MICHAELY (RED ROCK) PROJECT ASSESSMENT REPORT on the Red Rock Claim Located in the Remac Mine Area SALMO BC Approximate Location UTM Coords: 474525E 5432535N NELSON MINING DIVISION BRITISH COLUMBIA BCGS Grid: 082F.004 For Joel P. Ackert & Ed Lawrence By Emerald Ridge Industries Inc. Report Compiled by E.A. Lawrence, BASc, PEng. November 2013 WESTBANK, BC. 1
TABLE OF CONTENTS INTRODUCTION 4 General 4 Regional geology... 5 Local geology.. 7 LOCATION and ACCESS...8 PHYSIOGRAPHY 8 CLAIMS.....8 PROPERTY HISTORY 11 ECONOMIC ASSESSMENT 11 SUMMARY OF 2013 WORK...15 CONCLUSIONS 15 GENERAL DISCUSSION.15 RECOMMENDATIONS 16 STATEMENT OF COSTS..... 17 STATEMENT OF QUALIFICATIONS.... 18 REFERENCES 19 APPENDIX. 20 Appendix 1...Assays.. 21 Appendix 2... Sample Summary with assays. 22 Appendix 3... Historic Michaely Production Summary 23 2
LIST OF FIGURES FIGURE 1. BC Location map 8.5 x 11 1:235,000 Page 5 2. Regional Access Map 8.5 x 11 1:75,000 6 3. Claim Map 8.5 x 11 1:18,000 9 4. Regional Geology and Claim Showings 11 x17 1:70,000 10 5. Property Geology 8.5 x 11 1:600 12 6. Mine Sections 11x17 1:240 13 7. #3 Level Adit-- Geologic Mapping 11x17 1:250 14 8. Plan showing workings 8.5 x 11 1:600 14 9. #3 Level Raise Sampling 8.5 x 11 1:150 15 3
INTRODUCTION General The Michaely property consists of 1 claim with an area of 25 hectares. It is located in the West Kootenays region south of the town of Salmo on the north slope of the Salmo river valley near the dormant Remac Mine. The geology here is typical of eastern BC, consisting of north-south trending, folded sediments which are underlain by intrusives such as granite and granodiorite. These sediments have been host to the historic zinc-lead-silver deposits of the Jersey, Remac, HB, Blue Bell, and JackPot properties which are located at the southern end of the Kootenay Arc. Of specific significance for the Michaely property are the zinc-leadsilver deposits of the nearby Remac Mine. Existing roads and trails through the property provide good access to the immediate areas of interest. There is little exposed bedrock, but overburden is relatively shallow in the area where the deposit was first discovered. The climate is warm summer continental, with summers drier than winter and four distinct seasons. Annual precipitation is approximately 300cm, with snow from December to April. Snow may reach to 1.5 m at these elevations. Average temperatures range from 28 C in the summer to -10 in the winter. Vegetation consists of Balsam, White Spruce and Douglas Fir trees. Lower brush consists of alders, birch, maple and small evergreens. 4
BC LOCATION MAP Scale1:235,000 FIGURE 1 REGIONAL GEOLOGY The Michaely area was mapped on a regional basis in the mid-1950 s by Jim Fyles of the BC Geological Survey, and is the subject of Bulletin #41 titled Stratigraphy and Structure of the Salmo Lead-Zinc Area 1959. The regional setting is described as being in the southern area of the Kootenay arc. At the Michaely the strike of the arc is more westerly than it is to the north in the vicinity of the Jersey and HB zinc deposits. The Michaely property is described on pages 138and 139 of Fyles Bulletin. It is located approximately 3.2 kilometers to the northwest of the historic major zinc producer, the Reeves MacDonald mine. Fyles described the deposit as being in the Reeves limestone which is in conformable contact with the Reno formation quartzite on the footwall, and the Upper Laib black argillites on the hanging wall. The strike of the beds at this point is north 55 degrees east, and with a dip of 65 degrees to the south. The sequence in the vicinity of the Michaely deposit is well displayed in the west wall of the #3 adit, which was remapped by the author during the current season.. 5
The mineralization which was the subject of earlier mining is located near the footwall of the Reeves limestone. A unique feature at the Michaely deposit is that the mineralization is not in dolomite as was the case with the three major producers in the area. Fyles mapped exposures of intrusive rocks of the Nelson intrusives as close as 600 meters to the north of the Michaely deposit. The intrusive is large, continuing for approximately 9 kilometers to the north along the area west of the Salmo River. The Michaely environment is similar to the situation at the Jersey deposit which is also intruded by the Nelson granitic intrusives. This intrusive appears to have a southerly sloping surface in the Michaely area and therefore may be relatively close to the Michaely deposit. Some of the silicification noted in the mapping of the #3 adit may have been due to this proximity. REGIONAL ACCESS FIGURE 2 6
