CARACLE CREEK INTERNATIONAL CONSULTING INC. Zsuzsanna Magyarosi, Ph.D., P.Geo.

Transcription

1 SUMMARY REPORT MAGPIE PROPERTY Leclaire Township, Ontario, Canada ESSAR STEEL ALGOMA INC. 105 West Street, Sault Ste. Marie, Ontario, Canada P6A 7B4 Date: March 13, 2013 Prepared By: CARACLE CREEK INTERNATIONAL CONSULTING INC. Zsuzsanna Magyarosi, Ph.D., P.Geo.

2 Magpie Property, Leclaire Township, Ontario, Canada 1.0 HIGHLIGHTS Essar s Magpie Property consists of a ~117 ha area covering the Magpie Iron Range and is road accessible from Wawa. The Property covers a strike of ~640 m of iron formation with a width between 12 and 18 m and is composed mostly of chert and siderite with small amounts of magnetite. It was mined intermittently between 1911 and 1924 and the last exploration in 1951 to 1953 with the drilling of four drill holes. Reserves at the Magpie Mine were last estimated in 1917 at 634,900 tons. An average of 157 samples from the Magpie Mine returned 36.79% Fe, 5.7% SiO 2, 0.78% S, 0.012% P, and 2 to 3% Mn (Shklanka, 1968). The last exploration drilling returned ~4.6 m of 43.37% Fe, 9.66% S and 16.05% Si at ~274 m vertical depth. There are several iron ranges within 5 km of the Property boundary that are connected or merge into one another forming an arcuate belt. There are also two gold, silver and lead occurrences less 1 km from the Property hosted in veins, and a diamond occurrence 2 km from the Property. No modern exploration on the Property. No exploration for anything other than iron. 2.0 LOCATION AND TENURE The Magpie Property is located approximately 25 km north-northeast of Wawa, northeastern Ontario, in Leclaire Township. The approximate center of the Property in UTM coordinates is: m E, m N, Zone 16, NAD 83 and in geographic coordinates: W, N. The Magpie Property consists of nine (9) freehold patents totaling ha (Table 2-1, Figure 2-1). Essar holds 100% of both surface and mining rights on the patents. The patents have no expiry date and the only obligation is to pay land tax on them. All patents are subject to reservations in Crown Grant. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 1

3 Magpie Property, Leclaire Township, Ontario, Canada Table 2-1 Essar s tenure for the Magpie Property MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name JL62 (SSM1042) LT LECLAIRE S&MR* Magpie JL63 (SSM1045) LT LECLAIRE S&MR Magpie JL LT LECLAIRE S&MR Magpie JL LT LECLAIRE S&MR Magpie JL LT LECLAIRE S&MR Magpie JL67 (SSM1047) LT LECLAIRE S&MR Magpie JL68 (SSM1228) LT LECLAIRE S&MR Magpie JL69 (SSM1229) LT LECLAIRE S&MR Magpie JL LT LECLAIRE S&MR Magpie Total *S&MR = surface and mining rights March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 2

4 Magpie Property, Leclaire Township, Ontario, Canada Figure 2-1 Tenure map for the Magpie Property 3.0 ACCESS AND INFRASTRUCTURE The Magpie Property can be accessed by road following the Trans Canada Hwy. north from Wawa for ~34 km, then following a network of smaller roads to the east for an additional ~12 km (MNDM MDI). The Property can also be accessed from the town Magpie through a network of smaller roads and a trail. The nearest airport is in Wawa and the closest railway track is approximately 10 km south-southeast of the Property. The town of Wawa has restaurants, hotels, hospital, and Ontario Provincial Police Station. The town of Wawa could supply most of the needs of an exploration program at Magpie. Wawa has an urban March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 3

5 Magpie Property, Leclaire Township, Ontario, Canada population of 2,634 people in 2011 (Statistics Canada: EXPLORATION HISTORY Exploration on the Property started in the early 1900 s by Lake Superior Corp. (Algoma) and it concentrated on iron. The Magpie mine operated intermittently between 1911 and There is no record on any exploration on the Magpie Property since Table 4-1 summarizes the exploration history on the Property. Table 4-1 Summary of exploration on the Magpie Property Year Company Source of data Type of work Results Lake Superior Corp./Algoma Sage (1993), Iron Ore Committee (1924, p.160) trenching, stripping, testpitting, diamond drilling, deposit consists of siderite, some portions altered to magnetite Lake Superior Corp./Algoma 1914 Lake Superior Corp./Algoma Lake Superior Corp./Algoma 1951 Jalore Mining Sage (1993), Iron Ore Committee (1924, p.160) Sage (1993), Iron Ore Committee (1924, p.160) Sage (1993), Iron Ore Committee (1924, p.160) sinking of a shaft erection of a roasting plant new roasting plant mining Sage (1993) detailed geological Company Ltd. mapping Algoma Sage (1993) 4 drill holes totaling ~1680 m iron content ~35%, low S content, operation of roasting plant mine closed due to low iron prices approximately 1.5 million tons of ore were mined no public record of any results best intersection was ~4.6 m of 43.37% Fe, 9.66% S and 16.05% Si at ~274 m vertical depth 5.0 GEOLOGY The Magpie Property occurs within the Wawa Subprovince of the Superior Providence. The Wawa Subprovince is an aggregation of Archean greenstone belts and granitoid plutons (Williams et al., 1991). The greenstone belts are composed of metamorphosed komatiite, basalt, dacite and rhyolite and associated metasedimentary rocks dispersed in a sea of granitoid rocks. It is composed of two linear greenstone belts: one along its northern border with the Quetico Subprovince and another in the Mishibishu-Michipicoten-Gamitagama area. The Magpie Property is located within the Michipicoten greenstone belt, which is approximately 140 km long and reaches a maximum width of about 45 km (Williams et al., 1991). Regional mapping delineated March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 4

6 Magpie Property, Leclaire Township, Ontario, Canada three discreet episodes of volcanism: the Hawk assemblage, the Wawa assemblage and the Catfish assemblage. The iron formation on the Magpie Property is located within intermediate to felsic volcanic rocks of the Wawa assemblage (2.75 Ga) (Figure 5-1). The rocks overlying the iron formation are composed of chloritic schist that grades into intermediate metavolcanic rocks. A distinct silicified volcanic breccia unit underlies the iron formation. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 5

7 Magpie Property, Leclaire Township, Ontario, Canada Figure 5-1 Local geology map for the Magpie Property (modified from MRD126) 6.0 MINERALIZATION The Magpie Property covers approximately 2 km strike length of the Magpie Iron Range that extends from the Iron Knob at the east end, where it bends sharply and becomes the Alice Iron Range (Sage, 1993, MNDM MDI). The northwest end of the iron range extends just west of a diabase dike that cuts the iron formation. Smaller segments of iron formation occur to the northwest. The Magpie and Alice iron ranges may define a minor fold. The Magpie Iron Range consists of almost entirely carbonate (siderite) facies iron formation, or its metamorphosed equivalent, which is the bottom facies of the typical Michipicoten-type iron formation (Sage, 1993). The upper sulphide, chert, magnetite and graphite facies are missing (MNDM MDI). The March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 6

