TECHNICAL REPORT

DRIFTWOOD CREEK MAGNESITE PROPERTY Southern British Columbia Canada

NTS 82K/15E - BCGS 82K098

50°54' 16” N Latitude 116°34' 34” W Longitude UTM 11 529805E, 5639284N Golden Mining Division

Prepared for: MGX Minerals Inc. 303 – 1080 Howe St. Vancouver, B.C., Canada V6Z 2T1

Prepared by: Don MacIntyre, Ph.D., P. Eng. D.G. MacIntyre & Associates Ltd. 4129 San Miguel Close Victoria, B.C., Canada V8N 6G7

Effective Date of Report: July 22, 2014

Technical Report – Driftwood Creek Magnesite Property Page ii

Date and Signature Page

Effective Date of this Report: July 22, 2014

Date of Signing: July 22, 2014

“D.G. MacIntyre”

D.G. MacIntyre, Ph.D., P.Eng.

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Table of Contents

Title Page ...... i

Date and Signature Page ...... ii

Table of Contents ...... iii

List of Tables ...... iv

List of Figures ...... iv

1 Summary ...... 1

2 Introduction ...... 3

3 Reliance on other Experts...... 5

4 Property Description and Location ...... 5 4.1 Mineral Tenures ...... 5 4.2 Claim Ownership ...... 7 4.3 Underlying Option Agreement ...... 7 4.4 Required Permits and Reporting of Work ...... 8 4.5 Environmental Liabilities...... 9

5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ...... 10 5.1 Access ...... 10 5.2 Climate and Vegetation...... 10 5.3 Local Resources ...... 10 5.4 Infrastructure ...... 11 5.5 Physiography...... 12

6 History ...... 13

7 Geological Setting and Mineralization ...... 17 7.1 Regional Geology ...... 17 7.1.1 Structures ...... 20 7.2 Property Geology and Mineral Occurrences ...... 20

8 Deposit Types ...... 23

9 Exploration ...... 24

10 Drilling ...... 25 10.1 1990 Diamond Drilling ...... 25 10.2 2008 Diamond Drilling ...... 28

11 Sample Preparation, Analyses and Security ...... 31

12 Data Verification ...... 33

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property Page iv 13 Mineral Processing and Metallurgical Testing ...... 34

14 Mineral Resource and Mineral Reserve Estimates...... 35

15 Adjacent Properties ...... 35

16 Other Relevant Data and Information ...... 35

17 Interpretation and Conclusions ...... 35

18 Recommendations ...... 37

19 References ...... 38

20 Certificate of Author ...... 40

Appendix A. Summary of analytical results for 1990 and 2008 drill core samples...... 41 List of Tables

Table 1. List of Mineral Tenures, Driftwood Creek Magnesite Property as of June 23, 2014 ...... 7

Table 2. Range of values for magnesite analyses (Klewchuk, 2002)...... 14

Table 3. List of diamond drill holes, Driftwood Creek property...... 25

Table 4. High grade magnesite drill hole intersections from the 1990 drilling program...... 26

Table 5. Projected costs, proposed exploration program, Driftwood Creek magnesite property ...... 38 List of Figures

Figure 1. Location map, Driftwood Creek Magnesite property, southern British Columbia...... 4

Figure 2. Mineral tenure map, Driftwood Creek Magnesite property as of June 22, 2014. Map is in Universal Transverse Mercator projection, NAD 83 Datum, UTM zone 11N...... 6

Figure 3. Infrastructure map, Driftwood Creek Magnesite property...... 11

Figure 4. Location of diamond drill holes, Driftwood Creek property. After Rodgers (1990) and Klewchuk (2008). Map prepared by D.G. MacIntyre, July, 2014...... 12

Figure 5. Rock geochemical sample sites (1989) showing proportional symbols for” dead-burned” MgO value (after Rodgers, 1989). Map produced by D.G. MacIntyre, July 2014...... 15

Figure 6. Regional geologic setting, Driftwood Creek magnesite deposit. Geology after Massey et al., 2005. Map created by D.G. MacIntyre, July 2014...... 16

Figure 7. Stratigraphic column, Mt. Nelson Formation (Pope, 1990) ...... 18

Figure 8a. Property geology Western Magnesite. Map prepared by D.G. MacIntyre, July 2014...... 21

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property Page v Figure 8b. Property geology, Eastern Magnesite. Map prepared by D.G. MacIntyre, July 2014...... 22

Figure 9. Location of diamond drill holes, Driftwood Creek property. After Rodgers (1990) and Klewchuk (2008). Map prepared by D.G. MacIntyre, July, 2014...... 24

Figure 10. Drill section showing lithology and histogram values for MgO% and SiO2% for drill holes 90-1 and 90-2. See Figure 9 for drill hole locations...... 27

Figure 11. Graphic log for drill hole 90-4...... 29

Figure 12. Drill hole section for hole MG-08-2...... 31

Figure 13. Location of check samples collected by the writer, July 16, 2014...... 33

Figure 14. Location of proposed drill holes, Eastern Magnesite deposit...... 38

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Plate 1. View east along the crest of the ridge underlain by the Western and Eastern magnesite deposits. Photo taken in 1988 (Klewchuk, 2010). 1 Summary

This technical report describes previous work done on the Driftwood Creek magnesite deposit and makes recommendations for future exploration of the property. It has been prepared on behalf of MGX Minerals Inc. a private company seeking listing on a Canadian stock exchange. MGX has an option to purchase a 90% interest in the property from the property owners.

The Driftwood Creek Magnesite property is located approximately 53 kilometres southeast of Golden, B.C., and approximately 164 kilometres northwest of Cranbrook, B.C. The property covers a northwest trending ridge that is located between Driftwood and Bobbie Burns creeks in the Golden Mining Division of southern British Columbia, Canada. The property consists of three (3) contiguous mineral tenures that with a total area of 326.06 hectares.

The mineral tenures are under option to MGX Minerals Inc. (“MGX”) as outlined in an agreement signed on the July 7, 2014 between MGX and the property owners (P. Klewchuk,

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G. Rodgers and A. Kikauka). The option agreement specifies that MGX can earn a 90% interest in the Driftwood Creek property by completing $300,000 in exploration expenditures, making payments of $50,000 to the property owners and issuing 900,000 common shares to the owners prior to July 1, 2017.

The Driftwood Creek Magnesite property can be accessed from either Brisco or Spillimacheen, both of which are located on paved Interprovincial Highway 95 east of the property. From Brisco the Bugaboo Creek and Driftwood Creek Forest Service Roads (FSR) are followed for about 39 km. From here a 1 km access trail leads onto the western edge of the magnesite deposit. There is good infrastructure in the form of paved highways, a CPR spur line and a major power line all of which are within 15 kilometres of the property.

The Driftwood Creek magnesite deposit is hosted by the Helikian (Precambrian) age Mount Nelson Formation, part of the Purcell Supergroup. The Mount Nelson Formation is about 1300 meters (4300 feet) thick and includes mainly dolomitic and quartzitic units with minor argillite. The magnesite occurs in the upper part of the formation. The Driftwood Creek deposit is classified as a stratabound Sparry Magnesite deposit that is most likely of an evaporitic origin.

Magnesite weathers prominently and the Driftwood Creek deposit is well exposed as an isolated ridge within relatively low valley bottom topography, at an elevation of 1250 meters. Numerous cliff exposures are present, with some cliff walls greater than 15 meters (50 feet) high. A series of cross-cutting faults produce some offset of geologic contacts but displacement is minor.

Magnesite has been mapped over a strike length of 1900 meters and maximum width of about 220 meters. The magnesite occurs at surface in two discrete bodies; a larger 'Western Magnesite' and a smaller 'Eastern Magnesite'. The deposits have been folded into a series of anticline-syncline pairs that trend northwest along the ridge crest.

Two previous studies of the Driftwood Creek magnesite deposit have estimated tonnages, based primarily on surface mapping. These resource estimates are not NI43-101 compliant and cannot be relied upon. Kaiser Resources inferred 22,500,000 tonnes of magnesite using a specific gravity of 2.5 while Canadian Occidental inferred a resource of 29,400,000 tonnes using a specific gravity of 3.0.

A total of 911 metres of diamond drilling in 11 drill holes has been done on the Driftwood Creek magnesite property. The first drilling was done in 1990, by Canadian Occidental. This work targeted the Eastern Magnesite deposit. The 2008 diamond drilling was done by Tusk Exploration Ltd. and targeted the Western Magnesite deposit.

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Drilling indicates that there are zones of impurity especially at the base of the magnesite where it is in contact with underlying dolomite. Above this basal zone the grade and purity improves, approaching nearly pure magnesite in places.

The Driftwood Creek Magnesite property represents an under-explored property of merit that has considerable potential for future development. A two stage, success contingent, exploration program is recommended for further advancement of the property. Stage 1 would involve 1200 metres of NQ diamond drilling in 10 holes located along the axis of the higher grade Eastern Magnesite deposit. Projected cost of this proposed work program is $240,500. 2 Introduction

This technical report has been prepared at the request of Jared Lazerson, President and CEO of MGX Minerals Inc. (“MGX” or the “Company”), a private company seeking listing on a Canadian stock exchange. The writer was asked to review all data pertaining to the property and to prepare a technical report that describes historical work completed on the property, reviews the results of diamond drilling done in 2008 and makes recommendations for further work if warranted.

The author prepared all sections of this report unless otherwise noted in the text.

This technical report has been prepared in compliance with the requirements of National Instrument 43-101 and Form 43-101F1 and is intended to be used as supporting documentation to be filed with appropriate regulatory authorities The purpose of this filing is to support the listing of MGX Minerals Inc. on a Canadian stock exchange.

In preparing this report, the author has reviewed geological and geochemical reports, maps and miscellaneous papers listed in the References section. Of particular value are a number of publically available assessment reports filed by previous operators on the Driftwood Creek Magnesite property. These reports contain detailed information on the results of geological mapping, diamond drilling and geochemical sampling conducted on the property since its initial discovery.

The writer visited the Driftwood Creek Magnesite property on July 16, 2014. Two samples of sparry magnesite from the Western Magnesite deposit were collected at this time.

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Figure 1. Location map, Driftwood Creek Magnesite property, southern British Columbia.

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Units of measure in this report are metric; monetary amounts referred to are in Canadian dollars. All maps are in Universal Transverse Mercator projection (UTM Zone 11) and based on the North American 1983 datum (NAD83). 3 Reliance on other Experts

Most of the work done on the property has been filed for assessment credit and much of this information is available as free, downloadable Adobe Portable Document (PDF) format files from the B.C. Ministry of Energy and Mines Assessment Report Indexing System (ARIS). The author is satisfied that the information contained in these publicly available reports was collected and processed in a professional manner following industry best practices applicable at the time, and that the historical data gives an accurate indication of the nature, style and possible economic value of known mineral occurrences on the property.

MGX has provided information on the underlying option agreement with the property owners who holds title to the Driftwood Creek Magnesite mineral claims. Although the writer has no reason to believe this information is inaccurate in any way, a detailed audit of this option agreement has not been done and the writer is relying solely on information that has been made available to him by MGX. 4 Property Description and Location

The Driftwood Creek Magnesite property is located approximately 53 kilometres southeast of Golden, B.C., and approximately 164 kilometres northwest of Cranbrook, B.C. (Figure 1). The property is located on NTS map sheet 082K/15E and on TRIM map sheet 082K 098.The Driftwood Creek Magnesite showing is located at Latitude 50°54' 16” N and Longitude 116°34' 34” W. The property covers a northwest trending ridge that is located between Driftwood and Bobbie Burns creeks in the Golden Mining Division of southern British Columbia, Canada. (Figure 2).

4.1 Mineral Tenures

The Driftwood Creek Magnesite claim group consists of three (3) contiguous mineral tenures that are located within the Golden Mining Division (Table 1 & Figure 2). The total area of the mineral tenures that comprise the property is calculated to be 326.06 hectares.

