CADILLAC VENTURES INC.
FORM 2A - LISTING STATEMENT
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2
Table of Contents
2. Corporate Structure 3. General Development of the Business 4. Narrative Description of the Business 5. Selected Consolidated Financial Information 6. Management's Discussion and Analysis Off-Balance Sheet Arrangements 7. Market for Securities 8. Consolidated Capitalization 9. Options to Purchase Securities 10. Prior Sales 11. Escrowed Securities 12. Principal Shareholders 13. Directors and Officers 14. Capitalization 15. Executive Compensation 16. Indebtedness of Directors and Executive Officers 17. Risk Factors 18. Promoters 19. Legal Proceedings 20. Interest of Management and Others in Material Transactions 21. Auditors, Transfer Agent and Registrars 22. Material Contracts 23. Interest of Experts 24. Other Material Facts 25. Financial Statements Certificate of the Issuer Schedule "A"
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2. 2.1
CORPORATE STRUCTURE State the full corporate name of the Issuer or. if the Issuer is an unincorporated entity, the full name under which the entity exists and carries on business and the addressees) of the Issuer's head and registered office. Cadillac Ventures Inc. (the "Company", formerly Blue Power Energy Corporation) The Company's head/registered office is at 360 Bay Street, Suite 500, Toronto, Ontario, M5H 2V6.
2.2
State the statute under which the Issuer is incorporated or continued or organized or, if the Issuer is an unincorporated entity, the laws of the jurisdiction or foreign jurisdiction under which the Issuer is established and exists. If material, state whether the articles or other constating or establishing documents of the Issuer have been amended and describe the substance of the material amendments. Governing Statute: Business Corporations Act (Ontario) Corporate History:
The Company (formerly Blue Power Energy Corporation)1 was formed on February 19, 1996 by the amalgamation of Blue Power Energy Corporation, 1155698 Ontario Inc. and 1155697 Ontario Inc. On April 28, 2006, the Company acquired 100% of Chilly-Bin Inc. ("Chilly-Bin") by issuing a total of 5,000,000 post-consolidation common shares ("Common Shares") in the capital of the Company to the shareholders of Chilly-Bin in exchange for all of the issued and outstanding common shares of Chilly-Bin ("ChillyBin Acquisition"). At the same time, the authorized capital of the Company was altered by consolidation of all of the issued and outstanding Common Shares of the Company on the basis of one post-consolidation Common Share for every five pre-consolidation Common Shares ("Consolidation"). Refer to Section 20 - "Interest of Management and Others in Material Transactions - The Chilly-Bin Acquisition" of this Listing Statement for a description of this transaction. On April 20, 2006, the name of the Company was changed from Blue Power Energy Corporation to its current name Cadillac Ventures Inc. 2.3 Describe, by way of a diagram or otherwise, the intercorporate relationships amons the Issuer and the Issuer's subsidiaries. For each subsidiary state: (a) the percentage of votes attaching to all voting securities of the subsidiary represented by voting securities beneficially owned, or over which control or direction is exercised, by the Issuer;
The Company has one wholly owned subsidiary, Chilly-Bin. (b) the place of incorporation or continuance; and
Chilly-Bin is incorporated under the laws of Ontario. (c) the percentage of each class of restricted shares beneficially owned, or over which control or direction is exercised, by the Issuer.
Not applicable.
Blue Power Energy Corporation was created in October 1995 as a result of the amalgamation of Blue Power Gas Pipelines Inc. and Twin Star Energy Corporation. Twin Star Energy Corporation was incorporated in June 1985. In May 1995, Twin Star Energy Corporation amalgamated with Twin-Cam Pipeline Ltd. and continued as Twin Star Energy Corporation.
1
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2.4
If the issuer is requalifvins following a fundamental change or is proposing an acquisition, amalgamation, merger, reorganization or arrangement, describe by way of diagram or otherwise these intercorporate relationships both before and after the completion of the proposed transaction. Not Applicable.
2.5
Non-corporate Issuers and Issuers incorporated outside of Canada must describe how their governing legislation or constating documents differ materially from Canadian corporate legislation with respect to the corporate governance principles set out in Policy 4. Not Applicable.
3. 3.1
GENERAL DEVELOPMENT OF THE BUSINESS Describe the general development of the Issuer's business over its three most recently completed financial years and any subsequent period. Include only major events or conditions that have influenced the general development of the Issuer's business. If the business consists of the production or distribution of more than one product or the rendering of more than one kind of service, describe the principal products or services. Also discuss changes in the business of the Issuer that are expected to occur during the current financial year of the Issuer.
The Company was formed in February 1996 by the amalgamation of Blue Power Energy Corporation, 1155698 Ontario Inc. and 1155697 Ontario Inc. Upon the sale of an interest in an oil and gas property in 2000, the Company had no operating assets and had been inactive for several years. Following the reconstitution of the Board of Directors of the Company (the "Board") on November 1, 2005, the Board decided to seek business opportunities in the mineral exploration sector while maintaining its reporting issuer status in British Columbia, Alberta and Ontario. In December 2005, the acquisition of the New Alger property located in the Cadillac Township, Quebec ("New Alger Property"), through the Chilly-Bin Acquisition, was proposed to the Board. Chilly-Bin2 acquired the New Alger Property from Alfer Inc. pursuant to an agreement of purchase and sale dated January 31, 2005 in exchange for 5,000,000 Chilly-Bin shares. Alfer Inc. also retained a 1% net smelter returns production royalty from the sale of all minerals produced from the New Alger Property. As Messrs Voisin and Novak were beneficial shareholders of Chilly-Bin, the disinterested directors of the Board formed an ad hoc committee (the "Committee") comprised of Messrs. Wilton, Iscove and Stekel to review the Chilly-Bin Acquisition. The Committee performed its due diligence on the New Alger Property and unanimously determined that the Acquisition was in the best interests of the Company. The Chilly-Bin Acquisition was approved by shareholders of the Company at its annual and special meeting held on April 11, 2006. The Company completed the Chilly-Bin Acquisition in April 2006. The Company is currently focusing on the re-development of the New Alger Property. Refer to Section 4.3 of this Listing Statement for a detailed description of the New Alger Property under "Narrative Description of the Business - New Alger Property". Refer to Section 20 of this Listing Statement for a detailed description of the Chilly-Bin Acquisition under "Interest of Management and Others in Material Transactions - The Chilly-Bin Acquisition". In April 2006, the Company completed the Consolidation and changed its name as described in Section 2.2 above. The Company has completed several private placement financings in 2006. Financing activities in 2006 are discussed in detail in Sections 6 and 8.1 of this Listing Statement. In April of 2007, the Company acquired an option agreement from a privately held Ontario corporation pertaining to the Burnt Hill Project in New Brunswick. Through the acquisition of this option the Company has
:
Chilly-Bin was incorporated on October 21, 2004 under the laws of the Province of Ontario as 2056867 Ontario Corp. On October 28, 2004, Chilly-Bin amended its articles to change its name to "Chilly-Bin Inc."
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entered into a joint venture with publicly traded Noront Resources. Refer to Section 4.3 of this Listing Statement for a detailed description of the Burnt Hill Project. 3.2 Disclose: (1) (a) any significant acquisition completed by the Issuer or any significant probable acquisition proposed by the Issuer, for which financial statements would be required under Part 6 or 7 ofOSC Rule 41-501 if this Listing Statement were a prospectus: and any significant disposition completed by the Issuer during the most recently completed financial year or the current financial year for which pro forma financial statements would be required under Part 8 of OSC Rule 41-501 if this Listing Statement were a prospectus.
(b)
(2)
Under paragraph (1) include particulars of (a) (b) (c) (d) (e) (f) the nature of the assets acquired or disposed of or to be acquired or disposed of; the actual or proposed date of each significant acquisition or significant disposition; the consideration, both monetary and non-monetary paid, or to be paid, to or by the Issuer; any material obligations that must be complied with to keep any significant acquisition or significant disposition agreement in good standing; the effect of the significant acquisition or significant disposition on the operating results and financial position of the Issuer; any valuation opinion obtained within the last 12 months required under Canadian securities legislation or Canadian securities directives of a Canadian securities regulatory authority or a requirement of a Canadian stock exchange or other Canadian market to support the value of the consideration received or paid by the Issuer or any of its subsidiaries for the assets, including the name of the author, the date of the opinion, the assets to which the opinion relates and the value attributed to the assets; and whether the transaction is with a Related Party of the Issuer and if so, disclose the identity of the other parties and the relationship of the other parties to the Issuer.
(g) Chilly-Bin Acquisition
Refer to Section 20 of this Listing Statement for a detailed description of the Chilly-Bin Acquisition. Proposed Acquisitions Not Applicable. 3.3 Discuss any trend, commitment, event or uncertainty that is both presently known to management and reasonably expected to have a material effect on the Issuer's business, financial condition or results of operations, providing forward-looking information based on the Issuer's expectations as of the date of the Listing Statement.
Refer to Section 17 "Risk Factors".
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4. 4.1
NARRATIVE DESCRIPTION OF THE BUSINESS General (1) Describe the business of the Issuer with reference to the reportable operating segments as defined in the Handbook and the Issuer's business in general. Include the following for each reportable operating segment of the Issuer: (a) (b) State the business objectives that the Issuer expects to accomplish in the forthcoming 12month period. Describe each significant event or milestone that must occur for the business objectives in (a) to be accomplished and state the specific time period in which each event is expected to occur and the costs related to each event. Disclose the total funds available to the Issuer and the folio-wins breakdown of those funds: (i) (ii) (d) the estimated consolidated working capital {deficiency) as of the most recent month end prior to filing the Listing Statement: and the total other funds, and the sources of such funds, available to be used to achieve the objectives and milestones set out in paragraphs (a) and (b).
(c)
Describe in reasonable detail and, if appropriate, using tabular form, each of the principal purposes, with approximate amounts, for which the funds available described under the preceding paragraph will be used by the Issuer.
Certain information contained or incorporated by reference in this Listing Statement, including any information as to the timing of completion of various aspects of the development of the New Alger Property or of future performance of the Company, constitute "forward-looking statements" within the meaning of the Canadian securities legislation. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule", and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. In particular, this Listing Statement includes many such forwardlooking statements and such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the Company to be materially different from its estimated future results, performance or achievements expressed or implied by those forwardlooking statements and its forward-looking statements are not guarantees of future performance. These risks, uncertainties and other factors include, but are not limited to: changes in the worldwide price of precious metals; fluctuations in exchange rates; legislative, political or economic developments including changes to mining and other relevant legislation; operating or technical difficulties in connection with exploration, development or mining; environmental risks; the speculative nature of gold exploration and development, including the risks of diminishing quantities or grades of reserves; and the Company's requirements for substantial additional funding. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except where required by law. The Company's operations comprise a single reporting operating segment, that is, exploration and development of mineral properties. The Company is currently focusing its efforts on its mineral property interest in the New Alger Property. The following details the business objectives the Company expects to accomplish within the next 12 months. The expected timeframe and the cost associated with achieving each business objective are included below. The general objective of the Company is to enhance the value of both the New Alger Property, with a long-term goal of turning it into commercial gold producing property, as well as the Burnt Hill Project, with a long-term goal of turning it into a producing tungsten and molybdenum property. The Company will also continue to assess new
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properties and will seek to acquire interests in additional properties if the Company feels that they have sufficient potential. In the forthcoming 12-month period it is the intent of the Company to undertake a drill program in the Summer 2007 season on both the New Alger Property and the Burnt Hill Project. At present, with regard to the New Alger property, the Company is awaiting receipt of the report encompassing the results of the Induced Polarization Survey and its Inversion, as well as Electromagnetic and Magnetic ground surveying carried out over the entire property area. This report, in conjunction with the filed 43-101 New Alger Property Report and the consideration of historic data, shall permit the Company to select drill targets which it is anticipated be both exploratory and designed to test historic results. The Company intends to devote 75% of the flow-through funds held by the Company to this drill program. Once the drill program is complete the information resultant from the program shall be used by the Company to determine if further work on the property is warranted, and if so determine what it shall be. The Company has the required permits to carry out this work, and will be using the services of an exploration management company in order to provide a site geologist and identify a competitive drilling services provider. The Company's plans for the Burnt Hill project in the forthcoming 12 months include re-surveying the Burnt Hill claim, as previous mining significantly altered the surface, cutting grids on each of the four prospects and carrying out geophysical surveys on each, and carrying out an initial drill program on the Burnt Hill claim designed to validate the historical 43-101 authored on the property and test the strike of the mineralization. The Company has, as of February 28th 2007 a total of $635,250 in flow-through funds available for operations on the New Alger Property and hard cash of $238,531.20 as of February 28* 2007 in order to fund ongoing business expenses. (e) Not Applicable. (f) Not Applicable. (g) The competitive conditions in the principal markets and seographic areas in which the Issuer operates, including, if reasonably possible, an assessment of the Issuer's competitive position. Concerning production and sales For principal products or services
Refer to Section 17 "Risk Factors" of this Listing Statement. (h) Not Applicable. (2) Disclose the nature and results of any bankruptcy, or any receivership or similar proceedings asainst the Issuer or any of its subsidiaries or any voluntary bankruptcy, receivership or similar proceedings by the Issuer or any of its subsidiaries, within the three most recently completed financial years or the current financial year. With respect to lending operations of an Issuer's business, the investment policies and lendins and investment restrictions.
