PROPERTY REPORT

PALCO EXPLORATION LIMITED

GRAHAM TOWNSHIP

SUDBURY MINING DIVISION

ONTARIO

BY

D. C. McKECHNIE, P. ENG.

June 21, 1968

DUPLICATE COPYPOOR QUALITY ORIGINAL

TO FOLLOW

To The Directors PALCO EXPLORATIONS LIMITED 845 McLaren Street NORTH BAY, Ontario

Gentlemen :

INTRODUCTION

The property comprises 30 unpatented mining claims in two non-contiguous groups in the northern part of Graham Township about 14 miles southwest of the city of Sudbury, Ontario.

The claims are situated from one-half to one and one-half miles south of the southern edge of norite phase of the nickel irruptive, along which edge the Creighton and Green Hill mines are located.

The writer has not examined the property in the recent past but did make an examination of part of the ground comprising the West group in 1952. Additional information for this report is derived from the Ontario Department of Mines Geological Map No. P-203 of "Graham Township" issued in 1963.

SUMMARY

The claims are largely underlain by the Creighton Granite

in which are many inclusions of older volcanics and sediments.

These have been intersected by faults and later intrusions of basic igneous rocks.

A minor amount of assessment work in the form of drilling

has been done on two of the claims in the West group. As far as

the writer is aware no economic deposits of nickel and copper have

as yet been found within the boundaries of the property.

CONCLUSIONS AND RECOMMENDATIONS

The property is in an area south of where important Nickel copper ore bodies have been found along the Nickel Irruptive contact. However, nickel mineralization has been found in bodies of quartz diorite and in zones of sulphide mineralization in the volcanics

in the souther part of Graham and Denison Townships. The possibility

of finding similar nickel copper deposits on your property should not be overlooked. Before undertaking a program of drilling the writer recommends thaat an electromagnetic survey be made of those

- 2 -

parts of the property along known and suspected fault zones and

which are covered by overburden.

The writer estimates that the cost of this initial geo physical survey would be about $2,500,00

Depending on the results of the surve and the delineation of suitable targets the next step would be to dimaond drill such targets and a miniumum of 2,000 feet of drilling should be provided for at an estimated cost of 511,500 or a total of $14,000 for the first phase of exploraion of the property, exclusive of overhead costs and expenses.

PROPERTY

The property is in the Sudbury Mining Division of Ontario and consists of 30 unpatented mining claims in two non-contiguous groups, which are numbered as follows :

WEST GROUP OF 18 CLAIMS

S-133725 to 133727, incl.

S-133730 to 133733, incl.

S-134897 to 134905, incl.

S-136141 to 136142,

EAST GROUP OF CLAIMS

S-143951 to 143962, incl.

3 claims4 claims9 claims2 claims

12 claims

The rights and title to the above mentioned claims have not been checked by the writer.

LOCATION, ACCESS AND FACILITIES

The property is in the northern part of Graham township and about 14 miles southwest of the city of Sudbury, Ontario, to which place it is easily accessible by road. There is no plant or equipment on the property.

HISTORY AND DEVELOPMENT

A minor amount of assessment work in the form of drilling

was done on ground now covered by the property. This work was done on two claims now located as S-134899 and S-136142 and comprised 504 linear feet in two holes. These holes intersected

granite withinclusions of altered vocanic rocks and small dykes

of diabase.

GEOLOGY AND MINERALIZATION

The consolidated rocks are of Precambrian Age and are largely comprisedof the pink porphyritic and equigranular phases of the Creighton granite complex, which is intrusive into an older series of mesomorphic volcanic and sedimentary rocks. The whole complex has been intrudedby basic dykes, including gabbro and a later diabase.

The rocks have been intersected by two major faults, the? Creighton fault through the West group, and the Graham fault

through the north west claim of the Est group. Minor faults are present and branch off the major faults, and it is along these minor faults that preliminary exploration might well be directed.

REFERENCES

Geological References

Ontario Department of Mines, Preliminary Geological Map No.P-203, "GRAHAM TOWNSHIP", Scale l inch to | mile

Claim Maps

Ontario Department of Mines, claim Map No.M-893of Graham Township, Sudbury Mining Division.

Respectfully submitted :

D. C. McKechnie, P. Eng.185 McNaughton St Sudbury, Ontario

June 21, 1968 DUPLICATE CPOOR QUAUTY ORIGINAL

TO FOLLOW

i-

Vi

1"V

gfS

it-v

r*W)

m

T* Tk# Ditto ter* VXLUD

Street MOtTO Ut - tot** l*.

