A REPORT

ON

PROSPECTING ACTIVITIES

conducted on

MINING CLAIM #1231100

KITTSON TOWNSHIP

1.28501

1 RECE\VED SEP 24 ::,~'i

\iEOSC1ENCf ~SSESSMENl OffiCE

Larder Lake Mining Division

Province of Ontario

PREPARED BY:

HAROLD A. WATTS P.O. Box 136 Latchford, ON POJ 1NO 705-676-2081

TABLE OF CONTENTS

Introduction, Location and Access

Property Location Map

Regional Geology

Previous Exploration

History of the Property and Conclusions

Current Work Program

Work Log

Equipment Used

Conclusions and Recommendations

Plan of Trenches in shaft area

Excerpt of Claim Map, G-3418

Certificate

1

2

3

4

4

6

6

7

7

9

10

11

INTRODUCTION

The property is Mining claim #1231100, comprising 9 claim

units. The recorded holder of the mining claim is Harold A. Watts,

Licence #S-3322. The said mining claim is located in the Township

of Kittson, in the Larder Lake Mining Division, approximately seven

miles north of Latchford, Ontario, on the south side of Bay Lake

where the Montreal River enters the lake.

LOCATION AND ACCESS

Latchford is five miles south of Cobalt, Ontario, and is in

the Larder Lake Mining Division, located on NTS Sheet #31M/SW.

The property coordinates are 79 0 54' longitude and 47 0 23'N latitude.

The property is readily accessible by water from Portage Bay Lodge,

3-1/2 miles to the east, or from the Town of Latchford, 7 miles to

the south.

Page 1

REGIONAL GEOLOGY

Rocks underlying the property consist mainly of Keewatin

greywacke, diabase and quartzite. The Justin Creek Break, which

can be traced for 3 miles, traverses the claim in a north-south

direction. The shaft and workings are in close proximity to the

fault and explore a number of narrow calcite veins occupying

fissures relating to the main Justin Creek Break.

The dominant regional structure trends to the north-west and

is represented by the Latchford Fault which runs through Bay Lake

on the eastern edge of the property. The area has been intruded by

the Nipissing Diabase sill.

Mineralization occurs along the edge of the sill in calcite

veins. Three mines have extracted cobalt in the immediate area:

the Shakt-Davis, Edison and Cobalt-Kittson mines.

Kittson mine is a part of the subject property.

The Cobalt-

Mineralization within these deposits include smalltite,

cobaltite, gerfsdarfite, erythrite (cobalt bloom), annabergite

(nickel bloom), pyrite, chalcopyrite, niccolite, silver and gold.

The area has potential for precious base metal mineralization

along the sill. An airborne survey north of Bay Lake indicated

several conductors at depth beneath the proterozoic sediments.

Page -3-

PREVIOUS EXPLORATION

In the early 1900 l s several high grade cobalt, silver veins

containing nickel and varying amounts of gold were explored in the

region. Many of these veins are striking NE SW and the previous

program of line-cutting, EM and Mag to determine geological trends

and identify these and other unexplored vein systems that may occur

on the claims, has been completed and a separate report written.

HISTORY

The following is an excerpt from an Ontario Department of

Mines report in the Resident Geologist's Office:

"The property consists of 5 claims located in Kittson and Coleman Townships on the Montreal River, about 6 miles north of Latchford. The first recorded work on the prospe ct was in 1927 when the Cobal t - Ki t t son S i I ver Mining Syndicate did some surface work, installed a small mining plant l and sank a 2-compartment shaft to a depth of 250 feet. The following year the Cobalt-Kittson Mines l Limited l was incorporated to acquire and further develop the property. During 1928 an 1929 and the early part of 1930 1 this company deepened the shaft to 628 feet and carried out lateral work on 4 levelsj 30 feet on the 60-foot level; 368 feet on the 250-foot level; 860 feet on the 450-foot level; and 400 feet on the 625-foot level. Values in Cobalt 1 silver, gold and nickel were encountered but no positive ore shoots were outlined. Channel samples from the 450-foot level 1 said to be from a vein 2.5 to 4 feet wide l are reported to have averaged 2% to 4% cobalt; 4% to 13% copper; 3 to 6 oz/ton silveri and $4 to $7/ton gold (gold at $20.67/oz). High grade cobalt mineralization was reported also from the other

Page -4-

levels. Work on the property ceased in the latter half of 1930."

CONCLUSIONS

Regarding the Department of Mines report, samples across the

2-1/2 to 4-foot wide vein reported from the 860-foot long drift on

the 450-foot (depth) level of the mine yielded:

2-4% Co.av. = 4-13% Cu. = 4-6 oz Ag 4-7 dollars Au @

3% = 8.5% = 4.5 oz

$20.67

60 lb. Cobalt 170 lb. Copper

Silver 0.26 oz.ton

As you can estimate, values exceed $1800./ton, which makes this a

very valuable property. No assays were given for nickel which is

also present.

Since this vein sampling was carried out on the 450-foot level

of the mine for a horizontal distance of 860 feet, it would be

reasonable to assume a depth of at least 450 feet or 225 feet above

and below the level. At an average width of 3.25 feet, this area

would yield about 105, 000 tons in place or about $190, 000, 000.

