Xstrata Canada Corporation Diamond Drilling on the Nukko

Xstrata Canada Corporation

Diamond Drilling on the Nukko Property 2010 Nukko Property – Carbiboo Mining Division – British Columbia Tenure #’s 561000‐01, 561003‐04, 561006‐19, 561021‐39, 561041‐51, 61216, 560991‐99, 560628‐40, 560642‐43, 643723, 643744, 643746, 5643763, 643764, 798382, 798402, 798422, 798442.

.026 NTS Sheet #’s – 93J.005/.006/.014/.015/.016/.024/.025/

0 E , 5998200 N (Centre) UTM NAD 83 – Zone 10 ‐ 49950

TO Event Number ‐ 4818184 M

Report by:

Max Keogh, GIT January 11, 2011 Timmins, Ontario

ldegroot

Text Box

BC Geological Survey Assessment Report 32374

Table of Contents

Summary ...................................................................................................................................................................... 1 Property Description .............................................................................................................................................................. 1

Property Access ......................................................................................................................................................................... 1

Regional Geology ...................................................................................................................................................................... 5

Local Geology ............................................................................................................................................................................. 6

PG‐10‐09 ...................................................................................................................................................................................... 6

PG‐10‐13 ...................................................................................................................................................................................... 6

Discussion of Results ............................................................................................................................................................... 7

ummary and Conclusions ................................................................................................................................................... 7 S

Tables and Figures

Figure 1 – Regional Location Map ..................................................................................................................................... 2

Figure 2 – Property Tenure Map ....................................................................................................................................... 3

Table 1 – List of Claims ...................................................................................................................................................... 4/5

Appendix A

PG‐10‐09 tion Map PG‐10‐13 Map ith Magnetics

Map 1 – DDH Loca2 – DDH Location Map wPG‐10‐09 Drill Log

PG‐10‐09 Cross Section

PG‐10‐13 tion Map PG‐10‐13 Map ith Magnetics

Map 1 – DDH Loca2 – DDH Location Map wPG‐10‐13 Drill Log

PG‐10‐13 Cross Section

Appendix B Statement of Expenditures

Appendix C

Statement of Qualifications

Appendix D References

1

Summary:

Between October 30th and November 28th 2010, Xstrata drilled two diamond drill holes totaling 450 meters on the Nukko Property, tenure numbers 561008 and 560998. Both drill holes were targeted at high resolution magnetic features and soil geochemical anomalies. Nukko is one of several Xstrata exploration properties belonging to Xstrata’s larger Prince George/Fort St. James porphyry exploration project, a grassroots initiative focused on the discovery of alkalic Cu-Au porphyry deposits in the Quesnel Terrane of British Colombia. The NQ core obtained from this drill program is currently stored at 3572 Massey Drive in the city of Prince George, British Columbia. The drill program was supervised by the author, Max Keogh. Drill logs, cross-sections and plan maps are included in the appendix of this report.

Property Description:

Nukko is located in central British Columbia, beginning approximately 17 kilometers north-west of the city of Prince George. Nukko represents a large land package held by Xstrata which extends for a maximum north-south length of 25 kilometers and east-west width of 24 kilometers. The property consists of 82 contiguous mineral tenures and covers an area of 37,346 hectares in the Cariboo Mining Division, centered at 5998200 N, 499500 E (NAD 83, Zone 10) within the limits of NTS Sheets 93J/05/06/14/15/16/25/26. A property location map (Figure 1) and a claim tenure map (Figure 2) are both provided. Table 1 provides a list of the mineral tenures included in the Nukko property. The property possesses a mildly undulating topography and primarily coniferous tree cover. Hybrid white spruce, lodgepole pine and subalpine fir are the dominant tree species. Extensive areas of the property have been clear cut, and active logging processes are still in operation.

Property Access:

Access to Nukko can be obtained by vehicle from the city of Prince George from a variety of directions using the well established network of logging roads branching off Pilot Mountain Rd. and the 200/Mossvale Forest Service Rd.

PG-10-09 is located approximately 40 kilometers north of Prince George near the northern property boundary. To get there, Chief Lake Rd. should be driven to the 200/Mossvale Forest Service Rd. located just past the small community at Nukko Lake. This road should be driven to the 400 FSR (17 kilometers). A right turn should be made onto the 400 FSR and driven until to an unnamed intersection after 4.2 kilometers and turn right. From this intersection, the PG-10-09 drill site location is approximately 10 kilometers down this unnamed logging road.

To get to PG-10-13, Chief Lake road should be driven for 3.5 km west from Highway 97 until Pilot Mountain Rd. From this intersection, the PG-10-13 drill site location is approximately 8 kilometers north on the Pilot Mountain Rd.

2

*The underlain geology is from the G

eological Survey Branch of the B

ritish Colum

bia Governm

ent.

