Ann Mason (Nevada, USA) - PacMag 100%

Last Updated 15 February 2008

PacMag holds a commanding land position in one of North America’s exciting resurgent copper districts. The Company was an early starter in the district and assembled a high-quality portfolio of deposits and targets prior to significant competitor activity. The district has past and current endowment of 24 billion pounds of copper and is now the focus of significant exploration and predevelopment activity by numerous North American copper companies in competition with PacMag (Figure 1). The 100% PacMag owned Ann Mason project boasts a mineral resource of 810 million tonnes @ 0.4% copper, 0.004% molybdenum (7.1 billion pounds of contained copper metal).

Figure 1: Yerington District – PacMag Projects and Resources

Drilling is in progress at the Company’s Ann Mason project with planned drill testing of a total of nine targets including three resource and resource extension targets and six high-grade copper skarn targets within close proximity to the Ann Mason deposit.

Project -Target	Proposed Drill Program
	Number of holes planned *	Depth (m) (approx)	Total (m) (approx)
Porphyry copper-molybdenum targets
Ann Mason North-West Resource	3	600	2,400
Ann Mason East Resource Extension	4	600	2,400
Blue Hills	4	500	2,000
High-grade copper "skarn" style targets
Ann South	2	200	400
McConnell	2	200	400
Ludwig	3	200	600
Casting	2	200	400
Castings West	1	200	200
Minnesota	3	200	600
TOTAL	24		9,800
* Planned hole numbers are approximate

Drilling Progress, Core Processing and Assays

Five holes have been completed to date on the first two targets with assays received for only the first hole. Delays in processing and assaying have resulted from slow laboratory turnaround and the need for detailed geotechnical logging of the Ann Mason holes for the Pre-Feasibility study.

Figure 2: Ann Mason Deposit and Drill Targets

North West Resource Target

Results were received for drill hole Ann07004, the first of three drill holes completed in the Ann Mason northwest resource target area by PacMag to test potential for high-grade copper mineralisation in an area of sparse previous drilling. Ann07004 was drilled to test a large 400 metre gap in existing drilling (Figure 2). The hole returned a massive zone of copper and molybdenum mineralisation with associated silver and gold over a 667.5 metre interval estimated to be close to true thickness. The results extend the higher grade copper trend approximately a further 100 metres north and west of previous drilling.

Better intersections include;

292.6 metres @ 0.38% copper, 0.06 g/t gold, 156 ppm molybdenum, 1.1 g/t silver (0.57% copper equivalent) including a higher grade zone;
79.2 metres @ 0.55% copper, 0.1 g/t gold, 152 ppm molybdenum, 1.8 g/t silver (0.77% copper equivalent)

Shallow High-grade Copper Zone

Based on visual logging new hole Ann07006 confirmed the presence of a shallow zone of semi-massive sulphide mineralisation in the northwest of Ann Mason. The zone is interpreted to be a flat-lying sulphide vein system of a similar style to that intersected in Ann07001, located approximately 100m north, grading 6.1 metres @ 5% copper from 146 metres depth, including; 3 metres @ 9.05% copper. Other notable high-grade include a 10.5% copper zone intersected 120m south in hole D346.

Assay results are anticipated shortly for Ann07006.

Ann Mason East Target

Results are awaited for three drill holes (Ann07007, 8 and 9), 300 metres east and outside the current Ann Mason resource and scoping study conceptual pit limits (Figure 2). These eastern holes are testing a 600 metre zone from the end of the existing resource that will, if successful in defining further copper-mineralisation potentially add additional resources as well as improve the overall ore to waste strip ratio of the deposit and impact favourably on the project economics (Figure 3). Furthermore the holes will test the eastern up dip extension of the gold rich bornite zone, that was intersected at depth in hole Ann07004 in the north west of Ann Mason.

Figure 3: Ann Mason East Target

Ludwig – Casting High-Grade Copper "skarn" Style Targets

Results from recent PacMag geophysical surveying have identified a new strong IP chargeability geophysical anomaly beneath the historic Castings high-grade underground copper mine located approximately 4 kilometres south of the Company’s Ann Mason porphyry copper-molybdenum deposit. In addition to the immediate down dip extension targets beneath the Ludwig, Castings and Douglas Hill copper mines, the new IP anomaly is interpreted to be a significant sub-surface accumulation of sulphide minerals, and presents as a new and compelling target for testing in the current drill program.

Three dimensional IP geophysical surveying was undertaken by PacMag over the recently acquired Ludwig-Castings-Douglas Hill property with the aim of testing the strike extensions of the prospective rock sequence beneath shallow soil and alluvium, assessing the depth extents and continuity of mineralisation between the historical mines as well as attempting to refine drill targets beneath the historical underground workings.

