GEOPHYSICAL REPORT PIL PROJECT

FOR FJNLAY MINERALS LTD

BY DELTAGEOSCIENCE LTD

NOV. 21,1999. GRANT A. HENDRICKSON, P.GEO.

NOVEMBER 21,1999.

GEOPHYSICAL REPORT

PIL PROPERTY

OMINECA MINING DIVISION BRITISH COLUMBIA

NTS. 94313

FOR

FINLAY MINERALS LTD

BY

DELTA GEOSCIENCE LTD

TABLE OF CONTENTS

Location Map . . . . . . . . . .

Claim Map . .

Introduction . .

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Reduced Induced Polarisation Plan, 1:20,000..

Reduced Resistivity Plan 1:20,000 _. . .

Reduced Magnetic Field Strength Plan 1:20,000

Personnel . . . . . . . .

Equipment . . . . . . . .

Data Presentation . . . . . .

Survey Procedure . . . . . .

Discussion of the Data . . . .

Conclusion and Recommendations . .

References . . . . . . . .

Statement of Qualifications . . . .

APPENDIX:

Induced Polarization Plan . . Resistivity Plan . . . . Magnetic Field Strength Plan . .

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Stacked Profile of Magnetics, I.P. & Resistivity Data Posted Magnetic Field Strength Data . . . . . . Pseudo-section Line 0+00 . . . . . . . . Pseudo-section Line 4+OOS . . . . . . . . Pseudo-section Line WOOS . . . . . . . . Pseudo-section Line 1350s . . . . . . . . Pseudo-section Line 1800s . . . . . . . .

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Fig. #I.

Fig. #2.

Pages 1-2.

Fig. #3R.

Fig. #4R.

Fig. #5R.

Page 3.

Page 3.

Page 4.

Page 5.

Pages 6-9.

Page 10.

Page 11.

Page 12.

Fig. #3. Fig. #/4. Fig. #5. Fig. #6. Fig. #7. Fig. #8. Fig. I#. Fig. #lo. Fig. #1 1. Fig. #12.

INTRODUCTION

At the request of Finlay Minerals Ltd., Delta Geoscience has conducted Induced Polarisation, Resistivity and Magnetic field strength surveys on the Pi1 property. This interesting property is part of Finlay’s ongoing Toodoggone porphyry gold/copper exploration program. The Pi1 property is located approximately 30 kilometers north- northwest of the operating Kemess South open pit porphyry gold/copper mine. Other past mining operations in the area include the small dormant epithermal gold mines of Baker and Lawyers, approximately 10 kilometers to the northwest.

The work described within this report took place during the period August 11-21, 1999. During this time 9.5 kilometers of surveying were completed on five lines spaced approximately 400 meters apart.

The general geology of the survey area can be briefly summarised by quoting from the CIM special volume 46 of Porphyry Deposits “mafic flows and breccias of the Upper Jurassic Takla Group, mixed pyroclastic volcanics and epiclastic sedimentary rocks of the Lower to Middle Jurassic Hazelton Group (Toodoggone Formation). Both these groups have been intruded by Middle Jurassic Omineca Intrusions (the Black Lake Intrusive suite)“.

Government geologists and explorationists have found that “the Takla Group and the Toodoggone Formation are disrupted by numerous steeply dipping normal faults and a few strike slip and thrust faults that juxtapose successions of differing stratigraphic levels. The dominant structures are steeply dipping faults that define a prominent northwest trending regional structural fabric. In turn, high angle northeast trending faults appear to truncate and displace northwest trending faults. Collectively, these faults form boundaries for varied tilted and rotated blocks. The northeasterly trending faults are considered a subordinate fault system, which has often been an important control to mineralization in the district.

Published geophysical data from the nearby Kemess deposits has shown that the Kemess North has a strong positive magnetic field strength correlation, while the Kemess South correlates with a magnetic field strength low. Although both deposits correlate with good to moderate induced polarisation responses, there are many significant I.P. responses that have no correlation with economic mineralization.

