Clearwater Property STAN ENDERSBY

Transcription

1 Geophysical and Geological Assessment Report on the Clearwater Property 15 Mineral Claims located in the Nelson Mining Division British Columbia NTS 82F/6E UTM: mE, mN, Zone o North Latitude, 117 o West Longitude Prepared for STAN ENDERSBY by W. Kushner, B.Sc. Vancouver, BC DECEMBER 31, 2009

2 Clearwater Property 1 SUMMARY The Clearwater Property, formerly referred to as the Oldtimer/Summit Property in older publications, consists of 15 mineral claims covering approximately hectares. The Clearwater Property (the property) extends south from the headwaters of Clearwater Creek, which is in turn located 20 kilometres southeast of Nelson, B.C. The registered owner of 100% of the claims is Stan A. Endersby, P.Eng., of White Rock, B.C. The property is situated in the northeastern part of the Ymir District. Production in the Ymir District was from sulphide rich mesothermal quartz veins: regional scale, northeast trending structures occupying, paralleling or on the contact between Lower Jurassic and older sediments and Middle Jurassic granitic intrusions. The quartz veins are a few centimetres to greater than two metres in width with excellent lateral continuity. Historic production from the Ymir District was 635,000 tonnes grading greater than 10.3 grams gold per tonne. The Clearwater Property has a recorded historical production from 1980 as 20.3 tonnes grading 3.97 grams per tonne and 85.8 grams per tonne silver. Production prior to this was hampered by the relatively remote location of the property. Recent logging activity has provided good road access to the property. Fissure quartz veins with values up to 75 g/t gold and mineralized widths over four metres true width from drill hole intersections have been exposed by six adits, two shafts, numerous trenches and 35 diamond drill holes. The main underground workings are, from northeast to southwest, Oldtimer, Pathfinder, Summit and Elise. These workings are on veins with very similar attitudes and mineralogy. They are separated by 500 to 1000 metres and are probably all on slightly offset sections of the same vein. If this is the case, the vein has been exposed over more than 3.8 kilometres of strike length. The best mineralization in the Ymir Camp has been found where the northeast trending mineralized structures are cut by cross structures or dykes or sills of granitic intrusive. Geophysical exploration is one of the main tools to use on the property; there is little exposed bedrock due to overburden. A previously unexplored portion of the property was selected for geophysical exploration in 2009 to determine the possibility of another vein located parallel to the known mineralized system.

3 Clearwater Property 2 Table of Contents SUMMARY INTRODUCTION AND TERMS OF REFERENCE RELIANCE ON OTHER EXPERTS DISCLAIMER LOCATION, ACCESS, CLIMATE, PHYSIOGRAPHY AND INFRASTRUCTURE Location Access Climate Physiography Infrastructure STATUS OF MINERAL TENURE PROPERTY HISTORY Recent History REGIONAL GEOLOGY Property Geology DEPOSIT TYPES MINERALIZATION EXPLORATION OTHER RELEVANT DATA INTERPRETATION CONCLUSIONS RECOMMENDATIONS COST ESTIMATES REFERENCES CERTIFICATE OF QUALIFICATION... 22

4 Clearwater Property 3 Figure 1: Location Map... 5 Figure 2: Claim Map... 8 Figure 3: Regional Geology Map Figure 4: Regional Geology Map Legend Figure 5: Property Geology Map Figure 6: Grid Location TABLE 1: Claim Information... 7 TABLE 2: Stage 1 Cost Estimate TABLE 3: Stage 2 Cost Estimate APPENDIX I MAGNETOMETER SURVEY PLOTS APPENDIX II MAGNETOMETER COMPILATION APPENDIX III MAGNETOMETER SURVEY DATA APPENDIX IV STATEMENT OF EXPENDITURES... 66