The survey has been successful in defining two new targets, one beneath the Castings copper mine and the second a further 700 metres west beneath soil and alluvium cover (Figures 4 and 5). Both chargeability anomalies are strong features. The Castings anomaly (30 msec contour) is 900 metres long by 250 metres wide and averages 200 metres thickness. At its southern end it starts just below surface, is at a depth of approximately 50 metres beneath the historic Castings copper mine and extends to 100–150 metres below surface at its northern extremity. The anomaly cuts across the strike of several rock units based on detailed surface mapping and therefore is very unlikely to be caused by a single chargeable stratigraphic rock unit. The anomaly is also coincident with an area cross cut by a zone of quartz monzonite porphyry dykes and faults that trend into and are intimately associated with the Castings and the Douglas Hill copper mine, located some 600 metres east. An initial two drill holes will test beneath the Castings workings and coincident IP anomaly.

The second soil covered IP chargeability anomaly defined west of Castings occurs on the projected strike of the host unit to the Ludwig copper mine. This 200 metre by 200 metre anomaly can be easily tested by a single drill hole.

The survey was also successful in identifying a resistivity anomaly extending south of the Ludwig copper mine. Mineralisation at Ludwig is of a different style to that at Castings, with copper associated with intensive quartz veining and silica replacement of monzonite porphyry dykes, a likely cause of the resistivity anomaly.

Following completion of the current drill hole at Ann Mason, the rig will commence drilling at Ludwig and Castings.

Figure 4: Castings IP Chargeability Anomaly

(long section looking west, through 3D-IP inversion model)

Figure 5: IP Chargeability Anomalies and Local Geology

Minnesota Copper-Iron Target

Results from a recent induced polarisation (IP) geophysical survey covering the Minnesota copper-iron target, located approximately 7 kilometres northwest of PacMag’s Ann Mason porphyry copper deposit in Nevada (USA) have defined two exciting new copper targets. The Minnesota prospect covers much of a large untested discrete aeromagnetic anomaly (Figures 6 and 7) similar in magnitude and size to the magnetic anomalies associated with the Lyon Skarn copper-iron (magnetite) deposits located 15 kilometres to the south-east. The Lyon skarn deposits being explored by TSX listed Nevada Copper Corporation form a cluster of six individual copper-iron deposits including the South East Deposit containing 30 million tonnes at 1% copper, the North Deposit containing 131 million tonnes at 0.55% copper and the East Zone containing 12.1 million tonnes @ 1.45% copper and 15% magnetite (Figure 8). Both PacMag’s Minnesota magnetic anomaly and the Lyon Skarn copper-iron deposits are hosted by carbonate rocks with mineralisation associated with porphyry intrusive rocks.

The newly defined western IP anomaly (>25 ms) occurs on the flank of the magnetic high, it is 500 metres long by approximately 200 metres width, commencing at a shallow depth of 40 metres below surface and extending to approximately 200 metres depth, the northern portion of the anomaly is coincident with a modest to strong conductive zone interpreted as a core of massive to semi-massive sulphide surrounded by disseminated sulphides (Figure 6).

Fig 6: E-W Cross section view of Minnesota magnetic anomaly (red) and IP chargeability anomalies

(green) with surface topography (brown).

Fig 7: Minnesota Plan – Aeromagnetic Image overlain by magnetic contours, showing location of

Minnesota iron open-pit mine and large untested magnetic anomaly.

Fig 8: Comparison with Nevada Copper Corporations Lyon Skarn Copper Deposits located 15km south east of Minnesota (black outline of surface projection of ore bodies) overlying aeromagnetic image and aeromagnetic contours (note Figures 7 and 8 are the same scale and imagong and contouring are at the same interval).

A second IP anomaly (>25ms) is 200 metres long by 130 metres in width, commencing at 70 metres below surface and extending to 130 metres depth and occurs within the large magnetic anomaly.

The Company believes the Minnesota IP targets are prospective for both copper and iron and plans to drill test the two IP chargeability anomalies as copper skarn targets.

Iron Potential

The Minnesota iron open-pit mine (as shown on Figure 7) occurs on the northern flank of the aeromagnetic anomaly and is located immediately north of PacMag’s Minnesota claims. The mine area was originally explored as a copper prospect, however later developed as an iron mine. In 1954 approximately 70,000 tonnes of magnetite with very high iron content (58% iron) was direct shipped as iron ore to Japan with a further 4 million tonnes of iron ore being mined and shipped to the steel industry in Japan during 1952–1966. The mine exploited outcropping magnetite ore whilst the larger undetected aeromagnetic anomaly to the south of the mine has remained untested.

