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Results of Mobile Metal Ion (MMI-M) Soil Geochemical Surveys, Palmer Project, Sault Ste. Marie Mining Division, Ontario Prepared For China Metallurgical Exploration Corporation 145 Riviera Drive, Unit 7 Markham, Ontario L3R 5J6 Tel: 905-968-1166 Prepared By M.A.F. Fedikow Ph.D. P.Eng. P.Geo. C.P.G. Mount Morgan Resources Ltd. P.O. Box 629 50 Dobals Road North Lac du Bonnet, Manitoba R0E 1A0 Tel: 204-284-6869; Cell: 204-998-0271 FAX: 204-284-6869
Transcript

Results of Mobile Metal Ion (MMI-M) Soil Geochemical Surveys, Palmer

Project, Sault Ste. Marie Mining Division,

Ontario

Prepared For

China Metallurgical Exploration Corporation 145 Riviera Drive, Unit 7

Markham, Ontario L3R 5J6

Tel: 905-968-1166

Prepared By

M.A.F. Fedikow Ph.D. P.Eng. P.Geo. C.P.G. Mount Morgan Resources Ltd.

P.O. Box 629 50 Dobals Road North

Lac du Bonnet, Manitoba R0E 1A0

Tel: 204-284-6869; Cell: 204-998-0271 FAX: 204-284-6869

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 2

EXECUTIVE SUMMARY

This report presents interpretations based on the collection of 384 soil samples with analysis by

MMI-M from the Palmer project of the China Metallurgical Exploration Corporation

(“CMEC”).

The East Grid of the Palmer Property is marked by a well developed, multi-sample, linear

and northeast-trending Zn, Cd, Pb, Bi, In, K, P, Mn, Th and Ti anomaly. When the MMI

anomalies are compared to the chargeability features it becomes apparent there is a

reasonable correspondence between the Zn, Cd, Pb, Bi, In, K, P, Mn, Th and Ti anomaly

described earlier in this report and the IP anomaly. The two overlapping features are

likely attributable to a zone of disseminated to near solid sulphide mineralization with

Zn-rich mineralogy. The fact that there is excellent correspondence between Zn and Cd

strongly supports the Zn-rich nature of the source region that produces the MMI and IP

features and that the Zn mineral in the source zone is sphalerite. The presence of In and

Bi in association with the Zn-Cd responses are not unexpected since these elements are

common components of Zn-rich mineralization. The K, Mn and P are likely components

of iron formation noted in the survey area (Marc Gaudreau; pers. comm.) whereas Th

and Ti reflect a lithologic signature, possibly of mafic volcanic rocks and chemical

sediments.

Subsequent to verification of the sampling protocols on this property the East Grid

should be followed up by integrating all available data and drill testing. The nature and

chemical makeup of the East Grid anomaly suggests a zone of base metal mineralization

with low precious metal content. The low precious metal content may be due to the

sample collection being too low in the soil profile.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 3

The West Grid has very few significant MMI element suite responses. There are some

low-contrast Zn-Cd responses on this grid; however sample collection may have a direct

bearing on these results.

It is recommended that since sample collection is at the heart of an MMI soil

geochemical survey and without proper sampling protocols the results are necessarily

suspect. The sample collection at Palmer has been modified from that demonstrated to

be optimum. In addition, no vertical profiling of the survey area has been done.

Accordingly, the following steps are recommended before drill testing of the

“anomalous areas” is undertaken:

(i) Return to the East Grid and establish a short sampling transect that cuts

through the multi-element anomaly on the East Grid. Line 7+00S would

seem to offer the best opportunity to assess the sampling integrity.

(ii) Dig pits to coincide with the highest responses for the base metals.

(iii) Collect one sample from each pit at the 10-25 cm depth below the

contact between organic and inorganic soils.

(iv) From one pit, preferably over the base metal anomaly, collect four

samples at 10 cm intervals starting at the organic-inorganic contact. The

first sample will be 0-10 cm, followed by 10-20 cm, 20-30 cm and finally

30-40 cm. Each sample must be a vertical channel sampling all material

from top to bottom of the interval.

(v) Submit these analyses for MMI-M analysis.

The results will demonstrate whether acceptable results were obtained with the

first sampling program based on the responses for the anomaly-forming

elements. Secondly, the vertical profiling will indicate the optimum sample

depth.

An MMI anomaly does not indicate the depth to the source mineralization.

Therefore it is important that the depth to the source mineralization be

estimated by modeling any geophysical surveys that have been done on the grid.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 4

Since IP has been done at Palmer the depth to source and the orientation of the

mineralized zone can be estimated. Then, a drill hole can be determined with

appropriate inclination and declination over a suitably high MMI response.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 5

INTRODUCTION

This report describes the results of a Mobile Metal Ions (MMI) Technology soil

geochemical survey conducted at the Palmer Project. This work was conducted in the

summer of 2012. The intent of the survey is to assess two grid areas (the East Grid and

the West Grid) on the Palmer property for geochemical signatures related to buried

base and precious metal mineralization. Sample collection was contracted to Dan Patrie

Exploration Ltd. Induced Polarization geophysical survey results are compared with the

MMI results from this property.

PROJECT LOCATION AND ACCESS

The subject property is centered at 84°-35°W longitude, 46°-59°N latitude (UTM

coordinates, Zone 16, 684000mE, 5207000mN, NAD 83) in Palmer Township (G-

2478),District of Sault Ste. Marie, Ontario approximately 40 km north of Sault Ste.

