Ultramafic Volcanics Sedimentary Rock Belt

8/14/2019 Ultramafic Volcanics Sedimentary Rock Belt

1/117


2/117


3/117

57741.v11 1

BLUE POWER ENERGY CORPORATION

NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the annual and special meeting of the shareholders (the " Meeting ") of BluePower Energy Corporation (the " Corporation ") will be held on April 11, 2006, at the hour of 10:30 a.m., Torontotime, at the offices of Macleod Dixon LLP, Toronto-Dominion Centre, Canadian Pacific Tower, 100 Wellington

Street West, Suite 500, Toronto, Ontario, M5K 1H1 for the following purposes:

(1) to receive the audited financial statements of the Corporation for the years ended May 31, 2005,2004, 2003, 2002 and 2001 together with the reports of the auditors thereon;

(2) to elect directors;

(3) to appoint auditors and to authorize the directors to fix their remuneration;

(4) to consider and, if deemed advisable, to pass an ordinary resolution, with or without variation,authorizing and approving the acquisition by the Corporation (the " Acquisition ") of all of theissued and outstanding shares of Chilly-Bin Inc. (" Chilly-Bin ") in exchange for the issuance bythe Corporation of one common share in the capital of the Corporation for each common share inthe capital of Chilly-Bin;

(5) to consider and, if deemed advisable, to pass, with or without variation, a special resolutionauthorizing and approving an amendment to the Corporation's articles of amalgamation toconsolidate the issued and outstanding common shares of the Corporation on the basis of one

post-consolidation common share for every five pre-consolidation common shares, to take effectfollowing the closing of the Acquisition;

(6) to consider and, if deemed advisable, to pass, with or without variation, a special resolutionauthorizing and approving an amendment to the Corporation's articles of amalgamation to changethe name of the Corporation from "Blue Power Energy Corporation" to "Cadillac Ventures Inc."or such other name as may be approved by the directors and applicable regulatory authorities, totake effect following the closing of the Acquisition;

(7) to consider and, if deemed advisable, to pass, with or without variation, an ordinary resolutionauthorizing and approving the adoption of a share option plan; and

(8) to transact such further and other business as may properly come before the Meeting or anyadjournment or adjournments thereof.

Reference is made to the attached Management Information Circular and Proxy Statement (the " Circular "), whichdescribes the matters referred to in items (2) to (7) and includes the text of the resolutions to be passed.

Only holders of common shares of record on February 23, 2006 are entitled to notice of and to vote at the Meeting. Tothe extent any such shareholder transfers the ownership of any of his/her shares after that date and the transferee of

those shares establishes that he/she owns such shares and demands not later than 10 days before the Meeting thathis/her name be included in the shareholders list, such transferee will be entitled to vote such shares at the Meeting.

A copy of the Circular and Proxy Form accompany this Notice.

As a substantial representation of the shareholders is desired, if you are not able to be present at the Meeting, kindlydate, sign and return the Proxy Form accompanying this Notice in the envelope provided for that purpose.


4/117

57741.v11 2

DATED at Toronto, Ontario this 13 th day of March, 2006.

By Order of the Board of Directors,

"Jim Voisin"

Jim VoisinPresident


5/117

57741.v11 3

BLUE POWER ENERGY CORPORATION360 Bay Street, Suite 500, Toronto, Ontario, Canada M5H 2V6

MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT

SOLICITATION OF PROXIES

This Management Information Circular and Proxy Statement (the " Circular ") is furnished in connection with thesolicitation of proxies by the management of Blue Power Energy Corporation (the " Corporation ") for use at the annualand special meeting of shareholders of the Corporation (the " Meeting ") to be held at the time and place and for the

purposes set forth in the attached Notice of Annual and Special Meeting (the " Notice "). It is anticipated that thesolicitation will be by mail primarily, but proxies may also be solicited personally by directors, officers and regular employees of the Corporation. The cost of such solicitation will be borne by the Corporation.

The form of proxy forwarded to shareholders of the Corporation with the Notice confers discretionary authority uponthe proxy nominees with respect to amendments or variations of matters identified in the Notice or other matters thatmay properly come before the Meeting.

The form of proxy affords the shareholder the opportunity to specify that the shares beneficially owned by him/her shall be voted for or withheld from voting or voted against, if so indicated on the form of proxy, any ballot that may be calledfor, in accordance with the specifications made by shareholders.

EXERCISE OF DISCRETION BY PROXIES

Shares represented by properly executed proxies in favour of persons designated in the printed portion of theenclosed form of proxy WILL BE VOTED FOR EACH OF THE MATTERS TO BE VOTED ON BYSHAREHOLDERS AS DESCRIBED IN THIS CIRCULAR OR WITHHELD FROM VOTING OR VOTEDAGAINST IF SO INDICATED ON THE FORM OF PROXY . Where shareholders have properly executedproxies in favour of the persons named in the enclosed form of proxy and have not specified in the form of proxy the manner in which the named proxies are required to vote the shares represented thereby, such

shares will be voted in favour of the passing of the matters set forth in the Notice. The enclosed form of proxyconfers discretionary authority upon the persons named therein with respect to amendments or variations to mattersidentified in the Notice, or other matters which may properly come before the Meeting. At the time of printing thisCircular, the management of the Corporation knows of no such amendments, variations or other matters to come

before the meeting.

APPOINTMENT AND REVOCATION OF PROXIES

The persons named in the enclosed form of proxy are directors and/or officers of the Corporation. Eachshareholder has the right to appoint a person, who need not be a shareholder of the Corporation, other thanthe persons named in the enclosed form of proxy, to represent such shareholder at the Meeting or anyadjournment thereof. Such right may be exercised by inserting such persons name in the blank space provided inthe enclosed form of proxy or by completing another proper form of proxy. All proxies must be executed by theshareholder or his or her attorney duly authorized in writing or, if the shareholder is a corporation, by an officer or attorney thereof duly authorized. The completed form of proxy must be deposited with Equity Transfer ServicesInc., Suite 420, 120 Adelaide St. W., M5H 4C3 (416) 361-0470, not less than 48 hours (excluding Saturdays,Sundays and holidays) prior to the time of the Meeting or any adjournment thereof at which the proxy is to be used,or deliver it to the Chair of the Meeting on the day of the Meeting or any adjournment thereof prior to the time of voting.

A shareholder who has given a proxy has the power to revoke it as to any matter on which a vote has not already been cast pursuant to the authority conferred by such proxy and may do so either:


6/117

57741.v11 4

1. by delivering another properly executed form of proxy bearing a later date and depositing it as aforesaid;

2. by depositing an instrument in writing revoking the proxy executed by him or her:

(a) with Equity Transfer Services Inc. at any time up to and including 10:30 a.m. (Toronto time)on the last business day preceding the day of the Meeting, or any adjournment thereof, atwhich the proxy is to be used; or

(b) with the Chair of the Meeting on the day of the Meeting, prior to the commencement of theMeeting or any adjournment thereof; or

3. in any other manner permitted by law.

ADVICE TO BENEFICIAL HOLDERS OF SECURITIES

Only registered shareholders of the Corporation or the persons they appoint as their proxies are permitted to vote atthe Meeting. However, in many cases, Common Shares beneficially owned by a person (a Non-RegisteredHolder ") are registered in the name of a nominee such as an intermediary (an Intermediary ") that the Non-Registered Holder deals with in respect of the Common Shares (Intermediaries include, among others, banks, trustcompanies, securities dealers or brokers and trustees or administrators of self-administered RRSPs, RRIFs, RESPsand similar plans) or a clearing agency (such as The Canadian Depository for Securities Limited) of which theIntermediary is a participant.

Generally, Non-Registered Holders who have not waived the right to receive meeting materials will either be givena form of proxy or a request for voting instructions (often called a proxy authorization form"). In either case,Non-Registered Holders who wish their Common Shares to be voted at the Meeting should carefully followthe instructions of their Intermediary or other nominee, including those regarding when and where the proxyor proxy authorization form is to be delivered.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The Corporation's authorized share capital consists of an unlimited number of non-participating, redeemable, votingClass B preference shares, an unlimited number of Class C preference shares (issuable in series) and an unlimitednumber of common shares (" Common Shares "). On March 13, 2006 there were 40,820,728 Common Shares issuedand outstanding.

