First Year Assessment Report

Of

Prospecting and Geochemical Investigations

On

Licence # 14574m

The Beaver Cove Property

Chapel Island area , NTS 2E/10, Newfoundland

By

Roland & Marilyn Quinlan

UTM coordinates of Northeast corner (5487500N; 675500E) of Zone 21, NAD 27Work conducted April , 2008 to February 16th , 2009

February 30th , 2009

Table of contents

i Introduction 1

ii Location and Access 2

iii Previous work 3-4

iv Nfld Geology 5-6

v Regional Geology 7

vii Conclusions And Recommendations 8

Illustrations

Fig.1 Location One page

Fig.2 Sample location One page

Fig.3 NFLD Geology One page

Fig.4 Regional Geology One page

Appendices

viii Statement of expenditures One page

ix Assay sheets One page

x Sample descriptions One page

xi References Two pages

1

Introduction

The Beaver Cove property was first staked in 2005. Larry Quinlan who was working atthe time for Cornerstone Resources under a Quinlan option agreement discovered visible gold ina 0.75 meter wide quartz vein. A four claim block was then staked and became part of the largerland package that the Quinlan brothers had recently optioned to Cornerstone.

Grab samples taken by Mr. Quinlan from the vein assayed up to 42 g/t gold with minorgalena and chalco. Attempts to trace the vein inland were unsuccessful and after working theland package for an additional year the option agreement was terminated and the land packagewas eventually allowed to lapse.

After a couple of visits to the area and viewing the occurrences of visible gold as notedby Mr. Quinlan it was decided to reexamine the area more closely. To protect any possible newdevelopments it was decided to stake the immediate showing. Four claim blocks under license#14574m now became the Beaver Cove property.

2

Location , Access &Topography

The Beaver Cove property consists of four claim blocks held under license # 14574m andfor mapping purposes can be located in the southeast quadrant of nts map sheet 2E/10. All of theclaim blocks are located to the east of the community of Boyds Cove and to the west of thecoastal community of Port Albert. A small, since resettled, whaling community of Beaverton liesjust to the south of the property.

Access is strictly from a small boat launched from any of the small communities in thesurrounding area. A forestry access road originating just east of the community of Stonevilleends just short of the property but ongoing forestry operations appear to be extending it to theboundaries of the property.

Topography is relatively flat with the Atlantic ocean to the north and east of the property.Small hills and valleys occupy the coastline with the elevation never rising more then fifty meterasl.. Lakes and streams occur sporadically throughout the area with drainage mostly to the northwhich is roughly perpendicular to the regional trend

3

Previous Work

In the late 1800's the northeastern region of the province was visited and explored by A.Murray and J. Howley (Murray and Howley,1881). The two considered rocks along westernGander Lake and Gander River areas to be part of the Quebec Group. In 1964, Williams (Williams,1964) mapped the 2E/2 map area for the Geological Survey ofCanada. He also further refined the Stratigraphy and Structure of the Botwood Belt along withthe definition of the Dog Bay line in northeastern Newfoundland (Williams, H., 1993) Production of a 1:50,000 scale map of the Gander Group, Gander River Complex,Davidsville and Botwood Groups began in 1978 (Blackwood 1978). This mapping by theNewfoundland Department of Mines and Energy was initiated as part of the Canada-Newfoundland Regional Mineral Potential Evaluation. In 1988 a regional lake sediment survey was completed (Davenport.1989). Anomalous goldvalues in lake sediments for the region were set at > 4 ppb Au (>4mg/t). An extensive area ofgold and arsenic enrichment was highlighted, extending from Gander Lake to Dog Bay. The earliest documented industry work occurred when Noranda, in the early 80s’ tomiddle 90s’ subjected the entire area to a regional survey. From this survey many showings andprospects were located, eg. Duder Lake, Clutha and the Knob. It concluded that the entire regionwas highly anomalous in gold and recommended several follow up programs. It was during this time Brian Rowsell a prospector for Noranda discovered visible gold inoutcrop northwest of Dildo Run Provincial Park. Seven claim blocks were staked and a fallexploration program included mapping, prospecting and rock sampling. 1187 soil samples werecollected on two recce. grids in the vicinity of the Dildo Run gold showing. Prospecting resultedin the discovery of several new gold occurrences (mainly less than 1 g/t Au) and the soilsampling survey identified several gold anomalies. There is no indication of any follow-up onthe results of the 1987 work. Between 1999 and 2001 the Quinlan brothers carried out prospecting throughout the NewWorld Island area and located many new gold showings including several visible goldoccurrences. Two claim blocks (7497M, 7923M respectively) were staked in the New WorldIsland area in 1999-2001 and many more claim blocks to the south and west. Rubicon Minerals Corporation optioned the New World property from the Quinlan's inthe early spring of 2002 and expanded the property to cover most of the southeast side of NewWorld Island. An intensive prospecting program was carried out in the summer of 2002 thatincluded 1017 rock samples. The sampling documented extensive gold mineralized areas over a30 kilometer strike length (28% of the samples contained greater than 500ppb gold). Visible goldwas discovered in 6 widely separated areas.