None. (3) Disclose the nature and results of any material reorganization of the Issuer or any of its subsidiaries within the three most recently completed financial years or the current financial year.
Refer to Section 20 of this Listing Statement for a detailed description of the Chilly-Bin Acquisition.
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4.2 None. 4.3
For issuers with asset backed securities outstanding provide the disclosure required by items 6.2 and 10.3 ofOSCForm 41-50 IF 1 as if the securities were or -were being distributed under a prospectus .
For Issuers with a mineral project, disclose the following information for each property material to the Issuer:
The description of the New Alger Property in this section 4.3 is derived from the Technical Report "New Alger Property Mining Concession CM-0240-PTA, Cadillac TWP, Quebec" prepared for Blue Power Energy Corp. by Howard Lahti Ph.D.P. Eng., Deep Search Exploration Technologies Inc., dated February 1, 2006 ("43-101 New Alger Property Report"). The author of the 43-101 New Alger Property has not reviewed any joint venture agreement and/or letter of understanding between Blue Power Energy Inc. and the present owners of the New Alger Property. The author only evaluated the old historical mining and exploration data. None of this information is up to NI43-101 standard. To the best of the Company's knowledge, Mining Concession CM-0240-PTA is in good standing and no assessment work is required to maintain the New Alger Property. Alfer Inc. received 1,000,000 post-Consolidation Common Shares of the Company as the consideration for the New Alger Property and retains a 1% NSR. The description of the Burnt Hill Project in this section is derived from the Technical Report "Geological Report and Preliminary Resource Estimate on the Burnt Hill Tungsten Deposit, Claim Group #3785 (Claim #'s 390971-72, 397716-17, 402225-33, 402240-50), Stanley Parish, York County, New Brunswick, Canada, NTS 21J10" prepared for Noront Resources Ltd. by A.C.A. Howe International Limited, dated April 20*, 2005. The geological technical report was written to conform to the standards of NI 43-101 but was not intended to be fully compliant in particular due to project data not having been fully validated and verified as required. (1) Property Description and Location (a) (b) The area (in hectares or other appropriate units) and location of the property. The nature and extent of the Issuer's title to or interest in the property, including surface rights, obligations that must be met to retain the property and the expiration date of claims, licences and other property tenure rights. The terms of any royalties, overrides, back-in rights, payments or other agreements and encumbrances to which the property is subject. All environmental liabilities to which the property is subject. The location of all known mineralized zones, mineral resources, mineral reserves and mine workings, existing tailings ponds, waste deposits and important natural features and improvements. To the extent known, the permits that must be acquired to conduct the work proposed for the property and whether permits have been obtained.
(c) (d) (e)
(f)
The New Alger Property consists of a single mining concession (C.M. 240-PTA) immediately east of the Bousquet-Cadillac TWP boundary in the province of Quebec. The concession consists of Blocks 21-35 with an area of 317.2 hectares. The property is found on N.T.S. Map 32D01, 78o25'35"W and 48o 13' 05"N. The Burnt Hill Property is located in Stanley Parish of York County, west-central New Brunswick, near the confluence of Burnt Hill Brook and the Southwest Miramichi River, approximately 95 km (59 mi) north of Fredericton. The Property is centered at approximately 46°42' N latitude and 66°48' W longitude, on National Topographic System sheet 21J/10. (2) Accessibility, Climate, Local Resources, Infrastructure and Physiography
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(a) (b) (c) (d)
The means of access to the property. The proximity of the property to a population centre and the nature of transport. To the extent relevant to the mining project, the climate and length of the operating season. The sufficiency of surface rights for mining operations, the availability and sources of power, water, mining personnel, potential tailings storage areas, potential waste disposal areas, heap leach pads areas and potential processing plant sites. The topography, elevation and vegetation.
(e)
The New Alger Property has a very good access with main paved Highway 117 passing just south of the two abandoned shafts. This highway, which runs from the town of Cadillac, 3 km to the east of the property, to Rouyn-Noranda about 45km to the west, bisects the property. The New Alger Property occurs within a well established mining camp so has an excellent infrastructure with power lines crossing the property. The area has a well-trained works for in all aspects of exploration, mine construction and mining. The mineral industry in this area is well provided for by companies located in RouynNoranda, Malarctic and Val D'Or. Both Rouyn-Noranda and Val D'Or have Department of Natural Resource offices. The employees are happy to assist explorationists in any way. The New Alger Property is well forested with jack pine, spruce, balsam fir, poplar and birch. The winters are long, November to May and a considerable amount of snowfall can be expected. For short periods the temperature falls to —40 C°. Summers are short, but temperatures in the 5° C to 35° C range can extend well into October and November. Most types of exploration can be done throughout the year. The topography has a welldeveloped network of streams with good drainage. Much of the land is higher ground with a variable thickness of till. In the immediate area north of the shafts an east-west striking stream that has large beaver dams on it causing an extensive amount of flooding. Road access to the Burnt Hill Property is excellent via the following route from Fredericton: travel north for 33.8 km (21 miles) on New Brunswick Highway #8 to Nashwaak Bridge; travel northwest on Hwy 107 (formerly 25A) for 11.3 km (7 mi) to Stanley; travel northeast on Hwy 25 for 3.5 km (2.2 mi) to Cross Creek; travel northwest on the extension of Hwy 107 for 20 km (12.4 mi) to Napadogan Station on the CNR line; travel north on Napadogan Rd. to Upper Hayden Rd.; travel on well-marked gravel roads for 24 km (15 mi) to the centre of the Burnt Hill Property. The gravel roads are on Bowater timber limits and currently are not maintained (plowed) in the winter. There are no permanent buildings on the Burnt Hill Property. A CNR line passes within 24 km of the mine workings. All necessary amenities and services are available at Fredericton, Boiestown and Doaktown. There is also a large experienced mining labor pool in the immediate area. The Burnt Hill Property is located in an area of rough terrain, with hills rising steeply from the stream valleys. The mine workings lie along the northeast slope of a northwest-southeast trending ridge, which rises to an elevation of >150 m (>500 ft) above the Miramichi River. The river itself is at an elevation of 182.8 m (600 ft) above sea level. The elevation of the old shaft collar is approximately at 215.8 m (708 ft) above sea level. The climate is typical temperate continental, moderated and influenced by its proximity to the Bay of Fundy and the Gulf of St. Lawrence. The Burnt Hill Property area is well timbered; stumpage fees belong to Bowater Paper. The forest growth is mature, due to the difficulty of cutting on steep slopes, and consists of a mixture of deciduous hardwoods and evergreens with a scattered dense undergrowth of scrub vegetation. There is an ample supply of water available from the river and the brooks in the area. The mine workings are flooded to an elevation of about 200 meters above sea level, or about 50 meters above the river. The Southwest
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Miramichi River has an Atlantic salmon run, and fishing rights are consequently held by various individuals and clubs. (3) History (a) The prior ownership of the property and ownership changes and the type, amount, quantity and results of the exploration work undertaken by previous owners, and any previous production on the property, to the extent known. If a property was acquired within the three most recently completed financial years of the Issuer or during its current financial year from, or is intended to be acquired by the Issuer from, an insider or promoter of the Issuer or an associate or affiliate of an insider or promoter, the name and address of the vendor, the relationship of the vendor to the Issuer, and the consideration paid or intended to be paid to the vendor. To the extent known, the name of every person or company that has received or is expected to receive a greater than five per cent interest in the consideration received or to be received by the vendor referred to in subparasraph (b).
(b)
(c)
A summary of the previous work and development regarding the New Alger Property is presented below. The information was obtained from a report written by B. E. Gorman in 1984 for Sulpetro Minerals Limited. No work was done to verify the historical reserves so they cannot be considered as current reserves. The historical reserves cannot be relied upon and are only used as a guideline for the Company. 1924-1925 - The property was first stake by E. J. Thompson following the discovery of a wide zone of quartz veining in greywacke 240m south of the present workings. Further exploration led to the discovery of gold mineralization in the Piche Group volcanic rocks in contact with the Pontiac Group greywacke. 1925-1926 - The Huronian Belt Company sank two exploration shafts: #1 (East) to 35 feet and #2 to a depth of 15 feet. 1927 - The Thompson-Cadillac Mining Corporation was formed and continued shaft sinking. The #2 shaft reached 100 feet and the #1 shaft was enlarged to three compartments and deepened to 340 feet. 1929 - The #1 shaft was deepened to 600 feet, with levels at 150, 300, 450, and 600 feet. On the 150 level, the #1 Vein was drifted on for 275 feet, and the #2 Vein for 180 feet. On the 300-foot level both the #1 and #2 Veins were found. A 10-ton Straub mill processed 18 tons of ore with a grade of $9.74 gold. In November of 1928, 22 tons grading $7.43 gold was milled. By the spring of 1929 the lower levels were flooding, and the pumping kept the mine dewatered to the 300-foot level. 1930 - Reserves down to the 300-foot level were reported as 35,000 tons grading $8.00 gold. Due to financial difficulties, all work was suspended. 1933 - Thompson-Cadillac Mining Corporation resumed operations. The #1 shaft was dewatered and reexamined. Minor underground development and 877 feet of drilling was carried out. 1934-1935 The mine was dewatered to the 300-foot level, and later to the 600-foot level during the construction of a mill. 1936 - Lateral development continued to proceed on the 150, 300, and 600-foot levels. On the 150-foot level a drift extending 1000 feet west of the #1 shaft encountered spectacular visible gold. It is reported that 843 troy ounces were handpicked on the 109E stope. Slopes on the three levels provided enough material for a 75-tpd mill. By late 1936 it is reported that the mill was producing 85 tpd averaging $8.00 gold at the mill-head. Total production for the year was 16,346 tons or $123,740 gold (3,535 oz. @ $35/oz.) of which $68,782 was free-milling (1,965 oz. = 56%), with the remainder as arsenical sulphide concentrates. This represents a recovered grade of 0.216 oz/ton (7.63 g/t). Reserves as of February 1937 were reported to be 37,399 tons of an unspecified grade.
