GEOLOGIC REPORT UB04EXE1







EXECUTIVE SUMMARY REPORT

FOR THE UNION BAY PGE PROPERTY,

KETCHIKAN MINING DISTRICT,

ALASKA





prepared for



Pacific North West Capital Corp.

and

Freegold Ventures Limited

2303 West 41st Ave.

Vancouver, B.C. V6M 2A3





prepared by



Avalon Development Corp.

P.O. Box 80268

Fairbanks, AK  99708







April 6, 2004

AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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TABLE OF CONTENTS



Cover Sheet

1

Table of Contents

2

List of Figures

3

List of Tables

3

List of Appendices

3

Summary

4

Introduction and Terms of Reference

5

Disclaimer

6

Property Description and Location

6

Access and Infrastructure

8

History

8

Geologic Setting

10

Deposit Types

14

Mineralization

15

2003 Exploration

16

Drilling

38

Sample Method and Approach

48

Sample Preparation, Analysis and Security

49

Data Verification

50

Adjacent Properties

54

Mineral Processing and Metallurgical Testing

54

Mineral Resource and Mineral Reserve Estimates

55

Other Relevant Data and Information

55

Interpretations and Conclusions

55

Recommendations

56

References Cited

58

Statement of Qualifications

62



AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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LIST OF FIGURES



Figure 1: Location of the Union Bay project

Figure 2: Land status map for the Union Bay project

Figure 3: Prospect location map for the Union Bay project

Figure 4: Tectonic terrane map of southern Southeast Alaska

Figure 5: Geology of the Union Bay ultramafic complex

Figure 6: Structures and Pt thematics for the Continental zone

Figure 7: Air photo view of structures on the Continental zone

Figure 8: Air photo view of structures on the Chevelle zone





LIST OF TABLES



Table 1: Summary of exploration work at Union Bay, 2000 through 2003

Table 2: Significant 2000 rock sample geochemistry from the North zone

Table 3: Significant 2001 rock sample geochemistry from the North zone

Table 4: Significant saw channel sample geochemistry from the North zone

Table 5: Significant rock sample geochemistry from the Jaguar zone

Table 6: Significant saw channel geochemistry from the Jaguar zone

Table 7: Lithologic classification used in mapping at Continental zone

Table 8: Significant (+ 1 gpt Pt) grab rock samples from 2003 at the Continental zone

Table 9: Significant saw channel sample geochemistry, Continental zone

Table 10: Significant PGE mineralization at the Chevelle prospect

Table 11: Rock geochemistry from the Cannery Creek zone

Table 12: Significant grab rock geochemistry from the Lexus zone

Table 13: Significant grab rock geochemistry from the Mt. Burnett South prospect

Table 14: Stream sediment results from South Mt. area

Table 15: Significant North zone drill hole intercepts from 2001 and 2003 Union Bay drilling

Table 16: Significant Jaguar zone drill hole intercepts from 2003 Union Bay drilling

Table 17: Significant Mt. Burnett zone drill hole intercepts from 2001 Union Bay drilling

Table 18: Comparison of blind standard sample assays for the 2003 Union Bay standards

Table 19: Comparison of Pt and Pd rerun values from rock samples submitted for check assay

Table 20: Comparison of Pt and Pd rerun values from channel samples submitted for check assay

Table 21: Six element PGE analyses from the 2000 and 2001 Union Bay project





LIST OF APPENDICES



Appendix A: Union Bay project legal description

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P.O. Box 80268, Fairbanks AK  99708

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SUMMARY



The Union Bay project is a platinum group element exploration target hosted in a Ural  Alaska complex that intrude Gravina Belt assemblage rocks of the Alexander Platinum Belt of southern Southeast Alaska.  PGE mineralization was discovered on the 15,000 acre Union Bay project in 2000 with follow-up discoveries and limited drilling in 2001.  Additional discoveries of highly anomalous PGE mineralization occurred in 2003. Platinum group element mineralization at Union Bay appears to be genetically related to late-stage magnetite mineralization hosted in pyroxenite and wehrlite units stretching from the North zone on the eastern end of the property to at least the Continental zone on the west, a distance in excess of 6 kilometers.  The highest PGE values are associated with irregular magnetite veins in a mixed pyroxenite - wehrlite unit although elevated PGE values have been encountered in pyroxenite and hornblende pyroxenite.  The PGE mineralization is genetically associated with Al-Cr-Ti spinels which are referred to as magnetite in the field.  Other physical forms of magnetite, ranging from euhedral disseminated magnetite to massive podiform magnetite also occur on the project but normally have considerably lower PGE values.  Mineralized magnetite veins contain Pt:Pd ratios around 10:1 while ratios approach parity in the host rocks immediately adjacent to the veins.  Elevated Cr, Ti and V values often are associated with PGE mineralization and sporadic As, Sb, Bi and Cu are present locally. Cu-enriched PGE mineralization with Pt:Pd ratios closer to parity has been identified in two areas of the property and suggests metal zonation may have occurred during PGE deposition.  Subsequent structural dissection has resulted in juxtaposition of primitive ultramafic units with more evolved mafic  ultramafic units. A significant portion of the property has yet to be explored on a reconnaissance basis and only three of the eight known PGE-enriched zones have received drilling.  The Union Bay property has potential to host significant accumulations of PGE mineralization and warrants additional work including creating a detailed digital topographic map, completion of an airborne magnetic and electromagnetic survey, pre-drilling reconnaissance mapping and sampling along the trace of the favorable wehrlite  pyroxenite unit, diamond drilling in the Continental zone and reconnaissance sampling and mapping on other parts of the property not previously evaluated.  Total cost for the above recommend programs is approximately US$1,740,000.





AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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INTRODUCTION AND TERMS OF REFERENCE



The following report was commissioned by Pacific North West Capital Corporation USA. and its parent Pacific North West Capital Corporation (Pacific NW) and its Joint Venture partners, Lonmin PLC (Lonmin) and Freegold Recovery Inc. USA and its parent Freegold Ventures Limited (collectively Freegold) to summarize the results of field work completed between 2000 and 2003 on the Union Bay platinum group element prospect in southeast Alaska (Figure 1).  In 2000 Avalon Development Corp. (Avalon) identified several geologically promising PGE exploration targets in Alaska that prompted Freegold to acquire an interest in the Union Bay project. Subsequent field exploration was completed in that year with follow up work in 2001 and 2003 (Avalon, 2000; Avalon, 2001; Avalon, 2003). This report summarizes those efforts and presents recommendations for future work on the project.



FIGURE 1









For purposes of this report, the acronym PGE (platinum group element) will be used when referring to a specific group of elements, namely platinum (Pt), palladium (Pd), iridium (Ir), osmium (Os), rhodium (Rh) and ruthenium (Ru).  The acronym PGM (platinum group

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minerals) will be used when referring to identified mineralogical species containing one or more of the platinum group elements.  Ultramafic rock type nomenclature used in this report follows that of Streckheisen (1973).  For the purpose of this report, the term pyroxenite shall mean a rock whose pyroxene composition is greater than 90% clinopyroxene and less than 10% orthopyroxene. For purposes of this report the term magnetite shall mean any of the Fe-Ti-Cr-Al-Mg-bearing spinel group oxide family of minerals with physical characteristics similar to pure magnetite (Fe3O4). Unless otherwise noted, all costs contained in this report are denominated in United States dollars (US$1.00 = CDN$1.30).



DISCLAIMER



This report has been prepared by Avalon using public documents acquired by the authors and private documents created by Avalon or created by other parties and provided to Avalon for the purpose of writing this report.  While reasonable care has been taken in preparing this report, Avalon can not guarantee the accuracy or completeness of all supporting documentation.  In particular, Avalon did not attempt to determine the veracity of geochemical data reported by third parties, nor did Avalon attempt to conduct duplicate sampling for comparison with the geochemical results provided by other parties.  Consequently, the use of this report shall be at the users sole risk and Avalon hereby disclaims any and all liabilities arising out of the use or distribution of this report or reliance by any party on the data herein.  The interpretive views expressed herein are those of Avalon and may or may not reflect the views of Pacific North West or Freegold.





PROPERTY DESCRIPTION AND LOCATION



The Union Bay PGE prospect is located in Southeast Alaska about 35 miles north-northwest of Ketchikan on the northern end of the Cleveland Peninsula (Figure 1).  The property is bounded on the north and east by Vixen Inlet, on the south by Bear Creek and on the west by Union Bay.  The property is located in the Craig C1 1:63,360 quadrangle in Township 70 South, Ranges 86 and 87 East, Copper River Meridian.



