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REPORT ON

PRELIMINARY ASSESSMENT REVIEW OF THE SCOPE AND POTENTIAL OF THE

LAC PELLETIER GOLD PROJECT ROUYN - NORANDA, QUEBEC

Submitted to:

Alexis Minerals Corporation Managers, Lac Pelletier JV

65 Queen Street West P.O. Box 75 Suite 815

Toronto Ontario M5H 2M5

Canada

DISTRIBUTION: 4 Copies - Alexis Minerals Corporation. 2 Copies - Golder Associates Ltd. February 2007 06-1117-045

Golder Associates Ltd. 2390 Argentia Road Mississauga, Ontario, Canada L5N 5Z7 Telephone: (905) 567-4444 Fax: (905) 567-6561

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TABLE OF CONTENTS

SECTION PAGE

TABLE OF CONTENTS.......................................................................................... I 1.0 EXECUTIVE SUMMARY ............................................................................ 1

1.1 MINERAL RESOURCES.........................................................................2 1.1.1 Mineral Resource Estimate..........................................................2 1.1.2 Exploration Potential....................................................................2 1.1.3 Preliminary Production Schedule.................................................3

1.2 MINE PRODUCTION AND PROCESSING.............................................5 1.3 ENVIRONMENTAL ISSUES ...................................................................5 1.4 CAPITAL COSTS ....................................................................................6 1.5 OPERATING COSTS ..............................................................................8 1.6 ECONOMIC ANALYSIS ..........................................................................8 1.7 CONCLUSIONS ....................................................................................12

2.0 INTRODUCTION....................................................................................... 14 3.0 GENERAL PROJECT OVERVIEW .......................................................... 16 4.0 PROJECT HISTORY ................................................................................ 20 5.0 GEOLOGY OF THE LAC PELLETIER PROPERTY................................ 22

5.1 Regional Geological Setting ..................................................................22 5.2 Local Geological Setting........................................................................23 5.3 Property .................................................................................................23 5.4 Mineralization ........................................................................................24

5.4.1 Overview....................................................................................24 6.0 MINERAL RESOURCES .......................................................................... 28

6.1 Mineral Resource Estimate ...................................................................28 7.0 CONCEPTUAL MINING AND PROCESSING PLAN............................... 30

7.1 Overview................................................................................................30 7.2 Site Preparation.....................................................................................30 7.3 Mine Plan...............................................................................................32

7.3.1 Mine Design...............................................................................32 7.3.2 Crown Pillar ...............................................................................32 7.3.3 Mine Access ..............................................................................33

7.4 MINING METHOD .................................................................................34 7.4.1 Stepped Room and Pillar Mining Method ..................................36 7.4.2 Blasthole Stoping.......................................................................36 7.4.3 Backfill for Mining.......................................................................37 7.4.4 Ventilation ..................................................................................37 7.4.5 Mining Dilution and Recoveries .................................................37 7.4.6 Mining Rate................................................................................37 7.4.7 Preliminary Production Schedule...............................................38

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7.4.8 Development Quantities ............................................................38 7.5 ORE PROCESSING..............................................................................39

7.5.1 Overview....................................................................................39 7.5.2 Results of the CRM Program.....................................................40 7.5.3 Results of the Camflo Program..................................................40 7.5.4 Results of the SGS Lakefield Program ......................................41 7.5.5 Conclusions and Recommendations .........................................41

7.6 SUPPORT FACILITIES .........................................................................42 7.6.1 Access Road Construction ........................................................42 7.6.2 Electric Power Supply................................................................42 7.6.3 Settling Pond .............................................................................43 7.6.4 Explosive and Fuel Storage.......................................................43 7.6.5 Building Installation....................................................................43 7.6.6 Water Supply and Sewage System ...........................................44 7.6.7 Ore and Waste Storage .............................................................44

8.0 ENVIRONMENTAL ISSUES..................................................................... 46 9.0 CAPITAL COST ESTIMATES................................................................... 47

9.1 CAPITAL COST OF CONSTRUCTION.................................................47 9.2 SUSTAINING CAPITAL, AQUISITION COSTS AND WORKING CAPITAL

...............................................................................................................48 9.3 CAPITAL EXPENDITURE SCHEDULE ................................................49

10.0 OPERATING COST ESTIMATES ............................................................ 50 10.1 TOTAL OPERATING COST ESTIMATE...............................................50 10.2 MINE OPERATING COSTS ..................................................................50 10.3 Transportation Cost to Aurbel Mill .........................................................53 10.4 PROCESSING OPERATING COSTS ...................................................54

10.4.1 Overview....................................................................................54 10.4.2 Total Processing Costs..............................................................54 10.4.3 Direct Mill Costs.........................................................................54 10.4.4 Indirect Mill Costs ......................................................................55

10.5 GENERAL AND ADMINISTRATION COSTS........................................55 11.0 PRELIMINARY PROJECTED CASH FLOWS.......................................... 57

11.1 PRODUCTION RATE............................................................................57 11.2 ORE GRADE.........................................................................................57 11.3 METAL PRICES ....................................................................................57 11.4 GOLD RECOVERIES............................................................................57 11.5 OPERATING COSTS AND CAPITAL COSTS ......................................57 11.6 PRELIMINARY ECONOMIC EVALUATION..........................................58 11.7 SENSITIVITY ANALYSIS ......................................................................59

12.0 CONCLUSIONS........................................................................................ 62

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LIST OF TABLES Table 1-1 Mineral Resource Estimate (October 2006) Table 1-2 Table Model Resource Table 1-3 Summary of Estimated Capital Costs Table 1-4 Total Operating Costs per Tonne of Ore Table 1-5 Projected Undiscounted Pre-Tax Cash Flow Table 1-6 Sensitivity Analysis Results Table 4-1 Historical Resource Estimate Table 6-1 Mineral Resource Estimate (October 2006) Table 6-2 Mineral Resource and Mineable Resource Estimate by Zone (October 2006) Table 7-1 Preliminary Production Schedule Table 7-2 Estimated Development by Zone Table 9-1 Summary of Estimated Capital Costs Table 10-1 Total Operating Costs per Tonne of Ore Table 10-2 Summary of Stoping Costs Table 10-3 Summary of General Mine Expense Table 10-4 Summary of Ramp Haulage Expense Table 10-5 Summary of Surface Plant and Mine Services Table 10-6 Transportation Cost to Aurbel Mill Val d’Or Table 10-7 Total Estimate Ore Processing Cost Table 10-8 Estimated Direct Operating Costs Table 10-9 Estimated Indirect Operating Costs Table 10-10 Estimated General and Administration Cost Table 11-1 Projected Undiscounted Pre-Tax Cash Flow Table 11-2 Sensitivity Analysis Results LIST OF FIGURES Figure 1-1 Net Present Value at Various Discount Rates Figure 1-2 Sensitivity Analysis Results Figure 3-1 Detailed Location Map Figure 3-2 Map of Project Area Figure 5-1 Regional Geology with the Location of the Rouyn-Noranda area Figure 5-2 Geology of the Lac Pelletier Property Figure 5-3 Cross Section of Shear B Zone 3 Figure 5-4 Cross Section of Zone 4 Figure 7-1 Site Surface Plan during the Underground Exploration Project Figure 7-2 Existing Ramp Portal at Lac Pelletier Figure 7-3 Mining Method Zone 3 Figure 7-4 Mining Method Zone 4 Figure 7-5 Existing Waste Dump Figure 11-1 Net Present Value at Various Discount Rates

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Figure 11-2 Sensitivity Analysis Results LIST OF APPENDICES Appendix A Figures of Conceptual Mining Methods Appendix B Gold Price Premiums and the Potential Return for the Lake Pelletier Project Appendix C Memorandum, MS. Paterson, P. Eng., SGS Lakefield metallurgical results

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1.0 EXECUTIVE SUMMARY

The Lac Pelletier property is located approximately four kilometres southwest of the town of Rouyn-Noranda, Rouyn and Beauchastel townships, Quebec and is owned by Thundermin Resources Incorporated; formerly Thunderwood Resources Incorporated. Much of the work carried out on the Lac Pelletier property has been performed by predecessor firms, including SOQUEM, Thundermin, and Xstrata formerly Falconbridge.

Alexis Minerals Incorporated is a mineral exploration company with its head office located in Toronto, Canada. It is understood that Alexis has the option to earn a 100% interest from Thundermin.

In September 2006, at the request of Alexis, Golder Associates Ltd. (Golder) undertook a Preliminary Assessment or scoping study to determine the potential of bringing the project into production. It was understood that Alexis required this review as a basis to make a decision for the continued development of the project.

Considerable work has been done by previous companies in bringing the project to this stage. In the early 1990’s Falconbridge and Thunderwood Resources conducted an underground exploration campaign that included driving a 1,056 metre ramp and two drifts to access the two main mineralized zones. Additionally, two bulk samples were taken from the development drifts and processed at Barrick Gold’s Camflo Mill.

However the project did not advance, at least partly due to the declining price of gold. Only summary reports and technical reviews were available from this time period to assist in Golder’s current review of the project. In 2004, SOQUEM carried out assessment work on the property that included re-logging 62 historic drill holes, drilling 18 new drill holes “5,070” m and targeting an extension of the zones identified to the east of the ramp. The company went on to complete a reassessment of measured and indicated resource estimate reporting 484,799 tonnes grading 7.84 g/t Au with a cut-off grade of 5.0 g/t over 2 metres.

This report is a Preliminary Assessment, as defined by National Instrument 43-101.

Golder notes that this Preliminary Assessment is preliminary in nature and is not adequate to definitively confirm the economics of the project. A Preliminary Feasibility Study or Feasibility Study as defined under NI-43-101 is required for this purpose.

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1.1 MINERAL RESOURCES

1.1.1 Mineral Resource Estimate

In 2005, Alexis began a data compilation on the Zone 3 and 4 areas of the Lac Pelletier deposit. Work focused on review and reinterpretation of historical results based on 42,656 m of surface and underground diamond drilling, including 272 m of lateral drifting and an 11,634 tonne bulk sample (treated at the Camflo Mill in Malartic, Quebec). This reinterpretation permitted the generation of three dimensional mineralization outlines and a new structural model.

As part of Alexis’ review, the company recovered historic drill cores from Thundermin Resources. These cores have been relocated to the company’s Val d’Or office. A program of re-logging and re-sampling of the recovered Thundermin cores was conducted in June and July of 2006. Assay samples were split in half with one half being sent to a commercial laboratory and the other half retained for future reference. A strict QA/QC program has been reported to have been carried out, which included mineralized standards, blank and field duplicate for each batch sample. Analyses were performed by ALS Chemex – Chimitec of Val d’Or

Golder has not performed any estimation or confirmation of resources on any of the mineralized zones contained at the Lac Pelletier Property. However, Alexis and its retained consultants have provided Golder with a NI 43-101 compliant report of the mineral resources titled “NI 43-101 Technical Report and Mineral Resources Estimates on the Lac Pelletier Project”, prepared in October 2006, by Mr. Carl Pelletier, P.Geo. of Innovexplo Incorporated. Table 1-1 presents the resource estimate at a cut-off grade of 3 g/t Au.

Table 1-1 Mineral Resource Estimate (October 2006)

Note: Prepared by Carl Pelletier, P.Geo.

1.1.2 Exploration Potential

Alexis completed an additional 15 drillhole campaign over the summer of 2006. Assay results were not received before the completion of the current resource compilation shown in Table 1-1.

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Golder recommends that the mineral resources be re-evaluated and updated to include these results in the next resource estimate. This will be required in order to further delineate the down dip extension of Zone 4-4.

1.1.3 Preliminary Production Schedule

For the purpose of estimating the potential of the project, Golder has used the October 2006 resource estimate provided as a block model from Teck2mine Inc. Golder imported the block model into Datamine and used a cutoff grade of 4.42 g/t Au and zone thickness of 2 m and 2.5 m for stepped room and pillar and blasthole mining areas respectively, to make an order of magnitude estimate for a preliminary production schedule. Table 1-2 presents the block model resource calculation with appropriate mining methods and dilutions applied and Table 1-3 presents this preliminary schedule.

