SUMMARY REPORT MAGPIE PROPERTY...SUMMARY REPORT MAGPIE PROPERTY Leclaire Township, Ontario, Canada ESSAR STEEL ALGOMA INC. 105 West Street, Sault Ste. Marie, Ontario, Canada P6A 7B4

SUMMARY REPORT

MAGPIE PROPERTY

Leclaire Township, Ontario, Canada

ESSAR STEEL ALGOMA INC. 105 West Street,

Sault Ste. Marie, Ontario, Canada P6A 7B4

Date: March 13, 2013

Prepared By:

CARACLE CREEK INTERNATIONAL CONSULTING INC.

Zsuzsanna Magyarosi, Ph.D., P.Geo.

Magpie Property, Leclaire Township, Ontario, Canada Essar Steel Algoma Inc.

March 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page | 1

TORONTO – VANCOUVER – SUDBURY– JOHANNESBURG – DOMINICAN REPUBLIC WWW.CARACLECREEK.COM

1.0 HIGHLIGHTS

Essar’s Magpie Property consists of a ~117 ha area covering the Magpie Iron Range and is road

accessible from Wawa.

The Property covers a strike of ~640 m of iron formation with a width between 12 and 18 m and

is composed mostly of chert and siderite with small amounts of magnetite.

It was mined intermittently between 1911 and 1924 and the last exploration in 1951 to 1953 with

the drilling of four drill holes.

Reserves at the Magpie Mine were last estimated in 1917 at 634,900 tons.

An average of 157 samples from the Magpie Mine returned 36.79% Fe, 5.7% SiO2, 0.78% S,

0.012% P, and 2 to 3% Mn (Shklanka, 1968).

The last exploration drilling returned ~4.6 m of 43.37% Fe, 9.66% S and 16.05% Si at ~274 m

vertical depth.

There are several iron ranges within 5 km of the Property boundary that are connected or merge

into one another forming an arcuate belt.

There are also two gold, silver and lead occurrences less 1 km from the Property hosted in veins,

and a diamond occurrence 2 km from the Property.

No modern exploration on the Property.

No exploration for anything other than iron.

2.0 LOCATION AND TENURE

The Magpie Property is located approximately 25 km north-northeast of Wawa, northeastern Ontario, in

Leclaire Township. The approximate center of the Property in UTM coordinates is: 669657m E,

5342542m N, Zone 16, NAD 83 and in geographic coordinates: 84° 42’ 58.06” W, 48° 12’ 48.27” N.

The Magpie Property consists of nine (9) freehold patents totaling 116.553 ha (Table 2-1, Figure 2-1).

Essar holds 100% of both surface and mining rights on the patents. The patents have no expiry date and

the only obligation is to pay land tax on them. All patents are subject to reservations in Crown Grant.




Table 2-1 Essar’s tenure for the Magpie Property MNDMF patent number

Land Registry Pin No.

MPAC Roll Number

Township Ownership Area (ha)

Name

JL62 (SSM1042) 31138-0011 LT 579913600004800 LECLAIRE S&MR* 24.864 Magpie JL63 (SSM1045) 31138-0012 LT 579913600004800 LECLAIRE S&MR 12.675 Magpie JL64 31138-0008 LT 579913600004800 LECLAIRE S&MR 4.524 Magpie JL65 31138-0010 LT 579913600004800 LECLAIRE S&MR 12.440 Magpie JL66 31138-0009 LT 579913600004800 LECLAIRE S&MR 9.020 Magpie JL67 (SSM1047) 31138-0014 LT 579913600004800 LECLAIRE S&MR 20.416 Magpie JL68 (SSM1228) 31138-0007 LT 579913600004800 LECLAIRE S&MR 14.322 Magpie JL69 (SSM1229) 31138-0007 LT 579913600004800 LECLAIRE S&MR 13.606 Magpie JL74 31138-0013 LT 579913600004800 LECLAIRE S&MR 4.686 Magpie

Total 116.553

*S&MR = surface and mining rights




Figure 2-1 Tenure map for the Magpie Property

3.0 ACCESS AND INFRASTRUCTURE

The Magpie Property can be accessed by road following the Trans Canada Hwy. north from Wawa for

~34 km, then following a network of smaller roads to the east for an additional ~12 km (MNDM MDI).

The Property can also be accessed from the town Magpie through a network of smaller roads and a trail.

The nearest airport is in Wawa and the closest railway track is approximately 10 km south-southeast of

the Property.

The town of Wawa has restaurants, hotels, hospital, and Ontario Provincial Police Station. The town of

Wawa could supply most of the needs of an exploration program at Magpie. Wawa has an urban




population of 2,634 people in 2011 (Statistics Canada: http://www.citypopulation.de/php/canada-ua-

ontario.php?cityid=394).

4.0 EXPLORATION HISTORY

Exploration on the Property started in the early 1900’s by Lake Superior Corp. (Algoma) and it

concentrated on iron. The Magpie mine operated intermittently between 1911 and 1921. There is no

record on any exploration on the Magpie Property since 1953. Table 4-1 summarizes the exploration

history on the Property.

Table 4-1 Summary of exploration on the Magpie Property Year Company Source of data Type of work Results 1909-1910 Lake Superior

Corp./Algoma Sage (1993), Iron Ore Committee (1924, p.160)

trenching, stripping, test-pitting, diamond drilling, sinking of a shaft

deposit consists of siderite, some portions altered to magnetite

1911-1913 Lake Superior Corp./Algoma

Sage (1993), Iron Ore Committee (1924, p.160)

erection of a roasting plant

iron content ~35%, low S content, operation of roasting plant

1914 Lake Superior Corp./Algoma


new roasting plant mine closed due to low iron prices

1914-1921 Lake Superior Corp./Algoma


mining approximately 1.5 million tons of ore were mined

1951 Jalore Mining Company Ltd.

Sage (1993) detailed geological mapping

no public record of any results

1952-1953 Algoma Sage (1993) 4 drill holes totaling ~1680 m

best intersection was ~4.6 m of 43.37% Fe, 9.66% S and 16.05% Si at ~274 m vertical depth

5.0 GEOLOGY

The Magpie Property occurs within the Wawa Subprovince of the Superior Providence. The Wawa

Subprovince is an aggregation of Archean greenstone belts and granitoid plutons (Williams et al., 1991).

The greenstone belts are composed of metamorphosed komatiite, basalt, dacite and rhyolite and

associated metasedimentary rocks dispersed in a sea of granitoid rocks. It is composed of two linear

greenstone belts: one along its northern border with the Quetico Subprovince and another in the

Mishibishu-Michipicoten-Gamitagama area.

The Magpie Property is located within the Michipicoten greenstone belt, which is approximately 140 km

long and reaches a maximum width of about 45 km (Williams et al., 1991). Regional mapping delineated




three discreet episodes of volcanism: the Hawk assemblage, the Wawa assemblage and the Catfish

assemblage.

The iron formation on the Magpie Property is located within intermediate to felsic volcanic rocks of the

Wawa assemblage (2.75 Ga) (Figure 5-1). The rocks overlying the iron formation are composed of

chloritic schist that grades into intermediate metavolcanic rocks. A distinct silicified volcanic breccia unit

underlies the iron formation.




Figure 5-1 Local geology map for the Magpie Property (modified from MRD126)

6.0 MINERALIZATION

The Magpie Property covers approximately 2 km strike length of the Magpie Iron Range that extends

from the Iron Knob at the east end, where it bends sharply and becomes the Alice Iron Range (Sage,

1993, MNDM MDI). The northwest end of the iron range extends just west of a diabase dike that cuts the

iron formation. Smaller segments of iron formation occur to the northwest. The Magpie and Alice iron

ranges may define a minor fold.

