The Back 40 Project

Back 40 Project is an advanced stage exploration program focusing on a recently discovered polymetallic Zn-Cu type VMS deposit located in Menominee County, Michigan, USA. Early in 2002, drill testing of a geophysical anomaly resulted in the discovery of the massive sulfide deposit. Subsequent drilling in 2003 and 2006 totaling over 33,000 meters has defined several zones of significant zinc-gold-copper-silver mineralization, five of which comprise the current 43-101 resource of 6.64 million measured and indicated tonnes and 1.75 million inferred tonnes. (See table below for grade summary). Massive sulfide has been traced along strike for 700 meters and to a vertical depth of approximately 300 meters. All zones except the East Zone are open and plans for 2007 include an aggressive drilling program to expand the Back 40 massive sulfides and to explore and define adjacent high grade gold zones.

NI 43-101 Resource (April 2007)

The resource consists of massive sulfide, gossan, and stringer sulfide mineralization associated with the East Zone, Hinge and South Limb of the Main Zone, the Tuff Zone and Pinwheel Zone, but does not include mineralization associated with the Deep Zone, or gold mineralization associated with porphyry intrusion margins (PM Zone) and the 90 Gold Zone. Drilling has been ongoing to increase the resource and a new resource calculation is being completed.

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*Mineral resources not classified as reserves do not have demonstrated economic viability, and may be materially affected by environmental, permitting, legal, socio-political or other factors.

Note: The resource update was prepared by Eric Chapman, P.Geol of Datamine International and reviewed by independent "Qualified Person" Theodore A. DeMatties, P.Geol, Geological Consultant, Cambridge, Minnesota, using Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards on mineral resource classification and reporting.

** Inferred resources are conceptual in nature and are based on limited sampling, and will require additional exploration to upgrade to a measured or indicated category.  Mineral resources not classified as reserves do not have demonstrated economic viability, and may be materially affected by environmental, permitting, legal, socio-political or other factors.

The resource has a gross metal content as follows:

Geology

The project area occurs in early Proterozoic (Penokean) aged volcanic rocks of the Wisconsin Volcanic Terrain, an island arc sequence of dominantly volcanic and intrusive rocks  that host  a number of significant VMS deposits and occurrences.  Deposit stratigraphy consists of a stacked series of lithogeochemically distinct, intensely sericitized and silicified rhyolite crystal and fragmental tuffs with intermittent fine-grained ash-tuff horizons, overlain by fine-grained, laminated tuffaceous sediments. Massive sulfide (>80% total sulfide) mineralization occurs at three different stratigraphic horizons.  Structurally, the deposit and surrounding host rocks have been folded into a west-southwest striking, southwest plunging, asymmetric antiform. Numerous syntectonic, west-southwest striking, steeply dipping quartz-feldspar dikes intrude the stratigraphy. Faulting has resulted in minor offsets.

Massive and Stringer Mineralization

Five mineralized zones: Main Zone, East Zone, Pinwheel Zone, Tuff Zone and Stringer Zone comprise the 43-101 compliant resource. Main Zone massive (pyrite+sphalerite) includes the Hinge, where massive sulfide is tectonically thickened to 50-80m thick, and the South limb. Together they account for just over 4 million measured and indicated tonnes of 6.58% Zn. The Main Zone hinge and south limb are separated by a subvertical quartz-feldspar dike. Up-plunge from the Main Zone, the subcropping East Zone also occupies the same fold hinge with thicknesses in excess of 30 meters capped by 1 to 5 meters of gold enriched iron-oxide gossan, totaling 1 million measured and indicated tonnes.

The shallow, copper-rich Pinwheel Zone occupies the moderately dipping northwest fold limb. Pinwheel massive sulfide (pyrite + chalcopyrite + bornite + sphalerite) is exemplified by drill intercepts of 19.9m of 7.70% Cu and 201.4 g/t Ag and 33.3m of 3.7% Cu, 1.8% Zn, 2.1 g/t Au, and 50.2 g/t Ag. The updip portion of the Pinwheel Zone is capped by 1 to 20 meters of outcropping precious-metal enriched gossan.