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1937 - Production for the year was 38,081 tons yielding 1,730.4 ounces, for a recoverable grade of 0.045 oz/ton (1.56 g/t). The average mill head for the year was $5.39 (0.154 oz/ton at $35 gold). By October 31 a total of 12,995 feet of lateral work was done including 839 feet of sloping on the 150-foot level, 576 feet on the 300-foot level ands 124 feet on the 600-foot level. During August 9 DDH (2000 feet) were drilled examining a further 100 feet of strike length. Several encouraging section were cut. 1939 - A total of 78,247 tons were milled during the year and $227,004 bullion recovered (6,486 oz. At $35 gold) and 2,017 tons of arsenical concentrates containing another 2,875 oz. of gold was recovered. The recovered gold was 0.120 oz/ton. An important discovery was made south of the Cadillac Break on the 150-foot level. This new zone lies between 700 and 1300 feet west of the main zone. According to old notes taken by A.P. Beavan (the O'Brien Division of Sulpetro Minerals) and quoted by B. E. Gorman "It is apparent that Beavan reckoned better possibilities could be found in the greenstones further west". 1939 - The mine operated until July, producing $143,752 in bullion from 42,381 tons of milled ore (4,097 oz. at $35 gold). There are no records of any concentrates. The new zone did not persist below the 150-foot level and the only work was done on the 610, and 616 slopes on the 600-foot level. After operations ended in July the mill was leased to Central Cadillac. A memo from H. C. Young (manager) dated August 1st reviewed reserves: 10,457 tons of broken ore in slopes of variable grade and 57,424 tons of probable ore of "average mining grade" in place. 1940-1942 - The mine was kept de-watered and the mill treated ore from Central Cadillac. 1943-1944 - Steps were taken to sell the property, without success. A report by T. Koulimine recommended additional drilling on the west part of the property, concentrating on a system of cross-fractures and renewed exploration in the quartz albitites north of the Cadillac Break. 1945 - Attempts in selling the property having proved futile, a new company called Alger Gold Mining Limited was formed. Diamond drilling began in June, totaling 20 surface holes (9,451 feet) and 48 underground holes (1,447 feet). During December, 103 feet of drifting was done on the 450-foot level, and 178 feet of crosscutting on the 600-foot level. 1946 - An additional 4 surface holes were drilled on the west zone south of the Cadillac Break. Numerous erratic sections of mineralization were found according to resident geologist W. G. Robinson. The total surface and underground drilling amounted to 9,256 feet. In May the shaft was deepened from 620 feet to 850 feet, with 689 feet of cross-cuts and 2,326 feet of drifting. 1947 - The main (#1) shaft reached 1124 feet, with levels established at the 975 and 1100 feet. Two veins ("B" and "C") were opened up and found to join on the 1100- foot level but pinched out 225 feet below. Operations ceased in early 1948. 1949-1950 - The mine and the mill remained idle. A deal was made with O'Brien to process 221.75 tons of arsenical concentrates to recover 491.54 ounces of gold. 1951 -1962 - The Company, now New Alger Mining Limited remained idle, as did its operations. 1977-1981 - The property was acquired by A. N. Ferris following New Alger bankruptcy and transferred to Darius Gold Mines Inc. The property remained idle. Work completed by Sulpetro Minerals Limited (B. E. Gorman, 1984) Following the acquisition of the New Alger Property as part of the Darius Joint Venture in August 1981 and attempt was made to compile all of the available records of previous work (see above). Between 1982 and 1984 the following work was completed: • Re-draughting of the property boundary based on a 1928 survey by D. R. Lowe at a scale of 1" = 10 chains. The new scale is 1:2,500. • Surface compilation of diamond drilling (28 surface holes) totaling 14,735 feet or 4,491.2 meters at a scale of 1:1,000.
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• Preparation of sections (1:200) at 50 meter intervals extending 600 meters east of the Bousquet-Cadillac TWP line. • Capping of both shafts. Geological Compilation The A-series of diamond drill drilling (24 holes totaling 12,522.5 feet or 3,826 meters) give a complete stratigraphic section of the Piche Group south of the Cadillac Break, extending 600 meters east of the BousquetCadillac TWP boundary. South of the break the Piche Group is 200 meters thick. The rocks strike E-W with a vertical to steeply dipping to the south. The greenstones (Unit V7) are dark green chloritic basalts, fine grained, and variably altered to carbonate. Occasional horizons of "weakly porphyritic" and biotitic zones are reported. Several zones of coarser grained dioritic or gabbroic (3G) are described, as well as agglomerated (Unit V10). Two porphyritic horizons are recognized (Unit V6). The southernmost unit (the South Porphyry) is the more mafic of the two, often described as transitional from greenstone. Its thickness ranges between 15-30meters. The northernmost unit (the North Porphyry) is more siliceous, grey, and strongly porphyritic, marked by sharp contacts. It ranges in thickness from 8 meters (west end) to 60 meters (east end). The North porphyry is generally altered to carbonate, biotite, arsenopyrite + pyrite, and "bleached" zones. The north boundary of the North Porphyry is marked by a layer of black graphitic tuff (Unit V9), followed by greywacke (S3). Approaching the talc-chlorite schist of the Cadillac Break (Mij), a zone of chlorite schist is likely derived from the greenstones. The 14 Cadillac Break is approximately 180m thick as indicated in drill hole B1. Several zones of intense carbonate alteration are reported at the east end, and in the vicinity of the North Porphyry. The carbonate zones are described as light grey laminated carbonate rocks, visibly mineralized with pyrite, arsenopyrite and pyrrhotite. 1987 - Under the Darius Joint Venture deal a magnetometer and VLF geophysical survey (project 2140.21) was done by J. L. Wright and Dr. Barry Gorman. The salient results of the survey were 1) the magnetic survey traced the porphyritic andesite host rock (the mineralized horizon) across the property and inferred the existence of a bulge in the Piche volcanic unit. (See report titled "Darius Joint Venture, New Alger Property, Project 2140.21 Magnetometer and VLF Geophysical Survey, N.T.S. 32D/1.) 1989-1990 - The following work was done (R. V. Zainieriunas 1990): • 2 drill holes were completed along section 7+75E with a total 273.56m drilled. They were designed to test the Number 3 Zone at a shallow depth. • 2 trenches just to the west of the #2 shaft were re-opened and sampled. A summary of the Burnt Hill Property history is as follows, taken from the Geological Technical Report authored by A.C.A Howe International as previously referenced. The original discovery of mineralization in the Burnt Hill area was made 137 years ago. Exploration of the Burnt Hill deposit and environs began in 1915, and continued intermittently through the 1940s, 1950s and 1960s and 1970s; the most recent work was done in 1980. In 1868, Dr. Charles Robb, of the Geological Survey of Canada, discovered molybdenite in a quartz vein north of the Southwest Miramichi River near the mouth of Burnt Hill Brook. No further news was reported until 1904 when a local prospector located a second mineralized quartz vein some 2,000 ft (610 m) to the southeast of the first. In 1910, Dr. T.L. Walker of the Mines Branch in Ottawa recognized wolframite (Fe,Mn)WO3 in the quartz veins. Acadia Tungsten Mines Limited, incorporated in 1912, acquired the mining rights to a square mile (about 2.5 km2) of land covering the known showings. In 1915, Acadia entered into an agreement with the Imperial Munitions Board to produce 36 tons of concentrate grading 65% WO3. They undertook an exploration program of surface drilling and trenching, and sank
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a 15 m (50 ft) deep shaft. By the middle of 1916 they had defined resources sufficient for 52 tons of concentrate grading 65% WO3. In 1917, the Timmins brothers and H.M. Porteus undertook additional development, deepening the shaft to 50.9 m (167 ft) along with 178.9 m (587 ft) of lateral work on two levels. The property reverted back to Acadia, and work ceased at the end of WWI. In 1923, Acadia acquired a lease covering the property, which they held until 1941 when it reverted back to the Crown. In the meantime, examinations were done by the Geological Survey of Canada (1917) and Provincial Geological Survey (1939). In 1941 and 1942, the property was examined by Consolidated Mining and Smelting, Ventures Limited and Lapa Cadillac Gold Mines Ltd., V.L. Fardly-Wilmot and Dr. H.C. Cook of the Mines Branch. Subsequently A. Colter of Fredericton acquired the property. With the supply of tungsten tightened during the Korean War, attempts at domestic production were made. Burnt Hill Tungsten Mines Limited, incorporated in 1953, acquired the mineral rights to the property. From 1953 to 1956, they did exploration and development work consisting of installing an on-site 150 ton-per-day gravity concentrator; driving a 950 ft (290 m) adit into the hill; and drifting 400 ft (122 m) on the No. 1 Vein, 1,550 ft (472 m) on the No. 2 Vein, and 900 ft (274 m) on the No. 3 Vein. Some sloping was evidently completed on the No. 2 and No. 3 Veins. A total of 11 surface holes totaling 11,036 ft (3,364 m) and 5,957 ft (1,816 m) of underground diamond drilling (number of holes not specified) were also completed. It is reported that 50,128 Ibs (22,379 kg) of concentrate averaging about 69% WO3 and about 3.5% Sn were shipped during this period. The zone was traced along strike for approximately 1,000 ft (305 m) and the deepest drilling showed it to extend at least 1,130 feet (345 m) vertically below the shaft collar. Three "ore blocks" were estimated to contain a resource of 252,000 tons (228,675 tonnes) grading 1.63% WO3; it was also estimated that the tungsten concentrate would contain 4% recoverable Sn. After 1956, the company ran out of funds and the property again reverted to the Crown; it was later acquired by Miramichi Lumber Company with their timber rights. In 1963, Burnt Hill Tungsten and Metallurgical Limited arranged for new financing, leased the mineral rights from Miramichi for 10 years and re-evaluated the deposit. From 1963 to 1969, the company completed a total 14,079 ft (4,291 m) of surface diamond drilling and 1,097 ft (334 m) of underground drilling. Due to the coarse nature of the wolframite, all the core was crushed to 60% minus 1/4 inch and split on a Jones Riffle, keeping one half for WO3 assay at the assay laboratory of Eldorado Mining and Refining Limited in Ottawa, and the other for storage. A new shaft was sunk to a vertical depth of 238 ft (72.5 m). At a depth of 150 ft (45.7 m) mineralization was encountered and a cross-cut was driven southwesterly for 280 ft (85.3 m). The No. 2 Vein was encountered at 230 ft (70.1 m) in the crosscut; 77 ft (23.5 m) of drifting in a northwesterly direction and 44 ft (13.4 m) in a southwesterly direction were also completed. McCannell (1968, 1969), a consulting geologist, believed that a small tonnage tungsten operation was viable and recommended development work on at least two levels. At the end of 1969, however, all work was discontinued due to lack of financing; the property was eventually abandoned. From 1972 to 1974, the hard rock resources division of International Paper in New York supervised an exploration program for Miramichi Lumber in order to determine the economic potential of the tungsten mineralization and the remainder of the Freehold timber rights (350 sq. mi2 / 907 km2). The work consisted of an electromagnetic airborne survey by Geoterrex Ltd., 5,400 soil and stream samples (analyzed for copper and zinc), 17 mi (27 km) of vertical and horizontal loop EM and magnetic surveys, 250 mi2 (648 km2) of geological mapping and 426.7 m (1,400 ft) of diamond drilling. The anomalies discovered occurred in the non-granitic portion of the area and the ones tested by drilling were found to be due to graphitic sediments and/or sulphide mineralization of little interest. Wolframite in a quartz vein float boulder was discovered 2 mi (3 km) northeast of Burnt Hill. In 1976, Cominco did a reconnaissance geochemical survey and follow-up geophysical surveys in the Todd Mountain area. A strong magnetic-electromagnetic anomaly with associated spotty copper-lead-zinc anomalies was explained, in four drillholes, by a graphitic horizon with bedded pyrrhotite In 1977, focus was placed on the tungsten potential of the Burnt Hill deposit and surrounding area. A.C.A. Howe International Limited organized and carried out a regional surface exploration and underground exploration program. In 1978, the Burnt Hill workings were de-watered and rehabilitated through the No. 2 shaft. (1960); about 1,500 ft (457 m) of underground exploration was done on the 150 ft (45.7 m) level, consisting of: 980 ft (298.7 m) drifting on the No. 2 Vein system, and 520 ft (158.5 m) of cross-cut drifting. Two feet (0.6 m) of back material was mined from the drift on the No. 2 Vein and sent to Ore Sorters Canada Limited for pre-concentration (ore sorting,), and to Lakefield Research Laboratories Limited for metallurgical testing.