Dollars gross.

Since surface Mag and EM surveys show that the vein system

extends far beyond these boundaries, this then becomes a very

viable property. In the vicinity of the shaft, the mag anomaly,

while quite narrow, is very pronounced.

Page -5-

CURRENT WORK PROGRAM

An area just north of shaft between two 01 trenches and

a strike with vein system, was cl of trees and bush and a

pit was dug down to bedrock in an attempt to expose the vein.

Bedrock when reached at 6 was diabase, but steeply dipping to

the west which made it too deep to shovel further to try to expose

the vein.

WORK LOG

September 1 to Pit #03 01 digging 2 112 September 14, trench 2003 daily (13 working days total)

Sept 20 & 22, report 1 8 2004 writing

Persons Working:

H. Watts Sept 1 to Sept 14, inclusive 112 Sept 20 & 22, 2004 8

C. Watts 1 to Sept 14, inclusive 112

Costs:

H. Watts 112 hours @ $40.00 $ 4,480.00 C. Watts 112 hours @ $30.00 $ 3,360.00

Page -6-

EQUIPMENT USED

Husqvarna chainsaws 38

Husqvarna brush saw 235

Yamaha "Big Bear" 4x4 350

ATV trailer

Yamaha ATV tri moto 200E

14 aluminum boat with 20 hp out:board motor

L 16' X 8' barge with motor to move equipment up Lake

3 shovels

2 picks

1 mattox

1 adze

1 5 foot "bull prick" sounding bar fo:r-probing overburden

1 sledge hammer

CONCLUSIONS AND RECOMMEND.ATIONS

The property lies in the Cobalt silver-cobalt area of Ontario,

the diabase sill which hosted the area of the camp that produced

nuch of the ores of Cobalt is the same as that which traverses the

subject property_

There are several strong faults on the property_ The surface

~nd underground showings on the prope~ty contain smal_tite,

niccolite, silver and gold in strong fracturing.

Page -7-

The property has real merit and it is recommended that:

1. The picket line grid be recut and geological mapping be

completed.

2. Surface diamond drilling be carried out beginning in the

vicinity of the shaft and on the better geophysical targets.

3. The shaft be dewatered and underground workings be sampled.

Page 8-

Respectfully submitted

September 23, 2004

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-- KITTSON COBALT PROPERTY

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.. ,or PLAN OF TRENCHES IN SHAFT AREA

Scale 1 :2500

"- Drawn by H. Watts .... Date: September 22, 2004

J 1 1 1 I 1 1 I

. Printed Map :1-~~!!~~~~=8H=~~~~~~r-=~~~r~rnlProperties

Claims Is · now the Active Layer

(!'. Letter ~igh Reso lution)

C Legal (High Reso lu ·on)

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CERTIFICATE

I, HAROLD WATTS, certify that:

1. I graduated from the Haileybury School of Mines in Haileybury,

Ontario, in May 1955.

2. I reside at 66 Sullivan Avenue, in the Town of Latchford, in

the County of Temiskaming, Ontario.

3. My mailing address is: P.O. Box 136

Latchford, Ontario

POJ INO

4. I have worked in the mining industry since 1950 and have

practiced geophysics since 1966.

5. I personally attended the subject property and supervised all

the work thereon.

SIGNED at Latchford, Ontario, on September 23, 2004.

HAROLD WATTS

Page -11-

HAROLDA. WATTS P.O. Box 136 Latchford, Ontario POJ INO (705) 676-2081

January 29, 2005

Senior r'!.anuser, Mining LDnds SecLcn

Geoscience Assessment Office TINlE Ministry of North em Development and Mines

933 Ramsey Lake Road, 6th floor

R EM." ""'IVED / v " ~--,..,..--. '"'" ..... ,....... .,~ .. "''''''''-..... " ..... ~J

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,JAN ,;), :a't;:;:; ; Sudbury, Ontario P3E 6B5

Attention: Bruce Gates

Dear Sir: ._.j

RE: Transaction # W0480.01512 Submission # 2.28501

-, ·1

I.. .J () (.b l£C .... : .' ..- -, Ij;1JI ~-': :: '. . .... ~'. f

More s:::n::1:0 ::::::::::o:~O:~ results: ~:, ;',_~±~=:~I • a trench was dug; use sounding bar to prospect likely areas for digging of the

trench and when decided cut down trees with a chainsaw in the area where you plan to dig, throw (or using 4-wheeler) winch the branches and trunks of trees aside away from the area where you plan to dig, use a pick and mattox and adze to cut roots of trees which remained in the ground after cutting and remove overburden, use a shovel to dig and lift boulders and gravel from the area where you are digging, use a sledge hammer to break large boulders which hamper your

• digging when reaching bedrock, continue clearing area in same fashion to enlarge trench searching for vein

The map shows the location of trench, the dimensions of the trench, where the trench is situated within the claim.

• the "current work program" portion of the submitted report states as follows: • dug down to bedrock • bedrock reached at 6 feet was diabase • vein not located

Samples of diabase were not taken, and I do not intend to take samples of diabase until the price of same reaches a monetary value.

Yours truly

HAROLD WATTS

cc: Ron Gashinski

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