GLOBESTAR MINING AND CORPORACIÒN MINERA DOMINICANA S. A. EVALUATION OF SEVEN PROJECTS DOMINICAN REPUBLIC. January 2006

Transcription

1 GLOBESTAR MINING AND CORPORACIÒN MINERA DOMINICANA S. A. EVALUATION OF SEVEN PROJECTS DOMINICAN REPUBLIC January 2006 By: Denis Chénard, ing. 289, ch Val-du-Repos Val Senneville (Québec) J0Y 2P0 Canada

2 TABLE OF CONTENTS 1- Title page 2- Table of contents. i 3- Summary Introduction and terms of reference 2 5- Disclaimer Concessions description and location Bayaguana group of concessions Maimón concession El Anón concession 6 7- Accessibility, climate, local resources, infrastructure and physiography 7 8- History Bayaguana group of concessions Maimón concession El Anón concession 8 9- Geological setting General geology Geology of the concession Bayaguana group of concessions Maimón concession El Anón concession Deposit types Bayaguana group of concessions Cerro Kiosko Doña Amanda Doña Loretta Maimón concession Cerro de Maimón Loma Pesada Loma Barbuito 25 i

3 10.3- El Anón concession Cerro Verde Anomaly A Anomaly B Mineralisation Doña Amanda Cerro Kiosko Doña Loretta Loma Pesada Loma Barbuito Cerro Verde Anamaly B Exploration Bayaguana group of concessions Maimón concession El Anón concession Drilling Sampling method and approach Sampling preparation, analysis and security Data verification Doña Amanda Doña Loretta Cerro Kiosko Adjacent concessions Mineral processing and metallurgical testing Mineral estimation Doña Amanda Methodology Evaluation criteria Results. 41 ii

4 19.2- Cerro Kiosko Methodology Evaluation criteria Results Doña Loretta Methodology Evaluation criteria Results Loma Pesada Methodology Evaluation criteria Results Cerro Verde Methodology Evaluation criteria Results Anomaly B Methodology Evaluation criteria Results Other relevant data and information Interpretation and conclusions Recommendations Doña Amanda Cerro Kiosko Doña Loretta Loma Pesada Cerro Verde Anomaly B Loma Barbuito References Date Additional requirements for technical reports Illustrations. 52 iii

5 Tables Table 1: Results of the different calculations. 1 Table 2: Concession status.. 4 Table 3: Work done on the Bayaguama group of concessions Table 4: Work done on the Maimón concession 10 Table 5: Work done on the El Anón concession 11 Table 6: Drilling program summary for Bayaguana group of concessions Table 7: Drilling program summary for the Maimón concession.. 33 Table 8: Drilling program summary for the El Anón concession.. 33 Table 9: Check assays results from the different projects.. 36 Table 10: Check assays results from Doña Amanda core.. 37 Table 11: Assays result for the same interval in different holes 37 Table 12: Check assays on Cerro Kiosko.. 38 Table13: Resource estimation of Cerro Kiosko.. 42 Table14: Resource estimation of Cerro Verde.. 45 Annexes Annex 1: Calculation details and sections of Doña Amanda Annex 2: Calculation details, surface plan and sections of Doña Loretta Annex 3: Calculation details and sections of Loma Pesada Annex 4: Calculation details and surface plans of Cerro Verde Annex 5: Calculation details and sections of Anomaly B iv

6 3- Summary was appointed by GlobeStar Mining Corporation to provide a resource calculation of five deposits and verify another one located in the Dominican Republic in the Caribbean. Those deposits are located on four different concessions, El Anón, Maimón, Managuá and Rincón Abajo. The last two, with the Trinidad concession, are a part of the Bayaguana Group of concessions. All those concessions are held by Corporación Minera Dominicana S.A. which is in turn held 100% by GlobeStar Mining Corporation. The objective of this report is to review and up-date the previous calculations to the Canadian Institute of Mining standards, and produce a report in the Canadian norm form. The results of the calculations are shown in Table 1. Table 1: Results of the different calculation Deposit Cutting grade Method Category M Tons Cu % Au g/t Ag g/t Zn % Cerro Verde 0.5 g/t Au Longitudinale Indicated Cerro Verde 1.0 g/t Au Longitudinale Indicated Cerro Verde 1.5 g/t Au Longitudinale Indicated Anomaly B 1.0% Cu Tranversale Indicated Anomaly B 0.5 g/t Au Tranversale Indicated Doña Amanda 0.15% Cu Tranversale Inferred Doña Amanda 0.30% Cu Tranversale Inferred Doña Loretta 0.25% Cu Tranversale Inferred Doña Loretta 0.25% Cu Longitudinale Inferred Loma Pesada 1.0% Cu Tranversale Inferred Kiosko 0.35 g/t Au Block model Indicated Inferred Kiosko 2.0 g/t Au Block model Indicated Inferred With the exploitation of the Cerro de Maimón deposit by GlobeStar Mining Corporation and the increases of the copper and gold prices, the deposits held by GlobeStar Mining Corporation in the Dominican Republic can potentially be economic. Except for the Doña Loretta and the Loma Barbuito projects, the possibility to increase substantially the resource is limited. Considering this, an economic evaluation of these deposits, using the numbers produced in this report will be the next step. For the deposits with an economic potential, infill drilling and the drilling of some extensions are recommended. The drilling campaigns have to be designed to bring these mineral resources from inferred to indicated category. 1

