DRILLING REPORT ON THE HIGHLAND VALLEY, KAMLOOPS MINING DIVISION, OWNED BY GAZA MINES LTD., NEW JERICHO DEVELOPMENT AND TECK CORPORATION

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DRILLING REPORT ON THE GAZA 1 AND JERICHO 1 AND 2 MINERAL CLAIMS / (RECORD NUMBERS 159, 492 AND 161) HIGHLAND VALLEY, KAMLOOPS MINING DIVISION, LATITUDE 50' 26' N; LONGITUDE 120' 55' W; NTS 92-I/7W OWNED BY GAZA MINES LTD., NEW JERICHO DEVELOPMENT AND TECK CORPORATION WORK PAID FOR BY HIGHMONT OPERATING CORPORATION L. H. C. TSANG OCTOBER 8, 1980

Introduction Rotary Drilling Statement of Costs TABLE OF CONTENTS Page No. Apportionment of Cost Author's Certificate Appendix A: Rotary drill hole Logo. LIST OF FIGURES Index Map Figure 1: Rotary drill holes on Gaza 1 and Jericho 1 & 2 mineral claims - After Page 1 - In Pocket

Introduction The Gaza and Jericho mineral claims are located in the eastern part of the Highland Valley at elevations from 1150 to 1585 metres above sea level. Access to the claim is by the Ashcroft to Logan Lake paved highway which crosses the northwest corner of the Jericho 5 mineral claim approximately 7 km west of Logan Lake (see index map). The Gaza 1 mineral claim was located by A. J. Reed, agent for Gaza Mines Ltd. on December 12th, 1975. The Jericho 1 mineral claim was located by A. J. Reed, agent for New Jericho Development Corporation on September 8th, 1976. The Jericho 2 mineral claim was located by A. J. Reed, agent for New Jericho Development Corporation on December 12th, 1975. A small bornite-chalcopyrite orebody on the Jericho 1 mineral claim has been explored by percussion drilling, diamond drilling and by two adits indicating reserves of approximately 75,000 tonnes at an average grade of 1.17% copper. During the period August 6th, 1980 to August 16th, 1980, Highmont paid for the following exploration and development to be done. 1) 13.7 metres of 6 diameter rotary drilling on Gaza 1 claim. 2) 3) 25.9 metres of 6 diameter rotary drilling on Jericho 1 claim. 16.8 metres of 6 diameter rotary drilling on Jericho 2 claim.

Page 2 Rotary Drilling 56.4 metres of 6" diameter vertical holes were drilled on the Gaza 1 and Jericho 1 and 2 mineral claims to test the character of the bedrock adjacent to the tailings pond area. No significant mineralization was encountered with this program. These holes will be used as monitoring holes of the seepage from the tailings pond.

Page 3 Statement of Costs 1. WAGES FOR HIGHMONT EMPLOYEES. (a) Tsang, Louis H. C. /I210-1680, Tranquille Road Kamloops, B. C. V2B 3L4 Chief Geologist: $110.00/day (August 6-16) 2 days - total cost $220.00 (b) Porter, Merlin Post Office Box 144 Savona, B. C. VOK 250 Drilling Supervisor: $92.00/day (August 6-16) 6 days - total cost $552.00 2. FOOD AND ACCOMMODATION FOR DRILLER & HELPER OF A & H CONSTRUCTION LTD. (a) Ian McDonald 3 days @ $14./day - total cost (b) Mike McDonald 3 days @ $14./day - total cost $ 42.00 $ 42.00 3. TRANSPORTATION. Geologist's truck used: $12.00/day 1 day - total cost Drilling Supervisor's truck used: $12.0O/day 8 days - total cost $ 12.00 $ 96.00 4. SURVEYING COST FOR DRILL HOLES. (a) Nickerson, Gordon Box 622 Logan Lake, B.C. VOK 1WO Chief Surveyor: $12.00/hour 1 hour - total cost $ 12.00

