Rusty Ridge JEA Drilling Report (PDF Format)

JEA Report on The Rusty Ridge Property
Diamond Drilling and Geochemical Investigations
On Map-Staked Licenses
016773M (First Year) and 015991M (Second Year)
Bunyan’s Cove Area, Newfoundland
(NTS 2D/08 and 2C/05)
For
KAT Gold Holdings Inc. and
KAT Exploration Inc.
Total Claims: 53
JEA Eligible Expenditures - $191.375.10
By
Barry A. Sparkes, B.Sc.(Hons.), P.Geo.
And
J. Wayne Pickett, M.Sc., P.Geo.
KAT Gold Holdings Corp. and
KAT Exploration Inc.
1149 Topsail Road
Mount Pearl, NL A1N 5L1
April 14th , 2011
Table of Contents
1.0
2.0
3.0
4.0
4.0.1
4.0.2
5.0
6.0
7.0
8.0
8.0.1
9.0
10.0
11.0
12.0
13.0
14.0
15.0
Summary
Property Description, Ownership and Status
Location, Access and Terrain
Previous Exploration
Government and Academic Investigations
Industry Investigations
Geological Setting
Property Geology
Mineralization
Current Exploration
Diamond Drilling
Discussion and Interpretations
Conclusions
Recommendations and Planned Additional Exploration
List of Personnel and Contractors
Statement of Expenditures
References
Certificate of Author
2
5
8
8
8
9
11
11
14
14
14
20
21
21
22
23
24
26
Appendices
Appendix A – Diamond Drill Logs
Appendix B – DDH Cross Sections
Appendix C – Core Analyses and Core Sampling Intervals
Appendix D – Supporting Financial Documents
List of Tables
Table 1:
Table 2:
Table 3:
Table 4:
Table 5:
Claims Information - Rusty Ridge Project.
Diamond Drill Hole Parameters – Phase 1 Drilling
Assay Summary – RR10-02 Rare Earth Elements.
QA/QC Sampling
List of Personnel and Contractors.
5
15
17
19
22
List of Figures
Figure 1:
Figure 2:
Figure 3:
Figure 4:
Figure 5:
Location of the Rusty Ridge Property in Eastern Newfoundland
Figure 2: Claims Location Map
Figure 3: Property Geology, compilation and 2010 drill hole locations
Figure 4: Cross section – Drill Hole RR10-01
Figure 5: Cross section – Drill Hole RR10-02
6
7
13
Appendix B
Appendix B
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1.0 Summary
Exploration completed by Kat Exploration Inc. (KATX) in 2010 on the Rusty Ridge Property
near Bunyan’s Cove in East-Central Newfoundland consisted of diamond drilling in two holes
totalling 1093.3 meters. This Phase 1 drilling tested two areas of the existing grid based on
historic exploration including geological mapping, ground prospecting and geochemical surveys,
and ground geophysical surveys. Previous workers have proposed that Rusty Ridge displayed
IOCG-style characteristics (Froude, 2003) and have potential for REE mineralization in
peralkaline felsic volcanics of late-Precambrian Musgravetown Group affinity. KAT also
contracted DIGEOS Inc. to complete a GIS compilation of data for the Rusty Ridge property in
2010.
Drill hole RR10-01 was drilled vertically to 719.3 meters and tested an historic coincident
magnetics and gravity anomaly in the southern part of the grid at 8150N and 9950E. Historic
interpretation of the gravity anomaly indicated a large, tabular-shaped and steeply-dipping
density anomaly occurring from 75 meters to at least 500 meters vertical depth. The tabularshaped body also correlated with a high-magnetic susceptibility zone at 150 and 300 meters
vertical depth. The drill hole intersected a thick repetitive package of subaerial mafic flows and
interflow sediments underlain by a thick hematitic, cobble to boulder conglomerate and lesser
siltstone, which is in turn underlain by another thick sequence of mafic volcanic rocks. The
entire volcano-sedimentary sequence appears to be conformable and is intruded by two
significant magnetic, mafic intrusions. The upper mafic intrusion (243.3-300.72 meters)
correlates well with the upper margin of the gravity anomaly and coincident magnetics anomaly.
The lower mafic intrusion occurs between 480.83-490.25 meters and is approximately coincident
with the central part of the gravity anomaly.
Mineralization observed in hole RR10-01 was relatively minor. The upper mafic volcanic rocks
contain irregularly distributed native copper hosted within weak epidote-quartz veinlets, and
lesser fracture-hosted chalcopyrite. The conglomerate unit contains minor fracture-hosted
chalcopyrite, lesser pyrite and local native copper. Mineralization is generally weak with local
concentrations to 1% sulphides over narrow intervals with strong fracturing. The hole was
terminated in a lower sequence of mafic volcanic rocks at 719.3 meters. Assays received from
the weakly mineralized upper section of mafic volcanics contained only weakly elevated copper
and silver values.
Preliminary interpretations of the core logging from hole RR10-01 suggest that the gravity
anomaly is likely explained by the moderately to strongly hematitic conglomerate unit and
magnetic mafic intrusive bodies. The gravity anomaly had been interpreted to be 0.1 gm/cc with
a central core anomaly of 0.15 gm/cc. At this time, the hematitc conglomerate and mafic
intrusions intersected offer the best and most reasonable explanation for the large, relatively low
excess density anomaly.
Drill hole RR10-02 was collared at -75 degrees, toward grid east and drilled to 374 meters. This
hole tested the large rusty hill underlain by pyritic felsic volcanic rocks that is host to noted gold
occurrences (to 1.6 g/t) and indications of elevated rare earth elements. The hole intersected a
thick package of rhyolite flows along with massive to porphyritic rhyolite, which is underlain by
Page |3
a sequence of mafic volcanic rocks and mafic volcano-sedimentary sequences. The contact with
the base of the felsic volcanics and the top of the mafic volcanic rocks is somewhat enigmatic.
The nature of the contact suggests a possible unconformity resulting from a hiatus in volcanic
activity, due to the presence of strongly altered “regolith-like” material. Alternatively, one could
argue for the contact to be an altered fault breccia at the contact interface. The mafic volcanic
rocks in RR10-02 can be separated based on visual characteristics into an upper massiveporphyritic basalt and a lower volcano-sedimentary flowtop sequence. The latter is strikingly
similar to the subaerial mafic flows and interflow sediments that were cored in hole RR10-01.
The felsic volcanics in hole RR10-02 are cut by several strong high-angle fault zones exhibiting
variable deformation ranging from brittle fracture zones through to intense fault gouge breccia.
Everywhere, the deformation is accompanied by strong to intense yellow-green sericite (+/- clay)
alteration, lesser silica flooding and local zones of chlorite alteration. Disseminated local
stringer pyrite and rare local chalcopyrite are commonly associated with the alteration. Three
mineralized zones were observed in the felsic volcanic sequence. The “upper” mineralized
rhyolite was intersected from 27.30 to 45.50 meters down the hole and exhibits strong fracturing,
sericite-clay alteration, moderate to strong (1-25%) pyrite-fluorite (deep purple) stringers and
disseminated blood-red to brown-red sphalerite grains. Rare galena and sphalerite are noted
within the lower part of the zone. A strongly deformed and chloritized mafic dyke at 42.6043.10 meters demarks the end of the altered/mineralized section. The “middle” mineralized
rhyolite occurs from 72.10-152.64 meters down the hole and consists of variable moderately
sericite-clay altered fracture-related zones with disseminated/stringer/vuggy pyrite, sphalerite
and fluorite mineralization. Local patchy silica flooded zones are present starting at 116 meters.