Table 1-2 Block Model Resource

Mining Method (4.42 g/t cut-off)

Room and Pillar 91%

Blasthole 9%

Blasthole:

Recovery 80%

Dilution 30% (1g/t)

Stope Losses 5%

Room and Pillar

Recovery 70%

Dilution 10% (1g/t)

Stope Losses 0%

In Situ Grade

R&P 711,461 6.02

Recovery 498,023 6.02

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Mining Method (4.42 g/t cut-off)

Dilution 49,802 1.00

Sub-Total 547,825 5.57

BH 53,550 9.83

Recovery 42,840 9.83

Dilution 12,852 1.00

Sub-Total 55,692 7.79

Stope Losses 2,785 7.79

Sub-Total 52,907 7.79

Total 600,732 5.76

Table 1-3 Preliminary Production Schedule

Year Tonnes Grade (g/t)

1 252,000 5.76

2 252,000 5.76

3 96,732 5.76

Total 600,732 5.76

(1) base on a cut off grade of 4.42 g/t

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1.2 MINE PRODUCTION AND PROCESSING

The Lac Pelletier mineralization is contained in two major zones denoted Zone 3 and 4. Zone 3 mineralization is contained in a shear zone (Shear B) whereas Zone 4 mineralization consists of quartz-ankerite-albite-pyrite veins.

The mineralization is amenable to both stepped room and pillar and blasthole mining methods, in proportions 90%/10% respectively. An existing ramp approximately 1 kilometre in length with a 16% grade will be extended to access all zones.

A mining contracting company will be employed to operate the mine on a seven day per week schedule, working two eight hour shifts per day. The planned production rate for the mine is 700 tpd or 252,000 tonnes annually. Ore would be stockpiled on the existing dump east of the portal for assaying and loading into transport trucks. The mineralization would be transported 130 km to the Aurbel Gold Mill, which is owned by Alexis, for custom milling. An independent contractor will be used for trucking of material. From March to the end of April during the thaw periods the load trucks carry must be reduced, resulting in an increased cost per tonne transported. This report has assumed that mineralization would be stockpiled during this thaw period and transported later.

Two separate metallurgical test programs have been carried out. The first test was a bench scale test performed by Centre De Recherches Minerales. The second was a bulk sample milled at Thunderwood’s Camflo mill in Rouyn. Maureen Paterson, P.Eng. Alexis’s independent metallurgical consultant has performed a preliminary review of the data and notes that whole ore cyanidation gold recovery is in the range of 95%.

Golder has used a gold recovery rate of 90% in its analysis of the Project. This rate has been provided by Alexis and independently confirmed by Ms. Paterson, P.Eng. as being an accurate expectation of future recovery during actual mill operation. Nevertheless, Maureen notes that additional testing and analysis will be required to determine the flotation concentrate cyanidation gold recovery in the next level of production feasibility study.

1.3 ENVIRONMENTAL ISSUES

Golder completed an environmental verification of the Lac Pelletier property in November 2005. The original report, prepared in French, titled “Verification environnementale sommaire – Projet Lac Pelletier, Rouyn-Noranda, Quebec”, presented the following considerations with respect to the Lac Pelletier property:

• The claims and mining concessions were legally owned by Thundermin Resources Inc.;

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• The Xstrata (Falconbridge) #5 tailings site located northwest of the property contains acidogenic tailings. The report recommends that should Alexis purchase the property it should not accept environmental responsibility for this area, but rather should consider an exclusion clause to claim 4128911-A which covers a portion of the tailings site;

• The report notes that the Ramp area (block 56) of Lac Pelletier is not expected to present any environmental concerns. Nevertheless, it goes on to note that restoration of the area has not been completed according to government requirements. This would require restoration of the approximately 2-3 hectares that host the ramp, a concrete foundation, tailings pond, waste rock pile, as well as the dismantling of the electric transmission line;

• The property also has two mining concessions that cover Lac Pelletier which is known to waters and sediments contaminated by metals. It has been noted that under the Environmental Quality Act with regard to the restoration of contaminated lands, the responsibility related to the contaminated sediments on the concessions could be raised. As such it was recommended that these concessions be transferred prior to a possible acquisition by Alexis; and

• The property is also located near a residential area and rural roads. For this reason the effect of exploration and mining operations on the surrounding community will need to be addressed.

1.4 CAPITAL COSTS

A preliminary design for the proposed project facility, including mining and support infrastructure, has been developed. The cost of these facilities was estimated based in part on the actual costs incurred recently at Alexis’s Lac Herbin project.

A summary of the estimated capital costs for the entire program of work is provided in Table 1-3.

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Table 1-3 Summary of Estimated Capital Costs (CDN$)

4,031,250Total

806,250Contingency (25%)

1,200,000Sub-Total

150,000lot150,0001Pumping System

250,000lot250,0001Ventilation Fans (1 Lot)

210,000lot210,0001Compressor

200,000ea.200,0001Surface Substation

390,000ea.78,0005U/G Substations

Mine Equipment:

2,025,000Sub-Total

300,000300,000lump sum1Mobilization

100,000100,000lump sum1Electrical Reconnection

100,000100,000lump sum1Engineering and Construction Supervision

100,000100,000ea.1U/G and Surface Workshop

225,0001,500m150Vent Raise

100,000100,000lot1Ramp Rehibilitation

50,00050,000lot1Dewatering of Existing U/G Workings

50,00050,000lot1Offices/Warehouse

100,000100,000lot1Site Work and Access Road Expansion

50,00050,000lot1Permitting

250,000250,000lot1Environmental Studies

100,000100,000lot1Engineering Studies

500,000500,000lot1Additional Diamond Drilling

CDN $($)

Total CostUnit CostUnitsQuantityItem

PREPRODUCTION CAPITAL COSTS

4,031,250Total


1,200,000Sub-Total






Mine Equipment:

2,025,000Sub-Total





225,0001,500m150Vent Raise









CDN $($)



Sustaining capital, required during the projected operating life of the Lac Pelletier Property, is estimated at $4.5 million based on on-going underground development costs. The cost of closing the mine at the end of the mine life is estimated to be in the order of $500,000 taking into account salvage value of plant and equipment and anticipated bonding costs. This cost will need to be confirmed or revised based on a more detailed review of the requirements.

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There has been no provision made for property acquisition costs or, due to the short length of the mine life, working capital allowances.

1.5 OPERATING COSTS

Golder has estimated the preliminary operating cost for mining of the Lac Pelletier deposit. These estimates are based on the assumption that the currently defined resources will be exploited under the conditions that are currently believed to exist. These estimated costs include all site costs but do not include royalties or head office administration.

The total operating cost estimate for the facility is provided in Table 1-4.

Table 1-4 Total Operating Costs per Tonne of Ore ($)

Description Cost Per tonne Ore

Mining 43.94

Surface Plant and Mine Services 2.13

Mining G&A 4.80

Transportation to Mill 14.93

Processing 11.75

Total 77.55

This cost is based partly on previously prepared estimates, but also on recent actual costs incurred at Alexis’ Lac Herbin project. These estimates are also based on Golder’s current understanding of the conditions which are likely to be encountered during mining.

1.6 ECONOMIC ANALYSIS

A preliminary base case cash flow schedule has been prepared, using a gold price of $550 per ounce. On the basis of estimates and assumptions discussed herein, the Lac Pelletier project is expected to yield a pre-tax undiscounted cash flow of CDN$ 2.8 million over an operating life of less than 3 years. The Internal Rate of Return (IRR) is estimated to be 39%. The cash flow schedule is summarized in Table 1-5.

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Table 1-5 Projected Undiscounted Pre-Tax Cash Flow

A chart of the Net Present Value (NPV) at different discount rates is provided in Figure 1-1.

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Figure 1-1 Net Present Value at Various Discount Rates (‘000’s $)

Golder ran several sensitivities on the Base Case to determine the effect on the key financial statistics if the following parameters change:

1. Gold price change to US$525, US$550, US$575.00, and US$600.00;

2. Operating cost: 5% increase and 5% decrease;

3. Capital cost: 10% increase and 5% decrease;

4. Gold recovery: 5% lower and 5% higher;

5. Gold grade: 5% lower and 5% higher; and

6. Tonnage increase by 10% and 20%.

Sensitivity results are presented in Table 1-6 and Figure 1-2.

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Table 1-6 Sensitivity Analysis Results ($)

Parameter Changed Undiscounted Cash Flow (CDN$) IRR

Base Case: No Changes $2,840,000 39%

Gold Price to US$525/oz $228,000 3%

Gold Price to US$575/oz $5,542,000 72%


Operating Cost Increase: 5% $508,000 7%

Operating Cost Decrease: 5% $5,166,000 68%

Capital Cost Increase: 10% $1,934,000 24%

Capital Cost Decrease: 5% $3,288,000 46%

Gold Recovery less by: 5% ($86,000) -1%

Gold Recovery more by: 5% $5,760,000 75%

Grade Increase by: 5% $5,780,000 75%

Grade Decrease by: 5% ($106,000) -2%

Tonnage Increase by 10% $4,024,000 54%


*Results have been rounded. *The gold prices over the current year to-date have ranged from US$525 to US$725 with an average for the period of $599 US.

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Figure 1-2 Sensitivity Analysis Results (‘000’s of $)

Further to the sensitivity analyses of this section, and at Alexis’s request, Appendix B presents gold price premiums and the potential return for the project, give gold prices of US$700 and US$800 per ounce.

1.7 CONCLUSIONS

Golder has not performed any estimation or confirmation of resources on any of the mineralized zones contained at the Lac Pelletier project. Alexis and its retained consultants have provided Golder with a NI-43-101 compliant report titled “NI 43-101 Technical Report and Mineral Resources Estimates on the Lac Pelletier Project”, prepared in October 2006, by Mr. Carl Pelletier, P.Geo.

Based upon these preliminary investigations of the economies of mining a conceptual resource at Lac Pelletier, Golder recommends that steps be taken to advance the property towards a commercial production decision. Alexis should commence with a more detailed pre-feasibility study, in order to confirm this conclusion.

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It is also recommended that as preliminary to this work:

1. The assay results from the summer 2006 exploration campaign be incorporated into the existing block model;

2. A rock mechanics study be conducted to determine an acceptable crown pillar thickness and stope dimensioning;

3. Additional process testing of representative samples of the mineralization should be conducted to determine the flotation concentrate cyanidation gold recovery;

4. Additional drilling should be carried to better delineate mineralization in Zone 4-4; and

5. Infill drilling should be carried out to upgrade the confidence inferred resources to indicated and/or measured.

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2.0 INTRODUCTION

Alexis Minerals Corporation (Alexis) is a mineral exploration company with its head office located in Toronto, Canada. It holds an option to earn 100% interest in the Lac Pelletier Project from Thundermin Resources Incorporated (Thundermin). In order to earn this 100% interest, Alexis paid $75,000 and 100,000 shares, has spent to date over $200,000 on exploration and engineering work, and is required to spend a further $300,000 by September 1, 2007 with an optional further $500,000 by September 1, 2008. Should Alexis earn a 100% interest, the property will be subject to a 2.5% net smelter royalty (NSR) to Thundermin and an underlying 1.0% NSR to Xstrata (formerly Falconbridge).

Kirk Rodgers, Senior Mining Consultant at Golder, visited the Lac Pelletier property on September 15, 2006.

Golder has based its review in part on conversations with Alexis staff and also on data provided by Alexis and their retained consultants. Golder has not carried out any independent exploration work, drilled any holes or performed any independent sampling at the Lac Pelletier property. In addition, Golder has not performed any estimation of resources on any of the mineralized zones. Geological and property descriptions presented herein are drawn primarily from three reports:

• “Thunderwood Resources Inc. 1990-1991 Underground Exploration Report, Lac Pelletier Project, Rouyn-Noranda, Quebec”, prepared in January 1992 by Mr. Gilles Imbeau;

• “Thunderwood Resources Inc. Lac Pelletier Project Review for Deak Resources Corporation”, prepared in November 1992 by J.B Smith; and

• “NI 43-101 Technical Report and Mineral Resources Estimates on the Lac Pelletier Project”, prepared in October 2006, by Mr. Carl Pelletier, P.Geo.

The description of the property and ownership thereof provided in this report is for general information purposes only. Golder has not researched, and offers no opinion on, the security of title to any property referred to in this report.

The illustrations provided in this report were provided by Alexis or copied from the current Technical Report (October, 2006) and are for general information purposes only.

This report is a Preliminary Assessment, as defined by National Instrument 43-101.

Golder notes that this Preliminary Assessment is preliminary in nature and is not adequate to definitively confirm the economics of the project. A Preliminary Feasibility or Feasibility study as defined under NI-43-101 is required for this purpose.