The Magpie Iron Range consists of almost entirely carbonate (siderite) facies iron formation, or its

metamorphosed equivalent, which is the bottom facies of the typical Michipicoten-type iron formation

(Sage, 1993). The upper sulphide, chert, magnetite and graphite facies are missing (MNDM MDI). The




Magpie Iron Range has a strike length of approximately 2,100 feet (~640 m) and a width between 40 (~12

m) and 60 feet (~18 m). The central portion of the Iron Range contains the most amount of siderite and

the least amount of magnetite. The presence of magnetite decreases the value of the ore.

The Magpie Mine operated intermittently between 1911 and 1921. The main product was siderite, but the

exact amount of siderite produced from the mine is not known. Sage (1993) estimated that the amount of

raw siderite probably did not exceed 1.5 million tons. Reserves at the Magpie Mine were last estimated in

1917 at 634,900 tons. The sintered product after roasting graded 50.10% Fe, 9.14% Si and 2.74% Mn

(MNDM MDI). An average of 157 samples from the Magpie Mine returned 36.79% Fe, 5.7% SiO2,

0.78% S, 0.012% P, and 2 to 3% Mn (Shklanka, 1968).

Between 1951 and 1953 one drill hole by Algoma intersected ~4.6 m of 43.37% Fe, 9.66% S and 16.05%

Si at ~274 m vertical depth.

7.0 ADJACENT PROPERTIES

The adjacent properties are patents and there is no public information on any exploration on them.

There are several iron ranges within 5 km of the Property boundaries including the Alice and Reynolds

Lake iron ranges to the south-southeast, the Godon and Finger Lake iron ranges to the north-northwest,

and the South Evans Creek Iron Range to the northeast (MNDM MDI) (Figure 5-1). All of these iron

ranges are interpreted to be part of one iron formation forming an arcuate belt or merge into one another

(MRD 126). Most of these iron ranges are oxide facies composed of chert and magnetite with minor

siderite, pyrite and pyrrhotite, except the Godon Lake that consists of chert and siderite, similar to Magpie

(Sage, 1993 and MNDM MDI).

Other occurrences include the discretionary mineral occurrences Bingham-Holliday Showing North (Au,

Ag, Pb) (MNDM MDI42C02NE00120) and Bingham-Holliday Showing South (Pb, Ag, Au) (MNDM

MDI42C02NE00121) located 0.85 km and 0.63 km east-northeast of the Property. Mineralization is

hosted in quartz ± carbonate veins.

The Magpie Diamond Property is located ~2 km southeast of the Property and it is hosted in mafic to

intermediate breccias with clasts of carbonate, mafic and gneissic country rocks (MNDM

MDI42C02NE00136). Eight microdiamonds were found in a 32.02 kg sample.




8.0 REFERENCES

MNDM MDI: Ministry of Northern Development and Mines Mineral Deposit Inventory.

Ontario Geological Survey (2011): 1:250 000 scale bedrock geology of Ontario; Ontario Geological Survey, Miscellaneous Release---Data 126-Revision 1.

Ontario Iron Ore Committee (1924): Magpie Mine, Report of the Ontario Iron Ore Committee with Appendix 1923, 306p.

Sage, R.P. (1993): Geology of Abotossaway, Corbiere, Leclaire and Musquash townships and part of Dunphy Township, District of Algoma; Ontario Geological Survey, Open File Report 5587, 308p.

Shklanka, R. (1968): Iron Deposits of Ontario; Ontario Department of Mines, Mineral Resoruces Circular No. 11, 489p.

Williams, H.R., Stott, G.M., Heather, T.L., Muir, T.L. and Sage, R.P. (1991): Wawa Subprovince, Chapter 12, in Geology of Ontario, Ontario Geological Survey, Special Volume 4, Part 1, p. 485-

542.



April 23, 2013 Essar Steel Algoma Inc. McAuley Property Zsuzsanna Magyarosi, Ph.D., P. Geo. Location and Access Essar’s McAuley Property consists of four (4) patents covering 63.535 ha ( and Figure 1). It is Table 1located approximately 20 km north-northeast of Sault Ste. Marie, Ontario. The nearest international airport is in Sault Ste. Marie, Ontario. The access from Sault Ste. Marie is by 30 km of paved road and 3 km of unpaved road following the Trans-Canada highway to north and Road 556 to east, towards Searchmont ski resort. The property has bush road access and PIN 31354-0003 surrounds a small lake. The small lake is owned by the Crown. Essar owns the mining and surface rights of the patents. The patents have no expiry date and the only obligation is to pay land tax on them. The patent is subject to reservations in Crown Grant. Table 1 Tenure of Essar’s McAuley Property

MNDMF patent number


MPAC Roll Number

Township Area (ha) Name Rights

SSM1201 31352-0184 LT 572703000132100 AWERES 15.58 McAuley S&MR* SSM1203 31352-0183 LT 572703000132100 AWERES 15.58 McAuley S&MR SSM1199 31354-0001 LT 572704000001300 JARVIS 16.633 McAuley S&MR SSM1200 31354-0003 LT 572704000001200 JARVIS 15.742 McAuley S&MR

Total 63.535

*S&MR=Surface and mining rights

Page 2 of 2

CARACLE CREEK INTERNATIONAL CONSULTING INC. April 23, 2013


Figure 1 Land tenure map of Essar’s McAuley Property

Geology The McAuley Property is underlain by an Archean granitic intrusion in the east and Proterozoic rocks of the Huronian Supergroup in the west. The Proterozoic rocks are composed of mafic to felsic metavolcanic rocks of the Thessalon Formation and clastic sediments of the Livingstone Creek and Aweres formations. The McAuley iron occurrence is located in the centre of the property and consists of titaniferous magnetite in Proterozoic rocks. One sample returned values of 39% Fe, 5.4% SiO2, 0.37% S and 4.25% TiO2 (MNDM Mineral Deposit Inventory).



March 22, 2013 Essar Algoma Steel Inc. Nipigon Forest Reserve Property Zsuzsanna Magyarosi, Ph.D., P. Geo. Essar’s Nipigon Forest Reserve Property consists of one patent covering 16.187 ha ( and Figure Table 11). It is located approximately 16 km northeast of Beardmore, Ontario, and has road access. The nearest international airport is in Thunder Bay, Ontario, which is approximately 250 km from the Property. Essar owns the mining and surface rights of the patent. The patent has no expiry date and the only obligation is to pay land tax on it. The amount of mining land tax in 2012 was $ 64.75 CDN. The patent is subject to reservations in Crown Grant. Table 1 Tenure of Essar’s Nipigon Forest Reserve Property

MNDMF patent number


MPAC Roll Number

Township Area (ha) Name Rights

HF11 62408-0055 LT NA IRWIN 16.187 NIPIGON FOREST RESERVE

S&MR*

*S&MR = surface and mining rights

Figure 1 Land tenure map of Essar’s Nipigon Forest Reserve Property

SUMMARY REPORT

WAWA MAIN SITE AND LOONSKIN LAKE PROPERTIES

Wawa, Ontario, Canada



Date: March 13, 2013

Prepared By:

CARACLE CREEK INTERNATIONAL CONSULTING INC. Stephen Wetherup, B.Sc., P. Geo.

Zsuzsanna Magyarosi, Ph.D., P.Geo. Julie Selway, Ph.D., P.Geo.

Summary Report Wawa and Loonskin Properties, Wawa, Ontario

Essar Steel Algoma Inc.



1.0 HIGHLIGHTS

A large land package (~3450 ha) consisting of 206 mineral patents and 7 leases covering three

Michipicoten Iron Ranges and more than 7.8 km of iron formation strike length,

The Property borders the Wawa, Ontario town limits and has direct rail, power and highway

access as well as a network of gravel roads throughout,

Two former operating iron mines on the Property, Helen/MacLeod and Sir James Mines, with

remaining historical siderite resources of ~ 89 Mt, and open to depth.