The end of the “middle” mineralized zone is demarked by a strong fault gouge zone containing
intense milling, sericite-clay alteration, pyrite stringers and disseminations, and disseminated
sphalerite grains. Core angles suggest a relatively steep fault (60-70 degrees). The “lower”
mineralized rhyolite zone was intersected from 206.10-245.14 meters and consists of broadly
developed, moderate to locally strong fracture-related sericite-clay-silica alteration and in-situ
tectonic breccia zones. Mineralization consists of 2-10% disseminated, stringer, vuggy pyritefluorite-sphalerite associated with the stronger alteration zones. “Ghosty” white silica flooding
is present through the unit, generally increasing toward the lower part of the interval.
Initial ICP analytical results indicated elevated lanthanum and cerium through several sections,
these, along with other selected sections of the drill hole were sent for a complete suite of rare
earth and associated elements. Results received for the “upper” mineralized rhyolite section of
the drill hole from 30.0 to 40.1m, indicate a 7.5m interval from 30.0 to 37.5m having elevated
rare earth elements and zircon, returning a weighted average of 0.164% TREO (including
yttrium) consisting of 0.113% LREO and 0.051% HREO (including yttrium). The results also
returned 0.268% zirconium dioxide, 0.039% Nb2O5 (niobium oxide) and 0.022% rubidium.
Geochemically anomalous sphalerite and arsenic along with weakly elevated molybdenite,
copper and lead are also present through the altered zones. The “middle” mineralized section
returned lower values for lanthanum and cerium and REE’s, but elevated sphalerite and arsenic
were present throughout along with sporadic gold values reaching 52 ppb. A single anomalous
gold value of 366 ppb was returned from the “upper” mineralized rhyolite from 38.0-38.5
meters. All of the altered zones exhibit weak radioactivity when scanned with a portable
scintillometer. Readings were generally in the 150-300 cps range, indicating 1.5-3 times
Page |4
background levels compared to unaltered rhyolite. The radioactivity is likely associated with
elevated potassium in sericite altered intervals.
The Phase 1 diamond drilling program at Rusty Ridge proved to be successful in outlining broad
zones of fault-related alteration in felsic volcanic rocks that contain elevated values for REE’s,
gold and base metals. Further work is suggested to better understand the potential for these
rocks in the area that includes geological mapping, prospecting and geochemical surveys. The
current understanding is that the mineralization in RR10-02 is associated high-angle structures
and additional field investigations will result in a better interpretation of the nature and extent of
prospective structures on the area. Drill testing of the coincident magnetics-gravity anomaly in
the south part of the grid in RR10-01 indicates a “geological” explanation is most reasonable
based on the current data. The weak excess gravity anomaly appears to be explained by the
presence of significant magnetic mafic dykes and a thick hematitic conglomerate unit.
JEA eligible expenditures for diamond drilling costs are $191,375.10 compared to $248,253.99
in actual expenditures as reported on April 5, 2011 in the assessment report. KAT is applying to
be reimbursed for 50% of these JEA-eligible costs, for a total of $95,687.55.
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2.0 Property Description, Ownership and Status
This report covers JEA supported exploration work carried out on map staked mineral licences
16773M and 15991M respectively, and is referred to as the Rusty Ridge Property (Figure 1).
Ken Stead Jr. was the original license holder and has since transferred the licenses to KAT
Exploration Inc., (KAT) a mineral exploration company chaired by Mr. Stead. KAT Exploration
operates all of its current exploration activity within Newfoundland and Labrador at present, and
is registered in the state of Nevada, U.S.A. KAT trades on the US market on the Pinksheets with
the symbol KATX. Previous operators in the area include Cornerstone Resources and Ken and
Tim Stead which, at that time, was called the South Princess property.
The Rusty Ridge Property licenses comprise 155 total claims in three licenses (15991M, 16773M
and 18404M) covering an area of 38.75 square kilometres (Figure 2 and Table 1). They are
located on 1:50,000 NTS map sheets 2D/08 and 2C/05, which straddle the UTM Zone 21/Zone
22 boundary. The northeast corner of the claim group is located at UTM coordinate 5 361 500 N,
722 179 E (NAD 27, UTM Zone 22). The table below outlines the details for each license on the
property.
Table 1: Rusty Ridge Project Licenses
License
015991M
016773M
018404M
Property
Rusty
Ridge
Rusty
Ridge
Rusty
Ridge
Claims
Stake Date
Mapsheets
Status
21
March 24, 2009
2C/05 &
2D/08
Issued
32
October 31, 2009
2C/05 & 2D/08
Issued
102
December 22, 2010
2C/05 & 2D/08
Issued
155
*Note: Licenses in bold and italics were subject to the exploration program reported herin.
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Figure 2: Claims location map, Rusty Ridge Project.
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3.0 Location, Access and Terrain
The Rusty Ridge Property is located at the southwestern end of the Bonavista Peninsula, Eastern
Newfoundland. The property lies west of the communities of Bloomfield and Lethbridge, and
south of Bunyan’s Cove, Bonavista Bay on 1:50,000 NTS map sheets 2D/08 and 2C/05 (Figures
1 and 2). Access to the property is via Route 230 north from the Trans Canada Highway at
Clarenville to the community of Lethbridge, then west along Route 233 to the eastern outskirts of
the town of Bunyan’s Cove. Logging roads running south from Bunyan’s Cove provide direct
access to the Ken’s Mountain grid area.
The Rusty Ridge property contains two distinct areas of moderate relief, including the area
referred to as Ken’s Mountain in the north. Ken’s Mountain is essentially barren to poorly
forested, locally boggy and reaches approximately 228.6 meters above sea level. In the south,
another prominent east-west trending is present, but is heavily forested. These topographic
features are dissected by an east-west trending string of ponds, bogs and streams that flow east to
the ocean in Bloomfield. Outcrop exposure on the property is variable. The Ken’s Mountain
area is very well exposed while areas in the south are poorly to moderately exposed. The lowlying ground in the central portion of the property is very poorly exposed. The area has been
logged extensively in the past and second growth spruce, fir, aspen and birch are the dominant
species.
4.0 Previous Exploration
4.0.1 Government and Academic Investigations
Regional mapping programs were carried out by the Geological survey of Canada in the
Bonavista Bay area by A. M. Christie and S. E. Jenness in 1963 and 1950 respectfully. An
M.Sc. thesis was conducted by E. M. Hussey of Memorial University of Newfoundland in 1979
that focussed on the Cloude Sound map area.
Randy Miller of the Newfoundland Department of Mines and Energy carried out a study of Rare
Earth Element (REE) targets of Insular Newfoundland in 1989. The study included the felsic
volcanic rocks south and west of the Bunyan’s Cove area including the felsic volcanic rocks on
Ken’s Mountain. Mr. Miller proposed that favourable rocks are pantellerites (peralkaline
rhyolite) belonging to the Bull Arm Formation. He also suggested that these rocks are likely the
most prospective in insular Newfoundland for REE (Y-Nb-Zr) mineralization.