7 4- Introduction and terms of reference At the request of William Fisher of GlobeStar Mining Corporation (GlobeStar), Denis Chénard, of (Datac), visited seven metalliferous deposits, to provide mineral resource inventory assessments to the Canadian Institute of Mining (CIM) standard. These deposits, located in the Dominican Republic in the Caribbean, are on four mineral concessions (El Anón, Maimón, Managuá, and Rincón Abajon) held by Corporación Minera Dominicana, S. A. (CMD), a 100% owned subsidiary of GlobeStar. All the deposits were visited by the author, drill core of the different projects were reviewed, and some check samples were taken. The geological interpretation was reviewed with the geologists of CMD. All available reports and all the databases were reviewed. A validation with the assay certificates was also done. One objective of this report is to confirm and up-date as standards the previous mineral inventory done by the author in his previous reports (Chénard 2000, 2002) on the Doña Amanda, Loma Pesada, Cerro Verde and Anomaly B deposits. Another objective of this report is to evaluate as standards the deposit of Doña Loretta and review the mineral inventory previously done (Patrick 1998) on Cerro Kiosko. Finally, the Loma Barbuito prospect was regarded to determine the future work to be able to evaluate this prospect. 5- Disclaimer The author spent two weeks in the Dominican Republic between the 7 th and the 21 st of October. During this period, the concessions of Bayaguana group (Managuá, Rincón Abajon and Trinidad) were visited on the 11 th, the Loma Pesada and the Loma Barbuito projects (on the Maimón concession) were visited on the 12 th, and the El Anón concession was visited on the 13 th. A review of the core and some check sampling were done on the 14 th at the core-shack, located on the Falcondo mine plan, near the town of Bonao. Between the 17 th and the 21 st, a review of documents and the databases were done at the CMD office in Santo-Domingo. All the old drill-holes done by Falcondo are stored at the Falcondo core-shack on the mine plan. CMD has also two satellite offices: one at Bayaguana and the other at Maimòn. In both places, some recent drill-holes, and some pulps and rejects of assays are stored. During the visit, a total of 20 assays were taken by the author. This sampling has two goals: first, establish with more accuracy the density of the waste and mineralised zones, and second, verify the results of the assays obtained during the different campaigns. During the field visits, different GPS points were taken to cross-check the surveying done during the different campaigns. A Garmin etrex Legend GPS was utilised. The precision of this GPS is not that accurate, so the waypoints were taken just as an indicative form. No major location problem was noted. 2

8 At the Santo-Domingo office, all the exploration techniques, the sampling and the assay procedures were reviewed with the geologists (Julio Espaillat and Cevero Chávez). These exploration techniques, the sampling, and assay procedures are in accordance with the standard of the mining industry. CMD has produced a document where all the working procedures are described. This document is available in Spanish only. All the drill-hole databases were verified. All the sample assay certificates were found, and the majority were compared with the digital database. Some minor irregularities were found, and they were immediately corrected. The status of the concessions was not reviewed during this visit. 6- Concessions description and location The Mines Department of the Ministry of Commerce and Industry administers concessions in the Dominican Republic. Exploration concessions in the Dominican Republic provide the owner with the right to carry out exploration work through discovery and reserve delineation. Once a discovery is made, an exploitation concession is required for plant construction and mining. Only the exploration concession holder can apply for an exploitation concession. The concession holder is required to submit a positive feasibility study, showing the economic viability of the project, as well as an environmental impact statement. The Dominican Republic passed a comprehensive environmental law in Concession boundaries are not surveyed in the Dominican Republic. Legal descriptions are based on UTM coordinates relative to a monument that is installed at an easily accessible (roadside) spot in the field. GlobeStar s concessions in the Dominican Republic are held by CMD. All issued and outstanding shares of CMD were acquired from FIIL by Sarmin Exploration Corporation (Sarmin) in February All issued and outstanding shares of Sarmin were acquired by Boreal Exploration inc. (Boreal) in December Boreal was renamed The Great White Corporation (TGW) in January TGW was renamed GlobeStar in December GlobeStar holds all the issued and outstanding shares of CMD and, consequently, 100% of interest in the El Anón and Maimón concession and in the Bayaguana Group of concession. FIIL retains a net smelter royalty of 2% on the first CMD property to go into production, 1.5% on the second and 1% on the third. These royalties can be repurchased at a mutually agreed upon price and apply only to CMD s share of the property. If the CMD s interest is diluted, the royalty due to FIIL is diluted by a corresponding amount. The Bayaguana Group of concessions were under joint venture agreement with Everton Resources inc (Everton) between February 2003 and February Table 2 summarises the concession status and Figure 1 shows their location. 3

9 Table 2: Concessions status Bayaguana Group Concession Name El Anón Maimón Managuá Trinidad Rincón Abajo General Location (prov.) Dajabón / Montecristi Sánchez Ramírez Monte Plata Monte Plata Monte Plata Geologic Formation Amina Schist Maimón Fm. Los Ranchos Fm. Los Ranchos Fm. Los Ranchos Fm. Ownership CMD CMD CMD CMD CMD Date Granted Date Expire Area 1,720 has 10,0790 has 1,200 has 3,701 has 2, has Mining Resolution V-01 VI-01 XVII-02 XXXIV-05 XLI-05 Project names Cerro Verde Loma Pesada Cerro Kiosko Trinidad Doña Amanda within concessions Anomaly A Arroyo Laito Doña Loretta Anomaly B Doña Cristina Elias Gossan Doña Barbara Barbuito Loma La Mina El Altar Status Valid Valid Valid Under Re-Application Under Re-Application (was JV-Everton) (was JV-Everton) (was JV-Everton) 4