Finlay’s geological consultant, Peter Ronning, P.Eng., has prepared a much more comprehensive and informative report on the geology, geochemistry and alteration style of the Pi1 project area. Mr. Ronning is also the project manager for Finlay Minerals in conjunction with Dr. John Barakso, a geochemist and principal of Finlay Minerals Ltd.

Accommodation for the Delta Geoscience crew was provided by Finlay in their camp located on the minor road that runs along the south side of Jock Creek. The camp’s location relative to the survey grid is approximately 1OOW on line O+OO.

The topography of the grid area is typical ragged alpine terrain. Elevation ranges from 1200 meters to 1750 meters, with the tree line occurring at approx. 1500 meter elevation. The occasional use of a helicopter helped to facilitate the timely completion of the southern lines.

PERSONNEL

Grant Hendrickson - Senior Geophysicist Ladislav Zabo - Geographer Jan Dobrescu - Geophysicist

In addition, two helpers were provided by Finlay to assist with the Induced Polarisation and Resistivity work. Their very willing and cheerful assistance is appreciated.

EQUIPMENT

2 IRIS Instruments IP-6 Receivers 2 IRIS Instruments VIP-4000 Transmitters 1 GEM GSM- 19 Mobile Magnetometer 1 GEM GSM- 19 Base Station Magnetometer 6 Motorola VHF Portable Radios 1 Toshiba Field Computer 1 Hewlett Packard HP250C Colour Plotter 1 Ford F250C Extracab 4x4 Truck

DATA PRESENTATION

All of the geophysical data that accompanies this report is at a scale of 1 :SOOO, except for Figs. #3R, 4R and SR, which have been reduced to 1:20,000 for convenience in viewing the data in a pagesize format.

The induced polarisation and resistivity pole-dipole, a = SO meters, N = l-6 data is presented in the standard pseudo-section format (Figs. #8 to #12) and as contoured plans (Figs. #3 and #4). The I.P/Resistivity data was also filtered with an algorithm designed to remove the geometric effects of the electrode array geometry. This valid filtering technique is generally required with pole-dipole and dipole-dipole surveys to produce a value that can be contoured and correlated line to line. The filtering process does reduce the spatial resolution somewhat, however is not considered a problem in porphyry exploration due to the large size of the targets. In addition to the above, a stacked 3 parameter profile plan has been prepared (Fig. ##6) to help show the correlation between induced polarisation, resistivity and magnetic field strength.

The magnetic field strength data is presented in a contoured plan (Fig. #S).

The data is presented as an idealized grid, which is best for locating the position of anomalous responses along the survey lines, but in reality will have some minor spatial errors. The data was not altered to the recovered grid, since there would be very little change due to the gridding process required (SO meter cell size) to contour between the large separation lines. In addition, profile plots do not adapt very well to a crooked line presentation. Peter Ronning has however provided the differential G.P.S. co-ordinates for the grid lines, UTM based on NAD83. The line end points and baseline crossings are as follows. Detail sketches of the actual recovered grid are available in Mr. Ronning’s report. Line O+OO, the last line done, was bent to run along the Jock Creek road.

Local Grid Co-ordinates

L.o+oo 800W L.o+oo o+oo L.o+oo 200E L.4OOS o+oo L.4OOS 1OOOE L.8OOS 4oow L.8OOS o+oo L.8OOS 1lOOE L.13SOS 117sw L. 1350s o+oo L. 1350s 1700E L. 1800s 800W L. 1800s o+oo L.18OOS 1700E

UTM Co-ordinates East West

624596 6350955 625348 6350841 625534 6350780 625348 6350465 626338 63505 17 62497 1 6350115 625348 6350115 626392 6350156 624194 6349595 625352 6349619 626933 6349684 624578 6349158 625351 6349175 626916 6349302

Finlay Minerals ensured that the grid lines were ready for the arrival of the Delta Geoscience crew.

All of the induced polarisation/resistivity pole-dipole surveying was set up so that the current electrode (the pole) was to the west and followed the potential electrode array (a = SOm, n = l-6), as it moved to the east in 50 meter increments. The dry conditions and the gravel/sand or rocky overburden made for difficult current electrodes. To transmit sufficient power into the ground often required deep electrode holes and copious amounts of salt water. Water was also required on the potential electrode to ensure that the contacts were below the input impedance of the I.P. receivers. The lack of water at the higher elevations, in conjunction with the nature of the overburden, will be an ongoing problem for future I.P. survey work.