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Also during 1977 and 1978, an extensive tungsten-molybdenum-oriented exploration program was carried out over selected portions of the Miramichi Lumber Freehold, including a comprehensive (> 10,000 samples) soil and stream sediment program, as well as limited geological mapping and prospecting. Areas with high potential were subjected to more detailed follow-up work, resulting in the discovery of two tungsten-tin-molybdenum anomalies and/or showings outside the immediate Burnt Hill mine area - Tin Hill and McLean Brook. In addition, exploration in the area by Cominco and Shell Canada resulted in the discovery of tin-tungsten mineralization at Todd Mountain. At Tin Hill, located 2 mi (3 km) north-northeast of the Burnt Hill mine site, wolframite-bearing quartz, discovered in 1974 by Russell Crosby, was stripped, washed, mapped and channel-sampled over a 350 ft by 350 ft (107 m x 107 m) area. A series of quartz greisen veins carrying clusters or pods of cassiterite-wolframite mineralization were discovered (see Section 6.3.1 for details). In 1979, Miramichi undertook an additional 22,000 ft (6,706 m) diamond drill program to outline resources on the property. In 1980, a 1,200 ft (365.8 m) decline was driven at the Burnt Hill deposit to crosscut all the known mineralized structures, to provide approximately 13,600 tons (12,341 tonnes) of feed for a pilot plant set up at the site. The plant included ore storage, crushing, screening, sorting and sampling sections, with weighing and downstream storage areas. An integral part of the facility was an on-site photometric ore sorter test. In 1980 to 1981, Shell Canada carried out a reconnaissance and detailed grid sampling, mapping and prospecting program on a 202-claim block in an attempt to delineate zones of high tin content in the exocontact zone of the Trout Brook Pluton. The Cominco core was re-analyzed for tin, tungsten, fluorine and arsenic (Richardson, 1981). The present Todd Mountain claims cover part of this area. In 1981, Shell Canada Resources undertook reconnaissance geochemical and geological studies of a 202claim block in the Todd Mountain area, followed up by grid-based mapping and geochemical surveys over selected areas, and re-sampling of the Cominco drill core. Billiton Canada took over the property but dropped it in 1984; they are reported to have drilled nine holes in 1983 (MacLellan and others, 1990). In 1989, Canadian Forest Products Ltd. re-sampled previously excavated trenches on the McLean Brook Group (Pitre, 1989); and is on what is now the McLean Brook claim block. (4) Geological Setting — The regional, local and property geology.
The New Alger Property is located in the southern part of the Abitibi Greenstone Belt, in the Superior Province of the Canadian Shield. In this area, the Belt is composed of Archean age bimodal volcanic complexes, related sediments, granitoid stocks and early Proterozoic diabase dykes (Bherer, 1990). The supercrustal rocks form a series of east-west trending units of metavolcanic and metasediments arranged around a bifurcating synclinal structure, the main arm of which is termed the "Malartic Syncline" and the northwest trending arm termed the "Clericy Syncline". The fold axes are associated with major fault zones, which define lozenge shaped blocks that are postulated to be stratigraphically independent of each other. The Pontiac Block is extensively capped by clastic sedimentary rocks of the Pontiac Group and includes minor metavolcanic units as well as the Piche Group of volcanic of mafic volcanics. The Blake River and the Malartic blocks are separated from the Pontiac Block by narrow belts of clastic sedimentary rocks termed the Kewagama and Cadillac Groups, respectively. The Cadillac Fault represents the predominant structural feature in this area. This break strikes EW and extends from Kirkland Lake (Ontario) to Val D'Or Quebec, a distance of 250 kilometers. It is a Ramsay type "brittle-ductile" sinistral shear that exhibits a crustal fracture system of second order Riedel shears and tension gashes. Many interpretations are proposed for the movement that took place along this break: 1) sinistral component; 2) dextral transpression; 3) vertical inverse movement; and 4) vertical component. The Cadillac-Piche contact represents a high strain zone of deformation of the regional extent called the Cadillac Break (Pelchat, 1996). Bherer (1990) states that the trace of the fault is defined by "an uninterrupted band of talcchlorite-carbonate schist 20 to +200 meters thick".
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Meta-volcanic rocks of the Piche, Cadillac and Pontiac Groups underlie the New Alger Property. From old drill logs and surficial mapping it is the Piche Group that hosts the quartz vein gold-sulphide mineralization. The Cadillac break is interpreted cuts the property in a slightly ENE-WSW direction just to the north of the mineralized horizon. Cadillac Group: this group is composed of greywacke, siltstone, polymictic conglomerate, and talcchlorite-carbonate schist. Occasional beds of argillite with graphitic mudstone were observed in drill holes at the Decoeur Prospect west of the New Alger Property (possible Pontiac Group rocks). The beds can vary from a few millimeters to a few meters thick. The thick polymictic conglomerates have fragments of felsite, chert, and sediments. The matrix of the conglomerate is formed of siliceous-biotite-sericite material. The greywacke and siltstone are intercalated and exhibit graded bedding and parallel laminations. Pontiac Group: this group is composed of greywacke, interbedded with argillite, massive to pillowed mafic flows and ultramafic flows. This group overlies the south portion of the New Alger property. The greywacke and the argillite are similar to the sedimentary rocks of the Cadillac group but contain more biotite and sericite. Piche Group: this group is composed of a sequence of mafic rocks, amphibolites, volcanic tuffs and flows. The volcanic sequence is mineralized with gold and minor sulphide mineralization of chalcopyrite, arsenopyrite, and pyrite. The mineralized section was intersected both by diamond drilling and trenching. New Alger Property Geology The A-series of diamond drill drilling (24 holes totaling 12,522.5 feet or 3,826 meters) gave a complete stratigraphic section of the Piche Group south of the Cadillac Break, extending 600 meters east of the BousquetCadillac TWP boundary. South of the break the Piche Group is 200 meters thick. The rocks strike E-W with a vertical to steeply dipping to the south. The greenstones (Unit V7) are dark green chloride basalts, fine grained, and variably altered to carbonate. Occasional horizons of "weakly porphyritic" and biotitic zones are reported. Several zones of coarser grained dioritic or gabbroic (3G) are described, as well as agglomerated (Unit V10). Two porphyritic horizons are recognized (Unit V6). The southernmost unit (the South Porphyry) is the more mafic of the two, often described as transitional from greenstone. Its thickness ranges between 15-30meters. The northernmost unit (the North Porphyry) is more siliceous, grey, and strongly porphyritic, marked by sharp contacts. It ranges in thickness from 8 meters (west end) to 60 meters (east end). The North porphyry is generally altered to carbonate, biotite, arsenopyrite + pyrite, and "bleached" zones. The north boundary of the North Porphyry is marked by a layer of black graphitic tuff (Unit V9), followed by greywacke (S3). Approaching the talc-chlorite schist of the Cadillac Break (Mij), a zone of chlorite schist is likely derived from the greenstones. The Cadillac Break is approximately 180m thick as indicated in drill hole B-l. Several zones of intense carbonate alteration are reported at the east end, and in the vicinity of the North Porphyry. The carbonate zones are described as light grey laminated carbonate rocks, visibly mineralized with pyrite, arsenopyrite and pyrrhotite. Burnt Hill Property There are several generations of government mapping available for the region surrounding Burnt Hill, including: Geological Survey of Canada Map 6-1963 (Poole, 1963); New Brunswick government mapping released in 1981 (Irrinki, 1981; Grouse, 1981); and, most recently, work focused on the granite-related mineralization of the area (MacLellan and others, 1990). The Burnt Hill area is situated within the Miramichi Terrane of central New Brunswick, a north-northeast trending sequence of structurally complex and metamorphosed Cambro-Ordovician supracrustal rocks that forms a belt from the southwestern part of the province, to the northeastern part in the Bathurst area. The Miramichi Terrane is host to the word-class Brunswick volcanogenic massive sulphide deposit, and a number of smaller VMS deposits, around the towns of Bathurst and Newcastle. In the vicinity of Burnt Hill, the Miramichi Terrane is bounded on the northwest and southeast by the Matapedia and Fredericton cover sequences, respectively, that consist of volcanic and sedimentary rocks deposited unconformable on the older terrane between the Late Ordovician and Early
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Devonian; both are separated from the Miramichi Terrane, at least in part, by major faults (see MacLellan and others, 1990). In the Burnt Hill area, the Miramichi Terrane consists of Cambrian to Middle Ordovician rocks of the Tetagouche Group, which includes a thick quartz-wacke sequence, pillow basalt, minor felsic volcanic rocks and interbedded lithic wacke and slate; these have undergone greenschist facies metamorphism. To the northwest, there is an adjacent amphibolite-facies complex of paragneiss, biotite schist, and amphibolite cut by concordant plutons of metamorphosed granite of Ordovician age. All of these rocks were affected by the Acadian Orogeny, during which time syntectonic (Late Silurian to Early Devonian) intrusions of gabbro and granite were emplaced, mostly along the margins of the Miramichi Terrane, and deformed (Grouse, 1981; Irrinki, 1981; MacLellan and others, 1990). Subsequently, mid-Devonian granitic plutons were emplaced throughout the Miramichi Terrane. In the Burnt Hill area, there is a cluster of undeformed, sub-circular intrusions, including the Burnt Hill, Dungarvon, Rocky Brook, Sisters Brook and Trout Brook plutons (Figure 7-1). They are undeformed, clearly post-orogenic, and appear to have been intruded into higher crustal levels (epizonal) than the older Acadian-related intrusions. It is this suite which is responsible for the tungsten-tin-molybdenum-fluorine mineralization in the Burnt Hill-Dungarvon area, and elsewhere in New Brunswick. The mineralization at Burnt Hill, Tin Hill and McLean Brook lies adjacent to, or within the metamorphic aureole of the Devonian Burnt Hill granite (Figure 7-2); the intrusion was clearly the driving force of mineralization. Volcanic and sedimentary rocks in the area are generally of greenschist grade, but intrusion of the granite resulted in the development of cordierite and andalusite near the granite, and tiny biotite grains up to 3 km from the contact (Grouse, 1981). The pluton is multi-phase, consisting primarily of coarse-grained seriate to equigranular biotite granite with alkali feldspar phenocrysts. Near the southern end of the intrusion are zones of equigranular biotite granite and equigranular biotite microgranite; the rock type closest to the Burnt Hill veins is the microgranite, and it is the equigranular granites which in general are most spatially associated with tungsten mineralization in the area (MacLellan and others, 1990). Homogenous, fine-grained equigranular biotite quartz monzonite (granite?) has only been encountered in diamond drill holes beneath the deposit and is the possible source for the mineralization. Age dating suggests that the Burnt Hill and pluton crystallized at about 381 m.y. and that the mineralization followed at about 380 m.y. (MacLellan and others, 1990). The Burnt Hill tungsten deposit is hosted in a series of Ordovician sedimentary rocks (Figure 7-3). Potter (1969) identified an Early to Middle Ordovician conglomerate-sandstone sequence conformably overlain by a Middle Ordovician greywacke -quartzite -argillite sequence. There is a narrow band of mafic volcanic rocks in the southeast corner of the Burnt Hill property. Potter (1969) interpreted the northeasterly-striking, steeply northwestdipping (60° to vertical) sedimentary sequence as being overturned; Poole (1963) interpreted an anticlinal axis to the north of, and a synclinal axis south of the Burnt Hill deposit, so these strata could be on the limb of an overfold (overturned fold). Other maps, however, show either an anticlinal axis trending through the Burnt Hill deposit (Potter and others, 1979) or no axis at all (Grouse, 1981). The most detailed geological information (1:120 scale) on the Property is from the underground workings. On the adit level, sedimentary rocks dip between 30° and 75° northwest, but most are between 55° and 65°. Brewster (1975) mapped thick units of massive, thickly-bedded, faintly schistose argillite, and interbedded sequences of thickand thin-bedded argillite, quartzite and partly hornfelsed quartzitic argillite - impure quartzite. Some units are not traceable over distances as little as 200 to 300 ft (60 to 90 m) between parallel drifts; facies change, rather than faulting, appears to be responsible. A cordierite-andalusite thermal isograd has been interpreted in the middle of the Burnt Hill deposit (Grouse, 1981). However, porphyroblasts of biotite, andalusite and cordierite in argillaceous rocks are locally mantled with chlorite within a semi-circular zone about 6,000 ft (1,800 m) in diameter centered on the Burnt Hill deposit area - particularly the cupola granite. This retrograde metamorphism is thought to be due to the hydrothermal fluids (from the cupola granite?) responsible for the quartz-wolframite veins (Potter, 1969). The Tin Hill claims are partly underlain by a small (0.75-km diameter) pluton, likely a satellite of the Burnt Hill pluton, consisting of coarse-grained, seriate to equigranular biotite granite, and medium-grained porphyritic
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granite with phenocrysts of alkali feldspar and plagioclase MacLellan and others, 1990). The country rocks are the same as Burnt Hill. The McLean Brook claims are underlain by a fault-bounded package of biotite-grade metamorphosed Ordovician slate and siltstone. The Todd Mountain block overlies a sequence of Ordovician slate and chert with minor greywacke and felsic tuff. The rocks are within the thermal aureole of the Trout Creek pluton. (5) Exploration Information — The nature and extent of all exploration work conducted by. or on behalf of, the Issuer on the property, including (a) (b) (c) (d) the results of all surveys and investigations and the procedures and parameters relating to surveys and investigations; an interpretation of the exploration information: whether the surveys and investigations have been carried out by the Issuer or a contractor and if by a contractor, identifying the contractor: and a discussion of the reliability or uncertainty of the data obtained in the program.