The Union Bay project consists of 711 unpatented federal lode and 6 state mining claims covering 14,220 and 240 acres, respectively (Figure 2). The claims are located in Township 70 South, Ranges 86 and 87 East, Copper River Meridian and are recorded in the Ketchikan Recording District and at the Alaska Division of Lands and the U.S. Bureau of Land Management (see legal description, Appendix 1).  In this part of Alaska, mineral rights are administered by the State of Alaska and the U.S. Forest Service.  The Union Bay project is located within the Tongass National Forest on multiple-use lands open to mineral development. Annual rental payments on Federal mining claims are due on or before each August 31 and total $100 per claim per year.  Annual rentals are paid in lieu of work on Federal ground. For State claims annual rents are $25 per claim and work on the ground in the amount of $100 per claim per year is required.  All claims in the Union Bay property currently are in good standing through August 1, 2004. The claims have not been surveyed by a registered land surveyor and there is no State or federal law or regulation requiring such surveying.  There are no known environmental liabilities attached to the property and permits for future work will be acquired from the U.S. Forest Service and the Alaska Department of Natural Resources on an as-needed basis.

AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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FIGURE 2











In April 2001 Quaterra Resources acquired the right to earn a 50% interest in the Union Bay project by spending US$ 1.0 million on exploration and development and by making staged cash payments to Freegold totaling US$100,000 over four years. Quaterra would also issue Freegold up to 200,000 shares of its common stock over the next year. Quaterra was the operator during the earn-in period, with fieldwork directed by its Alaskan-based consultant Avalon Development Corporation. Expenditures by Quaterra at Union Bay through December 2001 totaled approximately $550,000.  Quaterra conducted no fieldwork in 2002 and in August 2002 Quaterra withdrew from the joint venture due to economic considerations.  The property reverted 100% to Freegold which announced in October 2002 that it had signed a joint venture agreement on the property with Pacific Northwest Capital Corporation whereby the latter could earn up to 50% interest in the project by completing exploration expenditures totaling $1 million, issuing 60,000 shares, and making cash payments of $100,000 over 4 years.  Pacific North West did not conduct fieldwork on the project in 2002.



In May 2003 Lonmin PLC entered into a joint venture agreement with Pacific North West and Freegold for further exploration and development on the project.  Under terms of the agreement Lonmin must fund a minimum US$815,000 exploration program in 2003.  This obligation has been met.  Lonmin has the further option to continue to fund the Union Bay project by expending a minimum of US$1 million per year in 2004, 2005, and 2006 and US

AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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$750,000 for each year thereafter. Pacific North West is the Operator of the project during the exploration phase. Under the terms of the agreement, Lonmin may earn up to 70% interest in the project by delivering a full feasibility study. Upon the decision of the joint venture management committee to proceed to place the project into commercial production, Lonmin will arrange 100% of the required financing on terms acceptable to all parties. Following commencement of commercial production, Pacific North West and Freegold will each repay their share of capital construction costs and contribute pro rata to operating costs. The three-party joint venture conducted exploration on Union Bay in 2003 (see History and Exploration).





ACCESS AND INFRASTRUCTURE



The Union Bay project is accessible via boat or barge, floatplane and helicopter.  There is tidewater access to the west of the property at the abandoned cannery on Cannery Creek and at Vixen Harbor on the north end of the property (Figure 2).  Numerous areas of the property are accessible with a helicopter.  Elevations on the property range from sea level to 3,018 feet at the peak of South Mt.  Topography ranges from relatively flat outwash plains on the north to rugged vegetation-free peaks in the center of the property.  Temperate wet weather conditions prevail in this part of Alaska and allow a snow-free working season in most years from May through November.  Average annual precipitation in this part of Alaska is approximately 115 inches mostly in the form of rain.



The city of Ketchikan (population 14,000) is located 35 miles to the south-southeast and is the regional commercial hub for this part of southeast Alaska.  The city hosts an all-season deep water ice-free port, international airport, commercial fixed wing and helicopter services, heavy and light ocean-going barge services and most of the support industry required for mineral exploration.  Cellular telephone grids cover the Union Bay area.  A high capacity hydroelectric power line linking Ketchikan with the cities of Wrangell and Petersburg currently is under construction.  This project, known as the Four Dam Pool project, would bring low cost commercial hydroelectric power to within a few miles of the eastern border of the Union Bay project.





HISTORY



In 1938, J.C. Roehm of the Alaska Territorial Department of Mines discovered chromite in the Dunite Peak area of the Union Bay complex (Figure 3).  Following Roehms discovery, the area was investigated by local prospectors through 1942 (Maas and others, 1995).  In 1941, Reed and Gates of the U. S. Geological Survey (USGS) performed a cursory examination of the geology and took representative samples of the ultramafic rocks (Maas and others, 1995).  In 1943, the first comprehensive geologic mapping was conducted in the area (Kennedy and Walton, 1946).  By 1954, Columbia Iron Mining Company, a subsidiary of U.S. Steel Corp., staked claims on the west side of the Cleveland Peninsula and conducted extensive drilling on magnetite mineralization.  Columbia Iron acquired patent to 18 claims and continued extensive surface and subsurface investigations through 1970. Drill-indicated iron ore resources at Union Bay were estimated at 900 million tons grading 18-20% Fe and 2% Ti (Maas and others, 1995).  In 1959, two former Columbia Iron geologists published a geologic map of the area and completed detailed petrographic investigations of the complex (Ruckmick and Noble, 1959). A

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P.O. Box 80268, Fairbanks AK  99708

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portion of the drill core from this program was stored in a warehouse near the mouth of Cannery Creek but this facility was destroyed by fire leaving the core in a homogenized state that makes it unusable for PGE sampling.  The remainder of the drill core was apparently donated by US Steel to the state of Minnesota where it was eventually discarded because of lack of space at its public core storage facility (T. Gin, oral comm., 2001).



FIGURE 3











In 1964, a small gold prospect known as the Alaskite Nose prospect was staked near the shoreline along Vixen Inlet.  In 1992, the area was examined by U.S. Bureau of Mines (USBM) geologists and a 4 meter deep shaft was found behind beach outcrops of mineralized alaskite that contained anomalous base-metal sulfides and silver (Maas and others, 1995). This prospect was examined briefly in 2003 (see 2003 Exploration).



As part of a study of various Alaskan ultramafic complexes, Clark and Greenwood (1972) performed limited sampling of the Union Bay complex.  Examination and assay of magnetic and non-magnetic mineral separates indicates that most of the PGE values are associated with the magnetic fraction (Clark and Greenwood, 1972).  Metallurgical work performed on dunite by the USBM in 1979 (Dahlin and others, 1981) and geochemical rock sampling completed in 1989 (Foley, 1990) support the magnetite rich pyroxenite - PGE association observed by Clark and Greenwood.  Further work performed by USBM returned

AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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values up to 19.44 ppm Pt from pan concentrate samples on the eastern side of the Union Bay property (Maas and others, 1995). The source of these anomalies was not investigated by the USBM but was the reason initial exploration conducted for Freegold in 2000 was targeted at the ridges above of the drainages from which these anomalous PGE values were derived.



In 2000, Avalon Development Corp. conducted reconnaissance scale fieldwork at Union Bay for Freegold.  Work included claim staking, reconnaissance geologic mapping, grab rock sampling and chip rock sampling. Field observations suggested that PGE mineralization is associated with magnetite in veins, clots and disseminations hosted primarily by wehrlite and olivine pyroxenite. Three principal zones of PGE mineralization were identified during the 2000 field program: North Zone, South Zone and Core Zone.  Total 2000 acquisition and field expenditures for the Union Bay project were approximately $67,000. The results of this work are presented in Avalon (2000).



In 2001 Quaterra Resources acquired an interest in the project and funded reconnaissance mapping, geochemical sampling and drilling during the period March through September (Avalon, 2001).  Additional claims were staked over the Union Bay complex in March and April 2001.  No geological work was completed during this period.  Initial field efforts conducted in June and July concentrated on the North Zone and on reconnaissance work which resulted in discovery of the Jaguar, East and West Cobra, Lexus and Mt. Burnett zones (Figure 3).  In September four NQ size diamond drill holes were completed, two each on the North and Mt. Burnett zones using a LF-71 model diamond drill for a total of 1,168.2 feet.  Total 2001 acquisition and field expenditures for the Union Bay project were approximately $550,000. The results of this work are presented in Avalon (2001).



No field work was conducted at Union Bay in 2002.  Detailed petrographic work, analytical work and microprobe analyses were completed in 2002 by MS-candidate Chris Van Treeck of the University of Alaska.  Interim results of this work are presented in Van Treeck and others (2003).



Fieldwork at Union Bay in 2003 consisted of staking of 394 additional federal lode claims in March followed by diamond drilling at the North and Jaguar zones in June and July.  A total of 4,490 feet of NQ diamond drilling was completed in 11 holes (8 and North, 3 at Jaguar zone) during 2003.  In addition, reconnaissance exploration work was completed on several other areas of the property during the period June through September.  These efforts resulted in the discovery of significant PGE values at the Continental and Chevelle zones and PGE-bearing sulfides at the Cannery Creek zone.  Additional 6-element analyses, check assays and microprobe work were completed in September and October. Acquisition and field expenditures for the Union Bay project through year-end 2003 totaled $945,000.