Each Common Share entitles the holder thereof (each a " Shareholder ", collectively " Shareholders ") to one vote at allmeetings of Shareholders. All Shareholders of record on February 23, 2006 are entitled either to attend the Meeting or any adjournment thereof and vote thereat, in person, the Common Shares held by them or, provided a completed andexecuted proxy shall have been delivered to the Corporation, to attend and vote thereat, by proxy, for the CommonShares held by them.

As at March 13, 2006 to the knowledge of the directors and senior officers of the Corporation, the only person, firm or

corporation who beneficially owns, directly or indirectly, or exercises control or direction over voting securities of theCorporation carrying more than 10% of the voting rights attaching to any class of voting securities of the Corporation,on a non diluted basis, is as follows:

Name and MunicipalityOf Residence Number of Common Shares

Percentage of Issued andOutstanding Common Shares

Christopher C. DundasToronto, Ontario 5,000,000 12.25%


7/117

57741.v11 5

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table contains information about the compensation paid to, or earned by, Gordon R. Wilton, who was thePresident of the Corporation and was acting in the capacity of the Corporations Chief Executive Officer and Chief Financial Officer during the fiscal year ended May 31, 2005. The Corporation had no executive officers whose salary

and bonus exceeded $150,000 during the fiscal year ended May 31, 2005.

Annual Compensation Long Term CompensationAward $ Payouts

Name and PrincipalPosition

FinancialYear-End

May 31Salary

($)Bonus

($)

OtherAnnualComp.

($)

Securitiesunder

Options /SARS (1)

(#)

RestrictedShares or

Units(#)

LTIP (2)

Payouts($)

All OtherCompensation

($)

2005 (3) Nil Nil Nil Nil Nil Nil Nil

2004 Nil Nil Nil Nil Nil Nil Nil

Gordon R. WiltonPresident & Director

2003 Nil Nil 24,000 (4) Nil Nil Nil Nil

(1) SAR means a right, granted by a company as compensation for employment services or office to receive cash or anyissue or transfer of securities based wholly or in part on changes in the trading price of publicly traded securities. TheCorporation has not granted any SARs.

(2) LTIP means a plan providing compensation intended to motivate performance over a period greater than onefinancial year. The Corporation does not have an LTIP.

(3) Mr. Wilton was the President from April 1, 1996 until November 1, 2005, at which time Jim Voisin was appointedPresident.

(4) Pursuant to an agreement dated December 15, 1988, as amended, the Corporation paid $2,000 per month inmanagement fees to Northern Mining Properties, a partnership of which Mr. Wilton was a 50% beneficial owner. Theagreement was terminated at the end of the fiscal year ended May 31, 2003.

Option/SAR Grants During 2005 Fiscal Year

The Corporation did not grant options to Named Executive Officers during the fiscal year ended May 31, 2005.

Aggregated Option/SAR Exercises During 2005 and Financial Year-End Option/SAR Values

No options were exercised by Named Executive Officers during the fiscal year ended May 31, 2005 and no optionswere held by Named Executive Officers as at May 31, 2005. The Corporation did not effect any downward pricingof stock options during the fiscal year ended May 31, 2005.

Compensation of Directors

During the fiscal year ended May 31, 2005, no director was paid any amount as compensation for his directorship.


8/117

57741.v11 6

Termination of Employment or Change of Control

The Corporation has no plan or arrangement in respect of compensation received or that may be received by NamedExecutive Officers to compensate such officers in the event of the termination of employment (resignation, retirement,change of control) or in the event of a change in responsibilities following a change in control.

Audit Committee Disclosure

The Corporations audit committee is composed of three directors: Maurice Stekel (Chair), Jim Voisin and Neil Novak. Two of the three members of the audit committee (Messrs. Stekel and Novak) may be considered to beindependent and all are financially literate (as determined under Multilateral Instrument 52-110 Audit Committees(MI 52-110 )). Mr. Voisin is President of a consulting company that provides investor relations services andMessrs. Stekel and Novak have acted as directors and/or audit committee members of a number of public issuers inthe past and as such each has obtained experience in performing his responsibilities as a member of theCorporations audit committee. As well, each of the audit committee members owns his own business and in suchcapacity has experience in the preparation, analysis and/or evaluation of financial statements generally and anunderstanding of internal controls and procedures for financial reporting. Given the scope and nature of theCorporations business, its financial statements and the accounting issues arising therefrom are relativelyuncomplicated. Based on the foregoing, it is the Boards conclusion that each of the members of the auditcommittee has an understanding of the accounting principles used by the Corporation to prepare its financialstatements, the ability to assess the general application of such accounting principles in connection with theaccounting for estimates, accruals and reserves and experience in evaluating financial statements that present a

breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Corporations financial statements.

The charter of the Corporations audit committee is set out in Appendix I to this Circular.

The Corporation is considered to be a venture issuer for the purposes of MI 52-110 and as such is exempt from therequirements of Parts 3 ( Composition of the Audit Committee ) and 5 ( Reporting Obligations ) of MI 52-110.

The following table sets out the aggregate fees billed by the Corporations external auditors in each of the last twofiscal years for the category of fees described.

2005 2004

Audit Fees $ 4,000 $ 4,000

Audit-Related Fees - -

Tax Fees 500 500

All Other Fees - -

Total $ 4,500 $ 4,500

Since the commencement of the Corporations most recently completed financial year, there has not been arecommendation of the audit committee to nominate or compensate an external auditor which was not adopted bythe Corporations Board of Directors.

Since the commencement of the Corporations most recently completed financial year, the Corporation has notrelied on the exemption in Section 2.4 ( De Minimus Non-Audit Services ) of MI 52-110, or an exemption from MI52-110, in whole or in part, granted under Part 8 ( Exemptions ) of MI 52-110.

The audit committee has adopted specific policies and procedures for the engagement of non-audit services asdescribed in Procedures for Approval of Non-Audit Services in the Audit Committees Charter.


9/117

57741.v11 7

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

As at May 31, 2005, there were no equity securities authorized for issuance pursuant to equity compensation plans. TheCorporation has not granted options or rights to purchase any of its equity securities to any person as compensation.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

None of the directors or executive officers, or their respective associates or affiliates, are or have been indebted to theCorporation or its subsidiaries since the beginning of the last completed financial year of the Corporation.

MANAGEMENT CONTRACTS

The Corporation was party to a management agreement with Harper Capital Inc., a corporation beneficially owned by Bernice Bregman, the President and director of Harper Capital Inc. Harry Bregman is an officer of Harper Capital Inc. Pursuant to the management agreement, the Corporation paid $2,000 per month in exchange for management and supervisory services. The agreement was terminated on October 25, 2005.

During the year ended May 31, 2005, the Corporation was charged the sum of $24,000 as management fees. As atOctober 25, 2005, the Corporation was indebted to Harper Capital Inc. in the amount of $171,119.14 for unpaidmanagement fees, for funds advanced by Harper Capital Inc. to the Corporation, and for accounts receivable held byHarper Capital Inc. that Harper Capital Inc. had purchased from certain creditors of the Corporation on August 31,2005 (collectively, the " Debt Amount "). On October 25, 2005, Harper Capital sold the Debt Amount in exchange for an aggregate sale price of $145,000. The Debt Amount was subsequently settled by the Corporation by the issuance of Common Shares to the holders of the Debt Amount. See below under the heading " Interest of Informed Persons InMaterial Transactions -- The Debt Settlement ".

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

No director, executive officer or proposed nominee for election as a director of the Corporation, no person beneficiallyowning, directly or indirectly, or exercising control or direction over Common Shares carrying more than 10 percent of the voting rights attached to all voting securities of the Corporation, and no associate or affiliate of the foregoing

persons has or has had any material interest, direct or indirect, in any transaction since the beginning of theCorporations last completed fiscal year or in any proposed transaction which, in either case, has materially affected or will materially affect the Corporation, except for the following.

The Debt Settlement

On November 1, 2005, the Corporation settled all of its outstanding liabilities, amounting to $171,119, through theissuance of 28,519,855 Common Shares to seven arm's-length creditors (the " Debt Settlement ") (representing aneffective subscription price of $0.006 per Common Share. The Corporation issued 4,074,265 Common Shares to eachof Allan Ringler Services Inc., Elen Enterprises (Ontario) Inc., George Duguay Services Inc., Kalwea Financial Corp.,

Peter Miller, Nominex Ltd., and Jim Voisin (together, the " Creditors "). Following this transaction, each Creditor heldapproximately 12.04% of the issued and outstanding Common Shares.