The 43-101 New Alger Property Report only examines work completed to date. As stated in the 43-101 New Alger Property Report, the author thereof is not aware of any unreported work done on the New Alger Property. The Burnt Hill report is the same; the Issuer has not yet done any work on the Burnt Hill project. (6) Mineralization — The mineralization encountered on the property, the surrounding rock types and relevant geological controls, detailing length, width, depth and continuity together with a description of the type, character and distribution of the mineralization.
The mineralization mined at the New Alger Mine consists of auriferous quartzcarbonate veins with a variable amount (trace to 10%) of sulphides. The most common sulphides are arsenopyrite, pyrite, chalcopyrite and pyrrhotite. Also gold can be found in sericite shears with the same sulphides. Most of the mined gold mineralization is found in the South Porphyry that hosts a blue quartz vein associated with arsenopyrite-biotite. Gold concentration varies from trace amounts to 87.8 g/t over 0.2 meters. The vein appears to splay into a stringer zone east of DDK A-17 and may correspond with the #1S Vein at depth. The unexploited North Porphyry contains several wider zones of biotite-arsenopyrite mineralization although quartz veining is minor. The Northern Porphyry may be similar in age to the mineralized porphyry (tonalite found on the Normin property west of the New Alger property (H.R. Lahti, 2004). Much of the mineralization is associated with carbonate and graphitic zones. The lower assays (of the order of 2 g/t) over wider intersections are reported. The association with carbonate alteration and graphitic tuff suggest a situation similar to the O'Brien "G" Vein further to the east. A good summary of the Cadillac Mining Camp is given in a Quebec Department of Natural Resources titled "The Deep-seated Gold Potential of the Cadillac Mining Camp" PRO 2005-02. Evidence from resent exploration work done on the near by O'Brien property (east side), Agnico-Eagle (west side) and others in the same geological environment that there remains to be found significant gold resources at depth. This is particularly true for the New Alger Property where previous exploration and mining has not explored below the 300m level. Burnt Hill Mineralization The mineralization at Burnt Hill, Tin Hill and McLean Brook lies adjacent to, or within the metamorphic aureole of the Devonian Burnt Hill granite (Figure 7-2); the intrusion was clearly the driving force of mineralization.
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Volcanic and sedimentary rocks in the area are generally of greenschist grade, but intrusion of the granite resulted in the development of cordierite and andalusite near the granite, and tiny biotite grains up to 3 km from the contact (Crouse, 1981). The pluton is multi-phase, consisting primarily of coarse-grained seriate to equigranular biotite granite with alkali feldspar phenocrysts. Near the southern end of the intrusion are zones of equigranular biotite granite and equigranular biotite microgranite; the rock type closest to the Burnt Hill veins is the microgranite, and it is the equigranular granites which in general are most spatially associated with tungsten mineralization in the area (MacLellan and others, 1990). Homogenous, fine-grained equigranular biotite quartz monzonite (granite?) has only been encountered in diamond drill holes beneath the deposit and is the possible source for the mineralization. Age dating suggests that the Burnt Hill and pluton crystallized at about 381 m.y. and that the mineralization followed at about 380 m.y. (MacLellan and others, 1990). The Burnt Hill tungsten deposit is hosted in a series of Ordovician sedimentary rocks. Potter (1969) identified an Early to Middle Ordovician conglomerate-sandstone sequence conformably overlain by a Middle Ordovician greywacke -quartzite -argillite sequence. There is a narrow band of mafic volcanic rocks in the southeast corner of the Burnt Hill property. Potter (1969) interpreted the northeasterly-striking, steeply northwest-dipping (60° to vertical) sedimentary sequence as being overturned; Poole (1963) interpreted an anticlinal axis to the north of, and a synclinal axis south of the Burnt Hill deposit, so these strata could be on the limb of an overfold (overturned fold). Other maps, however, show either an anticlinal axis trending through the Burnt Hill deposit (Potter and others, 1979) or no axis at all (Crouse, 1981) Tungsten mineralization at Burnt Hill occurs in numerous quartz veins within and above the apical portion of a cupola of the Burnt Hill pluton, which lies at depths of 650 to 800 ft (about 200 to 250 m) in the area of the underground workings. Most wolframite bearing veins, however, cut a sequence of folded greywacke, quartzite and argillite, as well as a set of earlier, non-mineralized, bedding-parallel quartz veins (MacLellan and others, 1990). The history of Burnt Hill vein emplacement is complex. Potter (1969) identified two vein types. The most abundant are quartz-muscovite "tension gash" veins with minor beryl, molybdenite, scheelite and cassiterite occupying joints and faults at about 120° (mostly) and 100°. The 120° veins are oriented roughly the same as the major joint set in the Burnt Hill pluton (MacLellan and others, 1990). Potter (1969) also identified 140°-trending faults which displaced some earlier veins or were locally deflected into, and reactivated the 120° vein trend. The second type of vein (containing quartz, topaz, wolframite, sulphides, fluorite, and minor amounts of other minerals) was deposited into the reactivated 120° trend and the 140° fault trend. There are also joints orientated at 140°, some of which are filled with vein material. The 140° faulting resulted in an en echelon arrangement of veins. Measurements made of vein attitudes in the ramp show dips varying from about 55° to 77°, averaging 69° NE. From previous Howe re-mapping of the 150 level crosscut, vein dip varies from 55° to vertical, also averaging 69° NE. It is unknown if this general attitude persists below the underground workings; connecting vein intercepts in deep drillholes has proved somewhat difficult. Within the mineralized zone, quartz veins range from hairline fracture fillings to veins 5 ft (1.5 m) in width, although most veins are in the order of 1.0 ft (0.3 m) wide. Veins occur across the full width of the mineralized zone, and individual veins are frequently up to 300 ft (91.4 m) long. There is, however, a tendency for secondary or minor veins to cluster around a dominant vein; five such "swarms' have been identified (Figure 8-2). This type of pattern is most readily evident on the adit and 150 levels. The No. 2 Vein system appears to be, vertically and laterally, the most consistent, although it is not the widest. It should be noted, however, that the No. 2 Vein system has been outlined in two underground levels and diamond drill intercepts, whereas the other zones have been outlined mostly by 1979 diamond drill intercepts - except for a drift on the No. 4 Vein system and one 150 level crosscut through the No. 1 and No. 3 Vein systems in the 1980 decline (Brewster, 1981). An attempt was made to segregate the great number of quartz veins and veinlets into systems, and this resulted in the preliminary definition of nine vein systems numbered 0 to 8 (Brewster, (1981). Within a vein swarm, individual veins are sinuous and vary in thickness both laterally and vertically, with the exception of the dominant vein of the No. 2 Vein. Swarms are, however, laterally persistent, with widths varying from drift width up to 50 ft (15.2 m). Veins within a swarm show an en echelon pattern, and several veins of 200 to 300 ft (60 to 90 m) strike length frequently horsetail and pinch out, replaced by several offset but parallel veins. Where veins pinch out, the structure carrying the vein frequently persists (Brewster, 1981).
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In general, the narrower veins tend to be better mineralized with tungsten than the wider and larger veins. The larger veins frequently show evidence of late movement or multi-stage deposition. Mineralization is locally quite spectacular, with face chips in the decline containing up to 7.70% WO3 and 0.35% MoS2 over 1.5 ft (0.46 m). Brewster (1981) felt that there is some zonation of mineralization within the Burnt Hill deposit. Tungsten content appears to be relatively consistent throughout, whereas molybdenum mineralization appears to increase (laterally and vertically) in proximity to the igneous source (cupola granite) and tin mineralization appears to be more prevalent in the southern portions of the mineralized area. Across the contact within the Burnt Hill stock, quartz veins occasionally change character to become greisen veins or greisen veins with a central quartz vein. The greisens normally contain molybdenitecassiterite mineralization and frequently, but not always, wolframite mineralization. Minerals of the veins, in order of decreasing abundance, are quartz (45-95%), topaz (10-20%), fluorite (110%), pyrrhotite, wolframite, beryl, sphalerite, muscovite, molybdenite, chlorite, chalcopyrite, cassiterite, pyrite, arsenopyrite, apatite; scheelite, the other principal ore mineral of tungsten, is extremely rare at Burnt Hill, as are native bismuth and galena (Lyon, 1988). Brewster (1981) commented that "silver values were identified in metallurgical sampling results" but the silver-bearing minerals have not been identified. In addition to its presence in veins, molybdenite also occurs locally in greisen and as fracture coatings in granitic rocks (in one drillhole). According to Lyon (1988), wolframite typically occurs as interpenetrating laths and tabular grains, with quartz and topaz; grains vary in size from 0.2 mm to 4 cm. In a limited mineralogical study, Lyon reports that wolframite varies from Mn-bearing ferberite (80.73% FeO) to Fe-bearing huebnerite (93.86% FeO); variations appear to be more on local (grain) scale than a deposit scale. The Tin Hill claims are partly underlain by a small (0.75-km diameter) pluton, likely a satellite of the Burnt Hill pluton, consisting of coarse-grained, seriate to equigranular biotite granite, and medium-grained porphyritic granite with phenocrysts of alkali feldspar and plagioclase MacLellan and others, 1990). The country rocks are the same as Burnt Hill. The McLean Brook claims are underlain by a fault-bounded package of biotite-grade metamorphosed Ordovician slate and siltstone. The Todd Mountain block overlies a sequence of Ordovician slate and chert with minor greywacke and felsic tuff. The rocks are within the thermal aureole of the Trout Creek pluton. (7) Drilling — The type and extent of drilling including the procedures followed and an interpretation of all results.
There is no new drill data available on either property. (8) Sampling and Analysis — The sampling and assaying including (a) (b) (c) (d) (e) Not Applicable. a description of sampling methods and the location, number, type, nature, spacing and density of samples collected: identification of any drilling, sampling or recovery factors that could materially impact the accuracy or reliability of the results; a discussion of sample quality and whether the samples are representative of any factors that may have resulted in sample biases; rock types, geological controls, widths of mineralized zones, cut-off grades and other parameters used to establish the sampling interval; and quality control measures and data verification procedures.