Johnson Iron Range which lies between the Helen/MacLeod and Sir James Mines has not been

mined.

Siderite portion of the iron formation has been the main focus of previous exploration and mining

yet significant iron remains in other styles of iron mineralization (e.g., hematite and magnetite).

Extensive drilling and mining data available.


The Wawa Properties are comprised of two separate claim blocks; one called the Wawa Property and the

second the Loonskin Lake Property (Figure 2-1 and Figure 2-2).

The Wawa Property is located immediately to the northeast of Wawa, northeastern Ontario, in McMurray,

Chabanel and Lendrum Townships. The Wawa Property is approximately 13 km long along the north

shore of Wawa Lake and up to 5 km wide. The approximate center of the Property in UTM coordinates is:

669593 m E, 5322298 m N, Zone 16, NAD83 and geographic coordinates: 84º 43’ 30.15” W and 48º 1’

53.18” N.

The Loonskin Lake Property is located 10 km northeast of Wawa, northeastern Ontario in Esquega

Township. The Loonskin Lake Property is approximately 3.8 km long along the south shore of Loonskin

Lake. The approximate center of the Property in UTM coordinates is: 675225 m E, 5326916 m N, Zone

16, NAD83 and geographic coordinates: 84º 38’ 51.64” W and 48º 4’ 17.16” N.

The Wawa Property consists of 196 patented claims totaling 3,282.130 ha and 7 leases totaling 30.926 ha

in Chabanel, McMurray and Lendrum townships (Figure 2-1, and Table 9-1, Table 9-2 and Table 9-3).

The patents have no expiry date and the only obligation is to pay land tax on them. The expiry date of all





leases is May 31, 2014. One patent in McMurray Township and parts of two patents in Chabanel

Township are leased by Essar to other companies. Essar owns the mining and surface rights of most

patents and only the surface rights on some of the patents (see Table 9-1 to Table 9-3). All patents are

subject to reservations in Crown Grant.

The Loonskin Lake Property is comprised of 10 patented claims totaling 137.688 ha in the Esquega

Township (Figure 2-2 and Table 9-4). Essar owns the surface and mining rights on all patents. The

patents have no expiry date and the only obligation is to pay land tax on them. All patents are subject to

reservations in Crown Grant.

For 2012 for both Wawa and Loonskin Lake Properties, the total Wawa property tax was $76,327, the

Mining Land tax was $12,108 and the Provincial Land tax was $1,087 for a grand total of $89,522/year.

The Wawa property tax includes $15,354 for the land with the sinter plant station.





Figure 2-1 Tenure map of the Wawa Property





Figure 2-2 Tenure map of the Loonskin Property


The main Wawa Property is located along the north shore of Wawa Lake and borders the town of Wawa

on the west, north, and east sides of the town limits. There is road access throughout and the Algoma

Central Railway connects Sault Ste. Marie to Wawa and railway tracks occur along the entire northern

boundary of the Wawa Property with a spur connecting to the old Sir James Mine on the east end of the

Property (Figure 2-1). The Loonskin Lake Property lies ~ 1 km northeast of the Wawa Property and is

serviced by a forestry road on its westernmost margin (Figure 2-2).





The town of Wawa is serviced by the Trans-Canada Highway and has restaurants, hotels, hospital, and

Ontario Provincial Police Station. The town of Wawa could supply most of the needs of an exploration

program at Wawa as it services several active gold mines and advanced exploration programs in the area.

Wawa has an urban population of 2,634 people in 2011 (Statistics Canada:

http://www.citypopulation.de/php/canada-ua-ontario.php?cityid=394).


This history section has been compiled through a search of public data and from the few remaining files

onsite at Essar Steel Algoma Inc. In 1998 upon the closing of the MacLeod Mine, all of the exploration

files from Algoma Ore Properties Division of the Algoma Steel Company were given to the Timmins

Regional Resident Geologist’s office. The records include both unsolicited property descriptions and

evaluations sent to the company, as well as exploration records for work conducted by the exploration

division of the Algoma Steel Company. Information contained within the records spans the years from

1899 to the mid-1970’s when the company ceased to conduct exploration (Atkinson, et al, 1999).

Although Essar does not have many of the files for the Wawa Properties, they appear to still have a

complete set of mine plans and sections for the Helen, McLeod and Sir James Mines.

4.1 Wawa Property

There are three ‘Iron Ranges”, the Helen, Johnson and Eleanor Iron Ranges and two historical mines on

the Wawa Property: the Helen/MacLeod Mine (Helen Iron Range) and the Sir James Mine (Eleanor Iron

Range).

4.1.1 Helen/MacLeod Mine

Multiple ore zones of the Helen Iron Range have operated at different times under a variety of names by

the Algoma Steel Corporation and affiliated companies.

1899-1918: Open pit mining of hematite/goethite ore; a total of 2,823,365 tons of 53% hematite

ore was shipped during this time (Rupert, 1979).

1937-1946: Helen Mine re-opened to exploit siderite ores from surface in the Helen and Victoria

open pits.





1945: Underground mining initiated with No. 3 shaft to 256 m depth

1953-1956: Algoma Ore Properties – Expansion of underground operations where No. 4 service

winze and No. 5 shaft was started and reached 630 m vertical depth (eventually the MacLeod

production shaft), surface diamond drilling and construction of new sintering plant (Rupert,

1979).

1957-59: Algoma Ore Properties - underground tramway extended to 4,877 feet (=1,486.5 m),

surface diamond drilling.

1960: Algoma Ore Properties - production from old Helen ore body ceases, production from G.

W. MacLeod Mine begins.

1998: G. W. MacLeod Mine closes, and mine rehabilitation begins (Atkinson, et al., 1998), total

production from MacLeod Mine 58.7 Mt @ 32.5% Fe

The Helen Iron Range has a total of 387 drill holes within a 500 m radius of the iron range in Ontario

Ministry of Northern Development, Mines and Forestry’s (“MNDMF”) drill hole database, but there are

more holes in the drill reports (Figure 4-1).

4.1.2 Sir James Mine

1877: Part of mining locations issued to J. W. Johnston.

1948: Algoma Ore Properties - acquisition of property, diamond drilling (17,879 m) delineating a

resource of 80 M tons to ~915 m depth; 7 M tons of this resource available to open pit mining

(Shklanka, 1968).

1956-1957: Algoma Ore Properties - stripping of deposit, building of railroad spur and

construction of surface facilities.

1958-1967: Algoma Ore Properties – open pit mining where a total of 7.7 M tons of ore (siderite)

shipped (Rupert, 1979).

1966: Algoma Ore Properties - incline started on north side of pit in preparation to recover

underground reserves; no underground production took place.

The Eleanor Iron Range has a total of 183 drill holes within a 500 m radius of the iron range in

MNDMF’s drill hole database, but there may be more (Figure 4-1).





4.1.3 Johnson Iron Range

The Johnson Iron Range lies between the Helen and Eleanor Iron Ranges and exploration work by

Algoma Ore Properties occurred sporadically in this area between 1941 and 1966 in conjunction with

work on the Helen and Sir James Mine with little descriptive work provided. Below is a summary of the

known drill programs.

1941: A single189 m drill hole below Wallbank Lake to test the faulted offset of the Helen Iron

Range.

1948-1950: 38 drill holes along most of the strike of the Johnson Iron Range totalling 5,925 m

1952: An additional 3 drill holes below Wallbank Lake totalling ~254 m.

1953: One hole totalling 48 m.

1966: Four drill holes totalling 371 m.

