1 (6) Distribution: Ministry of Trade and Industry 2 copies Polar Mining Oy, Outokumpu 1 copy Mineral Exploration Report on the Work carried out on the Härmänkylä Area Claims: Hautalehto 2, Kaulasuo, Kaulasuo 2-3, Hamppulampi 1-2, Nurkkala 1-3 and Pajula Location of the Härmänkylä area claims: (Map Grid 50 km x 50 km) Key words: gold exploration Kummunkatu 34, P.O. Box 15, FIN-83500 Outokumpu, FINLAND Tel. +358 13 5561, Fax +358 13 556 263 Domicile Espoo, Finland, Business ID 1509120-8
2 (6) Introduction This report describes gold exploration work carried out on the Härmänkylä area claims Hautalehto 2, Kaulasuo, Kaulasuo 2-3, Hamppulampi 1-2, Nurkkala 1-3 and Pajula. Claims Hautalehto 2 and Kaulasuo were granted to Outokumpu Mining Oy on October 14, 2002, and all other claims on January 13, 2003. In November 2003 all claims were transferred to Polar Mining Oy, which decided not to conduct any further work on the property, and all claims were relinquished on November 26, 2003. Location Claims are located on map sheets 4412 11 and 4412 12, approximately 40 km NW of the Kuhmo town centre, eastern Finland. Co-ordinates for the claims are presented in table 1. Table 1. Claim locations Claim # Name Claim mid-points Northing (mn) Easting (me) 7457/2 Hautalehto 2 7149000 4454500 7457/3 Kaulasuo 7148600 4453100 7514/3 Kaulasuo 2 7149500 4452600 7514/4 Kaulasuo 3 7149800 4452900 7514/1 Hamppulampi 1 7148000 4452800 7514/2 Hamppulampi 2 7147500 4453200 7514/5 Nurkkala 1 7147600 4454800 7514/6 Nurkkala 2 7148300 4455300 7514/7 Nurkkala 3 7149000 4455100 7514/8 Pajula 7149900 4454700 Co-ordinate system and survey methods Co-ordinate system and projection applied to all information in this report and appended digital data is Finnish KKJ Zone 4. Locations for till survey traverses were surveyed using a differential GPS unit. A GPS hand-unit has been applied to geological mapping and sampling. Personnel Mr. Jukka Jokela (MSc, Geology) has been in charge of all fieldwork carried out on the property. Mr. Seppo Penninkilampi and Mr. Jyrki Väisänen have provided with geotechnical services, and geology students Virve Heilimo (VMH), Heta Lampinen (HML) and Heini Reijonen (HMR) have carried out geological mapping and sampling.
3 (6) Geology The Härmänkylä area is located in the central portion of the Archaean Kuhmo greenstone belt. Ultramafic to intermediate volcanic rocks, sulphidic metasediments as well as tonalities are the main rock types in the area. The Arola nickel occurrence is located on the claim Pajula. Claim rationale A number of historical indications on gold mineralization are known in the Härmänkylä area. Outokumpu s reconnaissance-type heavy mineral and till geochemical surveys in mid 1990 s returned intriguing gold anomalies in the Härmänkylä area, and a short geological follow-up mapping program led to a discovery of outcropping gold anomalous quartz veins within highly altered quartz-feldspar porphyry east of the Mataralampi (figure 1, claims Hautalehto 1 and 3 ). GTK s till geochemical surveys have generated some gold anomalies, and drilling programs have resulted in the discovery of the Timola gold showing located in the southwestern portion of the claim Nurkkala 3. All these indications were considered to warrant further follow-up work at the time when Outokumpu Mining Oy commenced extensive precious metals exploration programs in the Kuhmo Suomussalmi area in 2002. Work carried out Previous work Geological mapping The Härmänkylä area has been explored for nickel in the past. Extensive diamond drilling programs have focused to test the Arola nickel mineralization located on the claim Pajula. Outokumpu carried out some reconnaissance gold exploration work in the area in mid 1990 s, and the GTK has explored same areas for nickel and gold also in 1990 s. A regional airborne survey contracted by the GTK was flown for Outokumpu Mining Oy in November 2002, i.e. prior to Härmänkylä claims, except Hautalehto 2 and Kaulasuo, were granted to Outokumpu. In 2002, Outokumpu conducted also some geological mapping and trenching as well as initiated diamond drilling program on the claims Hautalehto 1 and 3. Geological mapping and sampling was carried out during the field season 2003. Locations of field observations and analyzed samples are presented in figure 1, and all related information is included in the appended Harmankyla_Mapping2003 access database. A total 16 bedrock samples were submitted to Acme Analytical Laboratories in Vancouver BC, Canada for aqua-regia digestion followed by multielement ICP-MS and gold analysis. Original Acme analytical reports are included in the digital database appended to this report.
4 (6) Figure 1.Locations of geological mapping observations (yellow squares) and analyzed outcrop samples (green circles). The relinquished claims are shown in blue and current claims of Polar Mining Oy in red. Till geochemical survey Till geochemical survey contracted by Moreenityö Mäcklin was carried out in 2003. The survey was planned to test possible lateral extensions of the Timola gold showing. Samples were collected from basal till or, if possible, from weathered bedrock at 10 m intervals along lines 200 m apart. A total of 147 till samples and 123 weathered bedrock samples were submitted to Acme Analytical Laboratories in Vancouver BC, Canada for aqua-regia digestion followed by multi-element ICP- MS and precious metals analysis. Sample locations with gold contents are presented in figures 2 and 3. All analysis data with related sample information are included in the Harmankyla_TillSurvey2003 access database and in the original Acme analytical reports.
5 (6) Figure 2. Till geochemical survey. Gold content of till samples. Figure 3. Till geochemical survey. Gold content of weathered bedrock samples.
6 (6) Results All samples collected during geological mapping program returned only background gold values, and no well-defined targets for follow-up work were generated. Also the till geochemical survey failed to delineate any obvious indications on unknown gold mineralization as shown in figures 2 and 3. Digital database Digital database appended to this report includes the report text and the results of all work carried out on the property during the validity period of the claims. Conclusions The work carried out did not generate any new targets for follow-up gold exploration, and Polar Mining Oy decided to relinquish the claims Hautalehto 2, Kaulasuo, Kaulasuo 2-3, Hamppulampi 1-2, Nurkkala 1-3 and Pajula. Jarmo Vesanto