Mineral Exploration Report on the Work carried out on Claims Kuohunsuo 2-3 and Sipsanaho 1, 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 Kuohunsuo 2-3 and Sipsanaho 1, Kiannanniemi Area, Suomussalmi Location of Claims Kuohunsuo 2-3 and Sipsanaho 1 (6318/1-3). (Map Grid 50 km x 50 km) Key words: gold exploration Kummunkatu 34, P.O. Box 15, FIN Outokumpu, FINLAND Tel , Fax Domicile Espoo, Finland, Business ID

2 2 (5) Introduction This report describes gold exploration work carried out by Outokumpu Mining Oy and Polar Mining Oy on the claims Kuohunsuo 2-3 (Tupakkiloma and Syrjälä South gold prospects of the GTK) and Sipsanaho 1 (Syrjälä North gold prospect of the GTK). The claims were granted to the GTK on July 30, 1996, and on November 23, 2001 all claims, as a part of the Kiannanniemi claim package of the GTK, were transferred to Outokumpu Mining Oy as a result of a public tender arranged by the Ministry of Trade and Industry. In November 2003 all claims were transferred to Polar Mining Oy, and the claims expired on July 30, Location Claims Kuohunsuo 2-3 and Sipsanaho 1 are located in the Kiannanniemi area on the map sheet , approximately 30 km NNE of the municipality center of Suomussalmi, eastern Finland. Co-ordinates for the claims are presented in table 1. Table 1. Claim locations Co-ordinate system and survey methods Claim # Name Claim mid-points Northing (mn) Easting (me) 6318/1 Kuohunsuo /2 Kuohunsuo /3 Sipsanaho Co-ordinate system and projection applied to all information in this report and appended digital data is Finnish KKJ Zone 4. Drill hole collar locations were surveyed using a differential GPS unit. Personnel Mr. Krister Söderholm (MSc, Geology) has been in charge of all exploration work carried out on the property. Mr. Lasse Nousiainen and Mr. Jyrki Väisänen have provided with geotechnical services. Geology The Kiannanniemi area belongs to the late Archaean Suomussalmi greenstone belt. Felsic, intermediate, mafic and some ultramafic volcanic rocks constitute the main lithology of the area. A geological map of the southern portion of the Kiannanniemi area is presented in figure 1.

3 3 (5) Figure 1. Geology map of the southern part of the Kiannanniemi area. The relinquished claims are shown in red and current claims of Polar Mining Oy in blue. Map grid is 1km x 1km. Claim rationale The GTK has discovered and drill tested several gold showings in the Kiannanniemi area in 1990 s. In 2001, as a result of a public tender arranged by the Ministry of Trade and Industry, the Kiannanniemi claim package of the GTK was transferred to Outokumpu Mining Oy, which had decided to further explore and evaluate the Kiannanniemi area for precious metals. Work carried out Previous work The GTK has carried out ground geophysical and till geochemical surveys on the claim areas. Diamond drilling completed by the GTK is presented in table 2. Table 2. Diamond drilling by the GTK Prospect Number of DDH's Total length (m) Syrjälä South Syrjälä North Tupakkiloma Total

4 4 (5) Resource estimates by the GTK (Heino 2000) for the Syrjälä South and Syrjälä North mineralization quote 90, g/t Au and 57, g/t Au, respectively. The applied cut-off value has been 0.5 g/t Au. Diamond Drilling (Outokumpu Mining Oy) A four hole diamond drilling program totaling m WL-66 coring contracted by Oy Kati Ab was carried out on the claim Kuohunsuo 3 (Syrjälä South prospect) in Holes were planned to further test the grade and continuity of the gold mineralization delineated by the GTK. A total of 96 halved drill core samples were submitted to the GTK laboratory in Rovaniemi for multi-element ICP-AES and gold FAAS analysis. Drill hole collar locations are shown in figure 2, and a summary on anomalous intercepts of gold mineralization is presented in table 3. All drill hole and analysis data are included in the Kianta_6318_1,2,3 access database and in the original GTK analytical report. Figure 2. Locations of Outokumpu s drill holes SMS/SYR-1-4, and some of GTK s drill holes on the Syrjälä South prospect. Drill sections shown as black lines are 25 m apart. Figure compiled by Krister Söderholm. Results The Syrjälä South drilling program returned anomalous gold values from each drill hole. Grades and widths of intercepts are comparable with GTK s drill results in the same area (table 3).

5 5 (5) Drill Hole From (m) To (m) Intercept (m) Au (g/t) SMS/SYR SMS/SYR SMS/SYR SMS/SYR R R Table 3. Summary of the Syrjälä South drilling results. Also results of two GTK s drill holes tested the same target as holes SMS/SYR-1-4 are shown in the table. Digital database Digital database appended to this report includes the report text and the results of diamond drilling program carried out on the Kuohunsuo 3 claim (Syrjälä South prospect). Conclusions Diamond drilling on the Syrjälä South prospect ( Kuohunsuo 3 ) did not upgrade the gold mineralization discovered and initially drill tested by the GTK. Gold indications on the Syrjälä North ( Sipsanaho 1 ) and Tupakkiloma ( Kuohunsuo 2 ) prospects were considered to be too weak and sporadic to warrant any follow-up work. Jarmo Vesanto