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Northeast Queensland, Australia NI 43-101 Report

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Northeast Queensland, Australia NI 43-101 Report Draft Only Houston Seattle Section 1.0: Iron Glenn Project: Northeast Queensland, Australia NI 43-101 Report for: Iron Glen Holdings Limited Southport, Queensland Australia By Michael D. Campbell, P.G., P.H. and Jeffrey D. King, P.G. I2M Associates, LLC Houston, Texas and Seattle, Washington February 9, 2011 Houston Seattle Section 2.0 Table of Contents Page 3.0 Summary………………………………………………… 1 4.0 Introduction ……………………..……………………… 2 4.1 Location of Property ………………………. 2 4.2 Scope of Work ……………………………… 3 4.3 Iron Glen Tenement ……………………….. 4 4.4 Units ………………………………………… 6 5.0 Reliance on Other Experts ……….…………................. 6 6.0 Property Description and Location ….………………… 8 6.1 General Description ……………………….. 8 6.2 Property Ownership and Financial Obligations ………………………………… 10 6.3 Current Royalties & Agreements on Land Access …………………………........... 11 6.4 Permitting ………………………………….. 15 6.5 Environmental Issues ………………………15 7.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography ….………….………. 16 7.1 Topography, Elevation, and Vegetation ...... 16 7.2 Accessibility to Properties …………………. 19 7.3 Local Resources ……………………………. 20 7.4 Climate and Seasonal Operations ……..….. 20 7.5 Available Infrastructure …………..……….. 23 8.0 History …………………………………….…………… 23 8.1 Previous Activities ………………...……….. 23 8.2 Previous Exploration Results ……………... 25 9.0 Geology …………………………………………………. 28 1810 Elmen Street, Houston, Texas 77019 Telephone: 713-807-0021 - Fax: 713-807-0985 E-mail: [email protected] – Website: http://www.I2MAssociates.com Page ii Houston Seattle 9.1 Regional Geology ……………………….….. 28 9.2 Local Geology ……………………………… 29 10.0 Deposit Types …………………………..……………… 32 10.1 Contact Metasomatic Deposits …………… 32 10.2 Magnetite as Gangue Mineral ……………. 33 11.0 Mineralization …………………………………………. 34 11.1 Type of Mineralization ……………………. 34 11.2 Magnetics Modeling for Resource Estimates 35 12.0 Exploration ……………………………………………. 37 12.1 Previous Surveys and Investigations ............ 37 12.2 Current Concepts ……………..……………. 43 13.0 Drilling Activities ……………………………. …………44 14.0 Sampling Method and Approach ……………………… 55 14.1 Drilling Method ……………………………. 55 14.2 Geological Logging ………………………… 56 15.0 Sample Preparation, Analyses, and Security ……………………………………………. 57 16.0 Sample Data Verification ………………………………58 17.0 Adjacent Properties (Tenements) ..…………………… 60 18.0 Mineral Processing and Metallurgical Testing …........ 61 18.1 Preliminary Characteristics ……………….. 61 18.2 Desirable Properties for Coal Washing …… 62 19.0 Mineral Resource and Mineral Reserve Estimates ……………………………………………….. 63 20.0 Other Relevant Data and Information ……………… 65 1810 Elmen Street, Houston, Texas 77019 Telephone: 713-807-0021 - Fax: 713-807-0985 E-mail: [email protected] – Website: http://www.I2MAssociates.com Page iii Houston Seattle 20.1 Iron Occurrences in Queensland ………….. 65 20.2 Northwest Queensland …………………….. 67 20.3 Northeast Queensland ……………………… 69 21.0 Interpretations and Conclusions …………………….… 75 21.1 Interpretations by Analogy ……………….. 75 21.2 Iron Glen Interpretations ………………….. 79 21.3 Conclusions ………………………………… 80 22.0 Recommendations ……………………………………… 81 22.1 Exploration Strategy …………………… 81 22.2 Development Strategy …………………. 82 23.0 References …………………………………..………...... 83 24.0 Certificate of Qualified Persons ……………………….. 90 25.0 Illustrations (Expanded Views) ………………………… 95 26.0 Appendices ………………………………………………119 Appendix I – Laboratory Data ………………………….120 Appendix II – Hole Logs – 2010 Drilling Program …….123 Appendix III – A. Curriculum Vitae of Authors …….. 157 Michael D. Campbell, P.G., P.H. ……. 158 Jeffrey D. King, P.G. …………………... 189 B. Contributing Personnel Thomas C. Sutton, Ph.D., P.G. …………. 119 M. David Campbell, P.G. ………………. 119 Figures Figure 1 - General Location of Iron Glen and Subject Tenement …. 4 Figure 2 - Iron Glen & Surrounding Tenements …………………… 5 1810 Elmen Street, Houston, Texas 77019 Telephone: 713-807-0021 - Fax: 713-807-0985 E-mail: [email protected] – Website: http://www.I2MAssociates.com Page iv Houston Seattle Figure 3 - Aerial View of Iron Glen Pit within EPM # 15654 . ………… 6 Figure 4 - Site Visit Personnel …………………………………………. 6 Figure 5 - Section of Topographic Sheet showing Iron Glen Tenement and Infrastructure (roads, railroad, power line, creeks, and the Mingela State Forest, etc) ……………………………….. 9 Figure 6 - Topography and Elevation, State Forest Boundaries, and Current Mining Development Lease in Iron Glen EPM ….. 18 Figure 7 - Mean Maximum Monthly Temperatures and Rainfall …… 21 Figure 8 - Average Daily Relative Humidity ………………………….. 22 Figure 9 - Mean Monthly Wind Speed & Mean Daily Solar Exposure .. 22 Figure 10 - Early Geological Mapping ……………………………….. 