557 9

1975 Pe rcuss ion D r i l l i n g Report on t h e

CALEDON~A PROPERTY

C l a i m s Caledonia 1-27 i n c l . , 29, 31, 33, Cal 1-10 i n c l . , and Cal 1 4

Located 9 m i l e s SSW of F r a s e r Lake L a t i t u d e 53'56" Longitude 124'54'W Omineca Mining Div i s ion 93 F 15 By F.R. H a r r i s For AMAX Potash Limited

Work was c a r r i e d out du r ing June 1 - J u l y 25, 1975 " i ,

i Y

1975 Assessment Report

TITLE

AUTHOR

DATE

COMMOD I TY

Caledonia P rope r ty - Percuss ion D r i l l i n g

F.R. Harris

August, 1975

Mo

LOCATION-Area F r a s e r Lake -Mining Div i s ion Ornineca -Coordinates Longitude 124'54'W L a t i t u d e 53'56" -NTS 93 F 1 5

AMAX Vancouver O f f i c e

D e p a r t m e n t c_ of

7

TABLE OF CONTENTS

APPENDICES

APPENDIX I - Statement of Costs I1 - Statement of Qualifications I11 - List of Claims IV - Percussion Drill Logs V - Contractors Invoices

FIGURES

1

INTRODUCTION

Location And Access

The Caledonia Molybdenum Prope r ty is l o c a t e d n i n e m i l e s south-southwest of F r a s e r Lake . The F ranco i s Lake road and N i t h i River logging road (See F igu re 1) connect t h e p r o p e r t y w i t h Highway 16 approximately two miles w e s t of F r a s e r Lake .

P r o p e r t y

The Caledonia claims (#1-27 i n c l u s i v e , #29, #31, #33) are under op t ion from Mr. and Mrs. E . Thomson of Vanderhoof, B .C . T h e Cal #1-10 i n c l u s i v e and #14 are recorded i n t h e name of AMAX Potash Limited.

Locat ion of t h e claims i s shown on F igu re 2 and a list of t h e claims is given i n t h e Appendix.

Work Done

From June 1 t o J u l y 23, 1975 t h e fo l lowing work w a s completed on t h e Caledonia P rope r ty .

1. A 15 l i n e m i l e g r i d w a s c u t . 2 . Ground magnetometer and induced p o l a r i z a t i o n su rveys were

3. Geologica l mapping of t h e claims was completed.

4 . A t o t a l of 5 ,790 f e e t of percuss ion d r i l l i n g i n 22 h o l e s

c a r r i e d o u t .

w a s c a r r i e d o u t .

T h i s r e p o r t i n c l u d e s road p r e p a r a t i o n f o r d r i l l s i t es and pe rcuss ion d r i l l i n g .

A M A X P O T A S H L I M I T E D

C A L E D O N I A P R O P E R T Y B. C. O M I N E C A M. 0. -

- . .

.

-$A" w I 7 5 aw 2.*,l7

L O C A T I O N M A P 5 4 3 2 1 0 3 d 'SCALE - M I h E S

S C A L E KILOMETERS I . 250.000

10 0 - e . - N. I: S. Ref. 93 F 15

f /G. 1

2

PERCUSSION DRILL PROGRAM

The percussion drilling was carried out by A 1 Miller Percussion Drilling Ltd. of Kamloops, B.C. using a truck mounted Atlas Copco percussion drill.

F.R. Harris, assisted by B.C. Wright, T.R. Fry, and C.M. Lagatolla all of Vancouver, B.C. supervised the drilling. A total of 5,790 feet was drilled in 22 holes from July 9 to July 21, 1975.

Drill hole locations are shown on Figure 3 and logs of the drill chips are provided in Appendix IV.

F.R. Harris

^.

APPENDIX I

STATEMENT OF COSTS

Period of Work June 1 - July 25, 1975

Summary of Work 5,790 feet Percussion Drilling A1 Miller Percussion Drillina Ltd.. - Box 182, Kamloops, B.C. $19,981.85

Bulldozer Rental Eric Thomson, Box 705, Vanderhoof 1,362.50

Personnel (Drill site preparation, drill supervision, sampling handling & logging of chips)

F.R. Harris - 601-535 Thurlow Street, Vancouver Staff Geologist 11 days @ $93.50/day

B.C. Wright - 3806 W 27th Avenue, Vancouver Sr.Assistant 22 days @ $30.02/day

T.R. Fry - Box 12, Mayne Island, B.C. Sr.Assistant 3 days @ $30.02

C.M. Lagatolla - 1447 Barclay Street, Vancouver Jr.Assistant 2 days @ $28.83

Room and Board 38 man days @ $20.00/day

Vehicle Rental, Maintenance & Repairs 25 days @ $20.00/day

Drafting and Report Preparation

1,028.50

660.44

90.06

57.66

760.00

500.00

100.00

$24,541.01

Work to be Applied to 4 years Caledonia #13-18 incl., 20, 23-27 incl., 29, 31, 33

3 years Caledonia #1-10 incl., 22 2 years CAL #14 1 year CAL #1-10 incl.