10 Figure 1 : Location map and geology of the Dominican Republic 5

11 6.1- Bayaguana group of concessions The Bayaguana group of concessions is located in the Bayaguana Township, Province of Monte Plata, approximately 65 kilometres north-east of Santo Domingo. The Managuá Concession is located west, centered on Latitude N, Longitude W, UTM coordinates m N and m E; The Rincón Abajo Concession is located in the middle and is centered on Latitude N, Longitude W, UTM coordinates m N and m E; and the Trinidad Concession is located on the east, centered on Latitude N, Longitude W, UTM coordinates m N and m E; all concessions cover parts of topographic sheets Antón Sánchez (6172-I) and Bayaguana (6272-II). The access from Santo Domingo is by paved road to the town of Bayaguana for about 54 kilometers. From there, the access to the three project areas is by secondary paved and gravel roads from Bayaguana to other small villages, such as Antón Sánchez, Manta Santiago, Yuvina, Corozal, Pulgarín, Comatillo, Trinidad, Sierra de Agua, and El Guanito. A series of unpaved and gravel covered roads gives access within the concession, where 4WD vehicles are required for the internal movement in the project Maimón concession The Maimón concession is located approximately 50 kilometres north-west of Santo Domingo. Due to the length of the concession, it was divided in two for the purposes of this report, with the two areas referred to as North and South Maimón. The northern part occupies parts of topo sheets 6173 III, 6172 IV Series E 733 (Fantino and Bonao respectively), and is centered on Latitude N; Longitude W; UTM cords: m N, m E, Provinces of La Vega, Monseñor Nouel and Sánchez Ramírez, Dominican Republic. The southern part of the concession occupies parts of topo sheets 6172 IV and 6172 I Series E 733 (Bonao and Hatillo respectively); it is centered on Latitude N; Longitude W; UTM cords: m N, m E; 4Km east of Maimón, Provinces of Monseñor Nouel and Sánchez Ramírez, Dominican Republic. The Maimón concession covers an area of Ha ( km²). The access from Santo Domingo is by main 4-lane highway of the country, the Autopista Duarte to Piedra Blanca; and from here the access is gained by secondary and gravel roads where 4WD vehicles are required. In most of the concession areas the access is done by vehicle, walking, or by using mules El Anón concession: The El Anón concession is located in Lat North, Long West. Topo sheet 5874 I (Dajabón), northwestern part of Dominican Republic, approximately 140 6

12 kilometers northwest of the town of Bonao, and 5 km to 10 km from the border between the Dominican Republic and Haiti. CMD has the exclusive rights over the El Anón concession. The property lies 20 kilometers south of the main paved highway from Santo Domingo to Monte Cristi and is accessed by several minor roads running south from the highway. It is situated along a northwest trending ridge transected by a series of north-trending rivers, to the west of a large reservoir. Access to the property is provided by drill roads. 7- Accessibility, climate, local resources, infrastructure, and physiography (modified from Nelson 2000) The climate of the Dominican Republic is tropical with a temperature range between 18 C to 32 C with generally high humidity. The heaviest rainfall period is between May and November with an accumulation of, more or less, 3 meters of water. The area where the concessions are is composed of an alternation of hills and valleys, part of the Central Cordillera. The Cordillera has a northwest southeast trend. Terrain on the concessions consists of rolling, cultivated hills with elevations typically less than 500 meters. Improved and unimproved roads serve all of the concessions. A divided highway (Carretara Duarte) from the south to the north coast runs through the Maimón concession. Standard 4WD vehicles can reach the concessions throughout the year. Nearby communities include the towns of Bayaguana, serving the Trinidad, Rincón Abajo and Managuá concessions, Bonao and Maimón, serving the Maimón concession, and Dajabón, serving the El Anón concession. These communities provide mining personnel and support services to the nearby Pueblo Viejo and Falcondo mines. 8- History 8.1- Bayaguana group of concessions The Mines Department was the first to conduct exploration work in the Bayaguana District by carrying out soil geochemical surveys. Also five percussion air holes were drilled in Falconbridge followed up in 1988 and 1989 with regional suveys that focused attention on Cerro Kiosko, Cerro Guaimarote, and Doña Loretta. A soil program was conducted on the Managuá and Rincón Abajo concessions. Anomalous results for gold, arsenic, antimony, and molybdenum led to a geophysical survey and drill program in 1990 and VLF-EM and magnetics were completed (79.5 line km) along with both gradient Induced Polarization (51 line km) and dipole-dipole IP (7 line km) were completed at Doña Loretta and Doña Amanda. 7

13 A Falconbridge drill program commenced in Eleven holes (2 506 meters) were drilled at Doña Amanda and six holes (750 meters) were drilled at Doña Loretta. The best results were 40.4 meters of 2.99% Cu, 0.37 ppm Au, and 37 ppm Ag at Doña Loretta. A low grade copper deposit was identified at Doña Amanda. Falconbridge moved over to the Managuá concession in 1996 and completed a soil survey and an Induced Polarization (IP) survey. Twenty-two trenches were dug and samples were collected for assay. The Cerro Kiosko target was drill tested in 1997 (17 holes for meters) and again in 1998 (12 holes for meters). Geologic mapping and surface sampling continued in Thirty line kilometers of soil samples were collected over the Doña Amanda deposit; 22.8 line kilometers of soil samples were collected at Rincón Abajo; 50 line kilometers were completed on the Trinidad concession. Six trenches were dug (550 meters) on the Managuá concession and 391 trench samples were collected and analyzed. Another IP survey was conducted (9 line kilometers) at Managuá and four drill holes were completed (650 meters). One confirmation hole was drilled at Doña Loretta (87.5 meters). IP conductors identified on the Rincón Abajo concession in 1999 were drill tested in 2002 (7 holes, 845 meters). The targets were conductors located north and west of the Doña Amanda deposit. The best intercepts were 0.52 meters of 2.56% Cu in DA-17 and meters of 0.284% Cu in DA-12. Two additional holes drilled on the Trinidad concession (101 meters) tested the thickness of the Hatillo limestone. Table 3 summarises the work done on the Bayaguana group of concessions Maimón concession Exploration in the Maimón Belt began in the early 1980 s with a government-sponsored program of soil geochemistry. Rosario did some airborne geophysics, stream and soil geochemistry, and drill testing (Loma Barbuito). Falconbridge continued the exploration effort through the 1990 s with VLF, IP, Mag, and soil surveys at El Altar, Loma El Can, Laito, and Doña Cristina, plus drill programs at Loma Barbuito, Loma Pesada, Arroyo Laito and Doña Nieve. Additional rock and soil sampling is recommended for the Maimón concession along with additional drilling on untested concessions (e.g. Doña Barbara, Cerro Gordo) and on incompletely tested projects (e.g. Doña Cristina). Table 4 summarises the work done on the Maimón concession El Anón Recursos del Caribe explored the property from 1985 to 1987, conducting soil, VLF-EM, and standard EM surveys. Two main areas of anomaly were identified: namely the Cerro Verde prospect in the far northwest of the property, Anomaly A, Anomaly B, and Elias Gossan, all of which lie along the same faulted horizon. 8

