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Geological Report REPORT ON THE 2010 EXPLORATION PROGRAM JULIENNE LAKE IRON DEPOSIT, WESTERN LABRADOR, NEWFOUNDLAND & LABRADOR, VOLUME I OF IV FOR DEPARTMENT OF NATURAL RESOURCES GOVERNMENT OF NEWFOUNDLAND & LABRADOR VOLUME I REPORT & APPENDICES July 24, 2012 Howard Coates, M.Sc., P.Geo. Toronto, Ontario, Canada MPH Reference: C-2334 WITH CONTRIBUTIONS FROM P&E MINING CONSULTANTS INC. & ROCHE LTD MPH Consulting Limited JULIENNE LAKE IRON DEPOSIT, NL TABLE OF CONTENTS VOLUME I SUMMARY...................................................................................................................................... i 1.0 INTRODUCTION.......................................................................................................... 1-1 1.1. Authorization and Terms of Reference ..................................................................... 1-2 1.2. Qualifications of MPH and Authors .......................................................................... 1-2 1.3. Scope of Work and Sources of Information ............................................................. 1-4 2.0 RELIANCE ON OTHER EXPERTS........................................................................... 2-1 3.0 PROPERTY DESCRIPTION AND LOCATION ...................................................... 3-1 4.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ..................................................................................................................... 4-1 5.0 HISTORY ....................................................................................................................... 5-1 5.1. General Background ................................................................................................... 5-1 5.2. The Julienne Lake Area .............................................................................................. 5-3 6.0 GEOLOGICAL SETTING ........................................................................................... 6-1 6.1. Paleotectonic Setting and Temporal Range .............................................................. 6-1 6.2. Cretaceous and Younger Geological Units of the Labrador Trough ..................... 6-3 6.3. Regional Geology Wabush Lake Region ................................................................... 6-5 6.4. Property Geology, Julienne Lake EML .................................................................... 6-8 7.0 DEPOSIT TYPES .......................................................................................................... 7-1 7.1. Lake Superior-type Iron Formation Descriptive Model ......................................... 7-1 8.0 MINERALIZATION ..................................................................................................... 8-1 9.0 EXPLORATION ............................................................................................................ 9-1 9.1. Historical Exploration Work Nalco/Canadian Javelin (1953-1966) ....................... 9-1 9.2. 2010 Exploration Program ......................................................................................... 9-3 10.0 DRILLING AND SURFACE TRENCHING ............................................................ 10-1 10.1. Nature and Extent of Work .................................................................................. 10-1 10.2. Historical Drilling and Test Pits, Canadian Javelin, 1957-1963........................ 10-1 Historical Javelin Drilling and Test Pits. ............................................................................. 10-2 Drilling Database Used For Historic Resource Estimates .................................................. 10-5 10.3. 2010 Drilling and Mechanical Trenching Program ............................................ 10-5 11.0 SAMPLING METHOD AND APPROACH ............................................................. 11-1 11.1. Historical Canadian Javelin Drill Core Samples ................................................ 11-1 11.2. Historical Canadian Javelin Surface Bulk Samples ........................................... 11-1 11.3. 2010 Drill Core Samples........................................................................................ 11-2 11.4. 2010 Trench Samples............................................................................................. 11-3 MPH Consulting Limited JULIENNE LAKE IRON DEPOSIT, NL 11.5. 2010 Drill Core Coarse Reject Duplicate Samples ............................................. 11-3 12.0 SAMPLE PREPARATION, ANALYSES AND SECURITY .................................. 12-1 12.1. Historical Canadian Javelin Core and Rock Samples ....................................... 12-1 12.2. 2010 Routine Core and Rock Samples, Actlabs .................................................. 12-1 12.3. Referee Core Samples, AGAT Laboratories ....................................................... 12-4 12.4. Dry Bulk Density Determinations ........................................................................ 12-5 12.5. Security ................................................................................................................... 12-6 13.0 DATA VERIFICATION ............................................................................................. 13-1 13.1. Historical Field Duplicate Sample Data Analysis ............................................... 13-1 13.2. Verification of Historical Work Sites................................................................... 13-4 13.3. 2010 Drilling and Trench Sampling Program .................................................... 13-4 14.0 ADJACENT PROPERTIES ....................................................................................... 14-1 14.1. Iron Ore Company of Canada, Carol Project .................................................... 14-1 14.2. Wabush Mines, Scully Mine ................................................................................. 14-2 14.3. ArcelorMittal Mines Canada, Mont Wright and Fire Lake Mines, Quebec ... 14-2 14.4. Consolidated Thompson Iron Mines Limited, Bloom Lake Mine, Quebec ..... 14-3 14.5. Other Labrador Trough Advanced Iron Ore Projects ...................................... 14-3 14.6. Adjoining Mineral Claims .................................................................................... 14-3 15.0 MINERAL PROCESSING AND METALLURGICAL TESTING ....................... 15-1 15.1. Historical Canadian Javelin Studies .................................................................... 15-1 15.2. 2010 Ore Characterization and Beneficiation Studies ....................................... 15-4 16.0 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES ................... 16-1 16.1. Historical Javelin Resource Estimates ................................................................. 16-1 16.2. MPH Julienne Lake Iron Deposit Historical Resource Audit, January 2010. 16-3 16.3. Current Resource Estimation, March 2011. ....................................................... 16-6 17.0 POTENTIAL OPEN PIT MINING & PROCESSING OPERATIONS ................. 17-1 17.1. Potential Open Pit Mine ........................................................................................ 17-1 17.2. Potentially Mineable Portion of the Mineral resources ..................................... 17-4 17.3. Development and Production Schedule ............................................................... 17-4 17.4. Conceptual Processing Plant ................................................................................ 17-5 17.5. Other Possible Mining Scenarios ......................................................................... 17-6 18.0 RECOVERABILITY ................................................................................................... 18-1 19.0 MARKETS ................................................................................................................... 19-1 19.1. The Iron Ore market ............................................................................................. 19-1 19.2. Potential Marketability of Julienne Lake Iron Deposit Products ..................... 19-6 20.0 CONTRACTS .............................................................................................................. 20-1 21.0 ENVIRONMENTAL CONSIDERATIONS .............................................................. 21-1 22.0 INTERPRETATION AND CONCLUSIONS ........................................................... 22-1 MPH Consulting Limited JULIENNE LAKE IRON DEPOSIT, NL 23.0 RECOMMENDATIONS ............................................................................................. 23-1 24.0 REFERENCES ............................................................................................................. 24-1 LIST OF TABLES Table 5-1: Julienne Lake and Wabush, 1956 Surface Sampling Results ............................. 5-4 Table 5-2: Julienne Lake Diamond Historical Drill Hole Summary .................................... 5-5 Table 5-3: Preliminary Capital & Operating Cost Estimates, 1962 MOD ........................... 5-7 Table 5-4: 1970 MOD Capex and Opex Estimates, Julienne/Star-Okeefe Iron Project ..... 5-9 Table 5-5: Western Labrador Undeveloped Iron Ore Prospects 1980 ............................... 5-10 Table 8-1: Historical Iron and Deleterious Element Empirical Averages ............................ 8-1 Table 8-2: 2010 Diamond Drilling Intersections Analytical Results Summary ................... 8-2 Table 10-1: 1957 Drilling Program Core Sizes.....................................................................
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