APPENDIX I1

STATEMENT OF QUALIFICATIONS

F.R. Harris B.Sc. Honour Geology, University of Western Ontario 1961. M.Sc. Geology, University of New Brunswick 1964. Experience includes; student summer employment with Geological Survey of Canada and New Brunswick Department of Lands and Mines 1960-1964, party chief for Ontario Department of Mines at Thunder Bay 1964 to 1970. Currently staff geologist with AMAX Exploration, Inc.

T.R. Fry Third year geology student at University of British Columbia. Geophysical operator (induced polarization) for Hudsons Bay Oil and Gas during 1973 field season. Two field seasons experience as a geological assistant for AMAX Exploration, Inc. during 1974 and 1975.

B.C. Wright Completed High School in Chomeday, Laval, Quebec in 1968 and attended two semestres at Vancouver City College. Two field seasons experience as a geological assistant f o r AMAX Exploration, Inc. during 1974 and 1975.

C.M. Lagatolla Holds a degree in geology from an Italian University. Assisted on resistivity surveys for Swam Progette (Italy) in Irag during 1972. Geophysical/geological assistant for AMAX Exploration, Inc. during 1975 field season.

APPENDIX I11

LIST OF CLAIMS

Name Record Number Expiry & Renta l Date Group

Caledonia 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 25 26 27 29 31 33

CAL 1-10 i n c l .

14

93864 32042 93865 32044 93866 32046 93867 32048 93868 32050 93869 32052 93870 32054 93871 32056 93872 32058 93873 32060 93874 32062 93875 32064 93876 32066 93877 93878 93879 93880

October 5, August 13, October 5, August 13, October 5, August 13, October 5, August 13, October 5, August 13, October 5, August 13, October 5, August 13, October 5, August 13, October 5, August 1 3 , October 5, August 13, October 5, August 13, October 5, August 13, October 5, August 13, October 5, October 5, October 5, October 5,

1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975 1975

133603-133612 i n c l . January 7, 1976

2’4 June 16, 1976

South South South South South South South South South South South South South South South South South South North South North North South South South South South South South South

North

South

APPENDIX IV

PERCUSSION DRILL LOGS

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-3’ 3-80

80-110 110-160 160-170 170-180 180-210 210-300

CP- 7 5- 1P

3+00N, 2+20w

goo

300’

2880’

Caledonia 1

South

Overburden Q u a r t z monzonite Q u a r t z d i o r i t e Q u a r t z monzoni t e D i o r i t e dyke Quar t z monzonite D i o r i t e dyke Q u a r t z monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-36' 36-80 80-110 110-300

CP-75-2P

5+20E, 4+50N

goo

300'

2885'

Caledonia 3

South

Overburden Quartz monzonite Diorite dyke Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-90' 90-300

CP- 7 5- 3P

17+30N, 2+17W

goo

300'

2640'

Caledonia 13

South

Overburden Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-51 ' 50-200

200-220 220-300

CP-75-4P

14+50N, 4+20W

goo

300'

2670'

Caledonia 14

South

Overburden Quartz monzonite Diorite dyke Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-45’ 45-80 80-90 90-120 120-130 130-250 250-270 270-300

CP-75-5P

11+90N, 7+70W

goo

300’

2685‘

Caledonia 14

South

Overburden Quartz monzonite Diorite dyke Quartz monzonite Diorite dyke Quartz monzonite Diorite dyke Quartz monzonite

HOLE

COORDINATES

D I P

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-36' 36-50 50-60 60-100

100-120 120-130 130-150 150-190 190-270 270-300

CP-75-6P

8+00N, 1o+oow goo

300'

2720'

Caledonia 14

South

Overburden Quartz monzonite D i o r i t e dyke Quartz monzonite D i o r i t e dyke Quar tz monzonite D i o r i t e dyke Quartz monzonite D i o r i t e dyke Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-22 ' 22-100 100-110 110-230 230-250 250-290 290-300

CP-75-7P

5+35N, 12+60\V

goo

300'

2740'

Caledonia 1

South

Overburden Quartz monzonite Diorite dyke Quartz monzonite Diorite dyke Quartz monzonite Diorite dyke

. .