The Newfoundland Department of Mines and Energy conducted a regional lake sediment survey
over NTS 2D in 1988 and over NTS 2C in 1993. Sean O’Brien of the Newfoundland Department
of Mines and Energy carried out geological mapping over parts of NTS sheets 2C/5 and 2D/8 in
1992 and 1993.
Recent and ongoing studies by the Geological Survey of Newfoundland are being conducted by
Sean O’Brien, Dr. Arthur King (MUN) and Leon Normore.
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4.0.2 Industry Investigations
There are no reports of previous exploration having been carried out at Rusty Ridge by industry
prior to 1997. There is evidence however, of previous exploration in the nearby Holloway Cove
area resulting from the discovery in 1998 of a small pit excavated on a showing consisting of
quartz-sphalerite-pyrite veins associated with a fine grained mafic intrusive immediately west of
Holloway Cove. No record of this work was found which is estimated to be at least 60 years old.
In 1942, two prospectors, W. Davis and H. Gillard, staked a small showing of galena and
sphalerite bearing quartz veins along the coast at Bloomfield, Bonavista Bay.
The first reported significant mineral exploration work in the area was in 1997. Ken Stead Jr.
discovered gold-copper mineralization in the Stag Brook area. This discovery led to the
founding of Cornerstone Resources and subsequently, the staking of a large portion of the
Bonavista Peninsula. Cornerstone initiated several progressive stages of exploration, some of
which were conducted with Joint Venture partners including Phelps Dodge and Noranda
Exploration. Cornerstone currently is partnered with Vale (Inco) on its Red Cliff copper
prospect. Vale (Inco) is also partnered with KAT Exploration on its Lucky Property located the
southeast of the Rusty Ridge Project.
The first reported sampling at Rusty Ridge (formerly Ken’s Mountain) by Cornerstone
Resources was in 1998. Reconnaissance geological mapping and prospecting was conducted in
the Cloude Sound and Rusty Ridge areas. Two float samples of altered/mineralized mafic
volcanics with values of 1450 and 908 ppm copper (Kiex, 1998) were reported from Ken’s
Mountain. Elevated scintillometer readings were documented in both areas and several samples
of felsic volcanic rocks were analyzed for REE’s. Sheared and altered felsic rocks from the
Cloude Sound area returned values up to 310 ppm Y, 4060 ppm Zr and 936 ppm Nb. Felsic
volcanic rocks from Rusty Ridge returned values of 239 ppm Y, 2450 ppm Zr and 240 ppm Nb
(sample Rmz-78).
Work conducted in 2000 and 2001 included reconnaissance prospecting and soil sampling along
an airborne geophysical survey (Froude, 2002). An elongate magnetic anomaly was detected in
the Rusty Ridge area running north-south from Bunyan’s Cove in the north to the Aviation
property in the south. Radiometrics and a VLF-EM survey were also completed during the
August 2000 program by SIAL Geosciences Inc.
The 2001 program at Rusty Ridge consisted of prospecting, line cutting, soil sampling, ground
magnetic and gradient IP/Resistivity (Discovery Geophysics) (Froude, 2002). Geophysical data
collected in 2000 was modelled utilizing a 3D inversion technique. The Rusty Ridge (Ken’s
Mountain) grid was cut with a north south trending baseline 2.0 kilometers in length and cross
lines cut at right angles spaced 200 meters apart. All cross lines were subsequently soil sampled
at 25 meter intervals. A total of 873 B horizon soil samples were collected and submitted to
Eastern Analytical in Springdale, Newfoundland for Au and 30 element ICP analysis. The results
indicated weak to moderate anomalies in copper (Cu), silver (Ag), cerium (Ce), lanthanum (La)
and gold (Au), generally in the western half of the grid, except for copper which was strongest in
the eastern portion of the grid. Maximum values include Au (45 ppb), Ag (2.44 ppm), Ce (>440
ppm), Cu (249 ppm) and La (>220 ppm).
P a g e | 10
The Rusty Ridge grid was geophysically surveyed with magnetometer and IP/resistivity surveys
in late 2001 by Discovery Geophysics Inc. of Springdale, Newfoundland. In addition, an area
measuring 5.8 kilometers by 3.6 kilometers including the Ken’s Mountain grid was targeted for
3-D magnetic inversion by Discovery Geophysics. The objective was to determine depth and
shape of several moderate to strong magnetic anomalies identified by the ground survey and an
earlier airborne survey. The survey produced several coincidental magnetic, IP/Resistivity and
soil geochemical anomalies. Froude proposed that the property had potential for a body of iron
oxide +/- base, precious metals and REE’s similar in style and setting to the Olympic Dam
deposit in Australia.
The 3-D inversion of the magnetics data showed a discrete, strong magnetic anomaly underlying
Rusty Ridge that is coincident with several IP chargeability anomalies. Froude eliminated
graphite as a potential explanation since the rocks are terrestrial and not marine argillite.
Prospecting and mapping revealed that the rocks overlying the magnetic anomaly are brecciated
and hematitic felsic volcanic rocks that contain veins of purple fluorite and disseminated pyrite.
Froude recommended detailed geological mapping and prospecting, geophysical target checks in
the field and a gravity survey over the most prospective areas.
During 2002 Cornerstone Resources completed 4.0 kilometers of line cutting on the Ken’s
Mountain grid to facilitate completion of a gravity survey that was carried out by Eastern
Geophysics Limited (Froude, 2003). The gravity survey identified one large gravity anomaly as
well as several other smaller anomalies. A total of five rock samples were collected and assayed
from the Ken’s Mountain grid area. The best values obtained, from a single sample, were up to
169 ppb Au, 137 ppm Mo and 1.0 ppm Ag from a hematized felsic breccia, cut by sulphide rich
veins and stringers of massive to heavily disseminated pyrite. During late September and early
October of 2002, a program of geological mapping was conducted over 22 kilometers of cut and
picketed lines comprising the Ken’s Mountain grid. 3-D inversion of the gravity data was
conducted by Dennis Woods in 2003 for Cornerstone. Woods reported on a number gravity
anomalies, including several linear anomalies in the west-central part of the grid and a large,
vertical-tabular in the southern part of the grid.
Exploration by Cornerstone in 2003 consisted of trenching and rock sampling (Dyke and Froude,
2003). Approximately 450 meters of trenching was conducted in the southwest portion of Rusty
Ridge. Three of the trenches (Trenches 1-3) exposed bedrock while a fourth trench (Trench #4)
did not reach bedrock due to thick overburden. Twenty two rock samples were collected from
the trenches with the highest values obtained for Au, Zn and Cu from different samples, was
0.127 g/t, 278 ppm and 309 ppm respectively. Eight samples underwent whole rock analysis for
REE’s and produced high values of 1950 ppm Zr, 126 ppm Nb and 149 ppm Y from different
samples. Trench #4, which was excavated over the strongest portion of the broad gravity
anomaly on line 8000N, did not reach bedrock and therefore the gravity anomaly is still
unexplained.
