Keels Venure Inc. Re: Assessment Report for 6735M, 8289M & 10280M Grouped to M

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3 Keels Venure Inc. April 10, 2011 Mr. Jim Hinchey, P. Geo. Department of Natural Resources P.O. Box 8700 St. John s, NL A1B 4J6 Re: Assessment Report for 6735M, 8289M & 10280M Grouped to M Dear Jim, Attached please find above-mentioned assessment report, as discussed in March I trust all is to your satisfaction. Please call with any questions or concerns. Best regards, Basil Power

4 Keels Venture Incorporated The Keels Slate Property Mineral Licenses 6735M, 8289M & 10280M Grouped to M Assessment to June 13, 2011 Compilation Current Marketing Efforts For: Keels Venture Inc. P.O. Box 1230 Bonavista, NL A0C 1B By: Basil Power P.O. Box 1230 Bonavista, NL A0C 1B April 2011

5 Table of Contents Introduction... 2 Location and Access... 2 Topology and Vegetation... 2 Claim Status... 3 Regional and Property Geology... 3 Compilation of Previous Work... 3 Current Marketing Efforts... 4 Conclusions... 5 Appendix: Expenditures

6 Introduction Keels Venture Incorporated now holds the mineral rights to all the slate resources on the Keels Peninsula including a production-ready slate quarry. Slate products, particularly roofing and flooring slate, are used throughout Europe, the US and Japan. The statistics available from the US Bureau of Mines and the UK Department of Industry show that the annual world market for slate is approximately 650,000 tonnes with product values ranging from $ to $ per tonne. This translates into a global market approaching $1 billion annually. Location and Access The property is located adjacent to tide water on the Bonavista Peninsula in Bonavista Bay, Eastern Newfoundland. The property is within the community boundaries of the small coastal town of Keels (Figure 1). Access to the site is via paved road (routes 230 and 235) from Clarenville, a regional center located on the Trans Canada Highway, 100 km to the southwest. Topology and Vegetation The slate belt in the Keels area occupies barren hills which rise steeply from sea level in the north with a maximum elevation of 33 metres. The area vegetation consists of typical Newfoundland barren lands with berry bushes, low shrubs and alders. There is also some moorland and small tucks of fir and spruce. Outcrop exposure is excellent throughout the property. 2

7 Claim Status The Keels property is comprised of three 25-hectare mineral licenses: 6735M, 8289M, and 10280M, all 10% owned by Keels Venture Inc. and were issued on April 12, 1999, November 11, 2001 and August 23, 2004 respectively. Now grouped to M, Figure 1 shows the boundaries of the licenses. Regional and Property Geology The Keels slate deposit is part of a slate belt hosted by the Lower Cambrian Bonavista Group in the Avalon Zone of eastern Newfoundland. The Bonavista Group is comprised of purple, green and red slate and mudstone with minor limestone, and a red basal conglomerate (Landing and Benus 1987; 1988). The slate belt is exposed at various locations over a strike length of approximately 60 km in eastern Newfoundland (Figure 2). In addition to Keels, significant past and current producing quarries are located at Nut Cove, Random Island and Black Duck Cove. This slate belt is correlative with the Cambrian slate belts of Wales, which host the world s largest slate quarry at Penrhyn. Compilation of Previous Work Production at the Keels Slate deposit began 1993 and in 1996 noted Welsh slate expert Dr. Dennis Woods mapped the Keels Peninsula in detail. His conclusion was that the Keels Deposit is best suited for the production of +8 mm slate in both purple 3

8 and green slate found in the deposit. Figure 3 shows Dr. Woods mapping with the boundaries of the Keels Venute Inc. mineral rights included. Also in 1996 Mining Engineer Andrew Drake produced a quarry plan to optimize the recovery of the slate in the quarry. In the late fall of 1996, a report on the hardness of the Keels slate relative to colour was produced. These reports and the work of Dr. Woods mentioned above were appended to a report entitled The Keels Slate Property submitted to DNR by this author in Readers are referred to it for complete details. In an effort to comply with existing legislation regarding pit safety, Keels Venture Inc. undertook a pit wall scaling in several areas of the existing quarry. This work was completed in July In August 2009, Keels Venture Inc. established a new 30 m long by 7 m high bench to access some green blocks for further evaluation (see attached invoice). In November 2010, more blocks were removed, purple and green for further evaluation. See attached invoice. Current Marketing Efforts At present Keels Venture Inc. is conducting discussions with a Toronto Roofing Company regarding the marketing of roofing slate produced at Keels. Additionally, Keels Venture has had discussions with an American firm that is interested in our slate roofing. The company plans to continue to pursue both these opportunities. In addition, Keels Venture Inc. is actively working with a local Newfoundland company, Resource Development Associates. At present, they hold an option on the Keels site until Dec 31,

9 Conclusions Based on the efforts of Keels Venture Inc., the Keels Slate quarry has potential to produce again. The roofing we produced in 1996 has since been sold and now can be seen on: 1) Grand Concourse Buildings in St. John s 2) A gazebo in West Point, New York 3) A house in Trinity, NL 4) A display roof in Bonavista, NL Respectively Submitted, Keels Venture Inc. Basil Power 5

10 Appendix Statement of Expenditure Item Cost Data Review Compilation $50.00 Report Preparation Submission Day Site Supervision & Consultation Equipment Rental Total $ Expenditure Allocation per License 6735M $ M $ M $

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