HD MINERAL PROPERTY ASSESSMENT REPORT FOR THE 2009 ROCK GEOCHEMISTRY AND ROAD WORK NTS 93L047 LATITUDE: 54'27" LONGITUDE: 126'39 H

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1 HD MINERAL PROPERTY TRANS # ASSESSMENT REPORT FOR THE 2009 ROCK GEOCHEMISTRY AND ROAD WORK RECEIVED SERVICE BC SMiTHERS JAN NOT AN OFFICIAL RECEIPT MINERAL TITLES BRANCH [File Rsc'd : '<'N COUVER, B.C. NTS 93L047 LATITUDE: 54'27" LONGITUDE: 126'39 H GPS NAD 83 UTMZONE9 NORTHING: EASTING: OMINECA MINING DIVISION, BRITISH COLUMBIA & * c.- >f,'. >.' : ^ i ^ i cc ' OWNERS -- JOHN WESLEY MOLL, GLORIA MAY MERKLEY, DANIEL MORICE MERKLEY r REPORT BY: DANIEL MERKLEY JANUARY 2010 L a

2 INDEX LOCATION AND ACCESS 1 HISTORY 1-4 TENURE STATUS 5 HD MINERAL PROPERTY REGIONAL MAP 6 HD MINERAL PROPERTY CELLS 7 PART ONE ROAD WORK PURPOSE AND PROCEDURE 8 ROAD MAP 9 PART TWO ROCK GEOCHEMISTRY PURPOSE, PROCEDURE 10 RESULTS 11 SAMPLE SITE LOCATION MAP 12 PLATE OF ANDREW MARTENSON ADIT AND SHAFT 13 ASSAY CERTIFICATE 14 EXPENDITURES AUTHOR'S QUALIFICATIONS 16 WAPS& PLATEf\ HD MINERAL PROPERTY REGIONAL MAP 6 HD MINERAL PROPERTY CELLS 7 ROAD MAP 10 SAMPLE SITE LOCATION MAP 12 PLATE OF ANDREW MARTENSON ADIT AND SHAFT 13

3 LOCATION AND ACCESS: The HO mineral property, which consists of two contiguous tenures tenure numbers and is located approximately 6 km north of Houston, British Columbia, a village in the west-central sector of the province. The two tenures encompass Mount Harry Davis, a prominent mountain, which risesfromthe northern edge of the Bulkley Valley. Access to the HD property is provided by Mt Davis Way, an all-weather, partially paved road, which ascends the southern slope of the mountain off Highway 16. Mt Davis Way road departs in a northwesterly directionfromhighway 16 immediately east of the village of Houston and ascends on a gravel road for approximately 6 km to the top of the mountain. Several mineral exploration roads now largely overgrown with willow divergefromthe main access road near the crest of the mountain to various test pits and trenches excavated by prospectors in the early part of the century, and work performed more recently by both junior and major mineral exploration companies. HISTORY: 1908 In the late 50's, Melvin McQuatt, a Houston prospector, discovers a post on the eastern slope of Mt Harry Davis carved with the name Traser" and the date 's Paul Tickoles, a prospector who lives a short distance north of Houston near Ross Creek, explores Mt Harry Davis with two adits and several test pits and trenches. The target of his exploration is polymetallic mineralization chalcopyrite, bornite, sphalerite, galena, tetrahedrite, possibly argentite, and gold in rhyolite, andesite and chert units on the northern and southerly slopes of the mountain. Paul Tickoles holds the Mammoth, Mison and B.C. Leader claims among others. A description of the claims and work are mentioned in The Minister of Mines and Annual Report for 1929". In The