The Johnson Iron Range has a total of 43 drill holes within a 500 m radius of the iron range in MNDMF’s

drill hole database, but there may be more drill holes (Figure 4-1).

4.1.4 Mammoth Metals Occurrence

The Mammoth Metals Occurrence is a Pb, Zn and Ag occurrence with minor Au between Wawa Lake

and the Johnson Iron Range (MDI42C02SE00109). An overview of the exploration history includes:

1927: G. Christie and W. Soulier - discovery.

1927: Dome Mines Ltd. - trenching, sampling 3 diamond drill holes (500 ft = 152.4 m).

1928-29: Mammoth Metals Ltd. - 2 shafts sunk, inclined shaft to 65 feet (=19.8 m) and 165 feet

(=50.3 m) of drifting completed.

1967: Algoma Ore Properties - mapping, magnetometer and EM surveys.





4.2 Loonskin Lake Property

The Loonskin Lake Property has been explored sporadically since 1949 for iron formation along the

contact between the Wawa and Catfish assemblages. Also, there has been some exploration for Cu-Ni in

peridotite rocks on the southeastern portions of the Property.

1949-50: Prospecting and regional geological mapping in the area with the discovery of an iron

formation (pyrite breccia) outcrop south of Loonskin Lake.

1953: One drill hole 293.2 m below a pyrite/pyrrhotite showing and one hole totalling 174 m into

peridotite.

1962 to 1963: Ground magnetic and EM survey and geological mapping (Gray, 1963)





Figure 4-1 Location of historic drill holes on the Wawa and Loonskin Lake Properties (hole locations from MNDMF’s drill hole database).

5.0 GEOLOGY

5.1 Regional geology

The Wawa Property occurs within the Wawa Subprovince of the Superior Providence. The Wawa

Subprovince is an aggregation of Archean greenstone belts and granitoid plutons (Williams et al., 1991).

The Wawa Property is located within the Michipicoten greenstone belt that is approximately 140 km long

and reaches a maximum width of about 45 km (Williams et al., 1991). Regional mapping delineated three

discreet episodes of volcanism: the Hawk assemblage (the oldest episode), the mafic to felsic volcanism

(Wawa assemblage) and the mafic volcanism (Catfish assemblage). The iron formation horizon on the





Wawa Property is located at the boundary between the intermediate to felsic volcanic rocks of the Wawa

assemblage (2.75 Ga) and the mafic metavolcanic rocks of the Catfish assemblage (2.70 Ga) (Figure 5-1).

Five main facies have been identified and include carbonate (dominantly siderite), sulphide (dominantly

pyrite), chert-magnetite, chert-wacke and argillite-graphite-pyrite. In the region, the iron formation

horizon has been subdivided into zones along the horizon or “ranges” of which there are 32 that make up

the Michipicoten Iron Formation and three of these are on the Wawa Property, the Helen, Johnson and

Eleanor Iron Ranges (Figure 5-1).

5.2 Local Geology of Iron Ranges

The Helen Iron Range is terminated by the Talbot Lake Fault at the west end and the Wallbank Lake

Fault at the east. The great thickness of the iron formation at its west end is due to tectonic activity along

the Talbot Lake Fault which thickened the iron formation by drag folding. It strikes roughly east-west

dips 80o to the south and is ~ 4 km long. All five Michipicoten Iron Formation facies occur in the Helen

Iron Range of which the chert-magnetite and chert-wacke units are up to 300 m thick and average ~ 100

m in thickness, the pyrite member ~ 3 to 15 m thick and the most significant economically the siderite

member is up to 100 m thick.

The Johnson Iron Range is an east-west to WNW-ESE striking iron formation that is 3 km long and ~ 40

m wide with lenses of siderite up to 8 m thick (Rupert, 1979). This Range lies between the Helen and

Eleanor Iron Ranges but iron formation is nearly continuous between separated from these ranges by the

Wallbank Lake Fault to the west and the Mildred Lake Fault to the east.

The Eleanor Iron Range is the eastern extension of the Helen Iron Range and occurs in a wedge-shaped

block bounded on the west and east by branches of the Mildred Lake Fault and on the south by the Wawa-

Hawk-Manitowik Lakes fault. It consists of three members, banded chert, pyrite member and the

carbonate (siderite) member, the latter of which has been the focus of most production. The Eleanor Iron

Range is 790 m long and 76 m wide vertically oriented and northward younging sequence (Gross, et al.,

1991).





Figure 5-1 Local geology for Wawa and Loonskin Lake Properties

5.3 Mammoth Metals Occurrence (Pb, Zn and Ag)

The Mammoth Metals Occurrence lies close to the contact between a quartz diorite (mafic intrusive) and

an intermediate to felsic metavolcanic (rhyolite) (MDI42C02SE00109) (Figure 5-2). The quartz diorite is

a subvolcanic intrusive. The quartz vein lies within a shear zone within a quartz diorite. The quartz vein is

heavily mineralized with galena, sphalerite and arsenopyrite. The vein strikes at approximately 70º, dips

30 to 50º and varies from 12 to 15 inches in width (Sage, 1993). The occurrence consists of at least three,

roughly parallel veins.

Grab samples have returned varied assays. Grab samples from the quartz vein have returned values

ranging from 5.2 oz/t Ag and 6.38% Pb to 23.8 oz/t Ag and 51.95% Pb. Grab samples collected by OGS





returned 27.1 % Zn from coarse sphalerite in milky quartz vein and 53.6 % Pb from coarse galena in

milky quartz vein, 39.88 oz/ton Au from coarse gained galena in quartz vein (Sage, 1993).

5.4 Gold Potential

The Wawa and Loonskin Lake Properties have been explored exclusively for iron, but gold

mineralization is known to occur between the Mildred and Helen Iron Ranges. There are four gold

mineral occurrences between the Mildred and Helen Iron Ranges just northeast of Essar’s Wawa Property

(see Adjacent Properties section 7.0). Gold mineralization in Esquega and Chabanel Townships is related

to quartz veins and shearing in association with pyritization, carbonatization and silicification (Sage,

1993).

Figure 5-2 Iron and gold occurrences in the Wawa area.





Occurrences are from MNDMF’s Mineral Deposits Inventory (MDI) database.

6.0 REHABILITATION OF WAWA PROPERTY

The former Wawa Property MacLeod/Helen mines were closed in 1998. A mine closure plan was

submitted in 2006 and accepted by the Ministry of Northern Development and Mines (“MNDM”) in

January 2008. The Property is presently under care and maintenance. Water sampling/ testing is

conducted quarterly. Two out of three water retaining concrete bulkheads called for in the closure plan

were installed at Service and Cable Belt tunnels in 2010 to contain mine water and prevent it from spilling

out onto surrounding lands/waters. The third bulkhead for Ropeway tunnel is to be constructed in 2014.

Also, as part of the mine closure plan, a water treatment plant would be constructed and operational by

2016.


7.1 Gold Occurrences between Mildred and Helen Iron Ranges

There are four gold mineral occurrences between the Mildred and Helen Iron Ranges, just northeast of

Essar’s Wawa Property (Figure 5-2). These gold occurrences are currently owned by private individuals.

1. Gold, zinc, lead occurrence near the west end of Lagarde Lake (MDI42C02SW00025). The

showing consists of a massive vein within a carbonate rich breccia at the contact between mafic

to intermediate and felsic to intermediate metavolcanic rocks. Grab samples collected by Noranda

in 1986 returned values up to 2.26 g/t Au. The Zn mineralization is sphalerite and Pb

mineralization is galena.

