalline. End of box 14 is 85.09m, veining ofwhite calcite at 85.08111is 55” to C.A. Considerable white sparry mottling. Gradational end of brecciation. \~ 88.89 102.85 DARR to MEDIUM GREY, MEDIUM CRYSTALLINE LIMESTONE: Some minor breccia sections. Minor cherty intervals at 89.27.89.31m, 89.34-89.44m, 90.37. 90.51m. End of bar 15 is 90.85m Cherty zones fragment at 91.62m. Nodules 91.86.91.89m, 92.88-92,93m, 93.03.93,05m, 93.06-93.15m, 93.29.93.39q 94.%2-94.17m, 94.27-94.32m, 95.71.95.77q 96.33-96.38m. Several nodules are at 70” to CA. Stylolites common throughout often at 65’ to CA. Endofbox16is96.61m Short cherty interval - very brecciated 96.77.96.83m. WHITE SPERRY CALCITE BRECCIA from 96.83.97.69m partly digested dark limestone fragments. Short chert nodule 97.69-97.76m, highly brecciated. Shaly layer or insoluble zone at 99.1211~ 1 cm wide at 60” to C.A. Lighter grey coarser crystalline “layers” alternate with darker fine grained at 100.18~11at 65” to C.A. Rough lamination in darker layers at 66” to C.A. LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: Hole 2 Page: 3 DDH#: SS98-2

fron 1 Description from/ to width cao ‘. (m) a % Has a fragmental appearance due to solution textures. White sparry calcite veining at 101.65m is at 41” to C.A. Endofbox17islO2.37m 102.85 1119.80 RECRYSTALLIZED, ALTNRNATING WRITE COARSE CRYSTALLINE and MEDIUM CRYSTALLINE LIMEBTONE: Variably brecciated, white coarser crystalline intervals common as irregular patches and stinger zones. Chat nodules 104.19-104.25m at 65” to C.A., nodules often broken. Chert 104.59-104.70 at 51” to C.A., 104.76-104.78m at 61” to C.A., 105.93-106.04m vuggy and fractured, 107.26-107.29m, 107.33.107.41m. End ofbox18is108.17m Some Relatively large sections s 1 metre which have minor calcite veining. Minor chert 108.54.108.58m. Broken, ntbbly core (fault) at 111.81.112.25m. Abundant white breccia 112.25-112.68m. Some convoluted bedding 50 114.00m mainly at 65’ to CA. average. Endofbax19is114.0Om. Core rubble at 115.10-115.85m. Minor chert at 117.31-117.34m, 117.48.117.49m, 118.81. c 118.83m, 119.06.119.07111, 119.12.119.15m. Endofbox2Oisll9.66m 119.80 38.38 FINE to MEDIUM CRYSTALLINE, DARK to MEDIUM COLOURED LIMESTONE: Bedding more discernible. White calcite veining at 119.80m, 23mm wide is 62O to CA. Endofbar21 isl25.11m Dark shaly wisps defining original bedding at 125.28m @ 83” to C.A. Minor chertgranules 125.86m, 126.05m and 127.75m. Thinly laminated at 129.26m @ 42” to C.A. End ofbox22is130.54m Main fracture direction at 70” to C.A. but not well developed,. wispy nodular bedding common. Stylolites throughout. Recrystallized fossils at 1344.80~11 and 135.20.135.33m crinoids and fusulinids. End ofbox23136.04m. More brecciation and white lenses increasing gradually down to lower contact from about 137.50m - core broken for 15 cm before contact. ; 138.38 41.83 WHITE SPARRY CALCITE DOMINANT - SOLUTION BRECCIATION ZONE - Short darker sections are ;highly [ragmental - rounded clasts. Some of the white sections are vein- like up to 3 cm wide at 15” to CA. near lower contact. Stylolites common throughout @ 55’ to C.A. at 141.70m End ofbox24at141.43m Lowercontact sharp at 36" to C.A. Yellowish brown fragment at 141.70m, 20mm wide along one side >f stylolite. p 141.83 58.78 BRRCCIATED & RECRYSTALLIZED MEDIUM GREY LIMESTONE - Mainly medium crystalline with numerous white :oarser crystalline lenses and patches. Minor black layers up to 3mm wide @ 60° to C.A.

t LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: Hole 2 Page: > DDH#: SS98-2