4 Report of the Minister of Mines" pages A74-A75 state: "Paul Tickoles has accomplished a great deal, single-handed, at this property, in the way of open-cuts and one tunnel 30 feet in length." Martin Bellicini and Andrew Martenson, two Houston prospectors, explore the east sector of the mountain. The work entails several trenches, test pits and a shaft approximately 15 meters deep. Targeted mineralization is a stockwork of silver-rich tetrahedrite, chalcopyrite and bornite in a argillicaltered rhyolite. A log cabin is constructed near their work site. A pack trail, which traverses the southeast slope of the mountain, passes through the exploration work and continues to the crest of the mountain. The trailterminusis later designated "Chert Knole". At this location two short adits (approximately 2 meters in length) are excavated along with severaltestpits and a shallow shaft (3 meters deep) in pursuit of sphalerite, galena, chalcopyrite mineralization. The targeted zinc mineralization is associated with gold (0.05 oz/ton). Some of the mineralization explored at "Chert Knole" is syngenetic (laminated amber sphalerite in dark gray-green chert overlain by black mudstone). 1950's Melvin McQuatt, a Houston-based prospector, discovers the old exploration sites of Paul Tickolese worked during the early part of the century. He and William Merkley explore the old work sites and William Merkley stakes the "Eagle" claims over the east slope of Mount Harry Davis. 1960's During construction of the "North Road" near the southern base of Mount Harry Davis copper-silver mineralization is unearthed. Edward Westgarde, et all, stake claims over the mineralization. He and William Merkley subsequently option their claims to Molymine Exploration Limited. The company carries out a large exploration program that entails 13 trenches, 440 meters long, and 38 trenches, which were stripped for 1737 meters. The Molymine Exploration Limited work is detailed in the government publication Mines and Petroleum Report 1967, pg During this same period, Texas Gulf Sulphur Company performes sometechnicalwork, which includes an Induced Polarization Survey, some Geological Mapping and Soil Geochemistry. The work is detailed in the publication Exploration and Mining 1969, pg. 121 and Exploration and Mining 1970, pg Wes Moll and Dan Merkley stake the "Grouse" and "Hilltop" mineral claims over the crest and northern 2

5 slope of Mount Harry Davis, during a long hiatus in exploration in the area, a period of several years during which no mineral claims had been staked on the mountain. Impetus for their staking besides the workings of the "old timers" is the recent discovery by Wes Moll of more than 30 meters of sphalerite, chalcopyrite, galena,fluoritemineralization on the south side of a recently constructed access road to the VOR antennae on the crest of the mountain Noranda Exploration Company completes a limited soil sample program over the polymetallic mineralization discovered by Wes Moll in The small east-west survey grid mentioned in the government publication, Exploration and Mining 1977, pg. 195 focused on zinc-lead-fluorite mineralization The Endako Mines Division of Placer Development Limited options the tenure owned by Wes Moll, Gloria Merkley and Dan Merkley. The company restakes the ground under the 4-post method and the new tenures are named HD-1, HD-2, HD-3 and HD-4. An exploration program follows, which entails Geological Mapping, Geochemical Soil Surveys, Geochemical Rock Sampling Surveys, a Magnetometer Survey and a VLF-EM survey. The company terminates the option before the first anniversary Eldor Resources Limited options the tenure owned by Wes Moll, Gloria Merkley and Dan Merkley. Rock samplesfromthe old trenches, test pits, adits and shafts are gathered and assayed. A grid is established utilizing the base line and major east-west grid lines completed by the Endako Mines Division of Placer Development in 1981 in preparation for a Topographical Survey and Gravity Survey, which focuses on the central sector of the tenure. A limited program of drilling follows, employing a "Winky" drill. Two drill holes 300 meters to the north of the "Switchback Zone" polymetallic mineralization target the northern edge of the large gravity anomaly, which overlays and extends for some distance beyond the zone. The drill holes do not intercept any mineralization of importance Equity Silver Mines Limited options the HD propertyfromwes Moll, Gloria Merkley and Dan Merkley. The company stakes the new HD-5 mineral tenure to adjoin the existing tenure on its southern border. Equity Silver Mines Limited drills 776 meters in 6 holes in an area of old copper-silver surface showings. Two of the drill holes are located down-slopefromthe "Switchback Zone" and target 3

