Meliadine Property

Location, Setting and Access

The Meliadine property is located in Nunavut Territory of Canada near the north western shore of Hudson Bay. The center of the property is approximately 24 kilometers north of Rankin Inlet in Nunavut Territory on the northwest coast of Hudson Bay.

Rankin Inlet is a full service community with a population of approximately 2,500 people. The town has an airstrip with landing capacity for 737 and DC-9 jets and can only be accessed by air or ocean­going barges. An all­weather road from Rankin ends within 15 kilometers of the property, south of the Meliadine River. Access to the property is by helicopter from Rankin year round. The Meliadine West camp is typically supplied in winter by overland hauling with various all terrain vehicles.

Deep seated permafrost is prevalent. Vegetation is restricted to low lying (<25 centimeter high) willows, moss, and other typical sub-arctic species. Topography is gently rolling in the project area with a mean sea level elevation of 65 meters ASL and 20 meter maximum relief on hills.

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Land Holdings

The Meliadine property is over 80 kilometers long with total land holdings of 65,539 hectares. The property is presently under two separate agreements: the Meliadine West property in which Comaplex has a 78% interest and Resource Capital Fund (RCF) a 22% interest (Comaplex is the operator); and the Meliadine East property in which Comaplex and RCF each own a 50 percent working interest (RCF is the operator). Details are available in Meliadine Land Holdings.

The Meliadine West property consists of 45,837 hectares. Of this amount, 42,577 hectares are under Federal jurisdiction (10,006 hectares are claims, 32,571 hectares are leases) and 3260 hectares are Nunavut Tunngavik Inc. (NTI) subsurface concessions.

The Meliadine East property consists of 19,702 hectares. Of these lands, 17,054 hectares in 18 claims come under the jurisdiction of the Federal Canadian Mining Regulations (leases) and 2648 hectares come under NTI subsurface rights.

Regional exploration work by Comaplex on NTI concession lands comprising the Meliadine West property is ongoing and ground determined to have little geological potential to host an economic mineral deposit is dropped from the Joint Venture as deemed necessary.

Title

In the late 1980’s, Comaplex and Asamera Minerals jointly staked 1 million acres of claims and prospecting permits in the Meliadine Lake area and began drilling. In 1993, Cumberland acquired Asamera’s interest.

In 1995, the western portion of the Meliadine property was optioned to WMC International Limited (WMC), a subsidiary of WMC Limited of Australia. WMC earned a 56 percent interest in the property by making exploration expenditures of $12.5 million as of July 31, 1997.

In October of 2003, Comaplex assumed the obligations of the WMC deal through its merger with WMC International Ltd. This deal gave Comaplex a 78% working interest in the Meliadine West property.

In a deal released on October 25, 2006, and that closed on December 1, 2006, Cumberland Resources Ltd. Of Vancouver, announced that it sold it 22% interest in the Meliadine West property and its 50% operating interest in the Meliadine East property to Resource Capital Funds (“RCF”) for Cdn $23 million. As part of this transaction, RDF will assume Cumberland’s contingent non-resource loan obligation with respect to the Meliadine West project. RCF now holds a 22% interest in the Meliadine West property and a 50% interest in the Meliadine East property (operator of Mel East).

Comaplex has the option to acquire an additional 2 percent interest from RCF by paying $2 million. RCF would then retain a 20 percent working interest. Comaplex must pay 100 percent of all exploration and development costs on a non-recourse loan basis. RCF’s loan repayment, plus interest, will be made from production profit from the Meliadine West property. Comaplex will retain 70% of RCF’s production profit to retire the non-recourse loan and with this interest Comaplex will receive 94 percent of production profit until payout.

Regional Geology

The Meliadine property is situated within the Meliadine greenstone belt, in the Hearne sub-province of the Churchill Province. Rocks of the Meliadine belt are part of the Rankin Inlet Group (2665 +/-3 Ma). The Meliadine trend is defined by northwest trending stratigraphy and a regional structure known as the Pyke Break or Fault.

The Rankin Inlet Group has been polydeformed and subjected to greenschist to amphibolite facies metamorphism. The ground underlying the property consists of ultramafic to felsic volcanics, turbiditic sedimentary rocks as well as volcanic- and sediment-hosted iron formations. The west-northwest striking Meliadine Trend is easily recognized by two packages of laterally continuous iron-formations: 1) clastic-sediment-hosted iron formation, which is magnetite-rich with very high magnetic susceptabilities and 2) a series of two volcanic-hosted iron formations, which are chert-rich, with a much less pronounced magnetic geophysical signature.

In the Rankin Inlet Group, at least two periods of Archean and one Proterozoic deformation have been recognized. In the Archean, an east-southeast dipping F1 homocline was developed and extensive bedding-parallel thrusts deformed the Rankin Inlet Group. Two penetrative Proterozoic age regional shear fabrics, S2A and S2B, are developed on the F1 folds and thrusts. The Pyke fault zone defines the trend of the Meliadine Belt as a 1-2 kilometer wide ductile to brittle strain zone interpreted as an Archean thrust that underwent late Archean to Proterozoic reactivation. The S2A fabric is oriented 285/53NE, parallel to the regional trend of iron-formation and the Pyke fault zone. Syn- to late D2 folding of S2A foliation developed in response to dextral shearing on the Pyke fault zone.

Mineralization

The target of exploration on the Meliadine property is a mesothermal lode gold deposit. The gold mineralization at Meliadine is found in quartz-vein stock works, laminated veins and sulphidized iron formation in complexly folded and sheared iron formation rocks, sedimentary rocks, and volcanic rocks in or near certain volcanic-sedimentary contacts. Textural and structural relationships together with age dating of alteration minerals associated with the gold mineralization suggests the gold event at Meliadine may be Proterozoic in age (related to the S2B deformation event).

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