Details of the status of tenure ownership for the Iron Horse - Bolivar property were obtained from the Mineral-Titles-Online (MTO) electronic staking system managed by the Mineral Titles Branch of the Province of British Columbia. This system is based on mineral tenures

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acquired electronically online using a grid cell selection system. Tenure boundaries are based on lines of latitude and longitude. There is no requirement to mark claim boundaries on the ground as these can be determined with reasonable accuracy using a GPS. The Driftwood Creek Magnesite claims have not been surveyed.

Figure 2. Mineral tenure map, Driftwood Creek Magnesite property as of June 22, 2014. Map is in Universal Transverse Mercator projection, NAD 83 Datum, UTM zone 11N.

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The mineral tenures comprising the Driftwood Creek Magnesite property are shown in Figure 2 and listed in Table 1. The claim map shown in Figure 2 was generated from GIS spatial data downloaded from the Government of BC GeoBC website. These spatial layers are the same as those incorporated into the Mineral-Titles-Online (MTO) electronic staking system that is used to locate and record mineral tenures in British Columbia. Table 1. List of Mineral Tenures, Driftwood Creek Magnesite Property as of June 23, 2014 Tenure Owner(s) Issue Date Good To Date Area Number (ha) 511333 Kikauka (34%) / Rodgers April 21, 2005 Sept. 4, 2020 224.17 (33%) / Klewchuck (33%) 511335 Kikauka (34%) / Rodgers April 21, 2005 Sept. 4, 2020 40.76 (33%) / Klewchuck (33%) 1027955 Rodgers (100%) April 30, 2014 April 30, 2015 61.13 326.06

Claim details given in Table 1 were obtained using an online mineral tenure search engine available on the MTO web site. All claims listed in the table are in the Golden Mining Division within NTS map sheet 82K/15E.

4.2 Claim Ownership

Information posted on the MTO website indicates that mineral tenures 511333 and 511335 are owned 33% by Peter Klewchuk, 33% by Glen Munro Rodgers and 34% by Andris Arturs Kikauka whereas mineral tenure 1027955 is owned 100% by Mr. Rodgers.

4.3 Underlying Option Agreement

The mineral tenures listed in Table 1 are under option to MGX Minerals Inc. (“MGX”) as outlined in an agreement signed on the July 7, 2014 between MGX and the property owners (“optionors”). MGX provided the writer with the details of this option agreement which specifies the terms whereby MGX can earn a 90% interest in the Driftwood Creek Magnesite Property by completing $300,000 in exploration expenditures, making payments of $50,000 to the optionors and issuing 900,000 common shares to the optionors as outlined below.

The schedule of required exploration expenditures to be made by MGX is as follows;  $50,000 prior to July 1, 2015  $100,000 prior to July 1, 2016  $150,000 prior to July 1, 2017

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MGX will make the following share distribution to the optionors according to the following schedule;  300,000 shares on signing (July 7, 2014)  300,000 shares on or before July 1, 2015  300,000 shares on or before July 1, 2016

All share issuances will be made to the optionors in proportion to their claim ownership.

MGX will make cash payments to the optionors according to the following schedule:  $20,000 on or before July 1, 2015  $30,000 on or before July 1, 2016.

Cash payments will be made to the optionors in proportion to their claim ownership.

The optionors will have a 10% carried interest in the property through to commercial production. MGX can purchase this carried interest at any time by paying the optionors a sum of $300,000.

4.4 Required Permits and Reporting of Work

In British Columbia, an individual or company holds the available mineral or placer mineral rights as defined in section 1 of the Mineral Tenure Act by acquiring title to a mineral tenure. This is now done by electronic staking as described above. In addition to mineral or placer mineral rights, a mineral title conveys the right to use, enter and occupy the surface of the claim or lease for the exploration and development or production of minerals or placer minerals, including the treatment of ore and concentrates, and all operations related to the business of mining providing the necessary permits have been obtained. In order to maintain a mineral tenure in good standing exploration work or cash in lieu to the value required must be submitted prior to the expiry date. The amount required is specified by Section 8.4 of the British Columbia Mineral Tenure Act Regulation.

Up to 10 years of work or cash in lieu can be applied on a claim. A change in anniversary date can be initiated at anytime and for any period of time up to 10 years. In order to obtain credit for the work done on the Driftwood Creek Magnesite property, MGX must file a Statement of Work (SOW) and submit an Assessment Report documenting the results of the work done on the property. This report must also include an itemized statement of costs.

On July 1, 2012, the Province of British Columbia increased the assessment work required to maintain a mineral tenure in good standing. The tiered increases for mineral claims were revised and expanded, while the single tier for placer claims remained the same. For mineral

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claims, the assessment work requirement changed from a 2-tier to 4 tier structure. The new assessment work requirements are:  $5.00 per hectare for anniversary years 1 and 2;  $10.00 per hectare for anniversary years 3 and 4;  $15.00 per hectare for anniversary years 5 and 6; and  $20.00 per hectare for subsequent anniversary years.

To aid in the adjustment to the new work requirements, all claims will be treated as if they are in their first anniversary year for assessment purposes as of the date of implementation (July 1, 2012). In other words, regardless of the age of the claim, the next time work is registered on or after July 1, 2012, the assessment work requirement for a mineral claim will be $5.00 per hectare per year.

Payment instead of exploration and development work (PIED) amounts have also increase and a minimum time period for use of PIED has been established.

The old PIED rate was equivalent to the value of exploration and development work. The new PIED rate has been set at double the value of the corresponding assessment work requirement.

Previously, a minimum of one day of PIED could be applied to the expiry date of a mineral tenure. The new minimum requirement for PIED is now 6 months. The 12 month (1 year) maximum still remains in place.

Similar to the assessment work requirements, if a recorded holder wishes to register PIED, the claim will also be treated as if it is in its first anniversary year for the purposes of calculating the assessment requirement, as of the date of implementation (July 1, 2012). PIED will be $10.00 per hectare for anniversary years 1 and 2 for mineral claims (double the work amount).

Prior to initiating any physical work such as drilling, trenching, bulk sampling, camp construction, access upgrading or construction and geophysical surveys using live electrodes (IP) on a mineral property a Notice of Work permit application must be filed with and approved by the Ministry of Energy and Mines. The filing of the Notice of Work initiates engagement and consultation with all other stakeholders including First Nations.

4.5 Environmental Liabilities

There has not been any mining or other exploration related physical disturbances on the Driftwood Creek Magnesite property that would be considered an environmental liability. Most of the roads built on the property have overgrown and are no longer passable. Roads

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built for logging activities are not the responsibility of the mineral tenure holder. The author is not aware of any environmental issues or liabilities related to historical exploration or mining activities that would have an impact on future exploration of the property. 5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1 Access

The Driftwood Creek Magnesite property can be accessed from either Brisco or Spillimacheen, both of which are located on paved Interprovincial Highway 95 east of the property. From Brisco the Bugaboo Creek and Driftwood Creek Forest Service Roads (FSR) are followed for about 39 km. From here a 1 km access trail leads onto the western edge of the magnesite deposit and to the site of a small quarry where Kaiser Resources Ltd. excavated a small bulk sample in 1978. A new road was built from this point in 2008 to provide access to both the Western and Eastern magnesite deposits.

From Spillimacheen the road follows the south side of the Spillimacheen River and Bobbie Burns Creek. At about 18 km a tributary road leads southeasterly to a saddle on the magnesite ridge (Figure 2). This road to the ridge was used for a small diamond drilling program by Canadian Occidental Petroleum Ltd. in 1990. This road is quite steep in places and has a clay base. It is only usable in dry weather. New access trail construction from the west in 2008 eliminated the need to use this road.

5.2 Climate and Vegetation

Vegetation on the property consists mainly of Lodgepole Pine with lesser Douglas Fir and Western Yellow Larch, with minor birch and aspen.

5.3 Local Resources

The nearest towns are Brisco and Spillimacheen on Highway 95. These are small towns with limited resources. The nearest population centers with significant services are Golden, population 4200, a road distance of approximately 97 kilometres to the northwest and Invermere, population 3000, a road distance of approximately 67 kilometres to the southeast (Figure 3). Radium Hot Springs, population 900, is also close to the property but it is primarily a tourist town with limited services. Both Golden and Invermere have hotels, grocery stores, hardware stores, gas stations, medical services and heavy equipment service companies that work in the logging industry. Helicopter charters are also available from

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both communities. The property is 53 kilometres by air from Golden and 57 kilometres by air from Invermere.

Figure 3. Infrastructure map, Driftwood Creek Magnesite property.

5.4 Infrastructure

Both Golden and Invermere are on paved Interprovincial Highway 95 and a CPR railway spur line serving the southeast B.C. coal fields that runs up the Southern Rocky Mountain Trench and parallels the Columbia River (Figure 3). Golden is on the Trans Canada Highway and the CPR main line. A power transmission line parallels Highway 93 and is located approximately 14 kilometres due east of the Driftwood Creek property.

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5.5 Physiography

The Driftwood Creek magnesite deposit is located west of the Southern Rocky Mountain Trench in the Purcell range of the Columbia Mountains. The property covers part of a prominent isolated ridge that trends about 115° azimuth between Driftwood Creek to the south and Bobbie Burns Creek to the north (Figure 2). Topography is moderate except for the magnesite itself which locally forms steep cliffs more than 15m (50 ft) high on both the north and south sides of the deposit. East of the claims and the magnesite, the host dolomite continues as a prominent ridge. Elevations on the claim block range from 1190 to 1370 meters.

Figure 4. Location of diamond drill holes, Driftwood Creek property. After Rodgers (1990) and Klewchuk (2008). Map prepared by D.G. MacIntyre, July, 2014.

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6 History

The following history is based on information contained in publically available assessment reports filed with the Province of British Columbia by previous property operators. These reports are listed in the References section of this report. Selected maps and illustrations are reproduced from these reports as a means of illustrating the location and extent of previous exploration activities on the property. The writer is confident that these maps and illustrations fairly depict the results of previous exploration efforts and were produced following industry best practises applicable at the time.

Magnesite was first discovered in the Brisco area in the 1960's and a series of small deposits are described by McCammon (1965) in British Columbia Minister of Mines Annual Report for 1964. The Driftwood Creek Deposit is not included in McCammon's summary but was evidently discovered about this time as it was first staked in 1968.

In 1978 Kaiser Resources Ltd. (predominantly a coal-mining company) acquired the Driftwood Creek deposit and carried out a program of surface geologic mapping and some very minor and poorly-documented diamond drilling. From their surface work, a resource of 22,500,000 tonnes of magnesite was inferred (using a specific gravity of 2.5). This resource estimate is not NI43-101 compliant. Publicly-available reports indicate some minor diamond drilling was done, but no data is provided. According to Rodgers (1989) Kaiser drilled 12 short holes between 0.6 to 2.0 metres deep using a small plugger type drill in order to test near surface purity. The location of this drilling is shown in Figure 4. The property was held for ten years, and then the claims were allowed to expire.

In 1987, the Driftwood Creek magnesite deposit was staked by Canadian Occidental Petroleum Ltd. ('Canoxy'). In 1989, a 2500 metre baseline was established at azimuth 115° that was parallel to the magnesite area shown in Figure 4 (Rodgers, 1989). Cross lines at 100 metres spacing were established across the magnesite and ranged from 50-500 metres in length. The lines were flagged at 50 metre intervals. This survey grid was used to do geological mapping and build cross sections at 1:2,000 and 1:1,000 scales. Surface mapping was used to infer a total magnesite resource of 29,400,000 metric tonnes (not NI43-101 compliant).

As part of the geologic mapping program, a total of 68 – 5 kilogram samples of magnesite were also collected along 17 cross-section survey lines (Figure 5). Samples were analyzed

by Chemex Laboratories Ltd., Vancouver B.C. The analyses were done for SiO2, Al2O3,

Fe2O3, MgO, CaO, Na2O, K2O, TiO2, P2O5, MnO, BaO and L.O.I. As well, a “dead-burned” assay was done for each sample. This involves analysis for %MgO after roasting at 1000°C

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for an hour. Proportional, colour-coded symbols representing different “dead-burned” MgO values are shown in Figure 5.