8 Magpie Property, Leclaire Township, Ontario, Canada Magpie Iron Range has a strike length of approximately 2,100 feet (~640 m) and a width between 40 (~12 m) and 60 feet (~18 m). The central portion of the Iron Range contains the most amount of siderite and the least amount of magnetite. The presence of magnetite decreases the value of the ore. The Magpie Mine operated intermittently between 1911 and The main product was siderite, but the exact amount of siderite produced from the mine is not known. Sage (1993) estimated that the amount of raw siderite probably did not exceed 1.5 million tons. Reserves at the Magpie Mine were last estimated in 1917 at 634,900 tons. The sintered product after roasting graded 50.10% Fe, 9.14% Si and 2.74% Mn (MNDM MDI). An average of 157 samples from the Magpie Mine returned 36.79% Fe, 5.7% SiO 2, 0.78% S, 0.012% P, and 2 to 3% Mn (Shklanka, 1968). Between 1951 and 1953 one drill hole by Algoma intersected ~4.6 m of 43.37% Fe, 9.66% S and 16.05% Si at ~274 m vertical depth. 7.0 ADJACENT PROPERTIES The adjacent properties are patents and there is no public information on any exploration on them. There are several iron ranges within 5 km of the Property boundaries including the Alice and Reynolds Lake iron ranges to the south-southeast, the Godon and Finger Lake iron ranges to the north-northwest, and the South Evans Creek Iron Range to the northeast (MNDM MDI) (Figure 5-1). All of these iron ranges are interpreted to be part of one iron formation forming an arcuate belt or merge into one another (MRD 126). Most of these iron ranges are oxide facies composed of chert and magnetite with minor siderite, pyrite and pyrrhotite, except the Godon Lake that consists of chert and siderite, similar to Magpie (Sage, 1993 and MNDM MDI). Other occurrences include the discretionary mineral occurrences Bingham-Holliday Showing North (Au, Ag, Pb) (MNDM MDI42C02NE00120) and Bingham-Holliday Showing South (Pb, Ag, Au) (MNDM MDI42C02NE00121) located 0.85 km and 0.63 km east-northeast of the Property. Mineralization is hosted in quartz ± carbonate veins. The Magpie Diamond Property is located ~2 km southeast of the Property and it is hosted in mafic to intermediate breccias with clasts of carbonate, mafic and gneissic country rocks (MNDM MDI42C02NE00136). Eight microdiamonds were found in a kg sample. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 7

9 Magpie Property, Leclaire Township, Ontario, Canada 8.0 REFERENCES MNDM MDI: Ministry of Northern Development and Mines Mineral Deposit Inventory. Ontario Geological Survey (2011): 1: scale bedrock geology of Ontario; Ontario Geological Survey, Miscellaneous Release---Data 126-Revision 1. Ontario Iron Ore Committee (1924): Magpie Mine, Report of the Ontario Iron Ore Committee with Appendix 1923, 306p. Sage, R.P. (1993): Geology of Abotossaway, Corbiere, Leclaire and Musquash townships and part of Dunphy Township, District of Algoma; Ontario Geological Survey, Open File Report 5587, 308p. Shklanka, R. (1968): Iron Deposits of Ontario; Ontario Department of Mines, Mineral Resoruces Circular No. 11, 489p. Williams, H.R., Stott, G.M., Heather, T.L., Muir, T.L. and Sage, R.P. (1991): Wawa Subprovince, Chapter 12, in Geology of Ontario, Ontario Geological Survey, Special Volume 4, Part 1, p March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 8

10 April 23, 2013 McAuley Property Zsuzsanna Magyarosi, Ph.D., P. Geo. Location and Access Essar s McAuley Property consists of four (4) patents covering ha ( Table 1 and Figure 1). It is located approximately 20 km north-northeast of Sault Ste. Marie, Ontario. The nearest international airport is in Sault Ste. Marie, Ontario. The access from Sault Ste. Marie is by 30 km of paved road and 3 km of unpaved road following the Trans-Canada highway to north and Road 556 to east, towards Searchmont ski resort. The property has bush road access and PIN surrounds a small lake. The small lake is owned by the Crown. Essar owns the mining and surface rights of the patents. The patents have no expiry date and the only obligation is to pay land tax on them. The patent is subject to reservations in Crown Grant. Table 1 Tenure of Essar s McAuley Property MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Area (ha) Name Rights SSM LT AWERES McAuley S&MR* SSM LT AWERES McAuley S&MR SSM LT JARVIS McAuley S&MR SSM LT JARVIS McAuley S&MR Total *S&MR=Surface and mining rights CARACLE CREEK INTERNATIONAL CONSULTING INC.

11 Page 2 of 2 Figure 1 Land tenure map of Essar s McAuley Property Geology The McAuley Property is underlain by an Archean granitic intrusion in the east and Proterozoic rocks of the Huronian Supergroup in the west. The Proterozoic rocks are composed of mafic to felsic metavolcanic rocks of the Thessalon Formation and clastic sediments of the Livingstone Creek and Aweres formations. The McAuley iron occurrence is located in the centre of the property and consists of titaniferous magnetite in Proterozoic rocks. One sample returned values of 39% Fe, 5.4% SiO 2, 0.37% S and 4.25% TiO 2 (MNDM Mineral Deposit Inventory). CARACLE CREEK INTERNATIONAL CONSULTING INC. April 23, 2013

12 March 22, 2013 Essar Algoma Steel Inc. Nipigon Forest Reserve Property Zsuzsanna Magyarosi, Ph.D., P. Geo. Essar s Nipigon Forest Reserve Property consists of one patent covering ha ( Table 1 and Figure 1). It is located approximately 16 km northeast of Beardmore, Ontario, and has road access. The nearest international airport is in Thunder Bay, Ontario, which is approximately 250 km from the Property. Essar owns the mining and surface rights of the patent. The patent has no expiry date and the only obligation is to pay land tax on it. The amount of mining land tax in 2012 was $ CDN. The patent is subject to reservations in Crown Grant. Table 1 Tenure of Essar s Nipigon Forest Reserve Property MNDMF patent number Land Registry Pin No. MPAC Roll Number HF LT NA IRWIN Township Area (ha) Name Rights NIPIGON FOREST RESERVE S&MR* *S&MR = surface and mining rights Figure 1 Land tenure map of Essar s Nipigon Forest Reserve Property CARACLE CREEK INTERNATIONAL CONSULTING INC.

13 SUMMARY REPORT WAWA MAIN SITE AND LOONSKIN LAKE PROPERTIES Wawa, Ontario, Canada ESSAR STEEL ALGOMA INC. 105 West Street, Sault Ste. Marie, Ontario, Canada P6A 7B4 Date: March 13, 2013 Prepared By: CARACLE CREEK INTERNATIONAL CONSULTING INC. Stephen Wetherup, B.Sc., P. Geo. Zsuzsanna Magyarosi, Ph.D., P.Geo. Julie Selway, Ph.D., P.Geo.