14 Table 3: Work done on the Bayaguana group of concessions Year Compagny Work done Sector Result Direccion de Minera Soil geochemistry, geological survey, geophysic (mag) and radiometrics Bayaguana group 1982 Direccion de Minera Geophysic (IP) and percussion drilling (369 m in 5 holes) Doña Amanda 1.75 g/t Au over 1.5 m and 1.09%Cu over 1.6 m Direccion de Minera Stream sed and rock geochemistry Managuá Falconbridge Soil geochemistry and regional geology Bayaguana group 1990 Falconbridge Soil geochemistry and geophysic (VLF, Mag and IP) Doña Amanda Falconbridge Drilling (2 506 m in 11 drill-holes) Doña Amanda Discovery of the Doña Amanda deposit 1991 Falconbridge Soil geochemistry, geophysic (IP) and drilling (750 m in 6 holes) Doña Loretta 2.99% Cu, 0.37 g/t Au, 37.9 g/t Ag over 40.4 m 1989 Falconbridge Drilling (1 546 m in 8 drill-holes) Trinidad (Guaimarote) 1.75 g/t Au over 8.3 m Falconbridge Soil geochemistry and mapping Cerro Kiosko 1996 KWG and CMD Geophysical survey (IP), soil geochemistry and mapping Cerro Kiosko 1997 KWG and CMD Soil geochemistry Managuá Discovery of the Kiosko veins system 1997 KWG and CMD Mapping, trenching (28) and drilling (3 743 m in 17 drill-holes) Cerro Kiosko Delianation of the Kiosko veins system 1998 CMD Drilling (1 928 m in 12 drill-holes) Cerro Kiosko 1998 CMD Geophysic (IP and mag) Managuá 1998 A C A Howe Resource estimation Cerro Kiosko Indicated: g/t Au, 1.01% Cu Inferred: g/t Au, 0.98% Cu 1999 Sarmin Drilling (650 m in 4 drill-holes) Cerro Kiosko 1999 Sarmin Soil geochemistry and drilling (88 m in one drill-hole, twin of CC- 01) Doña Loretta 2.09% Cu, 0.3 g/t Au over 23.4 m 1999 Soil geochemistry and mapping Trinidad Delimated an hydrotermal alteration system 1999 Soil geochemistry Doña Amanda Delimated an hydrotermal alteration system 2000 CMD - Boreal Geophysic (IP) Doña Amanda 2000 Datac Geo-Conseil Resource estimation Doña Amanda Inferred: % Cu, 0.22 g/t Au 2001 CMD - TGW Rock geochemistry and mapping Doña Amanda- Trinidad 2002 CMD - TGW Drilling (845 m in 7 drill-holes) Doña Amanda 2.56% Cu over 0.52 m and 0.28% cu over 25.0 m GlobeStar-CMD-Everton Soil geochemistry, 11 trenches, drilling (2 051 m in 24 drill-holes) Trinidad GlobeStar-CMD-Everton Soil geochemistry, geophysic (IP) Rinco Ajabo - Managuá GlobeStar-CMD-Everton Drilling (721 m in 4 drill-holes) and metallurgic test (DA-19) Doña Amanda GlobeStar-CMD-Everton Geophysic (IP), drilling (1 104 m in 11 drill-holes) and metallurgic test Doña Loretta 2004 GlobeStar-CMD-Everton Aster remote sensing study (by MIR technologies) Bayaguana group 9

15 Table 4: Work done on the Maimón concession Year Compagny Work done Sector Result 1960s Falconbridge Prospection Loma la Mina 1960s Northbridge Nickel Mines Soil geochemistry, geophysic (IP) and drilling (488 m) Loma la Mina 1982 Falconbridge Prospection Maimón Discovery of 8 gossans Rosario Dominicana Mapping (1:20 000), airborne geophysic (EM), stream sediment Maimón soil geochemistry and ground geophysic (EM)? Rosario Dominicana Drilling (3 RC-dilling and m in 12 drill-holes) Loma Barduito Delinated a massive sulfide len 1990 Falconbridge Soil geochemistry, geophysic (EM and mag) and mapping Doña Christina 1990 Falconbridge Drilling (2 680 m in 13 drill-holes) Loma Pesada Delinated a massive sulfide len 1990, 1995 Falconbridge Soil geochemtry and mapping Doña Barbara 1994 Falconbridge Drilling (441 m in 2 drill-holes) Loma Barduito Falconbridge Limited prospection Maimón Discovery of Cerro Gordo 1995 Falconbridge Drilling (135 m in 1 drill-hole) Doña Christina 2000 Datac Géo-Conseil Resource estimation Loma Pesada % Cu, 0.75% Zn 10

16 Table 5: Work done on the El Anón concession Year Compagny Work done Sector Result Recursos del Caribe Soil geochemistry and geophysic (VLF-EM and EM) El Anón Discovery of Cerro Verde and Anomaly A, B and Ellias gossan 1987 Falconbridge Geological mapping, trenching and geophysic (EM, IP and mag) El Anón 1987 Falconbridge RC-drilling (3509 m in 79 holes) Cerro Verde Delinated an oxidized massive sulfide 1987 Falconbridge Drilling (1166 m in 7 drill-holes) Cerro Verde 1990 Falconbridge Drilling (750 m in 3 drill-holes) Cerro Verde 1990 Falconbridge Drilling (1809 m in 13 drill-holes) Cerro Verde 1988 Falconbridge Drilling (702 m in 12 drill-holes) Anomaly A Falconbridge Drilling (3048 m in 25 drill-holes) Anomaly B Delinated a massive sulfide 1989 Falconbridge Drilling (506 m in 8 drill-holes) Ellias Gossan 1997 Sarmin Drilling (168 m in 1 drill-holes) Ellias Gossan 1997 Samin Drilling (102 m in 1 drill-holes) Anomaly A 1998 ACA Howe Resource estimation Anomaly B g/t Au, 13.6 g/t Ag, 2.0% Cu and 1.67% Zn 2000 Datac Geo-Conseil Resource estimation Cerro Verde g/t Au 2000 Datac Geo-Conseil Resource estimation Anomaly B g/t Au, g/t Ag, 1.9% Cu and 1.45% Zn 11