2. Gold occurrence near Cardiac Hill known as the Magpie Gold Occurrence

(MDI42C02SW00021). The showing consists of a pyritic-silicified carbonate zone consisting of

up to three separate narrow and closely spaced gossan zones. These zones are hosted within felsic

tuffs which are heavily silicified in the vicinity of the showing. Quartz eyes, tourmaline and

silicification are prominent in the vicinity of the showing. Pyrite is the most common sulphide

present and occurs in up to 10% of the zone. Minor pyrrhotite and arsenopyrite are seen locally.

Where pervasive silicification is the most intense, pyrite content reaches 30% and consists of

disseminated and semi-massive crudely banded pyrite and arsenopyrite. Veins consist of ankerite

and quartz. Channel samples collected by Noranda returned values ranging from 1.32 g/t Au over





3 m to 4.56 g/t Au over 1 m. Gold values up to 6.6 g/t Au and silver values up to 14.3 ppm Ag

have been found within the alteration zones in samples collected by Hutteri.

3. Gold occurrence near the west end of Lagarde Lake known as Lagarde Lake East Showing

(MDI42C02SW00024). Mineralization is hosted by a silicifed shear zone at the contact between

the intermediate-mafic and the intermediate-felsic metavolcanic rocks. The veins consist of quartz

and siderite. Grab samples collected by Noranda in 1986 returned assays up t0 3.26 g/t Au.

4. Gold occurrence near the west end of Lagarde Lake known as the Boliden Syndicate Claims

(MDI42C02SW00005). Between 1986 and 1990, Noranda Exploration Co Ltd drilled 3 holes for

a total of 282 m in the area. Mineralization is hosted within narrow sulphide-bearing shear zones

in rhyolitic fragmental rocks. Drilling also indicated the presence of quartz porphyry units. No

relationship between the quartz porphyry and the mineralization was observed. Random veinlets

of quartz are present which may comprise 20% of the veins. Ankerite alteration is common. The

best gold values were obtained in areas rich in arsenopyrite. Pyrite and arsenopyrite occur as

disseminated grains in the carbonate. Visible gold was reported in 1936. Grab samples collected

by Noranda returned values up to 11.64 g/t Au.

8.0 CONCLUSIONS

The Wawa Main Site Property is in an area with excellent mining infrastructure and close proximity to a

major steel producer in Sault Ste. Marie with direct rail access. The Property covers a large strike length

of Michipicoten iron formation (> 7.8 km) which even though there has been a significant iron mining

history on the Property there are known resources remaining and much of the strike has not been touched

by mining. Furthermore, the historical mining has focussed almost exclusively on the siderite member of

the iron formation while most of the iron formation remains.

There is also abundant exploration and mining data on the Wawa Property all of which is in paper maps,

drill logs and sections and has not be interrogated by modern computer compilation and 3D modelling

techniques to find additional resources.

In addition to the iron mineralization on the Wawa Property, there is also Pb, Zn and Ag mineralization at

the Mammoth Metals Occurrence with sphalerite, galena and arsenopyrite in quartz veins. Between 1928

and 1929, two shafts were sunk on this Occurrence.





The Wawa and Loonskin Lake Properties have been explored exclusively for iron, but gold

mineralization is known to occur between the Mildred and Helen Iron Ranges. There are four gold

mineral occurrences between the Mildred and Helen Iron Ranges just northeast of Essar’s Wawa

Property. Gold mineralization in Esquega and Chabanel Townships is related to quartz veins and shearing

in association with pyritization, carbonatization and silicification.

9.0 REFERENCES

Atkinson, B.T., Hailstone, M.H., Pressacco, R.,Wilson, A.C., Draper, D.M., Hope, P.,Morra, P.M. and Egerland, D.C., 1999: Report of Activities 1998, Resident Geologist Program, Timmins Regional Resident Geologist Report: Timmins and Sault Ste. Marie Districts; Ontario Geological Survey, Open File Report 5990, 100p.

Gray, J.E., 1963: General Report, Loonskin Lake Claims, November 1963; MNDM Asssessment Files 42C02SE0086.

Gross, G.A., Donaldson, J.A., Berusco, E., Brisbin, D., Cook, R., Garrett, R.G., Kelley, V., Lovell, H.L., Oliver, L.K., Roos, and P., Sage, R.P., 1991: Iron Formation and Metalliferous Sediments in Central Canada, Field Trip 8; eds. G.A. Gross and J.A. Donaldson, 8th IAGOD Symposium Field Trip Guidebook, Geological Survey of Canada, Open File 2163.

Rupert, 1979: Geology of McMurray Township and parts of Surrounding Townships, District of Algoma; Ontario Geological Survey OFR 5283, 170p., 8 Tables, 3 Figures, Geological Map (uncoloured) in back pocket.

Sage, R. P. 1993. Geology of Chabanel, Esquega, Lastheels and McMurray townships, District of Algoma; Ontario Geological Survey, Open File Report 5586, 462p.

Shklanka, R. (1968): Iron Deposits of Ontario, Ontario Department of Mines, Mineral Resources Circular

No. 11, 489pp.

Williams, H.R., Stott, G.M., Heather, T.L., Muir, T.L. and Sage, R.P. (1991): Wawa Subprovince, Chapter 12, in Geology of Ontario, Ontario Geological Survey, Special Volume 4, Part 1, p. 485-542.





Appendix 1 – Tenure

Table 9-1 Essar’s tenure for the Wawa Property in Chabanel Township MNDMF patent number


MPAC Roll Number


Name Comments

DJ20 31158-0144 LT 577600001723601 CHABANEL S&MR* 16.188 Helen

DJ21 31158-0110 LT 577600001725200 CHABANEL S&MR 7.879 Helen

DJ22 31158-0110 LT 577600001723601 CHABANEL / MCMURRAY

S&MR 12.545 Helen


S&MR 13.355 Helen

DJ24 31158-0111 LT 577600001723602, 577600001723601, 577600001723603

CHABANEL / MCMURRAY

S&MR 11.331 Helen some parcels are leased

DJ25 PT 31158-0110 LT 577600000329500, 577600000329501, 577600000329502

CHABANEL / MCMURRAY

S&MR 12.505 Helen some parcels are leased


S&MR 11.210 Helen


S&MR 11.898 Helen



S&MR 11.898


S&MR 18.069


S&MR 13.294






















MNDMF patent number


MPAC Roll Number


Name Comments


S&MR 9.470


S&MR 9.154

JL104 (SSM487)