4

Further to the south from 1998 to 2002 the Quinlan brothers also identified numerousshowings between Dog Bay on the Horwood peninsula and Beaver Cove on the Port Albertpeninsula. Copper and other base metal values were obtained up to 12% within both the PortAlbert and the Chapel Island properties. Gold values exceeded 42 g/t in the Port Albert area andexceeded 152g/t within the Chapel Island property. After staking a number of additional claim blocks to protect these and the many other newly discovered showings, two properties covering the Chapel Island and the Port Albert areas were optioned to Cornerstone Resources in 2002. The work that followed consisted ofprospecting and soil sampling which identified many more additional zones of gold and basemetal enrichment within both properties. Both properties have since reverted back to the original vendors

5

Newfoundland Geology

Taken from Barbour D. and Churchill R., 1999.

Tectonostratigraphic setting: The Appalachian Orogen in Newfoundland is composed of fournortheast-trending late Precambrian to lower Paleozoic tectonostratigraphic zones. The zones aretermed Humber, Dunnage, Gander and Avalon Zones and were classified on the basis of distinctstructural, depositional, tectonic and volcanic-plutonic characteristics. Portions of these zoneswere deformed during the Precambrian Avalonian Orogeny, the middle Ordovicianpenebscot/Taconic orogeny, the lower to middle Silurian Salinic Orogeny, the DevonianAcadian orogeny, and finally during the Carboniferous Alleghanian Orogeny.

The Humber Zone records the development and subsequent destruction of an Atlantic-typepassive continental margin on the southeast margin of Laurentia. The Dunnage Zone representsvestiges of the Iapetus Ocean and later accreted island arc systems and melanges. Rocks of theGander Zone record the development and destruction of a continental margin located in the eastof the Iapetus Ocean and possessing Celtic affinities. The rock record of the Avalon Zone relatesto either rifting and subsequent opening of the Iapetus during Precambrian times, or to asubduction cycle that predated opening of the Iapetus. The zone was a stable marine platformduring Cambro-Ordovician time, characterized by shallow water deposition of platformalcarbonates and siliciclastic rocks.

With the exception of the Gander-Avalon boundary, malanges and ophiolite complexescharacterize the boundaries between the other zones. The Humber-Dunnage boundary isdelineated by the Baie Verte - Brompton Line - Long Range Fault system along which ophioliticslivers such as the Flatwater Pond Complex are found. The Gander River Complex separates theGander and Avalon Zones. The Avalon-Gander boundary, the Dover Fault - Hermitage Flexureis delineated by subverticle to vertical faults that contain broad zones of ductile deformation.