Marie, Ontario and 3 km east of Batchawana Bay, Ontario on the east side of Lake

Superior. From Sault Ste. Marie, it is 64 km north on provincial highway 17 to the village

of Batchawana Bay. Four kilometers southeast of Batchawana Bay is the Tribag Mine

road which leads north from highway 17 for 4 km then an old logging road traveling

west 2 km to the East Grid. A gravel road 400 meters north of the village of Batchawana

Bay leads east 3 km to the West Grid. There is no significant infrastructure in the area

apart from the access roads.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 6

Figure 1: Location of the Palmer MMI Project area.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 7

DESCRIPTION OF THE PALMER PROPERTY

The Palmer Property is comprised of 14 mining claims in good standing containing 162

units and covering approximately 2,592 ha. The Property is located within Palmer

Township, claim map (G-2478).

GEOLOGY OF THE PALMER PROJECT AREA (From CMEC)

The subject property is located in the Batchawana Greenstone Belt (BGB) at the western

end of the Abitibi Subprovince. The BGB extends on an east-northeast trend from the

eastern shore of Lake Superior at 47°N latitude. The Palmer property is 3 km to the east

and is underlain by mafic to intermediate volcanic rocks of the Griffin Assemblage.

The Batchawana Greenstone Belt is subdivided into the metavolcanic Griffin and Dismal

assemblages, and the metasedimentary Wart assemblage. The greenstone belt is

gradational into migmatite of the Ramsey Gneiss Domain to the northwest and east; 2)

intruded to the south by the Algoma Plutonic Domain, which includes massive tonalite

and granodiorite intrusions and some gneissic units; and 3) separated from the

Chapleau Gneiss Domain migmatite and syn- to post-massive granodiorite and granite

by the Montreal River fault.

The western part of the greenstone belt is overlain by Keweenawan metavolcanic rocks,

Upper Keweenawan metasedimentary rocks and the Mesoproterozoic Jacobsville

formation. Metamorphic grade in the belt varies from greenschist in the central areas to

amphibolite facies; locally, anatectic migmatite exists near the plutonic-gneiss domains.

Synvolcanic, 2716 million-year old external tonalite plutons were emplaced into the

southern part of the greenstone belt (Griffin Assemblage) and into the Algoma Plutonic

Domain. Isoclinal folding and metamorphism of greenstone belt units occurred between

2677 and 2668 Ma, coincident with the emplacement of structurally concordant, syn-

tectonic to late tectonic diorite, tonalite and granodiorite plutons into the Ramsey

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 8

Gneiss Domain, and the emplacement of several small, post-tectonic, internal plutons

into the greenstone belt. Contact metamorphic aureoles, which are related to the late

internal intrusions, are superimposed upon the regional metamorphic pattern. Diabase

dykes of the northwest-striking Sudbury and northeast-striking Preissac dyke swarm cut

all Precambrian rocks.

Most mineral deposits in the belt are located in the western part of the Greenstone belt

with both Archean and Proterozoic copper mineralization being present. Proterozoic

copper mineralization consists of carbonate、quartz、barite、chalcopyrite、pyrite and

molybdenite within breccia pipes cutting Archean metavolcanic and granitoid rocks.

GEOPHYSICS OF THE PALMER PROJECT AREA (From CMEC)

Property geology and the collection of magnetic and electromagnetic information were

elucidated by 2 Induced Polarization (IP) geophysical surveys carried out between the

26th to the 27th of July 2012 and 27th to 28th November. Surveys were undertaken by

Dan Patrie Exploration Ltd. on behalf of CMEC over its Palmer and Ryan property. The

survey coverage for the area is in the east portion of claims 4249406, 4249407, the west

portion of claim 4249412.

A total of 4.65 km IP survey lines along 6 previously cut lines in 2 grids, West and East,

were carried out on the first time by the Batchawana First Nation (BFN) Phil Swanson. 3

lines on the West Grid (2.65 km) with an “a” spacing of 50 m showing in the with blue

lines and black line and an “a” spacing of 25 m on the 3 lines of the East grid (2 km)

showing with 6 levels on both grids being read (n = 6).

Based on the anomaly of the first time results, another IP survey on the West Grid was

undertaken with a combination array with n of 1 to 5 using 25 m long and 2 additional

levels n = 7 to 9 using 50 m long, 25 m sampling. A total of 3.15 km were covered by the

IP survey. The location of the lines are shown in (Figure 2) with the pink lines and black

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

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line.

Figure 2. Location of IP survey lines.

Results

There is one moderate-strength IP anomaly on the East IP grid indicated a broad zone of

increased 13 chargeability that may be due to disseminated sulphides, trending 65°–

245° and in the order of 300 m wide. The anomalous values occur at depth on levels 4, 5

and 6. A number of strong IP anomalies on the West IP grid that may describe 2 or more

IP northwest trending IP zones that are at least 500 m long on the first time IP survey.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 10

As the second time follow-up pole-dipole IP survey was completed on the 3 new lines of

the Palmer Property West Grid in late November and early December 2012. The results

from the 2 surveys, July 2012 and the November 2012 in the West grid, indicate an

N45oW trending zone of anomalous chargeability up to 2.5 by background and with an

associated low resistivity. The zone is in the order of 500 m wide, has a strike length of

at least 1200 m and continuity to a depth in the order of 150 m and more. The zone is

open along strike to the northwest, southeast and to depth.

GEOCHEMISTRY OF THE PALMER PROJECT AREA

A Mobile Metal Ions soil geochemical survey was undertaken on two grids on the

property. These include the East grid where 230 soil samples were collected and the

West grid where 154 soil samples were collected. Sample locations with labels are

presented in Figures 3 and 4.

Mobile Metal Ions (“MMI-M”) Soil Geochemical Survey

Figure 3 depicts the locations of soil samples for the 2012 program in the Palmer Project

area. MMI-M samples were collected at 384 sites on the Palmer Property in 2012.

Samples were collected from hand-dug pits at a constant depth of 10-25 cm below the

base of the B-Horizon. Sample collection was done by Dan Patrie Exploration (P.O. Box

45, Massey, Ontario, P0P 1P0; Telephone 705-844-2113) under the supervision of Brent

Patrie.