31158-0117 LT 577600001725700 CHABANEL S&MR 20.498 Alexander

LOC 10 31158-0077 LT 577600001727900 CHABANEL S&MR 118.979 Johnson Loc





LOC 9 31158-0076 LT 577600001727800 CHABANEL SRO** 124.547 Johnson Loc

PT TWP portion no 10

31158-0003 LT NA CHABANEL Algoma Central Railway

R725 31158-0114 LT 577600001722800 CHABANEL S&MR 10.724 Helen



R728 PT 31158-0112 LT 577600001724100 CHABANEL S&MR 10.522 Helen



R731 PT 31158-0113 LT 577600001724500 CHABANEL S&MR 9.308 Helen


R733 31158-0115 LT 577600001725000 CHABANEL S&MR 14.569 Victoria

R734 31158-0115 LT 577600001725400 CHABANEL S&MR 13.152 Victoria


SSM12654 31158-0116 LT 577600001725201 CHABANEL S&MR 4.872 Helen

SSM13682 31158-0073 LT 577600001710600 CHABANEL S&MR 19.421 Siderite Hill




fee simple qualified

SSM15596 PT 31158-0101 LT 577600001715300 CHABANEL S&MR 13.735 Siderite Hill


SSM15596 PT 31158-0105 LT 577600001715300 CHABANEL SRO Siderite Hill





SSM15598 PT 31158-0105 LT 577600001715200 CHABANEL SRO Siderite Hill

SSM15647 31158-0041 LT 577600001727301 CHABANEL S&MR 3.464 Siderite





MNDMF patent number


MPAC Roll Number


Name Comments

Hill





SSM15845 PT 31158-0101 LT NA CHABANEL S&MR, except shoreline

12.424 Siderite Hill






SSM17357 PT 31158-0157 LT 577600001713800 CHABANEL S&MR, except shoreline



SSM17648 PT 31158-0155 LT ? CHABANEL S&MR, except shoreline

2.590 Siderite Hill




SSM17945 PT 31158-0105 LT 577600001715100 CHABANEL SRO 13.715 Siderite Hill






SSM22088 31169-0459 LT 577600001607000 CHABANEL / MCMURRAY

S&MR 16.167 Helen








9.441 Siderite Hill






9.721 Siderite Hill







MNDMF patent number


MPAC Roll Number


Name Comments













4.804 Siderite Hill



6.346 Siderite Hill





5.172 Siderite Hill


9.037 Siderite Hill


9.275 Siderite Hill







SSM5337 31158-0107 LT 577600001727200 CHABANEL S&MR 15.378 Wallbank






MNDMF patent number


MPAC Roll Number


Name Comments

SSM5339 31158-0107 LT 577600001727001 CHABANEL S&MR, except shoreline

8.498 Wallbank



SSM5418 PT 31158-0143 LT 577600001727000 CHABANEL S&MR 8.903 Wallbank WPLA 65***

SSM5419 PT 31158-0143 LT 577600001726900 CHABANEL S&MR 8.498 Wallbank WPLA 65

SSM5537 (SSM7218)

31158-0150 LT 577600001726500 CHABANEL S&MR 15.702 Wallbank

SSM5683 / SSM7120

31158-0109 LT 577600001716900 CHABANEL S&MR, except shoreline

19.020 Wallbank

SSM5684 / SSM7117

31158-0109 LT 577600001716701 CHABANEL S&MR 20.720 Wallbank

SSM5756 / SSM7118

31158-0109 LT 577600001725600 CHABANEL S&MR, except shoreline

28.328 Wallbank


SSM72133 PT 31158-0136 LT NA CHABANEL S&MR 30.926 Talbot Lake

leasehold, expires May 31, 2014

SSM72133 PT 31158-0153 LT NA CHABANEL S&MR Talbot Lake












Total 2154.111

*S&MR=surface and mining rights

**SRO=surface rights only

***WPLA 65=Water Power Lease Agreement





Table 9-2 Essar’s tenure for the Wawa Property in McMurray Township MNDMF patent number


MPAC Roll Number Township Ownership Area (ha) Name Comments

BLK A PL M129 31169-0048 LT NA MCMURRAY SRO** n.d.****

BLK B PL M229 31169-0592 LT NA MCMURRAY n.d.

DJ38 PT / SSM8806 31169-1908 LT 577600000330505, 577600000330100

MCMURRAY SRO 0.372 Sinter Plant Station

leased

SSM8619 PT 31169-0449 LT NA MCMURRAY MRO*** 2.570

LOT 11 PL M229 31169-0592 LT NA MCMURRAY MRO 0.000

LOT 1333 31169-0967 LT 577600000306902 MCMURRAY SRO 0.011

LOT 1347 31169-0044 LT 577600000310801 MCMURRAY SRO 0.020

PARKING COURT 31169-0046 LT 577600000306901 MCMURRAY SRO 0.360

PLAYGROUND 31169-0045 LT 577600000305101 MCMURRAY SRO 0.190

SSM10527 31169-2206 LT 577600001609400 MCMURRAY SRO 7.689 Wawa Flats



SSM10531 PT 31169-2206 LT 577600001627700 MCMURRAY SRO 9.915 Wawa Flats

SSM10532 31169-2206 LT NA MCMURRAY SRO n.d. Wawa Flats

SSM10533 31169-2207 LT NA MCMURRAY SRO n.d. Wawa Flats

SSM12655 31169-0395 LT 577600001604200 MCMURRAY S&MR 22.974 Helen

SSM14944 PT 31169-0473 LT NA MCMURRAY n.d.

SSM14948 PT 31169-0473 LT 577600001609900 MCMURRAY 14.828

SSM14949 31169-0473 LT 577600001609901, 577600001609900

MCMURRAY SRO 1.485

SSM16028 31169-0473 LT 577600001608700 MCMURRAY S&MR* 13.780

SSM192 577600001608200 MCMURRAY 16.835

SSM20542 PT 31169-1048 LT 577600001605600 MCMURRAY S&MR 20.809 Helen






























MNDMF patent number


MPAC Roll Number Township Ownership Area (ha) Name Comments











SSM5420 PT 31169-0329 LT 577600001603300 MCMURRAY S&MR 6.475 Wallbank

Total 657.628


**SRO=surface rights only

***MRO=mining rights only

****n.d.-not determined





Table 9-3 Essar’s tenure for the Wawa Property in Lendrum Township MNDMF patent number


MPAC Roll Number


Name Comments

CK85 PT 31169-0477 LT NA LENDRUM / MCMURRAY

S&MR* 141.454

JC435 31169-2191 LT 577600001900400 LENDRUM S&MR 63.807 Sinter Plant Station


DJ94 31169-2192 LT 577600001900400 LENDRUM / MCMURRAY

S&MR 13.798 Sinter Plant Station






SSM10673 31170-0051 LT 577600001900700 LENDRUM / MCMURRAY

S&MR 84.637 Wawa Flats fee simple qualified

SSM10674 31170-0051 LT NA LENDRUM S&MR 31.570 Wawa Flats fee simple qualified

SSM10675 31170-0051 LT 577600001900600 LENDRUM S&MR 42.492 Wawa Flats fee simple qualified

SSM11087 31170-0052 LT 577600001900400 LENDRUM S&MR 17.373 Sinter Plant Station








SSM11091 31170-0052 LT 577600001900400 LENDRUM S&MR, except along river

18.142 Sinter Plant Station


SSM10477 31170-0056 LT 577600001900400 LENDRUM / MCMURRAY

S&MR 9.738 Wawa Flats fee simple qualified

Total 501.317






Table 9-4 Essar’s tenure for the Loonskin Lake Property MNDMF patent number


MPAC Roll Number


Name Comments

SSM17345 31159-0205 LT 572748000120000 ESQUEGA S&MR* 17.195 Siderite Hill WSM 4008**

SSM17346 31159-0206 LT 572748000120800 ESQUEGA S&MR 6.702 Siderite Hill WSM 4008





SSM17351 PT 31159-0203 LT 572748000120300 ESQUEGA S&MR 5.014 Siderite Hill WSM 4008

SSM17352 PT 31159-0202 LT 572748000120200 ESQUEGA S&MR 12.667 Siderite Hill WSM 4008



Total 137.688


**WSM 4008=area administered under the Ontario Mining Act

SUMMARY REPORT

EAGLE ISLAND PROPERTY

Lake St. Joseph, Ontario, Canada



Date: May 13, 2013

Prepared By:


Julie Selway, Ph.D., P.Geo.

Summary Report Eagle Island, Lake St. Joseph, Ontario


May 13, 2013 CARACLE CREEK INTERNATIONAL CONSULTING INC. Page | 1


1.0 HIGHLIGHTS

Essar’s Eagle Island Property is located on three islands in the western part of Lake St. Joseph,

northwestern Ontario, approximately 108 km northeast of Sioux Lookout.

The Property consists of three (3) freehold patents with a total area of 23.901 ha

Algoma Steel Inc. has mining rights only on the Property

Lake St. Joseph Iron Limited completed two drill holes claim PA17195: J-19 completed in 1958

and J-33 completed in 1959 for a total of 390.14 m. Both holes intersected magnetite and

hematite banded beds.

To the best of Caracle Creek’s knowledge, no exploration has been completed on Essar’s Eagle

Island Property since 1959.