14 1.0 HIGHLIGHTS A large land package (~3450 ha) consisting of 206 mineral patents and 7 leases covering three Michipicoten Iron Ranges and more than 7.8 km of iron formation strike length, The Property borders the Wawa, Ontario town limits and has direct rail, power and highway access as well as a network of gravel roads throughout, Two former operating iron mines on the Property, Helen/MacLeod and Sir James Mines, with remaining historical siderite resources of ~ 89 Mt, and open to depth. Johnson Iron Range which lies between the Helen/MacLeod and Sir James Mines has not been mined. Siderite portion of the iron formation has been the main focus of previous exploration and mining yet significant iron remains in other styles of iron mineralization (e.g., hematite and magnetite). Extensive drilling and mining data available. 2.0 LOCATION AND TENURE The Wawa Properties are comprised of two separate claim blocks; one called the Wawa Property and the second the Loonskin Lake Property (Figure 2-1 and Figure 2-2). The Wawa Property is located immediately to the northeast of Wawa, northeastern Ontario, in McMurray, Chabanel and Lendrum Townships. The Wawa Property is approximately 13 km long along the north shore of Wawa Lake and up to 5 km wide. The approximate center of the Property in UTM coordinates is: m E, m N, Zone 16, NAD83 and geographic coordinates: 84º W and 48º N. The Loonskin Lake Property is located 10 km northeast of Wawa, northeastern Ontario in Esquega Township. The Loonskin Lake Property is approximately 3.8 km long along the south shore of Loonskin Lake. The approximate center of the Property in UTM coordinates is: m E, m N, Zone 16, NAD83 and geographic coordinates: 84º W and 48º N. The Wawa Property consists of 196 patented claims totaling 3, ha and 7 leases totaling ha in Chabanel, McMurray and Lendrum townships (Figure 2-1, and Table 9-1, Table 9-2 and Table 9-3). The patents have no expiry date and the only obligation is to pay land tax on them. The expiry date of all March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 1

15 leases is May 31, One patent in McMurray Township and parts of two patents in Chabanel Township are leased by Essar to other companies. Essar owns the mining and surface rights of most patents and only the surface rights on some of the patents (see Table 9-1 to Table 9-3). All patents are subject to reservations in Crown Grant. The Loonskin Lake Property is comprised of 10 patented claims totaling ha in the Esquega Township (Figure 2-2 and Table 9-4). Essar owns the surface and mining rights on all patents. The patents have no expiry date and the only obligation is to pay land tax on them. All patents are subject to reservations in Crown Grant. For 2012 for both Wawa and Loonskin Lake Properties, the total Wawa property tax was $76,327, the Mining Land tax was $12,108 and the Provincial Land tax was $1,087 for a grand total of $89,522/year. The Wawa property tax includes $15,354 for the land with the sinter plant station. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 2

16 Figure 2-1 Tenure map of the Wawa Property March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 3

17 Figure 2-2 Tenure map of the Loonskin Property 3.0 ACCESS AND INFRASTRUCTURE The main Wawa Property is located along the north shore of Wawa Lake and borders the town of Wawa on the west, north, and east sides of the town limits. There is road access throughout and the Algoma Central Railway connects Sault Ste. Marie to Wawa and railway tracks occur along the entire northern boundary of the Wawa Property with a spur connecting to the old Sir James Mine on the east end of the Property (Figure 2-1). The Loonskin Lake Property lies ~ 1 km northeast of the Wawa Property and is serviced by a forestry road on its westernmost margin (Figure 2-2). March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 4

18 The town of Wawa is serviced by the Trans-Canada Highway and has restaurants, hotels, hospital, and Ontario Provincial Police Station. The town of Wawa could supply most of the needs of an exploration program at Wawa as it services several active gold mines and advanced exploration programs in the area. Wawa has an urban population of 2,634 people in 2011 (Statistics Canada: EXPLORATION HISTORY This history section has been compiled through a search of public data and from the few remaining files onsite at In 1998 upon the closing of the MacLeod Mine, all of the exploration files from Algoma Ore Properties Division of the Algoma Steel Company were given to the Timmins Regional Resident Geologist s office. The records include both unsolicited property descriptions and evaluations sent to the company, as well as exploration records for work conducted by the exploration division of the Algoma Steel Company. Information contained within the records spans the years from 1899 to the mid-1970 s when the company ceased to conduct exploration (Atkinson, et al, 1999). Although Essar does not have many of the files for the Wawa Properties, they appear to still have a complete set of mine plans and sections for the Helen, McLeod and Sir James Mines. 4.1 Wawa Property There are three Iron Ranges, the Helen, Johnson and Eleanor Iron Ranges and two historical mines on the Wawa Property: the Helen/MacLeod Mine (Helen Iron Range) and the Sir James Mine (Eleanor Iron Range) Helen/MacLeod Mine Multiple ore zones of the Helen Iron Range have operated at different times under a variety of names by the Algoma Steel Corporation and affiliated companies : Open pit mining of hematite/goethite ore; a total of 2,823,365 tons of 53% hematite ore was shipped during this time (Rupert, 1979) : Helen Mine re-opened to exploit siderite ores from surface in the Helen and Victoria open pits. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 5

19 1945: Underground mining initiated with No. 3 shaft to 256 m depth : Algoma Ore Properties Expansion of underground operations where No. 4 service winze and No. 5 shaft was started and reached 630 m vertical depth (eventually the MacLeod production shaft), surface diamond drilling and construction of new sintering plant (Rupert, 1979) : Algoma Ore Properties - underground tramway extended to 4,877 feet (=1,486.5 m), surface diamond drilling. 1960: Algoma Ore Properties - production from old Helen ore body ceases, production from G. W. MacLeod Mine begins. 1998: G. W. MacLeod Mine closes, and mine rehabilitation begins (Atkinson, et al., 1998), total production from MacLeod Mine % Fe The Helen Iron Range has a total of 387 drill holes within a 500 m radius of the iron range in Ontario Ministry of Northern Development, Mines and Forestry s ( MNDMF ) drill hole database, but there are more holes in the drill reports (Figure 4-1) Sir James Mine 1877: Part of mining locations issued to J. W. Johnston. 1948: Algoma Ore Properties - acquisition of property, diamond drilling (17,879 m) delineating a resource of 80 M tons to ~915 m depth; 7 M tons of this resource available to open pit mining (Shklanka, 1968) : Algoma Ore Properties - stripping of deposit, building of railroad spur and construction of surface facilities : Algoma Ore Properties open pit mining where a total of 7.7 M tons of ore (siderite) shipped (Rupert, 1979). 1966: Algoma Ore Properties - incline started on north side of pit in preparation to recover underground reserves; no underground production took place. The Eleanor Iron Range has a total of 183 drill holes within a 500 m radius of the iron range in MNDMF s drill hole database, but there may be more (Figure 4-1). March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 6