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-110'

CP-75-8P

13+40N, 12+20E

9oo

110'

2720'

Caledonia 8

South

Overburden - could not reach bedrock

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-36' 36-120

120-130 130-200 200-280 280-300

CP- 7 5 - 9P

11+50N, 9+40E

goo

300'

2755'

Caledonia 18

South

Overburden Quartz monzonite D i o r i t e dyke Quartz monzonite D i o r i t e dyke Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-90'

90

27

CP-7 5- 1 OP

13+60N, 4+30E

goo

5 '

Caledonia 15

South

Overburden - could not reach bedrock

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-70’

CP - 75 - 11P 16+10N, 4+65E

goo

300 ’

2680’

Caledonia 15

South

Overburden - could not reach bedrock

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-49' 49-90 90-110 110-130 130-170 170-240 240-260 260-300

CP-75-12P

10+35N, 0+15E

9oo 300'

2755'

C a l e d o n i a 16

S o u t h

Overburden Quar tz monzon i t e D io r i t e dyke Q u a r t z monzon i t e D io r i t e dyke Q u a r t z monzon i t e D i o r i t e dyke Q u a r t z monzon i t e

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS 0-15' 15-30 30-110

110-190 190-230 230-300

CP-75-13P

8+20N, 3+00W

9oo

300'

2780'

Caledonia 16

South

Overburden Diorite dyke Quartz monzonite Diorite dyke Quartz monzonite Diorite dyke

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-18’ 18-40 40-50 50-140 140-150 150-220 220-250 250-300

CP-75-14P

7+05N, 7+05E

goo

300’

2840’

Caledonia 16

South

Overburden Quartz monzonite Diorite dyke Quartz monzonite Diorite dyke Quartz monzonite Diorite dyke Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-15' 15-30 30-40 40-60 60-80 80-230

230-300

CP-7 5- 1 5P

17+33N, 17+28E

goo

300'

2830'

Caledonia 18

Sout b

Overburden Quar tz monzonite D i o r i t e dyke Quar tz monzonite D i o r i t e dyke Quartz monzonite D i o r i t e dyke

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-90' 90-120 120-150 150-220 220-230 230-280 280-300

CP- 7 5- 16P

10+80N, 20+00E

goo

300'

2790'

Caledonia 18

S o u t h

Overburden Quartz monzon i t e D i o r i t e dyke Q u a r t z monzon i t e D i 0 r i t . e dyke Q u a r t z monzon i t e A p h a n i t i c f e l s i c dyke

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-120'

CP-75- 17P

13+00N, 23+023

goo

120'

2775'

Caledonia 17

South

Overburden - could no t r each bedrock

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-37’ 37-300

CP-75-18P

0+69N, 3+30E

90°

300’

2920’

Caledonia 3

South

Overburden Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-14 ' 14-50

140-300 50-140

CP-7 5 - 19P 4+20N, 14+23E

goo

300'

2890'

Caledonia 5

South

Overburden Diorite dyke Quartz monzonite Diorite dyke

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-6 ' 6-300

CP-7 5- 2 OP

1+89N, 7+70E

goo

300 '

2920'

Caledonia 3

South

Overburden Quartz monzonite

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-48' 48-300

CP-75-21P

23+00N, 48+253

goo

300'

2740'

Caledonia

North

Overburden L igh t grey porphyry

21

a n d e s i t e

HOLE

COORDINATES

DIP

TOTAL DEPTH

ELEVATION

CLAIM

GROUP

REMARKS

0-50' 50-280

280-300

CP-75-22P

21+10N, 43+453

goo

300'

2725'

Caledonia 21

North

Overburden Light grey andesite

Quartz monzonite porphyry

APPENDIX V

CONTRACTORS INVOICES

c

9 2-

,

E

, p a -

L . -

I

f .

1 b

I t I

7-5-

- 5 b

I II I 1 1 3 , I

I I II I l l I I

A S U B S I D I A R Y O F A M E R I C A N M E T A L C L I M A X , I N C .