In connection with the foregoing transaction, each of the Creditors entered into a pooling agreement with theCorporation, pursuant to which each Creditor deposited all of its shares issued pursuant to the Debt Settlement inescrow for release on the following basis: (a) 50% of the initial number of escrowed Common Shares to be releasedfrom time to time within 60 days following the Listing Date at the discretion of the Corporation; and (b) 50% of theinitial number of escrowed Common Shares to be released from escrow from time to time within 120 days followingthe Listing Date at the discretion of the Corporation; where the Listing Date means the date upon which the Common


10/117

57741.v11 8

Shares are listed and posted for trading on the TSX Venture Exchange Inc. or any other exchange or trading facilityacceptable to the Corporation.

Following the Debt Settlement, the Board accepted the resignation of Lawrence Harding appointed Jim Voisin, Neil Novak and Maurice Stekel as directors of the Corporation and appointed Jim Voisin and Gordon Wilton as Presidentand Secretary, respectively.

The Offering

On December 30, 2005, the Corporation completed a private placement financing under which it issued 8,475,000flow-through units of the Corporation (the " Units ") at a price of $0.02 per Unit for aggregate gross proceeds of $169,500 (the " Offering "). Each Unit comprised one Common Share issued on a flow-through basis pursuant to the

Income Tax Act (Canada) and one-third of one Common Share purchase warrant. Each whole Common Share purchasewarrant entitles the holder to acquire one Common Share at a price of $0.03 per Common Share until December 30,2006. Pursuant to the Offering, Neil Novak, a director and "related party" (as defined in Ontario SecuritiesCommission Rule 61-501 (" Rule 61-501 ")) of the Corporation, purchased 250,000 Units and Norman Brewster, a"related party" of the Corporation, purchased 1,350,000 Units. As a consequence, the participation of Neil Novak and

Norman Brewster in the Offering constituted a "related party transaction" that was subject to Rule 61-501.

As the Offering included a "flow-through" component and therefore had to close on or before December 31, 2005, thedirectors of the Corporation made the decision to close the Offering on December 30, 2005, which was less than 21days following the date of the initial decision of the Board to proceed with the Offering, which was December 30,2006. The securities issued under the Offering are subject to a four-month hold period, until May 1, 2006.

The Corporation relied on the exemptions under subsections 5.5(2) and 5.7(2) of Rule 61-501 to exempt it fromobtaining a formal valuation of the Offering and minority shareholder approval for the Offering on the basis that neither the fair market value of the Units or the consideration therefor, insofar as it involves interested parties, exceeded themarket capitalization of the Corporation on the date that the Offering was agreed upon. The aggregate participation of

Neil Novak and Norman Brewster in the Offering was less than 7% of the market capitalization of the Corporation atthe time the Offering was agreed upon.

The Acquisition

The Corporation has entered into a share purchase agreement dated February 28, 2006 with Alfer Inc., Allan Ringler Services Inc., Elen Enterprises (Ontario) Inc., George Duguay Services Inc., Kalwea Financial Corp., Peter Miller,

Nominex Ltd., and Jim Voisin (collectively, the " Vendors ") pursuant to which the Corporation has agreed to acquire(the " Acquisition ") all of the issued and outstanding common shares of Chilly-Bin Inc. (" Chilly-Bin "), which total25,000,000, in exchange for 25,000,000 Common Shares. Jim Voisin, a director of the Corporation, is an "informed

person" of the Corporation, as defined in National Instrument 51-102. Nominex Ltd. is beneficially owned by Neil Novak, a director and "informed person" of the Corporation, and his wife. Additionally, each of the Vendors, with theexception of Alfer Inc., holds 4,074,265 Common Shares, which is equal to approximately 9.98% of the issued andoutstanding Common Shares. As a result, the Corporation considers these Vendors to be informed persons of theCorporation. A detailed description of the Acquisition follows below under the heading " Special Business -- Approval

of the Acquisition of Chilly-Bin Inc. "

INTERESTS OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

No person who has been a director or executive officer of the Corporation at any time since the beginning of its lastcompleted financial year, no proposed nominee for election as a director, and no associate or affiliate of any of theforegoing persons has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise,in any matter to be acted upon at the Meeting, except, in respect of the Acquisition, the interests of Neil Novak, who,together with his wife, is a beneficial owner of Nominex Ltd., one of the Vendors, and Jim Voisin, one of the Vendors,


11/117

57741.v11 9

all as more particularly described above under the heading " Interest of Informed Persons in Material Transactions --The Acquisition " and below under the heading " Special Business -- Approval of the Acquisition of Chilly-Bin Inc. ".

ELECTION OF DIRECTORS

The directors of the Corporation are authorized to fix the number of directors on the board of directors of the

Corporation (the Board ") between a minimum of 3 directors and a maximum of 11 directors. The Shareholderswill be asked to elect five directors for the ensuing year. The persons named in the enclosed form of proxy intend tovote Common Shares for the election of the nominees whose names are set forth below. Management of theCorporation does not contemplate that any of the nominees will be unable to serve as a director but, if that shouldoccur for any reason prior to the Meeting, the persons named in the enclosed form of proxy reserve the right to votefor another nominee in their discretion. Each director elected will hold office until the close of business of the firstannual meeting of Shareholders following his election unless his office is earlier vacated in accordance with the by-laws of the Corporation.

The names of all of the nominees, their position with the Corporation, their principal occupation or employmentduring the last five years, the dates upon which they became directors of the Corporation, if applicable, and thenumber of Common Shares beneficially owned by them, directly or indirectly, or over which control or direction isexercised as of March 13, 2006, are as follows:

Name, Position withCorporation and Municipality

of Residence Principal OccupationPeriod(s) Served

As Director

Shares Held or OverWhich Control or

Direction isExercised (1)

Jim VoisinPresident and director Heidelberg, Ontario

President of Greenstone Consulting Inc., acompany that provides investor relationsservices.

November 1,2005 to present

4,074,265

Neil Novak,Director Cambridge, Ontario

President of Nominex Ltd. and BillikenManagement Services Inc. (both privategeological consulting and management

companies); President, CEO and director of Spider Resources Inc.

November 1,2005 to present

250,000 (2)

Maurice Stekel,Director Toronto, Ontario

Independent business consultant. November 1,2005 to present

Nil

Nicole Brewster,Toronto, Ontario

Independent business consultant.Formerly, a registered representative and

professional financial planner withDesjardins Securities.

n/a 125,000 (3)

William McCulloughToronto, Ontario

President, Superior Logistical ServicesInc., a company that provides primaryfreight brokerage and logistics services

n/a Nil

(1) The information in the foregoing table as to Common Shares beneficially owned or over which control or direction isexercised, not being within the knowledge of the Corporation, has been furnished by each respective nominee.

(2) Mr. Novak holds 250,000 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 4,074,265 Common Shares. Mr. Novak alsoholds common share purchase warrants to purchase 83,333 Common Shares at a price of $0.03 per Common Shareuntil December 30, 2006.


12/117

57741.v11 10

(3) Ms. Brewster also holds common share purchase warrants to purchase 13,888 Common Shares at a price of $0.03 per Common Share until December 30, 2006.

PROXIES RECEIVED IN FAVOUR OF MANAGEMENT WILL BE VOTED FOR THE ELECTION OFTHE ABOVE-NAMED NOMINEES, UNLESS THE SHAREHOLDER HAS SPECIFIED IN THE PROXYTHAT HIS OR HER SHARES ARE TO BE WITHHELD FROM VOTING IN RESPECT THEREOF.MANAGEMENT HAS NO REASON TO BELIEVE THAT ANY OF THE NOMINEES WILL BE UNABLE

TO SERVE AS A DIRECTOR BUT, IF A NOMINEE IS FOR ANY REASON UNAVAILABLE TO SERVEAS A DIRECTOR, PROXIES IN FAVOUR OF MANAGEMENT WILL BE VOTED IN FAVOUR OF THEREMAINING NOMINEES AND MAY BE VOTED FOR A SUBSTITUTE NOMINEE UNLESS THESHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS OR HER SHARES ARE TO BEWITHHELD FROM VOTING IN RESPECT OF THE ELECTION OF DIRECTORS.