20 4.1.3 Johnson Iron Range The Johnson Iron Range lies between the Helen and Eleanor Iron Ranges and exploration work by Algoma Ore Properties occurred sporadically in this area between 1941 and 1966 in conjunction with work on the Helen and Sir James Mine with little descriptive work provided. Below is a summary of the known drill programs. 1941: A single189 m drill hole below Wallbank Lake to test the faulted offset of the Helen Iron Range : 38 drill holes along most of the strike of the Johnson Iron Range totalling 5,925 m 1952: An additional 3 drill holes below Wallbank Lake totalling ~254 m. 1953: One hole totalling 48 m. 1966: Four drill holes totalling 371 m. The Johnson Iron Range has a total of 43 drill holes within a 500 m radius of the iron range in MNDMF s drill hole database, but there may be more drill holes (Figure 4-1) Mammoth Metals Occurrence The Mammoth Metals Occurrence is a Pb, Zn and Ag occurrence with minor Au between Wawa Lake and the Johnson Iron Range (MDI42C02SE00109). An overview of the exploration history includes: 1927: G. Christie and W. Soulier - discovery. 1927: Dome Mines Ltd. - trenching, sampling 3 diamond drill holes (500 ft = m) : Mammoth Metals Ltd. - 2 shafts sunk, inclined shaft to 65 feet (=19.8 m) and 165 feet (=50.3 m) of drifting completed. 1967: Algoma Ore Properties - mapping, magnetometer and EM surveys. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 7

21 4.2 Loonskin Lake Property The Loonskin Lake Property has been explored sporadically since 1949 for iron formation along the contact between the Wawa and Catfish assemblages. Also, there has been some exploration for Cu-Ni in peridotite rocks on the southeastern portions of the Property : Prospecting and regional geological mapping in the area with the discovery of an iron formation (pyrite breccia) outcrop south of Loonskin Lake. 1953: One drill hole m below a pyrite/pyrrhotite showing and one hole totalling 174 m into peridotite to 1963: Ground magnetic and EM survey and geological mapping (Gray, 1963) March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 8

22 Figure 4-1 Location of historic drill holes on the Wawa and Loonskin Lake Properties (hole locations from MNDMF s drill hole database). 5.0 GEOLOGY 5.1 Regional geology The Wawa Property occurs within the Wawa Subprovince of the Superior Providence. The Wawa Subprovince is an aggregation of Archean greenstone belts and granitoid plutons (Williams et al., 1991). The Wawa Property is located within the Michipicoten greenstone belt that is approximately 140 km long and reaches a maximum width of about 45 km (Williams et al., 1991). Regional mapping delineated three discreet episodes of volcanism: the Hawk assemblage (the oldest episode), the mafic to felsic volcanism (Wawa assemblage) and the mafic volcanism (Catfish assemblage). The iron formation horizon on the March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 9

23 Wawa Property is located at the boundary between the intermediate to felsic volcanic rocks of the Wawa assemblage (2.75 Ga) and the mafic metavolcanic rocks of the Catfish assemblage (2.70 Ga) (Figure 5-1). Five main facies have been identified and include carbonate (dominantly siderite), sulphide (dominantly pyrite), chert-magnetite, chert-wacke and argillite-graphite-pyrite. In the region, the iron formation horizon has been subdivided into zones along the horizon or ranges of which there are 32 that make up the Michipicoten Iron Formation and three of these are on the Wawa Property, the Helen, Johnson and Eleanor Iron Ranges (Figure 5-1). 5.2 Local Geology of Iron Ranges The Helen Iron Range is terminated by the Talbot Lake Fault at the west end and the Wallbank Lake Fault at the east. The great thickness of the iron formation at its west end is due to tectonic activity along the Talbot Lake Fault which thickened the iron formation by drag folding. It strikes roughly east-west dips 80 o to the south and is ~ 4 km long. All five Michipicoten Iron Formation facies occur in the Helen Iron Range of which the chert-magnetite and chert-wacke units are up to 300 m thick and average ~ 100 m in thickness, the pyrite member ~ 3 to 15 m thick and the most significant economically the siderite member is up to 100 m thick. The Johnson Iron Range is an east-west to WNW-ESE striking iron formation that is 3 km long and ~ 40 m wide with lenses of siderite up to 8 m thick (Rupert, 1979). This Range lies between the Helen and Eleanor Iron Ranges but iron formation is nearly continuous between separated from these ranges by the Wallbank Lake Fault to the west and the Mildred Lake Fault to the east. The Eleanor Iron Range is the eastern extension of the Helen Iron Range and occurs in a wedge-shaped block bounded on the west and east by branches of the Mildred Lake Fault and on the south by the Wawa- Hawk-Manitowik Lakes fault. It consists of three members, banded chert, pyrite member and the carbonate (siderite) member, the latter of which has been the focus of most production. The Eleanor Iron Range is 790 m long and 76 m wide vertically oriented and northward younging sequence (Gross, et al., 1991). March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 10

24 Figure 5-1 Local geology for Wawa and Loonskin Lake Properties 5.3 Mammoth Metals Occurrence (Pb, Zn and Ag) The Mammoth Metals Occurrence lies close to the contact between a quartz diorite (mafic intrusive) and an intermediate to felsic metavolcanic (rhyolite) (MDI42C02SE00109) (Figure 5-2). The quartz diorite is a subvolcanic intrusive. The quartz vein lies within a shear zone within a quartz diorite. The quartz vein is heavily mineralized with galena, sphalerite and arsenopyrite. The vein strikes at approximately 70º, dips 30 to 50º and varies from 12 to 15 inches in width (Sage, 1993). The occurrence consists of at least three, roughly parallel veins. Grab samples have returned varied assays. Grab samples from the quartz vein have returned values ranging from 5.2 oz/t Ag and 6.38% Pb to 23.8 oz/t Ag and 51.95% Pb. Grab samples collected by OGS March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 11

25 returned 27.1 % Zn from coarse sphalerite in milky quartz vein and 53.6 % Pb from coarse galena in milky quartz vein, oz/ton Au from coarse gained galena in quartz vein (Sage, 1993). 5.4 Gold Potential The Wawa and Loonskin Lake Properties have been explored exclusively for iron, but gold mineralization is known to occur between the Mildred and Helen Iron Ranges. There are four gold mineral occurrences between the Mildred and Helen Iron Ranges just northeast of Essar s Wawa Property (see Adjacent Properties section 7.0). Gold mineralization in Esquega and Chabanel Townships is related to quartz veins and shearing in association with pyritization, carbonatization and silicification (Sage, 1993). Figure 5-2 Iron and gold occurrences in the Wawa area. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 12