GEOLOGIC SETTING



The Union Bay project is situated within a narrow tectonic belt of Upper Jurassic to mid-Cretaceous rocks known as the Gravina Belt (Figure 4, Himmelberg and Loney, 1995).  Rocks of the Gravina Belt include marine argillite and graywacke, interbedded andesitic to basaltic volcanics and volcaniclastics and lesser conglomerate and intrusive rocks ranging from quartz diorite to dunite and peridotite.  Gravina Belt rocks are tectonically bounded by the Alexander

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Terrane to the west and have an uncertain but possibly overlapping relationship with rocks of the Taku Terrane to the east (Figure 4, Gehrels and Berg, 1994).  Deformation of the Gravina Belt occurred in mid-Cretaceous time as a result of eastward migration and accretion of the previously sutured Alexander and Wrangellia terranes.  Regional greenschist to amphibolite facies metamorphism and subduction related intrusive activity accompanied accretion of the Alexander Terrane.  This same crustal shortening may have resulted in westward overthrusting of the Taku Terrane onto the Gravina Belt.  A series of mafic-ultramafic bodies such as the Union Bay complex and known as Ural  Alaska complexes, intrude the Alexander Terrane or the Gravina Belt/Taku Terrane assemblage over a distance of 350 miles through the Alexander Platinum Belt of southeast Alaska (Himmelberg and Loney, 1995).  Age dates from these complexes cluster between 100 and 110 Ma and these complexes are believed to be temporally if not genetically related to accretion of the Chugach Terrane to the western margin of the previously accreted Alexander and Wrangellia Terranes (Foley and others, 1997).  Accretion of the Chugach Terrane coincides with a marked change in the regional stress regime of southeastern Alaska, from an east-west compressional regime to a right-lateral transpressional stress regime.  This relative relaxation of stress may have fostered emplacement of the Ural  Alaska complexes in the Alexander Platinum Belt.



FIGURE 4









The Union Bay complex is a zoned mafic-ultramafic complex ranging from dunite in the core on the southeastern side of the complex through wehrlite and olivine clinopyroxenite to hornblendite and gabbro on the margins (Figure 5).  Magnetite is widespread within the complex

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but is most common in wehrlite, pyroxenite and hornblendite. Jurassic age flysch/turbidite rocks of the Gravina Belt make up the country rocks in the area and consist of thinly bedded mudstone, siltstone, sandstone, grit, conglomerate and minor limestone (Gehrels and Berg, 1988).  Previous investigators (Ruckmick and Noble, 1959) indicated that sedimentary units surrounding the complex are hornfelsed for up to one-quarter mile from their contact with ultramafic rocks.  Field observations made in 2001 and 2003 do not support this conclusion.



FIGURE 5













Previous investigations suggest the Union Bay complex is a pipe and lopolith complex (Himmelberg and Loney, 1995) however field work completed in 2003 suggests the possibility of more than one dunite pipe within and beneath the complex.  Rubin and Saleeby (1992) have assigned the complex a mid-Cretaceous age of 102 Ma based on a U-Pb zircon age from gabbroic pods within hornblendite.  A reliable
40Ar/39Ar age date was derived from hornblendite in a hornblende pyroxenite from drill core from the Mt Burnett prospect and yielded an age of 101.8 ± 1 Ma (C. Van Treeck, written comm., 2003).  While age dates from gabbro and from hornblende pyroxenite within the Union Bay complex suggest mafic and ultramafic lithologies are contemporaneous, where mafic and ultramafic rock contacts are visible in the field, gabbro intrudes (post-dates) the ultramafic rocks.  The best examples of this age relationship are outcrops immediately east of the Continental zone where feldspar-bearing leucogabbro dikes intrude hornblende pyroxenite units.  These outcrops clearly indicate that gabbro is younger than the ultramafic rocks and probably constitutes the last phase of intrusive activity at Union Bay. High-altitude airborne magnetic surveys reveal a strong magnetic signature over the Union Bay complex probably as a result of magnetite-bearing pyroxenite and hornblendite (USGS, 1977; Ruckmick and Noble, 1959).  This survey does not provide sufficient detail to distinguish

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between individual rock units within the Union Bay complex but does suggest that strongly magnetic rocks equivalent to the ultramafic rocks on the north side of the complex probably underlie the gabbro of the South Mt. area on the southern side of the complex.



The most detailed geological summary of the Union Bay complex is that of Ruckmick and Noble (1959, Figure 5).  Much of the following geologic descriptions was extracted from their work and modified by subsequent field observations from 2000  2003.  The Union Bay ultramafic complex is comprised of a central core of late (final stage) dunite, generally centered on Dunite Peak (elev. 2535) on the southeastern edge of the Union Bay project (Figure 3).  Magnetite and chromite veins and pods occur locally within the late stage dunite.  This dunite core is surrounded by progressively less magnesium-rich shells of wehrlite, pyroxenite, hornblendite and gabbro (Figure 5). The rock unit mapped as peridotite by Ruckmick and Noble (1959) is in fact a mappable unit containing complexly mixed wehrlite and pyroxenite.  In some areas, such as the North and Jaguar zones, late stage diopside veins ranging from 1 cm to 10 cm thick crosscut compositional layers of earlier stage wehrlite and pyroxenite. Such veins are less common in PGE-bearing areas farther west on the property. Magnetite lenses, stringers and clots crosscut all other rock types except gabbro. Although difficult to recognize in weathered pyroxenite, chromite stringers also are associated with the late stage crosscutting pyroxenite veins and at times accompany magnetite veinlets. Chromite also occurs as thin (1-5 cm) stringers that are parallel or subparallel to younger dunite-rich compositional layers (Ruckmick and Noble, 1959) and as pods and irregular veins up to 50 cm thick on Dunite Peak (Avalon, 2001).



Magnetite occurs in both primary and secondary forms and spans a wide range of temperatures of formation (Van Treeck and others, 2003). Secondary magnetite occurs as disseminated magnetite grains formed as a result of serpentinization of olivine.  Primary magnetite is present in all igneous rocks of the Union Bay complex and may be divided into four types on the basis of textural relationships with the rocks:



1)

fine-grained euhedral magnetite constituting minor amounts of the dunite core.

2)

regular, closely-spaced parallel bands in hornblendite and pyroxenite.

3)

large, irregular clots and discontinuous veins up to several feet long in wehrlite and pyroxenite.

4)

disseminated fine- to coarse-grained anhedral to euhedral magnetite interstitial to diopside in clinopyroxenite and hornblende pyroxenite and commonly evenly distributed throughout the rock.



Rocks with type 1 magnetite were observed in the dunite core near Dunite Peak.  Samples containing this type of magnetite do not normally contain significant amounts of PGE.  Types 2 magnetite where found mostly in pyroxenite and hornblende pyroxenite in the Mt Burnett South area.  Type 3 magnetite was found within wehrlite of the North Zone, Jaguar, Lexus, Mt. Burnett North, Chevelle, and Continental zones and have returned multi-gram Pt + Pd values from all of these zones.  Type 4 magnetite is most abundant over the western end of the Union Bay project area and occurs most commonly in pyroxenite and hornblende pyroxenite units which host the iron-ore resources outlined by Columbia Iron (Maas and others, 1995).





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DEPOSIT TYPES



The Union Bay prospect has been historically described as a classic zoned Ural - Alaska type mafic - ultramafic complex (Taylor, 1979; Himmelberg and Loney, 1995). Remarkably similar complexes are found in Russia, Ethiopia, Columbia, Australia and Canada as well as several other places in Alaska (Elliot and Martin, 1991, Malich, 1991; Taylor, 1979; Moegessie and others, 1999; Nixon and others, 1990; Tistl, 1994; Zohan, 2002). On a worldwide basis, each of the ultramafic rock types within an individual complex and within a given belt is remarkably uniform chemically and mineralogically. More deeply eroded Ural  Alaska belts and complexes often are associated with alluvial PtFe alloy accumulations and are hosted in large volumes of more regionally extensive gabbroic rocks which coincide with the orientation of the host UralAlaska belt (Taylor, 1979; Tolstykh and others, 2000). Pyroxenes are almost exclusively clinopyroxenes (diopsidic augite) with orthopyroxenes being extremely rare. Plagioclase is nearly absent in most Ural  Alaska complexes, olivine is highly magnesian and magnetite contents average 15-20% by volume and commonly are titaniferous (Taylor, 1979; Himmelberg and Loney, 1995).  Chromite is a common trace mineral in Ural  Alaska complexes but its statistical and paragenetic relationship to PGE mineralization is inconsistent within an individual belt as well as within an individual complex (Foley and others, 1997).  Other than the Duke Island complex, located 65 miles south of Union Bay, copper and nickel contents in most Ural - Alaska complexes are lower than in most other PGE-bearing complexes and neither element is strongly correlated with PGEs. Platinum is the primary PGE recovered from UralAlaska deposits and forms coarse placer occurrences in the deeply weathered Ural Mountains, in Columbia, in the Goodnews Bay area of southwestern Alaska and in the Tulameen complex of southern British Columbia (Mertie, 1969; Van der Poel and Hinderman, 2001; Nixon and others, 1990; Tistl, 1994).  Lode accumulations of platinum have been identified in several locations in Russia, including the NishniyTagil District and at Galmeonsky on the Kamchatka Peninsula (Dodin and others, 2000).