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In this report, currency values are expressed in Canadian dollars ($), unless otherwise noted. Units of measurement are stated using the metric system. Nevertheless, in this report, reference is made to other reports which quote units in various systems. For clarity, the following abbreviations and conversions have been used.

Abbreviations:

Tonnes Metric Tonnes (1000 kg) Tons Short Tonnes (2000lbs)

g Grams oz Troy ounces opt Troy ounces per ton gpt Grams per tonne m Meters

m^2 Square Meters m^3 Cubic Meters

‘ Ft “ Inches

Conversions:

1 Ounce (Troy) 31.103 grams 1 Ton 0.907 tonnes

1 ounce per ton 34.286 g/t 1 Metric tonne 2204.6 pounds

1 Meter 3.28 Feet 1 Centimetre 0.394 inches

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3.0 GENERAL PROJECT OVERVIEW

The Lac Pelletier property is located approximately four kilometres southwest of the town of Rouyn-Noranda, Rouyn and Beauchastel townships, Province of Quebec, Canada (Figure 3-1) and is owned by Thundermin, formerly called Thunderwood Resources Incorporated.

Figure 3-1 Detailed Location Map

The property consists of 35 claims and two mining concessions (Number 149 and 163) for a total surface area of 722 hectares. This includes special permit number 490010 which defines a portion of the past-producing Stadacona Mine (mined from 1928 to 1958). Block 56, located on the southern shore of Lac Pelletier is consider the main project area as it contains infrastructures from past underground exploration programs.

There is year-round access to Rouyn-Noranda is good via Provincial Highway 117 from Val d’Or (110 kilometres) and from North Bay, Ontario (290 kilometres) via Provincial Highways 11 (Ontario), 391 and 117 (Quebec).

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Rouyn-Noranda is a mid-sized city with a population of 39,621 (census 2001) which increases or decreases dramatically depending on the local economic situation (the population dropped by 5% between 1996 and 2001). Nevertheless, the combined mining camps of Rouyn-Noranda and Val d’Or (population 32,000) offer access to mining labour and professionals, equipment suppliers, drilling contractors, etc. Local facilities and resources contained in each city include hotels, restaurants/bars, gas stations, grocery stores, and an airport with daily flights to Montreal. Electricity is supplied by Hydro-Quebec and telephone service by Telebec.

The Lac Pelletier property is accessible by all-weather road from Rouyn-Noranda via Quebec Boulevard Range Road 4/5, and a site access road. Since the site access road crosses private property, an agreement was signed in October 1990 between Thunderwood and the property owner (Madame Rollin). This agreement, permitted Thunderwood to build and use a 1.2 kilometre long single lane road across the western boundary of the property to access the portal site on block 56. This road is still available for use.

The local climate is typically continental boreal similar to other cities in northern Ontario. Snow remains on the ground from mid-November to early May. Winters are cold with January temperatures in the range of -20 degrees Celsius and summers are warm with mean temperatures between June and September of 20 degrees Celsius.

The terrain is generally flat and uniform with low rolling hills, although local relief is sharp in places. Rouyn-Noranda is about 301 meters (988 feet) above sea level, with the surrounding country generally varying between 275 and 305 m (902 and 1000 feet). Elevations at the Lac Pelletier project vary between 280 m to 290 m ( 919 feet and 951 feet). Lac Pelletier which covers approximately 60% of the property is at an elevation of 272 m (892 feet). Figure 3-2 illustrates the vicinity of the project site.

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Figure 3-2 Map of Project Area

The property is located within the Abitibi Greenstone belt, approximately one kilometre north of the Cadillac-Larder Lake Break. The Cadillac-Larder Lake Break hosts many of the present and past producing gold mines in the Larder Lake, Rouyn-Noranda, and Val d’Or areas of northern Ontario and Quebec. The central portion of the property, which is predominantly underlain by massive andesite, basalt, mafic to felsic lapilli tuff and intrusive diorite, hosts all of the known gold occurrences. Mineralization is contained in four zones, of which, two are considered to be main gold bearing structures. These zones denoted Zone 3 and Zone 4 are hosted in a shear zone (Shear B) and a tensional type of structure made up of parallel quartz veins separated by a steeply dipping shear zone (Shear A) respectively. The main mode of occurrence of the gold is as free grains in quartz and as grains either locked in pyrite or in open fractures in pyrite.

Gold mineralization has been explored on the property since as early as 1925 and focused in the Stadacona Mine area. Since that time, a number of diamond drilling programs have been carried out on the property which resulted in the discovery of the Lac Pelletier zone of mineralization in 1987. From 1987 to 1992 Thundermin and Falconbridge Ltd. completed approximately 42,656 m of surface and underground exploration drilling, 1050 m of ramp development and 292 metres of lateral drifting. This program of work included an 11,634 tonne bulk sample which was treated at the Camflo mill in Malartic Quebec. Following the extraction of the bulk sample a project review was conducted by J.B. Smith on behalf of Deak Resources. This report concluded that the property could not be brought into production at the then current price of gold of US$340 (1992).

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The mineralized zones vary locally in terms of thickness and dip. Given this range, the project will utilize a combination of mining methods, namely, step room and pillar and blasthole mining.

In August 2006, Alexis purchased the fully permitted Aurbel gold mill from Aur Resources. This mill is located approximately 130 km from the Lac Pelletier property, near the town of Val d’Or.

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4.0 PROJECT HISTORY

This section has been reproduced from the 2006 Technical Report prepared for the Lac Pelletier Property (October 2006) by Carl Pelletier, P.Geo titled “NI 43-101 Technical Report and Mineral Resources Estimates on the Lac Pelletier Property.”

In this section on Previous Work, note that references are made to historical estimates of “resources” and “reserves” at Lac Pelletier. These historical “resources” and “reserves” should not be relied upon as they very likely do not conform to Regulation 43-101 standards and definitions and they have not been verified to determine their relevance or reliability. They are included in this section for illustrative purposes only and should not be disclosed out of context.

A table of historical “resources” estimate is presented in Table 4.1.

Activities began on the property when the first claims were staked in 1922 on what would eventually become the Stadacona mine. Exploration led to the discovery of gold in a quartz vein along the southeast shore of Lac Pelletier in 1925. Diamond drilling delineated a mineable gold resources in 1926-1927, in the #2 Shear at the Stadacona mine, 600 metres east of Lac Pelletier. In 1928, a two-compartment vertical shaft was sunk.

From 1928 to 1958, Stadacona Mine Ltd produced 2.8 million tonnes of gold ore at an average mill grade of 5.49 grams gold per tonne, for 494,000 ounces of gold, from a 1,264-metre three-compartment shaft and 27 productions levels.

From the onset of exploration to 1987, the entire surface area of the current property was covered by geological mapping, magnetic and electromagnetic surveys, and tested by more than 19,870 metres of diamond drilling. This work culminated with the discovery, by Falconbridge Nickel Ltd, of the Lac Pelletier deposit.

In 1988, 28,991 metres of diamond drilling were completed in various parts of the property, namely on the Lac Pelletier gold deposit, to access its economic viability.

From 1990 to 1991, Falconbridge Ltd and Thunderwood Resources Inc. drove a 1,056 metre ramp and two drifts to access the two main ore zones (137 metres at 50 metres depth, and 135 metres at 150 metres depth). Two bulk samples of development ore from drifting were processed at the Camflo mill (Barrick Mining): the first 6,907-tonne sample graded 6.79 g/t Au, with 93.5% recovery, and the other 3,641-tonne sample graded 3.08 g/t Au with 93.72% recovery.

In 1992, 1,817 metres of underground drilling and 1,233 metres of surface drilling were added to detail the geometry and extensions of certain zones, namely zone #3. The work was later

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suspended due to problems in getting access to financing by Thundermin Resources Inc. (formerly Thunderwood Resources Inc.), who had by then become sole owner.

In 2004, SOQUEM carried out assessment work on the property, including relogging core from 62 historic drill holes (14,826 metres), drilling 12 new holes totalling 3,294 metres and targeting zone extensions east of the ramp, as well as trenching and sampling in zone E.

In 2004, SOQUEM completed a drilling program totalling 1,776 metres in 6 drill holes, targeting Cu-Ni-Pd-Pt occurrences on the north-western corner of the property.

The company also proceeded with a reassessment of measured and indicated resources in the Lac Pelletier zone and released an estimate of 484,799 tonnes grading 7.84 g/t Au (122,200ounces Au) using a cut-off grade of 5.0 g/t Au over 2 metres, or 688,253 tonnes grading 6.27 g/t Au (138,728 ounces Au) using a cut-off grade of 3.0 g/t Au over 2 metres.

Table 4-1 Historical Resources Estimate

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5.0 GEOLOGY OF THE LAC PELLETIER PROPERTY

This section has been reproduced from the Technical Report prepared for the Lac Pelletier Property (October 2006) by Carl Pelletier, P.Geo titled “NI 43-101 Technical Report and Mineral Resources Estimates on the Lac Pelletier Property.”

5.1 Regional Geological Setting

The Rouyn-Noranda area is located in the southern portion of the Abitibi Subprovince, a typical granite-greenstone terrane (Figure 5.1). The Abitibi Subprovince is located in the south-eastern part of the Superior Province of the Canadian Shield. The Abitibi belt is the largest greenstone belt in the world (85,000 km2; Card, 1990) and also one of the richest mining areas (Hodgsonand Hamilton 1989; Poulsen et al., 1992). The Abitibi Subprovince extends approximately 700 km from the Kapuskasing Structural Zone in north-eastern Ontario eastward to the Grenville Front (Province) in North-western Quebec. The Abitibi Subprovince is bounded to the North by gneiss and plutonic terrane of the Opatica Subprovince, while to the South it is bounded by metasedimentary rocks and plutons of the Pontiac Subprovince.

The Abitibi Subprovince is divided in a “Northern Volcanic Zone” and a younger “Southern Volcanic Zone” (Ludden et al., 1986; Chown et al., 1992; Mueller et al., 1996). The Rouyn-Noranda area and the Lac Pelletier property are located within the Southern Volcanic Zone. The Porcupine-Destor fault (PDF) is interpreted to be the limit dividing the Northern Volcanic Zone from the Southern Volcanic Zone. The Northern Volcanic Zone is interpreted as an older diffuse volcanic arc segment, 2705-2698 Ma (Mueller et al., 1996).

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Figure 5-1 Regional Geology Map with the Location of the Rouyn-Noranda Area

(Chown et al., 1992)

5.2 Local Geological Setting

The area is underlain by rocks of the Blake River Group, a volcanic pile that consists of a succession of flows, and volcanic and volcaniclastic rocks cut by a number of intrusions. The underlying assemblage comprises granitoids (50%), volcanic rocks (40%), and sedimentary rocks (10%). These rocks are generally metamorphosed to the greenschist facies, and locally to the amphibolite facies near major intrusions. The different volcanic domains are separated by thin bands of sedimentary rocks. Large tonalite-granodiorite batholiths constitute the dominant variety of plutonic rocks in the area.

5.3 Property

Volcanic rocks observed in the Lac Pelletier area occur within a north-facing homoclinal sequence. They strike N250°-N300° and dip 20-70°north. The distribution, strike and dip of the various lithological units however disturbed by the presence of abundant shear zones trending NE-SW and E-W. The dip of these zones ranges from 20° to subvertical (Gilber, 1986).

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The centre of Lac Pelletier is underlain by a dioritic intrusive body. Numerous irregular dykes of the same composition intrude lavas along the south shore of the lake. Gabbroic sills, occasionally magnetic, are intercalated with the mafic lavas (Figure 5-2).

Figure 5-2 Geology of the Lac Pelletier Property

5.4 Mineralization

5.4.1 Overview

At least three E-W shear zones were identified in the vicinity of the Lac Pelletier gold zones. From north to south, these are: shear zone B, which hosts zone #3, shear zone A, and shear zone C. These three structures show variable dips, ranging from 25° to 50° for shear zone B, and from 35° to 65° for shear zones A and C. Rocks outside of these deformation zones are only weakly foliated. Eastward, shear zones appear to become vertical and take on a NE trend, similar to Stadacona-type shears. Westward, they also become vertical but remain in an E-W direction.

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Another fault and fracture system trending N-NE with subvertical dips is identified. It is represented by fracture-filling quartz-calcite veins, occasionally associated with minor faulting. These structures may be gold-bearing, such as those observed on outcrop 2001-E stripped by SOQUEM, which showed visible gold specks.

