Pipestone Bay

Pipestone Bay Property is a 6 claim, 420 hectare package to the west and northwest of the Mount Jamie property. Potential exists to expand upon the Mt. Jamie gold zones along strike, and at depth, on these claims.

To review the complete Technical Report on the Pipestone Bay Gold Deposit, Todd Township, Red Lake Area, Northwest Ontario dated July, 2008 by P.A. Bevan, P.Eng., please click here.

Overview

Description and location: The Mount Jamie Property is situated in Todd Township, Red Lake Mining Division, District of Kenora (Patricia Portion), Northwestern Ontario. The Red Lake area is located 250 km northeast of Winnipeg, Manitoba, 150 km north-north-west of Dryden, Ontario and 430 km northwest of Thunder Bay, Ontario. The property is part of the historic Red Lake Gold Camp and hosts the past producing Mount Jamie Mine.After a series of transactions with Jamie Frontier Resources Inc. (JFRI), Hy Lake Gold acquired 100% interest in the property, subject to a 3% Net Smelter Royalty payable to JFRI.

Accessibilty, Climate, Local Resources, Infrastructure and Physography

The property is roughly 370 metres above sea level. Its topography is mostly small rolling hills with about seven areas of higher outcrop ridges, the high points of which are approximately 45 metres above their surroundings. The South East part of the Property is covered by relatively flat sand plain, which to the east is forested by jackpines. The area to the West of Shaft #I is covered by mixed vegetation. Access to the property can be gained by road from the Town of Red Lake. From Red Lake one would take the highway to Balmertown and Cochenour, and then turn onto Nungessor Road (a short distance west of Balmertown). Roughly 17 km along Nungessor Road, one would turn West on Pine Ridge Road for about 22 km and then South onto Devlin Timber/Jamie Bush Road. The property is approximately 25 km down this road.

Both Nungessor and Pine Ridge Roads are gravel, and built to penetrating road standards. However, the Devlin Timber/Jamie Bush Road was used in past decades by mining companies working on the Jamie and adjacent Rowan and later on the Rubicon properties. It has been improved somewhat by Rubicon Resources during the past few years, and is passable by 4x4 pickup trucks during the summer months. The property can also be approached via water by traveling on Red Lake and landing at the North end of Golden Arm Bay, or the East end of Pipestone Bay. Traveling this route using a 25-30 hp motor and a 14-16 foot boat takes approximately 1.5 hours.

Float-equipped aircraft are available for charter in Red Lake. The Red Lake Airport is serviced by regular scheduled flights from Winnipeg and Dryden. Most supplies and services can be sourced from Red Lake or delivered there via the Trans-Canada Highway, and Highway 105.

Geological mapping and sampling can usually be performed during the six warmest months of the year, while geophysical surveys can be carried out nearly year-round (with brief pauses for break-up and freeze-up). January and February can bring some extreme temperatures to the area, down to —50° C, far too cold for the outdoor use of electronic instrumentation or to efficiently conduct a diamond drilling program. These extreme cold spells can take anywhere from a few days to a few weeks to pass. Consequently most activities can be maintained for 10 to 11 months of the year, provided good ground transport is available. Water/ice transport can be utilized about nine months of the year; however storms on the lake can sometimes bring such transport to a complete halt.

All claims are patents, and include surface rights as well. There are no operational power lines near the property. The old power line to the adjacent Rowan deposit fell over decades ago. Therefore, all electrical energy required for work or lodging needs to be generated on site. Water is available in industrial quantities from Rowan Lake, which is the closest body of water (about 1 to 2 km to the South East). For larger quantities, Pipestone Bay is about 2 to 3 km West of Shaft 1. Tailings storage areas and waste disposal areas were assigned North of the shaft, and a safe distance from all bodies of water. The same applies to the processing plant. Red Lake and the surrounding settlements can provide a small but well trained labour force for start-up operation.