Gossan and massive sulfide from the Pinwheel Zone (DDH LK-116)

The Tuff Zone is found in the more steeply dipping south limb and exhibits locally impressive grades, but less consistent thicknesses (e.g. drill intercepts of 9.5m of 20.8% Zn, 152.5 g/t Ag and 6.2m of 18.4% Zn, 2.9 g/t Au, 147.8 g/t Ag). Stringer Zone mineralization (1.16 million tones @ 3.17 g/t Au inferred) consists of rhyolite-hosted pyrite+chalcopyrite+sphalerite stockwork (20-80% sulfide) that is footwall to the East and Main Hinge Zone massive sulfides.  The Deep Zone has been intersected in relatively few holes and therefore is not included in the 2007 resource figures.  It occurs as massive pyrite + chalcopyrite + sphalerite below the Main Zone within rhyolite 1. Examples of Deep Zone intercepts include 35.6m of 5.7% Zn and 6.7m of 1.75% Cu and 1.03% Zn.

Gold Mineralization

In addition to gold values in both the massive and stockwork-stringer sulfide zones, significant gold mineralization has been intersected in a shallow, updip portion of the tuffaceous sediments and chloritic tuffs (“90” Zone) as well as at or near the structural footwall contact of the large quartz-feldspar porphyry intrusion (QFP) that occupies the hinge of the main fold structure (PM Zone).

90 Zone

Thus far, 12 closely spaced drill holes have defined a tabular zone of gold and silver mineralization ranging from 7 meters to greater than 20 meters of estimated true thickness, extending from surface to a depth of 70 meters, and along strike for 45 meters. Mineralization consists of 5%-10% disseminated pyrite with lesser arsenopyrite, chalcopyrite and galena hosted in siliceous sediments and chloritic-siliceous fragmental rhyolite tuff. Gold mineralization is associated with variable silicification and may be structurally controlled, sub parallel and slightly crosscutting the section. The high-grades (up to 26.2g/t/1.5m) in the zone appear at least in part to be related to supergene oxidation. However, high gold grades have been found in unoxidized deeper portions of the zone as well. Assay results from the first twelve closely spaced drill holes from the 90 Zone are shown in the table below and graphically depicted in cross sections and plan view referenced below.

Plan View 90 Gold Zone Bedrock Geology
Cross Section Looking West 435005 E
Cross Section Looking West 435015 E
Cross Section Looking West 435025 E
Cross Section Looking West 435035 E
Cross Section Looking West 434995 E

PM Zone

Visible gold from the PM Zone (DDH LK-80)

Drilling in the central region along the axial plane of the folded stratigraphy hosting the Back Forty massive sulfides has outlined a zone of high-grade gold mineralization along the north margin (footwall) and interior of the central quartz feldspar porphyry intrusive.  Named the Porphyry Margin, or PM Zone, it is defined by intercepts spanning 140 meters of strike length and 230 meters down dip.  Gold mineralization is closely associated with pervasive, moderate to intense silicification.

Sulfide mineral assemblages include fine to medium-grained, pyrite + arsenopyrite + galena + sphalerite + chalcopyrite + pyrrhotite and locally visible free gold. Intercepts from this zone are summarized in the following table:

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Current Activity

Mineralized zones projected to surface with drill hole locations from latest press release

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 Exploration Potential

Potential to expand the existing massive sulfide zones is excellent. All massive sulfide zones except the East Zone remain open on strike or along stratigraphy. Geophysical surveys (downhole PEM, ground HLEM, gravity, magnetics) indicate probable untested extensions of the South Limb, Tuff, and Pinwheel zones.  Wide stepout drilling in 2006 (DDH LK-110) indicates that mineralization and ore-zone related stratigraphy and alteration persists to the southwest.  The Tuff Zone has not been drilled along its surface projection where there is potential for enriched gossans similar to the East Zone. Numerous GEOTEM airborne EM anomalies remain to be tested and gold mineralization in both the 90 Zone and PM Zone is open to expansion as well.