RECEIVED. SEP f e REPORT ON FIELD OBSERVATIONS FOR COINCIDENT AEROMAGNETIC AND TILL SAMPLE RESULTS CLAIM SO , TUDOR TOWNSHIP, ONTARIO FOR

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1 REPORT ON FIELD OBSERVATIONS FOR COINCIDENT AEROMAGNETIC AND TILL SAMPLE RESULTS CLAIM SO , TUDOR TOWNSHIP, ONTARIO FOR LYDIA DIAMOND EXPLORATION OF CANADA LTD. SEPTEMBER 2nd, 2004 By Jeremy S. Brett, M.Sc., P.Geo. RECEIVED SEP f e QEOSCIENCEASSESSMEWT 31C13SE GRIMSTHORPE 010

2 INDEX Page Introduction l Property l Location and Access 2 General Geology 2 Field Investigations Method 3 Location Plan Appendix Survey Location Map with Claims Appendix Field Report and Observations Map (A. Peshkepia) Appendix Field Photographs Appendix

3 INTRODUCTION Page l Winter field investigations and mapping were carried out on Lot 3 Concession 8, Claim SO , in Tudor Township, on the exploration property of Lydia Diamond Exploration of Canada Ltd., in December of The work was carried out by Ardian Peshkepia, M.Sc., a senior geologist with Lydia, and two field assistance, Daniel hardy and Steven Woodward. The work was carried out to investigate till sample results (confidential) coincident with two positive aeromangetic anomalies (also confidential). The locations of these are indicated on the field map (appendix 3). The investigation returned two lithologies: gabbro and weathered gabbro. Due to the high susceptibilities observed in the field, these rocks are concluded to be indicative of the causative bodies for the anomalies. PROPERTY The Lydia Property consists of 125 claims containing 1025 claim units. The claims are numbered SO , to incl., to incl., to incl., , , , , , , , , to , , , , to inch, to incl., to incl., to incl., , to incl., to incl., to incl., and to incl., in the Townships of Tudor, Grimsthorpe, Cashel, and Effingham, Southern Ontario Mining Division. They are held in the name of Lydia Diamond Exploration of Canada Ltd.

4 LOCATION AND ACCESS Page 2 The property is located approximately 20km north of Madoc, Ontario. Madoc lies at the junction of highways 7 and 62. Highway 7 runs east from Toronto through Peterborough to Ottawa. Highway 62 runs north from Belleville to Bancroft. Madoc is about 41 km north of Belleville. Access to the property is by secondary township roads which run east from Highway 62. Claim SO , hi Tudor Township, was accessed via ATV trails l forest roads which begin at the intersection of Cleveland Road and Pine Ridge road. Cleveland road runs east off of Highway 62, just north of the town of Bannockburn, Ontario. A winter ATV trail was roughed-in off of this main trail network. GENERAL GEOLOGY The property is underlain by a Precambrian volcanic to sedimentary sequence, intruded by mafic/ultramafic and granitic rocks. The metamorphic grade is generally high, though the area lies within the Hastings metamorphic low. The area is part of the Proterozoic Grenville Province of the Precambrian Shield, hi general, this western part of the property is underlain by volcanic rocks and the gabbroic rocks of the Ligham Lake Gabbro Complex. Narrow bands of felsic volcanics followed intrude these sequences and remnants of the paleozoic sedimentary cover are present sporadically. The presence of kimberlite indicator minerals (unpublished) collected by Lydia Diamond Exploration of Canada Ltd., infers the presence of intrusive mantle rocks, within a probable short transport distance of the till sample sites. As such, Lydia has conducted exploration for potentially diamond-bearing rocks on its property.

5 FIELD OBSERVATIONS Page 3 The field area was examined in order to identify the local bedrock in the area of coincident positive aeromagnetic anomalies (survey unpublished) and kimberlite indicator minerals derived from till sampling (also unpublished). The area was accessed by ATV via winter trails and the shallow snow cover and overburden was removed by pick, shovel and broom in convenient areas to expose the bedrock. The area was quite swampy and this limited the aavailable bedrock exposure. A sufficient number of bedrock sites were exposed to conclude that the lithology of the probable causative body of the coincident small aeromagnetic anomalies was gabbro l weathered gabbro (please see filed report of A. Peshkepia - Appendix). High bedrock susceptibilities further confirmed this. The kimberlite indicator minerals in this area remain unexplained, and the source is, in all probability, further up-ice. All fieldwork, mapping and observations were GPS controlled using a Magellan hand held OPS. Res Jeremy PH King Street West Toronto Ontario M5V2W8 Tel/Fax: (416) Cell: (416)