5 Clearwater Property INTRODUCTION AND TERMS OF REFERENCE The author was contracted by Stan Endersby to conduct geophysical exploration and write an Assessment Report on the Clearwater Property. This report summarizes the work performed on the Property from October rd, 2009, and offers a compilation map compiled from previous reports. Sources of information included available published sources, including industry assessment reports on the Property and on the general area, as well as unpublished reports that were made available to the author by Mr. Endersby. 2.0 RELIANCE ON OTHER EXPERTS The author has personally visited the Property and supervised the work performed for submission in this report. The author has also relied on the truth and accuracy of the aforementioned private and public data in the preparation of this assessment report. 3.0 DISCLAIMER The author is not responsible for previous data collected and prepared by others. With respect to mineral tenure information for the subject claims, the author has relied solely on the information available for public access on the Mineral Titles Online website and the disclaimers associated with this site. 4.0 LOCATION, ACCESS, CLIMATE, PHYSIOGRAPHY AND INFRASTRUCTURE 4.1 LOCATION The Clearwater Property is located in the Kootenay region of southern British Columbia (Figure 1). It is composed of 15 contiguous mineral claims, situated within the Nelson Mining Division. The claims are situated approximately 18.7 kilometres southwest of Nelson, B.C. on NTS map sheet 82F. The geographical centre of the property is 49 21'8.5 north latitude and 117 8' 29.9 west longitude, or at UTM coordinates mE and mN, Zone ACCESS The property is easily accessed off of the paved Highway 6 between Nelson and Ymir. The Clearwater Creek access road is located 12 kilometres south of Nelson (or 15 kilometres north of Ymir). This well-maintained, gravel logging road provides access to the centre of the property 12 kilometres southwest. In good weather a

6 Clearwater Property 5 FIGURE 1: LOCATION MAP

7 Clearwater Property 6 two wheel drive vehicle can easily access the centre, but to fully utilize the logging roads and old mining trails providing access to much of the property, a four wheel drive vehicle is necessary. Some roads have been decommissioned by the logging companies and as such a quad would be able to provide additional access. 4.3 CLIMATE The climate in the Nelson area is boreal forest, changing to subalpine and alpine as elevation increases. The climate in the Nelson area is characterized by four very distinct seasons. Average minimum and maximum temperatures vary from -5 C to 5 C in winter and 15 C to 27 C in the summer. Annual precipitation averages 730 mm. Rainfall averages around 25 mm a month from March through October. Snowfall occurs from November through March with December and January averaging 70 cm each. Snow-free exploration can be conducted on the property from mid-may until late October. 4.4 PHYSIOGRAPHY Topography on the property is moderate to rugged. The immediate area around the Oldtimer and Summit showings are relatively flat with precipitous slopes immediately north of the Oldtimer showing and west of the Summit showing. Elevations range from 1000 metres above sea level in the southwest corner of the property on Huckleberry Creek to over 2160 metres northeast of the Oldtimer showing. Vegetation consists of mature cedar, hemlock, fir, and larch in the western and central parts of the property, grading into subalpine and alpine vegetation in the eastern part of the property. Approximately 50% of the property has been clearcut. This has been replanted, and is extensively vegetated with wild blueberry bushes. 4.5 INFRASTRUCTURE Nelson, a historic mining centre with a population of 9800, is able to provide all the services needed to support work on the Clearwater Property. The author stayed in Ymir for this program, which is able to provide excellent accommodation services. Electrical power is available from the BC Hydro grid located approximately 5 kilometres west of the property. Clearwater Creek, Huckleberry Creek and numerous small creeks on the property are able to provide ample water for drilling or mining purposes. 5.0 STATUS OF MINERAL TENURE Mr. Stan Endersby is the registered owner of a 100% interest in 15 contiguous mineral claims totalling hectares in the Nelson Mining Division of British

8 Clearwater Property 7 Columbia (Figure 2). Claim information is summarized in Table 1. Three claims, (tenures , and ) were established using the online staking system now in use in British Columbia. The remaining claims had been staked using the traditional system of physical demarcation of claim boundaries on the ground, and were converted to cell claims. The Clearwater Property claims are presently all in good standing. There are presently two Crown granted mineral claims located within the boundaries of the property: Alexandre (L.5729) and Dumas (L.5727). The Crown granted claims cover a total area of hectares, and are not considered part of the property. TABLE 1: Claim Information Claim Tenure Area Expiry Date* Name Number (Ha) June, 2011 Spruce June, 2011 Spruce June, 2011 Spruce June, Sept, June, June, Sept, Sept, Sept, Sept, Sept, June, June, June, 2011 *Pending acceptance of this report Cell claims as they are defined in B.C. can consist of between one and twenty-five individual contiguous cells. Each individual cell is defined on the map by lines of latitude and lines of longitude, covering approximately 21 hectares in the area of the property. Cells decrease in size as the lines of longitude converge as one goes northward, reducing to a size of approximately 16 hectares at the north of the province. Acquisition and maintenance charges are based on the area of each particular claim. Fieldwork conducted on the claims can be applied to hold the claims in good standing up to a maximum of ten years from the date of application. If no work is performed, cash may be paid in lieu. In British Columbia, work performed on a claim must equal or exceed the minimum specified value per hectare; excess value of work in one year can be applied to cover work requirements on the claim for additional years. During the first three years of a claim s existence, the minimum work value is $4 per hectare (plus an additional $10 per unit recording fee); this amount increases to $8 per hectare after the third year.