More recent work by KAT Exploration has reported gold in bedrock samples to 1.6 g/t Au on
Rusty Ridge. The gravity data was further processed by Woods Geophysics. Chris Hutchings of
KIEX Consulting prepared a thorough technical review for KAT Exploration in 2010
(Hutchings, 2010). In the review, Mr. Hutchings proposed several diamond drill targets and in
P a g e | 11
addition, reviewed the literature of IOCG-style deposits worldwide in light of the data at Rusty
Ridge. Mr. Hutchings proposed that the most applicable genetic mineral deposit models to Rusty
Ridge are those related to the Zambian-Namibia Copperbelt-type, otherwise known as the
Greater Lufilian Arc IOCG model. His priority 1 drill target occurs at the southern part of the
grid at 9800-10000E on lines 8000-8200N, targeting the deep gravity/magnetics anomaly.
Priority 2 drill target is a shallow, high-density gravity anomaly located at line 9800N and
8750E.
5.0 Geological Setting
The property is situated in the western portion of the Avalon Tectonostratigraphic Zone of
Newfoundland (Williams, 1979) and consists of Late Proterozoic aged volcanic, plutonic and
sedimentary rocks, characteristic of continental crust within an arc-rift setting (O’Brien et al,
1988, 1990). Globally, the Avalon Zone is correlative to both the Carolina Slate Belt and parts of
northwest Africa.
The oldest rocks exposed in the region are marine turbidites of the Connecting Point Group,
which are unconformably overlain by terrestrial sediments and volcanic rocks of the
Musgravetown Group. Along the western edge of the property, a major structural break known
as the Charlottetown Fault separates strongly deformed volcanics and sediments of the Love
Cove Group from the relatively undeformed Musgravetown Group (O’Brien et al, 1988).
6.0 Property Geology
The South Princess property is underlain mainly by sedimentary and volcanic rocks of the Late
Proterozoic Musgravetown Group (Figure 3). The northeastern margin of the property is
underlain by the Connecting Point Group, which is composed of green arenaceous sandstone,
grey and green siltstone and minor granule conglomerate. The Connecting Point Group is
unconformably overlain by the Musgravetown Group to the south (O’Brien, 1993). The extreme
western portion of the property is underlain by highly strained felsic and mafic volcanic rocks of
the Love Cove Group that are in fault contact (Charlottetown Fault) with the Musgravetown
Group to the east. Within the property area the Musgravetown Group consists of the Canning’s
Cove Formation and an unnamed sequence of bimodal volcanic rocks that conformably overlie it
(O’Brien,1993). The Canning’s Cove Formation is the basal member of the Musgravetown
Group and consists of a gently dipping sequence of red to locally grey sediments including
pebble to cobble polymictic conglomerate, sandstone and siltstone.
The unnamed sequence of volcanic rocks consists of a bimodal sequence of subaerial mafic and
overlying felsic volcanics, considered by Hussey (1979) to be of alkaline and peralkaline affinity
respectively. Hussey has classified the felsic volcanics as pantellerites. The mafic volcanics are
generally thin (< 1 meter), green to red, amygdaloidal and vesicular flows with minor tuff,
agglomerate and locally flow top breccia. The felsic volcanics vary from fine grained massive to
locally feldspar porphyritic flows, with local flow banded and autobrecciated flows. The felsic
P a g e | 12
volcanic rocks are also weakly radioactive with occasional scintillometer readings approaching
750 counts per second.
The volcanic sequence is best exposed in the western portion of the property, south of the
community of Bunyan’s Cove. At this location, the felsic volcanics are well exposed along a
prominent ridge dubbed Ken’s Mountain. The felsic volcanics at this location differ from
exposures further northeast in that pyrite is much more common, locally to 5%, occasionally
with clear to purple fluorite occurring as vug fillings and veinlets.
The Love Cove Group is a north trending belt of strongly foliated felsic to intermediate volcanic
rocks with lesser sedimentary rocks all of which were deposited in a shallow marine environment
(O’Brien, 1993). These volcanic and sedimentary sequences have been intruded by at least two
generations of mafic dykes, pre and post tectonic.
The Connecting Point Group is composed mainly of fine-grained, marine siliciclastic rocks and
is characterized by extensive shale-rich, distal turbidites. The strata are moderately to steeply
dipping, extensively homoclinal and, locally, tightly folded. There are widespread pretectonic
and posttectonic mafic dykes present (O’Brien, 1993).
Intrusive rocks on the property consist of medium grained porphyritic gabbro which is exposed
on a logging road east of Ken’s Mountain and mafic dykes that presumably intrude all
lithologies. Faults, largely inferred from regional scale airborne geophysics, generally trend
NNW - SSE, NE– SW, and E –W.
P a g e | 13
Figure 3: Property geology, compilation and diamond drill hole location map.
P a g e | 14
7.0 Mineralization
Mineralization identified to date on the property consists mainly of disseminated to locally
stringer pyrite, hosted by felsic volcanic rocks (locally with significant fluorite) and mafic
volcanic rocks, in the Rusty Ridge area. The Rusty Ridge occurrences also contain anomalous
REE (Zr, Nb, Y) values. Other significant areas of mineralization that have been identified in the
area are located in the Stag Brook, Southwest Brook, Milner’s Cove and the Holloway Cove
area.
The Rusty Ridge occurrences consist of a number of pyrite +/- fluorite +/- REE (Zr, Nb, Y)
occurrences hosted within massive to locally brecciated rhyolite along a prominent ridge known
as Rusty Ridge. The mineralization has also been observed in mafic volcanics that outcrop at the
base of Rusty Ridge. Disseminated chalcocite and malachite returned 1450 ppm Cu from
vessicular basalt sampled in 1998, TF-197 (Hutchings, 1998b).
8.0 Current Exploration
8.0.1 Diamond Drilling
Phase 1 diamond drilling was completed by Kat Exploration Inc. (KATX) in 2010 on the Rusty
Ridge Property near Bunyan’s Cove in East-Central Newfoundland and consisted of two holes
totalling 1093.3 meters. This Phase 1 drilling tested two areas of the existing grid based on
historic exploration including geological mapping, ground prospecting and geochemical surveys,
and ground geophysical surveys. Previous workers have proposed that Rusty Ridge displayed
IOCG-style characteristics (Froude, 2003) and have potential for REE mineralization in
peralkaline felsic volcanics of late-Precambrian Musgravetown Group affinity.
Drilling was contracted to CABO (Atlantic) Corp. from Springdale, NL, was initiated on October
15th, 2010 and continued until November 16th. Mechanical issues caused a standby period from
October 16th to Oct 21st. The drilling was completed with a Longyear 44 drill recovering NQsized drill core. Holes were located using the existing field exploration grid and chaining along
lines or along sighted compass bearings. UTM co-ordinates were collected at the collars in the
NAD 83 reference system using hand-held Garmin GPS units.