PHONE [ A R E A CODE 6 0 4 ) 683-0474

T E L E X 0454387

. X601 - 535 T H U R L O W STREET

V A N C O U V E R , BRIT ISH COLUMBIA

V 6 E 3L6

AGREEMENT ENTERED INTO THIS 26 th DAY OF MAY, 1975

BETWEEN AMAX Potash L imi t ed , 601-535 Thurlow S t r e e t , Vancouver, B . C . V6E 3L6

t h e p a r t y of t h e f i r s t p a r t , h e r e i n a f t e r r e f e r r e d t o as t h e C l i e n t ,

AND A 1 Miller Pe rcuss ion D r i l l i n g , L t d . , P.O. Box 182, Kamloops, B.C. V2C 5 K 6

t h e p a r t y of t h e second p a r t , h e r e i n a f t e r r e f e r r e d t o as t h e C o n t r a c t o r . WHEREAS t h e C l i e n t wishes t o have performed c e r t a i n p e r c u s s i o n d r i l l i n g on its Caledonia P r o p e r t y , B r i t i s h Columbia and whereas t h e C o n t r a c t o r , i n c o n s i d e r a t i o n of payments h e r e i n a f t e r c o n t a i n e d , unde r t akes t o do t h e s a i d p e r c u s s i o n d r i l l i n g commencing on o r about t h e 1st o f J u l y , 1975.

NOW THEREFORE I T I S WITNESSED:

GUARANTEED FOOTAGE

1. The C l i e n t g u a r a n t e e s a minimum o f f i v e t h o u s a n d ( 5 , 0 0 0 ) f e e t of pe rcuss ion d r i l l i n g i n a series o f v e r t i c a l h o l e s o f a minimum dep th of one hundred (100) f e e t , and a maximum d e p t h of th ree hundred (300) f e e t . A l l measurements t o be t aken from t o p o f c a s i n g .

-2-

BOLE S I Z E

2 . The C o n t r a c t o r g u a r a n t e e s t o d r i l l t h e minimum f o o t a g e by d r i l l i n g 2 i nch h o l e s u t i l i z i n g a t r u c k mounted d r i l l capab le of bo th w e t and d ry p e r c u s s i o n d r i l l i n g , and t o supply f o r t h w i t h cne d r i l l o u t f i t a long w i t h n e c e s s a r y a s s o c i a t e d equipment and l a b o u r t o commence t h e work w i t h i n t h e t i m e l i m i t s s p e c i f i e d by t h e C l i e n t .

FOOTAGE RATE

3 . The b a s i c foo tage ra te is Two D o l l a r s and Ninety C e n t s ($2 .90) p e r f o o t d r i l l e d . I f h o l e s of a g r e a t e r d e p t h t h a n t h r e e hundred and f i f t y (350) f e e t a r e d e s i r e d , such d r i l l i n g s h a l l be performed o n l y upon such c o n d i t i o n s and at such ra tes as may be agreed upon b e f o r e commencement o f such d r i l l i n g .

PENETRATION OF OVERBURDEN

4 . Wherever overburden is encountered on a set up , i t is agreed t h a t t h e C o n t r a c t o r ' s cha rge f o r p e n e t r a t i n g such overburden s h a l l be Two D o l l a r s and n i n e t y C e n t s ($2 .90 ) p e r f o o t . I n t h e c a s e of a n y h o l e r e q u i r i n g ove r 50 f e e t o f c a s i n g , t h e c o s t o f c a s i n g l o s t w i l l be €or t h e C l i e n t ' s account a t t h e ra te of Two Hundred and Eighty-Nine' D o l l a r s ($289.00) p e r 10 f o o t l e n g t h p l u s t h e c o s t of c o u p l i n g s .

CHEMICAL GROUT

5. Cost o f chemical g r o u t i f r e q u e s t e d s h a l l be f o r t h e C l i e n t ' s account a t Cost p e r b a t c h a p p l i c a t i o n . Mud c i r c u l a t i o n i f r e q u i r e d a t cost of materials.

WATER

6 . A water t r u c k is t o be s u p p l i e d by t h e C o n t r a c t o r .

TRANSPORTATION AND MOVES

7. The C l i e n t w i l l c o n s t r u c t a l l n e c e s s a r y access r o a d s and d r i l l i n g s i t e s and w i l l p r o v i d e on r e q u e s t and wi thou t d e l a y one b u l l d o z e r w i t h o p e r a t o r t o ass is t i n moving t h e s a i d d r i l l i n g equipment t o and from o r on o r about t h e d r i l l s i t e and w i l l b e a r t h e cost t h e r e o f .