9 Clearwater Property 8 FIGURE 2: CLAIM MAP

10 Clearwater Property 9 Crown granted mineral claims (Crown grants) in B.C. are similar to patented claims in other jurisdictions; some of the older ones may include some surface and timber rights. Crown grants do not have an expiry date but are kept in good standing by paying an annual tax of $1.25 per hectare. Full size Crown grants in B.C. are up to 25 hectares. Work values are the same on a claim regardless of whether a portion of the cell claim is occupied by one or more Crown grants. The claim holder does not own rights to minerals within the Crown grant by staking the claim. Mineral rights may be obtained by purchasing the Crown grant from the owner, or by entering into an option deal. With respect to mineral tenure information for the subject claims, the author has relied solely on the information available for public access on the Mineral Titles Online website and the disclaimers associated with this site. 6.0 PROPERTY HISTORY The Ymir District has had a successful mining history, with several significant gold producers such as the Yankee Girl, Wilcox, Dundee and Ymir Mines (Figure 3). The Ymir Creek area first attracted the attention of early placer miners in Accessibility improved with the construction of the Nelson and Fort Sheppard Railway in The first mineral claims were staked in At least seven auriferous quartz veins were identified in the early 1900's and a number of mines went into production. The District had two main periods of production, from 1904 to 1917 and 1932 to Production from the whole of the Ymir camp totalled 635,000 tonnes grading 10.3 grams gold per tonne from 6 main mines. The original Summit claim was staked on July 8, 1896 by Chas. W. Anderson, John Lindblad and John Bergman. It covered the vein in the area of the Summit Portal. A crosscut was driven about 50 metres to the vein, which was then drifted on for another 44 metres to the northeast. The vein width is three metres at the face. Another short adit above as well as surface outcroppings indicate similar widths but historic assays were low and the claim was forfeited to the crown in Prospecting, soil sampling and geological mapping has been carried out intermittently since the 1970's by Nugget Mines Limited and Stan Endersby to outline areas where the Summit vein might intersect granitic dikes or sills, prospective areas for high grade mineralized shoots in the Ymir District. The original Oldtimer claim was located on July 26, 1909, by R.R. Shrum, E.M. Peters and Chas. Desrosiers. The original workings from this era consist of a 50 metre drift on a quartz vein and a shaft 90 metres northeast of the drift. These workings have been covered by recent trenching but historic assays up to 2.5 ounces per ton were reported. 6.1 RECENT HISTORY Modern recorded work in the Oldtimer workings area started in 1980 when a rough road was constructed to the surface exposures and a large area stripped with an