The sample was collected as a single continuous sample or vertical channel. Samples

were referenced to UTM coordinates using a Garmin GPS (NAD83 Zone 16 Datum). All

samples were analyzed for MMI-M at SGS laboratories in Toronto, Ontario. Sample UTM

coordinates and analyses as received from CMEC and SGS Mineral Services (Toronto) are

presented in Appendix 1. Appendix 2 contains all worksheets and Tables and figures are

presented in Figure 3. The following sections describe the results from MMI-M partial

extraction for 19 elements interpreted to be useful in the survey.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 11

Figure 2: Location of 2012 MMI soil sample sites on the East Grid of the Palmer

Property.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 12

Figure 4: Location of 2012 MMI soil sample sites on the West Grid of the Palmer

Property.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 13

PREAMBLE – MOBILE METAL IONS TECHNOLOGY

The exploitation of mineral commodities in the near-surface geological environment has

become increasingly difficult due to the exhaustion of mineralization exposed at surface

and the mantling of prospective bedrock by residual soil or glacially transported till and

its derivatives. Thick residual soils and glaciofluvial and glaciolacustrine sediments

topped by organic deposits make mineral exploration in these terrains challenging. For

this reason a plethora of innovative exploration geochemical selective and partial

digestions, coupled with state-of-the-art instrumentation capable of measuring

concentrations in the parts per billion (ppb) and sub-parts per billion ranges, have been

developed. These techniques offer the explorationist tools to "see through" overburden

and derive useful mineral exploration data for integration with geology and geophysics

and ultimately for drill-testing multivariate anomalies.

The proprietary Mobile Metal Ions Process (MMI) soil geochemical technique has been

utilized on a wide range of commodity types from base and precious metals to

diamonds worldwide. The Process is based upon proprietary partial extraction

techniques, specific combinations of ligands to keep metals in solution, and relies on

strict adherence to sampling protocols usually established during an orientation

program. Geochemical data resulting from MMI analysis of improperly collected soils

cannot be ameliorated with univariate and/or multivariate statistical

and graphical solutions.

The recognition of anomalies in geochemical data has progressed from simple visual

inspection in small data sets to multivariate, parametric and non-parametric or robust

statistical methods for large datasets usually extracted from regional geochemical

surveys. Derived parameters from these statistical exercises, such as factor scores or

discriminate functions, have been successfully utilized in reducing a large number of

potentially useful variables to a select few variables that identify and localize anomalous

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 14

geochemical signatures. These statistical approaches have been required to manipulate

accurate and precise, low-cost, multi-element geochemical data.

The MMI technology uses a different approach to exploration geochemistry by analyzing

soils for a select few commodity elements upon which to base property evaluations.

Having stated this, the demand from explorationists for a more comprehensive package

including pathfinder element suites resulted in the development of “MMI-M”. The

MMI-M multi-element suite was utilized to analyze inorganic soils from the Palmer

Project area and provides analyses for 53 elements. These are a multi-element suite that

report ppb and sub-ppb analyses for base and precious metals, pathfinder elements for

these commodities, as well as elements useful for mapping bedrock geology obscured

by overburden and its derivatives. The large number of elements in the database

provides an opportunity to assess an area of interest for a wide range of metallic

mineral deposits with only minor drawbacks in terms of lower limits of determination.

Mobile Metal Ion Sample Collection and Analysis

In MMI surveys there are some general approaches that are used to guide sample

collection including preferred depths of sampling and these are described briefly here. A

wealth of additional information is also available from the SGS website

(www.sgs/geochemistry.com).

Soil samples, each weighing approximately 250 grams, are normally collected at 25-m

stations in precious metal exploration and up to 50-m in the case of base metals. For

larger targets such as porphyry copper systems the sampling spacing can be increased to

250 m or more. Sample spacing should be established on the basis of a “best-estimate”

of the likely target being sought with estimates from historical data or exploration

results from nearby/adjacent programs. Sample locations are usually documented

according to grid coordinates and GPS readings at each station. Samples are then

collected from a consistent depth of 10-25 cm beneath the point at which soil formation

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 15

is initiated in the particular landscape environment where the survey is taking place.

Samples are normally collected with a stiff vinyl trowel after the initial sample pit was

dug with a shovel. The shovel is clean without paint or rust. In particularly hostile

overburden scenarios where significant thickness of organic soils is encountered,

samples may be collected with an auger. A Dutch auger has been found to be

particularly useful for this purpose although maintaining a consistent sample depth with

an auger is difficult. Samples are bagged on site without preparation and shipped to SGS

Laboratories (Toronto, Ont.) for MMI-M analysis. Analytical finish for all extractions is by

inductively coupled plasma-mass spectrometry (ICP-MS).

Analytical duplicates and a standard MMI reference sample are utilized by SGS Mineral

Services (Toronto) to monitor analytical accuracy and precision. Analytical blanks

monitor laboratory-based contamination. The analytical data for all samples are

presented in Appendix 1 and all other work data sheets are presented in Appendix 2.

Figures generated for this report are presented in Appendix 3.