3

*The underlain geology is from the G

eological Survey Branch of the B

ritish Colum

bia Governm

ent.

4

Table 1 – Nukko Tenure List

5

Table 1 – Nukko Tenure List (continued)

Regional Geology:

The Quesnel Trough is an accreted volcanic arc terrane situated at the boundary of the Intermontane and Omenica Belts extending along most of the length of the Canadian Cordillera. It is believed to have been formed in an intra-oceanic island arc setting, and then obducted eastward onto the ancestral North American continent (Nixon et al., 1993; Ferri and Melville, 1994). The terrane consists of a series of Paleozoic to Eocene arc assemblages resulting from a long lived history of convergent-margin accretion and crustal growth (Brietsprecher et al., 2010).

The trough’s western margin is delineated by a zone of faulted ultramafic rocks interpreted as a southward extension of the Pinchi fault system (Nelson and Bellefontaine, 1996; Nelson et al., 2003). This fault system separates the Quesnel Terrane from the Cache Creek Accreted Complex Terrane. To the east, the Quesnel Terrane is in fault contact with the Late Paleozoic meta-sedimentary, volcanic and plutonic rocks of the Slide Mountain Accreted Complex Terrane.

Both calc-alkaline and alkaline plutonic suites of Late Triassic to Early Jurassic intrusive rocks are a prominent and economically significant component of the Quesnel Terrane. These intrusions are

6

associated with nearby significant porphyry copper mineralization at the Mount Milligan deposit 135 kilometers north-west of Nukko and the Mouse Mountain deposit 140 kilometers to the south.

Local Geology:

Near Prince George and Fort St. James British Columbia, bedrock geology is in interpreted by the British Columbia Geological Survey to be in large part represented by Middle to Upper Triassic strata of the Takla Group (BCGS Geology MapPlace). This group of rocks primarily consists of clastic sediments overlain by thick sequences of Late Triassic alkali volcanism and associated extrusive volcanic and volcaniclastic rocks.

This particular project region is covered in mainly continuous overburden comprised of till 3 to 10+ meters thick, with very rare outcrop exposure. Second and third order sediments derived from glaciofluvial, glaciolucstrine, aeolian, fluvial and lacustrine processes are also dominant (Maynard et al., 2010). Intrinsically, current geological maps are based primarily on interpretation and inferred geology rather than actual bedrock mapping.

Most of the Nukko property is covered with either shallow or thick overburden. A small amount of bedrock exposure can be found toward the southern property boundary encompassing the area known as Pilot Mountain.

PG-10-09

PG-10-09 was drilled by Xstrata to a total depth of 170 meters.

The drilling was conducted between October 30th and November 4th 2010 collared at 6008145 N, 503165 E (UTM NAD 83) on tenure number 561008 towards the northern property boundary (near the boundary of tenure 561007) and inclined vertically at 90°.

PG-10-07 encountered 170 meters of overburden consisting of interbedded clays, sands and gravels. A decision was made to abandon the hole after 170 meters do to the very slow advancement by the diamond drill through the overburden. No bedrock was encountered in this drill hole.

A plan map, cross section and geological log of PG-10-09 are provided in Appendix A

PG-10-13

PG-10-13 was drilled by Xstrata to a total depth of 280 meters.

The drilling was conducted between November 21st and November 28th 2010 collared at 5992964 N, 509868 E (UTM NAD 83) on tenure number 560998 (approximately 750 meters from the northern boundary of tenure 560998) and inclined at -50° at an azimuth of 170°.

PG-10-13 encountered 26 meters of overburden before intersecting a series of fine-coarse grained layered ultramafic rocks including hornblendite, lamprophyre and pyroxenite until the end of hole at 280 meters.

7

Several intrusive dykes passed through these rocks. All rocks encountered are moderately-strongly magnetic. No significant mineralization was observed in any of the rock units of PG-10-13.

A plan map, cross section and geological log of PG-10-13 are provided in Appendix A.

Discussion of Results:

PG-10-09 was directed at 2.0 km by 2.0 km circular shaped magnetic target located close to the northern property boundary, in addition to a nearby soil geochemical anomaly. The 170 meters of overburden encountered in PG-10-09 is certainly masking any valid soil geochemical response that may have been observed over this target. Since bedrock was not encountered in this drill hole, an explanation for the targeted magnetic feature was not provided.

PG-10-13 was directed at a 1.8 km by 3.5 km oval shaped magnetic feature oriented in a north-east/south-west direction close to the southern property boundary, approximately 24 kilometers south of PG-10-09. The intensely magnetic ultramafic rocks intersected in PG-10-13 provide a clear explanation for the magnetic feature targeted in PG-10-13. It is currently not understood whether these are either basement rocks or younger intrusive rocks as Xstrata does not possess any other geological reference points apart from this single drill hole.