26 Occurrences are from MNDMF s Mineral Deposits Inventory (MDI) database. 6.0 REHABILITATION OF WAWA PROPERTY The former Wawa Property MacLeod/Helen mines were closed in A mine closure plan was submitted in 2006 and accepted by the Ministry of Northern Development and Mines ( MNDM ) in January The Property is presently under care and maintenance. Water sampling/ testing is conducted quarterly. Two out of three water retaining concrete bulkheads called for in the closure plan were installed at Service and Cable Belt tunnels in 2010 to contain mine water and prevent it from spilling out onto surrounding lands/waters. The third bulkhead for Ropeway tunnel is to be constructed in Also, as part of the mine closure plan, a water treatment plant would be constructed and operational by ADJACENT PROPERTIES 7.1 Gold Occurrences between Mildred and Helen Iron Ranges There are four gold mineral occurrences between the Mildred and Helen Iron Ranges, just northeast of Essar s Wawa Property (Figure 5-2). These gold occurrences are currently owned by private individuals. 1. Gold, zinc, lead occurrence near the west end of Lagarde Lake (MDI42C02SW00025). The showing consists of a massive vein within a carbonate rich breccia at the contact between mafic to intermediate and felsic to intermediate metavolcanic rocks. Grab samples collected by Noranda in 1986 returned values up to 2.26 g/t Au. The Zn mineralization is sphalerite and Pb mineralization is galena. 2. Gold occurrence near Cardiac known as the Magpie Gold Occurrence (MDI42C02SW00021). The showing consists of a pyritic-silicified carbonate zone consisting of up to three separate narrow and closely spaced gossan zones. These zones are hosted within felsic tuffs which are heavily silicified in the vicinity of the showing. Quartz eyes, tourmaline and silicification are prominent in the vicinity of the showing. Pyrite is the most common sulphide present and occurs in up to 10% of the zone. Minor pyrrhotite and arsenopyrite are seen locally. Where pervasive silicification is the most intense, pyrite content reaches 30% and consists of disseminated and semi-massive crudely banded pyrite and arsenopyrite. Veins consist of ankerite and quartz. Channel samples collected by Noranda returned values ranging from 1.32 g/t Au over March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 13

27 3 m to 4.56 g/t Au over 1 m. Gold values up to 6.6 g/t Au and silver values up to 14.3 ppm Ag have been found within the alteration zones in samples collected by Hutteri. 3. Gold occurrence near the west end of Lagarde Lake known as Lagarde Lake East Showing (MDI42C02SW00024). Mineralization is hosted by a silicifed shear zone at the contact between the intermediate-mafic and the intermediate-felsic metavolcanic rocks. The veins consist of quartz and siderite. Grab samples collected by Noranda in 1986 returned assays up t g/t Au. 4. Gold occurrence near the west end of Lagarde Lake known as the Boliden Syndicate Claims (MDI42C02SW00005). Between 1986 and 1990, Noranda Exploration Co Ltd drilled 3 holes for a total of 282 m in the area. Mineralization is hosted within narrow sulphide-bearing shear zones in rhyolitic fragmental rocks. Drilling also indicated the presence of quartz porphyry units. No relationship between the quartz porphyry and the mineralization was observed. Random veinlets of quartz are present which may comprise 20% of the veins. Ankerite alteration is common. The best gold values were obtained in areas rich in arsenopyrite. Pyrite and arsenopyrite occur as disseminated grains in the carbonate. Visible gold was reported in Grab samples collected by Noranda returned values up to g/t Au. 8.0 CONCLUSIONS The Wawa Main Site Property is in an area with excellent mining infrastructure and close proximity to a major steel producer in Sault Ste. Marie with direct rail access. The Property covers a large strike length of Michipicoten iron formation (> 7.8 km) which even though there has been a significant iron mining history on the Property there are known resources remaining and much of the strike has not been touched by mining. Furthermore, the historical mining has focussed almost exclusively on the siderite member of the iron formation while most of the iron formation remains. There is also abundant exploration and mining data on the Wawa Property all of which is in paper maps, drill logs and sections and has not be interrogated by modern computer compilation and 3D modelling techniques to find additional resources. In addition to the iron mineralization on the Wawa Property, there is also Pb, Zn and Ag mineralization at the Mammoth Metals Occurrence with sphalerite, galena and arsenopyrite in quartz veins. Between 1928 and 1929, two shafts were sunk on this Occurrence. March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 14

28 The Wawa and Loonskin Lake Properties have been explored exclusively for iron, but gold mineralization is known to occur between the Mildred and Helen Iron Ranges. There are four gold mineral occurrences between the Mildred and Helen Iron Ranges just northeast of Essar s Wawa Property. Gold mineralization in Esquega and Chabanel Townships is related to quartz veins and shearing in association with pyritization, carbonatization and silicification. 9.0 REFERENCES Atkinson, B.T., Hailstone, M.H., Pressacco, R.,Wilson, A.C., Draper, D.M., Hope, P.,Morra, P.M. and Egerland, D.C., 1999: Report of Activities 1998, Resident Geologist Program, Timmins Regional Resident Geologist Report: Timmins and Sault Ste. Marie Districts; Ontario Geological Survey, Open File Report 5990, 100p. Gray, J.E., 1963: General Report, Loonskin Lake Claims, November 1963; MNDM Asssessment Files 42C02SE0086. Gross, G.A., Donaldson, J.A., Berusco, E., Brisbin, D., Cook, R., Garrett, R.G., Kelley, V., Lovell, H.L., Oliver, L.K., Roos, and P., Sage, R.P., 1991: Iron Formation and Metalliferous Sediments in Central Canada, Field Trip 8; eds. G.A. Gross and J.A. Donaldson, 8th IAGOD Symposium Field Trip Guidebook, Geological Survey of Canada, Open File Rupert, 1979: Geology of McMurray Township and parts of Surrounding Townships, District of Algoma; Ontario Geological Survey OFR 5283, 170p., 8 Tables, 3 Figures, Geological Map (uncoloured) in back pocket. Sage, R. P Geology of Chabanel, Esquega, Lastheels and McMurray townships, District of Algoma; Ontario Geological Survey, Open File Report 5586, 462p. Shklanka, R. (1968): Iron Deposits of Ontario, Ontario Department of Mines, Mineral Resources Circular No. 11, 489pp. Williams, H.R., Stott, G.M., Heather, T.L., Muir, T.L. and Sage, R.P. (1991): Wawa Subprovince, Chapter 12, in Geology of Ontario, Ontario Geological Survey, Special Volume 4, Part 1, p March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 15

29 Appendix 1 Tenure Table 9-1 Essar s tenure for the Wawa Property in Chabanel Township MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments DJ LT CHABANEL S&MR* Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL / MCMURRAY DJ LT CHABANEL / MCMURRAY DJ LT , CHABANEL / , MCMURRAY S&MR Helen S&MR Helen S&MR Helen some parcels are leased DJ25 PT LT , , CHABANEL / MCMURRAY S&MR Helen some parcels are leased DJ LT CHABANEL / S&MR Helen MCMURRAY DJ LT CHABANEL / S&MR Helen MCMURRAY DJ LT CHABANEL S&MR Helen DJ LT CHABANEL / S&MR MCMURRAY DJ LT CHABANEL / S&MR MCMURRAY DJ LT CHABANEL / S&MR MCMURRAY DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen DJ LT CHABANEL S&MR Helen March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 16