Current electrodes were stainless steel bars (usually 6), which were wired together and buried in a hand-dug trench. Potential electrodes were porous ceramic pots filled with a centre copper electrode surrounded by a solution of copper sulphate.

The magnetic field strength measurements were taken every 12.5 meters along the lines. A base station magnetometer cycling every 10 seconds allowed for accurate tracking of the diurnal change, which was subsequently removed from the survey data.

The induced polarisation signal was also stacked in the receiver (multiple recordings) until the standard deviations were acceptable (less than 1%).

Survey data was dumped into the field computer each evening, whereupon it was further processed and available for viewing by the senior explorationists to ensure everything was satisfactory and to assist with day-to-day exploration planning.

DISCUSSION OF THE DATA

The induced polarisation/resistivity array was designed to evaluate the grid for relatively shallow broad zones of porphyry gold/copper mineralization, which it has done well. However the array lacks the horizontal resolution necessary to properly delineate isolated vein-type responses.

Line O+OO. Fig. #8.

the I.P. and resistivity data suggests that the broad area (450W to 5OW) of narrow, closely spaced near surface zones of increased chargeability and resistivity are related to a network of weakly mineralized quartz sulphide veins centered within a moderately west dipping body. The eastern edge of this body appears very irregular. The apparent veins on the eastern edge of the body are relatively isolated from the rest of the body. This type of response is otten typical of those areas adjacent to a well mineralized porphyry body. Veins of this nature often have an elevated copper and gold content; thus the zone is of further interest.

there is a correlation of near surface narrow magnetic field strength anomalies with the postulated quartz sulphide veins; thus it’s probable they also contain narrow zones of magnetite mineralization. These magnetic spikes are superimposed on a broad area of increased magnetic field strength that indicates the underlying geology also contains disseminated magnetite.

* the low resistivities and chargeabilities on the west side of the line suggest a cover of sedimentary rocks and overburden that is thickening to the west (from l-2 meters in the east to lo-20 meters in the west).

Line 4+OOS. Fig. #9.

a significant strong I.P. anomaly has been identified between 50W and 400W. The anomaly’s western limit is undefmed at this time, due to the present limits of the survey. The top of this apparent flat lying, thick (at least 15Om) body of mineralization (2-5% sulphide above background) appears weathered or oxidised beneath a shallow (approx. 5m) overburden cover. The resistivity data also suggests the top of the mineralized body is silicified and/or lying beneath a thin, weakly mineralized cherty sediment cover. This I.P. anomaly also correlates with a broad area of increased magnetic field strength, which has not been fully defined, but is indicative of a body dipping moderately to the west.

a second smaller, but slightly deeper I.P. anomaly is centered at lOOE, with a width of at least 200 meters. This zone is likely a slight fault offset of the larger body to the west. This zone terminates abruptly at approx. 2+75E, which suggests a fault contact. The strong resistivity response just to the east of this apparent fault correlates with a significant near-surface, but complicated magnetic

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anomaly, thus could be related to quartz magnetite veining within the proposed fault zone.

there is some evidence of another, much deeper zone centered at 4+75E that is currently poorly defined due to its depth Again this zone may be a faulted-off portion of the western anomaly.

the area from 5+00E to 9+00E is characterised by low chargeability and moderate resistivity. This area has been mapped as a mixed sequence of intrusive rock. The moderate resistivity suggests minor argillic alteration of this broad area of intrusive rock.

