SUMMARY REPORT

ON

TARGET AREAS

WITHIN THE

AFTON MINES AREA MINERAL CLAIMS

OF

GREEN VALLEY MINE INCORPORATED

(GVY)

AND

LAKEWOOD MINING CO. LTD.

(LKW)

SUMMARY REPORT

ON

TARGET AREAS

WITHIN THE

AFTON MINES AREA MINERAL CLAIMS

OF

GREEN VALLEY MINE INCORPORATED

AND

LAKEWOOD MINING CO. LTD.

 

INTRODUCTION

Green Valley Mines and Lakewood Mining hold considerable property holdings in the Afton Mines area of Kamloops.  This report, therefore, is a brief review of the various targets located within these properties.  The information used is from exploration reports dating from the ‘70’s for previous operators as well as from reports for Green Valley and Lakewood that have been carried out up until the present time.

HISTORY

Before the Afton deposit was discovered, this area was best known for numerous small deposits of copper mineralization with gold values.  They occurred mainly within and adjacent to the Iron Mask Batholith and were mined mainly when metal prices were strong.

The area became the center of one of the hottest staking rushes in Canada when significant mineralization was discovered on the Afton property in the early ‘70’s.  Eventually, the discovery became an ore deposit that was mined from 1977 to 1988 by Teck.  At the beginning of production, Afton had drill-proven ore reserves of 30.84 million tonnes grading 1.0% copper, 0.58 ppm gold, and 4.19 ppm silver.

Currently, DRC Resources have discovered a new mineral body that has a combined size of measured and estimated 68.7 million tonnes, grading 1.68% copper equivalent using copper at $0.85/lb, gold at $375/oz, silver at $5.25/oz, and palladium at $200/oz, all US prices.  The mineralization occurs below the old Afton Pit and extends in a southwesterly direction for over 1000 meters.  In addition, DRC have discovered a significant gold zone 1000 meters southeast of the Afton Pit and towards the Monarch Zone on the Green Valley/Lakewood Wood Group property.  The most significant assay return within one drill hole is 0.77 grams/tonne gold from 6 to 162 meters.

PROPERTIES IN THE AFTON MINES AREA

Within this mineral-rich area, Green Valley Mine Incorporated (GVY) and Lakewood Mining Co Ltd. (LKW) have acquired significant acreage.  All of this ground was staked in the ‘70’s during the Afton staking rush and owned by a variety of different exploration companies.  However, very little of it has had significant work done on it.  And much of what was done was inadequate because of the deeper-than-expected overburden and/or its gumbo-like nature.  For example, traditional soil sampling, which has an average exploration depth of up to 30 meters, probably has a much shallower depth of exploration over much of the Afton area, perhaps as little as 10 meters.  Traditional soil sampling was done over some parts of the property and therefore was probably quite ineffective, and yet the overburden over some of the significant target zones such as the Monarch Zone is much deeper.  Or geophysical techniques or methods, such as VLF-EM surveying, were used with similar overburden depths in mind.

As a result, Green Valley and Lakewood are using up-dated exploration techniques and methods.  For example, a relatively new and sophisticated soil sampling technique has been chosen that has an exploration depth capability of several hundreds of meters and is not affected by glacial till.  This new method is called MMI, which stands for “mobile metal ions.  Also IP and resistivity surveying is being carried out with targeted exploration depths of up to several hundred meters.

The properties of Green Valley and Lakewood are described as follows.

WOOD GROUP

This group occurs to the immediate south of the Afton Mines property and is comprised of 206 claim units, which is 51.5 sq km, or 20 sq mi, or 12,725 acres.  It is owned 50% by Green Valley Mine and 50% by Lakewood Mining.

A.   MONARCH ZONE: 

This target is located to the immediate west of the Coquihalla Highway only about 15 minutes outside of downtown Kamloops.  The highlights of this zone are that it consists of MMI soil geochemistry values highly anomalous in gold, cobalt, and copper.  IP surveying has revealed northerly and northwesterly trending anomalies correlating and adjacent to the MMI soil anomalies indicating sulphide mineralization.  Drilling done to date has given very positive results showing a significant amount of sulphides, much faulting and fracturing, much dyking indicating intrusive activity, and alteration indicative of a hydrothermal porphyry copper system.  Drilling is expected to continue shortly to test remaining targets within this zone including the extremely high cobalt and gold MMI soil values.

B.   DORADO ZONE:

This target occurs within the northern part of the Wood property closest to the Afton deposits.  It consists of EM conductors some of which were diamond drilled in 1980.  The drilling revealed much alteration with some significant copper mineralization, which indicates an area of strong exploration interest.  Also occurring within this area is a thorium/potassium ratio anomalous low radiometric anomaly, which is the same type as that occurring over the Afton deposit.

C.   TWIN ZONE:

This target consists of a strong VLF-EM conductor striking in a northerly direction and on strike with the Dorado Zone that is 1.5 km to the north.  Also correlating with the eastern part of this target is a copper-gold MMI soil anomaly.

D.   KAM 5 ZONE:

This zone occurs within the west central part of the property.  It consists of a copper soil geochemistry anomaly correlating with an IP anomaly.  In addition, three diamond drill holes were drilled about 200 meters to the west of the IP high and encountered a large zone of native copper mineralization.  Though the mineralization is of sub-economic grade, E.D. Cruz, P.Eng, suggested that the native copper mineralization might be a fringe effect of an intrusive similar to that of Afton.  In addition, the airborne gamma ray spectrometric survey carried out by the Geological Survey of Canada revealed a thorium/potassium ratio anomalous low similar to that of Afton within the center of the Kam #5 Claim.

E.   DAVE ZONE:

This zone occurs within the central western edge of the Wood Group and consists of a strong HLEM (MaxMin) anomaly paralleling Cherry Creek.  There are two weaker HLEM anomalies as well.