The C l i e n t w i l l de te rmine t h e l o c a t i o n of a l l d r i l l h o l e s , t h e o r d e r o f d r i l l i n g t h e s a i d h o l e s , and t h e method o f o b t a i n i n g samples b u t i n a l l o t h e r respects t h e d r i l l i n g o p e r a t i o n s s h a l l be c a r r i e d o u t under t h e d i r e c t i o n and c o n t r o l of t h e C o n t r a c t o r . The C o n t r a c t o r w i l l carry o u t

-3-

t h e d r i l l i n g as e x p e d i t i o u s l y a s p o s s i b l e b u t s h a l l n o t b e l i a b l e f o r d e l a y s due t o w e a t h e r , o r o the r c i r cum- s t a n c e s beyond its c o n t r o l n o r s h a l l t h e C o n t r a c t o r b e o b l i g e d t o d r i l l a t , o r move its equipment o r p e r s o n n e l , t o any s i t e .

M o b i l i z a t i o n t o t h e p r o p e r t y f rom Kamloops and d e m o b i l i - z a t i o n f rom t h e p r o p e r t y t o Kamloops s h a l l be f o r t h e C l i e n t ' s a c c o u n t , a t a ra te o f One Dollar and Twenty-Five C e n t s ($1 .25) p e r m i l e . I n t e r i m s e r v i c e t r i p s i n c o n n e c t i o n w i t h t h e m a i n t e n a n c e of d r i l l camps and t h e d r i l l i n g o p e r a t i o n s h a l l b e f o r t h e C o n t r a c t o r ' s a c c o u n t .

WAITING TIME FOR ORDERS

8. I t is u n d e r s t o o d and a g r e e d t h a t t i m e l o s t w a i t i n g f o r o r d e r s €rom t h e C l i e n t ' s R e s i d e n t E n g i n e e r , o r Represen - t a t i v e , s h a l l be c h a r g e d t o t h e C l i e n t a t Twen ty - f ive D o l l a r s ($25.00) per h o u r . For t h e p u r p o s e o f t h i s Agreement " w a i t i n g time" i n c l u d e s o n l y t h e t i m e l o s t by t h e C o n t r a c t o r t h r o u g h d e l a y s o c c a s i o n e d by t h e C l i e n t , i t s s e r v a n t s o r employees , t h r o u g h f a i l u r e t o p r o v i d e i n s t r u c t i o n , p e r m i t s , l i c e n c e s , access r o a d s , t r a n s p o r - t a t i o n and t h e l i k e when r e q u i r e d . I f a no rma l w o r k i n g day i s l o s t t h e r e imbursemen t s h a l l b e t h e s t i p u l a t e d ra te f o r e a c h hour which would n o r m a l l y have been worked ( i . e . 8 h o u r s f o r s i n g l e s h i f t opera t ion and 16 h o u r s f o r d o u b l e s h i f t o p e r a t i o n ) .

SAMPLING

9 . Samples w i l l be t a k e n on s t a n d a r d t e n f o o t r u n s and w i l l be d e l i v e r e d t o t h e C l i e n t ' s r e p r e s e n t a t i v e a t t h e d r i l l s i t e s i n s u i t a b l e c o n t a i n e r s . C o n t a i n e r s w i l l b e p r o v i d e d by C l i e n t . The C o n t r a c t o r w i l l m a i n t a i n a d a i l y record of t h e d r i l l i n g o p e r a t i o n and w i l l f u r n i s h t o t h e C l i e n t a copy t h e r e o f d u l y s i g n e d by t h e C l i e n t ' s r e p r e s e n t a t i v e a t t h e d r i l l s i t e . I n t h e r e p o r t t h e h o l e i d e n t i f i c a t i o n number s h a l l be t h a t p r e s c r i b e d by t h e C l i e n t .

CAMPS

10. The C o n t r a c t o r agrees t o p r o v i d e b o a r d and l o d g i n g for its own men, and a t i ts own e x p e n s e .

DISCIPLINE

11. The C o n t r a c t o r s h a l l , a t a l l t i m e s , e n f o r c e s t r i c t d i sc i - p l i n e and m a i n t a i n good o r d e r among its employees , a n d s h a l l n o t re ta in on t h e work any u n f i t p e r s o n o r anyone n o t s k i l l e d i n t h e work a s s i g n e d t o him.

-4-

,

Any employees of t h e C o n t r a c t o r who are o b j e c t i o n a b l e or u n s a t i s f a c t o r y t o t h e C l i e n t , s h a l l b e removed from t h e work and r e p l a c e d by an employee s a t i s f a c t o r y t o t h e C l i e n t .