fron1 Description from/ to width cao % 0 J!!L Wide spaced stylolites throughout often associated with minor traces of brown insoluble, stylolites vary from 15’ to 70’ to C.A. Stylolites often mark the boundary between white coarse lenses and dark fme grained, less recrystallized, material. End of box 26 is 152.58m Very nodular appearance around 154.50111,prominent line&ion at 58” to C.A. Minor brecciated chat at 156.64~1~ More faulted appearance starting 155.00m down to lower contact This contact is a major fault boundary. Endofbox27is158.19 Core highly fractured from 158.05111to 158.7&n. Main fracture direction is sub-parallel to core axis. 158.78 1 73.63 DARH GREY, REZATIVBLY UNIFORM, FINE TO MEDIUM CRYSTALLIAE LIMESTORE Minor thin lighter grey calcite v&lets averaging 75” to C.A. Minor shearing at 162.21@ 43’ to C.A., black matrix with white small fragments, rough slickensides on fractures, minor shearing evident down to 165.45111. Endofbox28isl63.72m Relatively uniform with minor shearing. Prominent fracture sub-parallel to core axis at 167.74~11,cutting white veinlet at 167.88111at 21’ to CA. End of box 29 is 169.21m Fractures at 10.15’ to C.A. - 173.63 74.66 CHERTY-SILICA RICH SECTION - Highly sheared appearance in white-black limestone. Small round chert blobs up to 2mm in diameter, lenticular texture, main line&ion at 55” to C.A. 174.66 78.54 SLIGHTLY SHEARED Medium Crystalline Uniform Grey Limestone - Rough slickensides at 176.85~11,horizontal on 10” Fractures, some vague recrystallized fusulinids at 176.48m - 178.54 79.51 WHITE SPARRY SOLUTIOR BRRCCIA BORE - Main contact at 16” to CA., stylolites up to 65” to CA. 179.51 93.18 SLIGHTLY MOTTLED MODERATE GREY MEDIUM CRYSTALLIAE LIMESTORE - Numerous black stylolites *roughout, mainly at 35’ to C.A~ White calcite veinlets 75’ to 85” to C.A. up to 6mm wide.

ERD of HOLE 183.18m (601 feet) - LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTIOR: Hole 3 Diamond Drill Lag DDHX: 8598-3

Northing: 2811 Drill Hole survey Property: south Slesse Easting: 1433 Method: Dewee Rule Limestone Elevation: 390 Azimuth Dip Depth NTS: 92H/41 Azimuth: __ 000 I -90 I collar Claim: Selesse 1 IncIination: -900 I I Date Started: April 3. 1998 I I I I Grid: Nickel Date Completed: April 5, 1998 J.T.Shearer L-w (m): 91.75m (301 ftl Logged by: core size: ~BO M.Sc., P.Geo. contractor: F. Boisvenu l=i=i=lI Drill Type: ProSPeCtOr (new drill) I I

Near Boundary with Existing Highways Quarry, Along Ridge Crest

from Description from/ to width ,(m) -& a 0.00 1.22 CASIRG - No Core Recovered _ 1.22 5.25 DARK GREY, MEDIUM CRYSTALLIRE LIMESTORE - Abundant white span-y veinlets and irregular patches and lenses. Veinlets at 1.30m are 54’ to C.A. averaging 2-3mm in width. Mottled texture caused by light coloured hairline veinlets. Thicker veinlets at 2.00m are at 19’ to C.A. Minor brittle fracturing at 52” to C.A., vuggy. Traces of highly fractured and brecciated small chat nodule at

- 4.24-4.27m, irregular in orientation but ~10’ to CA. 5.25 5.40 WRITE, HIGHLY SILICIFIED ZONE - White, very fine grained, cut by numerous 4-5mm wide quartz veinlets at 15’ to C.A. Possibly represents a healed fault zone. -, Upper and lower contacts are punky friable brownish carbonate material. Lower contact is very fractured sub-parallel to core axis. End of box 1 is 6.0117~ 6.40 DARK GREY MEDIUM to FINELY CRYSTALLIAE LIMESTORE Characterized throughout by complex hiahlv irregular stylolites which vary between 5” to 50’ to C.A. but tend to be roughly sub- parallel to core axis. All stylolites juxtapose fine crystalline “lenses” of original material with medium to coarse crystalline secondary material. The numerous white calcite veinlets are usually truncated by the stylolites. Suggesting that the secondary veinlets are earlier than the pervasive solution event. EndofboxZislL62m Minor cherty lenses between 8.26m to 8.40m, at lO.lSm, at 13.61m to 13.75m and 16.79m to 16.90m. The chert is highly brecciated into small l-2mm in diameter close spaced blobs. Where the stylolites are close spaced, the overall texture appears fragmental. (Solution brecciation) End ofbox 3isl7.2711~ Uniform section 17.27m to 21.00m with minor white spany calcite veinlets and patches mainly at 14” to CA. Slightly more mottled and fractured toward contact, rough slickensides at 22.10m at 23’ to CA., indicative of recrystallization and solution. End ofbox4is23.01m LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: Hole 3 Page: 2 DDH#: SS98-3