Shear zone B, which hosts zone #3, is strongly schistose with intense sericite, carbonate (calcite) and chlorite alteration, over thicknesses reaching up to 30 metres. Within this wide deformation zone, gold-bearing zones from 1 to more than 12 metres thick are characterized by quartz-ankerite-chlorite-calcite-pyrite shear veins. These veins are accompanied by an alteration halo of sericite-ankerite-fuchsite-calcite and 1-5% fine grained pyrite. This alteration assemblage is based solely on a visual description.

Zones 4-1 to 4-4 consist of a set of quartz-ankerite-albite-pyrite veins embedded in an alteration halo of a few centimetres to more than 1 metre. The alteration zone is characterized by strong to intense ankeritization and weak pyritization. These vein systems generally follow the contacts of dioritic intrusions in gabbroic sills, and are bounded by E-W shear zones (B-A-C shear zones). This vein system ends along strike where the E-W to NE shear zones become vertical.

Zone 4-1 is bounded to the south by shear zone B, and has been traced over more than 300 metres along strike, over a width of 60 to 100 metres. Another vein system parallel to zone 4-1 was also identified: zone 4-1L, which was traced over a strike length of 30 metres.

Zone 4-2 is bounded by shear B and A, and was traced over more than 600 metres along strike over a width of 60 to 120 metres. Two other subparallel vein systems are also present: zone 4-2Up, traced over a strike length of 180 metres, and Zone 4-2L, traced over 110 metres length.

Zone 4-3 is bounded by shear zones A and C, and has been traced over more than 300 metres along strike, over a width of 70 to 120 metres. A second gold zone, zone 4-3Up branches off from Zone 4-3 but remains within the same system. A third zone, subparallel but separated from the other two, zone 4-3L, was traced over 120 metres along strike.

Zone 4-4 begins south of shear zone C. It was recognized in only two drill holes and remains open in all directions.

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Figure 5-3 Cross Section of B Shear Zone 3

Section S39W facing 300° Azimuth. The mineralized zone is shown in red and Shear B is shown in blue.

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Figure 5.4 Cross Section of Zone 4

Section S29N facing 030° Azimuth. The mineralized zone is shown in red and the surrounding shear zone is shown in blue.

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6.0 MINERAL RESOURCES

6.1 Mineral Resource Estimate

In 2005, Alexis began a data compilation on the Zone 3 and 4 areas of the Lac Pelletier deposit. Work focused on review and reinterpretation of historical results based on 42,656 m of surface and underground diamond drilling, including 272 m of lateral drifting and an 11,634 tonne bulk sample (treated at the Camflo Mill in Malartic, Quebec). This reinterpretation permitted the generation of three dimensional mineralization outlines and a new structural model.

As part of Alexis’ review, the company recovered historic drill cores from Thundermin Resources. These cores have been relocated to the company’s Val d’Or office. A program of re-logging and re-sampling of the recovered Thundermin cores was conducted in June and July of 2006. Assay samples were taken, sawed in half with one half sent to a commercial laboratory and the other half retained for future reference. A strict QA/QC program has been report which included mineralized standards, blank and field duplicate for each batch sample. Analyses were performed by ALS Chemex – Chimitec of Val d’Or.

Additionally, the company conducted a barge-based diamond drilling program in July 2006 comprised of 15 drill holes (4,517 m) that confirmed the continuity and extension of the new structural model for Zones 3 and 4. A significant number of the assays from this program of work were not received from the laboratory in time for consideration by Golder in this report. As such, the 15 drill holes were not been included in the Resource estimate presented in the October 2006 Technical Report.

Alexis has completed a revised geological model and established a new resource estimate for the deposit, shown in Table 6-1 below.

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Table 6-1

Mineral Resource Estimate (October 2006)

Note: Prepared by Carl Pelletier, P.Geo.

The mineral resource reported in Table 6-1, above, has been extracted from the 2006 Technical Report prepared by Mr. Carl Pelletier, P.Geo. It has been prepared using a 3D block modeling method based on square inverse distance to calculate the volume and grades of the mineralized zones within geologically defined limits. Limits were defined on the basis of structure and continuity of the mineralization between drill holes. Additionally, Alexis constructed a 3D model of past underground developments. The resulting volume was subtracted from the block model.

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7.0 CONCEPTUAL MINING AND PROCESSING PLAN

7.1 Overview

The Lac Pelletier mineralization is contained in two major zones denoted Zone 3 and 4. Zone 3 mineralization is contained in a shear zone (Shear B) whereas Zone 4 mineralization consists of a quartz-ankerite-albite-pyrite veins.

The mineralization is amenable to both stepped room pillar and blasthole mining methods, in the proportions of 90%/10% respectively. An existing ramp approximately 1 kilometre in length with a 16% grade will be extended to access all zones.

A mining contracting company will be employed to operate the mine on the basis of a seven day per week schedule with two eight hour shifts per day. The target production rate for the mine is 700 tpd or 252,000 tonnes annually. The following sections discuss in more detail the existing infrastructures available on the property as well as the conceptual mine methods and mine design.

Ore produced from mining would be stockpiled on the exiting dump site, just east of the portal, in preparation for loading into transport trucks operated by an independent contractor. The ore would be transported 130 km to Alexis’ Aurbel Gold Mill, for custom milling. From March to the end of April during thaw periods the load trucks carry must be reduced, resulting in an increased cost per tonne transported. This report has assumed that mineralization would be stockpiled during this thaw period.

The metallurgical characteristics of the mineralization are extremely important to the economic viability of any precious metals mining operation. Two separate metallurgical tests have been performed to date. The first test was a bench scale test performed by Centre De Recherches Minerales (CRM). The second was a bulk sample milled at Thunderwood’s Camflo mill in Rouyn. Maureen Paterson P.Eng. Alexis’s independent Metallurgical consultant, has performed a preliminary review of the data and notes that whole ore cyanidation gold recovery is in the range of 95% Au.

7.2 Site Preparation

In October 1990, an underground exploration project commenced on the Lac Pelletier property. The exploration program completed much of the initial site preparation which would be required and is outlined in a report prepared by Mr. Gilles Imbeau for Thunderwood Resources Inc. entitled “1990-1991 Underground Exploration Report Lac Pelletier Project, Rouyn-Noranda, Quebec.”

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The report indicates that J.L. Corriveau, a Quebec Land Surveyor, surveyed and picketed an area measuring approximately 200 by 200 metres, surrounding the location of the portal (block 56) that was excavated as part of the exploration program. This area was cleared of all trees and became the location of surface facilities and infrastructure during underground exploration. Accordingly, for the proposed mining operation minimal clearing, and grubbing is anticipated.

Figure 7-1 shows the Lac Pelletier site surface plan during the underground exploration project. Most of the surface infrastructure and facilities present at the time of the underground exploration program have been removed. Nevertheless, many of the footprints remain, as observed during Golder’s visit to the site. Site preparation will therefore focus on refurbishing and/or preparing areas for proposed infrastructure and facility locations.

The initial construction period is anticipated to be approximately 6 months and will include:

• Re-commissioning of the portal;

• Inspection and refurbishing of the existing settling pond;

• Dewatering of the underground workings;

• Expansion of the on-site access roads;

• Construction of sediment control structures;

• Grading and construction of foundations for facilities; and

• Construction of diversion and drainage ditches;

• Rehabilitation of the existing underground development;

• Development of a ventilation raise also acting as a second means of egress; and

• Preparing initial mining areas.

Construction would be scheduled to commence when all necessary project approvals and permits from federal and provincial regulatory agencies have been received.

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Figure 7-1 Site Surface Plan during the Underground Exploration Project

Access Road

RampPortal

SepticBed

Ore & Waste RockStorage

Shop

Settling Pond

Dry & Wash

SepticTank

Contractor &Client Offices

Water Tank

Lac Pelletier

Parking

Access Road

RampPortal

SepticBed


Shop

Settling Pond

Dry & Wash

SepticTank


Water Tank

Lac Pelletier

Access Road

RampPortal

SepticBed


Shop

Settling Pond

Dry & Wash

SepticTank


Water Tank

Lac Pelletier

Parking

7.3 Mine Plan

7.3.1 Mine Design

The mine plan was based on the three dimensional model of the inferred, indicated, and measured resources prepared by Robert Duchesne of Tech2Mine Inc., on behalf of Alexis. The mine plan incorporates the resources reported in section 6.1 and does not take into account any potential extension of the resource in Zone 3 or Zone 4.

The mine design was completed to a level such that the development and mining requirements for each block could be assessed within a preliminary confidence range. Detailed stope plans have not been developed.

7.3.2 Crown Pillar

A crown pillar with a thickness of 30 metres (between surface and the highest mined out areas), has been left intact to prevent surface caving. This pillar height estimate is based on: 1) an industry standard ‘rule of thumb’ that allows a crown pillar thickness of twice the transverse

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width of the widest stope: 2) empirical data from a summary of crown pillar case records; and 3) the general rock conditions reported during the underground exploration project. It must be pointed out that a more detailed geotechnical investigation and design exercise must be completed as part of the next level of study.

7.3.3 Mine Access

The existing ramp will provide access to the proposed mine. This ramp was developed in 1990 as part of Thunderwood’s underground exploration project.

The existing ramp is 1056 metres in length with dimensions of 4.75 metres wide by 3.75 metres high. It was developed to provide access to Zones 3 and 4 and approaches from the footwall at an average grade of approximately 16%. Zone 3 is accessed on the 50 metre level below surface and Zone 4 on the 150 metre level. The ramp size is amenable to underground production truck haulage. Figure 7-2 shows a picture of the existing ramp portal.

This ramp would be extended to access the zones to be mined. The new ramp would be developed at a minus 15% grade. It would be likely developed by the mining contractor using a 2 boom electric hydraulic jumbo, 5 cu.m. bucket underground loader and 26 tonne trucks to haul waste rock to surface for disposal. Ground support consisting of rock bolts and screen would be installed off the muck pile or using a scissor lift. Services in the ramp would consist of compressed air, service water, drainline, power cables and communications infrastructure.

All mining zones would be accessed from this ramp.

Two drifts, were previously developed from the ramp: one 137 metres long on the 50 metre level (Zone 3) and one 135 metres on the 150 m level (Zone 4). The drifts are 3 metres wide and 2.7 metres high. These were used for exploration sampling and drilling and would be incorporated into the final mine design.

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Figure 7-2 Existing Ramp Portal at Lac Pelletier

7.4 MINING METHOD

Cross-sections of the mineralized zones and the block model (October 2006 Resource) provided by Alexis, indicate that a combination of mining methods could be applied to the Lac Pelletier deposit. The majority of the ore zones are shallow dipping, ranging from 15 to 40 degrees, while the remainder of the zones dip at greater than 50 degrees. As a result, the flatter mineralized zones comprise approximately 90% of the ore to be mined and would utilize stepped room and pillar mining. The remaining 10% would be mined using blasthole stoping methods. Figures 7-3 and 7-4 show the areas of Zone 3 and Zone 4 that are amenable to each mining method. Light blue shows the areas of step room and pillar mining and red represents blasthole mining areas.

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Figure 7-3 Mining Method Zone 3

Zone 3

Zone 3-1

Zone 4-1 &

4-1L

Zone 3

Zone 3-1

Zone 4-1 &

4-1L

Figure 7-4 Mining Method Zone 4

Zone 43L1

Zone 42 Zone 3

Zone 43

Zone 42U

Zone 43L1

Zone 42 Zone 3

Zone 43

Zone 42U

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7.4.1 Stepped Room and Pillar Mining Method

Stepped room and pillar mining would be used in the portions of the mineralized zones that are tabular, with thicknesses ranging from 2 to 5 metres, and where dips range from 15 to 30 degrees. To minimize development, in waste, the main ramp would be developed at a grade of 15%, through the zones to be mined by this mining method. The ramp would access the mining areas as close to the lowest elevation of a zone as practically possible and would be developed in ore, along the strike length of an ore zone. If the 15% grade ramp passes out of the ore zone before access to the complete strike length has been accomplished, an access drift(s) would be developed off of the ramp at the bottom of an ore zone for the remaining distance of the zone strike length. The ramp would then continue downwards to access the next ore zone for mining. The ramp and access drifts would be developed with dimensions of 4.75 metres wide by 3.75 metres high.