In 1990, Canadian Occidental did 219.8 metre of NQ diamond drilling in 4 holes (Figure 4). This drilling targeted the Eastern magnesite deposit. Drill core was split on site and samples taken at 1.5 metre intervals. Only sections through the magnesite were sampled. The core samples were shipped to Chemex Labs Ltd. in North Vancouver and were analysed for major oxides and loss on ignition (LOI). As well, a “dead-burned” assay was done for each sample. This involved analysis for %MgO after roasting at 1000°C for one hour.

The claims were held for 10 years with no additional work, and allowed to expire.

In 1999, the magnesite ridge was staked by the present owners and some additional rock geochemistry was completed on part of the Western magnesite (Kikauka, 2000). This work involved sampling along north and northeast trending lines over exposed outcrop in ten locations within a 325 X 125 m. area (Kikauka, 2000). Weighted average values ranged

from 41.1 to 45.5% for MgO and 0.4 to 8.3% for SiO2.

Additional geochemistry, along with bulk sampling and access trail construction, was conducted in 2001 (Klewchuk, 2002). Twenty samples collected in 2001 provided the following range of values: Table 2. Range of values for magnesite analyses (Klewchuk, 2002). Oxide Range of values MgO 39.98 to 44.42% SiO2 2.48 to 13.1% A12O3 0.05 to 1.11% Fe2O3 0.71 to 1.11% CaO 0.34 to 3.21% TiO2 <0.01 to0.1% P2O5 0.09 to 0.19% MnO 0.02 to 0.04% Cr2O3 001 to 0.12%

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Figure 5. Rock geochemical sample sites (1989) showing proportional symbols for” dead-burned” MgO value (after Rodgers, 1989). Map produced by D.G. MacIntyre, July 2014.

In 2008 Lakefield Research conducted a beneficiation study on samples from the Driftwood Creek magnesite deposit (Rodgers, 2008).

In the fall of 2008, a program of trail access construction and diamond drilling was also completed on the property. This work was under the direction of Peter Klewchuk, P.Geo., on of the property owners, on behalf of Tusk Exploration Ltd. of Vancouver, B.C. Trails were constructed from existing access at the west end of the magnesite ridge onto the Western Magnesite where the thickest zone of magnesite exists and additional trail was constructed to access the Eastern Magnesite. In total about 3300 meters of trail was constructed.

In late October and early November, seven NQ diamond drill holes were completed from an area near the thickest part of the Western Magnesite (Figure 4), for a total of 692 meters of diamond drilling. Core from this drilling was bagged and prepared for shipment to a laboratory but was never submitted. This core was subsequently analyzed by Torch River

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Resources in 2012 who were considering an option on the property. Torch River decided not to proceed with the option.

The writer is not aware of any significant work, other than the aforementioned analytical work, being done on the property since 2008.

Figure 6. Regional geologic setting, Driftwood Creek magnesite deposit. Geology after Massey et al., 2005. Map created by D.G. MacIntyre, July 2014.

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7 Geological Setting and Mineralization

7.1 Regional Geology

The area of the Driftwood Creek magnesite deposit was first mapped by Reesor (1973), although the magnesite deposits west of Brisco are not included in his work. The following regional geologic information is extracted from Simandl and Hancock (1991).

The Brisco and Driftwood Creek deposits are situated west of the Southern Rocky Mountain Trench fault (Figure 6). They are hosted by dolomites of the Middle Proterozoic (Helikian) Mount Nelson Formation of the Purcell Supergroup within the Purcell anticlinorium. Stratigraphic sections applicable to the area of the magnesite deposits were established by Walker (1926), Reesor (1973) and Bennett (1985). The geology of the Toby and Horsethief Creek areas has been described by Pope (1989, 1990). Only the Mount Nelson and Toby Creek formations will be described below. The upper part of the Mount Nelson Formation hosts the magnesite deposits.

The Mount Nelson Formation is separated from the overlying Toby Formation of the Windermere Supergroup (Hadrinian) by an unconformity (Reesor, 1973; Pope 1989). This unconformity records the East Kootenay orogenic event which consisted of regional uplift and thermal metamorphism dated at 750-850 Ma and submarine volcanic activity within the Purcell anticlinorium (Pope, 1989).

The magnesite deposits are located within an area affected by low-grade regional metamorphism (Reesor, 1973; Bennett, 1985). All known magnesite occurrences are located outside the contact metamorphic aureole of Mid Cretaceous intrusions.

In the Toby-Horsethief Creek map area the Mount Nelson Formation is at least 1320 metres thick and is the uppermost unit of the Purcell Supergroup (Pope, 1990). It is divided into seven members (Figure 7). The descriptions below, in order from oldest to youngest are summarized from Pope (1990).

The “lower quartzite” is 50 to 150 metres thick, white, well sorted, thin-bedded (<20 cm), ripple laminated, fine to medium-grained quartz arenite.

The “lower dolomite sequence” is characterized by its grey colour and light grey weathering surface, laminated beds 20 to 50 centimetres thick, soft sediment features, cryptalgal laminations and laterally linked hemispherical stromatolites. This dolomite also contains

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black argillite layers 1 to 2 centimetres thick and oolitic laminae. The top of the sequence is the cream coloured, cherty “cream marker dolomite” which is approximately 20 metres thick.

Figure 7. Stratigraphic column, Mt. Nelson Formation (Pope, 1990)

The “middle dolomite sequence” comprises the “middle quartzite”, “orange dolomite” and “white markers”. The “middle quartzite” is characterized by apple green colour. It consists

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of graded, crossbedded and massive arenites, siltstones and argillites. Beds are 10 to 50 centimetres thick with undulate bases and truncated tops. The orange dolomite consists of well-bedded silty or light beige to dark grey dolomites weathering orange-brown or orange- buff. Stromatolitic textures, cryptalagal lamination, chert intercalations, halite casts, solution-collapse breccias and dewatering features have been described in this unit. The stromatolitic dolomite most commonly forms the footwall to the Driftwood Creek magnesite deposit (Simandl and Hancock, 1992).

The “white markers” sequence is less than 70 metres thick and conformably overlies the orange dolomite. It consists of cream to medium grey dolomites and locally contains white magnesite beds up to 1 metre thick as well as purple, green and buff dolomitic mudstones and beds with dolomite-replaced halite crystals. It is assumed that the Driftwood Creek magnesite deposit occurs at this stratigraphic level.

The “purple sequence” conformably overlies the white markers. It consists of dolomites as well as dolomitic siltstones and sandstones consisting of 20 percent quartz, 70 percent dolomite and 10 percent hematite. These rocks contain halite casts and grade upward into purple shales with green reduction spots. Several mud chip breccias and monomictic conglomerates occur within this sequence. The upper part of the purple sequence is referred to as “purple shale unit”. It consists of purple argillites with or without green reduction spots and laminae. The purple sequence is separated from the overlying upper middle dolomite by a conglomerate consisting of angular to rounded dolomite and quartzite clasts of variable dimensions, cemented by purple sandy argillite.

The “upper middle dolomite” is 80 metres thick and similar to the lower main dolomite, however it contains abundant allochems (oncolites and oolitic peloidal and pisolitic laminations) replaced by chert.

The “upper quartzite” is over 260 metres thick. It is a cliff-forming well-sorted, quartz- cemented and medium to coarse-grained arenite, characterized by massive bedding and poorly preserved sedimentary features.

The “upper dolomite” has a conformable gradational contact with upper quartzite. Pale beige to dark grey, dolomite beds, 10 to 50 centimetres thick, are interbedded with quartz and dolomite-pebble conglomerates and dolomitic sandstones. The unit is characterized by abundant chert layers, cryptalgal structures replace by black chert and by a distinctive, laminated, strongly contorted and locally brecciated blue-grey dolomite. The contact with underlying quartzite is transitional and consists of interbeds of purple argillite, quartzite and dolomite.

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7.1.1 Structures

The earliest tectonic event in the area responsible for the syncline/anticline development within the Purcell Supergroup is likely related to formation of the Rocky Mountain fold and thrust belt in Late Cretaceous to Early Tertiary time. The northwest trending fault which parallels the Spillimacheen River, 4 kilometres north of the claims (Rodgers, 1990) probably formed at this time. The magnesite ridge, which trends the same as the main syncline/anticline axes (115 degrees) is frequently cut by north-northeast trending cross- faults of uncertain age (Figures 8a and 8b).

7.2 Property Geology and Mineral Occurrences

The following geological information is from an assessment report prepared by Peter Klewchuk, one of the property vendors (Klewchuk, 2010).

Reports by Morris (1978), Rodgers (1989) and Simandl and Hancock (1992) provide the best available geologic information on the Driftwood Creek magnesite deposit. Klewchuk (2002) provides additional detail for the Eastern Magnesite area.

The Driftwood Creek magnesite deposit is hosted by the Helikian (Precambrian) age Mount Nelson Formation, part of the Purcell Supergroup. The Mount Nelson Formation is about 1300 meters (4300 feet) thick and includes mainly dolomitic and quartzitic units with minor argillite. The magnesite occurs in the upper part of the formation.

According to Simandl and Hancock (1992), magnesite and sparry carbonate form stratabound lenses and pockets within the “white marker beds” subdivision of the “middle dolomite” unit of the upper Mount Nelson Formation at the Driftwood Creek property. The magnesite is either white, pale grey or beige and weathers buff. The unit is characterized by coarse to sparry crystals and locally contains light green interbeds less than 1 centimetre in thickness. The interbeds are either regular or disrupted by growth of sparry magnesite crystals within the coarsest magnesite-rich zones (Simandl and Hancock, 1992). Vestiges of hemispherical stromatolites are observed locally in finer-grained magnesite-bearing rocks. Chert, quartz veinlets and dolomite are the most common impurities especially within the lower part of the magnesite deposit. Calcite, pyrite and talc are typically present in trace amounts. The abundance and proportion of impurities change irregularly both along strike and across bedding (Simandl and Hancock, 1992).

Magnesite weathers prominently and the Driftwood Creek deposit is well exposed as an isolated ridge within relatively low valley bottom topography, at an elevation of 1250 meters (Klewchuk, 2010). Numerous cliff exposures are present, with some cliff walls greater than

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15 meters (50 feet) high. A series of cross-cutting faults produce some offset of geologic contacts but displacement is minor (Figures 8a and 8b).

Figure 8a. Property geology Western Magnesite. Map prepared by D.G. MacIntyre, July 2014.

Magnesite has been mapped over a strike length of 1900 meters and maximum width of about 220 meters (Klewchuk, 2010). The magnesite occurs at surface in two discrete bodies; a larger 'Western Magnesite' and a smaller 'Eastern Magnesite' (Figures 8a and 8b).

Freshly broken magnesite is typically a milky white color but weathers to a pale yellow to slightly pinkish color. Exposures of magnesite are commonly coated with a black lichen which appears to locally favour this rock type. The host dolomite to the south of the Eastern Magnesite is a much darker buff to reddish brown color while the (silty and cherty) dolomite to the north of the thicker Eastern Magnesite is a medium gray color. Where magnesite contacts with dolomite are exposed, they tend to be quite sharp and are easily recognized.

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Even where bedding transgressive contacts exist, the boundary tends to be fairly sharp (Klewchuk, 2010).

Figure 8b. Property geology, Eastern Magnesite. Map prepared by D.G. MacIntyre, July 2014.

Texture of the magnesite is variable, ranging from fine and medium grained to very coarse grained. Most of the deposit is of medium and fine-grained texture with irregular patches of more coarse-grained texture. Areas of coarse-grained magnesite appear to be irregularly developed within the area of exposed magnesite and are not obviously related to any structure.

Thin quartz veins are irregularly distributed through the magnesite, in a near-ubiquitous manner, although the concentration of quartz veins does vary. There are areas with no apparent quartz but these are not extensively developed. The more prominent quartz veins and quartz vein swarms tend to be oriented from N15°E to N60°E. Similar quartz veins are

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present in the host dolomite (seen mainly to the south of the Eastern Magnesite) indicating these quartz veins are not related to development of the magnesite.