PG-10-09 Map 2 and PG-10-13 Map 2 in Appendix A demonstrate the location of both drill holes with respect to the targeted magnetic features.

MapInfo and Discover 11.0 were used to generate the maps and figures found in this report.

Summary and Conclusions:

The overburden observed in PG-10-09 is believed to cover the entire northern half of the Nukko property and will severely restrict the effectiveness of traditional surface exploration techniques in those regions. Deep sensing IP and additional airborne geophysics will assist future targeting, in addition to alternative drilling technology which should improve the effectiveness of penetrating deep overburden.

The ultramafic rocks in PG-10-13 have provided a clear explanation for the targeted magnetic feature. These rocks appear be insignificant with regards to Xstrata’s objectives, and it is doubtful they belong the Quesnel Terrane. The shape, size and magnitude of this magnetic feature will be compared to similar features on other Xstrata exploration properties to negate unnecessary exploration efforts on additional ultramafic plugs and sills.

Appendix A

Diamond Drill Hole - HeaderXSTRATA Copper Canada

Drill Hole No. PG-10-09Property: NUKKOProject: PG PORPHYRY

No

FALCON DRILLING

Easting:Wedge:

N/A10/30/2010

n/a

11/4/2010

NQ3572 MASSEY DRIVE

561008

Bedrock not intersected - target remains unexplained

Circular 2.0 km * 2.0 km magnetic feature

North:East:

Elevation:Northing:Elevation:

NTS : 93J / 026

DH Geophysics:

Logged By:

Size:Storage Loc.:

Start Date:Finish Date:

Target:

Drill Contractor:Claim No:

Comments:

Grid Co-ordinatesCoordonnée - UTM

Pulled: YesLength: 170

170.00Length:

Collar Information Casing Location Contributors

Dip:Azimuth:

Drill Core

Capped: NoCemented: No

090 degrees

FRASER FORT GEORGE Township:

11/4/2010Log Date:

Type of Wedge: n/a

Mining Division: Cariboo Mining Division

E. OROVOANRe-Logged By:

M. KEOGHCompiled By:

M. KEOGHLocated By:Spotted By:

XSTRATAOperator:

NAD83-ZONE 10Reference System:

Grid Line:

6008145 N503165 E

meters

Mag Decli:

Source:

meters

Survey Test

Xstrata Copper Canada

Geological Description Drill Hole No. PG-10-09Property: NUKKOProject: PG PORPHYRY

From To(m) (m)

DescriptionFrom To

CuSample No.

Cu Zn Zn Au Au% ppm % ppm ppb g/t

Length m

Agg/t

0.00 170.00 OVERBURDEN (OVB)

OVB

Glacial till, clays, sand and gravel. Drill advancment very slow near EOH. Casing pulled.

Formation : OVERBURDEN

11-Jan-11 Page 1 of 1

Diamond Drill Hole - HeaderXSTRATA Copper Canada

Drill Hole No. PG-10-13Property: NUKKOProject: PG PORPHYRY

93J.006

No

FALCON DRILLING

Easting:Wedge:

N/A11/21/2010

n/a

11/28/2010

NQ3572 MASSEY DRIVE

560998

Magnetic feature explained by ultramafic rocks

Southern Nukko property magnetic feature

North:East:

Elevation:Northing:Elevation:

NTS :

DH Geophysics:

Logged By:

Size:Storage Loc.:

Start Date:Finish Date:

Target:

Drill Contractor:Claim No:

Comments:

Grid Co-ordinatesCoordonnée - UTM

Pulled: Yes Length: 26

280.00Length:

Collar Information Casing Location Contributors

Dip:Azimuth:

Drill Core

Capped: NoCemented: No

090

Fraser Ft George Township:

11/28/2010Log Date:

Type of Wedge:

Mning Division: Cariboo Mining Division

E. OROVANRe-Logged By:

M. KEOGHCompiled By:

M. KEOGHLocated By:

M. LEAHEY

Spotted By:

XSTRATAOperator:

NAD83-ZONE 10Reference System:

Grid Line:

5992964509868

meters

Mag Decli:

Source:

meters

Survey Test



From To(m) (m)

DescriptionFrom To

CuSample No.


Length m

Agg/t

0.00 26.00 OVERBURDEN (OVB)

OVBOverburden consisting of sand, gravel and clay.Formation : OVERBURDEN

26.00 40.00 ULTRAMAFIC METAINTRUSIVE (UMMI)

UMMI

Yellow-medium green-dark green, strongly magnetic medium grained rock with abundant intersticial mafic minerals including magnetite

Formation : LAMPROPHYRE DYKE


UMMI/EP + CL

Brecciated hornblendite, strong epidote and chlorite alteration. Light green-black in color coarse grained rock, strongly magnetic.

