Sails Lake JV

The Sails Lake Joint Venture is situated approximately 30 km east of the mining town of Snow Lake and comprises 8 claims with a total area of 1,888 hectares. The project is a joint venture between VMS Ventures and Ken deGraff. The recent discovery of chemical sediments commonly associated with VMS type mineralization and the presence of historic airborne geophysical anomalies prompted the company to option the property and stake adjoining claims to cover the favourable stratigraphy. A number of vein-type gold occurrences were documented and described in the Manitoba Government’s Mineral Deposit Series on the property. Alteration typical of base metal massive sulphide-type deposits and chemical sedimentary rocks or exhalites, occur in association with an extensive airborne electromagnetic and magnetic conductive unit. Historic drilling in this unit documented the presence of 7% Zn over a 60 cm core interval during the 1960’s survey.

The property is underlain by predominantly mafic volcanic rocks of arc geochemistry that were subsequently intruded by gabbro and diorite. Chemical sedimentary rocks are interlayered with the mafic volcanic sequence. The most significant gold mineralized zone to date is the Long Zone. Mineralization of the Long Zone consists of disseminated blebs, specks and stringers of arsenopyrite within a silicified – albitized alteration halo in a dioritic-gabbroic host rock. The general geological setting of the Long Zone is depicted in Figure 1.

VMS Ventures Inc. conducted an airborne geophysical survey over the property in early 2007 using GEOTECH’s VTEM system. A number of well-defined conductors were identified and partial and selective extraction soil geochemical surveys were undertaken on these targets. The modelling of airborne geophysical survey data (VTEM) was completed by Condor Geophysics of Denver, Colorado. Seventeen base metals and precious metals drill targets were drilled in late 2010 and into 2011. Gold assay results from one drill hole in the Long Zone (56.89 m of 1.21 g/t Au) led the Company to conduct additional line-cutting and Induced Polarization (IP) geophysical surveys. A second drill program also focused on the Long Zone mineralization and tested the mineralization over a strike length of 250 m and to a depth of 150 m below surface. Seven targets were drilled for a total of 1,564 m drilled. Hole SA-11-015 returned 13.41 m of 1.48 g/t Au; SA-11-013 returned 38.79 m of 0.68 g/t Au; and SA-11-014 returned 9.50 m of 0.93 g/t Au. This confirms that a low grade gold system is associated with the Long Zone target. Table 1 summarizes assay results.

In July, 2011 the Company completed mechanical stripping and channel sampling over three IP areas. Outcrops were stripped of overburden and power washed clean for detail mapping at 1:100 scale. The main focus was the “Long Zone”, “E Zone” and “M Zone”.

Table 1. Significant gold assays and widths from the Long Zone.

Currently no further work is planned on the property.