17 Anomaly A comprised a well-defined linear soil anomaly in lead, zinc and copper that was associated with a 1.8 kilometre-long gossanous and altered stratigraphic horizon, with coincident EM anomalies. They drilled five short percussion holes, but results were inconclusive due to poor recoveries and limited depth penetration. Anomaly B was a 700 meters long zone of gossan with coincident, linear, base and precious metals, and EM anomalies. The Elias Gossan was a 1.5 kilometer gossan extending between Anomaly A and Anomaly B. Table 5, on the previous page, summarises the work done on the El Anón concession. 9- Geological setting 9.1- General geology (from Patrick, 1998) The island of Hispaniola, which is divided between Haiti to the west and the Dominican Republic to the east, occupies the north-central part of a Cretaceous to Eocene island arc chain extending from Cuba to the north coast of South America. On the island, an agglomeration of west-northwest-striking island-arc terrains outcrop over the northern two-thirds of the island, and an oceanic plateau terrain outcrops in the southern third (Mann et al, 1991). The island arc terrains range in age from early Cretaceous to late Eocene, and represent oceanic ocean fragments, fore-arc/accretionary prism fragments of an island arc, remnants of the volcano-plutonic member of an island arc and fragments of a back-arc basin. Eight main tectonic phases are indicated, representing collision and subduction reversal phases, terminating in volcanism, deformation and metamorphism, late east-west strike slip faulting and oblique collision, and suturing of oceanic plateau terrains with overthrusting. The most important rock units in terms of gold and base metal mineralisation, namely the Los Ranchos and Maimón Formations, are exposed along the central Cordillera: a series of steep, forested hill chains parallel to the geological strike that form the central spine of the Dominican Republic. Figure 1 is a simplified geological map of the Dominican Republic, showing the major formations and the property locations. The southern coastal region of the Dominican Republic is dominated by uplifted Plio- Pleistocene coral reefs which form a wide plateau in the south-east: west of Santo Domingo, late Cretaceous argillic sediments, and limestones form a wide, fertile plain and valley. The sedimentary formations abut the south-western flank of the Central Cordillera and are succeeded to the north-west by the Duarte Formation: a complex of mafic metavolcanic rocks comprising chlorite schist, intruded by tonalites. Immediately to the north-west, a belt of serpentinised peridotites, up to six kilometers wide, extends some 90 kilometers, on the north-eastern side of the Cordillera. Lateritisation of this unit, termed the Lorna Caribe belt, has formed major nickel laterite deposits that are currently being exploited by Falconbridge Dominicana. The peridotites are succeeded by the Maimón Formation, which is in thrust contact with 12

18 formations to the southwest and is itself overthrust on the succeeding Los Ranchos Formation. The Maimón Formation comprises a 65 kilometers long, north-west trending belt of metavolcaniclastic and volcanic rocks, now represented by sericite and chlorite schists which form the major part of a zone of early Cretaceous fore-arc volcanism: the Los Ranchos Formation to its immediate north is interpreted by most workers to represent the associated island arc volcanism, though it has also been suggested that the two formations correlate. The volcanic rocks are largely metamorphosed to greenschist facies and consist of a bimodal spilite-keratophyre suite, much of which is represented by bedded submarine volcaniclastic units with subordinate flows and shallow intrusives. A belt of meta-tuffs, cherts, black shales and limestones occurs in the central part of the zone; the sediments are conformable with the volcanics, and contain exhalite units comprising manganous, hematitic and cherty layers. Two structural provinces have been recognised within the Formation parallel to the structural trend of the belt. In the southwest of the belt, the Ozama shear zone consists of highly strained inter layered mafic and felsic mylonites, formed in response to northward thrusting of the Loma Caribe peridotites over the Maimón Formation. The Altar zone in the northeast of the Maimón Formation demonstrates much less deformation. Volcanogenic massive sulphide deposits have been identified at several locations within the Formation, usually associated with the thin metasedimentary units. The mineralisation is described in more detail below in section 11. The Los Ranchos Formation outcrops along a belt about 100 kilometers long, striking west to west north-west for much of its outcrop and swinging to a north-south trend at the far east part of the belt. The rocks have been metamorphosed to lower greenschist facies and comprise a bimodal basaltic and dacitic assemblage with minor sedimentary and pyroclastic intercalations. The Formation is sub-divided as follows in descending succession: The Puebla Viejo Member, comprising laminated siltstones and sandstones with local conglomerates grading downwards into fragmental debris and breccia. The Zambrana Member comprising tuffs with abundant keratophyre fragments. The Platana/Navisa Member, represented by mafic porphyritic basalt to basaltic andesite with local agglomerates and quartz-breccia zones, erupted as sub-aerial to shallow marine flows. The Meladito Member, comprising debris flows grading upward into sedimentary rocks with a significant volcanic clast component. The Quita Suena Member of keratophyre intrusives and quartz keratophyre tuffs 13

19 and flows, representing altered porphyritic dacites and rhyolites erupted as submarine flows and pyoclastics with local shallow, sub-volcanic intrusions. The basal Cotui Member which consists of locally pillowed spilite flows. The rocks have been subject to low grade metamorphism attributed to sea water hydrothermal systems at greenschist facies temperatures which has been overprinted by advanced argillic alteration around the Puebla Viejo gold deposit and elsewhere along the Formation at Managuá where gold mineralisation has been identified, and on the Los Hojanchos property described below. A regional scale thrust fault overthrusts massive carbonates of Upper Cretaceous age onto the Los Ranchos Formation, which is itself affected by thrusting, low angle reverse faulting and north-striking, high angle faults which were penecontemporaneous with the hydrothermal activity and basinal formation. The Puebla Viejo deposit (Rosario Mine) is a world class epithermal system that has had an average production of some ounces Au per year since 1975, and currently contains a measured resource of million ounces of gold and 206 million ounces of silver. The location of the deposit is shown on figure 1. The Los Ranchos Formation is overthrust by Cretaceous limestones and succeeded to the north by Miocene limestones that form karst terrain. The northern coastal region is underlain by Recent lake and fluviatile deposits, Plio-Pleistocene coral reefs, Miocene- Pliocene siliciclastic formations, Eocene lavas and limestones and conglomerates, succeeded by the North Coast Belt of mixed melange, serpentinite amphibolite, mica schist, gabbro, and volcanics. 9.2 Geology of the concessions Bayaguana group of concessions (modified from Nelson and Blanchet, 2000) The Bayaguana Group has three mining concessions named Managuá, Rincón Abajo, and Trinidad. Three mineral deposits are presently known in the area, one on the Managuá concession (Cerro Kiosko) and two on the Rincón Abajo concession (Doña Amanda and Doña Loretta). The largest and most important high sulfidation hydrothermal system discovered in the Los Ranchos Formation to date, outside of Pueblo Viejo, is the Bayaguana district. The Bayaguana district hosts the Cerro Kiosko and Doña Amanda deposits, as well as a number of incompletely explored target areas (Doña Loretta and Guaimarote). The known deposits and targets are covered by the contiguous Trinidad, Rincón Abajo, and Managuá exploration concessions (figures 1 and 2). A geologic map of the Bayaguana Group of concessions is provided in figure 2. 14