11 Clearwater Property 10 excavator. One hundred metres of a shear zone containing an auriferous quartz vein was exposed and 20.5 tomes of mixed vein and wall rock, grading 3.97 grams per tonne gold and 85.8 grams per tonne silver, were shipped to the Trail smelter. In 1988, Golden Glory Resources Ltd. carried out a drill program consisting of three shallow diamond drill holes from one setup north of the stripped area on the Oldtimer showing. The first hole, 88-01, drilled south southeast under the stripped area at -45, intersected 5.37 metres of quartz vein and shear zone grading 4.4 grams per tonne gold. A second hole, 88-02, drilled the same direction as at -60, intersected a similar zone but only trace values of gold were reported. The third hole, 88-03, was drilled the same direction as and at -70 and did not intersect the zone. In 1990, P.M. Explorations Ltd. drilled two shallow holes totalling metres under the northeast end of the stripped area on the Oldtimer showing. These holes were drilled on the same section as 88-01, 02 and 03. DDH90-01 was drilled at azimuth 171, -60 and intersected a 4.3 metre zone of quartz and altered intrusive at 27.6 metres which assayed 12.0 grams gold per tonne. DDH90-02 was drilled at azimuth 171, -45 from the same setup as DDH90-01 and intersected a 3.1 metre zone of quartz and altered intrusive at 24.7 metres which assayed 10.0 grams gold per tonne. The mineralized zone strikes 70 and dips -60 to the northwest, indicating a 2.9 metre true width to the zone in this area. In 1991 Jaguar Equities Inc. drilled two shallow holes in the same area. DDH91-01 was drilled from the same setup as DDH90-01 and 02 at azimuth 178, -60 and was designed to intersect the zone 12 meters west of the 1990 holes. This hole intersected a 4.0 metre zone which assayed 12.7 grams gold per tonne. DDH91-02 was drilled 38.7 metres east northeast of DDH at azimuth 166, -60 and intersected a 4.3 metre mineralized zone. Assay results are not available for this intersection. In 1992, S. Endersby carried out 1.1 line kilometres of VLF-em16 geophysical survey. Six lines were run orthogonal to the exposed part of the Oldtimer vein and at 50 metre intervals to the west. The three eastern lines, A, B and C did not give a response over the vein. Line D has an anomaly on the projected strike of the exposed vein and Lines E and F have anomalies offset approximately 15 metres and 20 metres north, respectively, to the projected strike extension to the vein. In 1993, S. Endersby carried out a geochemical and mapping program on the property. This program located and surveyed claim posts, historic drill holes, geophysical surveys, surface and underground workings with reference to roads in the areas of the Summit and Oldtimer portals. Eighteen soil geochemical samples taken along a new logging roadcut approximately 250 metres east northeast of the Summit Portal returned six anomalous (> 30 ppb Au) and two highly anomalous (>l00 ppb Au) samples. Thirteen rock samples were taken from the same area. One sample of angular, mineralized, drusy quartz float assayed 29.1 grams gold per tonne. A north-south trending sill of granitic rock crosses this area and should intersect the projection of

12 Clearwater Property 11 the Summit vein 300 metres east of the Summit portal, near the fourth or highest switchback on the logging road. In 1995, S. Endersby carried out 4.8 line kilometres of VLF-em16 geophysical survey, 2.6 line kilometres of self potential geophysical survey and took 81 soil geochemical samples. The self potential VLF surveys both showed a strong anomaly in the area of the projected intersection of the Summit vein and the granitic sill, 300 metres north of the Summit portal. An approximately 30 centimetre diameter quartz float boulder assaying 19.7 grams gold per tonne was found in this area. VLF and self potential surveys southwest of the Oldtimer workings produced anomalies over the projected strike extension of the vein for 250 metres southwest of the stripped area. Soil sampling produced weak silver, zinc anomalies in the area of the projected strike of the vein 150 metres southwest of the Pathfinder adit. In 1997, S. Endersby carried out 6.8 line kilometres of VLF-em16 geophysical survey to test for northerly trending granitic bodies or shear zones. Distinct anomalies were seen on five of six lines which indicate a parallel structure 500 metres southeast of the Summit vein. In 1998, S. Endersby carried out 4.7 kilometres of VLF-em16 geophysical survey and took 58 soil geochemical samples. The VLF survey was designed to test for northerly trending granitic bodies or shear zones so their intersection with the projection of the Summit vein could be located and tested for gold mineralization. Distinct anomalies were seen on four of six lines surveyed. These anomalies show the granitic body and shear zone in the area 300 metres north of the Summit Portal, the extension of the Pathfinder vein 100 metres southwest of the Pathfinder adit and the possible parallel structure 500 metres southeast of the Oldtimer / Pathfinder vein. Soil sampling was carried out in two lines southwest of the Pathfinder vein. One highly anomalous sample (190 ppb Au) probably indicates the location of the southwest extension of the Pathfinder vein. A diamond drill program was conducted in 2004 to test the Oldtimer Vein for lateral and depth extensions of mineralization outlined in the adit and by previous shallow drilling. Four holes totalling metres were drilled. One hole, SO-04-04, intersected 4.4 metres true width grading 13.3 g/t Au. Assuming continuous mineralization from the Oldtimer Vein, this provides an inferred mineral resource of 600,000 tons grading 10.2 g/t Au in this area. A follow-up diamond drill program in 2005 consisted of a 24 holes totalling metres. All 24 holes intersected the mineralized structure and returned anomalous to economically interesting results. According to all known information available on the Clearwater Property, in total there are seven historic adits, numerous trenches and thirty five drill holes completed to date. Soil and rock geochemistry has been conducted, prospecting and geological mapping programs have been done and VLF-em16 and magnetometer surveys were completed and used in the exploration of this property over the last century.