Once the ramp and access drifts in an ore zone have been completed, rooms would be developed in a regular manner along strike and from the bottom to the top of the ore zone. The initial drift along strike in developing rooms, would be driven flat to allow loaders’s to travel to mucking areas creating steps in the footwall. Horizontal drilling of drift rounds and slashing would be used to develop the rooms to full height. Pillars would be left between the rooms to maintain ground stability. Rooms would have dimensions of 20 by 20 metres by the thickness of the mineralization. Pillars would have dimensions of approximately 5 metres by 5 metres. Broken rock would be mucked from the face by loaders’s and loaded into trucks for haulage to surface. Trucks would be loaded in the ramp or access drifts. Where the ore zone dips become greater than approximately 20 to 25 degrees rooms would be drilled with a combination of 2 boom electric hydraulic development jumbos. Long toms or jacklegs would be used where mobile equipment cannot travel. All broken material would be scraped to the elevation where a loader can extract the broken rock. Ground support would likely consist of rockbolts and screen.

Equipment operating in the stopes would consist of 2 boom electric hydraulic jumbos, 5 cu. m. bucket loaders, 26 tonne trucks and in steeper dipping areas long toms and jacklegs for drilling and slushers for scraping material back to loading points. Figure A1, which is found in Appendix 1, illustrates this mining method.

7.4.2 Blasthole Stoping

Longitudinal blasthole stoping would be used in the portions of the potentially economic mineralized zones that have an average thickness greater than 2.5 metres, dips greater than 50°and where the ore is hosted in competent rock. Blasthole stope development would include sublevels on 20 metre intervals, manway raises between sublevels, and slot raises at the ends of the stope opposite the manways, to provide a free face for production blasting.

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Stopes would be drilled off in a ring pattern using air track drills and blasted using ANFO. Mucking would be performed by 6 yd. underground loaders loading 30 tonne haul trucks located on transport levels. Mining would retreat to the manway raise. Figure A2, which is found in Appendix 1, illustrates this mining method.

7.4.3 Backfill for Mining

It is currently envisaged that backfill will not be placed in the excavated stopes. Whereas backfill may be able to increase mining recovery, a satisfactory source of competent backfill material has not been identified. This should be investigated more in a subsequent, more detailed feasibility study.

7.4.4 Ventilation

A vertical ventilation raise will be developed from Zone 4-3 to the outcrop along the South western shore of Lac Pelletier. This location is considered the best site for the raise collar, given the variable thicknesses of overburden in the general site area. The ventilation raise would have a diameter of 2 m, be in the order of 150 m long and be in a central location to the mineralized zones. For the current study it has been assumed that the mine would circulate air down the main ramp and use the ventilation raise as an exhaust conduit. For the current scope of work additional vent raise development to connect the zones has not been considered. Given the complexity of mineralization at Lac Pelletier further study is required to confirm the optimal location of the ventilation raise as well as the need for any additional ventilation raises that may be required.

7.4.5 Mining Dilution and Recoveries

Though more detailed work is required to finalize expected mining recoveries, the following parameters have been used for each mining method:

• Stepped Room and Pillar – Mining Recovery 70%, Mining Dilution 10% (at a grade of 1 g/t)

• Blasthole – Mining Recovery 80%, Mining Dilution 30% (at a grade of 1 g/t)

The recoveries shown for stepped room and pillar mining consider that pillars will be located in low grade sections etc. to maintain safe spans but also tie up less mineralization.

7.4.6 Mining Rate

A mining rate of 700 tonnes per day has been chosen based on mill feed requirements at the Aurbel mill. However, this rate is at the high end of a range of production rates normally

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considered reasonable for this size of orebody, considering ore zone configuration and industry standard ‘rules of thumb’.

7.4.7 Preliminary Production Schedule

Golder obtained the current block model from Teck2mine Incorporated and imported it into Datamine, a resource modelling and mine design software package. The block model was used to define the mineable zones of the geological resource based on a cut-off grade of 4.42 g/t Au and zone thicknesses of 2 m and 2.5 m for “stepped room and pillar” and “blasthole” mining methods respectively. Golder has not performed any confirmation of resources on any of the mineralized zones contained at the Lac Pelletier property, but has only queried the block model based on the criteria above to make an order of magnitude estimate of the preliminary production schedule.

Table 7-1 presents the preliminary production schedule.

Table 7-1 Preliminary Production Schedule


1 252,000 5.76

2 252,000 5.76

3 96,732 5.76

TOTAL 600,732 5.76


7.4.8 Development Quantities

Development quantities have been estimated based on the development required to access each area of the mineralization within the zones that are considered economically mineable. This design is based on the general mine plan developed and illustrated above. Development quantities are presented in Table 7-2.

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Table 7-2 Estimated Development by Zone

Zone Development (m) (in waste)

Sublevel Development (m)

Service Raise Development (m)

Slot Raise Development (m)

Z3 460 200 10 40

Z41 75 - - -

Z42 280 - - -

Z42L - - - -

Z42U 95 - - -

Z43L, Z43, Z43U

500 140 25 80

Z43L1 150 140 25 80

Total (m) 1560 480 60 200

7.5 ORE PROCESSING

7.5.1 Overview

Alexis completed its purchase of the Aurbel Gold Mill from Aur Resources Incorporated (Aur) in August of 2006. This mill was formerly known as the Belmoral mill and utilizes conventional rod mill / ball mill grinding followed by flotation. The mill has a production capacity of some 1,400 tpd and is expected to be primarily processing ore grade mineralization from Alexis’s Lac Herbin project. Ore from Lac Pelletier would supplement the ore feed from Lac Herbin to bring the total ore feed levels close to the rated capacity of the mill. The trucking distance for the Lac Pelletier ore to the Aurbel mill is approximately 130 kilometres.

As part of this scoping study, John Eggert, Senior Process Engineer at Golder, conducted a preliminary study to estimate milling costs for Lac Pelletier ore at the Aurbel mill. This operating cost estimate is provided in Section 10.4.

Testing to date has included three separate metallurgical tests. The first test was a bench scale test performed by Centre De Recherches Minerales (CRM). The second was a bulk sample milled at Thunderwood’s Camflo mill in Rouyn. A third test supervised by Alexis’s independent metallurgical consultant, Ms. Paterson, P. Eng., was conducted at SGS Lakefield in December 2006. Ms. Paterson, also completed a preliminary review of the procedures and conclusions presented from the CRM and Camflo test programs. Whereas the results where not definitive in

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terms of predicting with confidence the expected performance of the metallurgical processes, a basis for assigning possible metallurgical recoveries was provided.

The following sections briefly describe the testing that was performed and the results obtained.

7.5.2 Results of the CRM Program

CRM had four samples assayed for feed gold. The average used for the testing was 7.7 gpt Au within a statistical confidence range of two gpt, due to the small sample used. It was described in the report that the material to be assayed was screened on a 200 mesh screen with the oversize material accumulated to form one sample for assay and the undersize four samples individually assayed. The net head assay was then calculated from these assays using a procedure which was not documented in the report.

The CRM test results refer to % passing 200 mesh as both 79% for a 21 minute grind and 96% passing for a 34 minute grind. It appears that only one screen analysis was performed for each grind time and it was assumed that the grind time would generate this size distribution. This suggests that the values for the size distribution should be considered approximate.

Although CRM performed whole rock leach and flotation tests, it appears that no cyanidation testing was performed on the flotation concentrate. The cyanidation test results provide assays that are not categorized. These were probably the solution assays, except for the cyanide tails. The method of determining the gold distribution is not detailed.

Considering the limitations outlined above, testing is sufficient to make an estimate of gold recovery at a preliminary assessment level. A total of six flotation / flotation gravity recovery tests were performed. The mean recovery for these was 95%, based on the calculated head. In addition, six whole rock leach tests were performed. The mean recovery for these was 95.2%. Thus for a process flowsheet involving flotation followed by leach of the flotation concentrate, the total system recovery could be 95.2% of 95.0% or 90.4%. To obtain a range of expected recoveries, the highest flotation recovery of 96.8% with the highest cyanide recovery of 96.4% gives a top end recovery of 96.4% of 96.8% or 93.3%, while the lowest flotation recovery of 93.6% and the lowest cyanide recovery of 93.9% gives a low end recovery of 87.9%.

7.5.3 Results of the Camflo Program

A total of 6,615 short tons of Lac Pelletier ore was processed at the Camflo mill. The initial head grade of this material was 0.198 oz/ton or 6.78 g/tonne. The mill head was estimated to be 0.179 oz/ton or 6.13 g/tonne, due to dilution at the mill. However, gold in circuit is calculated as gold poured as product, plus gold reporting to tailings plus consideration for inventory change. These values, when summed provide a calculated head grade of 0.164 oz/ton or 5.61 g/tonne. There are

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thus two recoveries that can be calculated for the mill. The recovery based on the assay head grade and the recovery based on gold poured, tailing losses and inventory increase. It is the usual practice in gold metallurgy to assume that the second recovery is more accurate, as it incorporates the two most important numbers for the mill: the gold poured and the gold lost to tailings. The recovery based on the former is 91.6%, while the later suggests a recovery of 83.6%.

There is no indication in the Camflo report of the method used to obtain the assay head. There were 126 head samples taken with a relatively wide fluctuation in grades, from 0.430 oz/ton to 0.088 oz/ton (14.7 g/tonne to 3.0 g/tonne). Without accompanying tonnage figures, the total assay head can only be approximated.

Based on the bulk sample trial, it is possible to conclude that the recovery will be at least 83.6%. There is at this time no data to fully support a more optimistic recovery, though it can be assumed that the Camflo mill was not optimized for the Lac Pelletier ore.

7.5.4 Results of the SGS Lakefield Program

A metallurgical test program supervised by Ms. Paterson, P. Eng., was conducted at SGS Lakefield on an ore composite from the Lac Pelletier property. The program was started in December, 2006 and was completed in February, 2007. The purpose of the program was to provide metallurgical data to determine some metallurgical design criteria for processing of the ore at the Aurbel mill and provide recovery data for feasibility studies.

This study demonstrated that direct cyanidation of the whole ore gave the best gold recoveries, an average of 96.2%. The combined gold recovery in the gravity concentrate plus the gold recovered from leaching the tailings was 94.5%. As a result, it appears that there is no advantage to gravity concentration ahead of leaching. In addition, gravity plus flotation of the tails and cyanidation of the flotation concentrate gave the lowest gold recovery, an average of 90.3%. This study recommends this recovery (90.3%) be used for the current Golder Scoping Study, which assumes that the Lac Pelletier ore will be processed at the Aurbel mill using the current configuration of the plant; gravity, flotation and leaching of the flotation concentrate. However, based on the recoveries, conversion of the Aurbel mill to whole ore leaching may be more economic.

It was also recommended by SGS to regrind the concentrate to improve recovery. A copy of the SGS Lakefield test results is presented in Appendix C.

7.5.5 Conclusions and Recommendations

Based on the three reports provided, preliminary test results indicate that it may be possible to obtain gold recovery’s of 90% or greater. Further testing with respect to the flotation concentrate cyanidation gold recovery will be necessary to narrow the range of possible recovery values.

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Should the tonnages available for milling increase substantially, it is recommended that further testing be undertaken to determine if flotation followed by cyanidation is the best treatment method. The recoveries for the leach tests indicate that cyanidation recovery can be expected to be above 90% and could approach 95%. The flotation losses may be sufficient to justify the capital cost of converting the process to whole ore cyanidation.

7.6 SUPPORT FACILITIES

7.6.1 Access Road Construction

In October 1990, an agreement was signed with Madame Rollin which provided Thunderwood with the right to build and use an access road across her property between Range Road 4/5 and the portal site. A 1.2 kilometre long right of way was surveyed by J.L. Corriveau that followed the west boundary of Madame Rollin’s property from Range Road 4/5 to the location of the portal.

Between October and November of 1991, Les Entreprises Forestieres Lavergne et Fils slashed the trees along the right of way over a width of 13.72 m (45 feet) in order to provide enough clearance for the construction of a road and an electric power line. Les Excavations Du Cuivre built a 7.62 m (25 foot) wide gravel road bed, about 0.61 m (2 feet) thick, and installed culverts where needed for creek crossings.

Upgrading of the existing access road will likely be required to accommodate heavy equipment and transport trucks and to minimize potential for erosion and sedimentation. Golder has assumed that Alexis will maintain/retain access rights along the corridor to complete such work.

7.6.2 Electric Power Supply

The project area has an existing electric power line in place, running parallel and adjacent to the access road and ending at the entrance to the project area.