APPOINTMENT OF AUDITORS

McCarney Greenwood LLP, Chartered Accountants, have been the auditors of the Corporation since September 20,2004. The former auditor, Stewart Wright, Chartered Accountant, resigned at the request of the Corporation effectiveas of that date. In connection with this change of auditor, the Corporation issued a notice of change of auditors toMcCarney Greenwood LLP and to Stewart Wright and received a response from both parties as required under

National Instrument 51-102. The notice and letters were filed with the applicable regulatory authorities and areattached to this Circular as Appendix H.

The persons named in the accompanying form of proxy intend to vote such proxy in favour of the re-appointment of McCarney Greenwood LLP, Chartered Accountants, as auditors of the Corporation for the ensuing year, or until their successor is appointed, at a remuneration to be fixed by the Board, unless the Shareholder has specified in the proxythat his or her shares are to be withheld from voting in respect to this.

PROXIES RECEIVED IN FAVOUR OF MANAGEMENT WILL BE VOTED FOR THE APPOINTMENTOF McCARNEY GREENWOOD LLP, CHARTERED ACCOUNTANTS, AS AUDITORS OF THECORPORATION AND IN FAVOUR OF AUTHORIZING THE BOARD OF DIRECTORS TO FIX THEREMUNERATION OF THE AUDITORS, UNLESS THE SHAREHOLDER HAS SPECIFIED IN THEPROXY THAT HIS OR HER SHARES ARE TO BE WITHHELD FROM VOTING IN RESPECTTHEREOF.

SPECIAL BUSINESS APPROVAL OF THE ACQUISITION OF CHILLY-BIN INC.

General

The Acquisition, if completed, will result in the acquisition by the Corporation of all of the issued and outstandingshares in the capital of Chilly-Bin. In accordance with applicable regulatory requirements, the Board is requesting thatthe Acquisition be approved by the Shareholders.

The Acquisition

The Corporation has entered into a share purchase agreement dated February 28, 2006 (the " Purchase Agreement ")with Alfer Inc., Allan Ringler Services Inc., Elen Enterprises (Ontario) Inc., George Duguay Services Inc., KalweaFinancial Corp., Peter Miller, Nominex Ltd., and Jim Voisin (collectively, the " Vendors ") pursuant to which it hasagreed to purchase all of the outstanding shares in the capital of Chilly-Bin, which total 25,000,000 (the " Chilly-BinShares "), in exchange for the issuance by the Corporation of one Common Share for each Chilly-Bin Share, for anaggregate issuance of 25,000,000 Common Shares. The Board has fixed the consideration for the 25,000,000 CommonShares at $0.01 per Common Share.


13/117

57741.v11 11

At the Meeting, Shareholders will be asked to consider, and if deemed advisable, to pass a resolution approving theAcquisition. Following the Acquisition, the Corporation proposes to consolidate the Common Shares on the basis of one post-consolidation Common Share for every five pre-consolidation Common Shares and change the name of theCorporation from "Blue Power Energy Corporation" to "Cadillac Ventures Inc.", or such other name as may beapproved by the Board and applicable regulatory authorities. Details of the foregoing consolidation and name changefollow under the headings " Special Business -- Approval of Share Consolidation " and " Special Business -- Approval of Change of Name ", respectively.

Background to the Acquisition

The Corporation was formed on February 19, 1996 under the laws of the Province of Ontario by the amalgamation of Blue Power Energy Corporation, 1155698 Ontario Inc. and 1155697 Ontario Inc. The Corporation currently has nooperating assets and has been inactive for the past several years following the sale of an interest in an oil and gas

property in 2000. Since then, the Corporation has been seeking a new business opportunity while maintaining itsreporting issuer status in British Columbia, Alberta and Ontario. The Common Shares are traded on the CanadianUnlisted Board (CUB) over-the-counter system under the symbol BLU.

Chilly-Bin is a privately-owned Ontario corporation that owns a property known as "The New Alger Property"comprising Mining Concession CM0240PTA in the Township of Cadillac registration division of Abitibi Provinceof Quebec together with the related Surface Rights (the " New Alger Property "). A detailed description of the NewAlger Property follows under the heading " Description of the New Alger Property ".

Chilly-Bin acquired the New Alger Property from Alfer Inc. pursuant to an agreement of purchase and sale datedJanuary 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. No work has been done on the New Alger Property to date by Chilly-Bin.

On November 16, 2005, Chilly-Bin issued 20,000,000 Chilly-Bin Shares to Allan Ringler Services Inc., ElenEnterprises (Ontario) Inc., George Duguay Services Inc., Kalwea Financial Corp., Peter Miller, Nominex Ltd., and JimVoisin in satisfaction of funds advanced by them, which totalled in the aggregate $47,980, which represents aneffective subscription price of $0.0024 per share.

Reasons for the Acquisition

Following the reconstitution of the Board on November 1, 2005, the Board decided to seek business opportunities inthe mineral exploration sector. The Board believes that the resource sector offers sound opportunities for a junior

public company seeking to reactivate. Canadian capital markets are receptive to resource enterprises andcommodity prices have improved over the last several years. In anticipation of the Corporation's acquisition of Canadian mineral properties, the Board approved the flow-through share Offering in December, 2005 (see " Interest of Informed Persons in Material Transactions " above). Following the closing of the Offering, the acquisition of the

New Alger Property, through Chilly-Bin, was presented to the Board.

As Messrs Voisin and Novak are 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 theAcquisition. The Committee performed its due diligence on the New Alger Property, including a review of theTechnical Report (as defined below), and unanimously determined that the Acquisition is in the best interests of theCorporation. The Committee arrived at its determination after considering a number of factors, including the

proposed share exchange ratio for the Acquisition (which the Committee members believe is fair taking into accountthe respective assets of the Corporation and of Chilly-Bin) as well as the following:

(a) the Corporation currently has no material assets, no source of funding and no prospects;


14/117

57741.v11 12

(b) it is unlikely that the Corporation will be able to obtain any type of additional financing without amineral property;

(c) the Acquisition should provide an opportunity for the revival of the business of the Corporationand permit it to become actively involved in the mineral exploration industry and permit theCorporation to access additional funding; and

(d) the Committee believes that the exchange of Common Shares for Chilly-Bin Shares on the basisof one-for-one represents fair value for the Common Shares and that the Acquisition is fair toShareholders from a financial point of view;

In concluding that the Acquisition is fair to, and in the best interests of, the Corporation and in recommending thatthe Shareholders vote in favour of the Acquisition, the Committee did not assign any relative or specific weight tothe foregoing factors that were considered, and individual Committee members may have given differing weight todifferent factors. The Committee members are, however, unanimous in their recommendation that the Shareholdersvote in favour of the Acquisition.

Information About Chilly-Bin

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.".

Chilly-Bin is authorized to issue an unlimited number of common shares. On March 13, 2006 there were 25,000,000common shares in the capital of Chilly-Bin issued and outstanding. Chilly-Bin issued 5,000,000 Chilly-Bin Shares onJanuary 31, 2005 at an effective subscription price of $0.0111 per share in consideration for the acquisition of the NewAlger Property from Alfer Inc. Chilly-Bin issued 20,000,000 Chilly-Bin Shares on November 16, 2005 at an effectivesubscription price of $0.0024 per share to settle all of its outstanding debts.

Each of the following persons is a shareholder of Chilly-Bin and holds 10% or more of the voting securities of Chilly-Bin.

Name Number of Chilly-Bin SharesPercentage of Issued and

Outstanding Chilly-Bin Shares

Alfer Inc. 5,000,000 20%

Elen Enterprises (Ontario) Inc. 5,000,000 20%

Allan Ringler Services Inc. 2,500,000 10%

George Duguay Services Inc. 2,500,000 10%

Kalwea Financial Corp. 2,500,000 10%

Peter Miller 2,500,000 10%

Nominex Ltd. 2,500,000 10%

Jim Voisin 2,500,000 10%


15/117

57741.v11 13

Frank Smeenk has been the President and sole director of Chilly-Bin since its incorporation on October 21, 2004. Neil Novak, a director of the Corporation, has been the Secretary-Treasurer of Chilly-Bin since incorporation.Following completion of the Acquisition, Mr. Smeenk will be removed and the board of directors of Chilly-Bin will

be made up of nominees of the Corporation.

Chilly-Bin has not paid any of its officers or directors for their services as such, and Chilly-Bin has not granted anyoptions to purchase any of its securities to any person. No officer or director of Chilly-Bin is indebted to Chilly-

Bin.