Formation : HORNBLENDITE


UMMI/EP + CL

Massive hornblendite, strong epidote and chlorite alteration. Light green-black in color coarse grained rock, strongly magnetic.





From To(m) (m)

DescriptionFrom To

CuSample No.


Length m

Agg/t


UMMI/EP + CL




UMMI




UMMI/EP + CL







From To(m) (m)

DescriptionFrom To

CuSample No.


Length m

Agg/t

UMMI




UMMI/EP + CL + TC + ST

Brecciated hornblendite, strong epidote, chlorite, talc and serpentine alteration. Dark green-black in color coarse grained rock, strongly magnetic. Intermixed with serpenized pyroxenite.



UMMI/EP + CL + ST

Serpentinized and chlorite altered pyroxenite, fine-coarse grained, white-light green-black in colour (variable).

Formation : PYROXENITE

225.00 240.00 (DZ)

DZZone of intense folding, mylonite and faulting.Formation : DEFORMATION ZONE




From To(m) (m)

DescriptionFrom To

CuSample No.


Length m

Agg/t


UMMI/EP + CL



257.00 270.50 FELSIC METAINTRUSIVE (FMI)

FMIIntrusive felsic dyke.Formation : FELSIC DYKE

270.50 280.00 FELSIC METAINTRUSIVE (FMI)

FMI

Fine to medium grained porphyritic felsic intrusion consisting mostly of quartz and feldspar, weakly altered.

Formation : FELSIC INTRUSION


Appendix B

Statement of Expenditures ‐ NUKKO ‐ 2010

Field and Geological PersonelDays Rate Subtotal Total

M. Keogh 4 $400.00 $1,600.00

E. Orovan 13 $400.00 $5,200.00

$6,800.00

Food and AccomodationDays Rate Subtotal Total

M. Keogh 4 $110.00 $440.00

E. Orovan 13 $110.00 $1,430.00

$1,870.00

Vehicle RentalsDays Rate Subtotal Total

GMC 4*4 1Pick Up Truck 13 $100.00 $1,300.00

$1,300.00

Diamond Drilling ChargesSubtotal Total

Hourly ‐ ‐Drilling Charges ‐ PG 10 09 $38,976.00

Consumables ‐ ‐ ‐ PG 10 09 $5,373.11

Water ‐ ‐Haulage ‐ PG 10 09 n/ag /

Hourly ‐ ‐Drilling Charges ‐ PG 10 13 $40,437.60

Consumables ‐ ‐ ‐ PG 10 13 $461.88

Water ‐ ‐Haulage ‐ PG 10 13 $6,384.00$91,632.59

Equipment and SuppliesDays Rate Subtotal Total

Satellite Phone 13 $10.00 $130.00

SPOT Device 13 $5.00 $65.00

$195.00

Report PreparationDays Rate Total

M. Keogh 1 $400.00

$400.00

Grand Total Expenditures $102,197.59

Appendix C

Appendix D

References:

Ferri, F. and Melville, D.M. (1994). Bedrock geology of the Germansen Landing Manson Creek area, British

Columbia (94N/9, 10, 15; 94C/2). B.C. Ministry of Energy, Mines and Petroleum Resources, Bulletin

91.

Nelson, J.L. and Bellefontaine, K.A. (1996). The geology and mineral deposits of northcentral Quesnellia;

Tezzeron Lake to Discovery Creek, central British Colombia. BC Ministry of Employment and

Investment, Bulletin 99.

Nelson, J.L., Carmichael, B. and Gray, M. (2003). Innovative gold targets in the Pinchi Fault/Hogem Batholith

area: The Hawk and Axelgold properties, central British Columbia (94C/4, 94N/13). In Geological

Fieldwork 2002, B.C. Ministry of Energy and Mines, Paper 2003‐1, p. 97‐113.

Nixon, G.T., Archibald, D.A., and Hearman, L.M. (1993). 40Ar‐39Ar and U‐Pb geochronology of the Polaris

Alaskan‐type complex, British Columbia; Precise timing of Quesnellia‐North America interaction:

Geological Association of Canada – Mineralogical Association of Canada, Program and Abstracts Joint

Annual Meeting, Edmonton, v. 18, p. A‐76.

Maynard, D.E., Ward, B.C., Geertsema, M., Roberts, N., Sacco, D. (2010). Relative Drift Thickness Map, North‐

Central BC (93G, 93H/w, & 93J/s). Geoscience BC Map 2010‐14‐1.

Breitsprecher, K., Scoates, J.S., Weis, D., Anderson, R.G. (2010). Tracer‐isotope fingerprinting and magma

sourcing for mineralized and unmineralized intrusive porphyries associated with the Nicola Arc,

Southern Quesnellia. Geological Associated of Canada Cordilleran Section Abstract – Cordilleran

Metallogeny: Porphyry Settings 2010.

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Xstrata Canada Corporation Diamond Drilling on the Nukko