Gcaclcoea:

IhTHOlHJCTIOH

Tho property tuaprttes 30 uapateatcd alr.lai data* la

two noa- contiguous |roup* lo lh* aortbtra part of Crah*sa

bout 14 wiUi vnuthwott o( tM* City *f Sudbury, Ga cut to.

Tho dolan are tttutttfd from oat-QAlf t to ea* sad oat

mil** couth of eh* aoutbtra ttlga of ocrite ph;*M of tb*

irru.ittv*, along )tilch edgo thi* Crci(Uton ao*-' Cr*aa ilill

Tho writer has not rx'-vloco tUu ^ro^crty la Cho v

pf c b u c '.tlv! n^no i a vxurpinodoa of pjtrt of tht aroual

t!u wj^t Crou-i in I95 r . V.'Jiclyaal InfctwJtioa for chl* report

it . *riv(?J fnvu thu Ontario Ocjaruicot of Kin** Oaologtcai

Ka, P. ^03 ol "Cr-hi-a Tok/njhi?" l**u*d to 19&;.

Th* cl.ita* wr" l.-irg*ly uadci lata by the ir*?lthtoa Cr^att*

la which are nany tacluilon* of older veUcaict ABU rieOltMoc*.

T)iric hrtvo biica lntvr*0ccoi! by faalta *cw! Id t w tncructou* of k*att

Igotouf rocki.i

(eoattaittd)

A Altar *a*i*t of atMiratat vorfc im tht fora *f

rtr nilas b** b**a do** o* two of la* eUtv* in th* Vtit

A* far ** eh* vrlt*r l* atura ao MOM*!* d*p**lu tf ait aa l

nad copper hay* at ytt teen foutd vttbl* t h* b^uAdativs of tho

propaicy.

C4)HCLUS10N3 AUU

Th* property l* la *n aroa touth of "her*- lmport*nt

Hlcfcel Co^^'-r oro bo t1 Ir* hiv* bean fount! "long t ho Kirkol Irruptive

c one AC t. However, Mlckvl mlneralliAtioti h** b**u (aund la Inx'ta*

of quart* ('.icy l r* and lo toats of tulpbl^c min*raiU*tloq in tb*

volcanic* la the voathftn part of Crahcm *nd Ocnlton Tovathtpi.

Tht ;K)**iblHty of finding t tall i. r nickel copper ficpvttt* on your

^Uoulv- not bc overlook.*', trforti xuu'crtaklnt * pro&TQB of

th* writer rrcostam*** than aa ^lectTO-onjnnttc *urv*y b*

of choBv p^rt* of tho property tleoj Kno*o aatf tu*?ected

^; which ara covrrf* by overburt'*n.

Tait wrtur tiaatad that eh* cote of tblr, loltial geo-

?hyiilcal survey vouli) bo tiboot y?, 500.

ucb

oa tht noult* of tb* fvrvty 40** the

of fuitabl* ttrgttfl tha otnt ittp voold be to HivBOO'i drill

*aJ t aioiaua of ',050 fatt of Crllllog ahould b*

fot 4t *a ttaAt^J coat of 111*500, or a lo t w l of |Ut OOO

r::'.

Iff-*--|lf"; ,

RgCOKMIHMTIOKB

for Ui* f ir ac plUM of txpUratton ef th* property, rxeloaivo of

cotte

The property 10 lo tt* fwibory Hiatnf Dlvt*loo of

Oacario aad coatiktu of 30 uopxc*at*4 alula* clulm* la two

troup** wfclrb ar* Aunh^red n* f o How* t

*f.8T CtOUF of 19 C

9

8

3

S

JAW GMW oj

113773*^

133730 /

1M897 ^

136UI/

f l? CLAIH.S

to

to

to

And

133733*^1001

134105/lac l

3 t la tot*

4 cUtan

9 c l*la*

? i Ulan

3 K3151/ to U3?6r^lncl.

Th* right* *nrf del* to eh* ibov* afatioaar: cl4iwt kavs

bf.aa chxckod by ta* vrttcv.

LOCATtOM. ACrfSS AI^D FACIMTI^ff

Tk* proMtCy it la tnt ftortbern pare of Ci00*11 Townnhip

*ft4 About U *llt* Moth w**t of th* City of Sudbury, Ontario, to

fete* pl*c* le it easily necttiiblo by roAd. Thor* t* oo pleat

or ^oipaeat oa tat property.

Vv

M1810KY AND PIVELO!