There are 19 known UralAlaska type occurrences in the Alexander Platinum Belt of Southeast Alaska.  The Union Bay complex sits near the southern end of this belt which stretches over 350 miles northsouth by 20 to 30 miles east-west. A number of these complexes were explored in the 1950s through the 1970s for their iron ore potential due to their high magnetite and ilmenite contents. The UralAlaska complexes of the Alexander Platinum Belt are thought to be genetically related to eastward convergence of the Chugach Terrane with the previously emplaced Wrangellia and Alexander Terranes between 90 and 110 Ma (Foley and others, 1997).  The zoned complexes were emplaced above the subduction zone and within rocks of the Wrangellia, Alexander and Taku terranes and the overlying Gravina belt.  The linear nature of the Alexander Platinum Belt and the striking similarity between the individual complexes which make up the belt suggest their emplacement may be related to the same tectonic event, in this case the change from strongly compressional tectonics to oblique transpressional tectonics about 110 to 115 Ma.  This event, caused by subduction of the Farallon plate beneath the North American plate and docking of the Chugach terrane with the Alexander and Wrangellia superterrane , may have allowed deep-seated plutonic bodies to rise rapidly into the upper crust along major terrane sutures or inter-terrane structures (Foley and others, 1997).



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MINERALIZATION



Clark and Greenwood (1972) conducted PGE analyses on 50 pyroxenite and dunite rock samples from the Union Bay complex.  Results from these samples ranged up to 1.60 ppm Pt, 0.20 ppm Pd, 0.06 ppm Rh and 0.22 ppm Ir.  A magnetic and a non-magnetic fraction were extracted from one of these samples and analyzed for Pt content.  Results from this sampling showed 30 ppm Pt from the magnetic fraction and 0.040 ppm Pt from the olivine fraction, indicating a strong partitioning of Pt in the magnetic fraction.  Pan concentrate and stream sediment samples collected by the USBM (Maas and others, 1995) and during the 2001 field program (Avalon, 2001) show that high chromite-bearing stream sediment samples immediately below the dunite core did not contain significant PGE mineralization whereas pan concentrates collected from streams draining magnetite-rich wehrlite and pyroxenite returned Pt values up to 19.44 ppm.



The USBM conducted electron microprobe analysis of PGM species in crushed separates from two of their pan concentrate samples (Maas and others, 1995).  Mineral species identified include PtFe alloy, native osmium, osmium-iridium and hollingworthite (RhAsS). Minor pyrite, chalcopyrite, pyrrhotite, and marcasite occur around the periphery of the ultramafic body (Ruckmick and Noble, 1959).  Most of the sulfides are within heterolithic breccias composed primarily of olivine pyroxenite however minor concentrations occur locally in saussuritized gabbro (2003 Exploration).  Some of the sulfide minerals are intimately associated with magnetite.  The only other sulfides recognized in the area are associated with felsic intrusive rocks of the Alaskite Nose prospect at Vixen Inlet.



Following the 2000 field season limited scanning electron microscope (SEM) and electron microprobe analyses were conducted on North zone samples (King, 2000).  This work indicated the PtFe alloy grains ranged in size from 10 to 30 microns and were hosted primarily in magnetite.  Associated minor mineral phases included chalcopyrite, bornite, pentlandite, sperrylite(?) and chromite.  Palladium was noted in some samples and was associated with antimony, copper, iron and tin.  Subsequent microprobe work completed at Brussels University revealed that Pt was associated with a distinctive chromian titanomagnetite containing about 15 weight percent Cr2O3 (Jedwab, 2001).  Pure magnetite (no Cr) did not contain PGMs. Minerals observed under the microprobe included PtFe and PtSb alloys. As in the SEM study, most of the PGMs occur at grain interfaces within magnetite. Only OsS2 and Pt-Ir alloy were found within Ca-Fe-Mg silicate (pyroxenite?) phases.  Microprobe analyses from one sample also indicated that PGMs were concentrated in 14 separate horizons within a 10 mm band of magnetite.  Gold without PGMs occurred within two horizons in this same 10 mm section.



Masters thesis research conducted on the Union Bay project in 2001-2003 indicates that PGE mineralization is hosted in magnetite veins and pods which cut magmatic layering and have an irregular morphology at both the outcrop and thin section scale (Van Treeck, 2004).  Fe-Ti oxide geothermometry suggests that this mineralization took place between ~700-400°C.  Ilmenite and Mg-Al spinel exsolution decrease with temperature.  Magnetite veins with a formation temperature of <575oC are surrounded by an alteration envelope of hydrous silicates that vary with temperature and contain appreciable amounts of chlorine.  Conclusions drawn

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from this work suggest interaction of a PGE-Fe-Cl rich fluid with clinopyroxene which resulted in increased fluid pH and decreased PGE and Fe solubility.  The result was deposition of PGE-enriched magnetite within clinopyroxenite and wehrlite or at the contact between wehrlite and clinopyroxenite.



A limited number of 6 element nickel-sulfide PGE analyses were completed on samples collected in 2000 and 2001 (Avalon, 2003). These samples indicate that PGE mineralization at Union Bay is significantly depleted in Ir relative to chondrite normalized Ir values from other Ural Alaska type complexes around the world (Van Treeck, written comm., 2003).  Given that Ir is relatively immobile during hydrothermal alteration processes, the depleted IR values at Union Bay suggest PGEs were not deposited in a magmatic setting but rather were concentrated during a later hydrothermal event.





EXPLORATION



Background: Field exploration at the Union Bay project has taken place during 6 separate phases, two each in 2000, 2001 and 2003 (Avalon, 2000; Avalon 2001; Avalon, 2003).  A summary of geochemical sampling and associated work is presented in Table 1.



Table 1: Summary of geochemical sampling from 2000 to 2003.

YearSample TypeZone/Creek# SamplesComments2000Grab rock samplesNorth, South, Core152Phase 12000Comp 5' ChipsNorth, South40Phase 12000Comp 10' ChipsNorth, South19Phase 12000ResamplingNorth11Phase 22000Grab rock samplesNorth, South, Core13Phase 22001Grab rock samplesEast Cobra15Recon2001Grab rock samplesWest Cobra13Recon2001Grab rock samplesJaguar75Recon2001Grab rock samplesLexus7Recon2001Grab rock samplesMt Burnett50Recon2001Grab rock samplesNorth84Recon2001Grab rock samplesOthers62Recon2001Saw ChannelsNorth664 channels2001Drill coreNorth7804 holes, 1,168.2 feet2001Pan concentratesAkron Creek16Standard pans2001Pan concentratesCannery Creek7Standard pans2001Pan concentratesCincinnati Creek3Standard pans2001Pan concentratesColumbus Creek27Standard pans2001Pan concentratesDayton Creek4Standard pans2001Pan concentratesToledo Creek2Standard pans2001Pan concentratesYoungstown Creek3Standard pans


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2001Soil samplesNorth flats6Placer auger samples2001Soil samplesNorth Flats16 ft placer prospect hole2001Soil samplesJaguar17Grid shovel samples2001BlanksAll60Browns Hill Basalt2003Grab rock samplesNorth12Recon2003Grab rock samplesJaguar63Recon2003Grab rock samplesLexus30Recon2003Grab rock samplesMt Burnett North5Recon2003Grab rock samplesMt Burnett South29Recon2003Grab rock samplesContinental154Recon2003Grab rock samplesChevelle51Recon2003Grab rock samplesCannery34Recon2003Grab rock samplesEast End6Recon2003Grab rock samplesRecon13Recon2003Grab rock samplesZoning105Recon2003Saw ChannelsJaguar8515.3 meters2003Saw ChannelsMt. Burnett4949 meters2003Saw ChannelsContinental201184.2 meters2003Drill CoreNorth Zone8288 holes, 3,086 feet2003Drill CoreJaguar zone3863 holes, 1,404 feet2003Stream SiltsSouth Mt20Standard silts2003Soil samplesLexus84Grid shovel samples2003BlanksAll127Browns Hill Basalt2003StandardsContinental10Project standardTOTAL3,825




Initial work at Union Bay on 2000 consisted of claim staking in March followed by reconnaissance sampling and additional claim staking in September and October.  Fieldwork included reconnaissance geologic mapping, grab rock sampling and chip rock sampling on the ridges above known Pt-bearing creeks.  This work resulted in discovery of the North zone (Avalon, 2000).



Field work conducted at Union Bay in 2001 consisted of reconnaissance rock, soil and pan concentrate geochemical sampling in June and July followed by diamond drilling at the North and Mt. Burnett zones in September.  Fieldwork in June and July was support from a mobile tent camp with weekly helicopter support.  Diamond drilling was completed from a tent camp on Vixen Harbor with full time helicopter support.  This work revealed five new PGE-enriched zones (Jaguar, Lexus, East Cobra, West Cobra and Mt. Burnett) over a three-mile east-west distance on the north limb of the Union Bay complex.  Diamond core drilling was completed at the North and Jaguar zone in September (see Drilling).