The Purchase Agreement

The Purchase Agreement contains representations, warranties, terms and conditions and indemnities that are standardfor an agreement of this type prepared in accordance with Canadian commercial practices, including the following:

1. the closing date of the Acquisition will be April 18, 2006 (or such earlier or later date as may be mutuallyacceptable to the parties). In the event that the Acquisition is not completed by May 31, 2006, thePurchase Agreement shall terminate and the Corporation and the Vendors will be released from their obligations under the Purchase Agreement;

2. representations and warranties by the Corporation regarding, among other things:

(a) its corporate status and authority;

(b) the execution of the Purchase Agreement being duly authorized by the Corporation and notconflicting with or constituting a breach of or an encumbrance under any other instrument bywhich the Corporation is bound;

(c) the execution of the Purchase Agreement being duly executed and delivered by the Corporationand constituting a legal, valid and binding obligation of the Corporation, enforceable against theCorporation in accordance with its terms;

(d) the Common Shares to be issued to the Vendors being fully paid and non-assessable uponissuance; and

(e) the status of the Corporation and its public disclosure record under applicable securitieslegislation;

3. representations and warranties by the Vendors regarding, among other things:

(a) the corporate status and authority of corporate Vendors, the legal capacity, competence andauthority of individual Vendors, and the corporate status and authority of Chilly-Bin,

(b) the execution of the Purchase Agreement being duly authorized by each Vendor, not conflictingwith or constituting a breach of or an encumbrance under any other instrument by which such

Vendor or Chilly-Bin is bound;

(c) the Purchase Agreement being duly executed and delivered by each Vendor and constituting alegal, valid and binding obligation of each Vendor, enforceable against such Vendor inaccordance with its terms;

(d) no person having any agreement or option for the purchase of the Chilly-Bin Shares from theVendors and each Vendor being the registered and beneficial owner of its Chilly-Bin Shares, freeand clear of any encumbrances;

(e) Chilly-Bin's authorized capital; and


16/117

57741.v11 14

(f) Chilly-Bin's ownership of the New Alger Property;

4. the closing of the Acquisition will be subject to conditions precedent, including the following:

(a) receipt of all corporate, legal and regulatory proceedings, approvals and consents as arereasonably considered necessary by the solicitors of the Corporation and the Vendorsrespectively;

(b) all the representations and warranties of the Corporation and the Vendors contained in thePurchase Agreement being true and correct at the closing of the Acquisition with the same effectas if made at the time of the closing of the Acquisition;

(c) receipt of Shareholder approval of the Acquisition; and

(d) no action or proceeding, at law or in equity, and no investigation being pending or threatened byany Person to restrain, restrict or prohibit or materially adversely affect the consummation of theAcquisition, or trading in Common Shares; and

5. the Purchase Agreement may be terminated by a party to the Purchase Agreement if any of the conditionsin favour of that party is not satisfied or complied with at or before the time of the closing of theAcquisition.

There can be no assurance that the above provisions of the Purchase Agreement will not be revised. As well,there can be no assurance that the Acquisition will be completed.

Pro Forma Information About the Corporation Post-Acquisition

The following information contains certain forward looking statements. Words such as "may", "would", "could","will", "expects", "anticipates", variations of such words and similar expressions are intended to identify theseforward looking statements. Specifically all statements in this section of the Circular address activities, events or developments that the Corporation expects or anticipates will or may occur in the future, with respect to theCorporation following the completion of the Acquisition. Actual results could differ materially from thoseexpressed or implied by such forward looking statements.

The following diagram illustrates what will be the corporate structure of the Corporation and its subsidiariesfollowing the Acquisition and the Name Change:

Following the Acquisition, the board and management of Chilly-Bin will comprise nominees of the Corporation.

100%

Cadillac Ventures Inc.(formerly Blue Power Energy Corporation)

(Ontario)

Chilly-Bin Inc.(Ontario)

100%

The New Alger Property(Quebec)


17/117

57741.v11 15

Pursuant to the Acquisition, the Corporation will issue 25,000,000 Common Shares to the Vendors. The followingtable shows the effect of the Acquisition on the share capital of the Corporation:

Number of Common Shares Percentage of Total

Common Shares Issued and OutstandingPrior to the Acquisition

40,820,728 62.02%

Common Shares Issued Pursuant to theAcquisition

25,000,000 37.98%

Total 65,820,728 100%

Following the Acquisition, the Corporation proposes to consolidate the Common Shares on the basis of one post-consolidation Common Share for every five pre-consolidation Common Shares (the " Share Consolidation ").Fractional Common Shares will not be issued. (See below under " Special Business -- Approval of ShareConsolidation "). Following the Share Consolidation, there will be approximately 13,164,145 Common Shares issuedand outstanding. This number does not take into account fractional shares rounded up as part of the ShareConsolidation.

The following table sets out the shareholdings of the principal Shareholders of the Corporation, post-Acquisition and post-Share Consolidation, assuming a total of 13,164,145 issued and outstanding of Common Shares:

Name Number of Common SharesPercentage of Issued and

Outstanding Common Shares

Elen Enterprises (Ontario) Inc. 1,814,853 13.79%

Allan Ringler Services Inc. 1,314,853 9.99%

George Duguay Services Inc. 1,314,853 9.99%

Kalwea Financial Corp. 1,314,853 9.99%

Peter Miller 1,314,853 9.99%

Nominex Ltd. 1,314,853 9.99%

Jim Voisin 1,314,853 9.99%

Total Issued and Outstanding 13,164,145 100%

Attached to this Circular as Appendix G are the unaudited pro forma financial statements of the Corporation andChilly-Bin, which present the Corporation's consolidated financial position after giving effect to the Acquisition and theShare Consolidation. The pro forma consolidated balance sheet of the Corporation and Chilly-Bin dated as atDecember 31, 2005 should be read in conjunction with the unaudited balance sheet of the Corporation for the six-month period ended November 30, 2005 and the audited balance sheet of Chilly-Bin dated as at December 31, 2005(see " Audited Financial Statements of Chilly-Bin Inc. " in Appendix F to this Circular). Readers are cautioned thatchanges will have occurred in each company since the date of the relevant balance sheets.


18/117


19/117

57741.v11 17

Common Share for every five pre-consolidation Common Shares (the " Share Consolidation "). No fractionalCommon Shares will be issued in connection with the Share Consolidation and, in the event that a Shareholder wouldotherwise be entitled to receive a fractional share upon the Share Consolidation, the number of Common Shares to bereceived by such Shareholder will be rounded up to the next highest whole number of Common Shares.

Should the Consolidation Resolution be approved, the effective date of the Share Consolidation shall be the dateimmediately following the closing of the Acquisition, or such other date that the Board may decide in its sole

discretion. The Board shall have the authority to prepare and file articles of amendment for the ShareConsolidation. The Consolidation Resolution provides that the directors of the Corporation may determine not toimplement the Share Consolidation at any time prior to the issuance of the certificate of amendment without further action on the part of the Shareholders.

To be effective, the Consolidation Resolution must be passed by at least two-thirds of the votes cast in respect of theConsolidation Resolution at the Meeting.

PROXIES RECEIVED IN FAVOUR OF MANAGEMENT WILL BE VOTED FOR THE APPROVAL OFTHE SHARE CONSOLIDATION UNLESS A SHAREHOLDER HAS SPECIFIED IN THE PROXY THATHIS OR HER SHARES ARE TO BE VOTED AGAINST SUCH RESOLUTION. In the event that Shareholder approval is not given to the Share Consolidation, the Common Shares will not be consolidated.

SPECIAL BUSINESS APPROVAL OF CHANGE OF NAME

Shareholders will be asked at the Meeting to consider and, if deemed advisable, pass with or without variation, aresolution as set forth in Appendix C to this Circular (the " Name Change Resolution ") authorizing the Corporationto amend its articles of amalgamation to change the name of the Corporation from "Blue Power EnergyCorporation" to "Cadillac Ventures Inc." or such other name as may be approved by the Board and applicableregulatory authorities (the " Name Change ").

Should the Name Change Resolution be approved, the effective date of the Name Change shall be the dateimmediately following the closing of the Acquisition, or such other date that the Board may decide in its solediscretion. The Board shall have the authority to prepare and file articles of amendment for the Name Change. The

Name Change Resolution provides that the directors of the Corporation may determine not to implement the NameChange at any time prior to the issuance of the certificate of amendment without further action on the part of theShareholders.

