MINERAL PROPERTIES

During the Quarter, the Company reported assay results from Holes 1 and 2, taken from a series of 1.5 metre test samples, at ten metre intervals (28 samples in Hole 1, 18 samples in Hole 2) drilled on the C-1 target. The “one metre of granular semi massive pyrite” in Hole 2 assayed 3.52% Ni, 0.17% Cu, 2.7g Pd and 233 ppb Pt over 0.9 metres, from 44.1 metres to 45.0 metres in the hole. This occurrence, given its location could represent the edge of a larger sulphide zone at depth. The intersection lies approximately in the middle of a one hundred metre length in the hole from surface which is characterized by extensive faulting, strong hydrothermal alteration including development of hematite, chlorite and serpentinite. The zone is believed to be steeply dipping and lies about 100 metres to the east of the original VTEM “conductive corridor target” tested in the current drill programme.

The first one hundred metres in the overlying Hole 1 displays similar structure and alteration, although no significant sulphide was seen. A further difference can be seen in the silver content, which in the ten test samples of the Hole 2 interval, lies in the 1- 6 g/t range, as opposed to sub detection levels (mainly less than 0.3 g/t) in the nine test samples from the Hole 1 interval some twenty metres above. This contrast reinforces the idea that we are looking at the top of a hydrothermal system which includes massive nickel bearing sulphides. The balance of the total 46 test samples received to date show only background values for nickel in the 0.1% – 0.2 % range, and geochemically anomalous copper and PGM values in the .01% - .02% Cu, 2-13 ppb Au, 50-200 ppb Pd, 30-90 ppb Pt ranges.

Six holes have been completed on the target for a total of 2400 metres. No massive sulphides apart from that reported have been seen, although thin hairline seams of serpentinite in peridotite are often seen to carry weakly disseminated millerite - a nickel rich sulphide. Faulting and alteration zones are common.

Noront’s Hole 40, which enters Fancamp’s ground at 690 metres in the hole, at a depth of 570 metres, shows numerous massive chromite layers interspersed with pyroxenite and peridotite, and ranging in thickness from fractions of a meter to seven metres, scattered through a 90.9 metre wide section between 632.7 and 723.6 metres in the hole. The massive seven metre thick chromite zone occurs at the bottom of the section. Peridotite containing 5-10% fine grained sulphide, occurs in the 10.5 metre interval between 723.6 and the end of the hole at 734.1 metres.

Assays from about 200 test samples taken at ten metre intervals in Holes 3, 4, 5 and 6 are pending, as are the samples from Hole 40.

Hole 7 has been drilled on the C-6 target, for a total of 381 metres, all of which is in peridotite. No massive sulphides were seen but test samples have been taken at ten metre intervals for assay. The significance of this target is its position in a major north south fracture. It could, like Eagle One and Eagle Two, represent a conduit or feeder zone.