Two previous studies of the Driftwood Creek magnesite deposit have estimated tonnages, based primarily on surface mapping. These resource estimates are not NI43-101 compliant and cannot be relied upon. Kaiser Resources (Morris, 1978) inferred 22,500,000 tonnes of magnesite using a specific gravity of 2.5 while Canadian Occidental (Rodgers, 1989) inferred a resource of 29,400,000 tonnes using a specific gravity of 3.0. 8 Deposit Types

The Driftwood Creek and Brisco magnesite occurrences are classified as Sparry Magnesite deposits (E09) by the B.C. Ministry of Energy and Mines (Simandl and Hancock, 1998). This deposit type is characterized by stratabound and typically stratiform, lens-shaped zones of coarse-grained magnesite mainly occurring in carbonates but also observed in sandstones or other clastic sediments. Magnesite exhibits characteristic sparry texture.

There are two preferred theories regarding the origin of sparry magnesite deposits:

1. Replacement of dolomitized, permeable carbonates by magnesite due to interaction with a metasomatic fluid.

2. Diagenetic recrystallization of a magnesia-rich protolith deposited as chemical sediments in marine or lacustrine settings. The sediments would have consisted of fine-grained magnesite, hydromagnesite, huntite or other low temperature magnesia-bearing minerals.

The main difference between these hypotheses is the source of magnesia; external for metasomatic replacement and in situ in the case of diagenetic recrystalization. Temperatures of homogenization of fluid inclusions constrain the temperature of magnesite formation or recrystalization to 110˚ to 240˚C. In British Columbia the diagenetic recrystalization theory may best explain the stratigraphic association with gypsum and halite casts, correlation with paleotopographic highs and unconformities, and shallow marine depositional features of the deposits (Simandl and Hancock, 1998).

All the magnesite deposits in the Brisco and Driftwood Creek area are located within the upper half of the Mount Nelson Formation. Most are lenticular and seem to form chains as illustrated by the Driftwood Creek deposits. All deposits are stratigraphically associated with red to purple dolomites, cherty dolomites, stromatolitic dolomites, dissolution breccias and other rocks containing dolomite pseudomorphs after halite and lenticular gypsum crystals. Locally, stromatolitic textures are preserved, even within magnesite-bearing rocks.

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According to Simandl and Hancock (1992) most of the above features are indicative of the evaporitic depositional environment.

Figure 9. Location of diamond drill holes, Driftwood Creek property. After Rodgers (1990) and Klewchuk (2008). Map prepared by D.G. MacIntyre, July, 2014.

9 Exploration

There has not been any significant amount of exploration done on the Driftwood Creek property since the 2008 diamond drilling program that targeted the Western Magnesite deposit (Klewchuk, 2010, 2010a). As mentioned previously, drill core samples obtained in 2008 were not submitted for analyses at the time of collection. These core samples were subsequently submitted to Agat Laboratories in Burnaby B.C. in 2012 by Torch River Resources Ltd. on behalf of the property owners. At the time Torch River was considering taking an option on the Driftwood Creek property but decided not to proceed with this acquisition. The writer has been provided with the results of this analytical work and a copy

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of the unpublished drilling report prepared by Klewchuk (2010a). This information and analytical data was used to produce graphic drill core logs and sections for the 2008 drilling that are included in this report. 10 Drilling

A total of 911 metres of diamond drilling in 11 drill holes has been done on the Driftwood Creek magnesite property as outlined in the History section of this report. A list of drill holes is given in Table 3. The first drilling was done in 1990, by Canadian Occidental. This work targeted the Eastern Magnesite deposit (Figure 9). The 2008 diamond drilling was done by Tusk Exploration Ltd. and targeted the Western Magnesite deposit (Figure 9). Table 3. List of diamond drill holes, Driftwood Creek property. Length Hole Easting Northing Elevation Azimuth Dip (m) 90-1 531327 5639108 1400 25 -80 39.9 90-2 531328 5639113 1400 25 -50 47.6 90-3 531512 5638945 1410 25 -45 61 90-4 531406 5639034 1410 25 -45 71.9 MG-08-1 530427 5639563 1375 236 -46 141.5 MG-08-2 530490 5639481 1386 210 -46 133.5 MG-08-3 530578 5639391 1389 210 -44 52.2 MG-08-4 530612 5639469 1393 215 -44 82.7 MG-08-5 530611 5639465 1393 139 -49 99.4 MG-08-6 530555 5639498 1383 210 -46 100 MG-08-7 530477 5639524 1383 215 -47 82.7 Note: location coordinates determined from digitized maps and may not be accurate 912.4

A listing of analytical results for MgO, Al2O3, SiO2 and “dead-burned” MgO (MgO*) is given in Appendix A.

10.1 1990 Diamond Drilling

Canadian Occidental did 219.8 metre of NQ diamond drilling in 4 holes (Figure 9) in 1990. This drilling targeted the Eastern magnesite deposit. Drill core was split on site and samples taken at 1.5 metre intervals. Only sections through the magnesite were sampled. The core samples were shipped to Chemex Labs Ltd. in North Vancouver and were analysed for major oxides and loss on ignition (LOI). As well, a “dead-burned” assay was done for each sample. This involved analysis for %MgO after roasting at 1000°C for one hour.

Rodgers (1990) suggested that an “ore grade” cutoff would be greater than 87% dead-burned

MgO (MgO*), less than 2.1% Al2O3 and less than 3.0% SiO2. Based on these criteria the drill intersections listed in Table 4 from the 1990 drilling program would be considered “ore

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grade”. Note that pure magnesite, a.k.a. magnesium carbonate or MgCO3, has a theoretical magnesia (MgO) content of 47.61%. Some of the samples listed in Table 4 are approaching this magnesia content indicating some very high grade magnesite occurs in the Eastern Magnesite deposit. Table 4. High grade magnesite drill hole intersections from the 1990 drilling program. Sample From To MgO Al2O3 SiO2 MgO* Hole No. (m) (m) Length % % % % 90-1 421901 6.71 7.62 0.91 46.17 0.25 <0.01 91.5 90-1 421902 7.62 9.14 1.52 45.02 0.71 <0.01 88.1 90-2 421914 7.62 9.14 1.52 46.77 0.23 0.40 87.9 90-2 421915 12.19 13.72 1.52 44.61 0.41 1.48 89.2 90-2 421916 16.76 18.29 1.52 44.51 0.78 0.98 88.7 90-2 421917 18.29 19.81 1.52 44.47 0.53 0.96 88.7 90-2 421918 19.81 21.34 1.52 45.14 0.48 1.67 88.8 90-2 421919 21.34 22.86 1.52 45.29 0.66 1.82 87.2 90-2 421920 22.86 24.38 1.52 45.43 0.36 2.02 90.2 90-2 421921 24.38 25.91 1.52 44.73 0.40 1.77 88.5 90-2 421922 25.91 27.43 1.52 44.30 0.65 0.56 87.9 90-2 421923 27.43 28.96 1.52 41.10 0.35 0.33 89.5 90-2 421925 30.48 32.00 1.52 42.47 0.26 0.14 89.1 90-2 421928 35.05 36.58 1.52 47.23 0.41 0.53 89.6 90-2 421929 36.58 38.10 1.52 43.49 0.47 1.35 89.2 90-4 421723 15.24 16.76 1.52 44.89 0.12 1.19 87.9 90-4 421726 19.81 21.34 1.52 45.16 0.79 1.66 87.0 90-4 421729 24.38 25.91 1.52 45.68 0.05 0.73 89.4 90-4 421730 25.91 27.43 1.52 46.05 0.12 0.80 90.0 90-4 421731 27.43 28.96 1.52 43.59 0.82 2.56 90.5 90-4 421732 28.96 30.48 1.52 42.74 0.76 4.10 89.4 90-4 421733 30.48 32.00 1.52 43.24 0.73 3.62 90.7 90-4 421734 32.00 33.53 1.52 43.15 0.78 3.31 89.4 90-4 421735 33.53 35.05 1.52 43.60 0.92 2.80 89.6 90-4 421736 35.05 36.58 1.52 43.61 0.88 2.96 89.4 90-4 421738 38.10 39.62 1.52 43.97 0.58 2.72 90.7 90-4 421739 39.62 41.15 1.52 43.98 0.38 2.25 91.5 90-4 421740 41.15 42.67 1.52 44.08 0.66 2.64 91.1 90-4 421741 42.67 44.20 1.52 42.78 1.03 4.31 89.8

As shown in Figure 10, a fine-grained intrusive sill was intersected near the bottom of drill holes 90-1 and 90-2 (coded as porphyry or rhyolite in drill logs). A similar rock was exposed on surface during road construction. It is of unknown thickness but according to Rodgers (1990a) is likely on the order of 9 metres thick. This rock unit appears to dip 15-20 degrees to the south and may underlie most of the Eastern Magnesite. Rodgers (1990a) speculates that this intrusive body may be the heat source that has produced recrystallization of the Eastern Magnesite body. Mafic trachyte sills or dykes were also intersected.

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Figure 10. Drill section showing lithology and histogram values for MgO% and SiO2% for drill holes 90-1 and 90-2. See Figure 9 for drill hole locations.

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The 1990 drilling results also showed that there is a higher concentration of silica and alumina along the bottom contact of the magnesite with the dolomite (Figure 11). The best magnesite grades appear to be in the core of the syncline that forms the Eastern Magnesite deposit. The iron oxide content is generally less than 1% overall.

In addition to the standard major oxide and LOI determinations, the core samples were also “dead-burned”. As pointed out by Rodgers (1990a) the procedure used by Chemex actually implies only a caustic-calcined level of calcination as the maximum temperature possible in the laboratory setting was 1000 degrees Celsius. Ideally a temperature of 1450 degrees Celcius is required to obtain a proper “dead-burned” assay. Rodgers (1990a) suggested that the “dead-burned” MgO values obtained by Chemex could have been somewhat higher if it were possible to attain the higher temperature in the lab.

10.2 2008 Diamond Drilling

The following information is modified from a 2010 assessment report prepared by Peter Klewchuk, P.Geo., one of the current property owners. This report was prepared for Tusk Exploration Ltd.

Between October 25 and November 5, 2008, Tusk Exploration Ltd. drilled seven NQ holes from six sites within the Western Magnesite deposit (Klewchuk, 2010). Holes were generally drilled southerly across the steeply north-dipping magnesite, at angles close to - 45° (Figure 9). Hole depth ranges from 52.2 meters to 141.5 meters with a total of 692 meters drilled.

The central part of the Western Magnesite is the area of thickest known magnesite on the property and it forms a local topographic high on the magnesite ridge. This area also previously had no road access. Thus it was selected for access road construction and diamond drilling as it is a likely area in which to commence future mining.

Figure 9 shows the location of new access trail construction and the seven diamond drill holes; Table 5 provides details of the drilling. During logging, core was marked up for sampling but no samples were shipped for analysis.

According to Klewchuk (2010) about 325 meters of east-west strike length of the Western Magnesite was partially tested by the 2008 diamond drill program (Figure 9) and a maximum of approximately 140 meters of "thickness" was tested. The northern margin of the magnesite deposit was not tested and an apparently thick band of magnesite which forms cliffs along the southern boundary of the deposit was only tested by one drill hole (DDH MG-08-2).

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Figure 11. Graphic log for drill hole 90-4.

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The main lithology encountered by drilling is magnesite but there are also a number of other lithologies including dolomite, quartzite, siltstone, and a number of fine-grained intrusive (volcanic-associated?) units. Quartz veining is generally common in the magnesite with a few narrow zones of more intense veining intersected.

Contacts between magnesite and other non-carbonate lithologies are typically quite sharp to narrowly gradational and these contacts are typically more disturbed by late tectonic activity. These zones of broken ground and faulting at lithologic contacts proved difficult to drill through.

