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 mineral is a rock or naturally occurring substance that can be mined and processed for its unique qualities and used for industrial purposes (as defined in the Mineral Tenure Act). It does not include “Quarry Resources”. Quarry Resources includes earth, soil, marl, peat, sand and gravel and rock, rip-rap and stone products that are used for construction purposes (as defined in the Land Act). Construction means the use of rock or other natural substances for roads, buildings, berms, breakwaters, runways, rip-rap and fills and includes crushed rock. Dimension stone means any rock or stone product that is cut or split on two or more sides, but does not include crushed rock.

I.G. Machine and Fibers obtained a Crownland Permit to produce quarry resources in 2002.

Geological Assessment Report on 2 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant CLAIM MAP Hidden Valley

Mineral Titles Layers MTO Mineral Titles Online Polygons ~ Placer AMineral Topographic Layers Roads 1 :2#K(~1 #OK) Gravel Road 1 Lane Gravel Road 1 Lane UIC Gravel Road 2 Lane Gravel Road 2 Lane U/C -Paved Road -Paved Road 1 Lane U/C ____PavedRoad 2 Lane -Paved Road 2 Lane U/C --Paved Road 2 or more Lanes -Paved Road 3 Lane Elevated -Paved Road 4 Lane Divided -Paved Road 4 Lane Divided UIC -Paved Road 4 Lane UIC -Paved Road 6 Lane

SCALE 1 : 68,649 w-- , I 1 0 1 2 3 MlES

REGIONAL GEOLOGY

The area around the Granule Plant occurs within the western border zone of the Guichon Creek Batholith, Figure 5, which is associated and comagmatic with Late Triassic Nicola Group volcanic rocks. These intrusive and volcanic rocks occur in a belt (Intermontaine Belt) that runs the length of the Cordillera. They are characterized by a tensional regime intermediate volcanism from an island arc tectonic environment.

Duffel1 and McTaggart (1952) describe the Nicola Group as follows:

Rocks of the Nicola Group are well exposed at the type locality in the adjoining Nicola map area east of Ashcroft area where they were recently restudied by W.E. Cockfield (I 948). In the type area they consist principally of volcanic rocks with which are associated minor amounts of limestone, argillite and conglomerate. The volcanic rocks may very largely be grouped under the general term greenstones, but include green, red or grey lavas with breccias, tuffs and agglomerates. The lavas are mostly andesites and basalts and vary fromfine-grained types to coarsely porphyritic rocks. In places thin bands of argillite, lenses of limestone and, more rarely, thin beds of conglomerate are present.

Rocks assigned to the Nicola Group outcrop mainly along or near Thompson River, from Spatsum to the eastern boundaty of the map area. The outcrops are not continuous, for the group is intruded by narrow bodies of granite, overlain by rocks of Jurassic Age at Ashcroft, and covered by Tertiary lavas at McAbee. East of Barnes Lake, small areas of Nicola rocks occur as roof pendants in the Guichon Creek Batholith.

Unconformably overlying the Nicola Group are the Jurassic-aged sediments of the Ashcroft Formation. The sediments are predominantly composed of argillite, sandstone, shale and conglomerate. Occasionally, thick limestone beds are found intercalated with the sediments.

Overlying all rock types are Eocene rocks of the Kamloops Group. This group is composed predominantly of basaltic flows and high level intrusions, which often exhibit columnar jointing. Post Eocene erosion has left these volcanic rocks exposed as outliers throughout the region.

The 1938 Minister of Mines Report mentions the Coronation Group of eight claims on Barnes Creek at an elevation of 1800 feet (550m) described (Duffel and McTaggart, 1952) as two narrow, easterly striking shears in Nicola Group Volcanics carrying sparse pyrite, sphalerite, galena and lesser chalcopyrite in a gangue of quartz and calcite. An adit, 65 feet long was completed.

Geological Assessment Report on 3 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant GEOLOGY MAP Hidden Valley P-

Mineral Tiles Layers I - MTO Mineral Titles Online Polygons Placer LMinerai I Topographic Layers Roads 1 20K (21 OOK) Gravel Road 1 Lane Gravel Road 1 Lane UIC Gravel Road 2 Lane Gravel Road 2 Lane UIC ;i -Paved Road -Paved Road 1 Lane UIC -Paved Road 2 Lane -Paved Road 2 Lane UIC -Paved Road 2 or more Lanes -Paved Road 3 Lane Elevated --Paved Road 4 Lane Divided --Paved Road 4 Lane Divided UIC -Paved Road 4 Lane U/C -Paved Road 6 Lane

SCALE 1 : 68,649

w-c3 t 3 1 0 1 2 3 MILES

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http://webmap.em.gov. bc.calrnapplace/maps/minpot/dep-find. MWF Saturday, October 07,2006 1058 AM PROPERTYGEOLOGY

Geology

Husak, 1998, 2000 and Shearer, 2002 gives a detailed account of the geology of the quarry site based on surface observations and the information from drill core. From a mining perspective there are only two types of rock in this quarry: rock suitable for roofing granules and rock unsuitable for roofing granules.