Analytical Protocol

Mobile Metal Ions (MMI) Process

The proprietary Mobile Metal Ions Process (MMI) soil geochemical technique has been

utilized on a wide range of commodity types from base and precious metals to

diamonds worldwide. The MMI Process is based upon proprietary partial extraction

techniques and specific combinations of ligands to retain metals in solution once they

are stripped from individual soil particles. The MMI method relies on strict adherence to

sampling protocols usually established during an orientation program. An orientation

survey is normally conducted prior to the full-blown exploration survey. The orientation

comprises a series of hand dug pits established over a known mineralized target,

geophysical anomaly or a unique lithology. The sample pit is 40 cm deep and exposes 40

cm of inorganic soil. Organic soil (peat or humus) is not recommended for sampling. A

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 16

series of four samples are collected at 10 cm intervals below the organic/inorganic soil

contact. Analysis of these samples using MMI extraction will determine at what depth

the optimum base and/or trace element signature can be isolated. Geochemical data

resulting from MMI analysis of improperly collected soils cannot be ameliorated with

univariate and/or multivariate statistical and/or graphical solutions. Samples analyzed

using the MMI methodology require no preparation subsequent to collection and are

shipped to Toronto (SGS Minerals Services Laboratories) and analyzed. The method

targets recently arrived “mobile metal ions” that have traveled from buried/blind

mineralized sources at depth and migrated vertically to surface. The method is

effectively substrate independent and analyses are presented at parts per billion or sub-

parts per billion concentrations. Exceptions are Al, Ca, Fe and Mg, which are quoted in

ppm. Since the MMI-M extraction was utilized for the MMI surveys there are a wide

range of metals reported including precious and base metals and related or “pathfinder”

elements as well as lithologically-sensitive metals. Quality assurance, quality control,

analytical blanks and standards ensure analytical data is both accurate and precise. The

addition of new instrumentation, including an Elan DICP-MS to the SGS laboratory,

permits the measurement of low-level Cr to 1 ppb, a distinct advantage that allows the

differentiation between a Ni signature from a mafic or ultramafic lithology and a Ni

signature from Ni sulphide mineralization.

DATA TREATMENT

Analytical data from the Palmer Project was examined visually for analyses less than the

lower limit of detection (<LLD) for ICP-MS. Data <LLD were replaced with a value ½ of

the LLD for statistical calculations and graphical representation. The 25th percentile for

these data was determined using the software program SYSTAT (V10) and the arithmetic

mean of the lower quartile used to normalize all analyses. The normalized data

represent "response ratios" which were utilized in subsequent plots. Zeros resulting

from this calculation are replaced with “1”. Response ratios are a simple way to

compare MMI data collected from different grids, areas and environments from year to

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 17

year. This normalized approach also significantly removes or "smoothes" analytical

variability due to inconsistent dissolution or instrument instability.

Some elements within the Palmer dataset were excluded from statistical assessment

due to the significant number of samples with values at or <LLD. These included As, Au,

Cr, Li, Mo, Pd, Pt, Sb, Sn, Ta, Te and W. Peat samples were excluded from the data set.

Organic soils do not respond well, if at all to MMI partial extraction.

DATA PRESENTATION

Analytical MMI-M data from the survey is presented as two-dimensional bubble plots

for elements deemed to be useful indicators of signatures related to potential

mineralized zones. These plots include Ag, Au, Bi, Cd, Cu, Fe, Ga, In, K, Mn, Nb, Ni, Pb, P,

Sc, Th, Ti, Zn and Zr and are inserted in the report accompanied by a geochemical

narrative. Plots were produced with Vertical Mapper, a module within the MAPINFO

platform.

DATA DESCRIPTION

The 25th percentiles and backgrounds used for the calculation of response ratios for the

Palmer Project soil samples are presented in Appendix 2. The dataset is marked by a

number of elements that have numerous samples at or below the lower limit of

determination (LLD). These include the elements As, Au, Hg, In, Li, Pd, Pt, Sb, Sn, Ta, Te,

Tl and W. These elements are typically less mobile than Cu or Zn and their presence in

measurable quantities in a small number of samples is testament to this. The high

percentage of samples with Pd, Pt, Sn and Ta contents <LLD in this survey is not

surprising given their very low mobility in the surficial/secondary environment. In this

regard, any MMI-M analysis for Pd and/or Pt that is >LLD should be reviewed with care

for its overall significance in the survey and be field checked for possible association

with platinum group metal geological environments. The absence of coincident,

elevated Cd responses with high-contrast Zn response ratios in some samples can be

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 18

cause for concern. Generally, coincident Zn-Cd responses are interpreted to represent

bedrock-hosted sphalerite mineralization. The absence of Cd is suggestive of the

possible derivation of Zn from anthropogenic contamination from cultural and/or

industrial activity. This can result in what has been described as a “false” geochemical

anomaly.

For purposes of interpretation of the MMI-M data, element responses are described as

follows: 1-10RR (very low-contrast and generally insignificant); 11-20RR (low-contrast);

21-50RR (moderate-contrast) and >50RR (high-contrast). These are arbitrary divisions

based on observations from numerous MMI surveys undertaken in glaciated terrain and

are not necessarily the only method of data interpretation.

Histograms and Tukey Box Plots

Histograms-Distribution of the Elements

The distribution of select commodity and lithologically-sensitive elements are presented

in histograms below. The commonality amongst this group is the positively skewed

nature of each element presented (Figure 5). For these elements this is due to the large

number of samples that report in the very low parts per billion concentration range. A

review of these histograms also indicates that for the commodity elements selected for

presentation each has a long positively skewed distribution with a “tail” of high

concentration. This is strongly suggestive of an anomalous or elevated data population

and that this population may be related to mineralization.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 19

Figure 5. Histograms for commodity and lithologically-sensitive elements, Palmer

Project.

Tukey Box Plots

Another method of examining commodity elements is a Tukey box plot based on a

common Y axis for these elements (Figure 6). The Box plot below illustrates the range in

concentration for the same suite of elements in the histograms and suggests that the

elements Zn and Cd followed by Ga and In have very strongly skewed distributions with

some samples having very high concentrations >19,000 ppb Zn and >350 ppb Cd. If Zn is

removed from the suite of elements that are plotted, other highly elevated elements

include Ga and In (Figure 7). The elements P and Nb are likely indicators of lithologic

differences within the survey areas. The elements with the greatest range in

concentration are most likely to be the anomaly-forming elements.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 20

Figure 6. Tukey Box plots for all elements of interest in the Palmer MMI survey.