To be effective, the Name Change Resolution must be passed by at least two-thirds of the votes cast in respect of the Name Change Resolution at the Meeting.

PROXIES RECEIVED IN FAVOUR OF MANAGEMENT WILL BE VOTED FOR THE APPROVAL OFTHE NAME CHANGE UNLESS A SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT HIS OR HER SHARES ARE TO BE VOTED AGAINST SUCH RESOLUTION. In the event that Shareholder and/or regulatory approval is not given to Name Change, the name of the Corporation will not be changed.

SPECIAL BUSINESS APPROVAL OF NEW SHARE OPTION PLAN

Shareholders will be asked at the Meeting to consider and, if deemed advisable, pass with or without variation, aresolution as set forth in Appendix D to this Circular (the " Share Option Plan Resolution ") establishing a shareoption plan (the " Share Option Plan ") for the Corporation. A complete copy of the Share Option Plan is set forthin Appendix E to this Circular.

The salient features of the Share Option Plan are as follows:


20/117

57741.v11 18

(a) options may be granted by the Board to directors, officers and employees of the Corporation or asubsidiary of the Corporation and persons or corporations who provide consulting services to theCorporation or a subsidiary of the Corporation on an on-going basis;

(b) the maximum number of Common Shares reserved for issuance under the Share Option Plan shall notexceed 10% of the aggregate number of Common Shares issued and outstanding (calculated on a non-diluted basis) from time to time;

(c) the exercise price of each option shall be determined in the discretion of the Board at the time of thegranting of the option, provided that the exercise price shall not be lower than the "Market Price"."Market Price " means the last closing price of the Common Shares on any stock exchange or stock exchanges, or other trading facilities on which the Common Shares are then listed or posted for trading, or if more than one, on such one as shall be designated by the Board, and to the extent that the CommonShares are not listed or posted for trading on any exchange or trading facility, the Market Price shall besuch price as is determined by the Board in good faith;

(d) (i) at no time shall the number of Common Shares reserved for issuance pursuant to options granted to anyone optionee in a 12-month period under any security based compensation plan exceed 5% of the issuedand outstanding Common Shares, (ii) no one optionee may be granted, in any 12 month period, options to

purchase a number of Common Shares equal to more than 5% of the outstanding Common Shares, (iii) noone consultant may be granted, in any 12 month period, options to purchase a number of Common Sharesequal to more than 2% of the outstanding Common Shares, (iv) persons employed to provide investor relations activities may not be granted, in the aggregate in any 12 month period, options to purchase anumber of Common Shares equal to more than 2% of the outstanding Common Shares (v) at no time shallthe number of shares reserved for issuance pursuant to options granted to insiders of the Corporation under all security based compensation arrangements of the Corporation exceed 10% of the outstanding CommonShares, and (vi) insiders of the Corporation may not be granted under all security based compensationarrangements of the Corporation, within any 12 month period, in aggregate a number of options exceeding10% of the issued and outstanding Common Shares ;

(e) all options shall be for a term determined in the discretion of the Board at the time of the granting of theoptions, provided that no option shall have a term exceeding five years and, unless the Board at any timemakes a specific determination otherwise, an option and all rights to purchase Common Shares pursuantthereto shall expire and terminate immediately upon the optionee who holds such option ceasing to be atleast one of a director, officer or employee of, or consultant to, the Corporation or a subsidiary of theCorporation, as the case may be; and

(f) except in limited circumstances in the case of the death of an optionee, options shall not be assignable or transferable.

The Share Option Plan is subject to the approval of the Shareholders. In order to become effective, the ShareOption Plan Resolution must be approved by at least a majority of the votes cast by Shareholders at the Meeting.

PROXIES RECEIVED IN FAVOUR OF MANAGEMENT WILL BE VOTED IN FAVOUR OF THESHARE OPTION PLAN RESOLUTION, UNLESS THE SHAREHOLDER HAS SPECIFIED IN THE

PROXY THAT HIS, HER OR ITS SHARES ARE TO BE VOTED AGAINST THE RESOLUTION. In theevent the Share Option Plan Resolution does not receive the requisite Shareholder approval, the Corporation willnot adopt the Share Option Plan.


21/117

57741.v11 19

INDICATION OF DIRECTORS AND EXECUTIVE OFFICERS

All of the directors and executive officers of the Corporation have indicated that they intend to vote their CommonShares in favour of each of the above resolutions, except where the Common Shares of such directors and officers areExcluded Shares. In addition, unless authority to do so is indicated otherwise, the persons named in the enclosedform of proxy intend to vote the Common Shares represented by such proxies in favour of each of the aboveresolutions.

OTHER BUSINESS

Except as otherwise indicated, information contained herein is given as of March 13, 2006. Management knows of no matters to come before the Meeting other than the matters referred to in the Notice. However, if any other matters which are not now known to the Corporation's management should come properly before the Meeting, the

proxy will be voted on such matters in accordance with the best judgment of the person voting it.

DESCRIPTION OF THE NEW ALGER PROPERTY

The following information relating to the Project has been derived, except where noted, and in some cases extractedfrom a technical report entitled "Technical Report on the New Alger Property Mining Concession CM-0240-PTA,Cadillac Township, Quebec" (the " Technical Report ") prepared by Deep Search Exploration Technologies Inc.dated February 1, 2006. Reference is made to the Technical Report for a complete description of the New Alger Property and the maps, photographs and references contained in the Technical Report. Copies of the foregoing may

be examined at the offices of Macleod Dixon LLP, 100 Wellington Street West, Suite 500, Toronto, Ontario, M5K 1H1, during normal business hours and is available on the System for Electronic Data Analysis and Retrieval("SEDAR ") at www.sedar.com.

The Qualified Person, as such term is defined in National Instrument 43-101 -- Standards of Disclosure for Minerals Projects ("NI 43-101 "), who prepared the Technical Report, was Howard Lahti (Ph.D., P.Geo.). Dr. Lahtiis independent for the purposes of NI 43-101.

Summary

Dr. Lahti examined old reports of the previous work history of the New Alger mining concession and assessed thehistorical work done from its discovery in 1924 to the present. The previous mining companies mined the NewAlger Property between 1929-1930, 1935-1939 and 1946-1948. A minimum of 21,740 ounces of gold wasextracted from 175,055 tons of mined ore representing an average recovered grade of 0.123 oz/t. The mine onlyexplored and developed the top 300m of the vein system and not the whole E-W strike of the New Alger Property.From a 2005 Quebec Natural Resources publication (PRO 2005-02) titled "The Deep-seated Gold Potential of theCadillac Mining Camp" it is stated that from recent exploration work i.e. the O'Brien property lying adjacent to the

New Alger Property and other producing and past producers along the Cadillac Break, there is a very high potentialof finding significant gold mineralization at depth. Note: the past production, grade and other informationcontained in this circular are from historical records and do not meet the NI 43-101 standards.

About 60% of the ore is free milling gold while the rest is bound in an arsenical sulphide concentrate. Only theupper 300 meters of the east half of the vein system has been exploited. To help evaluate the western part of thesystem 24 A-Series of drill holes were drilled to test the Pich Group south of the Cadillac Break. Erratic goldmineralization was reported over narrow widths. However, few of the drill holes tested the mineralized zone atdepth.

To further evaluate the gold mineralization potential of the New Alger Property the following recommendations aremade for a Phase 1 work plan:


22/117

57741.v11 20

(a) Re-establish the old grid by cutting 27 kilometres of line and

(b) Drill a combination of 10 shallow (200-250m) and 10 deep (450-600m) holes totalling 7500m.

The estimated budget for this work including supervision of the drilling, reporting, and assaying of samples is$755,000. It is estimated that it would tale about 3 months to complete this phase of work.

New Alger Property Description and Location

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 317.2hectares.

Accessibility, Local Infrastructure, Climate, And Physiography

The New Alger Property has a very good access with main paved Highway 117 passing just south of the twoabandoned shafts. This highway, which runs from the town of Cadillac, 3 km to the east of the New Alger Property, to Rouyn-Noranda about 45km to the west, bisects the New Alger Property. The New Alger Propertyoccurs within a well established mining camp so has an excellent infrastructure with power lines crossing the NewAlger 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 Rouyn-Noranda, Malarctic and ValDOr.

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 fallsto 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 well-developednetwork of streams with good drainage. Much of the land is higher ground with a variable thickness of till. In theimmediate area north of the shafts an east-west striking stream that has large beaver dams on it causing an extensiveamount of flooding.