2003 fieldwork at Union Bay commenced immediately following signing of the joint venture between Pacific North West, Freegold and Lonmin in late May 2003.  All work was

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conducted from a helicopter base camp adjacent to Vixen Harbor.  Work programs entailed drilling at North and Jaguar zone saw channel sampling at Jaguar, Mt. Burnett and Continental zones, soil and rock sampling at Lexus, stream silt sampling on South Mt., structural and lithologic mapping at Continental and reconnaissance geochemical sampling on the eastern, southern and western limits of the Union Bay complex.  These efforts resulted in discovery of three new PGE-enriched zones, the Continental, Chevelle and Cannery Creek zones (Avalon, 2003).



A summary of the significant exploration findings from each of the major mineralized zones explored in 2000 through 2003 follows.  Unless otherwise noted, these summaries were excerpted from Avalon, 2000, Avalon, 2001 and Avalon, 2003.



North Zone: The North zone was discovered during reconnaissance rock sampling conducted in 2000 (Avalon, 2000).  Initial rock and saw channel sampling completed in 2001 suggests PGE mineralization is contemporaneous with late stage magnetite veins, clots and disseminations hosted primarily by wehrlite, pyroxenite and olivine pyroxenite.  Disseminated magnetite occurs locally within the pyroxenite as well. Magnetite in the late dunite (centered around hill 2535) appears mostly in irregular veins and lenses of 0.5 to 30 cm wide Variable amounts of disseminated magnetite (up to 20%) also occurs throughout the gabbro located on top of hill 2310.  Samples collected during 2001 returned values up to 18,397 ppb Pt + Pd (Table 2).



Table 2: Significant North zone geochemistry from the 2000 Union Bay program.  Sample values denoted as -9999 indicate an element that was not analyzed for in a given sample.

Sample #Pt
(ppb)Pd
(ppb)Pt+Pd
(ppb)Cr
(ppm)Cu
(ppm)Ni
(ppm)Sample Description49347117,49090718,397-9999-9999-9999Wehrlite with semi-massive magnetite clots.49334915,9101,39717,3078,39812538Wehrlite with <0.5' pyroxene veins and <0.5' magnetite pods.4934625,3442,3467,690-9999-9999-9999Wehrlite with a 0.5 foot magnetite vein.4933273,9612,8956,85615,49252346Wehrlite with 0.5 foot magnetite lenses.4934653,8412,8076,648-9999-9999-9999Wehrlite with a 0.5 foot magnetite vein.4934696,2652136,478-9999-9999-9999Wehrlite with 0.5 foot magnetite clots.4933474,2231,8026,0252,65923563Wehrlite and pyroxene with 3-5 mm magnetite veinlets.4934643,4091,9135,322-9999-9999-9999Wehrlite with a 0.5 foot magnetite vein.4933715,0302845,3147,0575434Pyroxenite with 5% chromite stringers.4934703,7505194,269-9999-9999-9999Wehrlite with semi-massive magnetite, 30%.4934662,8641,0523,916-9999-9999-9999Wehrlite with a magnetite vein.4933483,0374123,4494,8029611Wehrlite with <0.5' pyroxene veins and <0.5' magnetite pods.4933642,448922,5409363654Pyroxenite and wehrlite with 0.5 cm magnetite stringers and clots.4933691,3735511,9243,16536675Pyroxenite, wehrlite with magnetite stringers.4933661,6901881,8787,96936485Pyroxenite, wehrlite with 30% massive magnetite.4933281,052951,1473,9103534Wehrlite with 0.5 foot magnetite lenses.4934631,072701,142-9999-9999-9999Wehrlite with 1-2 mm magnetite veinlets and disseminations.




Initial fieldwork in 2001 was concentrated around high grade samples from the North zone.  Rock grab sample value ranged up 17,910 ppb Pt + Pd (Table 3).  A total of 10 samples from channels 1, 3 and 4 had values higher than 100 ppb Pt + Pd with two contiguous samples from channel 1 returning values of 10,872 and 4,927 ppb Pt + Pd (Table 4).  A detailed map of the North zone was completed during 2001 fieldwork.



Table 3: Significant North zone rock geochemical results from the 2001 Union Bay program. Sample values denoted as -9999 indicate an element that was not analyzed for in a given sample.

Sample #Rock UnitPt_ppbPd_ppbCr_ppmCu_ppmFe_%Mg_%Mn_ppmNi_ppm493471Wehrlite17490907-9999-9999-9999-9999-9999-9999493349Wehrlite159101397839812109.69975538468857Wehrlite1461033001714721103.7845372468870Wehrlite88755676522-110101543666464822Wehrlite6990731181958108.321735884493469Wehrlite6265213-9999-9999-9999-9999-9999-9999467814Wehrlite56001876410371101015611015493462Wehrlite53442346-9999-9999-9999-9999-9999-9999493371Pyroxenite503028470575108.21131434493347Wehrlite422318022659238.14101052563493327Wehrlite396128951549252103.18809346493465Wehrlite38412807-9999-9999-9999-9999-9999-9999493470Wehrlite3750519-9999-9999-9999-9999-9999-9999493464Wehrlite34091913-9999-9999-9999-9999-9999-9999493348Wehrlite30374124802910101074611493466Wehrlite28641052-9999-9999-9999-9999-9999-9999468805Wehrlite268710294601010101854948493364Pyroxenite24489293637.49101148654467805Wehrlite1828129568174310101811577493366Pyroxenite169018879693610101447485493369Pyroxenite13735513165368.73101085675493463Wehrlite107270-9999-9999-9999-9999-9999-9999493328Wehrlite105295391039.87101193534




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Table 4: Significant North zone saw channel geochemical results from the 2001 Union Bay program. Sample values denoted as -9999 indicate an element that was not analyzed for in a given sample.

ChannelFrom
ftTo
ftInt
ftRockUnitPt_ppbPd_ppbCr_ppmCu_ppmFe_%Mg_%Ni_ppmUBCH010121221Wehrlite585100779.1710831UBCH010122231Wehrlite1015072280709109.21492UBCH010123241Wehrlite4576351488669.4310467UBCH010124251Wehrlite51518587.910834UBCH010125261Wehrlite7214578.73101058UBCH010126271Wehrlite15620878.6710888UBCH010127281Wehrlite2669234616211571010895UBCH010128291Wehrlite19813778.7210941UBCH010129301Wehrlite273361097101010656UBCH010130311Pyroxenite23222154979.6710578UBCH01034.86.41.6Pyroxenite8116656.3810653UBCH01036.481.6Wehr-Pyrox46213284118.3410836UBCH010389.61.6Wehrlite44219079.710920UBCH01039.611.21.6Wehr-Pyrox85925619108.1910704UBCH010412.814.41.6Pyroxenite-5-119668.1810891UBCH010414.4161.6Pyroxenite39415605119.9710951




Field observations suggest that PGE mineralization in the North zone is associated with magnetite but not all magnetite contains PGE mineralization.  The magnetite occurs in variably oriented veins up to 15 cm wide and a meter long within or cutting late stage clinopyroxene veins crosscutting the magmatic compositional layering.  In most cases the magnetite mimics the orientation of the late stage clinopyroxene veins or is discordant to but within fractures cutting across the veins, indicating a late magmatic source for that type of magnetite.  Disseminated magnetite also occurs in wehrlite to olivine pyroxenite but does not appear to be associated with significant PGE accumulations. Disseminated chromite and irregular chromite veinlets <2 cm wide often are contemporaneous with the magnetite, but are difficult to distinguish when the two occur together.  Discontinuous chromite stringers 1-5 mm wide occur in the more olivine-rich zones and are usually parallel or subparallel to compositional layering and often show signs of deformation.  Field observations indicate that chromite stringers formed prior to the PGE-bearing magnetite because chromite stringers are often cut by magnetite-bearing clinopyroxenite veins.



The mineralized envelope in the North zone consists of PGE-enriched magnetite in wehrlite to olivine pyroxenite cut by late pyroxene veins.  The trend of magmatic layering and PGE mineralization trends north-northwest into a steep ravine where outcrops disappear under vegetation and alluvium.  This ravine flows to the northwest and intersects Columbus Creek just upstream from the 19.44 ppm Pt pan concentrate sample and other highly anomalous Pt samples that were collected by the USBM.  The mixed wehrlite  pyroxenite rock unit containing the clinopyroxenite veins which host the North zone mineralization weathers a distinctive orange color and exhibits moderate to intense shearing manifest by thin serpentinite selvages.  The PGE-favorable unit is easily distinguished from other rock units in the area and forms a predictable magmatic sequence extending to the west and southwest from the North zone. Similar rock types host elevated PGE mineralization at Mt. Burnett, Chevelle and Continental.