fron I Description from/to width cao I (In) &L % Minor gouge fractures with trace amounts of graphitic 7, slickensides 23.64-23.96m at about 10’ to CA. Traces of pyrite nodules less than 1 cm in diameter. 24.21 25.32 CHERTY MEDIUM CRYSTALLIAE GREY LIMESTORE - Characterized by diffuse to irregular cherty nodules averaging 1Omm in length. Many of the nodules are oriented SO0 to CA. 25.32 30.45 SLIGHTLY SHEARED NEDIUM CRYSTALLINE GREY LIMESTONE - Shearing at 25.84m is 24” to CA. along shaly partings, the shale laminae are 2 to 5mm wide and irregular in shape. The minor cherty content is likewise sheared and cut by healed fractures. Graphitic covered slickensides occur at 26.45m at 18’ to C.A. The shaly parting is 2mm wide. This shearing is associated with white spaxy calcite zones up to 35mm wide. EndOfbax5is29.72rn Solution features such as stylolites and solution brecciation increases toward lower contact. Breccia fragments oriented at 59” to C.A. - Lower contact at 75” to C.A. 30.45 32.54 CHERTY MEDIUM CRYSTALLINE GREY LIMESTORE - Chert nodules highly fractured mainly dark grey to black in colour. Fracturing at 65’ to CA. now healed. Approximately 40 to 45% chert, irregular stylolites common throughout. 32.45 34.97 SLIGHTLY SHEARED MEDIUM CRYSTACLIAE GREY LIMESTONE - Shearing at 33.82m is 17” to C.A. but irregular to subparallel to core axis. Irregular white sparry calcite patches common which are usually truncated by shear planes. End of box 6 is 34.31m shearing at 34.40 is at 24’ to C.A. 34.97 i5.12 MEDIUM CRYSTALLIBE, MEDIUM GREY SOLUTIOIi SRFXCIATED LIMESTONE Entire interval characterized by rounded to angular medium grey fragments commonly surrounded by a thin envelope of slightly darker material. These may reflect rubble or talus at the bottom of solution cavities which have now been completely refilled with recrystallized xrbonate. End of box 7 is 40.06m ?rominent contact between recrystallized and remnant is at 37.96m at 31’ to CA. Zonglomeratic carbonate between 39.68.39.95m. ?ragment boundaries at 42.10m is 18” to C.A. and at 42.25m is 32” to C.A. End of box 8 is 45.91m sheared zone 47.81-48.02m at 57” to C.A., short dark grey gougy ntervals. Nell developed fragmental-conglomeratic section between 48.46- jO.lOm. Appears to be mainly solution breccia. Minor highly ‘ractured chat nodules up to 5mm in diameter.. ‘ault Zone at 51.47.51Slm approx. 20” tc CA. Irregular small white sparry lenses just above fault. End of box 9 is 51.61m rine nodular to pelletoidal appearance 49.50m. Traces of Fcrystallized fusulinids. LG. MACHINE & FIBER LTD. South Slesse Limestone Project

SECTION: Hole 3 Page: 3 DDH#: SS98-3

from Description from/ to width cao (m) A& % Yellow-grey clay-rich carbonate fragment at 52.31m 7cm long at 28’” tc~C.A., perhaps an insoluble residue fragment. Fault gouge - fault at 53.40 u 70” to C.A. Recrystallized fusulinid at 53.64m 29mm in length elongated at high angle to CA. Highly brecciated in appearance between 54.10.56.52m, healed stylolites common, some fossil trash in short intervals, especially 56.83-57.06m. White, very coarsely span-y calcite lense 55.74-55.92m, 1Omm wide dark shaly layer at 55.92m. End of box 10 is 57.14m VERY DISTINCT FRAGMENTAL. APPEARUJCE between 61.71- 62.60m - Dark grey angular to wispy fragments within a light grey matrix. Fragments mainly oriented at 48” to C.A. One foot core loss 208-209-b&k in wrong place End of box 11 is 63.07m Gradational lower contact. 65.12 31.74 BIEDIUM CRYSTALLIIiE, MEDIUM GREY, RELATIVELY UIUFORM LIMESTONE with Renounced MottIW - Relatively uniform, much fewer solution breccia fragments, stylolitis are - common throughout, fairly wide spaced at usually a low angle to subparallel to CA.> End of box 12 i.s 68.82m White spany veinlets at 72’ to C.A. are more common in this interval than in the preceding breccia section. Traces of highly fractured chert nodules 63.72-63.84m. Occasionally, such as between 69.00.69.80x& the mottling is so pronounced that a rough banding at 58’ to C.A. is apparent. This mottling may be fecal pellets in origin. Stylolites are common throughout at less than 15” to C.A., minor dark lenses up to 5cm in length occur sporadically along the edges of the larger stylolites. These dark irregular lenses (of insolubles) impart a brecciated texture between 73.50-74.35~~ Endofbax13&74.66m. Thick, white spany veinlets up to 30mm wide between 77.26m and 78.40m mainly at 61” to C.A. Minor fractured and broken cherty areas from 78.22-78.31m. End of box 14 is 80.41m Stylolites common at 82.75m subparallel to core axis. Broken surfaces exhibit a strong alignment of the cleavage traces suggesting recrystallization under a directional stress. Endofbox16&86.26m Banding due to shearing between 87.05.87.15m at 44” to C.A., light and dark grey bands usually at 8mm wide some tension hairlines of white calcite also immediately below. Black, fine grained to granulated carbonate ffiled edges of parallel to C.A. Stylolite occurs from 89.38-90.27x& fractures rehealed, traces of gouge present. Light mottling apparent to end of hole. Endofbax16is91.74m

END OF HOLE 91.74M (301 ft)