History
It is reported that the discovery of gold on the property in the area of Shaft 1 dates back to 1920. Eleven claims were patented in 1928. The completion of any substantial work on the Property would have required those claims to be filed with the Ontario Bureau of Mines, however any information regarding ownership or work history of the claims prior to 1934 has not been found. In 1934, Frontier Red Lake Gold Mines Ltd. acquired the claims. This company completed a program of trenching on the No. 1 Vein that reportedly assayed 0.42 oz Au/ton over a width of 50 inches, for a length of 120 feet. This prompted the owners to undertake a diamond drilling program of 24 holes for a total of 6,545 feet. Based on the results of that operation, the company decided to sink a shaft on the vein. In 1936 a two-compartment shaft was completed to a depth of 244 feet. It had stations at 130 and 230 feet, with about 155 feet of drifting at the top level and 50 feet of drifting at the 230-foot level.

The above operations were halted in December of 1936. That month, A. H. Honsberger visited and examined the property. He submitted his report in January of the following year. The report details his examination of the surface geology of the vein targeted by Shaft No. 1. In it he describes a showing about 35 feet West of the vein, which consists of narrow quartz veinlets with massive sphalerite and pyrite. Honsberger examined and provided the locations for five additional showings of gold mineralization.

In 1939, Gold Frontier Mines Ltd. was incorporated and took over the property. The shaft was de-watered and underground work resumed in 1940. The shaft was later deepened to 500 feet, and increased to three compartments (this work was completed by 1942). The lateral work amounted to 2,881 feet, in addition to 630 feet of raising on 130, 230, 350 and 475 foot levels. Work was then halted in Shaft No. 1, in favour of sinking a second shaft on a vein that had been discovered in 1941 (referred to at that time as the North Vein). The No. 2 Shaft was located about 2,550 feet North West of the first shaft and went to a depth of 559 feet. Some lateral development was completed at the 100 foot elevation. In August of 1942 a government mandate terminated all work in non¬productive gold mines, bringing the activity on the prospect to a halt.

In 1944, Bayview Red Lake Gold Mines Ltd. acquired the property and deepened the No. 1 Shaft to 772 feet. No lateral work was done in the deepened portion of the shaft, except for stations developed at the 625 and 750 foot elevations. At the conclusion of the development program in 1947, the No. 1 Shaft was developed as a two-compartment shaft to the 230 foot level. From that depth it was widened to three compartments all the way to the shaft bottom (772 feet). By this time, the total lateral development in the shaft amounted to 3,225 feet of drifting and crosscutting on the 130, 230, 350 and 475 foot levels. In addition to this work, the company initiated an aggressive surface diamond drilling program totalling 15,000 feet. However, they were later forced to terminate the program due to fundraising difficulties.

Red Poplar Gold Mines Ltd. acquired the property in 1951. It was reported that a third de-watering took place and the underground workings were sampled once again, but none of these results are currently available. It is believed that the property then stood idle until 1961, at which time the company reorganized as Consolidated Red Poplar Mines and considered the possibility of reopening the mine to provide feed for the mill of McKenzie Red Lake Gold Mines. The plan did not come into fruition. McKenzie managed to find additional reserves, bringing an end to the proposed undertaking.
In 1971, Consolidated Red Poplar was once again reorganized and became New Dimension Resources. In 1975, this company optioned a 75% interest in the property to Mount Jamie Mines (Quebec) Ltd. In 1976 the mine was again de-watered and rehabilitated to the 230-foot level. The company developed three slopes and hoisted 1,224 tons of material from these [Stopes B, C-1 and C-2]. These stopes are shown on the longitudinal section of the Main Zone (see Appendix 3). Mount Jamie also constructed an open-air gravity mill, capable of treating 100 tons per day. Remnants of this mill are still on the property. The mill was in operation in 1976, at which time 550 tons of material was treated with a recovery of 78%.

It was used again in 1980 when the successor company, Mount Jamie Mines Ltd., processed 420 tons remaining from the stockpile of 1976 and an additional 300 tons of low-grade material. Only the grade of the 1976 material was known [as 0.5 oz Au/ton]. The concentrates of both were sent to a smelter. The weight of the concentrate shipped was 1.5 tons and it contained 175 oz of gold and 58 oz of silver. In 1981 these same operators completed the metallurgical testing of a tailings sample from the 1980 milling, in addition to surface exploration. None of the reports on the metallurgical testing (done by Lakefield Research) are available.