Siesmic data for the Baie Verte - Brompton Line and the Gander River Complex show that thesemajor breaks do not extend to deeper crustal levels reaffirming earlier suggestions that theDunnage Zone may be allochthonous on Humber and Gander Zone basement rocks. In addition,major structures such as Baie Verte - Brompton Line and Gander River Complex have shallowlydipping geometries consistent with ramp-flat style deformation.

Within the Dunnage Zone volcanic, plutonic and sedimentary rocks record the development andeventual destruction of the Iapetus Ocean during the early to middle Paleozoic. The northwesternsection of the Dunnage Zone, the Notre Dame Subzone, is underlain by a mixed volcanic-sedimentary package that was intruded by alkalic granitic bodies. The geometry of the NotreDame Subzone is dominated by a northeast-southwest trending belt of predominantly Ordovician

6

aged, arc-related mafic to felsic volcanic rocks and subsidiary volcaniclastic to sedimentarylithologies.

The southeastern part of the Dunnage Zone, the Exploits Subzone, is characterized by deepmarine sedimentary rocks of Ordovician age and Silurian, shallow marine to fluviatilesedimentary rocks and subaerial volcanic units that have subsequently been intruded by Siluro-Devonian gabbroid and granitoid rocks.

The boundary between the Exploits and Notre Dame Subzones is delineated by a late rectilinearfault or fault system termed the Red Indian Line which, in some areas, is manifested as amylonite zone locally punctuated by intrusions.

7

Regional Geology

The Beaver Cove Property is located on the Port Albert Peninsula in northeast-central Newfoundland and is situated within the Dunnage tectonostratigraphic zone (Figure 3) (Williams et al, 1988). Rocks of the Dunnage Zone consist of ophiolitic, volcanic, volcanoclastic and sedimentary rocks of island arc and back arc affinity which record the formation, development and subsequent destruction of the proto-Atlantic Iapetus Ocean. The Dunnage Zone is divided by the Red Indian Line into two subzones, namely the Notre Dame and Exploits subzones (Williams et al, 1988). The Port Albert Property is located within the Exploits subzone which is dominated by sedimentary successions with lesser volcanic assemblages (Williams, 1995).

The Port Albert Peninsula lies just west of the north trending tectonic boundary termed the Dog Bay Line (Williams et al., 1993). East of the Dog Bay Line rocks are assigned to the dominantly sedimentary, Silurian Indian Islands Group. To the west rocks are included in the Silurian Botwood Group, which is comprised of terrestrial volcanic and sedimentary rocks (Evans, 1996), and the late Ordovician to Early Silurian Badger Group.

The Indian Islands Group, as described by Baird (1958) and Patrick (1956), comprises phyllitic slates, quartzitic and calcareous sandstone, thin limestone lenses, conglomerate and minor felsic volcanic rocks. Three formations belonging to the Botwood Group underlie the Port Albert Peninsula: the Lawrenceton Formation, Farewell Formation and the Brimstone Head Formation. The lower Lawrenceton Formation is comprised of basaltic and rhyolitic flows, mafic to felsic tuff, conglomerate, and agglomerate, all with interbedded sandstone. The Farewell Formation is comprised of micaceous gray and green sandstone, tuffaceous sedimentary rocks, mafic to felsic flows and dykes, and conglomerate. The Brimstone Head Formation is comprised predominantly of tuffaceous and micaceous sandstone and siltstone, with lesser tuff, and complexes of mafic to felsic dykes and sills.

Both the Goldson and Sansom Formations of the Badger Group underlie an area on the west coast of the Port Albert Peninsula. The Goldson Formation is generally described as having interstratified and graded units of grey pebbly wacke and grey cobble- to boulder- conglomerate (O’Brien, 1990), whereas the Sansom Formation in this area comprises greywackes. A portion of this area is also underlain by felsic intrusives of the Loon Bay Batholith.

Taken and modified from Seymour C., 2004

8

Conclusions & Recommendations

Work this season has verified results obtained earlier by Larry Quinlan. Visible gold ispresent in the beach sand. It is also present in bedrock in at least one localized area of the quartzvein. Two float samples taken further to the west at the low water mark appear very similar tothe original visible gold bearing vein. Both samples were highly anomalous in gold with assayhighs of 8.5 and 13.6 g/t gold.