The magnesite intersected in drill core is generally white, pale gray or slightly yellowish in color. Texture is typically massive to mottled and grain size ranges from coarsely to finely crystalline. Faint banding, which may reflect original bedding, is rarely evident. Very minor wavy to styolitic gray talc laminae are present through the magnesite in a seemingly irregular manner. White to very light gray quartz veins are scattered through the magnesite; in the fresh core, quartz veins are generally very similar in color to magnesite and are thus quite difficult to differentiate, except by their crosscutting character and greater hardness. Because of this similarity in color of magnesite and quartz in the fresh core, no attempt was made to estimate silica content during core logging.

The intrusive lenses (dikes?) encountered by drilling are generally fine-grained felsic, intermediate and mafic composition and are probably volcanic-associated. These intrusive lenses have been described as 'trachyte', 'rhyolite' and 'mafic dike' in the drill logs. In places these lenses of intrusive are more broken up than other lithologies and they were often problematic for drilling. Drill holes MG-08-1, 6 & 7 ended in or just below bands of intrusive which caused drilling problems.

As mentioned previously, drill core was split and sampled in 2008 but the samples were not submitted for chemical analyses. This was presumably due to a lack of money to pay for the analyses. These samples were subsequently stored by the property vendors until such time as they could be submitted for assay. In 2012 Torch River Resources agreed to pay for analyzing the samples as part of their due diligence in evaluating the property. Although Torch River decided not to option the property, the data from this analytical work, which was done at Agat Laboratories in Richmond B.C. was provided to the writer. It should be noted that the writer was a director of Torch River at the time of this transaction.

The analytical data obtained from Agat Laboratories was used by the writer to plot drill sections and graphic logs for the 2008 drilling program. Figure 12 shows a typical drill section through the Western Magnesite deposit with the 2012 analytical results for MgO and

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SiO2 plotted as histograms along the drill hole axis. Analytical results for MgO, SiO2 and

Al2O3 for the samples submitted in 2012 are included in Appendix A.

Figure 12. Drill hole section for hole MG-08-2.

11 Sample Preparation, Analyses and Security

According to Rodgers (1990, 1990a), the 1989 and 1990 exploration programs used Chemex Labs Ltd. of North Vancouver to provide analytical services. The 1989 surface sampling

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program involved chipping off a representative sample from a 2 meter diameter area to produce a 5 kg. sample. The 1990 drilling program involved splitting of NQ core, bagging half of the core in 1.5 metre intervals and shipping the samples to the Chemex Lab in North Vancouver. This analytical facility is a well-recognized and accredited laboratory that was and still is used extensively by the exploration community. There is no mention of any special sample security procedures used for either the surface sampling or drill core sampling programs but the writer is confident that industry best practises applicable at the time were followed by the property operators, all of whom are well respected professionals.

Rodgers (1990) reports that at the lab the samples were crushed and pulverized to -80 mesh, then a representative split was taken and this was pulverized to -150 mesh. The +150 sample material was saved. Samples were digested using a perchloric-nitric-hydrofluoric acid

mixture. The samples were analyzed for SiO2, Fe2O3, MgO, CaO, Na2O, K2O, TiO2, P2O5, MnO, BaO and LOI using the ICP-AES technique. Detection limits for these major oxides was 0.01% with the upper limit of detection at around 99%. MgO was also analyzed using Atomic Absorption Spectrometry (AAS) with an upper detection limit of 100%. As well, a “dead-burn” analysis was done for each sample. This involved analysis for %MgO after roasting at 1000 degrees Celsius for one hour.

Copies of the original assay certificates issued by Chemex are included in Assessment Report 19,416 (Rodgers, 1990) and an internal company report describing the results of the 1990 drilling program (Rodgers, 1990a). Examination of these certificates by the writer indicates that Chemex did sufficient QA/QC procedures including the analysis of blanks and standards to ensure the accuracy and precision of the analytical results.

Drill core samples from the 2008 drilling program were collected in a similar manner to the 1990 samples. However, the samples were not immediately sent to the lab and remained in bags for 4 years until Torch River Resources offered to pay for shipping and analytical work. There is no information regarding how the samples were stored or if any special security precautions were taken. However, it seems unlikely that the samples were tampered with or modified in any way. The 2008 drill core samples were shipped to Agat Laboratories Ltd. in Burnaby B.C. on April 10, 2012. According to information on the Agat website, the laboratory is accredited to the ISO9001 standard. The analytical results were report on Certificate of Analysis 12V589981 on April 27, 2012. The analytical method involved a

Lithium Borate Fusion and analysis by ICP-OES. Results were reported for SiO2, Fe2O3,

MgO, CaO, Na2O, K2O, TiO2, P2O5, MnO, BaO and LOI. Examination of the analytical certificate by the writer indicates that Agat did sufficient QA/QC procedures including the analysis of blanks and standards to ensure the accuracy and precision of the analytical results.

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Figure 13. Location of check samples collected by the writer, July 16, 2014.

12 Data Verification

There has not been any independent verification of the analytical results reported by previous property operators. However, the results reported by three different companies – Kaiser, Canadian Occidental and Tusk are all comparable and indicate similar grades of magnesite in the Western and Eastern deposits. Samples collected by Kikauka (2000) also returned similar MgO grades to those reported in the 1989 sampling program conducted by Canadian Occidental. The writer has no reason to believe that the results reported to date are in anyway inaccurate or misleading. However, independent sampling and data verification may be required as part of any future work done on the property.

The writer visited the Driftwood Creek Magnesite property on July 16, 2014 and independently collected two samples (DCM14-001 and DCM14-002) of sparry magnesite from the Western Magnesite deposit. The location of these samples is shown in Figure 13.

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The samples were sent by the writer to the ALS Metallurgy Laboratory in Kamloops B.C. for “deadburn” Loss on Ignition (LOI) and major oxide analyses. The LOI determination involves heating the sample to 1600°C for an extended period of time then determining the remaining concentrations of major oxides. In this case, the main oxide of interest is of course MgO.

During the writer’s visit to the property, GPS readings were taken at drill sites shown in Figure 13. The GPS coordinates determined by the writer were essentially identical to those included in the 2008 report on diamond drilling (Klewchuk, 2010). 13 Mineral Processing and Metallurgical Testing

In 2008, Andris Kikauka, one of the property owners, contracted SGS Lakefield Research Ltd. (“SGS”) to conduct beneficiation studies on samples from the Driftwood Creek Magnesite property. This work was done on behalf of Tusk Exploration Ltd. The objective of this work was to perform a metallurgical assessment of the Driftwood Creek magnesite deposit. The results of this study are contained in a report date June 24, 2008 and authored by M. Aghamirian and D. Imeson. A copy of this report was provided to the writer by Mr. Kikauka.

The first phase of beneficiation studies on two composite samples of magnesite, one each from the Western and Eastern deposits, was done by SGS. The objective of this work was to develop a process to recover magnesite from the “ore”. A preliminary flotation flow sheet and reagent scheme was developed. This flow sheet consisted of pyrite and silicate flotation circuits. Magnesite concentrate was recovered as silicate flotation tailings. The magnesite recoveries from the Western and Eastern zone composites using reverse flotation were 91 and 92% respectively (Aghamirian and Imeson, 2008).

Aghamirian and Imeson (2008) derived the following conclusions from the results obtained;

 The “ore” has a high magnesite grade estimated at 93.4% for the Eastern deposit and 86.3% for the Western deposit. It responded well to beneficiation by silicate flotation with the magnesite concentrate generated as silicate tailings.

 Efforts to reduce the iron content of the magnesite concentrate were not successful possibly due to the presence of iron in magnesite crystal structure as solid solution;

 Heavy media separation can be considered as a potentially suitable process for primary upgrading to reject a large portion of silicate minerals at approximately 73 to 80% and calcite at nearly 40% in a coarse fraction;

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 Grinding and screening to different fractions, failed to generate an acceptable magnesite concentrate; and

 High intensity dry and wet magnetic separations were tired to separate iron containing minerals. These methods failed to perform reasonable tasks to reduce iron content of the magnesite concentrate.

Aghamirian and Imeson (2008) go on to state that the flowsheet and reagent scheme developed in the investigation was preliminary in nature, and more detailed test work should be conducted to optimize the floatation process. 14 Mineral Resource and Mineral Reserve Estimates

In the writer’s opinion there has not been sufficient drilling to determine the subsurface extent and overall grade of the Driftwood Creek magnesite deposit. There are no historical mineral resource estimates for the property. 15 Adjacent Properties

There are no significant mineral properties immediately adjacent to the Driftwood Creek Magnesite property. 16 Other Relevant Data and Information

The author has reviewed all public and private reports pertaining directly to the property. Many of these were provided by MGX Minerals Inc. The writer is not aware of any additional sources of information that might significantly change the conclusions presented in this technical report. 17 Interpretation and Conclusions

After reviewing all available data the writer offers the following interpretations, conclusions and observations;  The Driftwood Creek deposit is a significant magnesite resource, comparing favourably in size with other deposits in BC e.g. Mt. Brussilof, Marysville, Anzac, Topaz Lake.

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 36

 Access to the property is relatively good with a reasonable access road connecting to the Driftwood FSR. It should be possible to work on this property from early April through to the end of October.

 There is good infrastructure in the form of a paved highway, CPR spur line and powerline all of which are located approximately 15 kilometres due east of the property.

 The deposit is hosted by Proterozoic (Helikian) carbonates and clastic sediments of the Mt. Nelson Formation. The deposit is cut by younger felsic and mafic dykes. These have locally resulted in recrystallization of the magnesite.

 The deposit appears to be folded into a number of syncline-anticline pairs that occur along the crest of a northwest trending ridge. Fold axis also trend northwest.

 The orientation of the deposit along the crest of a ridge presents an ideal open pit mining situation with a relatively low stripping ratio.

 Magnesite has been mapped over a strike length of 1900 metres and a maximum width of about 220 metres. The magnesite occurs at surface in two discreet bodies; a larger “Western Magnesite” drill tested in 2008 and a smaller “Eastern Magnesite” drill tested in 1990.

 Kaiser Resources (Morris, 1978) inferred 22,500,000 tonnes of magnesite using a specific gravity of 2.5 while Canadian Occidental (Rodgers, 1989) inferred a resource of 29,400,000 tonnes using a specific gravity of 3.0. These estimates are not NI 43-101 compliant and cannot be relied upon. However, they do give a general sense of the size of the Driftwood Creek Magnesite deposit which is substantial.

 An important factor in determining the economic viability of the deposit is the overall grade of the main magnesite deposit. Previous drilling indicates that there are zones of impurity especially at the base of the magnesite where it is in contact with underlying dolomite. Above this basal zone the grade and purity improves, approaching nearly pure magnesite in places.

 The Driftwood Creek deposit is classified as a Sparry Magnesite deposit that is most likely of an evaporitic origin. As such one could expect some very pure beds of magnesite with low impurities.

 The local coarse crystallinity of the magnesite is believed to be related to recrystallization during a thermal metamorphic event associated with emplacement of intrusive sills into the host stratigraphy.

 A limited Beneficiation study by SGS on behalf of Tusk Exploration indicates that Fe is tied up in the magnesite crystal structure. They were not successful in reducing the Fe content of the test concentrate using conventional grinding and screening and wet and dry magnetic separation techniques. However, overall the

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 37

study indicates that an acceptable magnesite concentrate can be produced using conventional beneficiation techniques.

18 Recommendations

The Driftwood Creek Magnesite property represents an under-explored property of merit that has considerable potential for future development. However, in the writer’s opinion, there has not been nearly enough drilling to determine the overall tonnage and grade of the deposit. Previous drilling has tested only small parts of the Western and Eastern magnesite bodies. In order to generate an NI43-101 compliant resource estimate many thousands of metres of drilling will need to be done from strategically located drill sites. This might involve a radiating fan of holes from drill sites along the fold axis of the magnesite bodies or a grid of vertical holes covering the entire width of the deposit. Initially this work should focus on the higher grade Eastern magnesite body, which in the writer’s opinion has the best chance for future development.