A ttioor *ao*at of *i**toa*at work la tb* fen of

drilling VM tfoa* MI grow* aov co**r*tf by ea* property* Thlt

work w** i*** oa two claim* MM locate a* S- l 34999 aad t-lMU?

coaprittd 504 lia**r f**t ia tw* fcoUi. tht** bo Ut Inttr-

fr*aieo with iaelotioiif of fllttrod volcanic rock* tad null

of 4UbMt*

A1CP

Tba eca*olidac*4 rock* ar* of Procmtbri*a AC* tad

owprtvsd of tb* pink porpbyritic sod (juigronutar

of th* Creighton gr tait t coo.pl**, vhicb it locruvlv* lato to oldor

ri** of Mtwaorphic vole ante oa^J M^Uiiacary rock*, ta* vaolo

complex bo* bean iatrudtd b/ b**lc dyk**, loclodlag gmbbrc 4 od A

Uttr

Ta* rocks a*v* b**a iactr9*ct*d by tvo mjor ftultt, ta*

Croigbtoa fault tbroufb tb* V**t Crocp, *od tb* CrAbaa fault

cu* aorcb vtic cl*i* of tb* C*it Cioup. Hiaor {4ult* *r*

CJM) attach off tb* tvo wijor ft*Un, sod it l* *loo^

tb*t* nianr faolta ta*t or*lf*ila*ry *xp'fcr*tlon Might u*ll b*

direct*^.

•S-

Oatari* DopartiMat of Mlaat, rrallaiiury Geological

lUp Bo. f. J03. "OtABAM TOtfVSUr*1 , Sc*U l 1Kb to

1/4 H1U.

Claim

Ontario Ot^TUMM *f MiMf , CUU Hap lo. M.

of Cr*ba* Townftbip, ftadkwy Hlolof Divlalo*.

U5 MclUMBhtock St., , Qatar to.

Juft* li, 1968.

D.C. He&MlUlic. P.

D. C. McKECHNIE '

,',V

CERTIFICATE OF QUALIFICATION

Of OttiLtVfCArtM

i, BOIALD C. mUCtJttl, of tt* City of ftfrftwy U ta* 01* ir Ut

of Sudbury, U tbo frovloc* of OtUxlo* hortby ctffilfyt

THAT I M A Maim Ea*la*At Md GaoloflAt, **d toiUt la Cb* CUy of Sudbury, OatATlo,

TU.ST I *M A gvArfuAte of tt* Oaivarvity of Co limb t a (1930) la Hlaiaf Ea*ia*

tbAt l MI A aoaber of tba AaaocUttoa of of

|; 3. THAT l b4v* oo (Jlrtct or lodttvct iaterett la taeof JO data* la Cr*haa Tovaabip, la UK Fro-

L vlase of Ontario, AAd vhlcb oro^trty l* tb* subJoe t of ' - ay T*pore datorf Jua* ?1, 1968, oor *lo I oxpoct to ft loccivc *ny lot*r**c olthcr directly or Icwlrectly, la l tb* prepvrty, or la the ceajuiay bolOlKA the property.

4. TUAt l bAve not p*r*oaally stalaod cbe grouitd la the r receat p*n but did taake AH cxAnlaatloa of p*rt of the l ground oow cocpiltlag tbe We*c Croup of CUla* In 1952

aa4 tbAt *4dltloaal lofvraAtloa bA* beea deslvi Ootarlo U*p*rtwe6t of Niati, CeolotlcAl K*p of

, Mo. P. 103.

O* C* lUftecbaio, ^. iaft.

\65 M*U*uihtoB St.,

Juae 71, 19*6,

^ \

3 as

-*- N t

\—

N

—

—

* - -

AMENDMENT NO. 2 i w inu

PALCO EXPLORATIONS LIMITED (Incorporated under the laws of the Province of Ontario)

Hood Office: . Registrar and Transfer Agent;

t Suite 509, Guaranty Trust Company of Canada, 25 Adelaide Street West, 88 University Avenue, Toronto l, Ontario Toronto l, Ontario

UNDERWRITER-OPTIONEE:PALCO INVESTMENTS LIMITEDSuite 509, 25 Adelaide Street West, Toronto l, Ontario

- ' . . PURPOSE OF OFFERINGProceeds from the sale of treasury shares as set out 3n the Prospectus o

the Company dated August 35th, 1968, will be used to implement the recornmcnri. tions of Dr. S.S. Szetn contained in his Keport dated "February 20th, 1909, f Company's properties situate in Arnold Township, Larder Lake Mining WvicJon Province of Ontario, and more particularly set out in Amendment No. l under the heading "History and Business". The Company has completed the reconvene? vork programme for its properties in Graham Township and results are set out together with further recommendations in Amendment No. 1.

