Mineral Exploration Report on the Work carried out on Claims Peura 1-7, Kiannanniemi Area, Suomussalmi

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1 1 (5) Distribution: Ministry of Trade and Industry 2 copies Polar Mining Oy, Outokumpu 1 copy Mineral Exploration Report on the Work carried out on Claims Peura 1-7, Kiannanniemi Area, Suomussalmi Location of Claims Peura 1-7 (Map Grid 50 km x 50 km) Key words: nickel, platinum-group elements, high-mg basalt Kummunkatu 34, P.O. Box 15, FIN Outokumpu, FINLAND Tel , Fax Domicile Espoo, Finland, Business ID

2 2 (5) Introduction This report describes PGE exploration work carried out on the claims Peura 1-7, which were granted to Outokumpu Mining Oy on May 22, In November 2003 all claims were transferred to Polar Mining Oy, which decided not to continue any further work on the property, and all Peura claims were relinquished on November 26, Location Claims Peura 1-7 are located in the Kiannanniemi area of the Suomussalmi municipality, eastern Finland. Co-ordinates for the claims are presented in table 1. Table 1. Claim locations Claim # Name Claim mid-points Northing (mn) Easting (me) 7226/1 Peura /2 Peura /3 Peura /4 Peura /5 Peura /6 Peura /7 Peura Co-ordinate system and survey methods Co-ordinate system and projection applied to all information in this report and appended digital data is Finnish KKJ Zone 4. Originally all historical drill holes related to this report were tied to a local grid. National co-ordinates for each drill hole were calculated based on historical survey information. Personnel Mr. Jarmo Vesanto (MSc, Geology) has been in charge of all work carried out on the property. Geology The Kiannanniemi area belongs to the Archaean Suomussalmi greenstone belt. Supracrustal rocks in the property area consist of ultramafic to felsic volcanic rocks and some metasediments. The Peura-aho Ni-Cu deposit located on the claim Peura 7 is hosted by olivine cumulates related to high-mg basalts. Boninitic and gabbroic dykes as well as granodiorites represent intrusive rocks of the area (figure 1).

3 3 (5) Figure 1. Geology map of the Peura-aho area. Claim rationale The Kiannanniemi area hosts high-magnesium basalt related nickel copper mineralization with some historical indications also on elevated PGE values. In 2001 the Kiannanniemi area became one of the target areas for Outokumpu s precious metals exploration programs, and in this stage, also the PGE potential of the Peura-aho deposit and related lithologies were selected for further evaluations. Work carried out Previous work Outokumpu explored the Kiannanniemi area for base metals in the 1960 s 1970 s, which resulted in the discoveries of the Hietaharju and Peura-aho nickel copper occurrences already in the early 1960 s. Both deposits are hosted by highmagnesium basalt related olivine ortho-mesocumulates. Outokumpu s historical resource estimate for Peura-aho quotes a total tonnage of 164,000 t grading 0.52% Ni, 0.21% Cu, and 3.1% S.

4 4 (5) Evaluation of PGE potential / Re-analysis of historical drill core In 2002 a total of 44 drill core samples were submitted to the GTK laboratory in Rovaniemi for multi-element ICP-AES and precious metals (Pt, Pd, Au / fire-assay / ICP-AES) analysis to test PGE content of the Peura-aho mineralization. Samples were selected to represent the highest nickel grade assay intervals based on the historical data. Sample locations and the original laboratory report are appended to the digital database of this report. Results The following conclusions are based on the analytical data presented in figures 2-7). Estimated 2PGE+Au content of the Peura-aho mineralization is g/t, assuming a nickel grade of 0.52%. Nickel tenor of sulphide fraction is approximately 5-6%. 2PGE+Au grade in sulphide fraction is approximately 4-10 g/t. Pd:Pt is approximately 2.5. Sulfur vs. PGE's as well as nickel vs. PGE's have good correlations. Digital database Digital database appended to this report includes the report text and the results of all work carried out on the property during the validity period of the claims. Conclusions The work carried out showed that the PGE content of the Peura-aho Ni-Cu deposit is too low to turn the deposit viable, and for this reason Polar Mining Oy decided to relinquish the claims Peura 1-7. Jarmo Vesanto

5 5 (5) Peura-aho Ni vs. S Peura-aho Ni vs. SF_Ni S_% SF_Ni% 1 1 Peura-aho Ni vs. 2PGE+Au Peura-aho Ni vs. SF_2PGE+Au 2PGE+Au_ppm SF_2PGE+Au ppm Peura-aho Ni vs. Cu Peura-aho Pd vs. Pt Cu_ppm Pt ppb Pd ppb Figures 2-7. Lithogeochemistry of the Peura-aho deposit.