An initial drill test of the southern portion of the magnetic anomaly peak on PacMag’s claims will assess the potential of the area as a high-grade magnetite iron ore target.

Ann South Copper Skarn Target

PacMag has recently collected and interpreted new IP geophysical data at the Ann South project located approximately 4 kilometres south of Ann Mason, defining a new discrete high-grade copper skarn target.

The new 100% PacMag owned claims cover a gently dipping Triassic age sedimentary host rock sequence that has been intruded by younger Jurassic age porphyry dykes that are considered to be the source rocks for copper and gold mineralisation in the Ann Mason-Yerington district.

A 3D induced polarisation geophysical survey was completed by PacMag over the claim area and has defined a new IP anomaly associated with historic copper workings and down dip beneath skarn altered rocks mapped at surface. The core of the IP chargeability anomaly is approximately 200 metres wide and extends down dip for greater than 400 metres sub-parallel to the strike of mapped porphyry dykes (Figure 9). Drill testing of the target is proposed.

Figure 9: Ann South Chargeability Pseudo-cross section, showing chargeability anomaly (red),

depth from surface to centre of anomaly is approximately 150 metres.

McConnell Copper Skarn Target

The McConnell Prospect is located 6 kilometres south east of Ann Mason and covers a gently dipping Triassic age sedimentary host rock sequence that has been intruded by younger Jurassic age porphyry dykes that are considered to be the source rocks for copper and gold mineralisation in the Ann Mason- Yerington district. Central to the prospect area and partly obscured by younger volcanic rocks and soil cover lies a discrete 500 metre by 350 metre IP chargeability geophysical anomaly which is coincident with an east-west corridor of granite porphyry dykes (Figure 10). The untested anomaly is of similar magnitude but slightly larger than an anomaly that lies directly over the historical Mason Valley underground copper mine (past production approximately 1 million tonnes @ 2% copper) and the Malachite Mine located 600 metres north of the McConnell Prospect. In addition both the Mason Valley Mine and the McConnell Prospect have similar discrete magnetic anomalies. The area has not been explored since the early 1970’s. Following further mapping the Company plans to drill test the IP anomaly and postulated fault offset target areas.

Fig 10: McConnell Prospect - Geology overlain by IP chargeability contours

Blue Hills Prospect

Drilling completed by PacMag in 2007 at Blue Hills confirmed a new large porphyry copper system located 2km west of the Ann Mason deposit. Wide intercepts of copper sulphide mineralisation have been identified in broad spaced step out drill holes covering around 750 metres across the system; 46 metres @ 0.4% copper equivalent to end of hole with the last 34 metres of the hole containing strong molybdenum mineralisation (averaging 0.03% molybdenum) within a broader intercept of 277 metres @ 0.25% copper equivalent.

Three reverse circulation drill holes (BH07001 – 003) were drilled at 244 metres (800 feet) intervals along a line north east from previous hole D236. All holes were drilled to the maximum capacity of the rig but were stopped prematurely due to broken ground conditions. Hole BH07001 intersected an interpreted post-mineralisation diorite intrusive from surface to 241 metres depth, on entering the prospective porphyry rock sequence beneath the diorite the hole intersected disseminated copper sulphide mineralisation to end of hole, with the last 34 metres of the hole having the strongest copper and molybdenum mineralisation. The hole was deeply weathered and sulphide minerals were oxidised to approximately 240 metres below surface confirming potential for oxide copper mineralisation in areas where the prospective rock sequence occurs closer to the surface. The orientation of the non-prospective diorite intrusive intersected in BH07001 and a similar andesite rock unit intersected in BH07002 drilled a further 244 metres (800 feet) north east is not yet understood and future drilling will assist in determining its extents.

BH07003, the north eastern most drill hole in the prospect area, drilled 750 metres (2400 feet) north east of D236 also intersected porphyry copper style mineralisation at the end of hole with the last 76 metres (250 feet) grading 0.1% copper.

The alteration and sulphide species logged in each of the Blue Hills holes confirms a large porphyry copper-molybdenum system, and indicates that neither the core of the system nor its extents have not yet been determined. Follow up drilling is proposed following completion of detailed logging and full assessment of the geology and assays. A provision for 2 follow up holes has been made.

Progress on Pre-feasibility Study Activities

In addition to the ongoing resource and exploration drilling programs and detailed geotechnical data collection, progress has continued on the Environmental Assessment for the Ann Mason project, the study being conducted by local Reno based consultants Enviroscientists will take approximately six months to complete.