Line 800s. Fig. #lo.

a broad significant I.P. response exists from 3+75W to 6+OOE, i.e. 975 meters. This interesting I.P. anomaly is close to the surface at 1+5OW, but deepens to the east where at 2+00E it appears to be 80 meters deep. Continuing on to the east, the zone rises to within 20 meters of the surface at 6+OOE, where it appears to be faulted off. The attenuation of the I.P. response along the profile is due to its depth and the masking effect of cover. Masking is probably reducing the I.P. response by approx. 40%.

it’s becoming apparent that small scale faulting downdrops this significant I.P. response and that these are high angle faults marked by narrow high resistivity zones. A very significant magnetic response correlates with the high resistivity zone between 625E and 725E. Also note that another very significant narrow high resistivity zone occurs at 2+00E, in conjunction with several narrow strong magnetic anomalies within the area where the I.P. anomaly is deepest. This suggests silicified fault zones and/or quartz /magnetite veining within the faults.

a broad near surface very high resistivity body with good depth extent occurs at the extreme western end of the line. This body appears weakly mineralised and may represent a Rhyolite or a massive cherty sedimentary unit. The contact may be faulted.

the eastern end of the line (from approx. 6+50E) is again characterised by moderate resistivities and low chargeabilities, which appear typical of the area mapped as a mixed sequence of intrusives.

Line 1350s. Fig. #ll.

a very broad zone of increased chargeability exists between 5+OOW and 1600E (the eastern end of the line). Depth to the top of this zone varies considerably. Within this zone are two more restricted areas of higher chargeability, the first between l+OOE and 4+50E, the second between 9+50E and 1125E. The fust zone lies at a depth of approx. 60 meters, whereas the second zone appears to outcrop.

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This second zone likely also contains a narrow, very well mineralized steeply dipping vein-like structure between 1025E and 1050E.

the variable depth to the top of the above-mentioned broad I.P. zone is likely due to extensive small scale faulting. These postulated faults appear in the data as narrow high resistivity zones that frequently correlate with narrow intense magnetic responses, again suggesting quartz magnetite mineralization.

from 1500E to the east end of the line a moderate to low resistivity zone correlates with a broad, near surface zone of elevated chargeability that has good depth extent. This is within the area mapped as mixed intrusives; thus it’s probable that the alteration of the intrusive has increased substantially.

between 9+OOW and 2OOW, there appears a thin veneer of very high resistivity rock. This veneer manifests itself best at S+OOW, where there is an excellent correlation with a broad, but modest near surface I.P. response. This type of overall response is quite typical of responses seen over the oxidised portion of a small hydrothermal breccia or vein system in more arid areas and thus may be a relic of the geological history of the area.

Line 1800s. Fig. #12.

a broad strong near surface I.P. response of good depth extent has been detected between 425E and 825E. Indications are that the sulphide content has increased to 4-6% above background. This anomaly has a high resistivity cap, which probably is due to silicification centered at 675E, where there also appears to be a silicified vertical core. This type of response is quite typical of a hydrothermal breccia and/or mineralized porphyry occurrence. There is good correlation with a zone of multiple intense, but narrow, near surface magnetic field strength changes; thus quartz magnetite veining in the postulated silicified cap is a possibility. The silicified core at 675E correlates closely with a narrow, intense magnetic low, which may mark the location of a significant NNE trending structure. The multiple narrow near surface magnetite anomalies are superimposed on a very broad elevated magnetic response consistent with a large body dipping moderately to the west. Hydrothermal activity may have remobilized the magnetite mineralization into veins.

a much narrower flanking I.P. anomaly centered at 900E appears to be more indicative of a well-mineralized structure surrounded by a broad area of disseminated mineralization.

very narrow near surface vein type 1.P. responses occur at 275E and again at 375E.

the near surface broad, high resistivity zone centered at 125E and particularly the broad high resistivity pod centered at 45OW, is typical of the responses seen over

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the oxide zone of weakly mineralized hydrothermal breccia in the more arid or tropical regions of the world. They are ofkn good targets for gold exploration, although their tonnage potential is somewhat limited. In any event, they are a positive geological feature.

The plan maps, Figs. #3-6, show the line-to-line correlation of the magnetic field, induced polarization and resistivity data. This correlation is partly thwarted by the large separation between the lines and the apparent variable depth to the target horizon. A random gridding algorithm seems to improve the presentation. The reduced scale plots, Figs. #3R, 4R and 5R were redone using the algorithm.

Nevertheless, some very significant I.P. anomalies have been partially outlined by the survey and clearly the I.P. coverage should be expanded to the south.