Figure 7. Tukey Box plots for all elements of interest excluding Zn in the Palmer MMI

survey.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 21

PALMER PROJECT MMI RESULTS

Analytical data (MMI-M) received from CMEC and SGS are presented in Appendix 1.

Edited data with UTMs, calculated response ratios and both 25th percentiles and

backgrounds used to calculate the RR are given in Appendix 2. Quality control data is

also presented in this Appendix. Response ratios are calculated on the basis of all 2012

inorganic soil samples.

Quality Control “QC”

Analytical Duplicates

The reproducibility of MMI-M analyses in the 2012 Palmer Project dataset was

monitored with the use of analytical duplicates. These are samples that are selected

every 12th sample in the batch and re-analyzed under the same conditions as the

remainder of the unknown soil samples. The duplicate pairs, which illustrate the

analytical reproducibility, are given in Appendix 2.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

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Review of these data indicates good analytical reproducibility over a broad range of

concentration for most elements of interest (Figure 8). The results for the commodity

and lithologically-sensitive elements indicate excellent reproducibility across a wide

range of concentration and this same quality of analytical data is observed for the

majority of the MMI-M element suite. Some variability is noted for the elements near

the LLD and at higher concentration levels. Occasionally there are duplicate pairs that

exhibit variability for select elements but these sample pairs are not indicative of the

majority of results for the remainder of the sample pairs. Simple linear regression for

analytical duplicate pairs is given below for the elements of interest including Au, Ag, Zn,

Cd, Bi, In, K and P. For these plots simple linear regression is based upon concentration

and not response ratios. The results for Au are to be considered non-diagnostic since

the overwhelming majority of analyses from duplicate pairs fall below the lower limit of

detection. Overall, analytical reproducibility for the Palmer MMI-M survey is interpreted

to be good and not a hindrance to the recognition of anomalous responses at all

concentration/contrast levels.

Figure 8. Simple linear regression plots for elements of interest in the Palmer MMI

Project.

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Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 24

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 25

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Spearman Rank Correlation Coefficient Matrix

The results of the Spearman Rank Correlation Coefficient Matrix review of the Palmer

MMI data is presented in Table 1 below. The entire Matrix is presented in Appendix 2.

The most significant correlations for the commodity elements occurs between Zn and

Cd, Bi With a wide range of elements including Fe, Ga, In, K, Nb, P, Pb, Th and Zr, Cu

With Ni and the rare earths and Fe With Nb, P, Ti, Th and Zr. The rare earths are strongly

inter-correlated as should be expected because of their geochemical affinities. The

elevated correlations between the REE can be used as an indirect assessment of

analytical quality in that good quality analytical work will be reflected by strong

correlations between the individual REE. The lack of any significant correlation in the

Palmer dataset between Au, Ag and Cu is curious but may be explained by the sampling

methodology used in this survey. This issue will be discussed in a later section. Of

particular interest is the Fe-Ti-Nb correlation. This correlation is almost a guarantee that

the survey is underpinned by magnetite-bearing oxide facies iron formation in areas of

anomalous responses for these three elements.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 27

Table 1. Summary of significant correlations-Spearman Rank.

Correlation Coeficient Matrix, Palmer MMI Project.

ELEMENT "r" ELEMENT "r" ELEMENT "r"

DOUBLET

DOUBLET

DOUBLET

Zn With

Cu With Cd 0.76 Dy 0.625 Fe With

Er 0.629 Nb 0.748

Pb With

Eu 0.585 P 0.641

Th 0.622 Gd 0.602 Ti 0.738

Zr 0.538 La 0.569 Th 0.55

Mn 0.426 Zr 0.575

Bi With

Nd 0.582 Fe 0.585 Ni 0.427 Au With

Ga 0.603 Pr 0.576 Ag 0.245

In 0.867 Sc 0.507 Cu 0.248

K 0.504 Sm 0.589 Nb 0.468 Tb 0.574 P 0.686 Y 0.631 Pb 0.819 Yb 0.608 Th 0.677

Zr 0.654

Ca With

*REE >0.800

Mg 0.826

Sr 0.829

PALMER PROJECT RESPONSES

The observations and interpretation that follow are based upon the grid-based 2012

survey dataset. So that trends in the data would be more clearly visible there is a

separate bubble plot for elements analyzed in samples from the east Grid and one plot

for the West Grid. Those elements with RR>100 are truncated at RR=100 and re-plotted

so that subtle trends in the data can be examined.

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Base Metal and Related Element Responses (Cu, Pb, Zn, Cd, Ni, Ga, Bi, In)

CuRR (1-72; Figures 9 and 10)

Copper responses in the project areas have moderate- to high-contrast (to 72RR or 72

times background) responses. Unfortunately these elevated responses are present for

only two samples on the East Grid. There are no anomalous responses for Cu on the

West Grid and no vectors to mineralization in either the East or West Grids.

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Figure 9: Cu results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M) -

on the East grid of the Palmer Property.

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Figure 10: Cu results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West grid of the Palmer Property.

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PbRR (1-65; Figures 11 and 12):

The Pb responses from the Palmer survey are marked by northeast-trending linear

responses of 1-3 samples with maximum RR of 65 or 65 times background. This pattern

is present on the East Grid and to some extent on the West Grid. Elevated Pb responses

on lines 19+00N and 20+00N occur at the edge of sampling and could indicate the

presence of a significant Pb anomaly although additional surveys would be required to

ascertain this.

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Figure 11: Pb results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 12: Pb results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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ZnRR (1-28; Figures 13 and 14):

A multi-sample low- to moderate-contrast Zn anomaly occurs in the southwest corner of

the East Grid. The anomaly trends northeast and in this regard has a similar trend as the

Pb responses described earlier. The pattern of response trends off of the east Grid to

the northeast and likely continues in this direction. The anomaly is developed between

lines 10+00S and 7+00S. The West Grid is marked by numerous scattered low-contrast

Zn responses and a single moderate-contrast response in the southwest portion of the

grid. This elevated response occurs at the edge of the West Grid.