20 Figure 2: Geology of the Bayaguana group of concessions 15

21 Rock units in the Bayaguana district include olivine-bearing basalt flows and exogenous dacite domes. The basalts exhibit a porphyritic texture with phenocrysts of plagioclase, pyroxene, and olivine. Rock types include: locally amygdaloidal, locally flow banded, basalt porphyry flows monomictic flow breccias containing a crystalline and occasionally flowbanded matrix epiclastic breccias which contain a mixture of variably altered basalt clasts in a matrix of finely comminuted basalt fragments, and interbedded volcaniclastic sediments consisting of an immature mix of fine to medium grained basalt fragments Dacite domes are characterized by the presence of euhedral to subrounded quartz phenocrysts. Some of the quartz phenocrysts are embayed. Other phenocrysts include plagioclase and possibly k-feldspar. K-feldspar phenocrysts have largely been replaced by quartz. Mafic phenocrysts (e.g. biotite or hornblende), presumed to have been present originally, have also been replaced. Dacite domes are generally porphyritic but are locally fine-grained and equigranular. Evidence for emplacement at the surface includes columnar jointing, local flow banding, and discontinuous quartz porphyry spines with slickensided surfaces. Emplacement is thought to have been as exogenous flow-dome complexes. Dacite domes are surrounded by argillically altered pyroclastic aprons consisting of coarsely fragmental heterolithic tuff breccias and interbedded finer grained tuffs. Clasts in the tuff breccia are a mix of variably altered basalt, dacite and tuff breccia. Some of the clasts are veined and silicified. The presence of silicified clasts in the pyroclastic apron indicates: The hydrothermal system was active at the time the pyroclastic blanket was emplaced, and The vent for the pyroclastic apron is nearby, within the limits of the hydrothermal system. These features are also characteristic of gold mineralisation in the Pueblo Viejo district. Hydrothermal alteration related to gold mineralisation in the Bayaguana district includes silicification, argillic alteration, phyllic alteration, and propylitic alteration. Silicification, containing a small percent of disseminate pyrite, is centered on dacite domes. Sulfidic silicification is also found locally in the dacite tuff breccias, especially on Loma de Managuá, and in the propylitically altered basalts where they are cut by quartz veins. 16

22 Argillic alteration (quartz plus pyrite plus kaolinite) is largely confined to pyroclastic blankets that surround dacite domes. The largest dome in the area is centered on Loma de Managuá. Argillic alteration becomes more widespread and more intense (pyrite content increases) towards Loma de Managuá, where it grades into a silicified cap. Propylitic alteration consists of quartz plus pyrite plus chlorite plus calcite. Propylitic alteration is zoned around the argillized and silicified dacite domes and is largely confined to basalts. Quartz plus sulfide increase in the vicinity of veins that may run as high as 25% sulfide. Sericite also increases near veins (phyllic alteration) causing a lightening of the typical dark green propylitized basalts. Pyrophyllite (sericite without potassium) is also present as part of the phyllic assemblage Maimón concession The Maimón concession lies over the Maimón Formation. The Maimón Formation is a belt of Cretaceous-age metavolcanic and metasedimentary rocks that includes mafic, intermediate, and felsic volcanic rocks, minor sediments, exhalative iron formation, and gossan. Massive sulphide occurrences within this formation are known from the Maimón and the El Anon concessions and from de Cerro de Maimón deposit. The concession boundaries are shown in figure 3 Draper et al. (1996) interpreted the Maimón Formation as the fore-arc equivalent of the Los Ranchos Formation, host to the Pueblo Viejo deposits. They divided the Maimón Formation into the El Altar zone and the Ozama Shear zone: two parallel structuralmetamorphic provinces characterized by deformed, greenschist facies metamorphic rocks. Mapping at Pueblo Viejo shows that thrust faulting and metamorphism extend beyond the limits of the El Altar zone and into the Los Ranchos Formation. The Maimón Formation may simply represent sheared and metamorphosed Los Ranchos Formation, or its fore-arc equivalent El Anón concession (from Patrick 1998) The El Anón concession is underlain by rocks of the Amina/Maimón Formation, a Late Cretaceous suite of bimodal metavolcanic rocks consisting of mafic and felsic lavas now represented by chlorite and sericite schists respectively. The rocks are interbedded with minor layers of cherts, and hematitic metasediments, possibly exhalites, together with argillic metasedimentary layers. The rocks exhibit strong foliation along a northwest trend parallel to the stratigraphy. Late dykes intersected in drilling are recognised, though no trends have been identified. Figure 4 shows the geology of the El Anón concession. In the northwest of the concession, a sub-horizontal, regional scale synform and adjacent antiform has been identified. The whole area has been uplifted by late block faulting. All rocks on the concession are metamorphosed to greenschist facies and the felsic members exhibit pre-metamorphic hydrothermal alteration consisting of strong to moderate silicification and sericitisation. 17

