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1 GEOLOGICAL ASSESSMENT REPORT on TENURE 502307 (6 Cells) ASHCROFT GRANULE PLANT QUARRY PERMIT Q-3-825, MINING LEASE 367861 KAMLOOPS MINING DIVISION N.T.S

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1 GEOLOGICAL ASSESSMENT REPORT on TENURE 502307 (6 Cells) ASHCROFT GRANULE PLANT QUARRY PERMIT Q-3-825, MINING LEASE 367861 KAMLOOPS MINING DIVISION N.T.S 1 GEOLOGICAL ASSESSMENT REPORT on TENURE 502307 (6 Cells) ASHCROFT GRANULE PLANT QUARRY PERMIT Q-3-825, MINING LEASE 367861 KAMLOOPS MINING DIVISION N.T.S. 92I/ 11 (921.074) LONGITUDE 121”3’19”/ LATITUDE 50O42’58”N Gold Commissioriar’s Offi e,P.O. Box 1000 VANCOUVER, B.@,Odkarnes Lake Road ~~ . .-- Ashcroft, B.C. VOK 1AO Phone: 250-453-901 Fax: 250-453-90 J. T. Shearer, Phone: 60 E-mail: Consulting Geologist ,r- Quarry Supervisor #98-3550 June 15,2006 Work Completed March 1, 2006 to June 11,2006 TABLE OF CONTENTS LIST OF FIGURES and TABLES................................................................ ii ... SUMMARY .............................................................................................. 111 INTRODUCTION ........................................................................................ 1 LOCATION and ACCESS ............................................................................ 2 PROPERTY/LIST of CLAIMS ..................................................................... 2 REGIONAL GEOLOGY ............................................................................... 3 PROPERTYGEOLOGY Geology.......................................................................................... 4 Diamond Drilling Prior to 2006 ...................................................... 4 GEOLOGY of HIDDEN VALLEY 2006 CONCLUSIONS and RECOMMENDATIONS ................................................. 6 REFERENCES ........................................................................................... 7 APPENDICES Appendix I Statement of Qualifications .................................... 10 Appendix I1 Statement of Costs................................................. 11 1 LIST OF ILLUSTRATIONS and TABLES\ILLUSTRATIONS Following Paee... FIGURE 1 Location Map ........................................................................ 111 FIGURE 2 Site Map ................................................................................. 1 FIGURE 3 Claim Map .............................................................................. 2 FIGURE 4 Detail Site Map ....................................................................... 2 FIGURE 5 Regional Geology, 1:68,649 .................................................... 3 FIGURE 6 Orthophoto of Hidden Valley Proposed Dump .......................... 4 FIGURE 7 Hidden Valley Geology ............................................................ 4 FIGURE 8 Detail Geology of Hidden Valley .............................................. 5 TABLES Following TABLE I List of Claims ......................................................................... 2 11 SUMMARY The year 2002 marked the first year of continuous production at the Ashcroft Granule Plant under Quarry Permit Q-3-025. Production at the Granule Plant and Quarry of I.G. Machine &. Fibers began in September 200 1. The Plant is located approximately 3 km directly east of the town of Ashcroft, B.C. at an elevation of 762m (2500 ft). The quarry area was initially investigated by diamond drilling programs in 1997 and 1999. The plant was constructed in 2000 and 2001. The majority of rock at the quarry site consists of an interbedded sequence of Triassic- aged Nicola Group, highly welded andesitic to basaltic tuffs and lapilli tuffs. A similar roofing granule plant and quarry is operated by an associated company in Madoc, Ontario using "Trap" rock. Testing at the Madoc Laboratory determined that the Ashcroft rock would produce a very high quality roofing granule based on proprietary criteria including translucency, disintegration, oil absorption, hardness-abrasion index, rust potential, magnetic attraction, particle shape and calcite/carbonate content. The quarry has been designed based on standard mining parameters including rock lithology, overburden thickness, topography, environmental issues and BC mine regulations. The quarry has an open face quarry design with high walls along the west, south and east sides. The access ramp is along the south and west sides. The quarry design includes 1Om high benches with 8m wide catchment berms. The toe of each bench will extend 3m horizontally from the crest producing an interbench angle of 75" from the horizontal and a resulting overall slope of 46". Geological mapping was completed at the Hidden Valley Waste Dump site to better quantify the rock types in the area. M.Sc., P.Geo. Supervisor #98-3550 ... 