6 chalcopyrite, which outcrops on surface in jasperoid host rock. The drill holes intercept 15 meters of 0.15% copper. The mineral "zone" is intercepted by both drill holes, which are inclined one below the other. At the tenures southern sector four diamond drill holes target copper-silver mineralization and intercept narrow widths of mineralization, which are less than 2 meters in core length. The company trenches several hundred meters, completes an IP Survey, performs Soil Geochemical Surveys and Rock Geochemical Surveys centered on the area south of the "Hilltop Zone" Teck Exploration Limited options the HD property from Wes Moll, Gloria Merkley and Dan Merkley. The company drills four NQ size drill holes for a total length of 649 meters. Two drill holes target the "Chert Knole", which is located in the southern sector of the "Hilltop Zone"; one drill hole targets the 30+ meters of polymetaliic mineralization known as the "road cuf located on the road that leads to the VOR antennae at the mountain top; the remaining drill hole targets the bornite/silver mineralization at the west sector of the "Hilltop Zone". Results include 0.8 meters grading 14% zinc, 1.9 oz/ton gold and other lengthly intercepts of low-grade zinc mineralization Wes Moll, Bill Merkley and Dan Merkley drill six holes for a total length of 86.9 meters with an X-ray drill, which take EX size core to 2010 Wes MoH, Mary Jean Moll, Bill Merkley and Dan Merkley carry out drill programs, road and trail rehabilitation and assaying to maintain the HD tenures in good standing. 4

7 TENURE STATUS: The HD mineral property consists of 2 contiguous tenures. The larger of the two tenures 72 cells in size is adjoined at its east border by a 3-cell tenure. The 72-cell tenure-number encompasses an area of hectares ( acres). The smaller 3-celled tenure is named HD1 and bears the tenure number ; it consists of hectares (139.4 acres). Configuration of the 2 tenures is as follows: TENURE CELLS 12 cells X 6 cells wide TENURE CELLS 3 cells X1 cell wide TENURE NUMBER CLAIM NAME OLD EXPIRY DATE NEW EXPIRY DATE N/A 2009/0CT/ /JUN/ HD1 2009/0CT/ /JUN/20 Conversion of the original claims to the new cell nomenclature occurred on July/9/2005, event number The HD mineral property is jointly owned by John Wesley Moll ( %), Gloria May Merkley ( %) and Daniel Morice Merkley ( %). With acceptance of this report, the tenures will remain in good standing until JUNE 20 TH,

8 to MINERAL PROPERTY REGIONAL MAP SCALE 1:30,000

9 HD MINERAL PROPERTY CELLS Forl & John T«rrs«Quefeneh" Vtctbna Legend Indian Reserves National Parks p-j Conservancy Araas Parks MTO Grid (MTO) Blocked by MEM This map is a user generated static output from an Internet mapping site and is for general reference only. Data layers that appear on this map may or may not De accurate, current, or otherwise reliable. THIS MAP IS NOT TO BE USED FOR NAVIGATION. Notes: TENURE: #516488/ Mineral Tenure (current) r~ Mineral Claim r Mineral Lease Mineral Reserves (current) i Placer Claim Designation ; I Placer Lease Designation j Mo Staking Rerve I Conditional Reserve --1 Refeaae Required Reserve i ] Surface Restriction 12] Recreation Area Other* j Survey Parcels BCGS Grid Contours (1:250K) */ Contour - index Contour - Intermediate Araaof Exclusion Aretwf Indefinite Contours s Annotation (1:20K) Transportation - Points (TRIM) Helipad Transportation - Lines (TRIM),/ Airfield../ Airport 4 Scale: 1:37,630

10 PART ONE ROAD WORK

11 PURPOSE: The road work completed in 2009 was a continuation of the road work completed in The road work has provided access to sample sites for collection of rock samples from old workings, e. g.: test pits, adits and shafts, which were excavated around 1924 by Andrew Martenson and Martin Bellicini, two Houston-based prospectors. As outlined in the 2007 assessment report, the 2007 road work provided access to the old shaft and trenches on the Tiglish Zone, which are located approximately 500 meters to the west of the old shaft and adit discussed in the present work. The road work in this area of extensive mineralization will also eventually provide access to the old workings where modern geophysics, geochemistry and diamond drilling can be undertaken in the future. PROCEDURE: Road work was undertaken for six days during the middle of October, On the 10 th, 13 th, 14 th, 16 th and 18 th three men worked clearing brush and debris from the access road, while two men worked on the 17 th. Two power saws were operated by 2 men for 4 days while one man cleared brush and debre away from the road; 1 man operated one power saw on the 16 th. During the 17 th one man cleared debris away from the road while one man operated the power saw. 8

