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[ Kermode Newfoundland Property ] [Geological Summary ]

Geological Summary

Kermode's Jackson's Arm property in Newfoundland has the potential to contain two different, but related, deposit types. Firstly a bulk tonnage open pittable gold deposit and secondly a Carlin-type gold deposit. The 63 holes drilled to date on the property have partially defined the bulk tonnage potential and also point the way to the Carlin-type potential.

Bulk Tonnage

The Jackson's Arm alteration zone is exposed for 1.7 kilometres along the Cat Arm Road to the north and south of Rattling Brook. Gold mineralization occurs in this alteration zone and was the focus of most of the work carried out on the property to date. The exposed hydrothermal alteration zone is in late Proterozoic granitoid rocks. The gold mineralization is associated with sulphides occurring in veins, fractures and disseminations in the alteration zone.

Two main zones of gold mineralization of this type are known to occur about 1 kilometre apart and have been partially drilled. The Road zone is in alkali-enriched granite with strong alteration and mineralization over an area greater than 600 metres by greater than 300 metres. Drilled widths such as 47 metres grading 1.1 g/t Au are encountered in this zone. The Apsy zone is of similar extent and intersections such as 1.1 g/t Au over 67 metres are reported.

Kermode's target is an open pittable deposit of 50 to 100 million tonnes, grading 1 to 1.25 g/t Au similar to Kennecott's Ridgeway Mine in South Carolina. Ridgeway produced 1.47 million ounces of gold from 60 million tons of ore over an 11 year mine life -- a recovered grade of 0.0245 opt Au or 0.84 g/t Au. Ridgeway was not a heap leach operation, rather the ore was milled to less than 200 mesh and the gold extracted by a conventional carbon-in-pulp process.

Carlin-type

The alteration zones and gold mineralization in the granites on the Jackson's Arm property have been shown to extend into the unconformably overlying favourable Lower Paleozoic platform sediments. On regional, district and deposit scales the Jackson's Arm property shows strong similarities to gold deposits in the Carlin District of Nevada.

The major distinguishing features of Carlin-type deposits are the presence of micron-scale gold disseminated throughout mainly carbonate-bearing sedimentary host rocks. Orebodies tend to be stratabound disseminated zones, irregular breccia bodies and/or siliceous replacement zones near steep faults. The gold-bearing rocks typically underwent de-calcification, silicification and argillic alteration and are associated closely with replacement of the carbonate rock by jasperoid. The deposits also show a distinctive suite of trace elements including arsenic, antimony and mercury.

At Jackson's Arm, the alteration zones in the granite are characterized by argillic alteration and silicification in addition to the gold the mineralization contains arsenic, antimony and mercury. Drilling has shown that the alteration zones continue upward from the granite and mineralize the overlying platform sediments. One hole shows a 35 metre section of altered limestones bearing gold, within this a 23.35 metre section averages 1.12 g/t Au. This intersection has not been followed up. Many holes encountered significant gold values in the quartzites immediately overlying the mineralized granites. Mineralization is known over a 4 kilometre strike length, 3 gold zones have been discovered but the majority of the area is untested.

Zones of jasperoid have recently been discovered on the Jackson's Arm property near to lakes with highly anomalous gold values in the lake sediments. These areas are unexplored.

Kermode's target is a Carlin-type deposit in the calcareous platform sediments overlying the known gold zones in the granites. Carlin-deposits range from small (less than 100,000 tonnes) to very large (greater than 200,000,000 tonnes) and vary in grade from 1 to 20 g/t Au. The Carlin deposit itself is reported to contain 20 million tonnes grading 11.4 g/t Au. The Carlin district is one of the most significant gold producing areas in the United States and the 50 millionth ounce of gold was produced from the Carlin trend, Nevada on 16 May 2002.