Drill core was logged and sampled in a secure, well lighted, temporary logging facility located in
Bunyan’s Cove rented from local resident Brian Hobbs. The core was sampled according to
variation in lithology, alteration and mineralization. Sample intervals ranged from 0.5 to 2
meters based on mineralization characteristics. All drill core was photographed using consistent
lighting, normally three boxes per photo and detailed photos where required. All core logging
and sampling was conducted by the author, Barry A. Sparkes, P.Geo., and J. Wayne Pickett,
P.Geo., both qualified professional geologists and registered members of PEG-NL. Detailed
geotechnical measurements were collected by Tim Stead or the aforementioned geologists. Core
samples were cut at the logging facility, then tagged and securely bagged and shipped via DRL
bus to Eastern Analytical Ltd. in Springdale, NL. Eastern Analytical Ltd. conducted ICP-30 and
gold fire assay analysis. A strict QA/QC sampling protocol was established whereby one control
P a g e | 15
sample was inserted for every nine core samples. Control samples included alternating blanks
(Clarenville Granite Pluton) and standards (industry-prepared base metal standard – CDN
Resource Laboratories). Rare earth element analysis was conducted by Acme Analytical
Laboratories of Vancouver, BC and Actlabs Inc of Ancaster, ON. Acme and Actlabs completed
the REE analysis with lithium metaborate/tetraborate fusion and ICP-MS. Drill logs, cross
sections, core sample intervals and analytical analysis are presented in Appendicies A-C. A list
of QA/QC sampling is shown in Table 4 and a list of contractors and personnel is presented in
Table 5.
Table 2: Diamond Drill Hole Parameters, Rusty Ridge Phase 1 Drilling
DDH
Zones
East
(NAD83)
North
(NAD83)
Elevation
(meters)
Grid N
Grid E
Dip
Azimuth
Length
(meters)
RR10-01
21/22
277818
5360854
110
8150
9950
-90
0
719.3
RR10-02
21/22
278219
5362652
200
10000
10100
-70
115
374
Total
1093.3
Drill hole RR10-01 (Figures 3 and 4) was drilled vertically to 719.3 meters and tested an historic
coincident magnetics and gravity anomaly in the southern part of the grid at 8150N and 9950E.
Drilling operations were hampered by a mechanical breakdown (fuel pump) for a period of six
days soon after startup. Otherwise, drilling production was very favourable and recoveries were
excellent in RR10-01.
Historic interpretation of the gravity anomaly indicated a large, tabular-shaped and steeplydipping density anomaly occurring from 75 meters to at least 500 meters vertical depth. The
tabular-shaped body also correlated with a high-magnetic susceptibility zone at 150 and 300
meters vertical depth.
The drill hole intersected a thick repetitive package of subaerial mafic flows and interflow
sediments underlain by a thick hematitic, cobble to boulder conglomerate and lesser siltstone,
which is in turn underlain by another thick sequence of mafic volcanic rocks. The entire
volcano-sedimentary sequence appears to be conformable and is intruded by two significant
magnetic, mafic intrusions. The upper mafic intrusion (243.3-300.72 meters) correlates well
with the upper margin of the gravity anomaly and coincident magnetics anomaly. The lower
mafic intrusion occurs between 480.83-490.25 meters and is approximately coincident with the
central part of the gravity anomaly.
Mineralization observed in hole RR10-01 was relatively minor. The upper mafic volcanic rocks
contain irregularly distributed native copper hosted within weak epidote-quartz veinlets, and
lesser fracture-hosted chalcopyrite and pyrite. The conglomerate unit contains minor fracturehosted chalcopyrite, lesser pyrite and local native copper. Mineralization is generally weak with
local concentrations to 1% sulphides over narrow intervals with strong fracturing. A weak zone
of carbonate-epidote-quartz veining with trace pyrite from 173.1 to 176 meters assayed trace
amounts of gold (to 131 ppb Au, sample 45091). The hole was terminated in a lower sequence
of mafic volcanic rocks at 719.3 meters. Assays received from the weakly mineralized upper
P a g e | 16
section of mafic volcanics contained only weakly elevated copper and silver values (Appendix C
and Figure 4).
Preliminary interpretations of the core logging from hole RR10-01 suggest that the gravity
anomaly is likely explained by the moderately to strongly hematitic conglomerate unit and
magnetic mafic intrusive bodies. The gravity anomaly had been interpreted to be 0.1 gm/cc with
a central core anomaly of 0.15 gm/cc. At this time, the hematitc conglomerate and mafic
intrusions intersected offer the best and most reasonable explanation for the large, relatively low
excess density anomaly.
Drill hole RR10-02 was collared at -75 degrees, toward grid east and drilled to 374 meters
(Figures 3 and 5). This hole tested the large rusty hill underlain by pyritic felsic volcanic rocks
that is host to noted gold occurrences (to 1.6 g/t) and indications of elevated rare earth elements.
Drilling conditions were somewhat challenging through the felsic volcanic stratigraphy due to
the presence of several faults and gouge zones. Core recoveries varied through the fault zones in
the felsic volcanics, but overall production was good considering the conditions. Production
from the lower third of the hole, drilled in mafic volcanics, was very good and recoveries were
excellent.
The hole intersected a thick package of rhyolite flows along with massive to porphyritic rhyolite,
which is underlain by a sequence of mafic volcanic rocks and mafic volcano-sedimentary
sequences. The contact with the base of the felsic volcanics and the top of the mafic volcanic
rocks is somewhat enigmatic. The nature of the contact suggests a possible unconformity
resulting from a hiatus in volcanic activity, due to the presence of strongly altered “regolith-like”
material. Alternatively, one could argue for the contact to be an altered fault breccia at the
contact interface. The mafic volcanic rocks in RR10-02 can be separated based on visual
characteristics into an upper massive-porphyritic basalt and a lower volcano-sedimentary flowtop
sequence. The latter is strikingly similar to the subaerial mafic flows and interflow sediments
that were cored in hole RR10-01.
The felsic volcanics in hole RR10-02 are cut by several strong high-angle fault zones exhibiting
variable deformation ranging from brittle fracture zones through to intense fault gouge breccia.
Everywhere, the deformation is accompanied by strong to intense yellow-green sericite (+/- clay)
alteration, lesser silica flooding and local zones of chlorite alteration. Disseminated local
stringer pyrite and rare local chalcopyrite are commonly associated with the alteration. Three
mineralized zones were observed in the felsic volcanic sequence. The “upper” mineralized
rhyolite was intersected from 27.30 to 45.50 meters down the hole and exhibits strong fracturing,
sericite-clay alteration, moderate to strong (1-25%) pyrite-fluorite (deep purple) stringers and
disseminated blood-red to brown-red sphalerite grains. Rare galena and sphalerite are noted
within the lower part of the zone. A strongly deformed and chloritized mafic dyke at 42.6043.10 meters demarks the end of the altered/mineralized section. The “middle” mineralized
rhyolite occurs from 72.10-152.64 meters down the hole and consists of variable moderately
sericite-clay altered fracture-related zones with disseminated/stringer/vuggy pyrite, sphalerite
and fluorite mineralization. Local patchy silica flooded zones are present starting at 116 meters.
The end of the “middle” mineralized zone is demarked by a strong fault gouge zone containing
intense milling, sericite-clay alteration, pyrite stringers and disseminations, and disseminated
P a g e | 17
sphalerite grains. Core angles suggest a relatively steep fault (60-70 degrees). The “lower”
mineralized rhyolite zone was intersected from 206.10-245.14 meters and consists of broadly
developed, moderate to locally strong fracture-related sericite-clay-silica alteration and in-situ
tectonic breccia zones. Mineralization consists of 2-10% disseminated, stringer, vuggy pyritefluorite-sphalerite associated with the stronger alteration zones. “Ghosty” white silica flooding
is present through the unit, generally increasing toward the lower part of the interval.