F.    DIATREME ZONE:

This was named for the diatreme discovered here by diamond drilling carried out in 1992.  The size was indicated to be 800 m by 500 m and open in three different directions.  (A diatreme is a volcanic explosion vent that forms from gas-charged magmas exploding upwards.  They can often become the loci of pipe-shaped ore deposits.  A kimberlite is an example of a diatreme.)

The point of main interest is that the drilling has shown widespread native copper mineralization with assays up to 0.33% copper over 0.5 meters.  L. Sookochoff, P.Eng. in his report on the drilling, stated “In the volcanic breccia proximal the diatreme contact, a 35-foot (10.5-meter) section of quartz veining and brittle fracturing occurs in a heavily altered section.  Mineralization was not evident in the quartz vein section, however, similar geological conditions could be favorable controls for mineralization.”  Michael J. Skopos, geologist, in a letter to the company stated that the epidote and native copper mineralization is similar to that of the nearby Lornex porphyry copper mine.  He noted that one hole encountered 275 meters of native copper, but of sub commercial grade.

Previous work has revealed anomalous IP results, which indicate sulphide mineralization, and anomalous MMI soil sample results in gold, palladium and silver.

G.   LYONS CREEK ZONE:

This target consists of correlating IP and soil sampling anomalies, which were diamond drilled.  Disseminated native copper was noted at several locations within the core.  Also the diamond drilling indicated that two of the holes were drilled in the close vicinity of an intrusive suggesting the possibility of a porphyry copper deposit occurring nearby.

H.   VIC ZONE:

The Vic Zone target consists of several soil samples very highly anomalous in copper.  The values range up to 1100 ppm which is 36 times background assuming a background value of 30 ppm.  The work was done in 1972 using traditional soil sample techniques thus indicating that the causative source is quite shallow.  No follow-up work was ever carried out probably due to the inaccessibility at the time.  Logging roads now give good access to the area.

I.       KAM 6 ZONE:

This target is located within the southwestern part of the Wood Group and consists of strongly anomalous copper soil geochemistry values straddling Cherry Creek.

J.    DAM 3 ZONE:

Dr. A. B. L. Whittles located this target on the Dam #3 Claim using photogeology.  It correlates with anomalous values in copper soil geochemistry.

K.   JASPER ZONE:

This target occurs within the southeast corner of the Wood Group and consists of an airborne thorium/potassium anomalous low similar to that occurring over the Afton deposit.

BEATON GROUP

This group is situated to the immediate west of the Afton property and is comprised of a total of 44 claim units, which is 11 square km, or 4.25 sq mi, or 2,718 acres.  The northern claim is 100% owned by Lakewood and the rest, which is essentially the southern half, is owned 100% by Green Valley.

L.    ICE LAKE ZONE:

The Ice Lake Zone straddles the border between Green Valley’s property and Lakewood’s property.  It consists of an airborne thorium/potassium ratio anomalous low occurring on the flank of a magnetic high, which is a near identical geophysical signature to that of the Afton deposit.  In addition, there is a correlating MMI soil anomaly that is anomalous in copper, silver, gold, and palladium.  Robert Shives, head of the Radiation Geophysics Section of the Geological Survey of Canada, has recommended five different drill holes within this zone.  Only one of these was drilled and it encountered a significant zone of pyrite.  Pyrite is known to often occur within and/or around a porphyry copper deposit.

M.   POWER LINE ZONE:

This occurs on the Beaton #2 claim as well and consists of an MMI soil anomaly that is anomalous in gold and copper values.

N.   SNOW ZONE:

This occurs on the Beaton #2 Claim owned by Green Valley.  It consists of an MMI soil anomaly mainly anomalous in copper and gold results.  A diamond drill hole was put down and encountered anomalous gold values up to one gram/tonne.  It also encountered a wide band of picrite that resistivity surveying indicated strikes east-west.  (It was noted in the Afton deposit that picrite occurred near the mineralization and seemed important to its occurrence.)

O.   PARAGON CLAIM

This is not yet considered to be a zone.  However, some initial work will be done to determine the exploration potential of this area.

EXPLORATION PLAN

The directors of the two companies (two are professional geological engineers and one is a professional geoscientist) have put together an exploration plan for the Afton-area properties.  They prioritized the target areas as follows:

1.     Monarch Zone

2.     Twin Zone

3.     Dorado Zone

4.     Vic Zone

5.     Kam 5 Zone

6.     Kam 6 Zone

7.     Ice Lake Zone

8.     Power Line Zone

9.     Snow Zone

10. Paragon Claim

The exploration plan is as follows over these 10 target areas:

A. Monarch Zone

                    IP Surveying                                                     $25,000.00

                    MMI Soil Sampling                                                 5,000.00

                    Magnetic Surveying                                                5,000.00

                        Diamond drilling                                                             240,000.00

                        Contingencies                                                                    25,000.00

                    Sub total                                                          $300,000.00

B. Remaining 9 Target Areas

1st phase MMI, 900 samples@ $60/sample                            $  54,000.00

IP, 9 areas @ $20,000/target                                                180,000.00

Magnetic surveying, 9 areas @ $5,000/area                            45,000.00

Geology                                                                                50,000.00

2nd phase MMI, 900 samples@ $60/sample                             54,000.00

Contingencies                                                                        17,000.00

Sub-total                                                                               400,000.00

B. Diamond Drilling

16,000 meters @ $80/meter                                                 1,280,000.00

Contingencies                                                                        20,000.00

Sub-total                                                                             1,300,000.00

 

TOTAL                                                                              $2,000,000.00

Respectfully Submitted

Geotronics Surveys Ltd.

David G. Mark, P. Geo.                                                                   March 16, 2004