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Figure 13: Zn results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 14: Zn results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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CdRR (1-14; Figures 15 and 16):

Cadmium responses on the East Grid mirror those of Zn and provide excellent

coincidence between these two elements. This anomalous doublet is interpreted as the

geochemical signature of bedrock-hosted sphalerite. The Cd anomaly has low-contrast

maximum response ratios of 14 times background. A similar observation is made for the

West Grid with the coincidence between Zn and Cd defining an area of interest on lines

15+00N, 16+00N and 17+00N.

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Figure 13: Cd results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 14: Cd results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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NiRR (1-8; Figures 15 and 16):

Very low-contrast Ni responses are present on both the East and West Grids. The

pattern or distribution of the responses is erratic and without an indication of either Ni

mineralization or of mafic/ultramafic lithologies in the subsurface. Depending on the

element associations with Ni this element can detect nickel sulphides or mafic and

ultramafic lithologies.

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Figure 15: Ni results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 16: Ni results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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BiRR (1-102; Figures 17 and 18):

Very high-contrast Bi responses are present on the East Grid and are coincident with

both Zn and Cd responses and to a lesser extent with Pb. The Bi anomalies are well-

defined multi-sample linear responses and trend northeast. They are interpreted to

trend off of the East Grid and as such will require additional surveys to determine their

extent and characteristics. The results for the West Grid define numerous low- to

moderate-contrast responses developed for multiple samples as well. The best anomaly

from the West Grid occurs on line 17+00N. There is a curious angular pattern to the

overall MMI-Bi responses.

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Figure 17: Bi results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 18: Bi results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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GaRR (1-71; Figures 19 and 20):

There is only a single elevated response on the East and West Grids. The maximum 71RR

occurs on the East Grid on line 6+00S. All other responses are very low-contrast.

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Figure 19: Ga results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 20: Ga results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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InRR (1-13; Figures 21 and 22):

On the East Grid indium responses are very similar in morphology to those observed for

Pb. These are linear, northeast-trending features with low-contrast response ratios. The

anomalies trend off of the grid to the northeast and southwest. The West Grid is marked

by a small number of 1- and 2-smple low-contrast anomalies. Linear patterns of very

low-contrast responses are visible on the West Grid plot.

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Figure 21: In results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 22: In results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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Precious Metal Responses (Au, Ag)

AuRR (1-10; Figures 23 and 24):

Significantly elevated Au responses are absent from both the East and West Grids. The

West Grid is marked by no elevated responses-all responses are at background. Only 6

samples are weakly elevated on the east Grid and these responses are little more than

background with maximum RR of 10 times background. They occur mainly as single

sample responses.

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Figure 23: Au results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the Palmer Property.

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Figure 24: Au results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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AgRR (1-70; Figures 25 and 26):

Elevated silver responses have maximum values of 70RR or 70 times background. This

value comes from a single sample on the East Grid (Figure 25). There are no significantly

elevated Ag responses on the West grid (Figure 26).

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Figure 25: Ag results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 26: Ag results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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Lithologically-Sensitive Elements (Fe, K, Mn, Nb, P, Sc, Th, Ti, Zr)

FeRR (1-55; Figures 27 and 28):

Iron responses from both East and West Grids are scattered and non-definitive of a

mineralization-related response or of a particular lithologic unit. There are multiple

contributing sources to the Fe signature and as such the pattern of response can be

irregular.

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Figure 27: Fe results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 28: Fe results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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KRR (1-9; Figures 29 and 30):

Despite the low-contrast responses for K on the East Grid there is good correspondence

with the responses for Zn, Cd, Pb, Bi and In. The K anomalies are both linear, northeast-

trending features as well as single-and two-sample point anomalies. The source of the K

signature may be alteration mineralogy associated with the source of the base metal

anomalies on this grid. The West Grid is marked by sporadic and isolated single sample

anomalies with no correspondence with any of the metal responses seen on this grid.

This could suggest less intense alteration and would suggest less potential for significant

mineralized zones.

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Figure 29: K results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M) -

on the East Grid of the Palmer Property.

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Figure 30: K results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M) -

on the West Grid of the Palmer Property.

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MnRR (1-278; Figures 31, 32, 33 and 34):

Manganese responses for the East Grid are very successful in documenting linear,

northeast-trending responses that are coincident with K and the commodity and related

element suite of Zn, Cd, Pb, Bi and In. In truncated data these patterns are even more

pronounced. It is likely the linear Mn anomalies are related to chemical sedimentary

lithologies that are present in the stratigraphy that underpins the survey area. There

are no such patterns evident in the data from the West Grid suggesting a completely

different geological scenario may be present on the West Grid.

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Figure 31: Mn results (RR – response ratios) for 2012 soil geochemical surveys (MMI-

M) - on the East Grid of the Palmer Property.

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Figure 32: Mn results (RR – response ratios) for 2012 soil geochemical surveys (MMI-

M) - on the West Grid of the Palmer Property. Truncated data.

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Figure 33: Mn results (RR – response ratios) for 2012 soil geochemical surveys (MMI-

M) - on the West Grid of the Palmer Property.

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Figure 34: Mn results (RR – response ratios) for 2012 soil geochemical surveys (MMI-

M) - on the West Grid of the Palmer Property. Truncated data.

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NbRR (1-134; Figures 35, 36, 37 and 38):

The maximum response for Nb on both grids is 134 times background. However, this is

from a single sample collected from the east Grid which is in isolation. Regardless

whether truncated or non-truncated data is examined there are not distinctive patterns

in these data to suggest the presence of any lithology with a unique bulk chemistry.

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Figure 35: Nb results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 36: Nb results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property. Truncated data.