In 1982, Oneiro—Alfa Ltd. acquired 52.5% of the property and initiated a surface diamond drilling program consisting of 5,400 feet of drilling. Nineteen holes were drilled. Sixteen of these tested the main zone (Shaft No. 1), while three holes were completed at the site of the second shaft. At the same time, it is reported that some geological mapping was conducted around Shaft No. 1. In a document dated December 13, 1982, the geological consulting firm of Derry Michener, Booth and Wahl produced a set of compilation maps, plans and a record of that work.

In 1983, Keeley Frontier Resources Ltd. took over Oneiro-Alfa's interest in the Property. The undergrounds at Shaft No. 1 were again de-watered, this time to below the 475-foot elevation, for the purpose of implementing some of the recommendations made by Derry Michener Booth and Wahl. Reportedly, the work completed consisted of underground and surface diamond drilling with overburden stripping, sampling and mapping. Mr P. Vamos (who was working at this time on a property adjacent to the subject claims) has knowledge of the surface drilling being conducted by Keeley-Frontier.

This drilling was comprised of twenty-two holes in the vicinity of Shaft No. 1 and two holes near Shaft No. 2 that combined for a total of 8,400 feet of surface diamond drilling. According to a report by John Reddick dated December 1983, twenty-eight holes were drilled on the 130 foot level, nine holes on the 230 foot level, and finally two holes on the 475 foot, level totalling 5,004 feet of drilling. Reddick mentions that the drifts had to be slashed at the drill stations. He also notes that the muck was cleared out of the stations. Though it is stated that there were no cars available to move it, there is no explanation given as to how the muck ended up plugging the entrances to the drifts on either side of the stations, or why the rails had been blasted in several locations.

The total number of veins investigated by all previous operators is three, including the vein of the second shaft that was sunk on as well.
In early 1984, Jamie Frontier Resources Inc. acquired the property, which at that time consisted of eleven patented and four staked claims. The company proceeded to enhance the surface facilities, up quarters. They also constructed a washhouse, and by installing proper facilities (a septic tank field and sewer system), they brought the camp up to accepted standards of the time. To complete the refurbishing of the plant, the company installed diesel operated power generators and backup and constructed an assaying facility on the site. The aim was to further explore and expand the resource serviceable by Shaft No. 1, and to develop the underground for mining. This was to involve a complete overhaul of the mill. The latter was partially completed by winterizing the mill and replacing some of the equipment, while upgrading other facilities. Due to funding difficulties, this work was not completed.

De-watering and refurbishing of the shaft was completed during the winter of 1985. Rehabilitation of the levels was severely delayed for a number of reasons. The condition of the stations, where development muck had been left at the entrances, was terrible. Additionally, 5,000 feet of new rails had to be laid as the old tracks had been blasted in several locations. Furthermore, serious discrepancies in the underground surveying of the mine workings and drill hole locations were discovered and corrected at this time.

Underground Development

Surface exploration commenced in 1985. It consisted of the establishment a line grid, geological mapping, geophysical surveying and diamond drilling. Geological mapping and geophysical surveys were completed by the fall of 1986; surface diamond drilling (11,937 feet in 61 drill holes) was completed by the second half of the following year.

Underground diamond drilling started in 1985 and continued until 1988. During this time, 136 underground drill holes were completed for a total footage of 24,180 feet. This information (tabulated below) gives the number of holes and footage for each level on a yearly basis.

Underground Diamond Drilling by Year

Year	Level	Number of Holes	Total Length
1985	1st	31	3,240
130[1st]	2nd	40	3,902
230[2nd]	3rd	20	3,322
350[3rd]	4th	24	6,132
475[4th]	Sutotals	115	16,596
1986	1st	9	1,433
	2nd	6	2,638
	3rd
	4th	4	3,165
	Subtotals	19	7,236
1988	1st
	2nd
	3rd
	4th	2	348
	Subtotals	2	348

In the winter of 1988, Pezgold Resources Corporation of Vancouver initiated a diamond drilling program on the property. They commissioned GML Minerals Consulting Ltd. of Calgary, Alberta to execute and supervise the fieldwork. The program was planned by Pezgold and reviewed by GML, who suggested a few changes. Field activity started in December of 1988, and was completed by April 4, 1989. Recommendations were made by GML to terminate the option. During the four months of operation, thirty-nine drill holes were completed comprising 12,052 feet of NQ drilling at three sites.
The surface exploration contributed to a better understanding of the geology of the deposit and diamond drilling increased the dimensions of the known Deposit.