O P E R A T I O N S

H A R R I S O N L A K E P R O J E C T In 1987, Bema International entered into an agreement with Kerr Addison Mines Limited and Abo Resources Corp. to earn a 35% interest in the Harrison Lake Property by expending $1,000,000 on exploration and development. The Harrison Lake Property is located 80 miles east of Vancouver. Extensive exploration drilling has been carried out by Abo and Kerr over the past 6 years concentrating on the Jenner Stock, one of seven

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mineralized stocks on the property.

The 1987 program included 590 feet of drifting, 261 feet of cross cutting, 248 feet of raising and collection of a bulk sample from the Jenner Stock. Because of the nugget effect encountered in previous drilling, an extensive sampling program consisting of more than 1,500 samplesfrom working faces, ribs and muckswere collected and assayed from the 187

meter level. The samples indicated an average grade of 0.10 to 0.12 ounces of gold per ton. The bulk sample containing 1,053 metric tonnes collected from underground was processed through a portable mill established near the portal site. Due to design deficiencies and operational problems the mill failed to adequately recover the contained gold. Based on the extensive numbers of channel and muck samples collected and

Lompany tngmeer: dernara Keniert, P t n g ,

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Gary Nordm, Michael Beley at the poifa/, Jenner Stock

their consistent grade, we are confident that these results indicate a grade of 0.10 to 0.12 ounces per ton gold in the Jenner Stock. Total underground operations and previous drilling indicate a reserve potential in the Jenner Stock to be between 3.0 and 5.0 million tons A narrow but

high grade zone located in the footwall of the Jenner Stock could upgrade millfeed provided from Jenner ore.

Based on results from the 1987 program, L.J. Manning and Associates were commissioned to prepare a Preliminary Engineering

Study to generate a practical mine plan and cost evaluation for the JennerStock. A preliminarymodel was developed assuming an estimated 2,180,000 tons with a grade of 0.10 ounces of gold per ton. recoveries of 90% and a $450 (US) perouncegold price Manning estimates a caDital cost of

HARRISON LAKE PROJECT e JENNEFI STOCI(

I 1987 UNDERiRaRlD DEYaDPMENT

I pR0R)Sp) DEMLOPllENT !

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approximately $25 million for the operation. These low costs can be achieved because of the property's ideal location near a small lower mainland town where virtually no costs are required to provide housing, transportation, power and related facilities. Due to the wide dimension of the mineralized zone, either block caving or sub level caving mining methods will be utilized. A main haulageway from just above sea level will preclude expensive shaft development and hoisting of ore. Based on the Manning Study, gold production cost is forecast at roughly $190.00 (US.) per ounce at a production rate of 1,000 tonnes per day. At this rate of production, the mine would produce 35,400 ounces per year with a ten year mine life. Definition of additional reserves would increase production rates, While the Engineering Study is preliminary, it does indicate positive parameters to proceed with futher development work on

O P E R A T I O N S cont'd

Current Exploration Area

the Jenner Stock. Adrilling program underway on the nearby Portal Stock in early 1988 has encountered substantial widths of intrusive containing extensive visible gold in two drill holes. Drill testing for extensions of this zone is ongoing and could develop substantial additional reserves which would be accessible through the main haulageway proposed for development of the Jenner Stock. Seven additional quartz diorite stocks similar to the Jenner have been located containing substantial qua& vein zones hosting gold mineralization. To date, minimal testing of these targets has been undertaken. An extensive mapping, sampling and drilling program will begin in 1988 to assess the gold mineralization potential in these stocks. In addition, extensive underground drilling from the 187

level is planned to begin in July to test the down dip potential of the Jenner Stock. A successful drill program will be followed by a second underground drift at the 140 level leading to afull feasibility report.

Due to the favourable results of the 1987 program, Bema acquired control of Abo Resource Corp. and bought out Kerr Addison, giving it 1000/0 control of the Harrison Lake Property. In October, Bema acquired 2,500,000 shares from a group of insiders in exchange for 1,000,000 common shares of Bema International. In addition, Bema acquired an additional 600,000 shares of Abo in a private placement with a warrant for an additional 600,000 shares. Four directors from Bema have joined the Abo board of directors to assist in managing the company as a subsidiary of Bema International.

Geology of 187 Level Workings