13 Clearwater Property 12 FIGURE 3: REGIONAL GEOLOGY MAP

14 Clearwater Property 13 FIGURE 4: REGIONAL GEOLOGY MAP LEGEND

15 Clearwater Property REGIONAL GEOLOGY The Clearwater property is situated within the Kootenay Arc (Figures 3 & 4), a northerly trending arcuate structural zone which includes Proterozoic to Ordivician sedimentary rocks and unconformably overlying Mississippian to Mesozoic sedimentary and volcanic rocks. It extends from northern Washington state to north of Revelstoke along Kootenay Lake, a distance of several hundred kilometers. This miogeosynclinal suite of rocks is locally intruded by acidic phases of the Nelson Plutonic series. The belt is characterized by open to isoclinal north-trending folds in the oldest sedimentary rocks which contain stratiform zinc-lead-silver deposits in Cambrian limestones and dolomites and gold deposits in quartz veins filling late crossfaults. The Ymir mining camp is an example of gold deposits in quartz veins hosted in Proterozoic sediments. 8.0 PROPERTY GEOLOGY The Clearwater property straddles a north trending contact between Triassic and earlier metasediments of the Ymir Group to the west and Middle Jurassic granitic and dioritic intrusives of the Nelson Plutonic Series (Figure 5). The Ymir Group sediments are comprised of north northeast to northwest striking, complexly folded and metamorphosed argillaceous quartzites and phyllites. Intrusive rocks on the property are coarse grained, non-foliated diorite. Detailed mapping on the property shows that the intrusive-sediment contact is complex, with dikes and sill of diorite extending several hundred metres west into the sediments 9.0 DEPOSIT TYPES The most important deposit type in the Ymir camp are northeast trending quartz veins, variably mineralized with auriferous pyrite, galena, sphalerite and chalcopyrite, which occur at or adjacent to the intrusive-sediment contact. Production from the Yankee Girl, Dundee, Goodenough and Ymir Mines, located three to six kilometers southwest of the property, totalled more than 635,000 tonnes grading greater than 10.3 grams gold per tonne. Productive veins were typically 0.6 metres to 1.3 metres in width, with ore shoots locally up to 3.5 metres in width. The best ore shoot in the Yankee Girl Mine was mined over 330 metres vertically and 125 metres horizontally. These are "true fissure veins", following regional scale structures and exhibiting good vertical and horizontal continuity. The best ore shoots occur in the northeast trending veins where they are cut by intrusive dikes or sills or crosscutting structures.

16 Clearwater Property 15 FIGURE 5: PROPERTY GEOLOGY MAP

17 Clearwater Property MINERALIZATION The Clearwater Property is defined by exposed northeast striking, north dipping auriferous quartz veins (Figure 5). The veins exposed by these showings all exhibit similar attitudes and mineralogy. They probably are all slightly offset sections of the same vein. From northeast to southwest the main showings are Oldtimer, Pathfinder, Summit and Elise. At the Oldtimer showing a quartz vein striking 60 to 75 and dipping 60 to 70 to the northwest was drifted on for 50 metres and a shaft sunk 100 metres northeast of the portal in The vein is hosted by phyllite, part of the Ymir Group, crossing into granodiorite, part of the Nelson Intrusive Suite, at the northeast end of the stripped area. The vein contains galena, sphalerite and pyrite and is at least 1.37 metres in width. A sample taken from 0.61 metres of the vein by an officer of the B.C. Ministry of Mines (MOM) in 1928 assayed 31.8 grams gold per tonne and 88.9 grams silver per tonne. Two grab samples taken at the same time from the dump assayed 18.1 and 24.3 grams gold per tonne. One hundred metres of the vein was stripped with an excavator in 1980 covering the drift and shaft. A total of 20.5 tonnes of mixed vein and wall rock was shipped to the Trail smelter at this time. This material assayed 3.97 grams gold per tonne and 85.8 grams silver per tonne. Seven short diamond drill holes were drilled to test the vein between 1988 and Six holes intersected the vein with widths from 3.1 metres to 5.37 metres and returned gold assays from trace to 12.7 grams gold per tonne. The true width of the vein in the area of the1988 and 1990 drilling has been calculated to be 2.9 metres. The vein has been exposed for three hundred metres strike length in this area. At the Pathfinder showing, 750 metres at 245 from the Oldtimer portal, a tunnel was driven on a quartz vein on strike with the Oldtimer vein. No information is available from underground but a grab sample taken from the dump by a MOM officer in 1928 assayed 9.9 grams gold per tonne and a selected grab sample from a 0.91 metre quartz vein in a creek 10 metres from the portal assayed 97.2 grams gold per tonne. At the Summit showing, 1.1 kilometers at 250 from the Pathfinder portal, a 1.8 metre to 3.7 metre quartz vein with similar attitude to the Oldtimer vein is hosted in argillite of the Ymir Group. A 50 metre crosscut was driven to intersect the vein and the vein was drifted on for 44 metres. Negligible values in gold and silver have been returned from the vein in this drift. At the Elise showing, 1.95 kilometres at 225 from the Summit portal, a 75 metre crosscut was driven to intersect a quartz vein in Ymir Group rocks similar to the above showings. No assay information is available for this showing. All of these showings are roughly on strike and, assuming minor displacements, are probably the same vein exposed over 3.8 kilometres of strike length.