History Of Exploration

A summary of the previous work and development is presented below. The information was obtained from a reportwritten by B. E. Gorman in 1984 for Sulpetro Minerals Limited. No work was done to verify the historical reservesso they cannot be considered as current reserves. The historical reserves cannot be relied upon and are only used asa guide line.

1924-1925 The present New Alger Property was first staked 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 discoveryof 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 15feet.

1927 - The Thompson-Cadillac Mining Corporation was formed and continued shaft sinking. The #2 shaft reached100 feet and the #1 shaft was enlarged to three compartments and deepened to 340 feet.


23/117

57741.v11 21

1929 - The #1 shaft was deepened to 600 feet, with levels at 150, 300, 450, and 600 feet. On the 150 level, the #1Vein was drifted on for 275 feet, and the #2 Vein for180 feet. On the 300-foot level both the #1 and #2 Veins werefound. A 10-ton Straub mill processed 18 tons of ore with a grade of $9.74 gold. In November of 1928, 22 tonsgrading $7.43 gold was milled. By the spring of 1929 the lower levels were flooding, and the pumping kept themine dewatered to the 300-foot level.

1933 - Thompson-Cadillac Mining Corporation resumed operations. The #1 shaft was dewatered and re-examined.

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 amill.

1936 - Lateral development continued to proceed on the 150, 300, and 600-foot levels. On the 150-foot level a driftextending 1000 feet west of the #1 shaft encountered spectacular visible gold. It is reported that 843 troy ounceswere handpicked on the 109E stope. Stopes on the three levels provided enough material for a 75-tpd mill. By late1936 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).

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 stoping on the 150-foot level, 576 feet on the 300-footlevel ands 124 feet on the 600-foot level. During August 9 DDH (2000 feet) were drilled examining a further 100feet 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 goldwas 0.120 oz/ton. An important discovery was made south of the Cadillac Break on the 150-foot level. This newzone lies between 700 and 1300 feet west of the main zone. According to old notes taken by A.P. Beavan (theOBrien 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 $35gold). There are no records of any concentrates. The new zone did not persist below the 150-foot level and theonly work was done on the 610, and 616 stopes on the 600-foot level. After operations ended in July the mill wasleased to Central Cadillac.

1940-1942 - The mine was kept de-watered and the mill treated ore from Central Cadillac.

1943-1944 Steps were taken to sell the New Alger Property, without success. A report by T. Kouliminerecommended additional drilling on the west part of the New Alger 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 New Alger 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 undergroundholes (1,447 feet). During December, 103 feet of drifting was done on the 450-foot level, and 178 feet of cross-cutting on the 600-foot level.

1946 - An additional 4 surface holes were drilled on the west zone south of the Cadillac Break. Numerous erraticsections of mineralization were found according to resident geologist W. G. Robinson. The total surface andunderground drilling amounted to 9,256 feet. In May the shaft was deepened from 620 feet to 850 feet, with 689feet 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 andC) were opened up and found to join on the 1100-foot level but pinched out 225 feet below. Operations ceased in


24/117


25/117

57741.v11 23

porphyritic andesite host rock (the mineralized horizon) across the New Alger Property and inferred the existence of a bulge in the Pich volcanic unit.

1989-1990 - The following work was done:

2 drill holes were completed along section 7+75E with a total 273.56m drilled. They were designedto test the Number 3 Zone at a shallow depth; and

2 trenches just to the west of the #2 shaft were re-opened and sampled.

Geological Setting

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, relatedsediments, granitoid stocks and early Proterozoic diabase dykes. The supercrustal rocks form a series of east-westtrending 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 foldaxes are associated with major fault zones, which define lozenge shaped blocks that are postulated to bestratigraphically 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 andCadillac Groups, respectively.

The Cadillac Fault represents the predominant structural feature in this area. This break strikes EW and extendsfrom Kirkland Lake (Ontario) to Val DOr 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 contactrepresents 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 talc-chlorite-carbonate schist 20 to+200 meters thick.

Meta-volcanic rocks of the Piche, Cadillac and Pontiac Groups underlie the New Alger Property. From old drilllogs and surficial mapping it is the Piche Group that hosts the quartz vein gold-sulphide mineralization. TheCadillac break is interpreted cuts the New Alger Property in a slightly ENE-WSW direction just to the north of themineralized horizon.

Cadillac Group: this group is composed of greywacke, siltstone, polymictic conglomerate, and talc-chlorite-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 millimetersto a few meters thick. The thick polymictic conglomerates have fragments of felsite, chert, and sediments. Thematrix 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 flowsand ultramafic flows. This group overlies the south portion of the New Alger Property. The greywacke and theargillite 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. Thevolcanic 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.


26/117

57741.v11 24

New Alger Property Geology

The A-series of diamond drill drilling (24 holes totaling 12,522.5 feet or 3,826 meters) gave a completestratigraphic section of the Pich Group south of the Cadillac Break, extending 600 meters east of the Bousquet-Cadillac TWP boundary. South of the break the Pich Group is 200 meters thick. The rocks strike E-W with avertical to steeply dipping to the south. The greenstones (Unit V7) are dark green chloritic basalts, fine grained, andvariably 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 maficof the two, often described as transitional from greenstone. Its thickness ranges between 15-30meters. Thenorthernmost 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 bygreywacke (S3). Approaching the talc-chlorite schist of the Cadillac Break (Mij), a zone of chlorite schist is likelyderived from the greenstones. The Cadillac Break is approximately 180m thick as indicated in drill hole B-1.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.

Deposit Type

Gold mineralization is associated with all types of rocks. Some lithologies are more favourable than others becauseof their distinctive chemical properties i.e. stronger reducing environment due to carbon (graphite) or sulphides,and their susceptibility to fracturing and shearing. Other favourable lithologies are banded iron formation, pyritictuffs and ultramafic flows. However, on the New Alger Property gold mineralization is controlled by structuresidentified as high deformation zones within broader shear zones. At the New Alger Property or deposit scale themost important exploration criteria are:

areas of porphyry intrusions/extension,

local ore controlling structures,

gold mineralization (as a lead to finding more gold) and

alteration that maps hydrothermal activity.

The general geological criteria for area or target selection can be summarized in the following table taken fromTable 1.2, p5 in Bherer, 1990.

Feature Genetic SigificanceRocks

Mafic to ultramafic volcanics Ultimate source for gold (in contact with)Sedimentary rock belt Fundamental fault(especially if)Temiskaming-type sediments Broad dilation zone duringwith red chert and final oblique-slip stage of

porphyry clasts. movement on fundamental faults,with associated sedimentary,igneous and exhalative-hydrothermalactivity.


27/117

57741.v11 25

Feature Genetic SigificancePorphyry intrusion or extrusion Gold mobilizing adjacent or high-

level offshoot of immediatesource (via magmatic fluids) of gold.

StructuresFundamental faults or breaks. Magma conduits.Local faults and folds. Dilatational environment causing fluid

degeneration by decompression or throttling, in turn causingmineralization and alteration.

Mineralization-alteration.Carbonatized Gold-related hydrothermal activitySilicification; pyrotization; Subsurface, gold-depositingK or Na metasomatism; quartz. hydrothermal activity.

Three types of mineralization related to distinct gold-bearing geological settings characterize the Cadillac miningcamp:

1) gold-bearing massive sulphide lenses (Bousquet 2 and Laronde mines),

2) gold-rich polymetallic veins (Doyon and Muouska mines), and

3) auriferous veins associated with regional E-W-trending faults (OBrien, Thomson-Cadillac (New Alger),Kewagama, Central Cadillac, and Wood Cadillac, Lapa deposit).

Mineralization

The mineralization mined at the New Alger Mine consists of auriferous quartzcarbonate veins with a variableamount (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 witharsenopyrite-biotite. Gold concentration varies from trace amounts to 87.8 g/t over 0.2 meters. The vein appears tosplay into a stringer zone east of DDH A-17 and may correspond with the #1S Vein at depth.

The unexploited North Porphyry contains several wider zones of biotite-arsenopyrite mineralization although quartzveining 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 withcarbonate and graphitic zones. The lower assays (of the order of 2 g/t) over wider intersections are reported. Theassociation with carbonate alteration and graphitic tuff suggest a situation similar to the OBrien G Vein further tothe east.