Alexis’ personnel indicated that the power line is not presently operational. Given that the power line infrastructure remains on-site it is anticipated that reconnection could be obtained with minor refurbishment, upon application to Hydro Quebec.

Given current market conditions it is assumed that electrical power could be obtained at a cost of $0.08 per kilowatt hour.

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7.6.3 Settling Pond

As part of the underground exploration project, MENVIQ approved settling pond was constructed to hold water pumped from underground before discharge to Lac Pelletier. The engineering design was completed by Roche Ltee.

The pond was constructed with a compact clay lining removed as part of the ramp portal construction. It measures 50 metres long by 30 metres wide and has a holding capacity of some 1,300 cubic metres of water.

It is anticipated that this settling pond will be used during mine development and production. However, it must be inspected to verify the integrity of the lining. Also, it is expected that the pond may need to be expanded and re-permitted by MENVIQ, which would require an engineering review.

7.6.4 Explosive and Fuel Storage

A road was previously bulldozed from the portal site to a point on the south shore of Lac Pelletier to access a suitable explosive storage site. Berms were erected and two magazines (3 metres by 10 metres) were installed for storage of powder, caps, and explosives. Only a minimum of excavation and tree cutting was completed as the location of the magazines was a short distance from the lakeshore. During construction precautions were taken to comply with both C.S.S.T regulations regarding the distance required between buildings and explosives storage, and MENVIQ requirements for minimum distances from the lakeshore for environmental protection. These facilities were removed following the bulk sampling project. Access to the explosive storage site remains. It is assumed that explosive storage facilities would be supplied and maintained on this site by the explosives supplier or the mining contractor.

Diesel and gasoline fuel for the power generators, mine equipment and vehicles will be stored on-site in above ground tanks. Three 22,700 liter (6,000 gallon) storage tanks for diesel fuel and one approximately 7,570 litre (2,000 gallon) storage tank for gasoline will be provided. The storage tanks would be installed on earthen foundations and surrounded by a berm, sized to contain the contents of the tank in the event of a spill or tank rupture. It is assumed that these items would be supplied by the contracting company.

7.6.5 Building Installation

A sand pad spread over a portion of the tree cut area with minor resurfacing and grading should suffice for surface buildings. Surface buildings will include a portable maintenance shop with a compressor room; three containers for stock rooms and a main electrical room; four heated

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trailers hooked to water and the septic sewage system for the offices, mine dry and washrooms; a building for the drinking water pumping system; and a building for sample preparation.

An office trailer will provide space for the geology, engineering, and management functions required for the day-to-day operations of the mine. An assay lab will be located in a small area in prefabricated building, on concrete foundations. The assay lab will be equipped to assay drill-hole cuttings. A first aid station will be located in the offices area and include trauma kits.

7.6.6 Water Supply and Sewage System

Initially, the water supply will come from Lac Pelletier. It is planned that a 5,000 gallon tank will be used to supply water for the underground operations, especially considering that electric hydraulic Jumbo drills consume some 1,500 gallons of water per hour. Water in the settling pond will be used to load water trucks for dust control on the main access road and for fire fighting contingencies.

Although a 340 foot deep water well was drilled in order to provide potable water during the bulk sampling campaign, it is envisaged that potable water for use in project facilities will be obtained from an offsite source and will be trucked to the mine site.

A septic tank, septic bed and gravel lined discharge ditch will be built for the handling of sewage and located in the same area as the initial septic area constructed for the 1990/1991 bulk sample campaign.

7.6.7 Ore and Waste Storage

All broken waste rock excavated from the previous ramp development work was spread over an area immediately east of the portal to form a low-angled, flat-topped pad measuring approximately 80 by 100 meters. A 6-8 inch layer of sand was spread on top of the pad to form a marker between waste and ore. It is anticipated that this area could be used to stockpile, separate ore and waste materials, and load ore designated materials into trucks for shipment to the Aurbel mill.

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Figure 7-5 Existing Waste Dump

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8.0 ENVIRONMENTAL ISSUES

Golder completed an environmental verification of the Lac Pelletier property in November 2005. The original report, prepared in French, titled “Verification environnementale sommaire – Projet Lac Pelletier, Rouyn-Noranda, Quebec presented the following considerations with respect to the Lac Pelletier property:

• The claims and mining concessions were legally owned by Thundermin Resources Inc.;

• The Xstrata (Falconbridge) #5 tailings site located northwest of the property contains acidogenic tailings. The report recommends that should Alexis purchase the property it should not accept environmental responsibility for this area, but rather should consider an exclusion clause to claim 4128911-A which covers a portion of the tailings site;

• The report notes that the Ramp area (block 56) of Lac Pelletier is not expected to present any environmental concerns. Nevertheless, it goes on to note that restoration of the area has not been completed according to government requirements. This would require restoration of the approximately 2-3 hectares that host the ramp, a concrete foundation, tailings pond, waste rock pile, as well as the dismantling of the electric transmission line;

• The property also has two mining concessions that cover Lac Pelletier which is known to have waters and sediments contaminated by metals. It has been noted that under the Environmental Quality Act with regard to the restoration of contaminated lands, the responsibility related to the contaminated sediments on the concessions could be raised. As such it was recommended that these concessions be transferred prior to a possible acquisition by Alexis. It is not known whether this exclusion was obtained; and

• The property is also located near a residential area and rural roads. For this reason the effect of exploration and mining operations on the surrounding community will need to be addressed.

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9.0 CAPITAL COST ESTIMATES

9.1 CAPITAL COST OF CONSTRUCTION

A preliminary design for the proposed project facilities, including mining, and support infrastructure has been developed. The cost of these facilities were estimated in part, on recent actual costs incurred at Alexis’s Lac Herbin project, located adjacent to the Aurbel mill.

A summary of the estimated capital costs for the entire program of work is provided in Table 9-1.

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Table 9-1 Summary of Estimated Capital Costs (CDN$)

4,031,250Total


1,200,000Sub-Total






Mine Equipment:

2,025,000Sub-Total





225,0001,500m150Vent Raise









CDN $($)



4,031,250Total


1,200,000Sub-Total






Mine Equipment:

2,025,000Sub-Total





225,0001,500m150Vent Raise









CDN $($)



9.2 SUSTAINING CAPITAL, AQUISITION COSTS AND WORKING CAPITAL

Sustaining capital, required during the operating life of the project is estimated at $4.5 million and includes the anticipated on-going underground development costs. The cost of closing the mine at the end of the mine life has been estimated to be in the order of $500,000. This cost

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includes associated bonding costs and consideration for the salvage value of plant and equipment. This cost will need to be confirmed or revised based on a more detailed review of the requirements.

There has been no provision made for property acquisition costs or working capital allowances due to the short length of the mine life. It has been estimated that there will be no additional costs for bonding for site remediation. This will have to be confirmed in the next phase of analysis.

9.3 CAPITAL EXPENDITURE SCHEDULE

The total capital expenditures associated with the project, including that required for construction, operation and closure, are estimated to be $9,000,000.

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10.0 OPERATING COST ESTIMATES

10.1 TOTAL OPERATING COST ESTIMATE

Golder has carried out a preliminary estimate of the operating cost for the mining and processing of ore produced from the Lac Pelletier deposit. These estimates are based on the assumption that the currently defined resources will be exploited under the conditions that are currently believed to exist. These estimated costs include all site costs and are exclusive of any royalties or head office administration costs.

The total operating cost estimate for the facility is provided in Table 10-1.

Table 10-1 Total Operating Costs per Tonne of Ore ($)

Description Cost Per tonne Ore

Mining 43.94

Surface Plant and Mine Services 2.13

Mining G&A 4.80

Transportation to Mill 14.93

Processing 11.75

Total 77.55

10.2 MINE OPERATING COSTS

The mine will be operated on behalf of Alexis by a mining contractor. A separate contract will be let for the transportation of the ore to the Aurbel mill. For the purposes of this study, mining costs have been developed from ‘first principals’ and adjusted to include costs for contractor equipment rental, overhead and profit.

The mining cost report in Table 10-1 is the sum of the Stoping costs and the General Mine Expense. Table 10-2 presents a summary of stoping expenses. Stoping Labour is based on 24 miners at a cost of $130,000 per year, including a 30% burden.

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Table 10-2

Summary of Stoping Costs

Item Cost ($/tonne)

Stoping Labour 12.38

Drilling Supplies 3.49

Blasting Supplies 2.95

Ground Support Supplies 1.75

Support Services and Supplies 8.90

Equipment Operating and Maintenance Supplies 3.10

Sub-Total 32.57

Misc. Costs (10%) 3.26

Total 35.83

A summary of the approximate General Mine Expense items and costs are shown in Table 10-3.

Table 10-3

Summary of General Mine Expense

Position Quantity Rate ($/hr) Hr/yr $/yr

Mining Shift Boss 1 - - 90,000

Maintenance Foreman 1 - - 90,000

U/G Mechanics 3 30 2000 180,000

U/G Electricians 1 30 2000 60,000

Materials Handling Crew 2 25 2000 100,000

General Labour & Construction 4 25 2000 200,000

Subtotal 720,000

Burden (30%) 216,000

Total General Mine 936,000

Total Cost per tonne ($/t) 5.35

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A summary of the approximate Ramp Haulage Expense items and costs are shown in Table 10-4.

Table 10-4

Summary of Ramp Haulage Expense

Level Ft. m 164

50 492 150

820 250

Ramp haul 383 1150 1917

Transport Drift haul @ 8 k/hr 0 667 667

Load min 5 5 5

Transport Drift haul time @ 8 k/hr min 0 5 5

Ramp Haul time @ 8 k/hr min 2.875 8.625 14.375

Maneuver & dump min 2 2 2

Return time @ 10 k/hr min 2.3 10.9 15.5

Cycle time min. 12.175 31.525 41.875

@ 50 min hour trips /hour 4.1 1.6 1.2

Assume 26 ton truck @.85 tonnes /hour 82 32 24

Operating Hrs @ 700 tpd hours 8.50 22.01 29.24

No of trucks req'd operating 0.47 1.22 1.62

Fleet req'd @80% avail 1 2 2

Operating Cost /hr $97.30 $97.30 $97.30

Labour cost /hr $61.00 $61.00 $61.00

Total cost /hr $158.30 $158.30 $158.30

Cost/tonne 700 tpd $1.18 $3.06 $4.06

Cost/tonne $2.76

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The cost breakdown for Surface Plant and Mine Services as shown in Table 10-1 is given in Table 10-5 below.

Table 10-5

Summary of Surface Plant and Mine Services

Note: Monthly cost based on a production rate of 700 tpd and a 30 day month

Surface Plant Items $/month $/tonne

Offices, Surface shop, and Warehouse (maintenance / heat) 3,125 0.15

Lamp Room 551 0.03

Yard and Materials Handling 5,147 0.25

Sub-total 8,824 0.43

Mine Service Items

Power 19,447 0.90

Mine Ventilation and heating 16,438 0.80

Subtotal 35,886 1.70

Total 44,709 2.13

10.3 Transportation Cost to Aurbel Mill

Ore produced from the Lac Pelletier mine will be transported to Aurbel mill which is approximately 130 km east of the property. Four independent contractors have been contacted to provide budgetary estimates. These estimates are given in Table 10-6 and are based on the assumptions that the maximum haulage distance is 130 km one way.

Table 10-6 Transportation Cost to Aurbel Mill Val d’Or

Tonnes Hauled per Truck by Period Rate per Tonne Contractor

Regular Thaw Regular Thaw

Centre Jardin Lac Pelletier 35 30 15.50 18.00

J&R Dumas Inc. 35 30 14.80 16.80

Transport Nord-Ouest 35 30 14.50 17.50

Fournier & Fils 35 30 13.75 17.00

Average Cost 14.93 17.43 The above prices include an allowance for 30 minutes to 1 hour of loading and dumping time and consider a fuel price in the range of 0.75 to 0.80 dollars per litre. Of particular note is the price

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fluctuation during the period between mid March and mid May. During this period truck loads are reduced by a sixth of their normal rate.

10.4 PROCESSING OPERATING COSTS

10.4.1 Overview

Lac Pelletier ore will be transported to the Aurbel Gold Mill to supplement mill feed from Alexis’s Lac Herbin project. The milling costs at Aurbel have been estimated based on Golder’s experience with milling operations in Northern Ontario and include adjustments for inflation and economies of scale, where appropriated.

10.4.2 Total Processing Costs

The total estimated ore processing costs are summarized in Table 10-7.