Although the Driftwood deposit appears to be a significant magnesite resource it is not easy to determine if it might be economically viable as a mine without doing considerably more research into the magnesite market, especially on a local supply and demand basis. It is the writer’s understanding that the magnesite market has many variables that influence supply and demand. It would be wise for the issuer to research this subject thoroughly to determine if there is a need for additional production at this time. The services of an industrial minerals expert could help determine what the current needs are

A two stage, success contingent, exploration program is recommended for further advancement of the property. Stage 1 would involve 1200 metres of NQ diamond drilling in 10 holes located along the axis of the higher grade Eastern Magnesite deposit (Figure 14). This would be followed in stage two by additional drilling if required and a preliminary resource estimate. The projected cost of the Stage 1 program is $240,500. Depending on the results of the Stage 1 and Stage II programs, the next stage would involve bulk sampling and additional beneficiation studies to determine if a marketable product can be produced. A breakdown of projected costs for Stage 1 is shown in Table 5.

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 38

Figure 14. Location of proposed drill holes, Eastern Magnesite deposit.

Table 5. Projected costs, proposed exploration program, Driftwood Creek magnesite property Stage 1 Expense Units Unit cost Total Drilling 1200 metres $120 $144,000 Per diem costs 240 Person days $100 $24,000 Analytical 300 analyses $30 $9,000 Geologists/camp manager 30 Person days $550 $16,500 Report preparation 10 days $550 $5,500 Contingency 10% $41,500 Total $240,500 19 References

Aghamirian, M. and Imeson, D., 2008: An Investigation into the Beneficiation of Magnesite from Driftwood Magnesite Property, B.C., internal company report prepared for Tusk Exploration Ltd. by SGS Lakefield Research Ltd.

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 39

Kikauka, A., 2000: Geological and Geochemical report on the MG 1-7 claims, Driftwood Creek, Brisco, B.C., Golden Mining Division. B.C. Ministry of Energy, Mines and Petroleum Resources, Assessment Report 26,345.

Klewchuk, P., 2002: Prospectors Assistance Grant Report on MG 1-7 mineral claims, Driftwood Creek area, Golden Mining Division.

Klewchuk, P. 2010: Assessment Report on Access Trail Construction and Diamond Drilling, Driftwood Creek Magnesite property; B.C. Ministry of Energy and Mines Assessment Report 31353, 43 pages.

Klewchuk, P. 2010a: Report on the 2008 diamond drilling program, Driftwood Creek magnesite deposit, unpublished internal company report.

McCammon, J.W., 1965: The Brisco Magnesite area; in B.C. Minister of Mines and Petroleum Resources, Annual report for 1964.

Morris, R.J., 1978: Fish Magnesite Deposit; B.C. Ministry of Energy, Mines and Petroleum Resources, Assessment Report 8760.

Rodgers, G.M., 1989: Geological Report on the Tarn 1-8 mineral claims; B.C. Ministry of Energy, Mines and Petroleum Resources, Assessment Report 19,416.

Rodgers, G.M., 2008: An Investigation into the Beneficiation of Magnesite from Driftwood Magnesite property, B.C. Report prepared for Tusk Exploration Ltd. by SGS Lakefield Research Ltd.; B.C. Ministry of Energy, Mines and Petroleum Resources, Assessment Report 30,243.

Reesor, J.E., 1973: Geology of the Lardeau Map Area, east-half, B.C., GSC Memoir 369.

Simandl, G.J., and Hancock, K.D., 1991: Geology of dolomite-hosted magnesite deposits of the Brisco and Driftwood Creek areas, Geological Fieldwork, 1991: B.C. Ministry of Energy, Mines and Petroleum Resources, Paper 1992-1, pp 461-477.

Simandl, G.J. and Hancock, K.D., 1998: Sparry Magnesite, in Geological Fieldwork 1997, British Columbia Ministry of Employment and Investment, Paper 1998-1, pages 24E-1 to 24E-3.

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 40

20 Certificate of Author I, Donald George MacIntyre, Ph.D., P.Eng., do hereby certify that: 1. I am an independent consulting geologist providing services through D.G. MacIntyre and Associates Ltd. a wholly owned company incorporated December 10, 2004 in the Province of British Columbia (registration no. BC0710941). My residence and business address is 4129 San Miguel Close, Victoria, British Columbia, Canada, V8N 6G7. 2. I graduated with a B.Sc. degree in geology from the University of British Columbia in 1971. In addition, I obtained M.Sc. and Ph.D. degrees specializing in Economic Geology from the University of Western Ontario in 1975 and 1977 respectively. 3. I have been registered with the Association of Professional Engineers and Geoscientists of British Columbia since September, 1979, registration number 11970. I am a Fellow of the Geological Association of Canada and a member of the British Columbia Association for Mineral Exploration. 4. I have practiced my profession as a geologist, both within government and the private sector, in British Columbia and parts of the Yukon for over 35 years. Work has included detailed geological investigations of mineral districts, geological mapping, mineral deposit modeling and building of geoscientific databases. I have directly supervised and conducted geologic mapping and mineral property evaluations, published reports and maps on different mineral districts and deposit models and compiled and analyzed data for mineral potential evaluations. 5. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirement to be a “qualified person” for the purposes of NI 43-101. 6. I am responsible for all sections of the technical report titled “Technical Report: Driftwood Creek Magnesite Property, Southern British Columbia, Canada” dated July 22, 2014 (the “Technical Report”). The effective date of this Technical Report is July 22, 2014. Sections not written by myself are noted in the text. 7. I visited the Driftwood Creek Magnesite property on July 16, 2014 and independently collected two samples from the Western Magnesite deposit. 8. I have not had prior involvement with the property that is the subject of the Technical Report. 9. I am not aware of any material fact or material change with respect to the subject matter of the Technical Report the omission of which would make the Technical Report misleading. 10. I am independent of the issuer, the property vendors and the property applying all of the tests in Section 1.5 of National Instrument 43-101. 11. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form. 12. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them, including electronic publication in the public company files on their websites accessible by the public, of the Technical Report.

Dated this 22nd day of July, 2014

“D.G. MacIntyre”

D.G. MacIntyre, Ph.D. P.Eng.

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 41

Appendix A. Summary of analytical results for 1990 and 2008 drill core samples.

Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % 90-1 421901 6.71 7.62 0.91 46.17 0.25 -0.01 91.5 90-1 421902 7.62 9.14 1.52 45.02 0.71 -0.01 88.1 90-1 421903 9.14 10.67 1.52 45.22 0.95 0.42 83.3 90-1 421904 10.67 12.19 1.52 45.48 1.05 1.94 82.5 90-1 421905 12.19 13.72 1.52 42.47 1.26 11.12 67.6 90-1 421906 13.72 15.24 1.52 44.94 1.8 6.2 73.9 90-1 421907 15.24 16.76 1.52 41.72 1.47 6.48 74.6 90-1 421908 16.76 18.29 1.52 42.95 1.36 5.8 74.1 90-1 421909 18.29 19.81 1.52 37.2 1.32 5.35 64 90-1 421910 19.81 21.34 1.52 44.1 1.27 5.8 76.3 90-1 421911 21.34 22.86 1.52 43.7 0.97 5.06 79.6 90-1 421912 22.86 24.38 1.52 41.97 1.43 7.8 71.7 90-2 421913 3.05 4.57 1.52 43.05 1.71 9.14 70.3 90-2 421914 7.62 9.14 1.52 46.77 0.23 0.4 87.9 90-2 421915 12.19 13.72 1.52 44.61 0.41 1.48 89.2 90-2 421916 16.76 18.29 1.52 44.51 0.78 0.98 88.7 90-2 421917 18.29 19.81 1.52 44.47 0.53 0.96 88.7 90-2 421918 19.81 21.34 1.52 45.14 0.48 1.67 88.8 90-2 421919 21.34 22.86 1.52 45.29 0.66 1.82 87.2 90-2 421920 22.86 24.38 1.52 45.43 0.36 2.02 90.2 90-2 421921 24.38 25.91 1.52 44.73 0.4 1.77 88.5 90-2 421922 25.91 27.43 1.52 44.3 0.65 0.56 87.9 90-2 421923 27.43 28.96 1.52 41.1 0.35 0.33 89.5 90-2 421924 28.96 30.48 1.52 43.76 0.29 -0.01 76.6 90-2 421925 30.48 32.00 1.52 42.47 0.26 0.14 89.1 90-2 421926 32.00 33.53 1.52 45.15 0.33 2.76 81.9 90-2 421927 33.53 35.05 1.52 43.86 0.59 0.88 84.2 90-2 421928 35.05 36.58 1.52 47.23 0.41 0.53 89.6 90-2 421929 36.58 38.10 1.52 43.49 0.47 1.35 89.2 90-2 421930 38.10 39.62 1.52 43.86 0.69 5.12 78.9 90-3 421931 1.22 3.05 1.83 39.93 1.6 11.74 72.7 90-3 421932 3.05 4.57 1.52 37.28 2.28 16.13 63.6 90-3 421933 4.57 6.10 1.52 37.8 2.52 14.41 64.7 90-3 421934 6.10 8.53 2.44 36.73 2.24 15.79 63.5 90-3 421935 13.72 15.24 1.52 35.99 2.53 15.86 61.8 90-3 421936 15.24 16.76 1.52 37.53 2.36 13.8 57.5 90-3 421937 16.76 18.29 1.52 36.07 2.73 16.14 61.3 90-3 421938 18.29 19.81 1.52 38.53 2.26 12.14 67.2 90-3 421939 19.81 21.34 1.52 39.25 2.06 11.38 68.3 90-3 421940 21.34 22.86 1.52 38.62 2.31 11.91 67.3 90-3 421941 22.86 24.38 1.52 43.94 0.96 4.25 83 90-3 421942 24.38 25.91 1.52 44.19 0.88 3.85 83.6

