Operations

Kiena Exploration

Since acquiring the Kiena property in 2003, the Company initiated a long term exploration strategy based on the following priorities:

1) MINE AREA - Compilation and reinterpretation of the immediate potential within the mine area

2) EAST EXPLORATION DRIFT - Establishment of an eastern exploration drift on the 330 metre level to progressively examine the potential of the Wisik, Martin and Shawkey 22 zones

3) PROPERTY WIDE EXPLORATION - Progressive compilation of the entire land package to establish priorities for surface drilling

Wesdome Claims (click to enlarge)

The contiguous property package is a very large one exceeding 7,500 hectares. It includes ten historic underground mining ventures, historic gold production of 2.6 million ounces and numerous gold occurrences. It is situated halfway between the Sigma-Lamaque mines of Val d'Or and the Malartic Camp. Historic production from these camps to 2000 totalled 24.2 million ounces with 15.3 million ounces from Val d'Or and 8.9 million ounces from Malartic (MRN-MB 2000-2009).

The Kiena properties include both large disseminated gold deposits associated with stockworks that are typical of the Malartic Camp (eg. Kiena S-50, North and VC zones) and vein-type deposits typical of the Val d'Or Camp (eg. Siscoe, Wesdome A and Martin zones).

Regionally, gold deposits are spatially-associated with the Cadillac Break that stretches from Kirkland Lake to Val d'Or and its associated secondary structures and splay faults. The Cadillac Break traverses the southern portion of the property and hosts the Lapa, Canadian Malartic, East Malartic and Malartic Goldfields deposits immediately to the west. The Norbenite Shear traverses the central portion of the property and is spatially-associated with the Camflo, Norlartic, Kiena S-50 and Goldex deposits. The K zone Shear traverses the northern portion of the property and is spatially-associated with the Siscoe, Sullivan and Wesdome A zone deposits.

Historically, the Val d'Or region had a very fragmented ownership. The current consolidated and contiguous land position in a proven gold district represents not only a valuable long term asset, but the first time this promising land position may be explored and developed in a systematic and unencumbered fashion.

1) MINE AREA

Initial development to the north on the 520 metre level encountered very strong mineralization located 500 metres north of the shaft. This led to a production decision based on progressive mining and development of three pipe-like deposits named the VC, North and 388 zones. The mine commenced commercial production on August 1, 2006 with early production supplemented from remnant stopes in the old mine area.

This decision postponed the previously planned 4 km north exploration drift to the Wesdome A zone. Alternative development scenarios for the Wesdome A zone are under analysis.

Deep drilling provided encouragement that the S-50 zone continues at depth (see Press Release dated November 26, 2007). This stimulated development of an exploration drift at the 910 metre level. Drilling from this drift will commence in 2009. Not only will drilling follow previous encouragement at depth, it will test a new interpretation that considerable potential may exist north of the shaft below the 500 metre level in what is dubbed the S-50II target.

The purpose of the mine area exploration is primarily to replace reserves and secondarily to identify large new potential near existing workings.

2) EAST EXPLORATION DRIFT

The east exploration drift was designed primarily to evaluate potential of the Shawkey 22 zone. Located on the 330 metre level, this parallels the Norbenite Shear and extends 2.5 kilometres east of the Kiena shaft. This provides a drilling platform to test and access a number of favourable structures.

The main success to date has been confirmation of the Martin zone where drifting has exposed a 110 metre strikelength grading 4.1 gAu/tonne (Press Release dated May 25, 2007). This zone is located 1.0 km northwest of the former Martin Mine where historic production totalled 139,000 tonnes grading 6.2 gAu/tonne from above 230 metres depth during the period 1936-1938.

Drilling confirmed extension of this new Martin zone above and below the 330 metre level and results have been incorporated into the Kiena mine's mineral reserves and resources.

Work on the Shawkey 22 zone to date has opened up 42 metres of the structure generating 1,000 tonnes of low grade material grading 1.98 gAu/tonne. This drifting tested the western portion of a 700 metre long structure. Although not fully evaluated, drifting here has been postponed to reallocate the development crew to stope development in the VC zone. The 22 zone is interpreted as arrays of flat ladder veins in a vertically dipping feldspar porphyry sill.

The drift is currently within 1.0 kilometre of the new Dubuisson discovery and provides a potential early underground access and drilling base to continue evaluation of this promising find should further surface drilling justify its potential.

3) PROPERTY WIDE EXPLORATION

Work was initiated in 2004 to provide a comprehensive compilation of the entire land package to establish priorities for surface drilling.

Wesdome Property Geology (click to enlarge)

The immediate priority was determined to be a systematic test of the Jacola Formation which is bound to the south by the Norbenite Shear and dominated by a sequence of alternating basalt and komatiite flows. This drilling was launched in 2008 leading to the discovery of the Dubuisson zone. Although the initial drilling is widely-spaced, the potential dimensions of this mineralized system are impressive. Infill and step-out drilling in progress continues to hit multiple zones with impressive grades and widths (see Press Release dated Sept 8, 2009).

Other specific targets identified on the Kiena claim group include:

1) The Cadillac Break immediately east of the old Malartic Goldfields Mine which historically produced 2.0 million ounces.

2) The downplunge and downdip projections of the Goldex Mine which traverse our property boundaries, respectively, at 1,000 metres and 1,500 metres depth.

3) A potential repetition of the Siscoe orebody as indicated by previous drilling at a vertical depth of 800 metres.

4) The Wesdome A zone where resources have been determined and the system appears to remain open at depth. This project has been subject to proposed underground development scenarios to be decided upon when conditions and priorities dictate.

5) Numerous occurrences identified from compilation of historic work and recent drilling which merit follow-up to determine potential continuity.

As previously summarized, the Kiena claim group hosts ten former or current underground projects and mines. The land sits in the middle of a world class gold district and clearly merits a diligent and longterm exploration effort. Early success certainly underlines this potential and we are confident - despite the region's 80 year mining history - that we are just scratching the surface.