LOCAL GEOLOGY The local geology summarized below is based on reports by: Chas. C. Starr 8 th Dec1929 BC Mines geologists 1930 to 1949 PJ Shenon and RP Full February 1951 Cliff Rennie May 1956 James T. Fyles 1959 Pec Santos.Jopec Resources Mar1993 Personal examination by Ed Lawrence 2012 and 2013. The Michaely deposit is exposed on surface as a 20m long by 3m wide pit with an azimuth of 055 degrees. This exposure is described as high grade galena and sphalerite with minor pyrite within a 12 m wide band of Reeves formation limestone. Silver is also significant and probably occurs within the galena as is typical of these deposits in the Kootenay Arc. The occurrence is located at the footwall of the limestone band, adjacent to the contact with silicified micaceous argillite, possibly part of the Reno formation identified by J. Fyles (1959). The dip of the showing is ~ 65 degrees southerly. In addition to the surface exposure, the deposit is located about 32 meters down dip from the surface in underground workings (the #2 level) where a drift follows the zone on strike for about 31 meters. In the #3 level, approximately 40 meters down dip from the #2 level, the zone is exposed for about 3.5 meters along strike in a panel that was slashed from a 12 meter raise which followed the ore. The mineralized zone was not followed through to the 2 nd level. The width exposed here is probably not the full strike length because sampling by Jopec revealed significant mineralization on both the west and east walls of the panel. The down dip extension of the zone may have been offset by a flat-lying fault. Coring immediately under the footwall of the drift by Jopec did not intersect the anticipated extension of the zone. Their geologist believed that the zone was shifted southerly ~15 meters by a low angle fault. This theory was never tested by drilling. As noted by Cliff Rennie in an unpublished report by Canadian Exploration Ltd. in 1956, overburden covered the possible westerly and easterly extensions of the zone, along the strike of the limestone bed. He recommended further exposure by stripping to determine if extensions exist. The other direction where further potential may exist is the downdip extension below the #3 level. Rennie also observed mineralization in the #3 drift near the hanging wall contact of the limestone with a silicified argillite. Rennie was a geologist at Canex s Jersey mine, located in a similar setting about 7 kilometers to the northeast. The only drift that is currently accessible is the #3 level. It was mapped by the author in October 2013, showing a clear sequence of the sedimentary rocks overlying the deposit. Silicified blocky argillite is seen from the portal to the 20.0 meter point. The apparent dip here is about 48 degrees to the south. Following the above sequence, dark grey siliceous argillite is found to the 40.0 meter point. The above sequence of siliceous argillite is underlain by about 10.0 meters of dark grey fine grained siliceous argillite. This is followed by about 10.0 meters of grey green siliceous argillite with fine dark mottles. From the 60.0 meter point to the contact with the limestone horizon at 69.0 meters, there is a fine grained finely bedded siliceous argillite with occasional lenses of quartz. The limestone of the Reeves formation is found from this point to the end of the accessible workings at the bottom of the raise panel at about 96.0 meters. The apparent dip of the limestone in this area is 53 degrees to the south. There are similarities to the Jersey deposit in that mineralization is within the 12 meter wide Reeves formation, the footwall of which is in contact with silicified argillites. A significant difference is that the Jersey is in a dolomite within a limestone horizon of much greater thickness, exceeding 100 meters. 7
LOCATION and ACCESS The Michaely property is located in the Nelson Range of the Selkirk Mountains situated in the southeast area of the Province of British Columbia, Canada. The nearest communities are those of Salmo, ( 16.7 kilometers to the north) and Trail,( 27.1 kilometers to the west). The property is located within the Nelson Mining Division covered by the 82F.004 sheet of the BCGS Grid. Access to the property can be gained by travelling south from Salmo on the Crow s Nest Highway (BC # 3), to the junction with Highway #31 which branches to the south leading to the US border at Nelway. Immediately north of the US border a right turn is made onto the Pend D Oreille road, heading west. This road is paved for about 2.5 kilometers. At this point the gravel road is followed for another 5.6 kilometers to the junction with the McCormick Creek road. A right turn is made here and the McCormick Creek road is followed for 5.5 kilometers up a steep gravel road that has been upgraded for use as a logging road to the junction with the Michaely access road on the right. The relatively flat Michaely access road is followed 270 meters easterly to the #3 portal area. PHYSIOGRAPHY The property area is bounded on the east and south by the Salmo River which is about 250 meters lower in elevation. This valley side has a moderate slope to the south, being on the north side of the east-west trending Salmo River. The property is located on the southern flank of an unnamed rounded mountain with a summit at about 1600 meters elevation. There is one small stream approximately 800 meters west of the property, and a small intermittent stream about 100 meters east. CLAIM Tenure Tenure Owner Map Good to Date Status Mining Area Number Type Number Division (ha) 387781 Mineral 100159/115266 082F004 2019/Oct/15 GOOD Nelson 25.0 8