18 Clearwater Property 17 FIGURE 6: GRID LOCATION

19 Clearwater Property EXPLORATION Exploration work was conducted on the property from October rd, 2009, and consisted of establishing a grid and conducting a geophysical magnetometer survey across a previously unexplored region of the property (Figure 6). A baseline was established at 045, roughly parallel to the mineralized zone. It was cut using a chainsaw and stations on the line were well marked with flagging and metal tags. Lines were spaced 100 metres apart and surveyed in using a handheld GPS. Stations were created every 12.5 metres along the lines, and every 100 metre station along the lines was surveyed in with a GPS as well. In total, line kilometres of grid was established on the property. A total of 9.35 kilometres of geophysical magnetometer survey was conducted using a Geometric G-816 Magnetometer unit. A base station was not used to correct the data. While conducting the survey, loops were performed to close lines, and it was noted that on average for the survey, maximum variations were in the range of gammas when closing a loop between lines. Roads and several other features in the field were surveyed in using a handheld GPS, which was then used as a control for a new base map of the property. Previous hand-drawn maps were digitized and the new surveyed base was used to create a best fit compilation of previous work on the property OTHER RELEVANT DATA The author is not aware, at the time of writing, of other relevant data that would further contribute to the understanding of the status or potential of the subject property INTERPRETATION A moderate to strong magnetic high can be traced somewhat continuously on the eastern portions of Lines 42N-45N and up to Line 47; the same can possibly be delineated on Lines 53N, 54N and the Upper Road Line. A moderate to strong magnetic low appears further east of the high on Lines 44N-48N. The magnetic high located on Lines 53N, 54N and the Upper Road roughly corresponds to the mineralized zone in that location and could be an indication of the zone. The magnetic high on Lines 42N-47N appears as a northeast trending linear feature and could represent a parallel mineralized zone. The closely associated magnetic low to the east of this may indicate a moderately steep dip to that feature. A strong cross-over feature appears between Station 4525E and Station 4600E on Line 45N. It is very prominent and would tend to indicate a steeply dipping feature. However, a similar signature is not present on either line flanking Line 45 thus rendering this an interesting but localized feature.