111 0 500I 10001 15001 2000 m I. G. MACHINE & FIBERS LTD. ASHCROFT GRANULE PLANT LOCATION MAP SCALE as shown INTRODUCTION Production was continuous throughout the year 2002 to 2006. The Granule Plant of I.G. Machine & Fibers Ltd. started production in September 2001. The plant manufactures a variety of granule products including oiled, natural and a full array of different coloured granules. The granule products usually range from 0.6mm to 1.7mm in size. An application for a permit for the initial Mine Plan and Reclamation Program pursuant to the Mines Act RSBC 1996 C.293, dated August 12, 1998 and addendum dated February 4, 1999 was approved by the Ministry of Energy and Mines in early 1999 subsequent to a community open house on October 28, 1998 and December 1998. This original application was prepared by Clifton Associated Ltd. with supporting documents prepared by Water Resource Consultants Ltd. , Arcas Consulting Archaeologists Limited, Explotech Engineering Ltd., Cascade Environmental Resource Group, Polster Environmental Services and Talisman Land Resource Consultants Inc. A subsequent report entitled “Ashcroft Quarry Design” by O’Connor Associated Environmental Inc. by J. G. Agar, P.Eng. and W.R. Husak, P.Eng. was dated September 20900 and provides details for the year 2001. A more comprehensive Mine Plan 2002 was dated February 15, 2002 by J. T. Shearer, P.Geo. was submitted to document plans for 2002, work completed in 2001 and an outline of reserves and resources. Since September 200 1, the plant has refined company proprietary techniques to produce a variety of coloured products and have paid special attention to the monitoring of the placement and compaction of the waste portions (both filler and sand) in the experimental temporary surface waste dump northeast of the plant site. Results suggest a high degree of compaction is possible, which gives a stable waste pile (Bosdet, 2003). A similar roofing granule plant and quarry is operated by an associated company in Madoc, Ontario using “trap” rock. Testing at the Madoc laboratory has determined that the Ashcroft rock would produce a very high quality roofing granule. Initial production quality results at the Ashcroft facility confirm the high quality estimates of the Madoc lab scale tests. Qualities that define granule suitability are translucency, disintegration, oil absorption, W resistance, Hardness-Abrasion Index, rust potential, magnetic attraction, particle shape and calcite/ carbonate content. Reclamation has already started on hydroseeding the utility corridor, reseeding the overburden and topsoil stockpiles, weed management and growing of 550 Ponderosa Pines and other native plants in an onsite nursery. Hidden Valley is the site of the long term waste dump and geological work was performed to quantify the geological setting above the dump proper. Geological Assessment Report on 1 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant LOCATION and ACCESS The Ashcroft Quarry is located approximately 3 km east of the town of Ashcroft, British Columbia at an elevation of 762 ASL (2500 ft.). Figure 1 presents the location of the site. The quarry is reached by travelling south from Ashcroft on Highway 97C to the Barnes Lake Road. The access road to the quarry is located approximately 5 km east along the Barnes Lake Road. A processing plant and its associated infrastructure are located immediately east of the quarry. The climate in the region is semi-arid and the Plant-Quarry area is an open grassland with no trees. Climatic data from the Environment Canada station in Kamloops shows a mean daily temperature ranging from -6°C in January to 2 1°C in July. Temperature extremes range from -38°C in January to 4 1°C in July. Prevailing winds averaging 12 kph occur from the west in the spring and summer, and switch to the east in the fall and winter. Precipitation primarily falls as rain between March and October and snow the rest of the year. Precipitation rates range from a high of 30mm in December and January to a low of lOmm in March and April. Summer precipitation averages 25mm. Average annual precipitation is 256.6mm. TABLE I Claim Name Tenure # Cells Area Date Located Owner (ha) Hidden Valley Conv. 502307 6 120.656 Conversion I.G. Machine & Fibers MINERAL TITLE Assessment work was completed on the 6 cell claim tenure number 502307 covering an area of 122.731 ha as shown on Table 1 and Figure 3. The adjoining area is covered by the Mining Lease 367861. Leases are issued for a period of 25 years and are renewable. An annual surface area tax is payable each year. Mineral title is acquired in British Columbia via the Mineral Act and regulations, which require approved assessment work to be filed each year in the amount of $100 per unit per year for the first three years and then $200 per unit per year thereafter to keep the claim in good standing. Claims can be converted into mining leases upon a legal survey and a public consultation period. Under the present status of mineral claims in British Columbia, the consideration of industrial minerals requires careful designation of the products end use. An industrial
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