INSURANCE

1 2 . The C o n t r a c t o r w i l l c a r r y and m a i n t a i n d u r i n g t h e c o n t i n u a n c e of t h i s Agreement t h e f o l l o w i n g i n s u r a n c e :

a ) Worke r s ' Compensat ion I n s u r a n c e i n a c c o r d a n c e w i t h t h e laws of t h e P r o v i n c e of B r i t i s h Columbia , and

b ) Comprehens ive P u b l i c L i a b i l i t y I n s u r a n c e w i t h minimum l i m i t s o f F i v e Hundred Thousand D o l l a r s ($500,000) f o r g e n e r a l l i a b i l i t y p r o p e r t y damage, b o d i l y i n j u r y o r d e a t h . Comprehens ive i n s u r a n c e i n t h e amount of $200 ,000 s h a l l b e m a i n t a i n e d on e a c h v e h i c l e o p e r a t e d by t h e C o n t r a c t o r . Such i n s u r a n c e s h a l l n o t be c a n c e l l e d , a l t e r e d o r amended w i t h o u t t e n ( 1 0 ) d a y s p r i o r w r i t t e n n o t i c e h a v i n g been f u r n i s h e d t o t h e C l i e n t . B e f o r e commencing d r i l l i n g o p e r a t i o n s h e r e - u n d e r , t h e C o n t r a c t o r s h a l l f u r n i s h t h e C l i e n t ce r t i f ica te o r ce r t i f i ca t e s e v i d e n c i n g i n s u r a n c e c o v e r a g e i n a c c o r d a n c e w i t h t h e r e q u i r e m e n t s of t h i s

' sect i o n .

The C o n t r a c t o r s h a l l i n d e m n i f y and h o l d t h e C l i e n t harm- less from a n d a g a i n s t a l l c l a i m s , demands, causes of a c t i o n , losses , l i a b i l i t i e s and e x p e n s e s a r i s i n g i n f a v o u r o f C o n t r a c t o r ' s e m p l o y e e s , t h e C l i e n t ' s employees o r t h i r d par t ies on account of b o d i l y i n j u r y , d e a t h o r p r o p e r t y damage r e s u l t i n g f rom C o n t r a c t o r ' s o p e r a t i o n s u n d e r t h i s Agreement . The C o n t r a c t o r s h a l l a lso i n d e m n i f y and h o l d t h e C l i e n t h a r m l e s s f rom and a g a i n s t a l l claims and l i e n s fo r and i n respect of l a b o u r , mater ia ls and services a n d supp l i e s f u r n i s h e d t h e C o n t r a c t o r f o r i ts p e r f o r m a n c e u n d e r t h i s Agreement .

PAYMENT FOR WORK

13. The C o n t r a c t o r s h a l l r e n d e r statements of a c c o u n t a t weekly i n t e r v a l s and t h e amount d u e him s h a l l be p a y a b l e w i t h i n s e v e n d a y s . Payments are t o be made p a y a b l e t o :

A1 Miller P e r c u s s i o n D r i l l i n g , L t d . , P.O. Box 1 8 2 , Kamloops, B . C . V2C 5 K 6

THIS Agreement may be a l t e r ed o n l y by w r i t t e n c o n s e n t b o t h p a r t i e s h e r e t o .

of

* ,

T h i s Cont rac tor s h a l l be an i n d e p e n d e n t C o n t r a c t o r i n t h e pe r fo rmance of work h e r e u n d e r and n e i t h e r t h e C o n t r a c t o r n o r any o n e employed by him s h a l l be deemed f o r any p u r p o s e t o be t h e employee , a g e n t o r s e r v a n t of t h e C l i e n t .

The C o n t r a c t o r s h a l l n o t a s s i g n any r i g h t nor d e l e g a t e any d u t y u n d e r t h i s Agreement w i t h o u t t h e p r i o r w r i t t e n c o n s e n t of t h e C l i e n t . The C l i e n t w i l l w i t h h o l d F i v e Hundred Dollars ($500.00) f rom t h e f i n a l i n v o i c e u n t i l a l l d r i l l s i tes have p a s s e d i n s p e c t i o n by t h e C l i e n t ' s r e p r e s e n t a t i v e f o r c l e a n l i n e s s .

I N W I T N E S S WHEREOF, t h e p a r t i e s h e r e t o have e x e c u t e d t h i s Agreement as of t h e day and y e a r above w r i t t e n .

A1 Miller P e r c u s s i o n D r i l l i n g , L t d .

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AMAX P o t a s h L i m i t e d