mckay mining engineering, inc

320e4SEe485 63.5191 MCGARRY 010

MCKAY MINING ENGINEERING, INCENGINEERING A MANAGEMENT SERVICES

Armistice Resources Limited

Report On Sheldon-Larder Project

May 9, 1988

Foreword

The Larder Lake Property, under option from Sheldon-Larder Mines Ltd and Arjon Gold Mines Ltd, was visited on April 20, 1988 for the purpose of examining the work conducted by Dynatec Mining Ltd on behalf of Armistice Resources Limited. Only the surface plant installation was inspected on this particular visit; however, the shaft bottom was examined on a previous visit on January 21, 1988.

Work Phases

The exploration project has been divided into four phases which will accomplish certain targets as they are completed. Each phase is described as follows:

Phase I This phase includes the mobilization of the surface plant for shaft renovation and sinking. Added to this, is a six- foot diameter raise bore hole 1350 feet long, drilled from surface to the 1250 foot level horizon.

Phase II A total of 2825 feet of three-compartment shaft will be sunk to a depth of 4100 feet as part of this phase.

Phase III This phase of the project includes the exploration diamond drilling and lateral development as well as the bulk sampling.

Phase IV The final phase is optional and could involve either continuing or abandoning the project. In the latter is included the demobilization of the surface plant and cleaning up of the site. In the former, it could involve continuance of the project to successful mine production.

Observations

As the exploration project was started on October 2, 1987 with the awarding of the mining construction contract to Dynatec Mining Limited, this report will cover Phase I items only.

1 Place D'Armes, Unit 81, Frontenac Village, Kingston, Ontario K7K 6K1 . {613)544-2312

1. Mobilization Dewatering Plant

The project started with the rehabilitation of the mine road and levelling the mine yard. Both of these items were completed by October 21, 1987. Before the contractor could begin to dewater, it was necessary to remove the concrete collar plug and re establish a new concrete shaft collar both of which were completed by November 16, 1987.

The temporary hoist and headframe footings were completed by December 7, 1987 when erection of the 30 x 45 inch diameter single drum hoist and 32-foot steel headframe began. Both the temporary headframe and hoist were useable by January 7, 1988 when roping up was completed on January 9, 1988.

2. Detailed Engineering

This item is an on-going thing, which appears to be in hand, with the various plans and construction items already accomplished to date.

3. Substation S Powerline Installation

The project was fortunate to have the Ontario Hydro main powerline close at hand as there was only 200 feet of 44 KV powerline to erect. The powerline has been connected to the 5 MVA transformer substation and both have been energized. A temporary site distribution system station was housed in a separate building behind the permanent hoisthouse. Plans are to eventually move the distribution panels into the main" hoisthouse.

Prior to having permanent power, the site was supplied by a diesel generator set, situated adjacent to the repair shop trailer.

4. Plant Set-up

The plant consists of two separate office trailers, one for the contractor and one for the Armistice site personnel; shop and generator set trailers; two wash/dry trailers; and miscellaneous other small buildings, all of which are portable.

5. Dewater to 1275 feet

Dewatering of the shaft is being kept approximately 20 to 25 feet ahead of the shaft ring installation. Water elevation at present (May 9/88) is at ring 188 or 1127 feet below collar elevation.

6. Install Concrete Rings and New Timber to Enlarge Shaft Compartments

A total of 171 sets have been removed and rings have been installed in their place in order to enlarge the compartments to accommodate present day modern mining equipment. Concrete rings have been installed to elevation 1071 after the May 9/88 pour. The workmanship on this portion of the project is excellent.

7. Rehabilitate Drifts on Four Levels

As each level is reached during the dewatering and concrete ring installation, crews are examining the various headings for loose. To date only a cursory examination of levels 275, 400, 525, 650, 800, 900 and 1100 was made. Washing, mapping and sampling operations are being conducted on the 650 level.

8. Mobilization of 10 Foot Diameter Sinking Hoist and Headframe

Both the sinking hoist complete with generator, and the 105-foot headframe have been mobilized.

9. Installation of Hoist & Headframe

The 105-foot steel headframe and collarhouse have been erected. The 120 x 62 inch diameter double drum twin 500 HP motor DC hoist and generator have been installed. The hoist drums, complete with brakes and brake arms, at the time of the visit, were in place., The workmen had yet to instal the pinions and motors. The armature had to be inserted into the stator in order to complete the generator mechanical installation. Hoist commissioning is scheduled for the last week in May.

Three 1000 CFM centrifugal type compressors are on site.

10. Hoist Ropes S Permanent Shaft Equipment

The hoist ropes are on site but of course are not installed.