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Figure 37: Nb results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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Figure 38: Nb results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property. Truncated data.

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PRR (1-42; Figures 39 and 40):

Phosphorus responses on the East Grid document the presence of linear, northeast-

trending multi-sample anomalies that are coincident with Zn, Cd, Pb, Bi, In, K and Mn

anomalies. The source for the P is likely apatite, particularly if the stratigraphy

underlying the east grid is iron formation or other forms of chemical sediments. The

West Grid is devoid of significant anomalous responses with only low-contrast 1- to 2-

sample weakly elevated responses present.

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Figure 39: P results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M) -

on the East Grid of the Palmer Property.

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Figure 40: P results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M) -

on the West Grid of the Palmer Property.

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ScRR (1-20; Figures 41 and 42):

Scandium responses are normally enhanced in Fe-rich lithologies in MM data. There are

no patterns of response that would suggest the presence of the Fe-rich lithologies on

either the East or West grid. Maximum RR is 20 times background.

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Figure 41: Sc results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 42: Sc results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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ThRR (1-26; Figures 43 and 44):

The linear, northeast-trending anomalies observed on the East Grid for Zn, Cd, Pb, Bi, In,

K, Mn, and P are also observed for Th. The Th response ratios have maximum values of

26 times background, are multi-sample and extend across multiple sampling grid lines.

These anomalies do not extend off of the grid. Thorium responses from the West Grid

are spotty, irregular and non-diagnostic of a lithologic signature.

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Figure 43: Th results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 44: Sc results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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TiRR (1-269; Figures 45, 46, 47 and 48):

Very high TiRR are noted from the Palmer project area with maximum RR of 269 times

background. In non-truncated data the very high single sample response of 269RR

subdues the lower contrast responses however when truncated data is examined linear,

northeast-trending anomalies are observed. These lower contrast anomalies have some

correspondence with Zn, Cd, Pb, Bi, In, K, Mn, Th and P but are not always present in

every area of anomalous response for these elements. This is suggestive of variable

geology in the subsurface. Diffuse but multi-sample low-contrast Ti responses are also

present on the West Grid but these responses tend to be developed across the entire

grid with little variability. This could suggest the presence of a dominant single lithology

in the subsurface.

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Figure 45: Ti results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 46: Ti results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property. Truncated data.

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Figure 47: Ti results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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Figure 48: Ti results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property. Truncated data.

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ZrRR (1-23; Figures 49 and 50):

Spotty, irregular and non-diagnostic responses for Zr are apparent in the data for both

the East and West Grids. Maximum RR is 23 times background.

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Figure 49: Zr results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the East Grid of the Palmer Property.

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Figure 50: Zr results (RR – response ratios) for 2012 soil geochemical surveys (MMI-M)

- on the West Grid of the Palmer Property.

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OBSERVATIONS

Sample Collection in the Palmer MMI Project

Soil samples collected from the Palmer Project area targeted the 10-25 cm sample

depth beneath the base of the B-Horizon. This sample location in the soil profile was

collected from hand-dug pits. The depth of the sample location, however was not

consistent and numerous peat samples are recorded in the sampling information

supplied to the author. The peat samples were removed from the database for this

report. A telephone conversation was held with Brent Patrie of Dan Patrie Exploration

(January 4, 2013) and the sample depth was described/confirmed as above. This sample

location in the soil profile is not the recommended depth of 10-25 cm beneath the

contact between the organic and inorganic soil horizons. As such the data is considered

suspect or at the very least not optimum. Moreover, an orientation survey was not

undertaken to ascertain the optimum depth of sample collection. A total of 384 soil

samples were used for this report.

Data Quality

Simple linear regression, box plots coupled with a visual assessment of quality control

data from analytical duplicates and MMI standard reference materials indicate the

analytical data is both accurate and precise. There are some reproducibility problems

with data at or near the lower limit of determination and possibly at extremely high

responses, however for most elements the partial MMI-M extraction releases sufficient

concentrations of metals from the surfaces of soil particles to be easily measured with

ICP-MS instrumentation.

Anomalous Responses

Base and precious metal mineralization is the focus of exploration on the Palmer Project

and to this end MMI-M surveys were undertaken on both the East and West grids.

These surveys have been based on the collection of a soil sample between 10 and 25 cm

below the base of the B-Horizon. Accordingly the responses that have been observed,

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documented and described in this report must be viewed with caution.

Recommendations for assessing the quality of the data in terms of sample collection are

made in the Recommendations section of this report.

Induced Polarization Survey and Correspondence with Mobile Metal Ions Results

CMEC has undertaken an IP survey on the Palmer property and the results are displayed

below in Figures 51 and 52. The area surveyed indicates the presence of a chargeable

mass between lines 100W and 300W in N=2 and N=7 in an area that corresponds to the

East Grid” where MMI surveys were undertaken. The mass is persistent and non-

truncated to the east and west suggesting a continuation of the zone. It occurs between

400N to 600N (approximately) and extends across all survey lines.

When the chargeability features are compared to the MMI anomalies it becomes

apparent that there is a reasonable correspondence between the Zn, Cd, Pb, Bi, In, K, P,

Mn, Th and Ti anomaly described earlier in this report and the IP anomaly. The two

overlapping features are likely attributable to a zone of disseminated to near solid

sulphide mineralization with Zn-rich mineralogy. The fact that there is excellent

correspondence between Zn and Cd strongly supports the Zn-rich nature of the source

region that produces the MMI and IP features and that the Zn mineral in the source

zone is sphalerite. The presence of Bi and In in association with the Zn-Cd responses are

not unexpected since these elements are common components of Zn-rich

mineralization. The K, Mn and P are likely components of iron formation noted in the

survey area (Marc Gaudreau; pers. comm.) whereas Th and Ti reflect a lithologic

signature, possibly of mafic volcanic rocks and chemical sediments.