Figure 3 CLAIM MAP 9
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PROPERTY HISTORY The following history for the property has been developed from Reports of the Minister of Mines from 1930 to 1968; and from reports by Chas. C Starr (1929); Shenon and Full (1951); Cliff Rennie (1956); and Pec Santos (1993). The first mention of the property was in the 1930 Ministry of Mines Report. In 1930 the claims were known as the Red Rock group, owned by M. Meredith of Trail Various small leasing operations were carried out from 1947 to 1969. In 1956 C.C. Rennie of Canadian Exploration Ltd., the operators of the Jersey PbZn mine approximately 11kilometers to the northeast, carried out a thorough examination of the property. In the early 1980 s Tom Brown and a partner from Salmo drove a 12 meter raise along the mineralized band from a point about 96 meters from the #3 portal which they subsequently slashed to a panel width of about 3.6 meters. This work produced approximately 100 tonnes which was shipped to the Trail smelter. No data is available on the grade of these shipments. This appears to have been the last production from the Michaely mine. Total production (hand-sorted) as reported by Santos was 525 tonnes grading 16.2% Pb, 18.1% Zn, 9.4 ounces per tonne Ag. Geological work was carried out by Jopec Resources Ltd. from 16th May 1992 to 8 th May 1993, under the direction of P.J. Santos P.Eng. This program consisted of mine rehabilitation, underground mapping, chip and channel sampling, underground diamond drilling, and geochemical soil sampling. In 2001 the property was acquired by Mike Hudock of Nelson. He held the property until he transferred it to Joel Ackert of Salmo in 2011. Work on the property since that time has consisted of brushing out the roads, rehabbing the #3 portal, installing new timber for 6 meters inside the portal, and installing a timber door. Ackert and Ed Lawrence formed a partnership in 2013, and that is the current status of the property. ECONOMIC ASSESSMENT There are three possibilities for the potential of this deposit. 1. One is the small potential that could be mined as a remnant cleanup operation. The tonnage calculated is in the order of 1000 metric tons grading 6.8% Pb, 4.5% Zn, and 85 grams per tonne Ag for the area immediately adjacent to the #2 level drift and the #3 level raise panel. An additional potential of 1300 tonnes exists above the #3 level raise panel, up to the footwall of the #2 level drift that followed the ore. 2. Another larger potential is for the deposit to continue downdip to depth, and for extensions or similar deposits to be found along strike in the same limestone horizon. 3. Although the potential is limited, the dumps may be economic. All historic shipments were hand-sorted ore, with the rejects being left on the respective dumps. There is a possibility that the dumps may be resorted and thereby recover some previously discarded mineralization. The grab samples obtained this season indicate an unsorted grade of greater than 2% combined Pb and Zn, and Ag content of approximately 50 grams per tonne. The assay method used had an upper limit of 1% for both Pb and Zn, and 100 grams per tonne for Ag. At some future time an assay method capable of obtaining higher values will be used. The current values indicate that detailed sampling of the dumps is warranted. 11
PROPERTY GEOLOGY FIGURE 5 12
FIGURE 6 13
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SUMMARY OF CURRENT WORK The current work carried out in the fall of 2013 consisted of improving access to the property by slashing the brush from the access road, examining the showings that are still accessible, mapping the #3 level adit from the portal to the raise, a distance of 95 meters. This work confirmed the rock types and dip of the beds and tied in the collars of some of the drill holes by Jopec. Grab samples were also taken of the dumps to determine the grade of the dump surfaces. CONCLUSIONS It is concluded that a small tonnage of remnant mineralization exists in the walls of the current workings. This material may be economic if there is a processing plant nearby where it could be turned into concentrate. Further sampling of the existing walls is