MBDOCS 3374981.8
20
(9) Not Applicable. (10)
Security of Samples — The measures taken to ensure the validity and integrity of samples taken.
Mineral Resources and Mineral Reserves — The mineral resources and mineral reserves, if any, including (a) (b) (c) the quantity and grade or quality of each category of mineral resources and mineral reserves: the key assumptions, parameters and methods used to estimate the mineral resources and mineral reserves: and the extent to which the estimate of mineral resources and mineral reserves may be materially affected by metallurgical, environmental, permitting, legal, title, taxation, socio-economic, marketing, political and other relevant issues.
The technical reviews in both the 43-101 New Alger Property Report and the 43-101 Burnt Hill Property Report are based on historical reports, data, maps and limited drill logs. Insufficient work was done by the authors of these reports to classify the historical estimates as current mineral reserves and the authors are not treating the historical reserves as current. The historical reserves should not be relied upon. (11) Mining. Operations — For development properties and production properties, the mining method, metallurgical process, production forecast, markets, contracts for sale of products, environmental conditions, taxes, mine life and expected payback period of capital.
Not Applicable. (12) Exploration and Development — A description of the Issuer's current and contemplated exploration or development activities, to the extent they are material.
Refer to Section 4.1 above. 4.4 Issuers with Oil and Gas Operations — For Issuers with oil and sas operations, disclose the following (in tabular form, if appropriate)
Not Applicable. 5. 5.1 SELECTED CONSOLIDATED FINANCIAL INFORMATION Annual Information — Provide the following financial data for the Issuer in summary form for each of the last three completed financial years and any period subsequent to the most recent financial year end for which financial statements have been prepared, accompanied by a discussion of the factors affecting, the comparability of the data, including discontinued operations, changes in accounting policies, significant acquisitions or significant dispositions and major changes in the direction of the Issuer's business: (a) (b) (c) (d) (e) Net sales or total revenues. Income from continuing operations, in total and on a per share basis and fully diluted per share basis, calculated in accordance -with the Handbook. Net income or loss, in total and on a per share and fully diluted per share basis, calculated in accordance with the Handbook. Total assets. Total Ions-term financial liabilities as defined in the Handbook.
MBDOCS 3374981.8
21
(f) (g)
Cash dividends declared per share for each class of share. Such other information as the Issuer believes would enhance an understanding of and would highlight other trends in financial condition and results of operations.
The following table presents selected consolidated information of the Company at the date and for periods indicated. The information set forth below is derived from the historical consolidated financial statements of the Company and the related notes, and should be read in conjunction with Section 6 "Management's Discussion and Analysis" of this Listing Statement and the historical consolidated financial statements of the Company and related notes. Copies of audited financial statements of the Company for the preceding three years and unaudited financial statements all completed interim periods of the current fiscal year are included hereto in Schedule "A".
Q2 - As of Ql - As of Year Ended Nov31, Aug31, May 31, 2006 2006 2006 0 0 0
Year Ended May 31, 2005 2,446 (61,780) (0.08) (0.08)
Interest and other Income Income or Loss (Before Discontinued Operations and Extraordinary Items) Income or Loss/per Share Basic (Note 1) Income or Loss/per Share Diluted (Note 1) Income or Loss (Total) Income or Loss/per Share Basic (Note 1) Income or Loss/per Share Diluted (Note 1) Total Assets Total Long Term Financial Liabilities Cash Dividend Declared
Year Ended May 31, 2004 1,257 (90,000) (0.12) (0.12)
(104,562) (0.01) (0.01)
(45,996)
(37,001) (0.01) (0.01)
0.00 0.00
(104,562) (0.01) (0.01)
(45,996) 0.00
(37,001) (0.01) (0.01) 411,914
0 0
(61,780) (0.08) (0.08) 4,040
0 0
(90,000) (0.12) (0.12)
0.00
466,016
0 0
725,789
0 0
4,932
0 0
Note 1: Earnings per Common Share reflect a one for five Common Share Consolidation that occurred during the year ended May 31, 2006. Comparative earnings per share have been restated accordingly. Refer to Section 2 "Corporate Structure" of this Listing Statement for a description of the Consolidation. 5.2 Quarterly Information — For each of the eight most recently completed quarters ending at the end of the most recently completed financial year, provide the information required in paragraphs (a), (b) and fc) of Section 5.1 The information set forth below is derived from the historical consolidated financial statements of the Company and the related notes, and should be read in conjunction with Section 6 "Management's Discussion and Analysis" of this Listing Statement and the historical consolidated financial statements of the Company and related notes.
Q4May31 2006 Q3Feb28 2006 0 0 Q2Nov30 2005 0 QlAug31 2005 0 Q4May31 2005 Q3Feb28 2005 0 Q2Nov30 2004 0 QlAug31 2004 0
Interest and other Income
2,446
MBDOCS 3374981.8
22
Income or Loss (Before Discontinued Operations and Extraordinary Items) Income or Loss/per Share Basic (Note 1) Income or Loss/per Share Diluted (Note 1) Income or Loss (Total) Income or Loss/per Share Basic (Note 1) Income or Loss/per Share Diluted (Note 1)
(48,432)
43,303
(18,119)
(13,753)
(19,443)
(17,318)
(14,331)
(10,688)
(0.01) (0.01)
0.00 0.00
0.00 0.00
0.00 0.00
(0.03) (0.03)
(0.02) (0.02)
(0.02) (0.02)
(0.01) (0.01)
(48,432) (0.01) (0.01)
43,303
(18,119)
(13,753)
(19,443) (0.03) (0.03)
(17,318) (0.02) (0.02)
(14,331) (0.02) (0.02)
(10,688) (0.01) (0.01)
0.00 0.00
0.00 0.00
0.00 0.00
Note 1: Earnings per share reflect a one for five Common Share Consolidation that occurred during the year ended May 31, 2006. Refer to Section 2 "Corporate Structure" of this Listing Statement for a description of the Consolidation. In the third quarter of 2006 mere was income to the Company of $43,303 as a result of the accounting for the future income tax recovery of $61,223 in conjunction with the renouncement $169,500 in flow through exploration charged. The timing of this renouncement is approximately February of each year, this renouncement occurs each year there are flow through funds raised and renounced to investors in order to create a flow through tax credit for flow through investors. In the fourth quarter of 2006 the losses increased over the relatively stable level seen in prior quarters due to the increases seen in expenses reflected in the financial statements, including $25,489 in shareholder relations and communications incurred because of printing, mailing and filing fees incurred and $13,703 in legal and audit fees, both costs incurred in the forth quarter. 5.3 Dividends (a) (b) Describe any restriction that could prevent the Issuer from paying dividends. Disclose the Issuer's dividend policy and if a decision has been made to change the dividend policy, disclose the intended change in dividend policy.
The Company has not, since the date of its incorporation, declared or paid any dividends on its Common Shares and does not currently have a policy with respect to the payment of dividends. For the immediate future the Company will be developing the New Alger Property and does not envisage any earnings arising from which dividends could be paid. Once the New Alger Property becomes operational, the Company anticipates that it will initially retain future earnings and other cash resources for the operation and development of its business. The payment of dividends in the future will depend on the earnings, if any, and the Company's financial conditions and such other factors as the directors of the Company consider appropriate. 5.4 Foreign GAAP. Not Applicable.
MBDOCS 3374981.8
23
6.
MANAGEMENT'S DISCUSSION AND ANALYSIS Annual MD&A
The following Management's Discussion and Analysis ("MD&A") should be read in conjunction with the historical consolidated financial statements of the Company and related notes thereto. The MD&A was prepared as of September 22, 2006 and contains the management discussion and analysis of the results, operations, and financial condition of the Company for the fiscal year ended May 31, 2006. The consolidated financial statements of the Company and information contained in this MD&A were prepared in accordance with Canadian generally accepted accounting principles. The currency referred to below is the Canadian Dollar. The following discussion contains forward-looking statements that involve numerous risks and uncertainties. Actual results of the Company could differ materially from those discussed in such forward-looking statements as a result of these risks and uncertainties, including those set forth in this Listing Statement under "Risk Factors". Date 6.1 Specify the date of the MD&A. The date of the MD&A must be no earlier than the date of the auditor's report on the financial statements for the Issuer's most recently completed financial year. September 22, 2006. Overall Performance 6.2 Provide an analysis of the Issuer's financial condition, results of operations and cash flows. Discuss known trends, demands, commitments, events or uncertainties that are reasonably likely to have an effect on the Issuer's business. Compare the Issuer's performance in the most recently completed financial year to the prior year's performance. The analysis should address at least the following: (a) (b) operating segments that are reportable segments as those terms are used in the Handbook; other parts of the business if (i) (ii) (c) (d) (e) they have a disproportionate effect on revenues, income or cash needs; or there are any legal or other restrictions on the flow of funds from one part of the Issuer's business to another;
industry and economic factors affecting the Issuer's performance; why changes have occurred or expected changes have not occurred in the Issuer's financial condition and results of operations; and the effect of discontinued operations on current operations.
To fund the Company's goal of adding shareholder value through a successful exploration program, the Company raised cash proceeds of $169,500 in flow through proceeds with the issuance of 8,475,000 Common Shares as of May 31, 2006. For the twelve months ended May 31, 2005, the Company did not raise any funds from the issue of equity capital. As a result of the flow through financing activities undertaken in the twelve months ended May 31, 2006, the Company has to spend the flow-through proceeds raised of $169,500. The Company had until December 31, 2006 to spend these funds. The Company intended to spend these funds on the New Alger Property. The Company acquired the New Alger Property by purchasing 100% of Chilly-Bin by issuing a total of 5,000,000 Common Shares to the shareholders of Chilly-Bin in exchange for all of the outstanding common shares of Chilly-Bin (Chilly Bin Acquisition). Total cash held by Chilly-Bin Inc. at the time of this transaction and received by the Company was $10,363 which was used for general working capital purposes. At the date of this MD&A the Company was commencing an exploration program on the New Alger Property.
MBDOCS 3374981.8
24
All other expenditures and prior period expenditures other than the flow-through of $169,500 and the purchase of Chilly-Bin were for working capital purposes and maintaining the Company's reporting issuer status. These costs pertain to accounting and corporate services of $29,445 (2005 - $26,663), legal and audit fees of $17,986 (2005 - $5,482), and shareholder information of $39,983 (2005 - $7,417). These costs have increased significantly in fiscal 2006 due to the resumption of activity in the Company and the need for increased mailings, filings and legal and audit activity, and the professional fees associated with these services and increased activity level. If these costs are not incurred, the Company will lose its reporting issuer status and cannot pursue its goal of creating shareholder value. Selected Annual Information 6.3 Provide the following financial data derived from the Issuer's financial statements for each of the three most recently completed financial years: (a) (b) (c) (d) (e) (f) net sales or total revenues: income or loss before discontinued operations and extraordinary items, in total and on a pershare and diluted per-share basis: net income or loss, in total and on a per-share and diluted per-share basis; total assets; total long-term financial liabilities; and cash dividends declared per-share for each class of share.