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Figure 51. Chargeability, Lines 100W to 300W (N=2), Palmer property. IP survey by Dan

Patrie Exploration Ltd.

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Figure 51. Chargeability, Lines 100W to 300W (N=7), Palmer property. IP survey by Dan

Patrie Exploration Ltd.

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CONCLUSIONS

Notwithstanding the questionable sample collection the following conclusions are

evident:

1. There is a well developed, multi-sample, linear and northeast-trending Zn, Cd,

Pb, Bi, In, K, P, Mn, Th and Ti anomaly present on the East Grid. It should be

followed up by integrating all available data and drill testing.

2. There is some correspondence with a chargeability anomaly defined by an IP

survey. The correspondence is reasonably well developed however there is some

offset to the chargeability features and MMI anomalies.

3. The nature and chemical makeup of the East Grid MMI anomaly suggests a zone

of base metal mineralization without precious metal content. The nature of the

mineralization could be either disseminated or massive. The absence of precious

metals may be due to the sample collection being too low in the soil profile.

4. The West Grid has very few significant MMI element suite responses. There are

some low-contrast Zn-Cd responses on this grid. Again sample collection may

have a direct bearing on these results.

RECOMMENDATIONS

The following recommendations are made with respect to this MMI-M survey at the

Palmer Project of CMEC:

1. Sample collection is at the heart of an MMI soil geochemical survey. Without

proper sampling protocols the results are necessarily suspect. The sample

collection at Palmer has likely been modified from that which has been

demonstrated to be optimum. Moreover no vertical profiling of the survey area

has been done. Accordingly, the following steps are suggested for the short

term, meaning before drill testing of the anomalous areas is undertaken:

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(vi) Return to the East Grid and establish a short sampling transect that cuts

through the multi-element anomaly on the East Grid. Line 7+00S would

seem to offer the best opportunity to assess the sampling integrity.

(vii) Dig pits to coincide with the highest responses for the base metals.

(viii) Collect one sample from each pit at the 10-25 cm depth below the

contact between organic and inorganic soils.

(ix) From one pit, preferably over the base metal anomaly, collect four

samples at 10 cm intervals starting at the organic-inorganic contact. The

first sample will be 0-10 cm, followed by 10-20 cm, 20-30 cm and finally

30-40 cm. Each sample must be a vertical channel sampling all material

from top to bottom of the interval.

(x) Submit these analyses for MMI-M analysis.

The results will demonstrate whether acceptable results were obtained with the

first sampling program based on the responses for the anomaly-forming

elements. Secondly, the vertical profiling will indicate the optimum sample

depth.

2. An MMI anomaly does not indicate the depth to the source mineralization.

Therefore it is important that the depth to the source mineralization be

estimated by modeling any geophysical surveys that have been done on the grid.

Since IP has been done at Palmer the depth to source and the orientation of the

mineralized zone can be estimated. Then, a drill hole can be determined with

appropriate inclination and declination over a suitably high MMI response.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 97

CERTIFICATE of AUTHOR

I, Mark A.F. Fedikow, HB.Sc., M.Sc., Ph.D., P.Eng., P.Geo., do hereby certify that:

1. I am currently a self-employed Consulting Geologist/Geochemist with a field office

at:

50 Dobals Road North,

Lac du Bonnet, Manitoba, Canada R0E 1A0.

2. I graduated with a degree in Honors Geology (B.Sc.) from the University of Windsor

(Windsor, Ont.) in 1975. In addition, I earned a M.Sc. in geophysics and

geochemistry from the University of Windsor and a Doctor of Philosophy (Ph.D.) in

exploration geochemistry from the School of Applied Geology, University of New

South Wales (Sydney) in 1982.

3. I am a Member of the Association of Professional Engineers and Geoscientists of

Manitoba. I am also a Fellow of the Association of Exploration (Applied)

Geochemists, and a Member of the Prospectors and Developers Association of

Canada. I am registered as a Professional Engineer (P.Eng.) and a Professional

Geologist (P.Eng.) by the Association of Professional Engineers and Geoscientists of

Manitoba (APEGM). I am registered as a Certified Professional Geologist (C.P.G.) by

the American Association of Professional geologists (Westminster, Colorado, U.S.A.).

4. I have worked as a geologist for a total of thirty-five years since my graduation from

university; as a graduate student, as an employee of major and junior mining

companies, the Manitoba Geological Survey and as an independent consultant.

5. I have read the definition of “qualified person” set out in National Instrument 43-

101 (“NI 43-101”) and certify that by reason of my education, affiliation with a

professional association (as defined in NI 43-101) and past relevant work experience,

I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

Mount Morgan Resources Ltd. “Accurate and Precise Geochemistry in Mineral Exploration”

China Metallurgical Exploration Corporation Palmer MMI Project Page 98

6. I am responsible for the preparation of the technical report titled "Results of Mobile

Metal Ion (MMI-M) Soil Geochemical Surveys, Palmer Project, Sault Ste. Marie

Mining Division, Ontario”.

7. I have not had prior involvement with the property that is the subject of the

Technical Report.

8. I am not aware of any material fact or material change with respect to the subject

matter of the Technical Report that is not reflected in the Technical Report, the

omission to disclose which makes the Technical Report misleading.

9. I consent to the filing of the Technical Report with any stock exchanges or other

regulatory authority and any publication by them, including electronic publication in

the public company files on the web-sites accessible by the public, of the Technical

Report.

Dated this 17th Day of January, 2012.

Original Signed by Mark Fedikow

Mark A.F. Fedikow, HB.Sc., M.Sc., Ph.D., P. Eng. P.Geo.

Consulting Geologist and Geochemist

Mount Morgan Resources Ltd.

50 Dobals Road North

Lac du Bonnet, Manitoba R0E 1A0

Tel/Fax: 204-284-6869 Cell: 204-998-0271

Email: [email protected]


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