Essar’s Eagle Island is immediately adjacent to Rockex’s iron ore property which is at the

preliminary economic assessment stage. It is assumed that the iron formation on Rockex’s

Property extends westward onto Essar’s Property, but due diligence geological mapping is

required to confirm this.


Essar’s Eagle Island Property is located on three islands (Islands 371, 334 and 183) in the western part of

Lake St. Joseph, northwestern Ontario, approximately 108 km northeast of Sioux Lookout and 80 km

south of Pickle Lake in Trist Lake Area Township. The approximate center of the Property is in UTM

coordinates is: 627477 E, 5646923 N, Zone 15, NAD 83 and in geographic coordinates: 91º11’5”W and

50º57’35”N.

The Eagle Island Property consists of three (3) freehold patents which are merged into two (2) Land

Registry Property Identification Numbers (“PIN’s”) with a total area of 23.901 ha (Table 2-1). Algoma

Steel Inc. has mining rights only on all of the patents and all of the PIN’s are owned 100% by Algoma

Steel Inc. The patents have no expiry date and the only obligation is to pay land tax on them. The amount

of mining land tax in 2012 was $ 95.59 CDN. The patents are subject to reservations in Crown Grant.

Private individuals have the surface rights on Essar’s Eagle Island Property (Table 2-2).





Table 2-1. Tenure table for Essar’s Eagle Island Property MNDMF patent number


Township Area (ha) Owner Name Rights

PA17192 PT 42034-0689 LT Trist Lake 9.887 Algoma Steel Inc. MRO* PA17193 PT 42034-0689 LT Trist Lake 8.146 Algoma Steel Inc. MRO PA17195 PT 42034-0690 LT Trist Lake 5.868 Algoma Steel Inc. MRO

Total 23.901

*MRO = mining rights only

Table 2-2 Tenure table for the surface rights on the same PIN’s as in Table 2-1. MNDMF patent number


Part of PIN Township Owner Name Rights

PA17192 PT 42034-1634 Part 1 Trist Lake Scot Gerald Davidson, Marvin Mervyn Shepard, Timothy Andrew Davidson, Robert Allen Richardson

SRO*

PA17192 PT 42034-1635 Part 2 Trist Lake Michael Robert Jackson SRO PA17192 PT 42034-1636 except Part 1 & 2 Trist Lake Michael Robert Jackson SRO PA17193 PT 42034-0684 NA Trist Lake Michael Robert Jackson SRO PA17195 PT 42034-0685 NA Trist Lake Lake St. Joseph Iron Inc. SRO

*SRO = surface rights only





Figure 2-1 Tenure map for Eagle Island Property


Essar’s Eagle Island Property is located on three islands in the western part of Lake St. Joseph,

northwestern Ontario, approximately 108 km northeast of Sioux Lookout and 80 km southwest of Pickle

Lake in Trist Lake Area Township. The Eagle Island Property is about 51 km west of Highway 559 and

has boat access or float plane access via Sioux Lookout or Pickle Lake. The nearest international airport is

in Thunder Bay, Ontario, which is approximately 330 km south of the Property. There are no powerlines

or railway on the Property.





Sioux Lookout is located halfway between Thunder Bay and Winnipeg

(http://www.siouxlookout.ca/community/profile). The Town has over 5,500 residents and is called the

“Hub of the North” as it provides essential services to 30,000 people in 29 remote First Nation

communities. It has a new Hospital and MNR Fire Management Center. Sioux Lookout is connected to

other urban centers by Highway 72 and 642 which link to Highway 599; Canadian National Railway;

float plane air charter services and Sioux Lookout Municipal Airport which is serviced by Bearskin

Airlines and Wasaya Airways. Sioux Lookout also has hotels and restaurants.


Iron formation has been known to exist in the Lake St. Joseph area since the early 1900’s, although little

serious exploration took place until the late 1950’s (Breaks et al., 1979). At that time, the magnetite-

hematite iron formation was outlined on Eagle, Wolf and Fish Islands (to the east of Essar’s current

property).

The Lake St. Joseph deposit was staked in 1955 by Lake St. Joseph Iron Limited and at that time

consisted of 26 patents. Development work consisted of trenching, diamond drilling and benefication

testing. Lake St. Joseph Iron Limited completed two drill holes claim PA17195: J-19 completed in 1958

and J-33 completed in 1959 for a total of 390.14 m (MNDMF assessment file: 52J14NE0013). Both holes

intersected magnetite and hematite banded beds which were hosted by green schist in J-19 and tuff and

slaty sediments in J-33.

Table 4-1 Summary of historic drilling on Essar’s Eagle Island Property. drill hole number location claim azimuth (º) dip (º)

length (m)

date completed mineralization

J-19 about 121.92 m NW of witness post No. 1 PA17195 60 SW 45 S 195.07 15-Mar-58

magnetite, hematite

J-33 lake shore, NE end of mainland PA17195 N 95 E 30 N 195.07 25-Mar-59

magnetite, hematite

total 390.14

In September 1962, Lake St. Joseph Iron Limited owned 84 claims from Island 17 in the east to Island

334 in the west for an approximate length of 13 km (Clifford 1969). Lake St. Joseph’s Property included

Wolf, Fish and Eagle Islands.





Algoma signed an agreement to lease 73 mining claims from Lake St. Joseph Iron Limited. Algoma

agreed to expend not less than $500,000 by the end of the 5-year option extending from November 1,

1973 to October 31, 1978 (Kociumbas et al., 2011). In 1974-1975, Algoma carried out diamond drilling

and pilot plant test work focusing on Eagle Fish Island (Kociumbas et al., 2011). Algoma estimated a

historic resource on Eagle, Fish and a west extension. On November 1, 1978, Algoma exercised its option

and leased the property. In 1978-1979, Algoma focused its exploration on Fish Island with two drill holes

and geological mapping.

Claims were dropped by Algoma in 2006, 2007 and 2008 and new claims encompassing Eagle, Fish and

Wolf Islands were staked on behalf of Pierre Gagné and are now owned by Rockex Limited (“Rockex”)

(Kociumbas et al., 2011).

Late in 2009, Rockex acquired Algoma’s 1974 and 1975 archived drill core and project files from Essar

(Kociumbas et al., 2011). Full-scale hand-coloured geological maps for the Property completed by

Algoma were also obtained by Rockex from Essar. The drill core and files were transported to Rockex’s

storage area and offices in Thunder Bay for inventory. In early 2010, Rockex contracted a geologist to re-

log and sample selected drillholes to validate Algoma’s work as due diligence for Rockex’s mineral

resource estimate. Caracle Creek does not know if Essar had files on Island 371, 334 and 183 and if the

files existed, were they given to Rockex at this time.

5.0 GEOLOGY OF WESTERN LAKE ST. JOSEPH

5.1 Regional geology

The Uchi Subprovince is a tabular, eastward-trending region of metavolcanic and lesser metasedimentary

rocks forming a semicontinuous supracrustal network interweaving around granitoid batholiths and

plutons (Stott and Corfu, 1991). The collage of assemblages in the subprovince shows a general

southward younging. The southern half of the Uchi Subprovince consists of episodic crustal additions to a

microcontinent along its leading edge in the form of arc and marginal basin complexes and associated

plutons. The southern boundary with the metasedimentary-plutonic English River Subprovince is the

Sydney Lake – Lake St. Joseph Fault (Figure 5-1).