6 APPENDIX Location Plan Survey Location Map with Claims Field Report and Observations Map (A. Peshkepia) Field Photographs

7 PROPERTY LOCATION..A-,,--^-- '- LOCATION PLAN Itap So** 1:70)400 9 ip an jo iin*m or icmdnwm. 7 kkxnm*

8 To: Jeremy Brett, VP Exploration Lydia Diamond Exploration of Canadc December 20, 2002 Memo: Prospecting and tiff sampling in 263, 264 sites. December 16, 2002 i The centre of the magnetic anomaly in the 263 t^h site area is located ~5m north of the southern shore of a swamp between two northsouth trending ridges. The anomaly is located atoout 100m northeast of the tit! site 02-WLK The bedrock exposure is poor due to snow coverage but in certain areas feig uprooted trees have exposed the bedrock on a ridge northeast of the centre of the anomaly. The top part of the bedrock is a highly weathered light green, medium grained, micaceous gabbro, semewhat similar to the country rock gabbros exposed in the 238 trench fse*e pictures). This site is located ~ 20 meters northeast of till site 02-WLK jga^bros are also exposed on a small island (10x15m) about 60m north of the centre of the anomaly. These are medium grained dark grey fresh fiiiffobros. ^. PT y December 17, 2002 Till site 02-WLK-0264 is located in a small east west trending depression between two ridges. Bedrock exposure in this site is poor due to snow coverage, but we managed to strip an area 3x1 m on the southern ridge ~7m southeast of the till site. The rock in this exposure is a dark green, medium to coarse grained mafic rock. The west side of the outcrop (50 cm) is very magnetic. M.S. ranges from (Sample 264-1). The magnetic rock continues to the depth. In the centre of the outcrop a brecciated low mag (M.S ) mafic rock has a coarse gabbroic matrix (see pictures). The magnetic susceptibility of the surrounding rocks north and south of the striped area is in the range of , (samples 264-2, 264-3) up to 50 times lower than sample Based on these observations l think that sample represents the cause of the magnetic anomaly in this area. However, l was unable to confirm the real size of the anomaly due to poor exposure. The new till sample taken from this area is located about 50 m down ice from the high magnetic outcrop. Ardian Peshkepia Consulting Geologist

9 Tflt S a t* p le Site C'V* Ptfy* r* * f s'ot*. J

10 WLK 264 site - Exposed Bedrock WLK 264 site - Detail of Breccia

11 Exposed Bedrock Gabbro (NE ridge - WLK 263 site) Micaceous gabbro (NE ridge - WLK 263 site)

12 WLK 264 site - looking south WLK 263 site - looking northeast

13 ONTMUO MINISTRY Work Report Summary OF NORTHERN DEVELOPMENT AND MINES Transaction No: Recording Date: Approval Date: W SEP SEP-21 Status: APPROVED Work Done from: 2002-DEC-16 to: 2002-DEC-17 Client(s): LYDIA DIAMOND EXPLORATION OF CANADA LTD. Survey Type(s): GEOL Work Report Details: Claim# Perform SO ,375 SO SO SO SO Perform Applied Approve Applied Approve 52,375 SO SO SO 51,815 51,815 SO S382 S382 Assign S SO Assign Approve Reserve 2, SO 0 SO Reserve Approve Due rjate MAR SEP-03 SO 2005-SEP-12 52,375 S ,197 S ,197 S2.197 S178 S178 External Credits: SO Reserve: S178 Reserve of Work Report*: W Total Remaining Status of claim is based on information currently on record. 31C13SE GRIMSTHORPE Oct-19 16:01 PRUDHOMMEi Page 1 of 1

14 Ministry of Northern Development and Mines Date: 2004-SEP-24 Ministere du Ontario Developpement du Nord et des Mines GEOSCIENCE ASSESSMENT OFFICE 933 RAMSEY LAKE ROAD, 6th FLOOR SUDBURY, ONTARIO P3E 6B5 LYDIA DIAMOND EXPLORATION OF CANADA LTD. 8 KING STREET EAST, SUITE 1704 TORONTO, ONTARIO M5C1B5 CANADA Tel: (888) Fax:(877) Dear Sir or Madam Submission Number: Transaction Number(s): W Subject: Approval of Assessment Work We have approved your Assessment Work Submission with the above noted Transaction Number(s). The attached Work Report Summary indicates the results of the approval. At the discretion of the Ministry, the assessment work performed on the mining lands noted in this work report may be subject to inspection and/or investigation at any time. If you have any question regarding this correspondence, please contact STEVEN BENETEAU by at steve.beneteau@ndm.gov.on.ca or by phone at (705) Yours Sincerely, Ron C. Gashinski Senior Manager, Mining Lands Section Gc: Resident Geologist Lydia Diamond Exploration Of Canada Ltd. (Claim Holder) Assessment File Library Lydia Diamond Exploration Of Canada Ltd. (Assessment Office) Jeremy S. Brett (Agent) Visit our website at Page: 1 Correspondence 10:19851