Page 4 (b) Kirkpatrick, Greg 2911 Bank Road Kamloops, B. C. V2B 6Y6 Surveyor: $ll.oo/hour 6 hours - total cost $ 66.00 (c) Wager, A1 General Delivery Logan Lake, B.C. VOK 1WO Surveyor s helper: $lo.oo/hour 6 hours - total cost $ 60.00 5. ANALYSIS COST. Highmont Laboratory: 21 samples @ $lo./sample Total Cost $ 210.00 6. DRILL SITE PREPARATION. By the Cat unit of Pooley Construction (Merritt, B. C.) (July 28 - August 11, 1980) 3 days - total cost $3,352.50 7. AIR ROTARY DRILLING CONTRACT COSTS. A & H Drillers Ltd. 1681 Salton Road, P.O. Box 38 Abbotsford, B. C. 56.4 metres of drilling - total cost $6,827.25 8. PREPARATION OF REPORT. Total Cost $ 500.00 TOTAL $11,991.75

Page 5 APPORTIONMENT OF COST 1. TO GAZA 1. 13.7/56.4 of rotary drilling (item 7) $1,658.39 13.7/56.4 of rotary drilling direct costs (item 1, 2, 3, 5) $ 285.17 1/3 of surveying and site preparation costs (item 4 & 6) $1,163.50 1/3 cost of report preparation (item 8) $ 166.00 $3,273.06 2. TO JERICHO 1. (a) 25.9/56.4 of rotary drilling (item 7) (b) 25.9/56.4 of rotary drilling direct costs (item 1, 2, 3, 5) (c) 1/3 of surveying and site preparation costs (item 4 & 6) (d) 1/3 cost of report preparation (item 8) $3,135.21 $ 539.13 $1,163.50 $ 167.00 $5,004.84 3. TO JERICHO 2. (a) 16.8/56.4 of rotary drilling (item 7) (b) 16.8/56.4 of rotary drilling direct costs (item 1, 2, 3, 5) (c) 1/3 of surveying and site preparation costs (item 4 & 6) (d) 1/3 cost of report preparation (item 8) $2,033.65 $ 349.70 $1,163.50 $ 167.00 $3,713.85

Page 6 Author's Certificate I, Louis Tsang, of the City of Kamloops, British Columbia, do hereby certify that: 1. 2. 3. 4. 5. I am a member of the Geological Association of Canada. I am a graduate of the University of British Columbia with a B. Sc. degree (1972) in geology and geophysics. I have practiced my profession since 1972 while employed by Bacon & Crowhurst Consulting Engineering Ltd. (one summer season), and by Zapata-Granby Corporation, Granisle Division (seven years). Present, I am employed by Highmont Operating Corporation Ltd., Post Office Box 300, Logan Lake, B. C. I have examined and logged all the cuttings from rotary drill holes S1 to S3 at the Highmont mine site. Louis H. C. Tsang Chief Geologist of Highmont Operating Corporation

APPENDIX A: ROTARY DRILL HOLE LOGS

DRILLING RECORD Hole No. Sample No. *Hole Depth *Collar Elevation *Remarks R. D. H. - S1 12.2-13.7 13.7-15.2 15.2-16.8 16.8-18.3 18.3-19.8 19.8-21.3 21.3-22.9 22.9-24.4 24.4-25.9 1434.69 O/R 0-12.2 R. D. H. - S2 3.4-7.6 7.6-9.1 9.1-10.7 10.7-12.2 12.2-13.7 1452.37 O/B 0-3.4 R. D. H. - S3 1 7.6-9.1 9.1-10.7 10.7-12.2 12.2-13.7 13.7-15.2 15.2-16.8 1454.81 O/B 0-7.6 * Units in metres

LEGEND 6 CODING USED FOR LOGGING CUTTING Legend s= (5%,/mineral present A= 5-10% * mineral significant H= >lo% ",. mineral very significant a.. L lightly altered M medium alteration I intensely altered CODING.".t,E..W

BOREHOLE CUTTING LOG...,.......;,.......;..._L

APPENDIX B: ROTARY DRILL HOLE ASSAYS

II ICIINONT OFLP,ITI::G COIWI:,I~LON P.O. Box 3000 LOCzIN LAKE, B. C. V0K lij0 Tel: (604) 575-2471 Telex: 048-774 TO: -- LOUIS TSANG CERTIFICiYrE OF ANALYSIS DATE: August 22, 1980 NO: 0001 RDH s-1 5 1 TR. 0.01 ~ 7 i TR. 0.01 8 1 TR. 0.01 t i RDH s-2 c RDH 5-3