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Multi-element analyses of 2001 samples were conducted using a two-acid (aqua regia) digestion process.  As a result, trace element data from 2001 should be considered minimum values because of incomplete digestion of the host rocks.  Given these limitations, clear multi-element patterns can be recognized from the 2001 data at North Zone.  Rock samples have elevated Ni values in comparison to the other PGE-enriched zones discovered at Union Bay (avg. 801 ppm, max. 1,305 ppm).  They also contain high Fe (to +10%), Mg (to +10%) and Mn (to 1,854 ppm).  The grab samples show lower Ti (avg. 0.06%) and V (avg. 54 ppm) in the North Zone than anywhere else on the property. The Ni-enriched geochemistry of the North zone samples is thought to be caused by the relative abundance of olivine-rich wehrlite compared to more pyroxene-rich rocks which host most of the other PGE zones on the property.  This conclusion is supported by examination of the geochemical results from samples collected from the dunite core of the Union Bay complex.  These samples show strong enrichment in Ni, Co and Mn all of which are probably tied up within the crystal lattice of olivine.  A similar partitioning of Ni and Co into dunites has been noted in other ultramafic complexes (Goles, 1969; Irvine, 1974).



Limited surface sampling was completed on the North zone in 2003 however, mapping conducted in 2003 clarified the relationships between rock types.  Lithologies originally mapped by Ruckmick and Noble (1959) as peridotite and olivine pyroxenite have been combined into a mixed clinopyroxenite and wehrlite unit similar to that associated with PGE mineralization at the Continental zone. Paragenetic relationships observed in the field indicate that late diopside veins cut all other rock units and represent a younger alteration event.  The geometry of local clinopyroxenite bodies within the wehrlite have been interpreted as an effect of plastic deformation that occurred during cooling.  Mapping conducted during the 2003 field season negates the hypothesis that the diopside veining seen in the North zone is controlling the PGE enriched magnetite mineralization.  It is now believed that PGE enriched magnetite is related to the contact area between wehrlite and clinopyroxenite in the mixed clinopyroxenite wehrlite zones, a conclusion also drawn for the Continental, Chevelle and Mt. Burnett North zones (see below).  Magnetite mineralization is spatially associated with the diopside veining in both the North and Jaguar zones but assays from the majority of the vein diopside were not anomalous with respect to Pt.  In both the North and Jaguar zones the high-grade samples are not common in diopside veins, but occur as discontinuous veins and pods which pre-date diopside veins.  The results of drilling completed at North zone in 2003 are presented under Drilling.



Jaguar: The Jaguar zone is located 400 meters southwest of the North Zone on the same ridge (Figure 3).  The zone was discovered in 2001 during reconnaissance mapping and sampling.  Follow-up saw channel sampling and diamond drilling were conducted in 2003.  Significant grab rock sample geochemistry is shown in Table 5, significant saw channel rock geochemistry is presented in Table 6.

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Table 5: Significant grab rock sample geochemistry from the Jaguar zone.

Sample #YearRockUnitPt_ppbPd_ppbCr_ppmCu_ppmFe_%Mg_%Ni_ppm3947492003Pyroxenite, Wehrlite838010331901310.314.054084648342001Wehrlite329052533399.65104223947002003Magnetite Vein2280543900-17.6913.42954648742001Ol pyrox101034188538.03104634648812001Wehrlite9884013945-1104.172773939532003Magnetite Vein636195530721.97.752504688642001Wehrlite5221310124-17.962.241954648782001Pyroxenite5042712968-1102.122933947462003Magnetite Vein41599030816.614.854823947282003Magnetite Vein411410000524.512.25754678602001Ol pyrox, Wehrlite4105155055101.84278






Table 6: Significant saw channel sample geochemical results from the Jaguar zone

Sample #TypeFrom_ftTo_ftPt_ppbPd_ppbBi_ppmCr_ppmFe_%Mg_%S_%394749Spot8380103-2319010.314.050.01394700Spot228054-239007.6913.4-0.01394652UBCH03010.51107032-237709.31150.01393953Spot636194553021.97.75-0.01394746Spot4159-2903016.614.85-0.01394728Spot411461000024.512.2-0.01393978Spot3298-2597013.310-0.01393991UBCH030600.822113-252607.84150.01393974Spot2077-213806.17150.01393979Spot1884-28964.6910.050.01394000Spot1543-2729021.47.430.01394701Spot1202410000253.8-0.01




Mineralization at Jaguar is hosted in shallowly dipping magnetite veins which appear to be sub-horizontal to the host wehrlite and pyroxenite country rock.  Magnetite veins often are associated with pyroxene veins, a spatial relationship observed in the nearby North zone.  Channel sampling conducted in 2003 confirmed that the diopside veining is not controlling the distribution or grade of PGE-bearing magnetite mineralization at Jaguar and that the occurrence of PGE bearing magnetite with a diopside vein is coincidental.  The fluids that deposited both the diopside and the magnetite veins could have exploited the same structural conduits but there does not appear to be any cause  effect relationship between diopside veins and PGE mineralization.  Channels cut through veins that returned 3,910 ppb Pt (sample 464834) showed no PGE enrichment in other areas of the same vein.  If these veins were controlling the PGE enriched magnetite deposition, PGE enrichment should be present in other parts of the vein.  Results from channel UBCH0301 indicate that the first 6 inches of the channel have background Pt values (45 ppb).  The next 6 inches of the channel that incorporated the magnetite pod from sample 464834 returned a value of 1,070 ppb Pt and the adjacent 6 inches of magnetite-free rock also contains background levels of Pt (16 ppb).  Based on these results it appears that that is no genetic correlation between the diopside veining and the PGE enriched magnetite in the Jaguar zone. The results of drilling completed at Jaguar zone in 2003 are presented under Drilling.

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It is possible that the Jaguar zone is related to the North Zone.  Both zones are mostly composed of wehrlite with lesser pyroxenite.  In both areas, magnetite is included in or closely associated with clinopyroxenite veins cutting wehrlite. However, orientation of the major geologic features is different in the two zones.  The layering and the pyroxene veins are sub-horizontal to shallowly dipping towards the east at the Jaguar Zone while they are steeply east dipping at the North Zone.  This could be caused by late deformation of the ultramafic complex.  The Jaguar zone is open to expansion and could extend to the southeast and west but these areas were not furthermore investigated during the reconnaissance phase because of soil and vegetation cover to the southeast and a steep cliff to the west.



Continental Zone: The Continental zone was discovered during claim staking in March 2003.  A grab sample collected during this work returned 595 ppb Pt and prompted follow-up fieldwork conducted in June, July and September 2003.  The Continental zone is located on the western end of the Union Bay complex on a mesa at an elevation of 2000 feet (Figure 3).  Host rocks at Continental are composed of variable proportions of wehrlite and clinopyroxenite.  Wehrlite bodies often exhibit an elongate east-west tubular geometry reminiscent of boudins.  These tubular features are oriented at right angles to a crude magmatic bedding or stratification which strikes 000°-020° and consistently dips 17°-35° east.  This stratification is best exposed in wehrlite-rich cliff faces along the western and southern margins of the Continental plateau.  Abundant cross-cutting features indicate the wehrlite is younger than and intrudes the pyroxenite.  PGE-bearing magnetite is preferentially hosted at or near the contact between clinopyroxenite and wehrlite.



Magmatic layering in the Continental zone is disrupted by at least three ages of faulting which can be documented in the field: north-northwest (345-360o), northwest (300-325o), and northeast (030-040o, Figure 6).  These structures form marked topographic depressions reaching up to 25 meters in depth and 30 meters across.  Structures are remarkably persistent along strike with the longest measured fault, the Eden fault, reaching at least 750 meters in length before dropping out of sight in heavy vegetation to the north and south of the upland mesa on which Continental is located. Rocks to the east of the Eden fault are predominantly hornblende pyroxenite locally intruded by gabbro dikes up to 1 meter thick.  Outcrops in this structural block clearly prove that gabbro units, while probably co-magmatic with the main ultramafic complex, are younger than the ultramafic rocks.





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FIGURE 6







The magnitude and direction of movement on faults at Continental are unknown however relative ages of motion are evident.  Northeast trending structures show truncation and less continuous linear geometries and are thought to be the oldest structures identified at Continental.  Northwest trending structures are the next youngest in relative age since they appear to truncate northeast trending structures but are themselves offset by north-northwest trending structures like the Kahuna and Eden faults.  North-northwest trending structures cut the Continental zone into three distinct lithologic blocks  a western block where wehrlite>>pyroxenite (west of Kahuna fault), a middle block where pyroxenite>=wehrlite (between Kahuna and Eden faults) and an eastern block where hornblende pyroxenite>pyroxenite>>wehrlite (east of Eden fault).  While faults such as the Kahuna and Eden faults clearly post-date mineralization in their most recent form, there is little evidence available relating to whether or not these structures were long-lived enough to have influenced magmatic emplacement and/or PGE mineralization.



Based on limited field data it appears that rocks to the east of the Eden fault have been down-dropped relative to those to the west of the fault.  This relative motion has resulted in preservation of hornblende-bearing rocks and gabbro which are thought to be higher or more

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distal portions of the Union Bay complex.  This conclusion is supported by the nearly identical ages derived from gabbro (U-Pb age 102 Ma) and hornblendite (40Ar/39Ar age 101.8±1 Ma).