The upper porphyritic basalt unit, cut from 245.14-342.77 meters, contains moderate to strong
tectonic-hydrothermal brecciation throughout. The matrix to the breccia zone consists of greywhite to grey-blue “ghosty” silica, carbonate (massive and bladed), minor hematite and lesser
chlorite and epidote. Weak local pyrite, specular and earthy hematite veinlets and trace
sphalerite in carbonate veinlets are also present in the breccia zone.
Initial ICP analytical results indicated elevated lanthanum and cerium through several sections,
these, along with other selected sections of the drill hole were sent for a complete suite of rare
earth and associated elements. Results received for the “upper” mineralized rhyolite section of
the drill hole from 30.0 to 40.1m, indicate a 7.5m interval from 30.0 to 37.5m having elevated
rare earth elements and zircon, returning a weighted average of 0.164% TREO (including
yttrium) consisting of 0.113% LREO and 0.051% HREO (including yttrium). The results also
returned 0.268% zirconium dioxide, 0.039% Nb2O5 (niobium oxide) and 0.022% rubidium
(Table 3, Figure 5). Geochemically anomalous sphalerite and arsenic along with weakly
elevated molybdenite, copper and lead are also present through the altered zones. The “middle”
mineralized section returned lower values for lanthanum and cerium and REE’s, but elevated
sphalerite and arsenic were present throughout along with sporadic gold values reaching 52 ppb.
A single anomalous gold value of 366 ppb was returned from the “upper” mineralized rhyolite
from 38.0-38.5 meters. All of the altered zones exhibit weak radioactivity when scanned with a
portable scintillometer. Readings were generally in the 150-300 cps range, indicating 1.5-3
times background levels compared to unaltered rhyolite. The radioactivity is likely associated
with elevated potassium in sericite altered intervals.
Table 3: Assay Summary (weighted averages) for Rare Earth Elements,
Drill Hole RR10-01.
Hole #
Sample
RR10-02
45393
RR10-02
45394
RR10-02
45395
RR10-02
45396
RR10-02
45397
RR10-02
45398
RR10-02
45399
From (m)
To (m)
Length (m)
30
30.5
0.5
30.5
31
0.5
31
31.5
0.5
31.5
32
0.5
32
32.5
0.5
32.5
33
0.5
33
33.5
0.5
TREO%
LREO%
HREO%
0.127
0.090
0.037
0.169
0.116
0.053
0.180
0.123
0.057
0.157
0.108
0.050
0.172
0.119
0.053
0.168
0.116
0.052
0.171
0.118
0.053
P a g e | 18
RR10-02
45401
RR10-02
45402
RR10-02
45403
RR10-02
45404
RR10-02
45405
RR10-02
45406
RR10-02
45407
RR10-02
45408
33.5
34
0.5
34
34.5
0.5
34.5
35
0.5
35
35.5
0.5
35.5
36
0.5
36
36.5
0.5
36.5
37
0.5
37
37.5
0.5
Total
Weighted
Average
7.5
0.173
0.120
0.053
0.160
0.110
0.050
0.153
0.105
0.048
0.169
0.117
0.051
0.162
0.111
0.050
0.177
0.123
0.054
0.180
0.125
0.056
0.136
0.094
0.041
0.164
0.113
0.051
P a g e | 19
Table 4: QA/QC Sampling, 2010 Rusty Ridge Drilling.
HoleID
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
RR10-01
Sample
45010
45020
45030
45040
45050
45060
45070
45080
45090
45100
45110
45120
45130
45140
45150
45160
45170
45180
45190
45200
45210
45220
45230
45240
45250
45260
45270
45280
45290
45300
45310
45320
45330
45340
45350
45360
Comment
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
HoleID
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
RR10-02
Sample
45370
45380
45390
45400
45410
45420
45430
45440
45450
45460
45470
45480
45490
45500
45510
45520
45530
45540
45550
45560
45570
45580
45590
45600
45610
45620
45630
45640
45650
Comment
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Blank
Standard A
Standard A
Blank
P a g e | 20
9.0 Discussion and Interpretations
Exploration completed by Kat Exploration Inc. (KATX) in 2010 on the Rusty Ridge Property
near Bunyan’s Cove in East-Central Newfoundland consisted of diamond drilling in two holes
totalling 1093.3 meters. This Phase 1 drilling tested two areas of the existing grid based on
historic exploration including geological mapping, ground prospecting and geochemical surveys,
and ground geophysical surveys. Previous workers have proposed that Rusty Ridge displayed
IOCG-style characteristics (Froude, 2003) and have potential for REE mineralization in
peralkaline felsic volcanics of late-Precambrian Musgravetown Group affinity.
The Phase 1 diamond drilling program at Rusty Ridge proved to be successful in outlining broad
zones of fault-related alteration in felsic volcanic rocks that contain elevated values for REE’s,
gold and base metals. Mineralization is hosted within strongly alterered fault zones and breccia
zones. Lithological controls may be considered for example, the basal rhyolite-basalt contact is
itself enigmatic, but exhibits strong hydrothermal alteration indicating significant fluid flow.
Due to the similar alteration in the lower felsic volcanics and upper mafic volcanics (i.e. brecciahosted “ghosty” silica), a co-genetic relationship is suspected. Given the rheological contrasts
along this contact (exact nature undetermined), it is suspected that fluids were focussed along the
contact zone and then migrated upward along dissecting high-angle (either near-vertical or
moderately-steeply east-dipping) fault zones. Metals and fractionated fluids were deposited
along these favourable fault and breccia zones that include pyrite, fluorite, sericite, clays, silica,
sphalerite, galena and gold. Geochemically anomalous rare earth metals accompany the
strongest fluorite-pyrite zones.
Further work is suggested to better understand the potential for these rocks in the area that
includes geological mapping, prospecting and geochemical surveys. The current understanding
is that the mineralization in RR10-02 is associated high-angle structures, of undetermined age,
but potentially related to the Charlettown Fault or later re-activation of the structure (and/or
related structures). Additional field investigations will result in a better interpretation of the
nature and extent of prospective structures on the area as well as the timing of the mineralization
with respect to known structures.
Drill testing of the coincident magnetics-gravity anomaly in the south part of the grid in RR1001 indicates a “geological” explanation is most reasonable based on the current data. The weak
excess gravity anomaly appears to be explained by the presence of significant magnetic mafic
dykes and a thick hematitic conglomerate unit. Exploration models include Olympic Dam style
IOCG (Froude, 2003) and perhaps a more applicable Greater Lufilian Arc IOCG model
(Hutchings, 2010). The current information does not support the presence of a significant
mineral deposit using these models. Rather, the weakly copper-mineralized rocks encountered in
drillhole RR10-01, are more indicative of sediment-hosted and volcanic-hosted copper deposits.
Sulphide copper mineralization is mainly hosted along discrete fracture planes likely related to
axial planar S1 fabric related to gentle open folds. Lesser amounts of native copper
mineralization is observed in epigenetic quartz-epidote-carbonate veinlets hosted in the upper
mafic volcanic unit. No further drilling proposed at this time for this target.