20 Clearwater Property 19 Other than the feature mentioned on Line 45N, another notable result from the survey is a large area of extremely flat magnetic signature extending in a northerly direction along the western portion of Lines 42N-48N. It is widest along Lines 44N and 45N and narrows considerably from there both to the north and the south. This is best interpreted as a geological unit. Plots of the magnetometer survey can be found in Appendix II. The data from the survey is presented in Appendix III CONCLUSIONS The magnetometer survey results were inconclusive in determining the location of a parallel vein system. The northwest trending linear magnetic high feature with a corresponding low suggesting a moderately steep dip may represent this system, however the magnetic signature is subtle and remains open to interpretation. The large north trending area of flat magnetic response could be the result of a difference in lithology. Further study and direct comparison with VLF data over known anomalies is needed to determine the accuracy and usefulness of a magnetometer survey on this property RECOMMENDATIONS Anomalous zones consistent with mineralized quartz vein have been successfully identified in previous programs using a VLF-em16 geophysical survey. This appears the best cost-effective geophysical survey to use on the property. A two stage work program is recommended for the property. The initial stage can be performed without extensive expenditures while still furthering the knowledge of the property. The second stage will require more funding, and will define and may extend previous targets to be followed by either drilling or bulk sampling of ore. STAGE I 1. Due to time constraints, only the location of the Oldtimer showing was mapped in using a GPS. The remaining showing, adits and trenches should be mapped in with a GPS to ensure everything on the base map is located with the same accuracy. 2. A VLF-em16 geophysical survey should be conducted over the entire grid. If the budget permits, the survey should instead be conducted using a digital VLF / magnetometer combination unit with the associated base station to correct the magnetic data. 3. Stage 1 should be conducted following spring break-up to ensure ease in locating the flagged grid.

21 Clearwater Property 20 STAGE II 1. The grid should be expanded to cover the entire extension of the known mineralized zone. The lines should all be cut and stations marked using wooden lathe. 2. An IP geophysical survey should be conducted over the entire grid to locate the mineralized zones, provide information about the depth and extent of mineralization and to possibly locate new or parallel mineralized zones COST ESTIMATES TABLE 2: Stage 1 Cost Estimate TABLE 3: Stage 2 Cost Estimate STAGE 1: GPS Survey, VLF Survey Personnel 1 Geologist, 1 Helper $ 10, days total Rentals Survey Equipment $ Consumables $ Vehicle and Fuel $ 1, Room and Board $ 1, Subtotal: $ 13, % Contingency $ 2, Report $ 2, Total: $ 17, Say: $ 18, STAGE 2: Linecutting, IP Survey Geological Supervision $ 10, Linecutting Crew $ 15, Line kilometres IP Survey 2 weeks $ 60, Consumables $ 1, Vehicle and Fuel $ 2, Room and Board $ 24, Subtotal: $ 112, % Contingency $ 16, Report $ 7, Total: $ 136, Say: $ 140,000.00

22 Clearwater Property REFERENCES Dunn, D., 2004: Report on Diamond Drilling on the Summit/Oldtimer Property, Lady 2, OT 5 and OT 6 Claims, Auramex Resources Corp., Assessment Report #27,539. Dunn, D., 2005: Report on Diamond Drilling on the Summit/Oldtimer Property, Auramex Resources Corp., Assessment Report #28,026. Dunn, D., G. Allen and S. Endersby, 2008: Technical Report on the Mineral Properties of Yellowstone Resources in the Sheep Creek, Bayonne, Ymir and Rossland Mining Camps, Yellowstone Resources Ltd., Unpublished Report. Endersby, S., 1990: Geophysical and Prospecting Report on the Goat 2 and Goat 3 (Summit Property), Stan Endersby, Assessment Report #20,397. Endersby, S., 1992: Geophysical Report on the OT 2,3,5,6 and 9 Claims of Oldtimer Group, Stan Endersby, Assessment Report #22,571. Endersby, S., 1992: Geophysical Report on the OT 2, 3 and 5 Claims of the Oldtimer Property, Stan Endersby, Assessment Report #22,702. Endersby, S., 1993: Progress Report on Geochemical and Geophysical Surveying on the OT 1-5 and Lady 2 Claims of the Oldtimer Property, Stan Endersby, Assessment Report #23,119. Endersby, S., 1994: Progress Report on Geophysical and Geochemical Surveying on the Lady 2 Claim of the Oldtimer Property, Stan Endersby, Assessment Report #23,802. Endersby, S., 1996: Progress Report on Geophysical and Geochemical Surveying on the Summit/Oldtimer Property, Stan Endersby, Assessment Report #24,383. Endersby, S., 1998: Progress Report on Geophysical Surveying on the Summit/Oldtimer Property, Stan Endersby, Assessment Report #25,468. Endersby, S., 1999: Progress Report on Geophysical and Geochemical Surveying on the Summit/Oldtimer Property, Stan Endersby, Assessment Report #25,834. Höy, T. Dunne, K.P.E. and Jackaman, W. (2004): Geology of the Nelson map sheet (NTS 82F/06); B.C. Ministry of Energy and Mines, Geoscience Map Mineral Titles Online, 2009: Government of British Columbia Website, Mineral Titles Branch.