Table 10-7 Total Estimated Ore Processing Cost ($/tonne)

Cost Sector Annual Cost Cost per Tonne Processed

Direct Mill Costs 5,857,137 9.75

Indirect Mill Costs 1,201,464 2.00

Total 7,058,601 11.75

10.4.3 Direct Mill Costs

The estimated annual direct costs associated with the mill are listed in Table 10-8.

Table 10-8 Estimated Direct Operating Cost ($)


Crushing 1,261,537 2.10

Grinding 2,390,913 3.98

Flotation 600,732 1.00

Leach 913,113 1.52

Concentrating/Refining 90,110 0.15

Tailings Disposal 600,732 1.00

Total 5,857,137 9.75

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The above estimates include labour with a 32% burden applied.

10.4.4 Indirect Mill Costs

The estimated annual indirect costs for the mill are listed in Table 10-9.

Mill General includes the costs of a Mill Superintendent, four foreman, a metallurgist, assayers, and maintenance personnel. Again a burden of 32% has been applied.

Table 10-9 Estimated Indirect Operating Cost ($)


Effluent Treatment 60,073 0.10

Mill Assaying 60,073 0.10

Mill Power 240,293 0.40

Mill General 841,025 1.40

Total 1,201,464 2.00

10.5 GENERAL AND ADMINISTRATION COSTS

The costs of items that do not fall under the two main categories of Mining or Processing are included under the category of General and Administration (G&A). These costs include staff costs which are based on 2005 rates for similar projects in the Val d’Or mining camp, plus 10% to allow for a cost increase to 2007 dollars.

Alexis’ operations at Lac Herbin will provide opportunities to take advantage of synergies that will exist between the two operations. This includes sharing a Mine Manager, Accountant, Safety Coordinator, and Purchasing Agent. These positions account for about 30% of the materials and services estimate presented in Table 10-10.

Golder has prepared an estimate of the General and Administration costs as presented in Table 10-6.

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Table 10-10 Estimated General and Administration Costs ($)

Description Positions Cost per Year ($)

Mine Superintendent 1 110,000

Mining Engineer 1 90,000

Senior Geologist 1 90,000

Junior Geologist 2 120,000

Senior Surveyor / Planner 1 75,000

Junior Surveyor 1 45,000

Payable/Receivable Clerk 1 45,000

Warehouseman 1 45,000

Secretary 1 45,000

Security Guard 2 80,000

Sub-Total 745,000

Burden (25%) 186,000

Total Labour 931,250

Materials and Services (30%) 279,375

Total G&A Costs 1,210,625

Unit Cost Per Tonne 4.80

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11.0 PRELIMINARY PROJECTED CASH FLOWS

Future annual cash flows have been estimated based on production, mineralization grade, gold recoveries, and cost estimates presented previously in this report. The discounted cash flow technique has been applied to these cash flows in order to evaluate the potential economics of the Lac Pelletier project.

Each of the parameters that form the elements of the estimated future annual cash flows is discussed below. All costs are presented in Canadian dollars unless otherwise stated.

11.1 PRODUCTION RATE

For the purposes of this preliminary assessment and given the existing development to zones 3 and 4, it has been assumed that a full production rate of 252,000 tonnes per year of ore can be achieved after the initial 6 month preproduction period. The overall production schedule envisages the mining of about 601,000 tonnes of mineralization during the life of the mine.

11.2 ORE GRADE

The metal production estimates are based on processing mineralization with an average diluted grade of 5.76 g/tonne.

11.3 METAL PRICES

A gold metal price of US$550 per ounce has been used as the Base Case. Gold prices over the year have ranged from a low of US$525 per ounce to a high of US$725 per ounce with an average of US $599 per ounce.

11.4 GOLD RECOVERIES

Golder has used a gold recovery rate of 90% in its cash flow. This rate has been provided by Alexis.

11.5 OPERATING COSTS AND CAPITAL COSTS

The operating and capital costs for the project which have been described previously in this report, have been included in the cash flow analysis.

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11.6 PRELIMINARY ECONOMIC EVALUATION

A preliminary pre-tax Base Case cash flow is presented in Table 11-1. It can be seen that on the basis of estimates and assumptions discussed herein, the Lac Pelletier project could be expected to yield a pre-tax undiscounted cash flow of $2.8 million dollars over an operating life of under 3 years, with a pre-tax IRR of 39%. A chart of the Net Present Value (NPV) at different discount rates is provided in Figure 11-1.

Table 11-1 Projected Undiscounted Pre-Tax Cash Flow

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Figure 11-1 Net Present Value at Various Discount Rates (‘000’s $)

11.7 SENSITIVITY ANALYSIS

Golder ran several sensitivities on the Base Case to determine the effect on the key financial statistics if the following parameters change:

1. Gold price change to US$525, US$550, US$575.00, and US$600.00;

2. Operating cost: 5% increase and 5% decrease;

3. Capital cost: 10% increase and 5% decrease;

4. Gold recovery: 5% lower and 5% higher;

5. Gold grade: 5% lower and 5% higher; and

6. Tonnage increase by 10% and 20%.

Sensitivity results are presented in Table 11-2 and Figure 11-2.

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Table 11-2 Sensitivity Analysis Results ($)

Parameter Changed Undiscounted Cash Flow (CDN$) IRR

Base Case: No Changes $2,840,000 39%

Gold Price to US$525/oz $228,000 3%



Operating Cost Increase: 5% $508,000 7%

Operating Cost Decrease: 5% $5,166,000 68%

Capital Cost Increase: 10% $1,934,000 24%

Capital Cost Decrease: 5% $3,288,000 46%

Gold Recovery less by: 5% ($86,000) -1%

Gold Recovery more by: 5% $5,760,000 75%

Grade Increase by: 5% $5,780,000 75%

Grade Decrease by: 5% ($106,000) -2%



*Results have been rounded. *The gold prices over the year have ranged from US$525 to US$725 with an average over the period of US$599.

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Figure 11-2 Sensitivity Analysis Results (‘000’s of $)

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12.0 CONCLUSIONS

Golder has not performed any estimation or confirmation of resources on any of the mineralized zones contained at the Lac Pelletier project. Rather, Alexis and its retained consultants have provided Golder with a NI-43-101 compliant report titled “NI 43-101 Technical Report and Mineral Resources Estimates on the Lac Pelletier Project”, prepared in October 2006, by Mr. Carl Pelletier, P.Geo.

Based upon these preliminary investigations of the economics of mining a conceptual resource at Lac Pelletier, Golder recommends that steps be taken to advance the property towards a commercial production decision. Golder recommends that Alexis should commence with a more detailed pre-feasibility study, in order to provide confirmation of the results of this preliminary analysis. It is recommended that as a preliminary to this work:

1. The assay results from the summer 2006 exploration campaign be incorporated into the existing block model;

2. A rock mechanics study be conducted to determine an acceptable crown pillar thickness and stope dimensioning;

3. Additional process testing of representative samples of the mineralization should be conducted to narrow the range of anticipated mill recoveries;

4. Additional drilling should be carried to better delineate mineralization in Zone 4-4; and

5. Infill drilling should be carried out to increase the confidence inferred resources to indicated and/or measured.

GOLDER ASSOCIATED LTD.

Kirk Rodgers Associate, Mineral Resources and Reserves KR/ms n:\active\2006\1117\06-1117-045 alexis minerals, quebec\draft report feb 2007\06-1117-045 scoping study lac pelltier rev7 feb 27 2007.doc

Original signed by:

APPENDIX A FIGURES OF CONCEPTUAL MINING METHODS

DDH

DDH

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DIAMOND DRILL HOLES -DRILLED ON 15m HORIZONTALAND 17m VERTICALSPACING THROUGH ORE VEIN.

51.2

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AA

'

DRILL SUB LEVEL

SE

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RAI

SE SLO

T R

AISE

DIP

HEI

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T 53

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UNDERCUTDRILLINGUPHOLES

3.75

m

5.5m20

m

2m

20m

2.5m

SERVICERAISE

SLOTRAISE

SERVICERAISE

SLOTRAISE

DD

H

DDH

PRELIMINARY ASSESSMENT OF THELAC PELLETIER GOLD PROJECT A-2

SCHEMATIC BLASTHOLE STOPINGMississauga, Ontario, Canada

TITLE

PROJECT No.

FILE No.

REV.

SCALE

CAD

DESIGN

REVIEW

CHECK

DATE

FIGURE061117045AB0A2.dwg

06-1117-045 A

NOT TO SCALE

NOV. 2006

CAS

JFC

CAS

KR

CROSS-SECTION A-A'PRODUCTION DRILLING

BLASTHOLE STOPINGLONGITUDINAL SECTION

UPPER LEVEL PLAN

LOWER LEVEL PLAN

CROSS-SECTION A-A'DIAMOND DRILL HOLES

20.0m

20.0

m

5.0m 5.0m

5.0m

10.0m

STOPE

PERMANENTPILLAR 5.

0mPERMANENTPILLAR

TEMPORARYPILLAR

PILOT RAISE

VEN

T. D

RIF

T

HA

ULA

GE

DR

IFT

SLASHING

20.0

m

20.0m

SLUSHER AS REQUIREDIN MORE STEEPLYDIPPING ROOMS

20.0m

3.75m

4.75

m

HAULAGE DRIFT

VENTDRIFT

1

2

3

4

NUMBERS INDICATESEQUENCE OF EXTRACTION

PRELIMINARY ASSESSMENT OF THELAC PELLETIER GOLD PROJECT A-1

SCHEMATIC STEPPED ROOM &PILLAR STOPING

Mississauga, Ontario, Canada

TITLE

PROJECT No.

FILE No.

REV.

SCALE

CAD

DESIGN

REVIEW

CHECK

DATE

FIGURE061117045AB0A1.dwg

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STEPPED ROOM AND PILLARSTOPING - PLAN

STEPPED ROOM AND PILLARSTOPING - SECTION

APPENDIX B GOLD PRICE PREMIUMS AND THE POTENTIAL RETURN FOR

THE LAKE PELLETIER PROJECT

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TABLE OF CONTENTS

SECTION PAGE

B1.0 GOLD PRICE PREMIUMS - RETURN POTENTIAL.................................. 1 B1.1 Case 1 – Gold US $700 per Ounce.........................................................1 B1.2 Case 2 – Gold US $800 per Ounce.........................................................3

LIST OF TABLES Table B-1 Preliminary Production Schedule (Case 1 - Gold US $700) Table B-2 Projected Undiscounted Pre-Tax Cash Flow (Case 1) Table B-3 Preliminary Production Schedule (Case 2 – Gold US $800) Table B-4 Projected Undiscounted Pre-Tax Cash Flow (Case 2)

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B1.0 GOLD PRICE PREMIUMS - RETURN POTENTIAL

Alexis requested that Golder investigate the potential of the Lac Pelletier project based on gold prices of US $700 and US $800 per ounce. For this purpose, Golder has used the October 2006 resource estimate provided as a block model from Teck2mine Inc. Respective cut-off grades were determined and applied to the geologic block model to make an order of magnitude estimate of a preliminary production schedule.

Annual undiscounted pre-tax cash flows presented herein have been estimated based on the gold recovery, and operating costs developed in the main study. These parameters have been used to calculate the cut-off grade for each of the cases contained in this appendix. For “Stepped Room and Pillar” mining a recovery of 70%, dilution of 10% at 1 gram per tonne and no stope losses were applied to the in-situ results from the model. In terms of “Blasthole” mining a recovery of 80%, dilution of 10% at 1 gram per tonne and stope losses of 5% were applied to the in-situ results from the model.

Capital cost estimates have been adjusted according to the “in waste” development required on a case by case basis. These changes are reflected in the capital cost estimate, capital development portion of the cash flows presented in the following sub-sections. Of particular note, as the cut-off grade decreased, the amount of development in waste also decreased.

B1.1 Case 1 – Gold US $700 per Ounce

This case assessed the potential for the project given a gold price of US $700 per ounce. Based on this gold price, the block model has been used to define the mineable zones of the geological resource based on a cut-off grade of 3.5 g per tonne Au and zone thicknesses of 2 m and 2.5 m for “stepped room and pillar” and “blasthole” mining methods respectively. Table B1 presents the preliminary production schedule for this case.

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Golder Associates

Table B1 Preliminary Production Schedule


1 252,000 5.05

2 252,000 5.05

3 252,000 5.05

4 176,321 5.05

TOTAL 932,321 5.05

(1) based on a cut off grade of 3.5 g/t

Using a production rate of 700 tpd (developed in the main report) and given the existing development to zones 3 and 4, it has been assumed that a full production rate of 252,000 tonnes per year ore can be achieved following the pre-production period.