Outcrop geologic mapping of the Continental area revealed extreme variations in rock types over short distances.  This variability is caused by highly variable amounts of wehrlite and pyroxenite present in individual outcrops.  A given outcrop may vary from pure pyroxenite (+90% pyroxenite) to nearly pure wehrlite (+90% wehrlite) over distances as small as 1 to 3 meters.  Mapping was modified to allow for a wider compositional range that is compatible with the structural patterns present on the property.  The lithologic mapping completed followed the classifications outlined in Table 7.  In general this mapping indicated that wehrlite-rich rocks were more common west of the Kahuna fault, pyroxenite-rich rocks dominate in the area between the Kahuna and Eden faults and hornblende-rich, olivine-poor rocks are restricted to the area east of the Eden fault.  Rocks located immediately west of the Eden fault are dominated by featureless massive coarse grained pyroxenite which becomes progressively more wehrlite-rich to the west.



Table 7: Lithologic classification used in mapping at Continental zone.

Rock TypeDescriptionWehrliteRock contains >90% wehrlite by volume, most common west of Kahuna faultPyroxeniteRock contains >90% pyroxenite by volume, most common between Kahuna and Eden faultsW%P%Variable wehrlite-pyroxenite outcrops, e.g., W40P60 is 40% wehrlite, 60% pyroxeniteDuniteRock is >90% olivine, rare at ContinentalHornblende pyroxeniteRanges to hornblendite, only seen east of Eden faultGabbroHornblende and plagioclase content variable, only seen east of Eden faultOverburdenAll forms of cover including alluvium, glacial debris, etc.




The other significant feature mapped at Continental in 2003 relates to the volume and physical form of magnetite present on the prospect.  Magnetite is present to varying degrees in all rock types and structural blocks at Continental.  The highest concentrations of PGE-enriched magnetite occur in the structural block between the Kahuna and Eden faults. Subsidiary northwest and northeast trending faults tend to blur the relationship between PGE-enriched magnetite and rock lithologies but highly PGE enriched magnetite does appear to be structurally bounded by the various structures at Continental (Figure 7).  PGE grades are highest in three structurally isolated blocks surrounded by structural blocks with lower-level PGE anomalies.  Rock types within these favorable blocks are dominated by sub-equal pyroxenite and wehrlite indicating a possible litho-magmatic control of PGE enriched magnetite.





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FIGURE 7







Magnetite has several distinctive forms or physical habits at Continental that can be summarized as follows (in their relative order of most to least PGE favorable):

a). Frothy magnetite  highly irregular, jagged or splattered textures like hot slag dropped on a cold surface. This type of magnetite is broadly vein-like, has clearly discordant geometries relative to wehrlite and pyroxenite and has very irregular selvages and strike directions.  This magnetite is normally dull black on weathered and fresh surfaces. It is most common in mixed pyroxenitewehrlite rocks and forms preferentially within the wehrlite or at the boundary between wehrlite and pyroxenite.  The highest grades at Continental (+14 gpt) came from rocks with this style of magnetite.

b). Orbicular magnetite  similar irregular boundaries as frothy magnetite but forms diagnostic concentric rings or nested shells in wehrlite rich rocks west of Kahuna fault.  It is normally dull black on weathered surfaces but exhibits a highly lustrous, gun-metal bluish color on fresh surfaces.  Anomalous PGE values were recovered from these rocks at Continental but values seldom exceed 1 gpt Pt.

c). Massive magnetite  This type of magnetite has a fine to medium grain size and has a massive to blocky or podiform habit.  This magnetite is dull black on weathered

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surfaces and is lustrous silver to blue-silver on fresh surfaces. It is most common in hornblende pyroxenite where phlogopite micas may occur along magnetite selvages. Can also form in mono-lithologic massive pyroxenite but phlogopite is normally not present with magnetite in anhydrous magmatic units.  This type of magnetite is most common east of the Eden fault but has been observed in all structural blocks at Continental. PGE values in rocks with this style of magnetite at Continental seldom exceed 0.5 gpt Pt.

d). Disseminated magnetite  This type of magnetite forms in octahedral grains to 0.5 cm, can make up to 25% of the rock by volume and is shiny black on weathered surfaces and lustrous blue-black on fresh surfaces.  It is most common in hornblende-rich rocks west of and 1,000 to 1,500 feet below Continental zone (old iron-ore deposit). PGE values in rocks with this style of magnetite at Continental seldom exceed 0.25 gpt Pt.



In addition to recon-scale sampling conducted during structural and lithologic mapping, three generally north-south lines of rock samples were collected on approximately 25-meter centers for zoning purposes.  These samples (55 in all) were collected without regard for magnetite content in an attempt to determine whether or not lateral zoning of PGE fluids and related PGE depletion or enrichment could be identified at Continental.  Recent data from Russian exploration efforts in similar zoned complexes indicate that PGEs can be mobilized in fluids derived from or driven outward by dunite plugs injected in to the complex, often as the youngest phase of the magmatic cycle (T. Evans, Oral Comm., 2003).  PGEs are pushed outwards from the complexes until P-T-X conditions are favorable for their precipitation, mostly as Fe-Pt alloys.  If that model is applied to Union Bay PGE enrichment and depletion haloes should be detectable.  Evaluation of these sample data indicates no discernable enrichment or depletion patterns but this may be due in large part to the limited area covered by the samples.



Understanding the relative age and direction of motion on the Kahuna and Eden faults is critical to targeting future exploration at Continental.  If the wehrlite-rich rocks west of the Kahuna fault are part of an upthrown block then the lower Pt grade mineralization encountered in the western-most structural block would indicate that the Continental zone has a floor which consists of lower grade mineralization (Figure 6).  If the wehrlite-rich rocks to the west of the Kahuna are part of a downthrown block then the possibility exists that higher grade PGE mineralization occurs at depth below current erosional levels west of the Kahuna fault.  Further complicating the structural control of mineralization at Continental are the older, less well documented northeast and northwest trending faults which dissect rocks west of the Eden fault.  Certain blocks are more mineralized than adjacent blocks, suggesting that both vertical and horizontal movement has taken place on these faults.



Grab samples collected at Continental in 2003 contained a consistent Pt:Pd ratio and trace element assemblage that is similar in some respects to PGE and trace element values seen at the North and Jaguar zones (Table 8).  Pt:Pd ratios for rock samples collected at Continental range from 28 to 1 to less than 2 to 1 and average about 10 to 1.  Simple scatter plots (bi-variate correlation analysis) indicate that elevated Pt values are strongly correlated to Pd but otherwise have no clear relationship with other relevant trace elements such as As, Bi, Hg, Sb, Cu, Cr, Ni, Mg or Fe.  However, these simple statistics are misleading since factor analysis (multivariate correlation matrices) clearly indicates that Pt and Pd are strongly associated with Al, Fe, Cr, Mn, Ti, and V and strongly but negatively associated with Mg.  This factor group is indicative of magnetite while two other factor groups are indicative of dunite and pyroxenite, both of which are unassociated with Pt or Pd.  While similar conclusions were drawn from the 2001 field

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program (Avalon, 2001) and by Van Treeck and others (2003), the more accurate analytical techniques utilized in 2003 make these conclusions more certain.



Table 8: Significant (+ 1 gpt Pt) grab rock samples from 2003 at the Continental zone. Note: upper detections limits were Cr = 10,000 ppm, Fe = 25% and Mg = 15%.

Sample #RockUnitPt_ppbPd_ppbCr_ppmCu_ppmFe_percMg_percNi_ppm390478Magnetite vein149509401000026258.2415394581Magnetite vein142009001000028259.51462394503Magnetite vein6660237839010259.94461390479Pyrox - Wehr64205758450147258.6326393857Wehrlite55305421000017255.49444492940Magnetite vein443043310000592212.85403394513Wehrlite43401689270112510.8509394504Wehrlite41802121000021255.7451393895Pyrox - Wehr39905453850582415400394516Pyrox - Wehr388032262901318.311.65295393855Wehrlite382036473301922.511.65334393867Pyroxenite38203757250823.28.91263393852Wehrlite3160209970011255.04477393860Wehrlite297023851501023.211.1334394789Wehrlite267038645802723.712.45357390482Wehrlite25601695420721.915427394515Wehrlite24601611000011258.27453394505Magnetite vein2080183964015253.59413393853Wehrlite20101691830516.0511.6228393859Wehrlite16751466940122515478393864Wehrlite16751542170719.8515506394316Wehrlite16554696060142514.45451390481Wehrlite16251088790102512.5443466376Magnetite vein1565641945716.7514.8361394526Wehrlite1560895310722.715421394514Pyrox - Wehr14456010000132512.1427394797Wehrlite143520610000102510.8454394786Wehrlite131593915012257.04493394312Wehrlite12902151000010255.26465390462Wehrlite1280682160618.315425394506Wehrlite127097947014253.63408394527Pyrox - Wehr12058710000232511423394518Pyrox - Wehr1180761000033258.14448394501Wehrlite11757359409256.03297390480Wehrlite11651461000026254.47432394347Wehrlite1140278548014253.64405394507Wehrlite112565589012251.83455393856Wehrlite108514810000262510.7342394511Wehrlite1080148845016255.11409393854Wehrlite1050733700523.314.05335




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Results from saw channel sampling conducted in 2003 on outcrops containing visible magnetite support the hypothesis that PGE enrichment occurs only in the spinel-group oxides (magnetite) which post-date but are spatially associated with mixed wehrlite - clinopyroxenite rock units.  Pt:Pd ratios for channel samples collected at Continental range from 33 to 1 to less than 1 to 1 and average about 12 to 1.  The correlation between magnetite and elevated PGEs is easily seen in channel samples since both magnetite-bearing and magnetite-free rocks were sampled along a given channel.  Channel 14 from the Continental zone illustrates the close association between magnetite and PGEs (Table 9).  This channel is 11 meters in length and orientated roughly N-S, perpendicular to the surface expression of wehrlite tubes in Continental.  This channel crosses two distinct areas of magnetite veining with a section that contains wehrlite with no magnetite in between.  The Pt values associated with the meter long samples which contain magnetite range from 169-6240 ppb, while the samples that do not contain magnetite have a range of 10-18 ppb.  The presence of magnetite is correlative with an order of magnitude jump in Pt concentrations between magnetite bearing and non magnetite bearing rocks. Similar relationships are present in other channel samples collected at Continental.