The geophysical plans in general show a prominent northwest trend to the geology. The pseudo-sections show a probable series of fault steps or panels along the eastern margin of the area of elevated I.P. response. These postulated faults appear to be the focus for quartz magnetite veining. Overall, the magnetics suggest that initially the centre of the present grid was underlain by a broad, west dipping moderately magnetic body that was subsequently intensely altered. This alteration remobilized the magnetite into numerous near surface fracture zones along with silica. This event was probably contemporaneous with the intrusive events that deposited the sulphides within porphyry and/or hydrothermal breccia.

It’s hard to reconcile the data without inferring a major east-west bearing (azimuth 100’) fault just north of line 135OW, with significant strike slip movement and rotation of the northern side.

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The strong, broad, very near surface I.P. anomaly centered at 650E on line 1800s should be the focus for further work. The economic significance of this significant area of mineralization as a porphyry gold/copper deposit may be more readily apparent in the detail evaluation of the geophysical data, in conjunction with the latest geology, geochemistry and surface prospecting information.

The smaller flat lying I.P. anomaly centered at 250W on line 400s is also a very significant porphyry target that remains open to the west.

The above two anomalies appear to be the near surface manifestation of a much larger, but more deeply buried mineralized body. Depth variation appears largely due to minor faulting and the 500 meters of vertical relief. The masking of the I.P. signal by overburden and altered rock attenuates the response by as much as 40% in some areas, therefore the weaker anomalies (L.135OS) are also of interest. Frequently in porphyry exploration, the highest I.P. responses occur over dominantly pyrite mineralization, with the copper mineralization occurring in areas of reduced, but still very anomalous I.P. response. In addition, the intensive potassic and argillic alteration surrounding the copper mineralization produces a distinct resistivity and magnetic low. It’s significant that within this grid, zones of lower resistivity and increased I.P., exist beneath a high resistivity (silicified?) cap and that these zones correlate well with very erratic shallow zones of intense magnetic activity.

Future induced polarisation/resistivity and magnetic surveys of this area should include gamma ray spectrometry. This very powerful technique will help identify specialised intrusives and the very important potassic alteration common to well mineralized porphyry. This work can be done in conjunction with magnetic work at a small increase in cost. The shallow overburden and numerous outcrops allows for useful gamma ray information

The present line separation is somewhat large even for porphyry copper exploration, thus some fill-in lines may ultimately be necessary. Any further work should not exceed a line separation of 300 meters.

Grant A. Hendrickson. P.Geo.

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REFERENCES

Baird, J.G., Bosschart, R.A., and Seigel, H.0: Geotechnical Techniques in areas with conductive cover. Application Brief 72-2.

Coggon, J.H., 1973: A Comparison of I.P. Electrode Arrays: Geophysics, Vol. 38, 737- 761.

Mahnqvist, L., 1978: Some Applications of I.P. Technique for Different Geophysical Prospecting Purposes: Geophysical Prospecting 26,97-121.

Porphyry Deposits of the Northwestern Cordillera of North America. Special Volume 46. Papers # 23 and #29.

Ward, Stanley H., 1990: Resistivity and Induced Polarization Methods: Geotechnical and Environmental Geophysics, Vol. 1, Investigations in Geophysics 5, 147-190.

STATEMENT OF QUALIFICATIONS

Grant A. Hendrickson

BScience, University of British Columbia, Canada, 1971. Geophysics option.

For the past 28 years, I have been actively involved in mineral exploration projects throughout Canada, the United States, Europe, Central and South America and Asia.

Registered as a Professional Geoscientist with the Association of Professional Engineers and Geoscientists of the Province of British Columbia. Canada.

Registered as a Professional Geophysicist with the Association of Professional Engineers, Geologists and Geophysicists of Alberta, Canada.

Active member of the Society of Exploration Geophysicists, European Association of Geoscientists and Engineers, and the British Columbia Geophysical Society.

Dated at Delta, British Columbia, Canada, this 2/ day of Na V , 1999.

2L?-G/w_ _ __-____ __ -- ------ ----------- Grant A. Hendrickson, P.Geo.