The permanent shaft equipment includes the guides, shaft timber sets, ladders and landings, piping and all necessary hardware. Although it was impossible to take a complete inventory of all items, all permanent shaft items appeared to be on site.

11. Shaft Collar Replacement

As mentioned in Item l, before the contractor could begin to dewater, it was necessary to remove the concrete collar plug and re-establish a new concrete shaft collar both of which were completed on November 16, 1987.

12. Raise Bore Hole

The contractor requires fresh air for shaft sinking and lateral development work. It was planned to bring the air down the manway compartment in the shaft. However, with the enlarging of the hoisting compartments, it meant sacrificing some of the cross- sectional area in the manway compartment. Therefore, in order to have enough area for fresh air to flow unobstructed, it was necessary to bore a six-foot diameter air raise to the 1250 level. This was added as an extra, over and above the scope of the original sinking contract.

At the time of the visit, the pilot hole for this raise was drilled and the contractor was waiting until he could gain access to the 1250 level before he could attach the reaming head to bore the raise to full size.

Conelusion

Armistice Resources Limited are following the original plan as proposed in May 29, 1987. Their site representative, Meredith Armstrong, is closely monitoring the activities of the contractor, Dynatec Mining Limited, verifying compliance of the sinking and exploration contract. To date the work done by the contractor is of high quality and conforms to industry standards.

David L McKay P Eng Consulting Mining Engineer

ARMISTICE UNDERGROUND SAMPLING-650 AND 1250 LEVELS, 1987-88

Mapping and sampling of the 650 and 1250 levels at the Armistice Shaft Site, situated one half mile west of Virginiatown, Ontario on Highway 66, was carried out in spring 1988, following the re-habilitation and de-watering of the shaft.

As the mine had not been opened up for investigation since 1948, re-mapping and re-sampling of the existing openings in the mine was done in order to confirm information from old records of Armistice Gold Mines Ltd., the original owners of the property. The Mapping updated geological terms, correlated units between the two levels and provided more geological detail, as the original mapping was quite simplistic in nature. Re-sampling programs were carried out to confirm historic sampling and more importantly to provide a proven and reliable data base, using modern analytical techniques. Several areas of interest where no previous assay information is known to exist were sampled in order to test the existence of possible ore zones.

Also, in order to properly carry out an underground diamond drill program such as Armistice Resources is currently doing, it is necessary for people involved in the program to obtain an understanding of the various rock units and mineralized zones within the mine, preferably by the "hands on" approach that mapping and sampling provide, particularly underground mapping and sampling as mine openings provide the best exposure of rock in any particular area.

As a result of the mapping and sampling efforts at the Armistice Shaft Site, an essential working knowledge of the geology and mineralized zones was gained. Rock units within the mine range from various carbonate units, which are predominantly .extremely altered volcanic and sedimentary rocks and include a green carbonate unit similar to that found at Kerr Mine, through to less altered basalts and mudstones and unaltered sedimentary rocks of the Barber Lake Group. Anomalous gold values are predominantly associated with pyrite rock areas in basalts and mudstones and with green carbonate. Interesting gold values were also encountered within the vicinity of a large fault found within the mine locally referred to as the Sheldon Fault.

The results of the program are shown in the following maps

Sampling Plan 1250 level, HH

650 level J HH i n

David Bigelow August 8, 1988

0-300 E300-600 E

0-300 W200-500 W

100E-200 W300-600 E500-800 W100E-30QR

May 27, May 27, May 27, May 9, May 9, June 2, May 9, May 9,

19881988198819881988198819881988

38DMSEMM 89.6191 MCOAURY

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SAMPLING PLAN LEVEL

SCALE KAAY 89

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ARMISTICE GOLD MINES LIMITED UNDERGROUND LEVEL PLAN1250' LEVEL, WEST SHEET

MCGARRY TOWNSHIPSCALE. 1"s 20*

2O TO O 20Source of information:

Maps ky W.H. Gr***. I"^

drill holt legs. *S

r A-~i.snce Gel* Mines Limited, 1948 an4

t -3ZO/4-O3O4

INTERSECTIONS

U 163 i .C - :2.0 0.2Sc:XC..O

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U 168 C.O - i 5.0 C.C3o;/ i 5 C

U 176 42.5' - 53.0' O.C5c;x:-.5'

U 177 36.0'- 138.0' O.OSoz/2.0

U 186 -.C' - C.C' O.C7CZ/3.C'

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NORTHFAULT

VERTICAL SECTION THROUGH 1250-FT MAIN X-CUT NORT 1

INTERSECTIONS

INTERSECTIONS

NTERSECTtON - U 185

1250' LEVEL STATION

INTERSECTIONS U 188

ARMISTICE GOLD MINES LIMITED UNDERGROUND LEVEL PLAN

1250' LEVEL, CENTER SHEET

for

rder property.