15 31C13SE GRIMSTHORPE 200 ONTARIO CANADA MINISTRY OF NORTHERN DEVELOPMENT AND MINES PROVINCIAL MININO RECORDER'S OFFICE Mining Land Tenure Map E 305WOE Date l Time of Issue: Thu Oct 07 13:06:50 EOT 2004 TOWNSHIP 7 AREA PLAN TUDOR M-0156 ADMINISTRATIVE DISTRICTS l DIVISIONS Mining Division Land Titles/Registry Division Ministry of Natural Resources District Southern Ontario HASTINGS BANCROFT TOPOGRAPHIC A*ninisli alive Boundaries Township Land Tenure Freehold Patent i - ; Surface And Mtninj Concession, tot f "j*, ' Surface Rights Only R PcOYinr-fa! Park ( l Mining Rights Only ^ in!d Patent ir 4 ct iff, RI a PHe Contou! MineSlriafls Mine Headffanie Railway L S IS. Licence of Occupation Surface And Mining Rights Surface Rights Only Mining Rights Only Use* Not Specified Roact Surface Ariel Minir* Trail Surfaofe Rights Only Natural Gas Pipeline Mining Rtgfila Only Unties Land Use Permit Order In Council (Not open for staking) Walyr Power lease Agreement ~ ~ Mining Claim 6?'! " "" "j Filed Only Mmlng Claims LAND TENURE WITHDRAWALS Mining Ac's Wiirttjrawat Typon 1 Surface And Mining Rights Wiihdfsa Ws SuKace RlgSiis Onfy Wlhdntwn Wrn Minincj Rights OdJy Whhdra*"! Order!n Cuuncit Wtlidrawal Tyj. W'sm SuifetasAfsdMining Rights WUkfffl W"s Siirfee* RiUtiis Ortfj Wilfidrawn Wrn Mining Rights Onfy Withdrawn IMPORTANT NOTICES Settle 1:19*46 LAND TENURE WITHDRAWAL DESCRIPTIONS Type Description W-LL-C11 Wsm W-LL-C18 Wsm W-LL F18 Wsm Mar ^ href"" QSp^W-LL-CH-03 ONT M&S withdrawal S.35 Mining Act RSO 19SO. 10/03/03 Boundary generally dopicta Firea withdrawn Click to view actu *a/*. Mar 10, 2003 <a href3t"httpy^vww.mndm.9ov.on. MSS withdrawal S.35 Mining Ad RSO 1990, 10/03/05 Boundary generally depicts nroa withdrawn Click to vlaw actu o/?. Feb 28, 2004 *a href^"httpyavww.rnndm.gov.on.cai' itindmvminas^ands(1ivfeqav afipvw-l.l-2004/cm- ONT MSS withdrawal S.35 Mining Act RSO 1909, 26/02/0^1 Boundary generally depicts area withdrawn Click to view actu Those wishing to stake mining claims should consult: with the Provincial Mining Recorders'Office of the Ministry of Northern Development and Mines for additional General information and Limitations information on the status of the kinds shown hereon. This map IK not intended for navigations!, survsy, or land titlft determination purposes as the information Contact Information' shown on this map is compiittd from various sources. Completeness and accuracy are not guaranteed. Additional Information may also be obtained through the local Land Titles or Registry Office, or the Ministry of Natural Resources. The information shown ia dorivocf from digital data available in the Provincial Mining Recorders' Office at trm time of downloading from the Ministry of Norther Development and Mines web site, Toll Frae Map Datum; NAD 83 Provincial Mining Recorders' Office Tel: 1 (B&B) ext 57Wbj*ction: UTM (6 riegnae) Wiliest Green Miller Centra 933 Ramsoy Lake RoarS Fax: 1 (B77) Topographic Data Source; Land Information Ontario Sudbury ON P3E 6B5 Mining Land Tenure Source: Provincial Mining Recorders' Office Home Page; www,mndrn.gov,on.ca/mndm/mines/lands/rnlsmnpgs.htni This map may not show unregistered land tenure and interests in land including certain patents, leases, easements, right of ways, flooding rights, licences, or other forms of disposition of ricjhts and interest from the Crown, Also certain land tenure and land uses that rastrict or prohibit free fentry to stake mining claims may nof he illustrated. IMPORTANT NOTICES Areas under which special reguiation, limitations or conditions exist that affect normal prospecting, staking and mineral development activities.

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