The geology of the site consists primarily of an interbedded sequence of highly welded volcanoclastic rocks (tuff and lapilli tuffs) of andesitic to dacitic composition. Tests at the Madoc Laboratory have tentatively confirmed that all of these rocks will make a high quality roofing granule. Initial production confirms the superior quality of the material for granule manufacture. The one rock type encountered during the drilling program, which is unsuitable, is at least tow of limestone lenses occurring in the northeast corner of the quarry. Limestone is an unsuitable material, as it will dissolve under partially acidic conditions commonly found in urban environments. The depositional environment was one in which the volcanic sequence originated in a volcanic arc with fringing carbonate reefs. Similar reef complexes noted by the author in the Nicola Group near Merritt and Princeton are of a very lensoid nature and commonly do not have continuity over any appreciable distance. Therefore the amount of limestone to be wasted is considerably less in the current Mine Plan than what was estimated by Husak and Agar (2000).

The other possible source of unsuitable rock is the altered rock found within the two fault zones interpreted to run through the quarry. Although this rock was initially good quality volcanic rock, the faulting action and associated hydrothermal fluid flow along the fault zone have altered the rock such that unsuitable minerals such as calcite (which dissolves under acidic conditions), chlorite, hematite and limonite (hydrated oxide minerals which are soft and have the ability to soak up large quantities of paint into their crystal structures) are very abundant. It is believed that the quarrying operations of blasting and crushing will reduce this soft rock to such fine particle sues that most of the fine material will be screened out before the colouring process. If, during production, it is found that this material is making it through the rock processing systems then these zones should also be wasted.

There are a few zones outside of the faults, which are also comprised of rocks that have abundant alteration minerals. These zones will likely also have to be wasted, however, final determination of their status should occur when these zones are exposed in the quarry face.

Diamond Drilling Prior to 2006

Diamond drilling was completed in 1997 and 1999; details are contained in Shearer, 2002. .

The clasts in the mafic lapilli tuff/breccia range from over 50% of the rock to less than ' 50% with the clasts being much smaller. Petrographic examination by Husak determined that the unit consists of abundant, irregular shaped, randomly oriented, lithic fragments of diverse types. The clasts range from lmm to 10cm. Th; matrix is . andesitic in composition. The unit is fairly well fractured although localized zones near faults are more highly fractured. The fractures are either carbonate or limonite coated. Alteration consists of small spotty patches of epidote with occasional carbonate. The unit is very hard but brittle.

Geological Assessment Report on 4 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant I.G. Machine & Fiber Ltd. MINE PLAN 2003 ASHCROFT GRANULE PLANT Orthophoto of Hidden Valley Proposed Dump SCALE: DATE: WORK BY: as shown March 15, 2002 J. T. Shearer I ?

DESCRIPTION

NORTHERN DITCH LAYOUT Petrographic examination of a sample of the mafk tuff determined the rock consists of a homogenous, non-foliated assemblage of plagioclase feldspar, quartz, hornblende and volcanic glass. A relatively high amount of magnetite occurs in the rock. On the basis of the mineral composition, this unit is best called an andesitic to basaltic ash tuff. The unit is fairly lightly fractured with carbonate coating some of the fractures. Twelve polished thinsections were cut from various examples of Ashcroft granules and quarry rock. All the Ashcroft specimens are altered fragmental andesitic-basalt and are dominated by the alteration assemblage commonly referred to as “Saussurite”. (Saussurite is a fine grained, high relief assemblage of zoisite, calcite, sericite and albite, which forms as a result of hydrothermal alteration of calcic plagioclase.) There is also an abundance of fine grained massive sphene.

The magnetite content is relatively uniformly distributed in the Ashcroft specimens at about 8% to 10% level of abundance. The assays of FeO3 content of the Ashcroft rocks and granules also supports the observation that the magnetite content is in the 8%- 10% range.

A minor amount of dacitic crystal tuff (approximately 7m) was encountered in drill hole ASH97-8. The dacitic crystal tuff consists of fine grained crystals in an extremely fine grained matrix.