12 i ROAD MAP V \ CELL 093L07J031D i / / / / A& i i I Iff *& A LO^S a022-\ s / SCALE 1:5.000 CELL 093L07J031A METERS

13 PART TWO ROCK GEOCHEMISTRY

14 PURPOSE: Rock samples were collected from the dump at the Andrew Martenson Adit for analysis to determine if the mineralization was also silver-rich, similar to that bornite-tetrahedrite mineralization found at the Tiglish Zone, which is located approximately 500 meters to the west of the sample site plotted in this report The mineralization bears similarities to that found at the Tiglish Zone, although the hoste rock is dissimilar hoste rock at the Tiglish Zone is generally rhyolite, while the hoste rock at the Martenson Adit sampled and discussed in this report is a course grained mauvecoloured andesitic tuff. Slight skarnrfication is evident by the presence of minor epidote. The bornite tetrahedrite mineralization has been introduced into the andesite by milky quartz, calcite and possibly, barite veins. The presence of barite seems possible because of the apparent excessive weight of the hand samples. The mineralizing event has evidently caused weak silicification of the surrounding area. At another location to the west of the sample site less than 100 meters distant a peculiar geological formation suggests the rock was in part laid down in a subaqueous environment At this location large pods of calcite or barite approximately 0.5 meter in diameter extend for 100 meters or more in a north-south direction, while to the east and west of this geological peculiarity the pods gradually diminish in size over a distance of 50 meters or more, until the andesite shows uniform silicification. Similar mineralization also occurs in the quartzcalcite (barite?) pods at this location and the hoste andesite is identical to that analyzed in this report The peculiar geological occurrence could possibly be associated with theformationof pillow lava. PROCEDURE: Dan Merkley collected 2 representative rock samples from the dump at the Andrew Martenson Adit Wes Moll delivered the samples to the Assayers Canada office in Smithers, B. C, where they were prepared for analysis and shipment to the Vancouver laboratories of Assayers Canada. Analysis was by fire assay with gravimetric finish. A shaft (Andrew Martenson shaft in photographic plate included in this report) is located downslope, approximately 15 meters south of the Adit and sample location; no dump was visible at the shaft site the dump could possibly overgrown with moss and windfall debris so no rock samples could be gathered at that location. Where bedrock outcrops, it appears similar to the hoste rock in collected samples. Weak bedrock mineralization bearing minor bornite-tetrahedrite metallization similar to that analyzed and included in this report was noted in some surrounding outcrops, but the samples gathered from the dump seemed representative for mineralization in the adit 10

15 RESULTS: The impressive silver content of the samples analyzed and included in this report, substantiate the high silver content of the copper mineralization in the 2 rock samples submitted for assay. Several other rock samples from this area the Tiglish Zone" have shown high silver content also. The area has never received modern detailed expbration in the form of geochemistry, geophysics, or diamond drilling. The road detailed on the map in this report will provide access for these exploration methods in the future work further qualified by the present rock analysis. 11

16 SAMPLE SITE LOCATION MAP O TSm ; 1 '>*j*'j METERS

17 13

18 @uadty SyMapisip/cv eves Assay Certificate Company: Project: Attn: \y e s Moll Grab# 1,Grab#2 WeS Moll We hereby certify the following assay of 2 rock samples submitted Oct Sample Name *DUP *AC0501 *BLANK Au Ag g/tonne g/tonne < < < <0.03 <0.1 *Au & Ag F.A./ Gravimetric finish iatifledby

19 EXPENDITURES 2009: LABOUR: (5 days) X (3 men) X ($300) $4, (1 day) X (2 men) X ($300) $ VEHICLES: (6 days) X (4WD truck) X ($75) $ (4days)X(2WDtruck)X($50) $ POWERSAW: (4 days) X (2 saws) X ($35) $ (2days)X(1saw)X($35) $70.00 PROVISIONS: (5 days) X (3 men) X ($30) $ (1day) X(2men)X($30) $60.00 ROCKANALYSIS: (fee+handling) $ REPORT PREPARATION: $ TOTAL EXPENDITURES $7,

20 AUTHOR'S QUALIFICATIONS I, DANIEL MERKLEY, DO HEREBY CERTIFY THAT: (1) I am a prospector and reside at 3313 Highway 16 East, Houston, B. C. (2) I have more than 40 years of prospecting experience (3) I prepared this report Respectfully submitted Daniel Merkley Prospector 16

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