P a g e | 21
10.0 Conclusions
Phase 1 diamond drilling at Rusty Ridge has demonstrated some potential for REE
mineralization hosted in peralkaline felsic volcanic rocks. The first ever drill hole testing for
REE’s in this part of the province should be considered successful and further work is warranted
to better understand the mineral deposit potential in this area, and others regionally in similar
rocks. Drill testing the coincident gravity-magnetics anomaly in the southern part of the property
did not confirm historically proposed mineral deposit models in the IOCG classification. Minor
copper mineralization was encountered that is more representative of sediment-hosted and
volcanic-hosted deposits that can be loosely compared to other prospects on the Bonavista
Penninsula.
11.0 Recommendations and Planned Additional Exploration
Recommended follow-up exploration for REE’s should include detailed geological mapping and
prospecting, soil geochemical sampling in the area north of the existing grid and grid extension
to the north. If results are positive, diamond drilling should be considered to further test the REE
potential at Rusty Ridge. A better understanding of the mineralized structures (dip/orientation)
will guide any further drilling. Core angles suggest that the structures drilled in 2010 may be
near vertical or east dipping, future drill holes may be best drilled from the east toward the west.
No further exploration is proposed in the southern part of the property at this time.
P a g e | 22
12.0 List of Personnel and Contractors
A list of personnel and contractors is provided in Table 4 below.
Table 5: List of Personnel and Contractors.
Personnel
Name
Position
Location
*Barry A. Sparkes, P.Geo.
Exploration Manager - Program management,
core logging and report writing
Paradise, NL
VP Capital Projects - Program management,
core logging and report writing
VP Exploration - Geological technician
Core cutter/labourer
Conception Bay South,
NL
Little Catalina, NL
Little Catalina, NL
Position
Contract Diamond Drilling
Contract Geochemical Analysis
Contract Geochemical Analysis
Contract Geochemical Analysis
Core shack rental
Core cutter/labourer
Labourer
Labourer
Labourer
Labourer
Labourer
Location
Springdale, NL
Springdale, NL
Vancouver, BC
Ancaster, ON
Bunyan's Cove, NL
Bunyan's Cove, NL
Bunyan's Cove, NL
Bunyan's Cove, NL
Bonavista, NL
Little Catalina, NL
Bonavista, NL
J. Wayne Pickett, P.Geo.
*Tim Stead
Melvin Stead
Note: *Asterisk denotes the qualified
person and assistant claimed under JEA
guidelines.
Contractors
Name
CABO (Atlantic) Drilling Corp
Eastern Analytical
Acme Labs
Activation Laboratories
Brian Hobbs
Joey Tucker
Garland Foss
Ryan Bragg
Randy Stead
Jeremy Dalton
Dwayne Stead
P a g e | 23
13.0 Statement of JEA Eligible Expenditures
Wages
Rate
Days
Barry Sparkes, P.Geo.
$
400.00
46
$
18,400.00
Tim Stead, assistant.
$
300.00
66
$
19,800.00
$
38,200.00
Expenses
Barry Sparkes Oct_Nov 2010
$
2,930.88
Brian Hobbs - Core Shack
$
1,600.00
$
4,530.88
Cabot Industries - Dozer
$
678.00
Joey Tucker
$
750.00
Melvin Stead
$
8,098.00
$
9,526.00
Site Preparation
CABO (Atlantic) Drilling
Invoice #
Amount
Advance
$
8,000.00
134
$
24,208.01
136
$
55,422.76
144
$
42,357.27
148
$
6,941.88
$
136,929.92
Eastern Analytical
Invoice #
Amount
33676
$
2,188.30
33704
$
2,188.30
33713
$
196.51
33736
$
2,003.83
33785
$
1,996.09
33820
$
3,042.19
33865
$
1,986.20
33882
$
64.60
$
13,666.02
CDN Resource Labs.
Invoice #
301008
Total JEA Eligible Expenses
50% JEA Grant Amt.
Requested
Amount
$
705.15
$
191,375.10
$
95,687.55
Total
P a g e | 24
14.0 References
Christie, A.M (1950): Geology of Bonavista map area, Newfoundland (summary account).
Department of Mines and Technical Surveys. Geological Survey of Canada. Paper 50-7. O.F.
2C/7.
Department of Mines and Energy
(1993): Gold and associated elements in lake sediments (NTS 2C and 2F), O.F. NFLD/2273.
Department of Mines and Energy N.M.I. mineral occurrence file 2C/5/Pb001. (1988): Gold and
associated elements in lake sediments (NTS 2D), O.F. 2D/0175.
(1984): Mineral occurrence maps 84-21 (NTS 2C) and 84-45 (NTS 2D), scale 1:250,000.
Froude, T. D.
(2003): Third (8327M), Fourth (6418M) and Fifth (7126M) Year Assessment Report, on
Geological Mapping and Geophysical Surveying, for Cornerstone Resources Inc., South Princess
Property, Musgravetown, Newfoundland.
(2001): Third and Fourth Year Assessment Report, South Princess Property, Licences 6418M,
7126M and 8327M, Musgravetown.
Geological Survey of Canada (1962): Geology – Bonavista map sheet, NTS 2/C, Map 1130A,
scale – 1” = 4 mi., O.F. NFLD/217. Aeromagnetic map, Sweet Bay, Newfoundland, 1968, NTS
2C/5, Map 214G, scale 1” = 1 mile, O.F. 2C/5(15).
Hussey, E.M. (1979): The stratigraphy, structure and petrochemistry of the Clode Sound map
area, northwestern Avalon Zone, Newfoundland. Unpublished Masters thesis. Memorial
University of Newfoundland. 312 pages, O.F. 2D/101.
Hutchings, C.K. (2010): First and second year assessment report, prospecting and technical
review for diamond drilling program. License 15991M, Rusty Ridge Property. Bonavista
Peninsula, Newfoundland, Canada. NTS 02C/5 and 02D/8. Prepared for KAT Exploration
Incorporated. August 16, 2010. 37 pages plus appendicies.
Hutchings, C.K. (1998a): Reconnaissance geological mapping and prospecting report, Princess
property, Newfoundland, NTS No. 2C/5 & 2D/8, Assessment Year I, Part II supplementary
report, Licence No. 5643M, 5707M, 5823M, 5905M, 6013M, 6015M, 6017M, 6020M, 6024M,
5185M, 5693M, 5742M, 5824M, 6011M, 6014M, 6016M, 6019M, 6023M, 6184M, 6186M,
6187M. KIEX Consulting Limited report for Cornerstone Resources Inc., 9 pages + appendices
and maps.
P a g e | 25
Hutchings, C.K., and Dwyer, L. (1998b): Geological, geochemical, geophysical and
prospecting report, Princess property, Newfoundland, NTS No. 2C/5 & 2D/8, Assessment Year
I. Licence No. 5643M, 5707M, 5823M, 5905M, 6013M, 6015M, 6017M, 6020M, 6024M,
5185M, 5693M, 5742M, 5824M, 6011M, 6014M, 6016M, 6019M, 6023M, 6184M, 6186M,
6187M. KIEX Consulting Limited report for Cornerstone Resources Inc., 32 pages + appendices
and maps..1999: Hutchings, C.K. Newfoundland operations: Exploration update to November 2,
1999. KIEX Consulting Limited report for Cornerstone Resources Inc., 19 pages.
Hutchings, C.K. (1997): Geological report, Musgravetown Property, Newfoundland, NTS 2C/5.