Geological m pping was completed in the Hidden Valley are 2006 as plotted on Figuresv & 6 Most of the outcrops are exposed in the llies and along the excavated diversion structure. The main rock type is Nicola volcanoclastics. Minor amount of Tertiary basalt was observed on local promontories.

Geological Assessment Report on 5 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant

CONCLUSIONS and RECOMMENDATIONS

The Ashcroft Quarry and Granule Plant has a yearly production of about 420,000 tonnes. Using a conservative 40% waste factor this rate gives approximately 250,000 . tonnes of various granule products per year.

Geological mapping completed in 2006 shows that the majority of outcrops are Nicola ., Group volcanoclastics which have been hornfelsed by the nearby Guichon Batholith. Minor Tertiary basalt was noted on local mromontories..

Resp ctf y submitted,

~~ .1 Sh arer, .Sc., P.Geo., FCIM, FSEG (3;~;2;;::28-3550

Geological Assessment Report on 6 June 15, 2006 Tenure 502307 (6 cells) Ashcroft Granule Plant .. 13.0 REFERENCES

Bosdet, B. and Reid, G., 2001: Stage 1 Geotechnical Assessment for the Proposed Roofing Granule Plant Waste Dump, Ashcroft, B.C. by Golders Associates Ltd. June 15, 2001. 7pp.

Bosdet, B. et. al, 2002: Long Term Conceptual Design of Waste Gully Dump in Progress to be Attached to Present Report by Golders Associates Ltd.

British Columbia Mine Waste Rock Pile Research Committee, 199 1: Mined Rock and Overburden Piles Investigation and Design Manual - Interim Guidelines, May 199 1.

Brolly, R., 1998: Ashcroft Roofing Granule Quarry, Archaeological Impact Assessment for I. G. Machine and Fibers Ltd. by Arcas Consulting Archeologists Ltd., October 1998.

Bukkos, A., 2001: Cross Section Report, Ashcroft Rock Quarry, I. G. Machine and Fibers Ltd., Volume Report.

Christie, Paul A., 1999: Progress Report, Reclamation/Mitigation Planning and Construction for Ashcroft Roofing Granule Quarry Project, I. G. Machine and Fibers Ltd., by Talisman Land Resource Consultants Inc., December 3 1, 1999.

2001: Letter Report to Land Commission Dated October 3 1, 200 1, 4pp.

Christie, Paul A. and Huxley, David, 1999: Initial Agricultural Assessment for Proposed Roofing Granule Quarry, Ashcroft B.C. for I. G. Machine and Fibers Ltd., by Talisman Land Resource Consultants Inc., March 16, 1999. (Range Mitigation Report)

Cockfield, W. E., 1948: Geology and Mineral Deposits of Nicola Map-Area, B.C., Geological Survey of Canada, Memoir 249, 164pp.

Duffell, S. and McTaggart, K. C., 1952: Ashcroft Map-Area, British Columbia, Geological Survey of Canada, Memoir 292, 122pp.

Hritzuk, K., Yoshida, R. T. and Husak, W. K., 1999: Addendum to Application for a Permit Approving the Mine Plan and Reclamation Program Pursuant to the Mines Act R.S.B.C. 1996, C.293, Proposed Roofing Granule Quarry Ashcroft, British Columbia, for I. G. Machine and Fibers Ltd., by Clifton Associates Ltd., February 4, 1999.

Husak, W. K., 1997 Detail Site Investigation, Proposed Roofing Granule Quarry, Ashcroft, B. C., for IKO, December 22, 1997.

Geological Assessment Report on 7 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant 1998a: Diamond drill Assessment Report on the Ministry of Mines Assessment Report 25484, 72pp.

1998b: Application for a Mine Development Certificate, Proposed Roofing Granule Quarry; Ashcroft, British Columbia, April 17, 1998.

1998c: Application for a Mine Development Certificate, Proposed Roofing Granule Quarry; Ashcroft, British Columbia was submitted along with a Notice of Work and Reclamation Program on a Sand and Gravel and/or Quarry Operation on August 12, 1998.

2000: Geological Report, Ashcroft Roofing Granule Quarry, Ashcroft, B.C. for I. G. Machine and Fibers Ltd., by Clifton Associates Ltd., dated June 8, 2000, 19pp.

Husak, W. K. and Agar, J. G., 2000: Ashcroft Quarry Design Report for I. G. Machine and Fibers Ltd., by O’Connor Associates Environmental Inc. , dated September 2000, 1lpp.