5.2 Local geology

The stratigraphy of the western part of Lake St. Joseph greenstone belt has been subdivided into four

volcanic cycles: Blackstone Cycle 1, Western Lake St. Joseph Cycle 2, Carling Cycle 3 and Brodribb

Cycle 4 (Figure 5-1) (Stott et al., 1987). The first three volcanic cycles are folded about a major east

trending anticline that faces eastward away from the Bamaji-Blackstone granite batholith. The thickest

portion of each cycle and the most intense carbonization occurs in the vicinity of this fold hinge (near

Eagle Island). Each of the first three cycles comprises a bimodal suite of lower basaltic flows and upper

dacite-rhyolitic pyroclastic deposits. In western Lake St. Joseph, a folded sequence of magnetite

ironstone and clastic metasediments infills a major basin along the southern margin of the volcanic belt.

These metasediments are exposed on Eagle Island and the chain of islands to the west. The

metasediments were deposited uncomformably within a basin that was carved out subsequent to both the

deposition of the first three volcanic cycles and an eastward tilting of the volcanic stratigraphy. The

sediments form a basal suite of volcaniclastic material derived mainly from the felsic volcanics of the

upper Western Lake St. Joseph Cycle 2. This was followed by a largely quiescent period during which

much of the ironstone was deposited with intervening wacke beds. This stage was blanketed by the

development of a major submarine fan deposit that prograded southward away from the volcanic pile. The

late Bamaji-Blackstone batholith is typically composed of quartz-phyric granodiorite to monzogranite.

The large Bamaji-Blackstone batholith imposed a 1.5 km wide contract strain aureole upon the

Blackstone basalts along its eastern margin.

The overall tectonic history involves the general sequence:

1. Deposition of volcanic cycles

2. Regional eastward tilting of the volcanic stratigraphy in western Lake St. Joseph

3. Erosion of volcanic pile to produce Eagle Island ironstone-lined basin and submarine fan deposits

4. Regional north-south compression that produced the major folds and the penetrative foliation.

5. Emplacement of Bamaji-Blackstone granitic batholith

6. Regional oblique compression along northwest-southeast axis to produce a major dextral

transcurrent shear zone (i.e., Lake St. Joseph fault) along the southern margin of the greenstone

belt and into the English River subprovince.





North of the Lake St. Joseph fault zone, clastic metasediments typically contain chlorite-muscovite-

biotite-quartz-albite and south of the fault the assemblage of garnet-staurolite-sillimanite occurs locally in

the metasediments (Stott et al., 1987).

5.3 Property Geology

According to Ontario Geological Survey’s map M2158, Essar’s Property on Island 371 consists of silicic

tuffs and cherty iron formation (mostly magnetite) (Clifford, 1968).

Essar’s Property on Island 334 consists of basaltic to andesitic flows, lapilli tuff, arkosic-greywacke-

argillite metasediments and cherty iron formation (mostly magnetite) (Clifford, 1968). Clifford (1969)

describes the geology of Island 334 as mafic and felsic volcanic rocks are interlayered with volcaniclastic

rocks. Also present is iron oxide-bearing beds and conglomerates with are later that the volcanic and

volcaniclastic rocks.

Essar’s Property on Island 183 consists of arkosic-greywacke-argillite metasediments and cherty iron

formation (mostly magnetite) (Clifford, 1968).

5.4 Mineralization

Very little is mentioned in literature about the iron mineralization on Essar’s three islands. It is assumed

that mineralization on Essar’s Property is similar to that on Rockex’s adjacent Property, but due diligence

geological mapping is required to confirm if this is true.

According to Shklanka (1968), mineralization on Eagle and Fish Islands on Rockex’s Property consists of

magnetite-hematite-quartz Algoma type iron formation up to 500 ft wide with a broad easterly trend for

6.5 miles hosted by Archean sediments. Minor amounts of siderite and pyrite are present.

Iron-carbonate ± quartz pods, veins and veinlets characterize the mafic metavolcanics east of the Bamaji-

Blackstone batholith (Stott and Sanborn, 1987). The carbonate contains local stringers of pyrite. The

veins are notably abundant on the islands west of Eagle Island.

The magnetite to hematite ratio is 1:1 at Eagle Island on Rockex’s property according to Watts, Griffs and

McOuat’s (“WGM”) observation of Algoma historic drill core and Rockex’s 2008 drill core and assays

from 5 drill holes (Kociumbas et al., 2011). Most of the mineralization observed by WGM consists, on a





macro scale, of a near massive and intimate mixture of hematite and magnetite. In historic reports, gangue

is described as consisting of silica, sericite, mica, carbonate, chlorite with some hornblende and apatite.

WGM noted that the Eagle Island deposit (on Rockex’s property) is essentially in the form of an east to

northeast-trending, steeply plunging syncline with superimposed, less extensively developed, coaxial

anticlines. The iron formation is repeated by folding. West of Eagle Island, the steeply dipping north and

south limbs of the iron formation sequence have been traced for over 10 km. The south limb extends

through Fish and Wolf Islands and still further west (i.e., extends onto Essar property).

Figure 5-1 Local geology map for Western Lake St. Joseph






6.1 Rockex’s Eagle Island Property

Rockex’s Eagle Island property is 100% owned by Rockex Mining Corporation (“Rockex”). Rockex’s

Property is immediately adjacent to Essar’s Eagle Island Property (Figure 2-1) (Rockex’s website:

http://www.rockexmining.com/s/Home.asp). The actual Eagle Island belongs to Rockex and Essar’s

Property consists of Islands 334, 371 and 183. Rockex has a NI 43-101 compliant iron resource on Eagle

Island of: 590,847,000 tonnes at 28.8 % soluble Fe indicated and 415,757,000 tonnes at 29.5 % soluble Fe

inferred both to a depth of 300 m (Rockex’s website: http://www.rockexmining.com/s/Home.asp). They

also have historic non-compliant iron resources on Fish Island, Doran Lake and Soule’s Bay. Rockex is

planning to complete a Preliminary Economic Assessment on Eagle Island in 2013.

7.0 REFERENCES

Breaks, F.W., Bond, W.D., Stone, D. and Desnoyers, D.W. (1979): Operation Miniss-Tully Lakes, Lake St. Joseph-Miniss Lake Sheet, Districts of Kenora and Thunder Bay; Ontario Geological Survey, Preliminary Map P.2216, Geological Series, Scale 1:63,360 or 1 inch to 1 mile, Geology 1976.

Clifford, P.M. (1968): Blackstone Lake Sheet, Kenora District; Ontario Geological Survey, Map 2158, scale 1:31,680, Geology 1963-1964.

Clifford, P.M. (1969): Geology of the Western Lake St. Joseph Area Kenora and Thunder Bay Districts, Geological Report 70, Ontario Department of Mines, 61 pp.

Kociumbas, M., Risto, R. and MacFarlane, G.R. (2011): Technical Report and Mineral Resource Estimate on the Western Lake St. Joseph Iron Ore Project, Ontario, Canada, prepared by Watts, Griffs and McOuat for Rockex Limited and Rockex Mining Corporation, dated January 28, 2011.

Shklanka, R. (1968): Iron Deposits of Ontario, Ontario Department of Mines, Mineral Resources Circular No. 11, 489pp.

Stott, G.M. and Corfu, F. (1991): Uchi Subprovince; in Geology of Ontario, Ontario Geological Survey, Special Volume 4, Part 1, p. 145-238.

Stott, G.M., Kay, S.V. and Sanborn, M.M (1987): Precambrian Geology of the Lake St. Joseph Area, West Half, Districts of Thunder Bay and Kenora (Patricia Portion); Ontario Geological Survey, Map P.3050, Geological Series Preliminary Map, scale 1:50,000, Geology, 1985.

Documents

SUMMARY REPORT MAGPIE PROPERTY...SUMMARY REPORT MAGPIE PROPERTY Leclaire Township, Ontario, Canada ESSAR STEEL ALGOMA INC. 105 West Street, Sault Ste. Marie, Ontario, Canada P6A 7B4