23 Figure 3: Geology of the Maimón concession 18

24 Figure 4: Simplified geology of El Anón concession 19

25 Several areas of gossan have been identified on the property, three of which lie at the same stratigraphic level. Soil sampling and shallow pitting has revealed elevated precious and base metal values, suggesting the presence of a disrupted horizon of felsic schist mineralised in gold-bearing polymetallics. A fourth zone of gossan proved to be enriched in gold and to overlie weak primary sulphide mineralisation. 10- Deposit types Bayaguana group of concessions Exploration on the Bayaguana Group of concessions has identified high sulfidation type gold mineralisation at Cerro Kiosko and at Doña Amanda. High sulfidation gold mineralisation is characterized by ore mineralogy that includes enargite and by hydrothermal alteration mineralogy that includes pyrophyllite. High sulfidation deposits account for roughly half of the total gold endowment in the Caribbean Basin, largely contained in a cluster of deposits known as the Pueblo Viejo district. Pueblo Viejo, with over five million ounces in past production and close to 35 million ounces in remaining resources, is by far the largest gold deposit in the Caribbean Basin. However, other mineral occurrences in the Los Ranchos Formation are also associated with volcanic domes and thinly bedded carbonaceous sedimentary rocks. These occurrences may host ore deposits similar to those in the Pueblo Viejo district Cerro Kiosko deposit: Individual quartz veins measure up to 30 cm in thickness and occur as a swarm within a zone of intense hydrothermal alteration that measures up 100 meters in thickness. The vein swarm pinches and swells and, towards the southeast, splits in two. Mineralised intervals reviewed in drill holes OF-1 and OF-3 consist of a mix of strong phyllic alteration, silicification, quartz veining, and sulfide mineralisation. The longest mineralised interval (OF-02) averaged g/t Au and 4.28 g/t Ag over 22 meters and included a six-meter intercept of 7.53 g/t Au. Vein gold mineralisation on the Cerro Kiosko deposit is hosted by steeply dipping, northwest-striking faults which cut propylitically altered Cretaceous basalts. Nearby volcanic domes of dacitic composition cut the basaltic host rocks and are surrounded by pyroclastic aprons. Geology of the Cerro Kiosko is presented on Figure Doña Amanda deposit: The Doña Amanda copper deposit consists of a secondary enrichment blanket covering lower grade copper protore. Copper in the enrichment blanket occurs primarily as djurelite, a cousin of chalcocite. Host rocks include porphyritic dacite and surrounding dacitic tuff breccias. Alteration in the protore consists of strong phyllic alteration with an elevated sulfide content (5 to 10 percent) locally cut by sulfidic, chalcopyrite-bearing, quartz stockworks. The geological map is shown on Figure 6. 20

26 Figure 5: Geology of Cerro Kiosko 21

27 Figure 6: Geology of Doña Amanda 22

28 Doña Loretta project : The Doña Loretta project is not well known but seems to be similar to the Doña Amanda deposit. A sericitic schist encountered in holes CC-01 and CC-07 seems to be an important structure having control on the mineralisation. This structure is, for the moment, not well controlled. The geological map is shown on Figure Maimón concession Cerro de Maimón (modified from Nelson 2000) Cerro de Maimón is a massive sulfide deposit drilled by Falconbridge in Host rocks include felsic volcaniclastic rocks and mafic flows of the Maimón Formation. The deposit measures 800 meters along strike and is between five to 40 meters thick. Drilling by Falconbridge defined a historic sulfide resource of 3.36 million tonnes of 3.93% copper, 1.93% zinc, 0.56 g/t gold and 47.3 g/t silver at a 1% copper cut-off (Campbell, 1997). The near-surface, oxidized portion of the deposit contains an additional tonnes of 60 g/t silver and 3.1 g/t gold (Campbell, 1997). More recent work by Pincock Allen Holt (2004) has defined a compliant proven and probable reserve of 3.3 million 2.9% Cu and 1.28 g/tonne Au (Pincock, Allen & Holt, Dec. 2004). The Cerro de Maimón deposit is located near the Maimón concession, south-east of this one and is held 100% by GlobeStar through CMD. Cerro de Maimón is included here because it is the largest massive sulphide deposit discovered to date in the Maimón massive sulphide belt. This deposit is presently under study and financing for an eventual production. An exploitation of Cerro the Maimón deposit will give an economic interest for many satellite deposits in the Dominican Republic Loma Pesada: Loma Pesada is underlain by acid volcanic rocks interbedded with intermediate lavas and siliceous iron formation. Gossan crops out on Loma Pesada. A total of 329 soil samples were collected with high values of 870 ppm copper and ppm zinc. Thirteen diamond holes (2 680 meters), drilled by Falconbridge in 1990, (on 100 meters centre) were used to calculate a mineral resource of million tonnes at 2.13% copper, 0.77% zinc, 4.37 g/t silver, and 0.16 g/t gold. The resource is contained within a massive sulfide lens that measures 800 meters in strike length and is four to fifteen meters in thickness. Host rocks include weakly metamorphosed felsic volcanic rocks and local siliceous iron formation interbedded within a larger sequence of mafic tuffs and flows. 23