30 MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments DJ LT CHABANEL / MCMURRAY DJ LT CHABANEL / MCMURRAY S&MR S&MR JL LT CHABANEL S&MR Alexander (SSM487) LOC LT CHABANEL S&MR Johnson Loc LOC LT CHABANEL S&MR Johnson Loc LOC LT CHABANEL S&MR Johnson Loc LOC LT CHABANEL S&MR Johnson Loc LOC LT CHABANEL S&MR Johnson Loc LOC LT CHABANEL SRO** Johnson Loc PT TWP portion no LT NA CHABANEL Algoma Central Railway R LT CHABANEL S&MR Helen R LT CHABANEL S&MR Helen R LT CHABANEL S&MR Helen R728 PT LT CHABANEL S&MR Helen R LT CHABANEL S&MR Helen R LT CHABANEL S&MR Helen R731 PT LT CHABANEL S&MR Helen R LT CHABANEL S&MR Helen R LT CHABANEL S&MR Victoria R LT CHABANEL S&MR Victoria R LT CHABANEL S&MR Helen SSM LT CHABANEL S&MR Helen SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite fee simple SSM15596 PT LT CHABANEL S&MR Siderite SSM15596 PT LT CHABANEL SRO Siderite SSM LT CHABANEL S&MR Siderite SSM15598 PT LT CHABANEL S&MR Siderite SSM15598 PT LT CHABANEL SRO Siderite SSM LT CHABANEL S&MR Siderite fee simple fee simple fee simple March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 17

31 MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM15845 PT LT NA CHABANEL S&MR, except Siderite shoreline SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM17357 PT LT CHABANEL S&MR, except Siderite shoreline fee simple fee simple fee simple fee simple fee simple fee simple SSM17648 PT LT? CHABANEL S&MR, except shoreline Siderite fee simple SSM17649 PT LT CHABANEL S&MR Siderite SSM17945 PT LT CHABANEL SRO Siderite SSM17945 PT LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM21170 PT LT CHABANEL S&MR Siderite SSM LT CHABANEL / S&MR Helen MCMURRAY fee simple fee simple fee simple SSM22713 PT LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM22720 PT LT CHABANEL S&MR, except shoreline Siderite SSM22723 PT LT CHABANEL S&MR, except shoreline SSM22724 PT LT CHABANEL S&MR, except shoreline Siderite Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM22728 PT LT CHABANEL S&MR, except shoreline Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 18

32 MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Helen SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Helen SSM LT CHABANEL S&MR Helen SSM LT CHABANEL S&MR Helen SSM23865 PT LT CHABANEL S&MR, except shoreline Siderite SSM23866 PT LT CHABANEL S&MR Siderite SSM23867 PT LT CHABANEL S&MR, except shoreline Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM23871 PT LT CHABANEL S&MR, except shoreline Siderite SSM23872 PT LT CHABANEL S&MR, except shoreline SSM23873 PT LT CHABANEL S&MR, except shoreline Siderite Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM23880 PT LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Siderite SSM LT CHABANEL S&MR Wallbank SSM LT CHABANEL S&MR Wallbank March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 19

33 MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments SSM LT CHABANEL S&MR, except shoreline Wallbank SSM LT CHABANEL S&MR Wallbank SSM LT CHABANEL S&MR Wallbank SSM5418 PT LT CHABANEL S&MR Wallbank WPLA 65*** SSM5419 PT LT CHABANEL S&MR Wallbank WPLA 65 SSM5537 (SSM7218) SSM5683 / SSM7120 SSM5684 / SSM7117 SSM5756 / SSM LT CHABANEL S&MR Wallbank LT CHABANEL S&MR, except shoreline Wallbank LT CHABANEL S&MR Wallbank LT CHABANEL S&MR, except shoreline Wallbank SSM LT CHABANEL S&MR Wallbank SSM72133 PT LT NA CHABANEL S&MR Talbot Lake SSM72133 PT LT NA CHABANEL S&MR Talbot Lake SSM72134 PT LT NA CHABANEL S&MR Talbot Lake SSM72134 PT LT NA CHABANEL S&MR Talbot Lake SSM72134 PT LT NA CHABANEL S&MR Talbot Lake SSM72135 PT LT NA CHABANEL S&MR Talbot Lake SSM72135 PT LT NA CHABANEL S&MR Talbot Lake Total leasehold, expires May 31, 2014 leasehold, expires May 31, 2014 leasehold, expires May 31, 2014 leasehold, expires May 31, 2014 leasehold, expires May 31, 2014 leasehold, expires May 31, 2014 leasehold, expires May 31, 2014 *S&MR=surface and mining rights **SRO=surface rights only ***WPLA 65=Water Power Lease Agreement March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 20

34 Table 9-2 Essar s tenure for the Wawa Property in McMurray Township MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments BLK A PL M LT NA MCMURRAY SRO** n.d.**** BLK B PL M LT NA MCMURRAY n.d. DJ38 PT / SSM LT , MCMURRAY SRO Sinter Plant Station SSM8619 PT LT NA MCMURRAY MRO*** LOT 11 PL M LT NA MCMURRAY MRO LOT LT MCMURRAY SRO LOT LT MCMURRAY SRO PARKING COURT LT MCMURRAY SRO PLAYGROUND LT MCMURRAY SRO SSM LT MCMURRAY SRO Wawa Flats SSM LT MCMURRAY SRO Wawa Flats SSM LT MCMURRAY SRO Wawa Flats SSM10531 PT LT MCMURRAY SRO Wawa Flats SSM LT NA MCMURRAY SRO n.d. Wawa Flats SSM LT NA MCMURRAY SRO n.d. Wawa Flats SSM LT MCMURRAY S&MR Helen SSM14944 PT LT NA MCMURRAY n.d. SSM14948 PT LT MCMURRAY SSM LT , MCMURRAY SRO SSM LT MCMURRAY S&MR* SSM MCMURRAY SSM20542 PT LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM20544 PT LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM20548 PT LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM20554 PT LT MCMURRAY S&MR Helen SSM20555 PT LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM20557 PT LT MCMURRAY S&MR Helen SSM20558 PT LT MCMURRAY S&MR Helen SSM20559 PT LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM20562 PT LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen leased March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 21

35 MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM LT MCMURRAY S&MR Helen SSM5420 PT LT MCMURRAY S&MR Wallbank Total *S&MR=surface and mining rights **SRO=surface rights only ***MRO=mining rights only ****n.d.-not determined March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 22

36 Table 9-3 Essar s tenure for the Wawa Property in Lendrum Township MNDMF patent number Land Registry Pin No. MPAC Roll Number Township Ownership Area (ha) Name Comments CK85 PT LT NA LENDRUM / S&MR* MCMURRAY JC LT LENDRUM S&MR Sinter Plant Station fee simple DJ LT LENDRUM / MCMURRAY S&MR Sinter Plant Station fee simple DJ LT LENDRUM / MCMURRAY S&MR Sinter Plant Station DJ LT LENDRUM / MCMURRAY S&MR Sinter Plant Station SSM LT LENDRUM / MCMURRAY S&MR Wawa Flats fee simple SSM LT NA LENDRUM S&MR Wawa Flats fee simple SSM LT LENDRUM S&MR Wawa Flats fee simple SSM LT LENDRUM S&MR Sinter Plant Station SSM LT LENDRUM S&MR Sinter Plant Station SSM LT LENDRUM S&MR Sinter Plant Station SSM LT LENDRUM S&MR Sinter Plant Station SSM LT LENDRUM S&MR, except Sinter Plant along river Station SSM LT LENDRUM / MCMURRAY *S&MR=surface and mining rights fee simple fee simple fee simple fee simple fee simple S&MR Wawa Flats fee simple Total March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 23