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 42

Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % 90-3 421943 25.91 27.43 1.52 44.7 0.76 3.45 84.6 90-3 421944 27.43 28.96 1.52 43.96 0.74 4.06 82.3 90-3 421945 28.96 30.48 1.52 41.75 0.88 8.55 79.8 90-3 421946 30.48 32.00 1.52 39.96 1.42 6.02 73.6 90-3 421947 32.00 33.53 1.52 43.45 0.52 5.33 82 90-3 421948 33.53 35.05 1.52 43.99 0.45 4.72 84.6 90-3 421949 35.05 36.58 1.52 43.12 0.48 4.8 80.8 90-3 421950 36.58 38.10 1.52 43.32 0.48 3.41 86.4 90-3 421703 38.10 39.62 1.52 44.37 0.25 1.36 85.5 90-3 421704 39.62 41.15 1.52 38.34 0.94 7.68 69.8 90-3 421705 41.15 42.67 1.52 33.79 3.25 19.54 57.3 90-3 421706 42.67 44.20 1.52 34.24 3.21 18.91 58.6 90-3 421707 44.20 45.72 1.52 39.78 2.09 10.36 69.3 90-3 421708 45.72 47.24 1.52 31.94 7.47 17.46 53.7 90-3 421709 47.24 48.77 1.52 35.5 3.58 14.82 62.3 90-3 421710 48.77 50.29 1.52 34.97 2.54 18.25 59.6 90-3 421711 50.29 51.82 1.52 38.43 2.67 11.52 67.3 90-3 421712 51.82 53.34 1.52 34.13 4.07 17.96 57.5 90-3 421713 53.34 54.86 1.52 20.56 7 47.47 25 90-3 421714 54.86 56.39 1.52 16.46 10.33 62.79 16.9 90-3 421715 56.39 57.91 1.52 17.29 9.83 51.75 19.9 90-3 421716 57.91 59.44 1.52 25.39 5.33 37.65 33.9 90-3 421717 59.44 60.96 1.52 32.41 3.52 23.9 49.3 90-4 421718 7.62 9.14 1.52 32.36 4.67 28.66 45.6 90-4 421719 9.14 10.67 1.52 40.2 2.31 11.19 70.3 90-4 421720 10.67 12.19 1.52 42.16 1.86 6.43 77.3 90-4 421721 12.19 13.72 1.52 41.79 1.54 6.59 76.4 90-4 421722 13.72 15.24 1.52 43.74 0.3 2.19 86.9 90-4 421723 15.24 16.76 1.52 44.89 0.12 1.19 87.9 90-4 421724 16.76 18.29 1.52 43.81 0.29 1.51 85.4 90-4 421725 18.29 19.81 1.52 44.72 0.52 0.68 85.5 90-4 421726 19.81 21.34 1.52 45.16 0.79 1.66 87 90-4 421727 21.34 22.86 1.52 42.38 1.88 7.95 75.4 90-4 421728 22.86 24.38 1.52 45.28 0.59 1.12 86.1 90-4 421729 24.38 25.91 1.52 45.68 0.05 0.73 89.4 90-4 421730 25.91 27.43 1.52 46.05 0.12 0.8 90 90-4 421731 27.43 28.96 1.52 43.59 0.82 2.56 90.5 90-4 421732 28.96 30.48 1.52 42.74 0.76 4.1 89.4 90-4 421733 30.48 32.00 1.52 43.24 0.73 3.62 90.7 90-4 421734 32.00 33.53 1.52 43.15 0.78 3.31 89.4 90-4 421735 33.53 35.05 1.52 43.6 0.92 2.8 89.6 90-4 421736 35.05 36.58 1.52 43.61 0.88 2.96 89.4 90-4 421737 36.58 38.10 1.52 40.24 0.47 9.09 78.6 90-4 421738 38.10 39.62 1.52 43.97 0.58 2.72 90.7 90-4 421739 39.62 41.15 1.52 43.98 0.38 2.25 91.5 90-4 421740 41.15 42.67 1.52 44.08 0.66 2.64 91.1 90-4 421741 42.67 44.20 1.52 42.78 1.03 4.31 89.8 90-4 421742 44.20 45.72 1.52 38.94 3.47 10.5 71.4 90-4 421743 45.72 47.24 1.52 38.73 4 12.81 67.6

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 43

Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % 90-4 421744 47.24 48.77 1.52 38.24 8.84 13.51 67.6 90-4 421745 48.77 50.29 1.52 33.43 2.77 25.9 53 90-4 421746 50.29 51.82 1.52 36.96 2.51 18.25 62.3 90-4 421747 51.82 53.34 1.52 32.91 2.29 21.24 55.6 90-4 421748 53.34 54.86 1.52 36.95 2.32 15.43 66.1 90-4 421749 54.86 56.39 1.52 41.72 1.01 6.67 83.1 90-4 421750 56.39 57.91 1.52 29.82 1.84 31.62 46.5 90-4 421751 57.91 59.44 1.52 35 2.34 17.49 60.6 90-4 421752 59.44 60.96 1.52 10.66 6.1 60.44 12.4 MG-08-1 7376 2.00 4.00 2.00 34 0.1 2.39 MG-08-1 7377 4.00 6.00 2.00 38.1 0.14 1.03 MG-08-1 7378 6.00 8.00 2.00 37.6 0.12 1.04 MG-08-1 7379 8.00 10.00 2.00 39.3 0.27 1.92 MG-08-1 7380 10.00 12.00 2.00 37.7 0.19 1.4 MG-08-1 7381 12.00 14.00 2.00 39.3 0.86 1.83 MG-08-1 7382 14.00 16.00 2.00 38.8 0.31 0.88 MG-08-1 7383 16.00 18.00 2.00 38.7 0.14 0.31 MG-08-1 7384 18.00 20.00 2.00 36.7 0.27 0.83 MG-08-1 7385 20.00 22.00 2.00 36.6 0.56 4.52 MG-08-1 7386 22.00 24.00 2.00 37 1.17 4.76 MG-08-1 7387 24.00 26.00 2.00 36.9 1.4 4.84 MG-08-1 7388 26.00 28.00 2.00 35.1 0.84 4.16 MG-08-1 7389 28.00 30.00 2.00 35.2 0.88 4.52 MG-08-1 7390 30.00 32.00 2.00 36.8 1 5.38 MG-08-1 7391 32.00 34.00 2.00 36.3 0.86 3.71 MG-08-1 7392 34.00 36.00 2.00 36.4 0.86 5.6 MG-08-1 7393 36.00 38.00 2.00 36 1.04 4.85 MG-08-1 7394 38.00 40.00 2.00 36.3 0.7 3.35 MG-08-1 7395 40.00 42.00 2.00 36.8 1.09 4.21 MG-08-1 7396 42.00 44.00 2.00 37.3 0.91 3.37 MG-08-1 7397 44.00 46.00 2.00 37.6 1.01 4.32 MG-08-1 7398 46.00 48.00 2.00 39.6 0.97 5.21 MG-08-1 7399 48.00 50.00 2.00 37.6 1.1 4.4 MG-08-1 7400 50.00 52.00 2.00 37.4 1.04 4.88 MG-08-1 7401 52.00 54.00 2.00 38.8 1.28 4.17 MG-08-1 7402 54.00 56.00 2.00 39.5 0.56 3.4 MG-08-1 7403 56.00 58.00 2.00 38.1 1.73 7.05 MG-08-1 7404 58.00 60.00 2.00 39.5 1.31 6.94 MG-08-1 7405 60.00 62.00 2.00 39.5 1.51 6.59 MG-08-1 7406 62.00 64.00 2.00 41.7 0.99 4.12 MG-08-1 7407 94.80 97.00 2.20 36.6 1.4 3.66 MG-08-1 7408 97.00 99.00 2.00 36 1.27 6.67 MG-08-1 7409 99.00 101.00 2.00 36.2 0.97 4.81 MG-08-1 7410 101.00 103.00 2.00 37.4 1.92 7.66 MG-08-1 7411 103.00 105.00 2.00 39.4 1.03 4.75 MG-08-1 7412 105.00 107.00 2.00 39.9 1.03 4.61 MG-08-1 7413 107.00 109.00 2.00 37.5 1.8 4.52 MG-08-1 7414 109.00 111.00 2.00 38.7 1.36 3.42 MG-08-1 7415 111.00 113.00 2.00 37.6 1.05 4.07

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Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % MG-08-1 7416 113.00 114.40 1.40 36.8 0.93 4.29 MG-08-1 7417 118.20 120.40 2.20 37.8 0.72 3.79 MG-08-1 7418 120.40 122.50 2.10 40.6 0.11 1.49 MG-08-1 7419 122.50 124.60 2.10 38.4 1.29 3.45 MG-08-1 7420 124.60 126.70 2.10 39.6 0.94 3.11 MG-08-1 7421 126.70 128.80 2.10 39.4 0.74 3.7 MG-08-1 7422 128.80 130.90 2.10 39.7 0.73 2.98 MG-08-1 7423 130.90 133.00 2.10 36.8 1.03 4.28 MG-08-2 7424 2.00 4.00 2.00 36.3 0.12 9.66 MG-08-2 7425 4.00 6.00 2.00 40.7 0.08 2.24 MG-08-2 7426 6.00 8.00 2.00 40.4 0.05 2.41 MG-08-2 7427 8.00 10.00 2.00 37.7 0.47 2.14 MG-08-2 7428 10.00 12.00 2.00 37.5 0.08 1.42 MG-08-2 7429 12.00 14.00 2.00 38.8 0.07 0.59 MG-08-2 7430 14.00 16.00 2.00 38.7 0.14 1.45 MG-08-2 7431 16.00 18.00 2.00 39.1 0.37 1.59 MG-08-2 7432 18.00 20.00 2.00 37.3 1.32 3.95 MG-08-2 7433 20.00 22.00 2.00 39.5 1.01 5.8 MG-08-2 7434 22.00 24.00 2.00 38.4 0.45 4.92 MG-08-2 7435 24.00 26.00 2.00 32.6 0.6 13.7 MG-08-2 7436 26.00 28.00 2.00 36.5 0.43 5.31 MG-08-2 7437 28.00 30.00 2.00 39.8 0.66 6.01 MG-08-2 7438 30.00 32.00 2.00 38.4 0.73 4.77 MG-08-2 7439 32.00 34.00 2.00 38.1 0.92 6.63 MG-08-2 7440 34.00 36.00 2.00 41.5 1.06 4.31 MG-08-2 7441 36.00 38.00 2.00 39.2 0.67 6.54 MG-08-2 7442 38.00 40.00 2.00 41.2 0.67 5.62 MG-08-2 7443 40.00 42.00 2.00 41.7 0.58 6.18 MG-08-2 7444 42.00 44.00 2.00 40.3 0.78 4.54 MG-08-2 7445 44.00 46.00 2.00 36.5 0.37 5.81 MG-08-2 7446 46.00 48.00 2.00 38 0.86 7.07 MG-08-2 7447 48.00 50.00 2.00 39.2 1.01 4.4 MG-08-2 7448 50.00 52.00 2.00 39.8 0.66 5.09 MG-08-2 7449 52.00 54.00 2.00 39.3 0.73 4.66 MG-08-2 7450 54.00 56.00 2.00 39.7 0.79 5.33 MG-08-2 7451 56.00 58.00 2.00 37.6 0.8 5.29 MG-08-2 7452 58.00 60.00 2.00 41.7 0.89 4.37 MG-08-2 7453 60.00 62.00 2.00 39.5 0.93 5.48 MG-08-2 7454 62.00 64.00 2.00 40.7 0.8 5.73 MG-08-2 7455 64.00 66.00 2.00 37.9 0.91 4.42 MG-08-2 7456 66.00 68.00 2.00 40.2 1.32 4.8 MG-08-2 7457 68.00 70.00 2.00 38.5 1.14 6.37 MG-08-2 7458 70.00 72.00 2.00 39.7 1.03 4.38 MG-08-2 7459 72.00 74.00 2.00 39.9 1.03 4.49 MG-08-2 7460 74.00 76.00 2.00 41.3 1.19 5.23 MG-08-2 7461 76.00 78.00 2.00 41.5 1.09 3.31 MG-08-2 7462 78.00 80.00 2.00 39.8 1.07 5.14 MG-08-2 7463 80.00 82.00 2.00 42.3 1.27 3.23 MG-08-2 7464 82.00 84.00 2.00 37 0.73 4.67