See Section 5.1 above. 6.4 Discuss the factors that have caused period to period variations including discontinued operations, changes in accounting policies, significant acquisitions or dispositions and changes in the direction of the Issuer's business, and any other information the Issuer believes would enhance an understanding of, and would highlight trends in. financial condition and results of operations. Results of Operations 6.5 Discuss management's analysis of the Issuer's operations for the most recently completed financial year, including (a) net sales or total revenues by operating business segment, including any changes in such amounts caused by selling prices, volume or quantity of goods or services being sold, or the introduction of new products or services; any other significant factors that caused changes in net sales or total revenues; cost of sales or gross profit; for issuers (hat have significant projects that have not vet generated operating revenue, describe each project, including the Issuer's plan for the project and the status of the project relative to that plan, and expenditures made and how these relate to anticipated timing and costs to take the project to the next stage of the project plan; for resource issuers with producing mines, identify milestones such as mine expansion plans, productivity improvements, or plans to develop a new deposit; factors that caused a change in the relationship between costs and revenues, including changes in costs of labour or materials, price changes or inventory adjustments;
(b) (c) (d)
(e) (f)
MBDOCS 3374981.8
25
(g) commitments, events, risks or uncertainties that you reasonably believe will materially affect the Issuer's future performance including net sales, total revenue and income or loss before discontinued operations and extraordinary items: effect of inflation and specific price changes on the Issuer's net sales and total revenues and on income or loss before discontinued operations and extraordinary items; a comparison in tabular form of disclosure you previously made about how the Issuer was going to use proceeds (other than working capital) from any financing, an explanation of variances and the impact of the variances, if any, on the Issuer's ability to achieve its business objectives and milestones; and unusual or infrequent events or transactions.
(h) (i)
(j)
2006 Financing Activities On December 30, 2005, 8,475,000 Common Shares were issued for cash under a private placement, flowthrough financing. The terms of the financing included the issuance of 8,475,000 Units of the Company at $0.02 per Unit for gross proceeds of $169,500. Each Unit consisted of one Common Share of the Company and 1/3 Common Share Purchase Warrant, exercisable for one year at a price of $0.03 to acquire one Common Share of the Company. As of the date hereof, all Common Share Purchase Warrants issued in connection with the December 2005 private placement were exercised. 2006 Project Activities Summary The only mineral property held by the Company is the New Alger Property, acquired through the acquisition of the Company's wholly owned subsidiary Chilly-Bin in April 2006. As a consequence of the timing of the acquisition of Chilly-Bin Inc. in relationship to the fiscal year end for the Company there was no exploration work done on the property in fiscal 2006. The Company has commenced an exploration program in September 2006 funded by the $169,500 flow-through funds raised in December of 2005. Initially this program will consist of re-establishing the historical (circa 1990) ground grid on the property and cutting applicable lines, as well as completing ground Induced Polarization, Electromagnetic and Magnetic ground surveying over the entire property while redefining the property boundaries. It is expected that once this work is completed the results of the surveys will be evaluated to select drill targets, with drilling to occur shortly thereafter. The Company envisions that further funds will be required to carry out additional exploration and drilling, and will therefore need to raise further equity through private placements issues. If the Company is unable to raise these funds the Company will not be able to carry out this program once the current flow-through funds are exhausted. Summary of Quarterly Results 6.6 Provide the following information in summary form, derived from the Issuer's financial statements, for each of the eisht most recently completed quarters: (a) (b) (c) net sales or total revenues: income or loss before discontinued operations and extraordinary items, in total and on a pershare and dilutedper-share basis: and net income or loss, in total and on a per-share and diluted per-share basis.
Discuss the factors that have caused variations over the quarters necessary to understand general trends that have developed and the seasonality of the business. See Section 5.2 above.
MBDOCS 3374981.8
26
Liquidity 6.7 Provide an analysis of the Issuer's liquidity, including (a) its ability to generate sufficient amounts of cash and cash equivalents, in the short term and the Ions term, to maintain the Issuer's capacity, to meet the Issuer's planned growth or to fund development activities; trends or expected fluctuations in the Issuer's liquidity, taking into account demands, commitments, events or uncertainties; its working capital requirements; liquidity risks associated with financial instruments: if the Issuer has or expects to have a working capital deficiency, discuss its ability to meet obligations as they become due and how you expect it to remedy the deficiency; balance sheet conditions or income or cash flow items that may affect the Issuer's liquidity; legal or practical restrictions on the ability of subsidiaries to transfer funds to the Issuer and the effect these restrictions have had or may have on the ability of the Issuer to meet its obligations; and defaults or arrears or anticipated defaults or arrears on (i) (ii) (iii) dividend payments, lease payments, interest or principal payment on debt; debt covenants during the most recently completed financial year; and redemption or retraction or sinking fund payments,
(b) (c) (d) (e) (j) (g)
(h)
and how the Issuer intends to cure the default or arrears. The Company had a cash balance of $123,717 at May 31, 2006, compared with a cash balance of $2,989 at May 31, 2005. At May 31, 2006 the Company also held a mineral asset, the New Alger Property acquired through the Chilly-Bin Acquisition. Against this positive cash balance and asset base, the Company has liabilities which total $91,977 and are comprised of various professional fees and costs associated with the re-organization, consolidation and requisite filings incurred in conjunction with the newly active status of the Company. The Company is continuing its efforts to raise funds for future developments and operations and to meet its ongoing obligations as they arise. There is however, no assurance that the Company will be successful in its efforts, in which case, the Company may not be able to meet its obligations. The consolidated financial statements have been prepared on a going concern basis as discussed in Note 1 of the May 31, 2006 audited financial statements. Should the Company be unable to realize on its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded on the consolidated balance sheet. Capital Resources 6.8 Provide an analysis of the Issuer's capital resources, including (a) commitments for capital expenditures as of the date of the Issuer's financial statements including (i) (ii) the amount, nature and purpose of these commitments; the expected source of funds to meet these commitments; and
MBDOCS 3374981.8
27
(iii) (b) (c)
expenditures not yet committed but required to maintain the Issuer's capacity, to meet the Issuer's planned growth or to fund development activities;
known trends or expected fluctuations in the Issuer's capital resources, including expected changes in the mix and relative cost of these resources: and sources of financing that the Issuer has arranged but not yet used.
As at May 30, 2006 the Company had the following capital requirements under existing arrangements: accounts payable in the normal course of business. Off-Balance Sheet Arrangements 6.9 Discuss any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Issuer including, without limitation, such considerations as liquidity and capital resources. This discussion shall include their business purpose and activities, their economic substance, risks associated with the arrangements, and the key terms and conditions associated with any commitments, including (a) (b) (c) (d) a description of the other contracting partvttes); the effects of terminating the arrangement; the amounts receivable or payable, revenues, expenses and cash flows resulting from the arrangement; the nature and amounts of any other oblisations or liabilities arising from the arrangement that could require the Issuer to provide funding under the arrangement and the triggering events or circumstances that could cause them to arise; and any known event, commitment, trend or uncertainty that may affect the availability or benefits of the arrangement (including any termination) and the course of action that management has taken, or proposes to take, in response to any such circumstances.
(e)
The Company has no off-balance sheet arrangements. Transactions with Related Parties 6.10 Discuss all transactions involving related parties as defined by the Handbook.
As of the date of the MD&A filed in connection with the annual audited financial statements, the Company had the following transactions with Related Parties: The Company paid a total of $6,000 to Harper Capital Inc. ("Harper") for management fees at a rate of $2,000 per month. Harper is controlled by the spouse of a former promoter of the Company. The management services ceased in August of 2005, and there is no further related party relationship with Harper, or involvement in the Company of the former promoter of the Company. This expense will not re-occur. Refer to Section 20 "Interest of Management and Others in Material Transactions". Billiken Management Services Inc., a Company in which Mr. Neil Novak's spouse is a shareholder, was paid $892 in conjunction with management services rendered in fiscal 2006. Mr. Jim Voisin, the President, and Neil Novak, a director of the Company both participated in the flowthrough financing in December of 2005. Both individuals participated in the financing under the same terms, conditions, restrictions and price as other investors.
MBDOCS 3374981.8
28
Fourth Quarter 6.11 Discuss and analyze fourth quarter events or items that affected the Issuer's financial condition, cash flows or results of operations, including extraordinary items, year-end and other adjustments, seasonal aspects of the Issuer's business and dispositions of business segments. During the three months ended May 31, 2006, the Company reported a net loss of $48,432, compared to a loss of approximately $19,443 in the same quarter the previous year. The loss for both periods consists of: Q4- May 3 1,2006 Expenses Accounting and Corporate Services Legal and audit (1) Management fees (2) Office and general Shareholders relations ( 1 ) 8,770 13,703 0 673 25,489 48,635 (203) 48,432 Q4- May 31, 2005 9,200 5,132 6,000 0 1,557 21,889 (2,446) 19,443
Less: interest and other income
Notes:
(1)
These costs have increased significantly due to the resumption of activity in the Company and the need for increased mailings, filings and legal and audit activity. Under the current administration, the Company is no longer being charged management fees for running the day-to-day operations of the Company. The previous period had a charge of $6,000 from previous management that is no longer with the Company.
(2)
Proposed Transactions
6.12
Discuss the expected effect on financial condition, results of operations and cash flows of any proposed asset or business acquisition or disposition if the Issuer's board of directors, or senior management who believe that confirmation of the decision by the board is probable, have decided to proceed with the transaction. Include the status of any required shareholder or regulatory approvals. Refer to Section 3.2 "General Development of the Business - Proposed Transactions " Changes in Accounting Policies Including Initial Adoption
6.13
Discuss and analyze any changes in the Issuer's accounting policies, including (a) for any accounting policies that management has adopted or expects to adopt subsequent to the end of the most recently completed financial year, including changes management has made or expects to make voluntarily and those due to a change in an accounting standard or a new accounting standard that you do not have to adopt until a future date, (i) (ii) (Hi) describe the new standard, the date the Issuer required to adopt it and, if determined, the date the Issuer plans to adopt it; disclose the methods of adoption permitted by the accounting standard and the method management expects to use; discuss the expected effect on the Issuer's financial statements, or if applicable, state that management cannot reasonably estimate the effect; and
MBDOCS 3374981.8
29
(iv) (b) discuss the potential effect on the Issuer's business, for example technical violations or default of debt covenants or changes in business practices: and
for any accounting policies that management has initially adopted during the most recently completed financial year, (i)_ (ii) {Hi) (iv) describe the events or transactions that gave rise to the initial adoption of an accounting. describe the accounting principle that has been adopted and the method of applying that principle; discuss the effect resulting from the initial adoption of the accounting policy on the Issuer's financial condition, changes in financial condition and results of operations; if the Issuer is permitted a choice among acceptable accounting principles, (A} (B} (Cj. (D± state that management made a choice among acceptable alternatives; identify the alternatives; describe why management made the choice that you did; and discuss the effect, where material, on the Issuer's financial condition, changes in financial condition and results of operations under the alternatives not chosen; and
(yj
if no accounting literature exists that covers the accounting for the events or transactions giving rise to management's initial adoption of the accounting policy, explain management's decision regarding which accounting principle to use and the method of applying that principle.
In January 2005, the Canadian Institute of Chartered Accountants issued four new accounting standards: Handbook Section 1530, Comprehensive Income, Handbook Section 3251, Equity, Handbook Section 3855, Financial Instruments - Recognition and Measurement and Handbook Section 3865, Hedges. These standards became effective for interim and annual financial statements for the Company's reporting period beginning on October 1,2006. Financial Instruments and Other Instruments 6.14 For financial instruments and other instruments. (a) (b) (c) discuss the nature and extent of the Issuer's use of, including relationships among, the instruments and the business purposes that they serve; describe and analyze the risks associated with the instruments; describe how management manages the risks in paragraph (b), including a discussion of the objectives, general strategies and instruments used to manage the risks, including any hedsins activities; disclose the financial statement classification and amounts of income, expenses, gains and losses associated with the instrument; and discuss the significant assumptions made in determining the fair value of financial instruments, the total amount and financial statement classification of the change in fair value of financial instruments recognized in income for the period, and the total amount and financial statement classification of deferred or unrecognized sains and losses on financial instruments.
(d) (e)
MBDOCS 3374981.8
30
The Company's current financial instruments consist of cash, accounts payable and accrued liabilities. The carrying values approximate the fair value of these financial instruments due to short-term maturity of these items. Additional Disclosure for Venture Issuers without Significant Revenue Exploration
f^oAiUnr, \7 'V '•• .. • . . - • • " . , .