37 Table 9-4 Essar s tenure for the Loonskin Lake Property MNDMF Land Registry MPAC Roll Township Ownership Area Name Comments patent number Pin No. Number (ha) SSM LT ESQUEGA S&MR* Siderite WSM 4008** SSM LT ESQUEGA S&MR Siderite WSM 4008 SSM LT ESQUEGA S&MR Siderite WSM 4008 SSM LT ESQUEGA S&MR Siderite WSM 4008 SSM LT ESQUEGA S&MR Siderite WSM 4008 SSM LT ESQUEGA S&MR Siderite WSM 4008 SSM17351 PT LT ESQUEGA S&MR Siderite WSM 4008 SSM17352 PT LT ESQUEGA S&MR Siderite WSM 4008 SSM LT ESQUEGA S&MR Siderite WSM 4008 SSM LT ESQUEGA S&MR Siderite WSM 4008 Total *S&MR=surface and mining rights **WSM 4008=area administered under the Ontario Mining Act March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 24

38 SUMMARY REPORT EAGLE ISLAND PROPERTY Lake St. Joseph, Ontario, Canada ESSAR STEEL ALGOMA INC. 105 West Street, Sault Ste. Marie, Ontario, Canada P6A 7B4 Date: May 13, 2013 Prepared By: CARACLE CREEK INTERNATIONAL CONSULTING INC. Julie Selway, Ph.D., P.Geo.

39 Eagle Island, Lake St. Joseph, Ontario 1.0 HIGHLIGHTS Essar s Eagle Island Property is located on three islands in the western part of Lake St. Joseph, northwestern Ontario, approximately 108 km northeast of Sioux Lookout. The Property consists of three (3) freehold patents with a total area of ha Algoma Steel Inc. has mining rights only on the Property Lake St. Joseph Iron Limited completed two drill holes claim PA17195: J-19 completed in 1958 and J-33 completed in 1959 for a total of m. Both holes intersected magnetite and hematite banded beds. To the best of Caracle Creek s knowledge, no exploration has been completed on Essar s Eagle Island Property since Essar s Eagle Island is immediately adjacent to Rockex s iron ore property which is at the preliminary economic assessment stage. It is assumed that the iron formation on Rockex s Property extends westward onto Essar s Property, but due diligence geological mapping is required to confirm this. 2.0 LOCATION AND TENURE Essar s Eagle Island Property is located on three islands (Islands 371, 334 and 183) in the western part of Lake St. Joseph, northwestern Ontario, approximately 108 km northeast of Sioux Lookout and 80 km south of Pickle Lake in Trist Lake Area Township. The approximate center of the Property is in UTM coordinates is: E, N, Zone 15, NAD 83 and in geographic coordinates: 91º11 5 W and 50º57 35 N. The Eagle Island Property consists of three (3) freehold patents which are merged into two (2) Land Registry Property Identification Numbers ( PIN s ) with a total area of ha (Table 2-1). Algoma Steel Inc. has mining rights only on all of the patents and all of the PIN s are owned 100% by Algoma Steel Inc. The patents have no expiry date and the only obligation is to pay land tax on them. The amount of mining land tax in 2012 was $ CDN. The patents are subject to reservations in Crown Grant. Private individuals have the surface rights on Essar s Eagle Island Property (Table 2-2). May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 1

40 Eagle Island, Lake St. Joseph, Ontario Table 2-1. Tenure table for Essar s Eagle Island Property MNDMF Land Registry Pin Township Area (ha) Owner Name Rights patent number No. PA17192 PT LT Trist Lake Algoma Steel Inc. MRO* PA17193 PT LT Trist Lake Algoma Steel Inc. MRO PA17195 PT LT Trist Lake Algoma Steel Inc. MRO Total *MRO = mining rights only Table 2-2 Tenure table for the surface rights on the same PIN s as in Table 2-1. MNDMF patent Land Registry Pin Part of PIN Township Owner Name Rights number No. PA17192 PT Part 1 Trist Lake Scot Gerald Davidson, Marvin SRO* Mervyn Shepard, Timothy Andrew Davidson, Robert Allen Richardson PA17192 PT Part 2 Trist Lake Michael Robert Jackson SRO PA17192 PT except Part 1 & 2 Trist Lake Michael Robert Jackson SRO PA17193 PT NA Trist Lake Michael Robert Jackson SRO PA17195 PT NA Trist Lake Lake St. Joseph Iron Inc. SRO *SRO = surface rights only May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 2

41 Eagle Island, Lake St. Joseph, Ontario Figure 2-1 Tenure map for Eagle Island Property 3.0 ACCESS AND INFRASTRUCTURE Essar s Eagle Island Property is located on three islands in the western part of Lake St. Joseph, northwestern Ontario, approximately 108 km northeast of Sioux Lookout and 80 km southwest of Pickle Lake in Trist Lake Area Township. The Eagle Island Property is about 51 km west of Highway 559 and has boat access or float plane access via Sioux Lookout or Pickle Lake. The nearest international airport is in Thunder Bay, Ontario, which is approximately 330 km south of the Property. There are no powerlines or railway on the Property. May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 3

42 Eagle Island, Lake St. Joseph, Ontario Sioux Lookout is located halfway between Thunder Bay and Winnipeg ( The Town has over 5,500 residents and is called the Hub of the North as it provides essential services to 30,000 people in 29 remote First Nation communities. It has a new Hospital and MNR Fire Management Center. Sioux Lookout is connected to other urban centers by Highway 72 and 642 which link to Highway 599; Canadian National Railway; float plane air charter services and Sioux Lookout Municipal Airport which is serviced by Bearskin Airlines and Wasaya Airways. Sioux Lookout also has hotels and restaurants. 4.0 EXPLORATION HISTORY Iron formation has been known to exist in the Lake St. Joseph area since the early 1900 s, although little serious exploration took place until the late 1950 s (Breaks et al., 1979). At that time, the magnetitehematite iron formation was outlined on Eagle, Wolf and Fish Islands (to the east of Essar s current property). The Lake St. Joseph deposit was staked in 1955 by Lake St. Joseph Iron Limited and at that time consisted of 26 patents. Development work consisted of trenching, diamond drilling and benefication testing. Lake St. Joseph Iron Limited completed two drill holes claim PA17195: J-19 completed in 1958 and J-33 completed in 1959 for a total of m (MNDMF assessment file: 52J14NE0013). Both holes intersected magnetite and hematite banded beds which were hosted by green schist in J-19 and tuff and slaty sediments in J-33. Table 4-1 Summary of historic drilling on Essar s Eagle Island Property. drill hole number location claim azimuth (º) dip (º) length (m) J-19 J-33 date completed about m NW of witness post No. 1 PA SW 45 S Mar-58 lake shore, NE end of mainland PA17195 N 95 E 30 N Mar-59 total mineralization magnetite, hematite magnetite, hematite In September 1962, Lake St. Joseph Iron Limited owned 84 claims from Island 17 in the east to Island 334 in the west for an approximate length of 13 km (Clifford 1969). Lake St. Joseph s Property included Wolf, Fish and Eagle Islands. May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 4