Husak, W. K., Agar, J. G., Christie, Paul A. and McQueen, Don, 2001: Application for a Temporary Waste Dump Permit Design Report, Ashcroft Quarry and Roofing Granule Project, O’Connor and Talisman, April 16, 200 1.

Inglis, D. and McNally, C., 2000: Geotechnical Explorations, Colouring Plant and Tertiary Plant Tank Farms, Ashcroft B.C., for I. G. Machine and Fibers Ltd., by Terra Engineering Ltd., May 8, 2000.

Kelly, A. J. and Kent, D. D., 2000: Air Dispersion Modelling, Ashcroft Roofing Granular Processing Plant, I.G. Machine & Fibers Ltd., November 10, 2000, Clifton Associates Ltd.

McMillan, W. J., 1985: Geology and Ore Deposits of the Highland Valley Carnp, Geological Association of Canada, Mineral Deposits Division, Field Guide and Reference Manual Series, Number 1, 121pp.

Rice, H. M. A., 1947: Geology and Mineral Deposits of Princeton Map-area, B.C., Geological Survey of Canada, Memoir 243.

Shearer, J. T., 1999: Mine Plan, Slesse Limestone Project, Report for I. G. Machine and Fibers, submitted to Mines Department.

2001: Mine Plan, Apple Bay Chalky Geyserite Deposit Report for Homegold Resources Ltd. and Tilbury Cement.

2002: Mine Plan 2002, Ashcroft Granule Plant (with notes on Reserves and Resources) for I.G. Machine & Fibers Ltd., dated February 15, 2002. Geological Assessment Report on 8 June 15, 2006 Tenure 502307 (6 cells) Ashcroft Granule Plant Yoshida, R. T. andBrown, D. S., 2000: Interim Geotechnical Report, Roofing Granule Plant Site, Ashcroft, B.C., I. G. Machine and Fibers Ltd. February 22, 2000.

Geological Assessment Report on 9 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant APPENDIX I

STATEMENT of QUALIFICATIONS

June 15,2006 Appendix I

STATEMENT of QUALIFICATIONS

I, JOHAN T. SHEARER, of 3572 Hamilton Street, in the City of Port Coquitlam, in the Province of British Columbia, do hereby certlfy:

1. I am a graduate of the University of British Columbia (B.Sc., 1973) in Honours Geology, and the University of London, Imperial College (M.Sc., 1977).

2. I have over 30 years experience in exploration for base and precious metals and industrial mineral commodities in the Cordillera of Western North America with such companies as McIntyre Mines Ltd., J. C. Stephen Explorations Ltd., Carolin Mines Ltd. and TRM Engineering Ltd.

3. I am a fellow in good standing of the Geological Association of Canada (Fellow No. F439) and I am a member in good standing with the Association of Professional Engineers and Geoscientists of British Columbia (Member No. 19,279) and a member of the CIMM and SEG (Society of Economic Geologists, Fellow #723766).

4. I am an independent consulting geologist employed since December 1986 by Homegold Resources Ltd. at #5-2330 Tyner St., Port Coquitlam, B.C.

5. I am the author of the present report entitled “Geological Assessment Report on Tenure 502307 Ashcroft Granule Plant, Kamloops Mining Division” dated June 15, 2006.

6. I have visited the property on August 7, 2001 and thereafter on a regular weekly or bi- weekly basis up to the present, during which development and pioneer production occurred. I have carried out mapping and sample collection on Tenure 502307 on April 6, May 15 and June 2, 2006 and am familiar with the regional geology and geology of nearby properties. I have become familiar with the previous work conducted on the I. G. Ashcroft Granule Quarry by examining in detail the available reports and maps and have discussed previous work with persons knowledgeable of the area.

M.Sc., F.G.A.C., P.Geo. Supervisor #98-3 5 5 0

Geological Assessment Report on 10 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant APPENDIX I1

STATEMENT of COSTS

June 15,2006 Appendix I1

STATEMENT of COSTS HIDDEN VALLEY CLAIM

Wages 2% Benefits J. Shearer, Geological Mapping, 3 days @ $500, $1,500.00 April 6, May 15, June 2,2006 Excavator Work on Trenching (North Diversion, Cantex 4,000.00 Contractors) Prospecting, 2 days 1,000.00 Map Prep and Drafting (Autocad) 600.00 Report Preparation 1,500.00 $8,600.00

n

Geological Assessment Report on 11 June 15,2006 Tenure 502307 (6 cells) Ashcroft Granule Plant