No samples were taken from the actual visible gold occurrence but more samples from asmall quartz vein to the south on the other side of the peninsula were. This vein which isconsidered to be a possible strike extension of the visible gold bearing vein was found not to beanomalous.

Efforts to verify whether this small vein is a continuation of original gold bearing vein were not successful. If the vein does indeed continue to the south then it is obscured byoverburden or cuts more to the southwest which would allow it to pass across the peninsula in adensely wooded area.

Work next season will further investigate each of these possibilities.

Illustrations

Appendices

Table 1Sample DescriptionShoal Bay PropertyLicense # 14574mNTS Map Sheet 2E/10Zone 21 Nad 27

Sample#

Type Rock type Mineralization Au(ppb)

As(ppm)

Utm coordinates

m801 grab quartz trace py, 5 5 5487259:675302

m802 grab quartz trace py, chalco 5 5 5487261:675297

m803 grab quartz trace py 5 18 5487261:675301

m804 float quartz trace py, chalco, Pb 8535 6 5487486:675193

m805 float quartz trace py, chalco, pb 13670 5 5487485:675193

m806 grab sediments silicified ,minor py 17 5 5486618:674592

References

Cooper, G E and MacNeill, R J 1953: Report on a tungsten occurrence in the Gander Bay area, Newfoundland. Newfoundlandand Labrador Corporation Limited Unpublished report [GSB# 002E/07/0068]

Currie, K L 1995: The northeastern end of the Dunnage Zone in Newfoundland. Atlantic Geology, Vol. 31,No. 1, pages 25-38. [GSB# 002E/0925]

Currie, K L 1992: Ordovician-Silurian stratigraphy between Gander Bay and Birchy Bay, Newfoundland[NTS 2E/7 and 8]. In Report of Activities 1992. Geological Survey Branch, Department ofMines and Energy, Government of Newfoundland and Labrador In Report of Activities, pages 8-9. [GSB# NFLD/2490]

Evans, D T W 1996: Epigenetic gold occurrences, eastern and central Dunnage Zone, Newfoundland.Newfoundland and Labrador Mineral Development Division, Map 96-021, Geological Survey,Department of Mines and Energy, Government of Newfoundland and Labrador , NFLD/2610

Evans, D T W; Stapleton, G J 1996: Epigenetic gold occurrences, central Newfoundland Newfoundland and Labrador MineralDevelopment Division, Open File Geological Survey, Department of Mines and Energy,Government of Newfoundland and Labrador , NFLD/2620 Version 1.0

Helwig, J A and Horne, G S 1969: Ordovician stratigraphy of Notre Dame Bay Newfoundland. In North Atlantic-geologyand continental drift. Compiled by M. Kay, American Association of Petroleum Geologists,Memoir, No. 12, pages 388-407. [GSB# 002E/0218]

Hibbard, J and Williams, H 1979: Regional setting of the Dunnage Melange in the Newfoundland Appalachians. AmericanJournal of Science, Vol. 279, pages 993-1021. [GSB# 002E/0492]

Hibbard, J P and Williams, H 1976: The Dunnage Melange, Newfoundland (2e). In Report of Activities Part A. GeologicalSurvey of Canada, Paper, No. 76-01A, pages 183-185. [GSB# NFLD/2007]

Kalliokoski, J 1953: Evaluation of the mineral resources and geology of the Nalco concession in the NotreDame Bay area, Newfoundland. Newmont Mining Corporation of Canada Limited andNewfoundland and Labrador Corporation Unpublished report [GSB# 002E/0067]

Kay, M and Williams, H 1963: Ordovician-Silurian relations on New World Island, Notre Dame Bay, northeastNewfoundland. Geological Society of America Bulletin, Vol. 74, pages 807-808. [GSB#002E/0110]