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 45

Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % MG-08-2 7465 84.00 86.00 2.00 37.5 0.99 6.68 MG-08-2 7466 86.00 88.00 2.00 39.6 0.73 2.43 MG-08-2 7467 88.00 90.00 2.00 40.6 0.49 2.66 MG-08-2 7468 90.00 92.00 2.00 37 1.16 6.87 MG-08-2 7469 92.00 94.00 2.00 41.6 1.51 5.11 MG-08-2 7470 94.00 96.00 2.00 39.1 0.78 6.48 MG-08-2 7471 96.00 98.00 2.00 35.1 2.36 9.41 MG-08-2 7472 98.00 100.00 2.00 39.8 0.51 3.65 MG-08-2 7473 100.00 102.00 2.00 33.6 0.82 4.42 MG-08-2 7474 102.00 104.00 2.00 38.7 0.67 2.71 MG-08-2 7475 104.00 106.00 2.00 43.9 0.67 1.81 MG-08-2 7476 106.00 108.00 2.00 38.5 0.81 1.73 MG-08-2 7477 108.00 110.00 2.00 35.5 0.98 4.53 MG-08-2 7478 110.00 112.00 2.00 38.5 0.68 3.21 MG-08-2 7479 112.00 114.00 2.00 38.2 1.01 3.85 MG-08-2 7480 114.00 116.00 2.00 36.1 1.91 4.16 MG-08-2 7481 116.00 118.00 2.00 37.1 1.09 4.3 MG-08-2 7482 118.00 120.00 2.00 35.2 1.14 3.57 MG-08-2 7483 120.00 122.00 2.00 37.7 1.16 4.76 MG-08-2 7484 122.00 124.00 2.00 36.5 0.87 4.97 MG-08-2 7485 124.00 126.00 2.00 35.6 0.74 3.97 MG-08-2 7486 126.00 128.00 2.00 38.1 1.1 4.98 MG-08-2 7487 128.00 130.00 2.00 36.9 3.1 9.33 MG-08-2 7488 130.00 132.00 2.00 34.5 1.6 8.25 MG-08-3 7489 1.00 3.00 2.00 39 0.91 3.61 MG-08-3 7490 3.00 5.00 2.00 38.3 1.1 4.16 MG-08-3 7491 5.00 7.00 2.00 37.3 0.99 4.13 MG-08-3 7492 20.40 22.70 2.30 35.8 1.29 6.54 MG-08-3 7493 22.70 24.90 2.20 28.9 1.65 4.74 MG-08-3 7494 24.90 27.10 2.20 39.3 1.07 3.66 MG-08-3 7495 27.10 29.30 2.20 35.8 0.57 3.68 MG-08-3 7496 29.30 31.50 2.20 28.1 0.76 3.17 MG-08-3 7497 39.80 42.70 2.90 29.7 0.61 4.89 MG-08-3 7498 42.70 45.60 2.80 26.1 0.69 3.2 MG-08-4 7499 2.00 4.00 2.00 36.8 0.05 3.16 MG-08-4 7500 4.00 6.00 2.00 36.3 0.09 4.88 MG-08-4 8301 6.00 8.00 2.00 37.6 0.1 3.66 MG-08-4 8302 8.00 10.00 2.00 35.7 0.41 5.15 MG-08-4 8303 10.00 12.00 2.00 33.9 1.22 9.64 MG-08-4 8304 12.00 14.00 2.00 32.2 1.79 11.1 MG-08-4 8305 14.00 16.00 2.00 33.5 2.17 13.3 MG-08-4 8306 16.00 18.00 2.00 32.7 0.82 6.5 MG-08-4 8307 18.00 20.00 2.00 33.2 1.39 9.21 MG-08-4 8308 20.00 22.00 2.00 28.5 1.2 18.5 MG-08-4 8309 22.00 24.00 2.00 35.7 1.06 7.35 MG-08-4 8310 24.00 26.00 2.00 36.7 0.94 4.83 MG-08-4 8311 26.00 28.00 2.00 28.6 0.78 5.61 MG-08-4 8312 28.00 29.40 1.40 30.1 0.71 2.27 MG-08-4 8313 44.10 46.10 2.00 28 2 14.6

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 46

Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % MG-08-4 8314 46.10 48.10 2.00 35.9 1.61 7.77 MG-08-4 8315 48.10 50.10 2.00 32.6 0.69 7.68 MG-08-4 8316 57.00 59.00 2.00 33.6 0.94 5.99 MG-08-4 8317 59.00 61.00 2.00 36.7 0.89 6.11 MG-08-4 8318 61.00 63.00 2.00 36.9 0.95 3.86 MG-08-4 8319 63.00 65.00 2.00 37.7 0.6 3.44 MG-08-4 8320 65.00 67.00 2.00 36.3 0.85 5.88 MG-08-4 8321 67.00 68.60 1.60 38.3 1.08 7.43 MG-08-5 8322 0.70 2.90 2.20 35.3 0.1 2.29 MG-08-5 8323 2.90 5.10 2.20 35.1 0.07 5.32 MG-08-5 8324 5.10 7.30 2.20 36.6 0.17 4.16 MG-08-5 8325 7.30 9.50 2.20 36.4 0.08 2.75 MG-08-5 8326 9.50 11.70 2.20 36.2 0.31 9.16 MG-08-5 8327 11.70 13.90 2.20 39.1 0.52 6.75 MG-08-5 8328 13.90 16.00 2.10 39 1.05 9.18 MG-08-5 8329 16.00 18.20 2.20 36.5 1.53 14.6 MG-08-5 8330 18.20 20.40 2.20 35 1.65 11.2 MG-08-5 8331 20.40 22.60 2.20 36.6 2.01 15.3 MG-08-5 8332 22.60 24.80 2.20 33.6 1.59 11.6 MG-08-5 8333 24.80 27.00 2.20 33.5 1.56 12.8 MG-08-5 8334 27.00 29.20 2.20 32.4 1.72 13.3 MG-08-5 8335 29.20 31.40 2.20 31.9 1.38 16.4 MG-08-5 8336 31.40 33.50 2.10 29 1.95 17.1 MG-08-5 8337 33.50 35.60 2.10 30.1 3.03 18.2 MG-08-5 8338 35.60 38.20 2.60 22.1 1.72 18.2 MG-08-5 8339 38.20 40.20 2.00 33.6 0.62 4.39 MG-08-5 8340 40.20 42.30 2.10 35.5 0.42 4.1 MG-08-5 8341 42.30 44.40 2.10 34.4 0.45 3.26 MG-08-5 8342 44.40 46.40 2.00 32.6 0.76 7.28 MG-08-5 8343 46.40 48.40 2.00 35.2 0.51 5.18 MG-08-5 8344 48.40 50.40 2.00 35.2 0.64 5.16 MG-08-5 8345 50.40 52.20 1.80 34.2 5.18 15 MG-08-5 8346 52.20 54.40 2.20 37.7 0.72 4.33 MG-08-5 8347 54.40 56.60 2.20 36.2 0.68 3.64 MG-08-5 8348 56.60 58.80 2.20 35.3 0.82 3.94 MG-08-5 8349 58.80 61.00 2.20 36.6 0.76 3.26 MG-08-5 8350 61.00 63.20 2.20 37.1 1.63 5.75 MG-08-5 8351 63.20 65.50 2.30 34.9 0.89 9.83 MG-08-5 8352 65.50 67.80 2.30 33.6 1.11 6.16 MG-08-5 8353 67.80 70.00 2.20 30.7 4.4 20.6 MG-08-5 8354 70.00 72.20 2.20 30.5 3.59 22 MG-08-5 8355 72.20 74.30 2.10 31.2 2.12 18.4 MG-08-5 8356 74.30 76.40 2.10 35.8 0.89 5.26 MG-08-5 8357 76.40 78.50 2.10 35.1 0.48 5.52 MG-08-5 8358 78.50 80.60 2.10 34.3 0.41 4.65 MG-08-5 8359 80.60 82.70 2.10 37.7 0.91 5.62 MG-08-5 8360 82.70 84.80 2.10 36.3 0.91 4.7 MG-08-5 8361 84.80 87.00 2.20 37.8 0.58 3.52 MG-08-5 8362 87.00 89.20 2.20 38.5 0.83 3.86

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 47

Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % MG-08-5 8363 89.20 91.40 2.20 32.1 0.67 4.73 MG-08-5 8364 91.40 93.60 2.20 39.6 0.51 5.26 MG-08-5 8365 93.60 95.80 2.20 36.6 0.71 4.79 MG-08-6 8366 0.70 2.70 2.00 34.6 0.06 3.73 MG-08-6 8367 2.70 4.70 2.00 33.3 0.09 5.19 MG-08-6 8368 4.70 6.70 2.00 33.5 0.07 9.18 MG-08-6 8369 6.70 8.70 2.00 37 0.1 5.11 MG-08-6 8370 8.70 10.70 2.00 34.5 0.24 1.31 MG-08-6 8371 10.70 12.70 2.00 35.5 1.57 5.96 MG-08-6 8372 12.70 14.70 2.00 35.2 1.04 3.96 MG-08-6 8373 14.70 16.70 2.00 36 0.49 5.07 MG-08-6 8374 16.70 18.70 2.00 37.2 0.71 4.38 MG-08-6 8375 18.70 20.70 2.00 36.8 0.82 10.6 MG-08-6 8376 20.70 22.80 2.10 36.3 0.62 10.6 MG-08-6 8377 24.00 26.20 2.20 33.7 0.41 4.22 MG-08-6 8378 26.20 28.40 2.20 34 0.56 13.1 MG-08-6 8379 28.40 30.60 2.20 36.1 0.41 8.1 MG-08-6 8380 30.60 32.80 2.20 38.7 0.86 6.1 MG-08-6 8381 45.40 47.70 2.40 38.3 1.13 7.02 MG-08-6 8382 47.70 50.00 2.30 36.9 1.06 5.43 MG-08-6 8383 50.00 52.40 2.40 36.2 1.18 6.16 MG-08-6 8384 65.50 67.60 2.10 36.4 1.33 5.88 MG-08-6 8385 67.60 69.70 2.10 37.2 0.91 9.31 MG-08-6 8386 69.70 71.80 2.10 36 0.7 7.34 MG-08-6 8387 71.80 73.90 2.10 36.4 1.12 7.33 MG-08-6 8388 73.90 76.00 2.10 37.3 1.74 4.89 MG-08-6 8389 76.00 78.10 2.10 36.5 0.8 6.62 MG-08-6 8390 78.10 80.20 2.10 37.7 1.51 11.4 MG-08-6 8391 80.20 82.30 2.10 35.9 0.98 13.7 MG-08-6 8392 82.30 84.50 2.20 34 1.03 13.9 MG-08-6 8393 84.50 86.70 2.20 37.1 1.28 9.12 MG-08-6 8394 86.70 88.90 2.20 31.3 1.98 22.9 MG-08-6 8395 88.90 91.10 2.20 34.1 2.59 16.6 MG-08-7 8396 3.50 5.50 2.00 37 1 3.11 MG-08-7 8397 5.50 7.50 2.00 34.6 0.58 3.16 MG-08-7 8398 7.50 9.50 2.00 37.4 0.78 3.55 MG-08-7 8399 9.50 11.50 2.00 36.3 0.92 3.58 MG-08-7 8400 11.50 13.50 2.00 34.9 0.8 3.82 MG-08-7 143512 13.50 15.50 2.00 38.7 0.77 2.36 MG-08-7 143513 15.50 17.50 2.00 36.9 0.77 3.3 MG-08-7 143514 17.50 19.50 2.00 37.7 0.78 4.38 MG-08-7 143515 19.50 21.50 2.00 34.2 0.91 3.08 MG-08-7 143516 21.50 23.50 2.00 38.6 1.05 3.2 MG-08-7 143517 23.50 25.30 1.80 37.5 1.6 6.32 MG-08-7 143518 35.50 37.50 2.00 35.9 0.98 5.17 MG-08-7 143519 37.50 39.50 2.00 35.3 0.77 5.85 MG-08-7 143520 39.50 41.60 2.10 36.3 1.1 4.94 MG-08-7 143521 41.60 43.70 2.10 37.1 1.05 3.98 MG-08-7 143522 43.70 45.80 2.10 37.8 0.92 4.09

D.G. MacIntyre & Associates Ltd. July 22, 2014 Technical Report – Driftwood Creek Magnesite Property 48

Hole Sample No. From (m) To (m) Length MgO % Al2O3 % SiO2 % MgO* % MG-08-7 143523 45.80 47.90 2.10 34.3 1.16 4.08 MG-08-7 143524 47.90 50.00 2.10 36.5 1.22 4.32 MG-08-7 143525 50.00 52.10 2.10 35.9 1.24 8.03 MG-08-7 143526 52.10 54.20 2.10 35.9 1.54 7.39 MG-08-7 143527 54.20 56.30 2.10 37.4 1.9 4.73 MG-08-7 143528 56.30 58.20 1.90 31 1.64 13.9 MG-08-7 143529 58.20 60.50 2.30 35.8 0.88 5.46 MG-08-7 143530 60.50 62.80 2.30 35.6 0.85 5.47 MG-08-7 143531 62.80 65.10 2.30 38.2 0.79 4.8 MG-08-7 143532 65.10 67.40 2.30 37.9 0.96 6.79 MG-08-7 143533 67.40 69.70 2.30 35.7 0.76 9.85 MG-08-7 143534 69.70 72.00 2.30 37 1.15 6.23

Note: MgO* = “dead-burned” MgO analyses

D.G. MacIntyre & Associates Ltd. July 22, 2014