needed to confirm the grade of this material. Based on data from the Jopec work in 1993 the diluted tonnage is calculated to be1000 tonnes of 6.8%Pb, 4.5%Zn, 2.8 opt Ag. Further work is needed to check the possibility of west and east extensions, or repetitions of the deposit. Also, the downdip extension below the 3 rd level is still an unsolved structural geology issue at this time. GENERAL DISCUSSION To explore the possible west and east continuation along strike an examination of the historic pits and trenches would be necessary. These could be cleaned out with a small excavator. Prospecting along strike may reveal suitable areas for new trenching by excavator. An area of considerable potential exists in the downdip continuation of the mineralization. To help solve this problem it would be necessary to thoroughly clean out the broken rock (estimated to be 5 to 10 tonnes) on the footwall of the #3 access drift under the raise panel. This area would need to be washed and carefully mapped to obtain the data needed to determine what caused the discontinuation of mineralization below the 3 rd level at this point. 15
RECOMMENDATIONS It is recommended that the following work be done: Phase 1 Tie in the portals, the underground workings and the existing geological features by an accurate transit survey. Map the raise-panel at the end of the drift. Resample the mineralization in the #3 raise-panel. Prospect the possible surface extensions of the mineralization now exposed in the original trench area. Trench areas of potential found by the above work. Slash all roads so that surface access to the three levels of the mine is easier. Phase 2 (Will depend on the results of Phase 1 work) Clean out the existing pits and trenches so they can be mapped and sampled. Remove broken rock and wash #3 level panel at end of cross-cut. Map the rock exposed in the #3 panel area by the above work. Reestablish access to the 2 nd level by way of the #2 level adit, by removing sloughed rock. Map and sample the #2 level workings. Phase 1 (Mostly underground work except for road slashing and prospecting) Slash access roads to provide better access to work areas 1 day at 250/da $ 250 Survey as noted above 3 days at $600/da $ 1800 Map #3 raise and drift end 1 day at $400/da $ 400 Sample raise (use cordless drill with holes spaced along sample) 2 days at $$400/da $ 800 Prospect surface west and east of trench 2 days at $350/da $ 700 Prepare and draft geological data 5 days at $300/da $ 900 Transportation by 4x4 Truck... 20 days at $60/da $ 1200 Transit/chainsaw 4 days at $ 30/da $ 120 Assays 40 at $26 ea $ 1040 Report prep 3 days at $400 $ 1200 TOTAL.... $ 8,410 Phase 2 Estimate will depend on results of Phase 1 work. 16
STATEMENT OF COSTS Michaely Project For work done in 2013 Geology (Field) Geologist. 2.0 days at $400.$ 800.00 Field assistant 1.5 days at $200.. 300.00 Geology (Report Prep) Geologist. 2 days at $400/da.. 800.00 Accomodation/meals.. 2 days at $50/da.. 100.00 Chainsaw. ½ day at $25 12.50 Supplies (tape/spray paint/fencing ($85)).. 91.25 Vehicle.. 545 kms at $0.45/km.. 245.25 Assays.. 6 at $26.55. 159.29 Sample freight 12.29 TOTAL $2720.58 17
STATEMENT OF QUALIFICATIONS I, Edward A. Lawrence, B.A.Sc., P.Eng., of Westbank, B.C. do hereby certify: 1. That I am a graduate of the University of British Columbia with a BASc. in Geological Engineering (1959). 2. That I have been involved with the mining industry since 1956 3. That all of the current technical work in this report was done by me 4. That I am currently registered as a Professional Engineer in the Province of British Columbia. 5. That I have a one half interest in the Red Rock mineral claim. EA Lawrence E.A. Lawrence, BASc., PEng. Dated this 24 th day of December 2013 at Westbank BC. 18
REFERENCES 1. Fyles, James T., Bulletin #41 Stratigraphy and Structure of the Salmo Lead-Zinc Area 1959 2. Ministry of Mines Annual Reports 1930 to 1949 3. Rennie, C.C., Unpublished Report for Canex 26 th May1956. 4. Santo, Pec Assessment Report on the Michaely Property 1993 5. Shenon, P.J. and Full, R.P. Geology of the Russian Creek-Reeves McDonald Area Feb 1951 6. Starr, Chas. C., Preliminary Examination of the Red Rock Group 8 th December 1929 7. Tom Brown December 2013 Personal contact by Joel Ackert 19
APPENDIX 1) Assay Certificate ( 5 pages) 2) Sample Summary 3) Historic Michaely Production Summary 20
APPENDIX 1 ASSAYS CERTIFICATE 21
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APPENDIX 2) Sample Summary Sample M-12-09-13-05 was taken near the old rails leading from the portal and may contain spilled ore from cars. For the average grade of the dumps, this value was taken as 100 gms per metric ton. Average Ag grade for the dump surface areas is approximately 50 grams per metric ton. 26
APPENDIX 3) Historic Michaely Production Summary 27