43 Eagle Island, Lake St. Joseph, Ontario Algoma signed an agreement to lease 73 mining claims from Lake St. Joseph Iron Limited. Algoma agreed to expend not less than $500,000 by the end of the 5-year option extending from November 1, 1973 to October 31, 1978 (Kociumbas et al., 2011). In , Algoma carried out diamond drilling and pilot plant test work focusing on Eagle Fish Island (Kociumbas et al., 2011). Algoma estimated a historic resource on Eagle, Fish and a west extension. On November 1, 1978, Algoma exercised its option and leased the property. In , Algoma focused its exploration on Fish Island with two drill holes and geological mapping. Claims were dropped by Algoma in 2006, 2007 and 2008 and new claims encompassing Eagle, Fish and Wolf Islands were staked on behalf of Pierre Gagné and are now owned by Rockex Limited ( Rockex ) (Kociumbas et al., 2011). Late in 2009, Rockex acquired Algoma s 1974 and 1975 archived drill core and project files from Essar (Kociumbas et al., 2011). Full-scale hand-coloured geological maps for the Property completed by Algoma were also obtained by Rockex from Essar. The drill core and files were transported to Rockex s storage area and offices in Thunder Bay for inventory. In early 2010, Rockex contracted a geologist to relog and sample selected drillholes to validate Algoma s work as due diligence for Rockex s mineral resource estimate. Caracle Creek does not know if Essar had files on Island 371, 334 and 183 and if the files existed, were they given to Rockex at this time. 5.0 GEOLOGY OF WESTERN LAKE ST. JOSEPH 5.1 Regional geology The Uchi Subprovince is a tabular, eastward-trending region of metavolcanic and lesser metasedimentary rocks forming a semicontinuous supracrustal network interweaving around granitoid batholiths and plutons (Stott and Corfu, 1991). The collage of assemblages in the subprovince shows a general southward younging. The southern half of the Uchi Subprovince consists of episodic crustal additions to a microcontinent along its leading edge in the form of arc and marginal basin complexes and associated plutons. The southern boundary with the metasedimentary-plutonic English River Subprovince is the Sydney Lake Lake St. Joseph Fault (Figure 5-1). May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 5

44 Eagle Island, Lake St. Joseph, Ontario 5.2 Local geology The stratigraphy of the western part of Lake St. Joseph greenstone belt has been subdivided into four volcanic cycles: Blackstone Cycle 1, Western Lake St. Joseph Cycle 2, Carling Cycle 3 and Brodribb Cycle 4 (Figure 5-1) (Stott et al., 1987). The first three volcanic cycles are folded about a major east trending anticline that faces eastward away from the Bamaji-Blackstone granite batholith. The thickest portion of each cycle and the most intense carbonization occurs in the vicinity of this fold hinge (near Eagle Island). Each of the first three cycles comprises a bimodal suite of lower basaltic flows and upper dacite-rhyolitic pyroclastic deposits. In western Lake St. Joseph, a folded sequence of magnetite ironstone and clastic metasediments infills a major basin along the southern margin of the volcanic belt. These metasediments are exposed on Eagle Island and the chain of islands to the west. The metasediments were deposited uncomformably within a basin that was carved out subsequent to both the deposition of the first three volcanic cycles and an eastward tilting of the volcanic stratigraphy. The sediments form a basal suite of volcaniclastic material derived mainly from the felsic volcanics of the upper Western Lake St. Joseph Cycle 2. This was followed by a largely quiescent period during which much of the ironstone was deposited with intervening wacke beds. This stage was blanketed by the development of a major submarine fan deposit that prograded southward away from the volcanic pile. The late Bamaji-Blackstone batholith is typically composed of quartz-phyric granodiorite to monzogranite. The large Bamaji-Blackstone batholith imposed a 1.5 km wide contract strain aureole upon the Blackstone basalts along its eastern margin. The overall tectonic history involves the general sequence: 1. Deposition of volcanic cycles 2. Regional eastward tilting of the volcanic stratigraphy in western Lake St. Joseph 3. Erosion of volcanic pile to produce Eagle Island ironstone-lined basin and submarine fan deposits 4. Regional north-south compression that produced the major folds and the penetrative foliation. 5. Emplacement of Bamaji-Blackstone granitic batholith 6. Regional oblique compression along northwest-southeast axis to produce a major dextral transcurrent shear zone (i.e., Lake St. Joseph fault) along the southern margin of the greenstone belt and into the English River subprovince. May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 6

45 Eagle Island, Lake St. Joseph, Ontario North of the Lake St. Joseph fault zone, clastic metasediments typically contain chlorite-muscovitebiotite-quartz-albite and south of the fault the assemblage of garnet-staurolite-sillimanite occurs locally in the metasediments (Stott et al., 1987). 5.3 Property Geology According to Ontario Geological Survey s map M2158, Essar s Property on Island 371 consists of silicic tuffs and cherty iron formation (mostly magnetite) (Clifford, 1968). Essar s Property on Island 334 consists of basaltic to andesitic flows, lapilli tuff, arkosic-greywackeargillite metasediments and cherty iron formation (mostly magnetite) (Clifford, 1968). Clifford (1969) describes the geology of Island 334 as mafic and felsic volcanic rocks are interlayered with volcaniclastic rocks. Also present is iron oxide-bearing beds and conglomerates with are later that the volcanic and volcaniclastic rocks. Essar s Property on Island 183 consists of arkosic-greywacke-argillite metasediments and cherty iron formation (mostly magnetite) (Clifford, 1968). 5.4 Mineralization Very little is mentioned in literature about the iron mineralization on Essar s three islands. It is assumed that mineralization on Essar s Property is similar to that on Rockex s adjacent Property, but due diligence geological mapping is required to confirm if this is true. According to Shklanka (1968), mineralization on Eagle and Fish Islands on Rockex s Property consists of magnetite-hematite-quartz Algoma type iron formation up to 500 ft wide with a broad easterly trend for 6.5 miles hosted by Archean sediments. Minor amounts of siderite and pyrite are present. Iron-carbonate ± quartz pods, veins and veinlets characterize the mafic metavolcanics east of the Bamaji- Blackstone batholith (Stott and Sanborn, 1987). The carbonate contains local stringers of pyrite. The veins are notably abundant on the islands west of Eagle Island. The magnetite to hematite ratio is 1:1 at Eagle Island on Rockex s property according to Watts, Griffs and McOuat s ( WGM ) observation of Algoma historic drill core and Rockex s 2008 drill core and assays from 5 drill holes (Kociumbas et al., 2011). Most of the mineralization observed by WGM consists, on a May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 7

46 Eagle Island, Lake St. Joseph, Ontario macro scale, of a near massive and intimate mixture of hematite and magnetite. In historic reports, gangue is described as consisting of silica, sericite, mica, carbonate, chlorite with some hornblende and apatite. WGM noted that the Eagle Island deposit (on Rockex s property) is essentially in the form of an east to northeast-trending, steeply plunging syncline with superimposed, less extensively developed, coaxial anticlines. The iron formation is repeated by folding. West of Eagle Island, the steeply dipping north and south limbs of the iron formation sequence have been traced for over 10 km. The south limb extends through Fish and Wolf Islands and still further west (i.e., extends onto Essar property). Figure 5-1 Local geology map for Western Lake St. Joseph May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page 8