Or itletf by K e

the Sheldc

MCGARRY TOWNSHIPSCALE 1"^ 20*

20 10 O 20

ONTARIOOCTOBER 1987

40 to f**tSource or infornatio

Maps by W. H. C:

and underground cr

t "- 20'. for Armistice Gold Mines Limited, t 948

Itj*. 1946. 1947 4 1948.32D/4-O304

of wformat

Approximate ot

copy of mvTC pi.

and undcrgrounc

Datt Rovuion* By

ARMISTICE GOLD MINES LIMITEDUNDERGROUND LEVEL PLAN1250* LEVEL, EAST SHEET

i of th* (25O* E. drift from

1948, l "s lOO'

at holes from logs 1946. 1947 4 1948.

MCGARRY TOWNSHIPSCALE. 1"s 2O'

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ONTARIO DECEMBER 1987

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650' LEVEL, WEST SHEET fa. Sill

MCGARRY TOWNSHIPSCALE. 1'^ 20'

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ONTARIOOCTOBER 196 7

40 6O f**toctree Df information:

Maps and sectiors for

urxtegroi.nd dritl dele toe

rmisttce Goltf

; 1946. 1947 A 1348

PLAN OF 650 EAST RAISESCALE: l ' = 20'

U 93 -55

INTERSECTIONS

X X

SECTION OF 650 EAST RAISE

650 LEVEL STATION

INTERSECTION - U62 - 64 r^

INTERSECTIONS - U 71INTERSECTIONS - U 65485' - 48B' O.I 3

498' - 5O5' 0.046

46C - 485 97' - 5O3'

89 - 6O9'

INTERSECTIONS - U 67465 - 468 O.O4

- 493' 0.06

Source o' information:

Maps and sections for Ar

underground drill bole togs.

2 IOO N

———————————————————————————— l ————

Date Reviswn* By


650' LEVEL, CENTER SHEET

pttce GoW Mines Limited, l "-20 and

. l 947 i l 948.

MCGARRY TOWNSHIPSCALE- t"^ 20'

2O 1O O 2O

ONTARIO OCTOBER 1987

4O 60 f**t

320/4-O3O4


650* LEVEL, EAST SHEETMCGARRY TOWNSHIPSCALE: 1"z 2O*

20 10 O 2O


4OSource of information:

Maps an* sections for Armistice Gold Munderground drill hit* (091; 1946. 194

PLAN SHOWING LOCATION OF U 89. 9O l 91

SCALE: t*= 20'

Date ffovwwns By

Maps and stcttcns fer Armistice GtW Mm*t '

untergrotfntf drrfl h*l* lag*; l 946. l 947 S. l

ARMISTICE GOLD MINES UMITED UNDERGROUND LEVEL PLAN525' LEVEL, WEST SHEET

63.5H/

mtctf.

46.

MCGARRY TOWNSHIPSCALE: 1"~ 20'

20 10 O 2O

ONTARIO OCTOBER 1M7

4O CO *c*t

32D/4-03O4

U 144 65 0 l 29'Same location as U l 36

INTERSECTIONS 37.O-33.: 1 O.C5 5J.E-E5.C' 0.05

INTERSECTION U 267C.O'-73.0' 0.070Z/3.C'

525' LEVEL STATION


525' LEVEL, CENTER SHEETONTARIO

OCTOBER 198740 6O feet

MCGARRY TOWNSHIPSCALE:

2O tO O 20Source of information:

Maps and section for Armistice

underground drill hoi* loos; l 946. i

•net Limited. I H ^2O' and 7 A l 948.

: ea.sisi

INTERSECTIONS U 145

Source of information:

Maps and sectiors for Armistice

underground drill hole logs, l 94C

Mints Limited. \"=2Q' and

1947 A 1948

O O

Date Revision! By

ARMISTICE GOLD MINES LIMITEDUNDERGROUND LEVEL PLAN

525' LEVEL, EAST SHEET

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MCGARRY TOWNSHIPSCALE: \" - 2O'

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Date Revisions By

o oCM

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Source of mfornatior-

Maps and secticrs

drill hole


400' LEVEL. CENTER SHEET

rmstice Gold Mints United, l '^20' and

1946. 1947 A (948.

MCGARRY TOWNSHIPSCALE: 1'^ 20'

20 10 O 20

ONTARIOOCTOBER 1087

40 CO tect

320/4-O3O4

mckay mining engineering, inc

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