23 Clearwater Property CERTIFICATE OF QUALIFICATION I, Willie Kushner, B.Sc., do hereby certify that: 1. I graduated with a Bachelor of Science degree in Geology from the University of Alberta, Edmonton, Alberta, in I have been practicing my profession as an Exploration Geologist continuously since my graduation for the past 22 years. 3. I am a consulting geologist and I was contracted by Stan Enderby to compile the report titled Geophysical and Geological Assessment Report on the Clearwater Property dated December 31, The information contained within this report is based on information collected while visiting the property during October 19 th to 23 rd, 2009 and compiled from past reports, the sources of which are quoted in the report. 5. I am responsible for all of the maps and contained within. I personally believe this report accurately depicts the information available to date. 6. I hold no interest, directly or indirectly in the Clearwater Property or any surrounding properties, and have no agreements, arrangements or understandings with the property owner. Dated this 31 st day of December, 2009 Willie Kushner, B.Sc.

24 Clearwater Property 23 APPENDIX I MAGNETOMETER SURVEY PLOTS

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37 Clearwater Property 36 APPENDIX II MAGNETOMETER COMPILATION

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39 Clearwater Property 38 APPENDIX III MAGNETOMETER SURVEY DATA

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53 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

54 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

55 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

56 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

57 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

58 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

59 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

60 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

61 Clearwater Property N N N N N N N N N N N N N N N N N N N N N N N N N N

62 Clearwater Property N BL50 E 4200 N BL50 E 4225 N BL50 E 4250 N BL50 E 4275 N BL50 E 4300 N BL50 E 4325 N BL50 E 4350 N BL50 E 4375 N BL50 E 4400 N BL50 E 4425 N BL50 E 4450 N BL50 E 4475 N BL50 E 4500 N BL50 E 4525 N BL50 E 4550 N BL50 E N BL50 E 4575 N BL50 E 4600 N BL50 E 4625 N BL50 E 4650 N BL50 E 4675 N BL50 E 4700 N BL50 E 4725 N BL50 E 4750 N BL50 E 4775 N 55632

63 Clearwater Property 62 BL50 E 4800 N BL50 E 4825 N BL50 E 4850 N BL50 E 4875 N BL50 E 4900 N BL50 E 4925 N BL50 E 4950 N BL50 E 4975 N BL50 E 5000 N BL50 E 5025 N BL50 E 5050 N BL50 E 5075 N BL50 E 5100 N BL50 E 5125 N BL50 E 5150 N BL50 E 5175 N BL50 E 5200 N BL50 E 5225 N BL50 E 5250 N BL50 E 5275 N BL50 E 5300 N BL50 E 5325 N BL50 E 5350 N BL50 E 5375 N BL50 E 5400 N BL50 E 5425 N 55313

64 Clearwater Property 63 BL50 E 5450 N BL50 E 5475 N BL50 E 5500 N BL50 E 5525 N BL50 E 5550 N BL50 E 5575 N BL50 E 5600 N Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR

65 Clearwater Property 64 Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR Road LR

66 Clearwater Property 65 Road LR Road LR Road LR Road LR Road LR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR Road UR

67 Clearwater Property 66 APPENDIX IV STATEMENT OF EXPENDITURES

68 Clearwater Property 67 Field Costs Mob / DeMob $ 1, * Geologist 2 $ /day $ 1, * Helper 2 $ /day $ Survey and Prospecting $ 4, * Geologist 4 $ /day $ 2, * Helper 4 $ /day $ 1, * Survey Equipment Rental 8 $ /day $ Expendables Flagging, Bags etc $ * Chainsaw rental 6 $ /day $ * Equipment Rental (GPS, etc) 6 $ /day $ Transportation $ 1, Vehicle Rental 7 $ /day $ Transportation - Mob/Demob 1598 $ 0.35 /km $ Transportation for Survey 360 $ 0.35 /km $ Food and Accomodation $ Food (Cooking own food) 5 $ /day $ Accomodation 5 $ /day $ Subtotal $ 8, $ 8, * 10 % Management Fee $ $ Office Costs Project Planning and Preparation $ 1, * Geologist 3.5 $ /day $ 1, Other $ 1, * Report 4 $ /day $ 1, % GST on * $ $ Total $ 13, $ 13,335.03