:
(ftwe^I^^WB^!^O»i!^mA»)' .L-^'i^V-:. •_,„ ,,;v,^ ,„ j',,C" ;;:; ' •• ;:j • '•' • ' f~ '' ' I
;
;
'
Capitalized Costs - Mineral Properties Year Ended May 31, 2006 New Alger Property Cumulative From Inception Acquisition Cost Taxes Goodwill Other 75,000 10,686 183,419 11,173 280,278 (2,436)
Less Quebec refundable tax credits and mining duties refunds
Investment Year Ended May 31, 2006 75,000 10,686 183,419 11,173 280,278 (2,436)
Balance at May 31, 2006 75,000 10,686 183,419 11,173 280,278 (2,436)
277,842
277,842
277,842
Cadillac Ventures In«. - ' : • ..-..•\_-.-l Xtoi»e^W^^jwfe%yC v =". ' - , ' • - • . '••'• ";*' : ' is Exercised (1) : ';
Jim Voisin President and Director Ontario, Canada
Neil Novak Director Ontario, Canada
President of Greenstone Consulting Inc., a company that provides investor relations services. President of Nominex Ltd. and Billiken Management Services Inc. (both private geological consulting and management companies); President, CEO and director of Spider Resources Inc. Independent business consultant.
November 1 , 2005 to present
1,377,353 (6.23%) (2)
November 1, 2005 to present
116,667 (0.52%) (3)
Maurice Stekel Director Ontario, Canada
November 1, 2005 to present
Nil (4)
William McCullough Director Ontario, Canada
President, Superior Logistical Services Inc., a company that provides primary freight brokerage and logistics services Retired, Private Investor
April 11, 2006 to present
Nil (6)
Michael S. Harrington
Notes; (1)
April 17, 2007
Nil
The information in the foregoing table as to Common Shares beneficially owned or over which control or direction is exercised, not being within the knowledge of the Company, has been furnished by each respective director. Mr. Voisin also holds Common Share purchase warrants to purchase up to 62,500 Common Shares and stock options to purchase up to 600,000 Common Shares in the Company. Mr. Novak holds 116,667 Common Shares directly. Nominex Ltd., a corporation beneficially owned by Mr. Novak and his wife, and of which Mr. Novak is an officer and director, holds 1,377,353 Common Shares. Mr. Novak also holds Common Share purchase warrants to purchase up to 50,000 Common Shares. Nominex Ltd. holds Common Share purchase warrants to purchase up to 62,500 Common Shares in the Company. Mr. Novak also holds stock options to purchase up to 225,000 Common Shares in the Company. Mr. Stekel holds stock options to purchase up to 175,000 Common Shares in the Company. Mr. McCullough holds stock options to purchase up to 100,000 Common Shares in the Company.
(2)
(3)
(4) (5)
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13.2
State the period or periods during which each director has served as a director and when his or her term of office will expire.
Refer to Section 13.1 for the periods of time during which each director has served as a director of the Company. Each director will hold office until the close of business of the first annual meeting of shareholders of the Company following his/her election unless his/her office is earlier vacated in accordance with the by-laws of the Company. 13.3 State the number and percentage of securities of each class of voting securities of the Issuer or any of its subsidiaries beneficially owned, directly or indirectly, or over which control or direction is exercised by all directors and executive officers of the Issuer as a group.
As at the date hereof, the directors and officers of the Company beneficially own, directly or indirectly, or have control or direction over, 2,871,373 Common Shares in the capital of the Company. 13.4 Disclose the board committees of the Issuer and identify the members of each committee.
The Board currently has one (1) standing committee: the Audit Committee. The Company's Audit Committee is composed of three directors: Maurice Stekel (Chair), William McCullough and Neil Novak. 13.5 If the principal occupation of a director or officer of the Issuer is acting as an officer of a person or company other than the Issuer, disclose the fact and state the principal business of the person or company.
Refer to Section 13.1 above. 13.6 If a director or officer of the Issuer or a shareholder holding a sufficient number of securities of the Issuer to affect materially the control of the Issuer, is, or within 10 years before the date of the Listing Statement has been, a director or officer of any other Issuer that, while that person was acting in that capacity, (a) was the subject of a cease trade or similar order, or an order that denied the other Issuer access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days, state the fact and describe the basis on which the order was made and whether the order is still in effect; or became bankrupt, made a proposal under any legislation relatins to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manaser or trustee appointed to hold its assets, state the fact.
(b)
No director or officer of the Company or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company is, as at the date of this Listing Statement, or has been, within 10 years before the date hereof, a director or officer of any company that, while that person was acting in that capacity, (1) was the subject of a cease trade or similar order, or an order that denied the other Issuer access to any exemptions under Ontario securities law, for a period of more than 30 consecutive days; or (1) became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, except as follows: Mr. Maurice Stekel was a director of Verdx Minerals Corporation ("Verdx") from August 25, 1999 until April 18, 2006. On July 17, 2000 the Ontario Securities Commission issued a cease trade order to Verdx for failing to file its financial statements for its 1999 fiscal year. Verdx had no working capital and was faced with economic hardship due to its inability to raise additional financing. The cease trade order is still in effect.
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13.7
Describe the penalties or sanctions imposed and the grounds on which they were imposed or the terms of the settlement agreement and the circumstances that save rise to the settlement agreement, if a director or officer of the Issuer, or a shareholder holding sufficient securities of the Issuer to affect materially the control of the Issuer, has (a) been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or by a Canadian securities regulatory authority or has entered into a settlement agreement with a Canadian securities regulatory authority; or been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision.
(b) None.
If a director or officer of the Issuer, or a shareholder holding sufficient securities of the Issuer to affect materially the control of the Issuer, or a personal holding company of any such persons has, within the 10 years before the date of the Listing Statement, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director or officer, state the fact. Not applicable. 13.9 Disclose particulars ofexistins or potential material conflicts of interest between the Issuer or a subsidiary of the Issuer and a director or officer of the Issuer or a subsidiary of the Issuer.
There are potential conflicts of interest to which the directors and officers of the Company may be subject in connection with the operations of the Company. All of the directors and officers are engaged in and will continue to be engaged in corporations or businesses which may be in competition with the business of the Company. Accordingly, situations may arise where the directors, officers and insiders will be in direct competition with the Company. Conflicts, if any, will be subject to the procedures and remedies as provided under the Business Corporations Act (Ontario). 13.10 Management — In addition to the above provide the following information for each member of management.' (a) (b) (c) (d) state the individual's name, age, position and responsibilities with the Issuer and relevant educational background, state whether the individual works full time for the Issuer or what proportion of the individual's time will be devoted to the Issuer, state whether the individual is an employee or independent contractor of the Issuer, state the individual's principal occupations or employment during the five years prior to the date of the Listins Statement, disclosing with respect to each organization as of the time such occupation or employment was carried on: (i) (ii) (iii) (iv) (e) its name and principal business; if applicable, that the organization was an affiliate of the Issuer; positions held by the individual; and whether it is still carrying on business, if known to the individual;
describe the individual's experience in the Issuer's industry; and
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(f) state whether the individual has entered into a non-competition or non-disclosure agreement with the Issuer.
The following are the names and municipalities of residence for each member of management of the Company, their positions and offices with the Company and their principal occupations during the last five years: Jim Voisin - Director and President Mr. Voisin, age 50, has been active in the mining industry for the past twenty years, both as an investor and serving on the Board of Directors of a company with a producing mine in the Kirkland Lake area, as well as serving on the Board of Directors of OK Tire, a corporation with one billion dollars in sales based in Lanley B.C. Mr. Voisin is also President of Greenstone Consulting Inc., a company that provides investor relations services. Mr. Voisin is currently and has been since November 1, 2005, the President and a Director of the Company. Mr. Voisin anticipates devoting 50% of his time to the management of the Company, subject to the extent that the Corporation's affairs may require a greater or lessor time commitment. 14. 14.1 CAPITALIZATION Prepare and file the following chart for each class of securities to be listed: Issued Capital- Common Shares as of February 9, 2007 Number of Securities (non-diluted) Public Float Total outstanding (A) Held by Related Persons or employees of the Issuer or Related Person of the Issuer, or by persons or companies who beneficially own or control, directly or indirectly, more than a 5% voting position in the Issuer (or who would beneficially own or control, directly or indirectly, more than a 5% voting position in the Issuer upon exercise or conversion of other securities held) (B) 22,075,490 15,521,636 29,722,035 18,844,135 100% 70.3% Number of Securities (fully-diluted) % of Issued (non-diluted) % of Issued (fully diluted)
100% 63.4%
Total Public Float (A-B) Freely-Tradeable Float Number of outstanding securities subject to resale restrictions, including restrictions imposed by pooling or other arrangements or in a shareholder agreement and securities held by control block holders (C) Total Tradeable Float (A-C)
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6,553,854
10,877,900
29.7%
36.6%
15,088,016(1)
19,472,061 (1)
68.3%
65.5%
6,987,474
10,249,974
31.7%
34.5%
52
Notes: (1) Securities issued by the Company through private placements on December 21 and 29,2006 (4,384,045 units, each unit consisting of one Common Share and one Common Share purchase warrant) are subject to restrictions of resale for 4 months and a day after their respective distribution dates under securities legislation. 10,703,971 Common Shares are subject to Debt Settlement and Chilly-Bin Acquisition Pooling Agreements.
Public Securityholders (Registered)
Class of Security Shares Size of Holding 1 - 99 securities 100-499 securities 500 - 999 securities 1,000-1,999 securities 2,000 - 2,999 securities 3,000 - 3,999 securities 4,000 - 4,999 securities 5,000 or more securities
Common
Number of holders
Total number of securities 42,624 165,002 98,372 90,458 82,531 28,750 16,900
1,219
807 151
_74
37
41
2,342
3,866,169 4,302,306
Public Securityholders (Beneficial) Class of Security Shares Size of Holding 1 - 99 securities 100-499 securities 500 - 999 securities 1,000-1,999 securities 2,000 - 2,999 securities 3,000 - 3,999 securities 4,000 - 4,999 securities
MBDOCS 3374981.8
Common
Number of holders
_59 114 _29
Total number of securities 2,257 25,254 18,835 25,360 26,630 21,775 21,100
_22
13
53
5,000 or more securities Unable to confirm
15
264
1,981,866 2,123,077
Non-Public Security/holders (Registered) Class of Security Size of Holding 1-99 securities 100-499 securities 500 - 999 securities 1,000- 1,999 securities 2,000 - 2,999 securities 3,000-3,999 securities 4,000 - 4,999 securities 5,000 or more securities
14
Number of holders
_0 _0
0
Total number of securities
15,521,636 15,521,636
14.2
Provide the following details for any securities convertible or exchangeable into any class of listed securities Number «.Tn1 t duty passed bj i«> Hoard ot I-hrcctorv <. .xlill.K Vrnnnv^ Inc hcrchs a)>plies '-.* lltt. 'istuii.' «>t I he al«i<\v-iK<.tilh»/ieil stxiafilit-i ttft ("N't.l Hit liiitv.ium' cntiunis lull. Hue' anil puiin tlifcliiMirt: nTull nMicrt.il utKirmjiiKin u laiitij; t<~< i \kditiH Vaiiuici lit li txiiiiiins no ijiilnic '-Mlcnu-m li-.nilii>- in li^ta; ol OK- citiiinKrHJKt1^ 111 wliuj-. il u;
I >iroj:l<>r
* 6?
A*.
CERTIFICATE OF THE ISSUER Pursuant to a resolution duly passed by its Board of Directors, Cadillac Ventures Inc., hereby applies for the listing of the above-mentioned securities on CNQ. The foregoing contains full, true and plain disclosure of all material information relating to Cadillac Ventures Inc. It contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to prevent a statement that is made from being false or misleading in light of the circumstances in which it was made. Dated at _ /6r j^a
. it _
this
3O
day of
/3~ft/2/ L ^ 3 QO 7
_
Jim Voisin Director and President ' Michael Harrington Director
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CADILLAC VENTURES INC. FORM 2A - LISTING STATEMENT SCHEDULE"A" (See attached)
MBDOCS 3374981.8