KIEX Consulting Limited report for Cornerstone Resources Inc., 32 pages + maps.
Jenness, S.E. (1963): Terra Nova and Bonavista map areas, Newfoundland. Geological Survey
of Canada, Memoir 327, 184 pages.
Kirkham, R.V. (1996): Volcanic redbed copper; in geology of Canadian Mineral Deposit
Types. (ed.) O.R. Eckstrand, W.D. Sinclair, and R.I. Thorpe; Geological Survey of Canada,
Geology of Canada, no. 8, pages 241-252.
Miller, R.R. (1989): Rare-metal targets in insular Newfoundland: In current Research.
Newfoundland Department of Mines, Geological Survey of Newfoundland, Report 89-1, pages
171-179.
O’Brien, S.J.
(1993): A preliminary account of geological investigations in the Clode Sound-Goose Bay
region, Bonavista Bay, Newfoundland (NTS 2C/5 NW and 2D/8 NE). In Current Research,
Newfoundland Department of Mines and Energy, Geological Survey Branch, Report 93-1, pages
293-309.
(1992): A preliminary geological map of parts of the Sweet Bay area (2C/5 NW) and Port
Blandford (2D/8 NE) map areas, Bonavista Bay, Newfoundland. Geological Survey Branch.
Department of Mines and Energy, Government of Newfoundland and Labrador. Map No. 92-23.
Scale 1:50,000, O.F. NFLD 2246.
O'Brien, S. J., Strong, D. F. and King, A.F. (1990): The Avalon Zone type area: southeastern
Newfoundland Appalachians, Avalonian and Cadomian geology of the North Atlantic, Strachan,
R A; Taylor, G K., pages 166-194, Geofile No. NFLD/2511.
O'Brien, S. J., O'Neill, P. P., King, A. F., and Blackwood, R. F. (1988): Eastern margin of the
Newfoundland Appalachians-a cross-section of the Avalon and Gander zones; Geological
Association of Canada-Mineralogical Association of CanadaCanadian Society of Petroleum
Geologists, Field Trip Guidebook , 133 pages, Geofile No. NFLD/1715.
Williams, H. (1979): Appalachian Orogen in Canada. Canadian Journal of Earth Sciences, v.16,
pages 792 – 807.
P a g e | 26
15.0 Certificate of Author
Barry A. Sparkes, B.Sc., P.Geo.
21 Cameo Drive
Paradise, NL
A1L 2T6
I, Barry A. Sparkes, B.Sc.(Hons.), P.Geo. do hereby certify that:
1.
I am employed by KAT Exploration Inc. as Exploration Manager with a business office at:
1149 Topsail Rd.
Mount Pearl, Newfoundland
A1N 5G2
Telephone: 709-368-9223
Email:
bsparkes@katexploration.com
2.
I graduated with a Bachelor of Science (Hons.) degree in Geology from Memorial University of
Newfoundland in 2001. In addition, I obtained a Mineral Technology diploma from College of
the North Atlantic (formerly WestViking College) in 1996.
3.
I am a Registered Professional Geoscientist in good standing with the Professional Engineers and
Geoscientists of the Province of Newfoundland and Labrador.
4.
I have worked as a geologist for a total of 10 years since my graduation from university and as a
mining technician, geological technician and prospector since 1996.
5.
I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43101”) and certify that by reason of my education, affiliation with a professional association (as
defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a
“qualified person” for the purposes of NI 43-101.
6.
I am co-author of the technical report titled: “JEA Report on The Rusty Ridge Property; Diamond
Drilling and Geochemical Investigations on Map-Staked Licences 016773M and 015991M,
Bunyan’s Cove Area, Newfoundland (NTS 2D/08 and 2C/05)”
7.
I am not aware of any material fact or material change with respect to the subject matter of the
Technical Report that is not reflected in the Technical Report, the omission to disclose which
makes the Technical Report misleading.
P a g e | 27
8.
The information, opinions, conclusions and recommendations contained herein are based on work
performed and supervised by the author and co-author on the subject property from October to
November of 2010; and on a review of available literature and previous records of work on the
property and surrounding area. Literature reviewed comprises published articles in technical
journals, reports and maps filed for assessment with the government of Newfoundland and
Labrador, and reports supplied by the property owner. I have worked onsite as manager at the
Rusty Ridge Property and have logged drill core and collected samples from drill holes RR10-01
and RR10-02, which was drilled on the property during 2010.
Dated this 14th day of April, 2011.
Signature of Qualified Person
Barry A. Sparkes, B.Sc., P.Geo.
Print name of Qualified Person
P a g e | 28
J. Wayne Pickett, M.Sc., P.Geo.
37 Wintergreen Road
Conception Bay South, NL
A1W 4V5
I, J. Wayne Pickett, M.Sc., P.Geo. do hereby certify that:
9.
I am employed by KAT Gold Holdings Corp. and KAT Exploration Inc. as Senior Vice President
Capital Projects with a business office at:
1149 Topsail Rd.
Mount Pearl, Newfoundland
A1N 5G2
Telephone: 709-368-9223
Email:
jwpickett@katexploration.com
10.
I graduated with a Bachelor of Science degree in Geology from Memorial University of
Newfoundland in 1974. In addition, I obtained a Master of Science degree in Earth Sciences
(Geology) from Memorial University of Newfoundland in 1989.
11.
I am a Registered Professional Geoscientist in good standing with the Professional Engineers and
Geoscientists of the Province of Newfoundland and Labrador, and the Association of Professional
Engineers and Geoscientists of the Province of British Columbia.
12.
I have worked as a geologist for a total of 30 years since my graduation from university.
13.
I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43101”) and certify that by reason of my education, affiliation with a professional association (as
defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a
“qualified person” for the purposes of NI 43-101.
14.
I am co-author of the technical report titled: “JEA Report on The Rusty Ridge Property; Diamond
Drilling and Geochemical Investigations on Map-Staked Licences 016773M and 015991M,
Bunyan’s Cove Area, Newfoundland (NTS 2D/08 and 2C/05)”
15.
I am not aware of any material fact or material change with respect to the subject matter of the
Technical Report that is not reflected in the Technical Report, the omission to disclose which
makes the Technical Report misleading.
P a g e | 29
16.
The information, opinions, conclusions and recommendations contained herein are based on work
performed and supervised by the author and co-author on the subject property from October to
November of 2010; and on a review of available literature and previous records of work on the
property and surrounding area. Literature reviewed comprises published articles in technical
journals, reports and maps filed for assessment with the government of Newfoundland and
Labrador, and reports supplied by the property owner. I have worked onsite at the Rusty Ridge
Property and have logged drill core from drill hole RR10-01, which was drilled on the property
during 2010.
Dated this 14th day of April, 2011.
Signature of Qualified Person
J. Wayne Pickett, M.Sc., P.Geo.
Print name of Qualified Person
P a g e | 30
Appendix A
Diamond Drill Logs
P a g e | 31
Appendix B
DDH Cross Sections
P a g e | 32
Appendix C
Core Analyses and Sample Intervals
P a g e | 33
Appendix D
Supporting Financial Documents