30 Figure 11 - Interpretative Geology by Terra Search (2010) …………… 31 Figure 12 - A – Original Magnetite B – Enhanced View w/ PS Vibrance +75 .. 35 Figure 13 - A – Original Magnetite B – Enhanced View w/ PS Vibrance +75.. 35 Figure 14 - Reduced to Pole (RTP) Image of the Combined Ground Magnetic Surveys …………………………………. 38 Figure 15 - Example Modeled Cross Section …………………………… 40 Figure 16 - Gold and Silver Soil Value …………………………………. 42 Figure 17 - Copper, Lead, and Zinc Values ……………………………. 43 Figure 18 - Molybdenum, Antimony, and Tungsten Values …………… 43 Figure 19 - Drill rig on site of IGRC002, looking south ……………….. 45 Figure 20 – Iron Glen Drilling 2010, Collar Locations & Image ………. 46 Figure 21 – Iron Glen Drilling 2010, Collar Locations & Magnetics …… 47 Figure 22 -A Example of Hole Logs w/ Minerals and MS ……………….. 52 Figure 22 -B Example of Hole Logs w/ Major Oxides & Elements ……… 53 Figure 22 -C Example of Hole Logs w/ Elemental Scans and Metals ……. 53 Figure 23 – Tonnages of Fe Skarn Deposits ……………………….......... 64 Figure 24 – Iron Grades in Fe Skarn Deposits …………………………. 65 1810 Elmen Street, Houston, Texas 77019 Telephone: 713-807-0021 - Fax: 713-807-0985 E-mail: [email protected] – Website: http://www.I2MAssociates.com Page v Houston Seattle Figure 25 – Mining Magnetite at Mount Ross, 2010 ……………………..71 Figure 26 – General Geology Mount Biggenden Mine …………………...72 Figure 27 – Mineralogical Evaluations – Paragenisis at Biggenden Mine...73 Figure 28 – Sample IGRC002 at 60-61 meter Depth …………………….. 75 Figure 29 – Iron Distribution and Selected Elements Plotted Against Sulphur in the Mineralized Zones Drilled to Date …………. 79 Tables Table 1 Rentals for Sub-Blocks Held ………………………………… 11 Table 2 Company Reports: Pre-2007 Exploration Activities ………. 24 Table 3 Iron, Copper, Silver & Sulphur Intercepts ………………… 49 Table 4 Zinc and Silver Intercepts …………………………………... 50 Table 5 Major Element Oxide for Magnetite Intercepts ……………. 51 Table 6 Magnetite Presence & Other Anomalous Metals …………... 54 Table 7 Inventory of Iron Glen Data Set Available ………………... 59 Table 8 Estimated Phase II Cost: Iron Glen Exploration ………….. 82 1810 Elmen Street, Houston, Texas 77019 Telephone: 713-807-0021 - Fax: 713-807-0985 E-mail: [email protected] – Website: http://www.I2MAssociates.com Page vi Draft Only Houston Seattle Section 3.0 Summary Iron Glen Holdings Limited (Iron Glen) is a Queensland-based company that controls EPM 15654, which is located approximately 40 km southwest of Townsville, Queensland. The Iron Glen tenement holds a permit for exploration through mid-2012, granted by the Queensland Government on the 24th May, 2007. The tenement currently consists of seven sub blocks, one was relinquished in May, 2010. The area of primary interest is near the center of the tenement, with a current focus on an area known as the Iron Glen Pit, abandoned since 1969. Since EPM# 15654 was granted on May 24, 2007, the tenement has had several holders beginning with Walter Doyle, followed by Australian Gold Holdings Limited. It was then transferred from Walter Doyle in 2010 to Iron Glen Holdings Limited. These title holders have conducted a variety of exploration programs that included soil sampling, rock-chip sampling and some geophysics. Over the past few years, Terra Search Pty Ltd. (Terra Search) has concentrated on geological and geophysical evaluations on the Iron Glen magnetite skarn deposit and surrounding area, which included researching previous exploration data and geological investigations, geological mapping, rock-chip and soil sampling, reprocessing of available aeromagnetics and satellite imagery data and of undertaking new ground-magnetics and geological mapping and associated sampling programs. A preliminary drilling program was completed in October, 2010, indicating that the magnetite unit known from reports of previous small-scale mining occurs at depth over an area larger than the existing pit. The magnetite encountered is of sufficient thickness and quality to be of potential interest commercially and is located in proximity to local infrastructure that would support a rapid start-up of any mining operations. Based on the drilling sampling, the quality of the magnetite appears to meet typical requirements, Houston Seattle especially since titanium, aluminum, and phosphorus are low. However, the available tonnage remains to be evaluated by additional drilling. We have reviewed the available geochemical data produced during earlier exploration and from the recent drilling program, including a preliminary petrographic report on samples from Iron Glen in context with data from deposits of similar characteristics in various deposits of the world that have been mined, and have concluded that the Iron Glen property has sufficient merit established by drilling to date to recommend
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