The preliminary production schedule envisages mining approximately 932,000 tonnes of mineralization at an average diluted grade of 5.05 g per tonne. This represents an increase of approximately 330,000 tonnes of mineralized material from the base case. The majority of the additional tonnage is amenable to the “step room and pillar” mining method. As such, the proportion of mineralization amenable to stepped room and pillar versus blasthole mining has changed to 95% and 5% respectively, from the base case percentages of 90% and 10%.

A preliminary pre-tax cash flow for the US $700 per ounce gold scenario is presented in Table B2. Based on expected operating parameters and a gold price of US $700 per ounce, the expected pre-tax undiscounted cash flow is estimated to be $20.2 million dollars providing a pre-tax IRR of 154%, over an operating life of some 4 years.

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Golder Associates

Table B2 Undiscounted Pre-Tax Cash Flow (Case 1)

B1.2 Case 2 – Gold US $800 per Ounce

Case 2 examined the potential for the project given a gold price of US $800 per ounce.

Based on this gold price, the block model has been used to define the mineable zones of the geological resource based on a cut-off grade of 3.0 g per tonne Au and zone thicknesses of 2 m and 2.5 m for “stepped room and pillar” and “blasthole” mining methods respectively. Table B3 presents a preliminary production schedule for the 3.0 gram per tonne Au cutoff.

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Golder Associates

Table B3 Preliminary Production Schedule

(based on US$800 Gold)


1 252,000 4.67

2 252,000 4.67

3 252,000 4.67

4 252,000 4.67

5 136,795 4.67

TOTAL 1,144,795 4.67


Using the previously determined production rate of 700 tpd and given the existing development to zones 3 and 4, it has been assumed that a full production rate of 252,000 tonnes per year ore can be achieved. The overall production rate for this case envisages mining approximately 1.1 million tonnes of mineralization at an average diluted grade of 4.67 g per tonne. This represents an increase of approximately 544,000 tonnes of mineralized material from the base case. Most of the tonnage increase is amenable to the “stepped room and pillar” mining method. As such, the proportion of mineralization amenable to stepped room and pillar versus blasthole mining has changed to 96% and 4% respectively, from the base case percentages of 90% and 10% .

A preliminary pre-tax cash flow for the $US 800 per ounce of gold scenario is presented in Table B4. Based on the expected operating parameters for the Lac Pelletier Project, at a gold price of US$800 per ounce, the expected pre-tax undiscounted cash flow is estimated to be $34.4 million dollars providing a pre-tax IRR of 211%, over an operating life of approximately 4 ½ years.

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Golder Associates

Table B4 Undiscounted Pre-Tax Cash Flow (Case 2)

APPENDIX C MEMORANDUM - MS. PATERSON, P. ENG,

SGS LAKEFIELD METALLURGICAL RESULTS 2007

Maureen Paterson P.Eng. Confidential Metallurgical Consulting

1432 Alderson Rd.

Carlisle, Ontario L0R 1H1 (905) 512-1056 CELL

[email protected]

Attention: David Rigg From: Maureen Paterson Company: Alexis Minerals Corp. Project ref.: Lac Pelletier

Location: Toronto Copies: R. Adams Date: February 8/07

R. Inglis P. Berthelot F. Prevost-file

Subject: Lac Pelletier Testwork Summary Introduction A metallurgical test program was conducted at SGS Lakefield on an ore composite from the Lac Pelletier property near Rouyn Noranda, Quebec. The program was started in December, 2006 and was completed in February, 2007. The purpose of the program was to provide metallurgical data to determine some metallurgical design criteria for processing of the ore at the Aurbel mill and provide recovery data for feasibility studies. Below is a summary of the test results. Head Analysis of Ore Composite A 60 kg ore composite was prepared at SGS Lakefield from drill core collected from the Lac Pelletier property. The calculated head assay based on individual drill core assays was 7.1 g/t. A list of the samples is attached at the end of this report. The samples were shipped to SGS Lakefield from Val D’Or in drum. The samples were combined at SGS to make a composite for testing. representative sample was taken from the composite and assayed for Au, Ag, Cu, total S and sulphide S. The results are shown in Table 1. Table 1 – Lac Pelletier Composite Analysis

Element Mass Assay g g/t, %

Au Screen Metallics

+150 mesh 21.4 11.7

-150 mesh 483.8

Assay 1 5.76

Assay 2 5.81

Calc. overall grade 6.04

Ag 1.0

Cu 0.008

S(T) 1.28

S(sulphide) 1.03

mailto:[email protected]

Lac Pelletier Testwork February 8, 2007 Confidential Page 2

The assayed head is lower than the calculated head but is within about 15%, which seems reasonable. Gravity Tests A gravity test in a Knelson concentrator was carried out on 10 kg of the ore composite to determine if the gold in the ore was amenable to gravity concentration and also determine the presence of free gold. The concentrate produced in the Knelson was upgraded using a Mozley table. The results shown in Table 2 indicate that 29% of the gold present in the composite was recovered into a gravity concentrate resulting in a grade of approximately 80 oz/t Au. Table 2 – Gravity Test Results

Product Weight Analysis Distribution Au Ag Au Ag g % g/t g/t % %

Mozley Conc. 6.0 0.06 2477 307 29.2 Gravity Tails (combined) 9994 99.94 3.56 70.8 Calculated Head 10000 100.00 5.03 100.00 Head Assay (Direct) 6.04

Flotation Tests A flotation kinetic test was carried out on the gravity tailings at a grind of K80 of 67 microns. The test was carried out on a 2 kg sample. Five rougher concentrates were recovered, weighed and analyzed to determine the flotation kinetics. Tables 3 and 4 summarize the cumulative mass pulls and associated gold recoveries. Table 3 – Flotation Test F4 – Grind to K80 of 67 microns

Product Weight Assays, g/t, % %Distribution g % Au S Au S

Ro Conc 1 57.9 2.99 99.85 31.3 85.7 83.1 Ro Conc 1+2 80.8 4.17 78 25.5 93.9 94.8 Ro Conc 1-3 98.9 5.11 64.6 21.1 94.8 95.8 Ro Conc 1-4 120.1 6.20 53.5 17.5 95.3 96.3 Ro Conc 1-5 137.6 7.10 46.9 15.3 95.7 96.7 Ro Tails 1799.1 92.90 0.16 0.04 4.3 3.3 Feed Head (calc) 3.48 1.12 Feed Head (Direct)) 3.56

Over 95% of the gold reported to the flotation concentrate in Test F4, which had a mass pull of 7.1 wt%. The next flotation test (F5) was carried out under the same conditions as Test F4 using approximately 6 kg of gravity tails to produce enough concentrate for cyanidation tests (CN-12, CN-13). The gold recovery on this test was 94.5% with a mass pull of 4.9 wt%.


Table 4 – Flotation Test F5 – Grind to K80 of 67 microns Product Weight Assays, g/t, % %Distribution

g % Au S Au S Ro Conc 1-5 288.3 4.9 71.3 N/A 94.5 N/A Ro Tails 5646.0 95.1 0.21 5.5 Feed Head (calc) 3.66 Feed Head (assay) 3.56 N/A – not analyzed

From the tests, the average gold recovery to the flotation concentrate was about 95 %, in an average mass pull of 6 wt%. Cyanidation Tests Bottle rolls cyanidation tests were carried out on whole ore samples, gravity tailings samples and flotation concentrates produced from the gravity tails. Three cyanide bottle rolls leach tests, (tests CN-7, CN-10, CN-10, CN-11) were carried out on whole ore composite samples ground to 80% minus 75 micons. Samples were taken after 6, 12, 24, 36, 48, and 60 hours of leaching to determine the leaching kinetics. Two bottle rolls tests (tests CN-8, CN-9) were conducted on the gravity tailings, which were at 80% minus 67 microns. Samples were taken after 6, 12, 24, 36, 48, and 60 hours of leaching to determine the leaching kinetics. he sodium cyanide concentration for both the whole ore and gravity tails was maintained at 0.5 g/L and the pH was maintained at about 11 using lime. The leaching was carried out at 50 wt% solids. Two bottle rolls tests (tests CN-12, CN-13) were conducted on the flotation concentrate produced from the gravity tails. Samples were taken after 6, 12, 24, 36, 48, 60 and 72 hours of leaching to determine the leaching kinetics. The sodium cyanide concentration was maintained at 1.0 g/L and the pH was maintained at about 11 using lime. The concentrate was leached at 20 wt% solids. The cyanidation leach results are summarized in Table 5 below. Table 5 – Cyanide Bottle Rolls Results

Reagent Consumption Kinetic Au Extraction (% of CN Feed)

CIL Test No. Feed NaCN

kg/t whole

ore

CaO kg/t

whole ore

6 hr 12 hr 24 hr 36 hr 48 hr 60 hr 72 hr

CN Feed Calc.

Grade, g/t Au

CN Residue

Grade, g/t Au

CN-7 Whole Ore 0.08 0.42 69.4 86.8 92.4 94.6 95.7 N/A N/A 7.29 0.31

CN-10 Whole Ore 0.20 0.78 77.9 88.5 94.8 95.9 98.1 96.6 N/A 5.98 0.21

CN-11 Whole Ore 0.24 0.78 87.5 91.8 94.0 94.3 95.4 96.3 N/A 5.75 0.21

CN-8 Grav. Tails 0.13 0.43 75.5 87.6 90.6 91.8 92.4 N/A N/A 3.56 0.27

CN-9 Grav. Tails 0.16 0.61 76.0 82.3 87.6 89.7 95.1 92.1 N/A 3.42 0.27

CN-12 Flot. Conc. (F5 test) 0.12 0.09 49.0 67.3 84.2 89.1 91.6 91.5 91.5 77.0 6.57

CN-13 Flot. Conc. (F5 test) 0.15 0.10 53.9 70.9 85.3 89.9 91.4 91.4 91.4 65.0 5.65


Leaching of the whole ore yielded the highest gold recovery with an average of 96.2%. The average gold recoveries for leaching the gravity tails and flotation concentrate were 92.2% and 91.4%, respectively. Figure 1 shows the gold recovery versus time for the leaching tests.

Figure 1 - Lac Pelletier Cyanidation - Au Recovery vs Time

05

101520253035404550556065707580859095

100

0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72

Leach Time, hours

Gol

d R

ecov

ery,

%

Test CN-7Test CN-10Test CN-11Test CN-8Test CN-9Test CN-12Test CN-13

The leaching kinetics were slower for the concentrate, which may be due to the high gold content in the feed grade and the particle size. Conclusions The overall gold recoveries are listed in Table 6 below. Direct cyanidation of the whole ore gave the best gold recoveries, an average of 96.2%. The combined gold recovery in the gravity concentrate plus the gold recovered from leaching the tailings was 94.5%. So it appears that there is no advantage to gravity concentration ahead of leaching. Gravity plus flotation of the tails and cyanidation of the flotation concentrate gave the lowest gold recovery, an average of 90.3%. This recovery should be used for the current Golder Scoping Study, which assumes that the Lac Pelletier ore will be processed at the Aurbel mill using the current configuration of the plant; gravity, flotation and leaching of the flotation concentrate. However, based on the recoveries, conversion of the Aurbel mill to whole ore leaching may be more economic. It was recommended by SGS to regrind the concentrate to improve recovery. A test will be carried out at SGS on the concentrate leach residue where the residue will be ground to about 30 microns and re-leached.


Table 6 – Overall Gold Recoveries

Gold Recoveries from Ore Feed CIL Test

No. Feed Gravity, % Flotation,

% Cyanidation,

%

Total Au Extraction (%)

Calc. Head Grade, g/t Au

CN-7 Whole Ore - - 95.7 95.7* 7.29*

CN-10 Whole Ore - - 96.6 96.6* 5.98*

CN-11 Whole Ore - - 96.3 96.3* 5.75*

CN-8 Combined Grav Tails 29.2 - 65.4 94.6** 5.03**

CN-9 Combined Grav Tails 29.2 - 65.3 94.5** 4.89**

CN-12 Flot. Concentrate 29.2 66.9 61.2 90.4*** 5.41***

CN-13 Flot. Concentrate 29.2 66.9 61.0 90.2*** 4.85***

* Cyanidation Only

** Gravity + Cyanidation

*** Gravity + Flotation + Cyanidation

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