OFFERINGNo. of Shares

200,000 underwritten700,000 under option200,000 under option200,000 under op! ion200,000 under option

Price per Share

12-lA;15S20*

Net Amount to he Received by t ho Corripany

S 20,000.00 receivedS 25,000.00 receivedS 30,000.00 if exercisedi 40,000.00 if exercisedS 50,000.00 if exercised

m veAs of the c'cite of this Amendment a total of 400,000 shores of the capital Mod; of the Company

:; been iak'.Mi down and paid for in full by the Underwriter-Optionee, netting the treasury of the Company o total of S45,000.00 comprising the firm commitment of 200,000 shares at 10.J per S!UTC, eric! the fits! option on 200,000 shares ol 12~l72(J per share.

SECONDARY OFFERING75,000 shores, tho procuods of which will accrue to Cart^Angelo. P.a|o.na?o, 845 McLaren Sticcj.,

Nort!) Bay, Onlaiio, ar,d not to She Company's treasury.

A further 30,000 shares will be offered to the public from previously issued free shore; hold oy Carl Angolo l 'a l one; ?o as ecicli block of shares under option is token down, for a total of 120,000 further ihare?:, the proceeds of the sale of which will not accrue to the Company's froiisury.

72,900 o f |1,0 ciforcsaid shares have been sold to dale.

The Underwriicr-OpHonce purchasing the shares offered hornby from the Company rroy be said to realise a tiross profi! before expenses in an amount equal to the difference between th? sole price to iho public over the underwriting price, if any.

The shares of the Company offered hereby v/ill bc offered by the Underwriter-Optionee to t!;e public through the medium of registered security dealers in the Province of Ontario, acting as oyent*, one*

l be paid commissions nM exceeding ?.'J0,'o of the selling price of such shores.

^ The shares offered hereby will be offered subject lo the price ceiling established by the Bioker-1 , Dealers' Association of Ontario.

f l THERE EXISTS AN OVCR THE COUNTER MARKET IN THE PROVINCE OF ONTARIO FOR THEf f;'1 SHARES Of-TERCD HEkEUNDLR, WHICH MUST BE CONSIDERED SPECULATIVE SECURITIES.i K, '- ^f M/, No securities commission or similar authority in Canada has in'ony way passed upon the merits'

^ of the securities offered hcreunder, anc! any misrcprcsnn'otion to the contrary is on offence.

fR nffni's .Ai.u;ru-?n:r:r.f fs March 7, lo the Connxsnv's.PiosDcotus dolod 1,rjtj-t.

AMENDMENT NO. 2 TO THE PROSPECTUS OF PALCO EXPLORATIONS LIMITED

The Prospectus of Polco Explorations Limited dated August 15th, 1968, os omended by Amendment No. l dated February 21st, 1969, is hereby omended.

For convenience the material change is hereinafter referred to under the same caption as the original material is set forth in the Prospectus, ond the original Prospectus nnd Amendment No. l thereto, should be read in conjunction with this Amendment.

OFFERING

By Agreement dated March 7th, 1969, amending Agreement dated May 8th, 1968, beiwcen the Compony and the Underwriter-Optionee, Palco investments Limited, the Underwriter-Optionee was granted a three-month extension on all outstanding options which will now be due and cxorcisable as follows:-

200,000 at 15(J per share by June A, 1969;

200,000 at 20^ per shore by September A, 1969; ond

200,000 at 25iJ per shore by December A, 1969.

#^-"-' A V '

*XR WWW*'-" '"'"•iW.A't^S" 5'iT J?. -" ''. '*^'^\ '••-.".::^~'".~ : "••- 1 "'-/"-Sii*^'-^?''^ :^^ . :v '"'

. .- .. - . --.;-''* T He foregoing, together v/Ith the Prospectus of the Company, dated the 15th day of Augu&f

- ; 1968, and Amendment No. l thereto dated February 2Ut, 1969, constitutes full, true and plainf J disclosure of all material facts relating to the securities offered by the Prospectus of the Company

, os amended, as required by Part VII of The Securities Act, 1966 and the regulations thereunder."' "

Carl A. Palangio Chief Executiv3 Officer

George D. Pattison Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS

Robert D. Bell, Director

Peter A. Palangio, Director

PROMOTER

Carl A. Palongio

To the best of our knowledge, information and belief, the foregoing together with the Company's Prospectus dated August 15th, 1960, and Amendment No. l thereto dated Februory 21st, 1969, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this Prospectus as amended as required by Port VII of The Securities Act, 1966, and the regulations thereunder.

UNDERWRITER-OPTIONEE

Palco Investments Limited

Per;Carl A. Palangio

Mary l. Palangio

Dated, March 7th, 1969.

^^fiA ^.;^:,.-^* :;: " ^