Evidence from exploration work done on the near by OBrien 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 the300m level.

Exploration

Dr. Lahti is not aware of any unreported work done on the property.


28/117

57741.v11 26

Drilling

There is no new drill data available.

Interpretation And Conclusions

From the study of old mining drill logs, reports, maps mining records and the Quebec government report PRO2005-02 Dr. Lahti has reached the following conclusions;

The New Alger (Thomson-Cadillac) mine operated between 1929-1930, 1935-1939 and 1946-1948.Most of the production was from 1936-1939 when the minimum production was 21,740 oz. of

gold from 175, 055 tons of mined rock representing an average grade of 0.123 oz/ton (4.22 g/t).

About 60% of the gold was free milling with the remainder bound up in arsenical sulphideconcentrates with a grade of 1-2 oz/t.

An A-Series of 24 DDH totaling 3,826 meters was completed in 1984. This program gave acomplete cross-section of the Pich Group south of the Cadillac Break from the Cadillac-BousquetTWP 600 meters to the east toward the main mine shaft.

The low mining grade (0.123 oz/t) was attributed to using a heavy dilution to sustain a 200 ton per day production, wide stoping widths sometimes 3-4 times wider than used at the adjacent OBrienMine, and making an undue effort to mine broad mineralized zones 8-20 feet wide.

The New Alger Property has not been thoroughly explored below the 300m level or for the fulllength along strike of the mined quartz-carbonate-sulphide mineralized structure.

Although from the previous mining history only a modest tonnage of ore was extracted and processed, there is still a good potential to find ore grade mineralization at depth.

The gold veins F and G being mined on the OBrian property, which is located on the eastern

boundary of the New Alger Property near the main shaft, should be tested on the New Alger Property to see if they extend on to the New Alger Property.

Recommendations

Dr. Lahti recommends that the New Alger Property be systematically explored by deep drilling to test the NewAlger Property for an economic size gold deposit at depth and in particular the North Porphyry. In order to dofuture exploration on the New Alger Property the old grid would first have to be reestablished. The initialexploration work required is summarized below:

PHASE 1

It is recommended that a re-establish a grid be cut over the prospective part of the New Alger Property with a line spacing of 50 meters and pickets 25 meters surveyed along each line.

A drilling program designed to both test the economic potential of the North Porphyry where thehistorical grades are lower but the widths are larger and the whole length of the Main Mine VeinStructure from the east boundary to the west boundary, a total of 1200 meters. It is recommendedthat 10 shallow (200-250m) holes be drill to test the economic potential of the North Porphyry and10 deep holes (450-600m) be drilled to test the down dip extension of the old mine workings an the


29/117

57741.v11 27

potential of a new economic gold deposit at depth. The total amount of drilling would beapproximately 7500 meters.

BUDGET

The cost of the line cutting 27 kilometers is estimated to cost ........... ............ .......... 10,000

The cost of drill is estimated to be $ 80/meter all cost included ........... ........... ........ 600,000Cost for a geologist to supervise, and log core 90 days/$475 ........... ........... ........... .. 42,750Accommodations 90 days at $150/day ........... ........... .......... ........... ........... ........... .... 13,500Truck Rental 3 months plus fuel .......... ........... ........... ........... ........... .......... ........... ... 5,000Assaying 600 samples at $ 25/each .......... ........... .......... ........... ........... ........... .......... 15,000

$ 686,250Contingency 10% ..................................................................................................... 68,625Estimated Total Budget ......................................................................................... $ 754,875

RISK FACTORS

Shareholders should carefully consider the following risk factors and all other information contained in this Circular before approving the Acquisition. The risks below are not the only ones facing the Corporation. Additional risks notcurrently known to the Corporation, or that the Corporation currently deems immaterial, may also impair theCorporation's operations. If any of the following risks actually occur, the Corporation's business, financial conditionand operating results could be adversely affected. As a result, the trading price of the Common Shares could declineand investors could lose part or all of their investment.

Nature of mineral exploration and mining

The New Alger Property is not a mining property in production. The Corporation's viability and potential success liein its ability to develop, exploit and generate revenue from mineral deposits. The exploration and development of

mineral deposits involve significant financial risk over a significant period of time which even a combination of careful evaluation, experience and knowledge may not eliminate. While discovery of a mine may result insubstantial rewards, few properties that are explored are ultimately developed into producing mines. Major expensesmay be required to establish reserves by drilling and to construct mining and processing facilities at a site. It isimpossible to ensure that the current or proposed exploration programs on the New Alger Property will result in a

profitable commercial mining operation.

The operations of the Corporation will be subject to all of the hazards and risks normally incident to exploration anddevelopment of mineral properties, any of which could result in damage to life and property, environmental damageand possible legal liability for any and all damage. The activities of the Corporation may be subject to prolongeddisruptions due to weather conditions. Hazards, such as unusual or unexpected formation, rock bursts, pressure,cave-ins, flooding or other conditions may be encountered in the drilling and removal of material. While theCorporation may obtain insurance against certain risks in such amounts as it considers adequate, the nature of these

risks are such that liabilities could exceed policy limits or could be excluded from coverage. There are also risksagainst which the Corporation cannot insure or against which it may elect not to insure. The potential costs whichcould be associated with any liabilities not covered by insurance or in excess of insurance coverage or associatedwith compliance with applicable laws and regulations may cause substantial delays and require significant capitaloutlays, adversely affecting the future earnings and competitive position of the Corporation and, potentially, itsfinancial position.

Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are the particular attributes of the deposit, such as size and grade, proximity to infrastructure, financing costs andgovernmental regulations, including regulations relating to prices, taxes, royalties, infrastructure, land use,


30/117

57741.v11 28

importing and exporting and environmental protection. The effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Corporation not receiving an adequate return on investedcapital.

Fluctuating Prices

Factors beyond the control of the Corporation may affect the marketability of any minerals discovered on the NewAlger Property. Commodity prices have fluctuated widely and are affected by numerous factors beyond theCorporations control. The effect of these factors cannot accurately be predicted.

Permits and Licenses

The operations of the Corporation will require licenses and permits from various governmental authorities. TheCorporation believes that Chilly-Bin presently holds all necessary licenses and permits required to carry on withactivities it intends to conduct under applicable laws and regulations. However, licenses and permits are subject tochange in regulations. There can be no assurance that the Corporation will be able to obtain all necessary licensesand permits required to carry out exploration, development and mining operations at the New Alger Property.

Competition

The mineral exploration and mining business is competitive in all its phases. The Corporation will compete withnumerous other companies and individuals, including competitors with greater financial, technical and other resources than the Corporation, in search for and the acquisition of attractive mineral properties. The ability of theCorporation to acquire properties in the future will depend not only on its ability to develop the New Alger Property, but also on its ability to select and acquire suitable properties or prospects for mineral exploration. Thereis no assurance that the Corporation will be able to compete successfully with its competitors in acquiring such

properties or prospects.

Environmental Regulation

The operations of the Corporation will be subject to environmental regulations promulgated by governmentagencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions or various substances produced in association with certain mining industry operations, such as seepagefrom tailings disposal areas, which would result in environmental pollution. A breach of such legislation may resultin the imposition of fines and penalties. In addition, certain types of operations require the submission and approvalof environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards, and enforcement, fines and penalties for non compliance are more stringent. Environmental assessmentsof proposed projects carry a heightened degree of responsibility for companies and their directors, officers andemployees. The cost of compliance with changes in governmental regulations has the potential to reduce the

profitability of future operations.

Dependence on key personnel

The Corporation will be dependent on the services of its senior management. The loss of any such individuals couldhave a material adverse effect on the Corporations operations.

Limited financial resources

The existing financial resources of the Corporation are not sufficient to carry out the recommended work on the New Alger Property. The Corporation will need to obtain additional financing from external sources in order to


31/117

57741.v11 29

fund the exploration and development of the New Alger Property. There is no assurance that the Corporation will be able to obtain such financing on favourable terms, or at all. Failure to obtain financing could result in delay or indefinite postponement of further exploration and development of the New Alger Property.

Conflicts

Certain of the directors and officers of the Corporation are directors or officers of, or have significant holdings in,other mineral resource companies. Such other companies may compete with the Corporation for the acquisition of mineral property rights.

ADDITIONAL

Ultramafic Volcanics Sedimentary Rock Belt

Documents

Transcript of Ultramafic Volcanics Sedimentary Rock Belt