29 Figure 7: Geology of Doña Loretta 24

30 ACA Howe International Ltd. (Patrick, 1998) checked the resource calculation and assigned it to the indicated category. Chénard (2000), using the same data, calculated an inferred resource of 1.0 M tonnes at 2.15% copper, 0.75% zinc, 4.5 g/t silver and 0.16 g/t gold (at a 1% copper cut-off). This evaluation was reviewed and will be presented later in this report. The geological map is shown on Figure Loma Barbuito: The Loma Barbuito massive sulphide forms a prominent gossan located two kilometers west of Loma La Mina. Host rocks include andesite flows, feldspar porphyry tuffs, and a quartz porphyry dome now metamorphosed to quartz-sericite schist. Soil samples revealed copper anomalies up to ppm and zinc up to ppm. Gold values were spotty with a high of g/t. An 800 meters IP anomaly was drill tested by Rosario with three rotary drill holes and 12 core holes (2 141 meters). The geological map is shown on Figure El Anón concession Cerro Verde: Cerro Verde is an oxidized massive sulphide on the El Anón concession containing a resource estimated by Falconbridge at tonnes at 1.58 g/t gold (figure 5). The resource estimate is based on six diamond holes (1 519 meters) and thirteen reverse circulation holes (1 795 meters) drilled on 50-meter centers. No significant underlying base metal mineralisation was encountered. Two additional diamond drill holes (180 meters) completed by Sarmin on a possible strike extension were unmineralised. ACA Howe International Ltd. (Patrick, 1998) assigns the Cerro Verde resource to the indicated category and concludes that it is closed in all directions. Chénard (2000) used the same drill hole data to calculate an indicated resource of tonnes at 1.88 g/t gold (using a 1.0 g/t cut-off), tonnes at 2.73 g/t gold (using a 1.5 g/t cut-off), or tonnes at 1.23 g/t gold (using a 0.5 g/t cut-off). The geological map is shown on Figure Anomaly A : Anomaly A is an area of massive sulfide mineralisation underlying the Elias Gossan on the El Anón concession. Seven diamond drill holes (701.9 meters) completed by Falconbridge and two diamond drill holes completed by Sarmin (269.6 meters) revealed narrow intercepts (e.g. one meter of 0.82% copper, 1.2% zinc and 15.3 g/t silver). 25

31 Figure 8: Geology of Loma Pesada 26

32 Figure 9: Geology of Loma Barbuito 27

33 Figure 10: Geology of Cerro Verde 28

34 Anomaly B : Anomaly B, a massive sulfide on the El Anón concession, contains an indicated resource of 330,095 tonnes of 1.87% copper, 1.45% zinc, 1.16 g/t gold, and g/t silver at a 1% copper cutoff (Chénard, 2000). Figure 6 provides a location map. The resource is based on 25 diamond drill holes (3 048 meters) completed by Falconbridge. One additional hole was drilled on the nearby Elias gossan. ACA Howe International Ltd., using the same database, calculated a similar resource of tonnes at 1.28 g/t gold, 13.6 g/t silver, 2% copper, and 1.67% zinc. Patrick (1998) assigned the Anomaly B resource to the indicated category. 11- Mineralisation Doña Amanda The Doña Amanda copper deposit occurs on the Managuá concession and contains copper in a zone of secondary enrichment above a lower grade protore. The host rock is a dacitic dome with a pyroclastic tuff breccia apron, with strong phyllic and sulphidic alteration, locally cut by pyrite and chalcopyrite bearing quartz stockworks. The hydrothermal alteration continues onto the Managuá concession, on which additional dacitic- domes have been identified. The deposit is nearly flat (dip 15 to 20 south) with a more or less east-west direction Cerro Kiosko Veins at Cerro Kiosko are discontinuous, crustiform banded, chalcedonic to microcrystalline, milky quartz veins with moderate to high sulfide content (10 to 20%). Sulfides include pyrite, chalcopyrite, chalcocite, bornite, and enargite. The veins strike northwest and can be traced over a strike length of meters. Drilling confirms mineralisation to a depth of 400 meters and an overall southwest dip of 60 degrees Doña Loretta The Doña Loretta deposit is not well known for the moment. It seems very similar to the Doña Amanda deposit. A working hypothesis for the Doña Loretta assumes a more or less flat geometry whose extensions for the moment are not known. More drilling is necessary to better delineate this deposit. Presently, the known extent of the deposit is more or less 450 meters by 200 meters with a thickness which varies from 4.5 metres to 65 meters Loma Pesada The Loma Pesada deposit is a copper-zinc rich massive sulphide type with small amounts of silver and gold. The mineralised zone is stretched in a shear zone and has a N140 orientation with a south-west dip of 50. The massive sulphides lens is 1 to 8 meters in 29

35 thickness with a mean of 3 meters. The lens is in a felsic volcanic sequence. This sequence is in a mixed sequence of tuffs and mafic volcanic flow interbedded with felsic volcanics. A disseminated mineralisation (fine interstitial pyrite, chalcopyrite and sphalerite) envelope is present around the massive sulphides lens. This envelop is 800 meters long with a thickness between 4 to 15 meters, and it extends over 200 meters in depth Loma Barbuito Massive sulphide mineralisation up to twenty meters in thickness was encountered at the contact of a felsic porphyry with mafic tuffs and flows. The best intercept was 6 meters of 1.4 g/t gold, g/t silver, 4.4% copper and 3.0% zinc in drill hole LB-07. The longest intercept was 44 meters of 0.35 g/t gold, 15 g/t silver and 0.24% copper in drillhole LB-02. Two additional holes drilled by Falconbridge in 1994 (441 meters) encountered up to seven meters of weak anomalous massive sulphide mineralisation. The dimension and the continuity of this showing are presently not well defined and more drilling is requested before a resource calculation can be done Cerro Verde The Cerro Verde deposit is a supergene gold deposit with a secondary enrichment in gold from an altered sericitic schist with disseminated pyrite. The mineralised zone is subhorizontal with a thickness which varies from 1.5 to 94.5 meters with a mean thinkness of 23 meters (for a cutting grade of 0.50 g/t Au). It is elongated on the south-west northeast axe; with a long axe of 170 meters, by a short axe of 60 meters Anomaly B The mineralisation of Anomaly B deposit is a copper massive sulphide type with small amounts of zinc, silver, and gold. The zone is stretched by a shear zone and is oriented N155 with a south-west dip at 70. It is followed over 350 m in direction and between 50 to 150 meters in dip. The thickness varies from 0.45 to 4.45 meters, with a mean of 1.7 meters. The deposit is in a quartz-feldspar schist with chlorite and sericite. 12- Exploration GlobeStar has conducted exploration work in the Dominican Republic since Bayaguana Group of concessions Between 2000 and 2002 GlobeStar carried out local geophysics (IP), mapping, the drilling of 845 meters in seven drill-holes on Doña Amanda and the drilling of 101 meters in two drill-holes on Loma Guaimarote to test the thickness of the Hatillo limestone. Since 2003, several exploration programs were carried out, which includes drilling in three different campaigns (2 051 m in 24 drill-holes on the Trinidad 30