Table 9: Significant saw channel sample geochemistry, Continental zone.

Sample #ChannelFrom
ftTo
ftInt
ftRockUnitPt_ppbPd_ppbPt/PdCr_ppmFe_perc394412303.33.3Pyrox-Wehr-Mgt639719.0237017.1539441333.36.63.3Pyrox-Wehr4363612.19768.3839441436.69.83.2Pyrox-Wehr-Mgt499697.2181010.5394415403.33.3Pyrox-Wehr-Mgt1427.05656.8939441643.36.63.3Pyrox-Wehr-Mgt296012922.96107.4639441746.69.83.2Pyrox-Wehr-Mgt6965113.6145510.9394643903.33.3Pyrox-Wehr-Mgt12507317.1175015.139464493.36.63.3Pyrox-Wehr-Mgt4559.010558.1239464596.68.21.6Pyrox-Wehr-Mgt21210.55037.223946461003.33.3Pyrox-Wehr-Mgt10656316.9126013.8394647103.36.63.3Pyrox-Wehr-Mgt2762312.081412.3394648106.69.83.2Pyrox-Wehr-Mgt1671411.95999.573946491103.33.3Pyrox-Wehr-Mgt14106920.4171010.7394602113.36.63.3Pyrox-Wehr-Mgt5693019.0164511.65394603116.69.83.2Pyrox-Wehr-Mgt1735.79626.96394604119.813.13.3Pyrox-Wehr-Mgt1836.08517.363946051113.116.43.3Pyrox-Wehr-Mgt40104.067483946061116.419.73.3Pyrox-Wehr-Mgt50412.56308.463946071119.7233.3Pyrox-Wehr-Mgt9315118.3120010.83946101403.33.3Pyrox-Wehr-Mgt11605720.49239.1394612143.36.63.3Pyrox-Wehr-Mgt169821.16497.14394613146.69.83.2Pyrox-Wehr-Mgt14905726.16919.7394614149.813.13.3Pyrox-Wehr18118.06126.113946151413.116.43.3Pyrox-Wehr15115.06355.793945381416.419.73.3Pyrox-Wehr10110.07486.63945391419.7233.3Pyrox-Wehr12112.06896.26394540142326.23.2Pyrox-Wehr1025.06796.44


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3945411426.229.53.3Pyrox-Wehr1025.06286.313945421429.532.83.3Pyrox-Wehr-Mgt624026623.5269016.453945431432.836.13.3Pyrox-Wehr-Mgt7733025.89239.993945441503.33.3Pyrox-Wehr-Mgt395014926.5140510.853924021703.33.3Pyrox-Wehr340418.34829.47392403173.36.63.3Pyrox-Wehr-Mgt259021312.2415017.65392404176.68.21.6Pyrox-Wehr-Mgt240020012.0226011.23924202003.33.3Pyrox-Wehr-Mgt3548.8108014.75392421203.36.63.3Pyrox-Wehr-Mgt5704313.3398023.5392422206.69.83.2Pyrox-Wehr-Mgt436557.9522023.83924232103.33.3Pyrox-Wehr-Mgt12059313.0218017.25392424213.34.91.6Pyrox-Wehr-Mgt12059313.0259018.43924262203.33.3Pyrox-Wehr-Mgt14355526.1166516.7392427223.35.72.4Pyrox-Wehr-Mgt12056020.1155515.23925022603.33.3Pyrox-Wehr-Mgt6092623.419959.99392503263.36.63.3Pyrox-Wehr-Mgt19807825.4362015.65392504266.67.40.8Pyrox-Wehr-Mgt11111.012156.613924442803.33.3Pyrox-Wehr-Mgt3252513.0189517.55392445283.36.63.3Pyrox-Wehr-Mgt5263813.8197019.8392446286.67.50.9Pyrox-Wehr-Mgt187011017.02220213925343603.33.3Pyrox-Wehr-Mgt3952218.07358.57392535366.69.83.2Pyrox-Wehr-Mgt76419.06106.96392536369.813.13.3Pyrox-Wehr-Mgt307011626.51615133925373613.116.43.3Pyroxenite919.06406.133925383619.7233.3Pyrox-Wehr-Mgt23608527.8163512.55392539362326.23.2Pyrox-Wehr-Mgt14405725.3163014.2




This newly discovered prospect has significantly changed the exploration thinking at Union Bay.  Since its discovery it has become clear that the mixed wehrlite and clinopyroxenite rock type is a favorable magmatic host for high grade PGE mineralization.  This mixed-lithology is present and associated with +1 gpt Pt values at the North, Jaguar, Lexus, Mt. Burnett North, Chevelle and Continental zones.  PGE mineralization correlates well with the peridotite unit of Ruckmick and Noble (1959) and suggests a genetic link between these two magmatic units and significant PGE mineralization.  The genetic or structural reasons for this association remain unknown.  Some hypotheses include buffering caused by the two rock types, a certain P-T-X environment either as a result of these rocks or characteristic of their formation, or possibly position in the intrusion.  Regardless of the physio-chemical reasons for the elevated PGEs, evaluation of other areas of the property is warranted wherever the pyroxenite  wehrlite lithologies contain abundant spinel group oxides (magnetite).  PGE mineralization remains open to expansion at Continental to the north and east toward the adjacent Chevelle zone and to the south into Cannery Creek.



Chevelle: The Chevelle zone was discovered in 2003 approximately mid-way between the Continental zone and the Mt. Burnett zone along a relatively flat lying mesa underlain by mixed wehrlite and clinopyroxenite (Figure 8).  In the western portion of the prospect magmatic layering strikes 020° and dips 34°E similar to that farther west at Continental.  The eastern part of Chevelle has yet to be mapped.  Magnetite in this area is similar to magnetite seen in the

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Continental, Mt. Burnett North, and Lexus zones.  Magnetite is located in the olivine rich rocks and is associated with coarse-grained diopside veins and pods.  The edges of this zone are cliffs to the north, east, and west and a slope with poor exposure to the south where gabbro tops the ridge.  The cliffs are accessible in some areas but technical climbing expertise will be required to properly sample this area.

FIGURE 8







Sampling at Chevelle was conducted along a cliff face with a vertical exposure of approximately 100 feet.  Magnetite occurs in fairly continuous bands/veins that appear to be tabular in nature and reflect the orientation of the olivine-rich host rock.  The orientation of the layering is consistent with the layering in Continental, but the high angle Eden fault is located between the Chevelle and Continental zones and relative motion along this structure is unknown. Pt values from grab rock samples at Chevelle reach up to 6,080 ppb while Pd values reach 1,845 ppb (Table 10).  Pt:Pd ratios for rock samples collected at Chevelle range from 21 to 1 to less than 1 to 1 and average about 4 to 1.  These ratios differ significantly from those seen at Continental.  Although the sample population from which the Chevelle statistics were derived is small (n = 52), there also appears to be a weak correlation between Pt and Cu at Chevelle suggesting the samples collected at Chevelle in 2003 were derived at least in part from rocks south of the peridotite unit of Ruckmick and Noble (1959).  The lower Pt:Pd ratio and the association of geochemically correlative copper is similar to the Mt. Burnett South and Cobra West zones where hornblende pyroxenite is the dominant rock type.  PGE mineralization remains open to expansion at Chevelle.

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Table 10: Significant PGE mineralization at the Chevelle prospect.

Sample #RockUnitPt_ppbPd_ppbCr_ppmCu_ppmFe_percMg_percNi_ppm393918Pyrox-Wehr-Mgt608018453290918.7513.35452492946Wehr-Mgt1530139581013253.98347394594Pyrox-Wehr-Mgt103036856301019.3510.4354392707Pyrox-Mgt684123969018252.09430392716Pyrox-Mgt555117592016253.85385394611Pyrox-Wehr-Mgt4528289402913.5510.1251392708Pyrox-Mgt4509373814255.88235394571Pyrox-Wehr-Mgt449804510511.310.85259394583Pyrox-Wehr-Mgt44323061501618.7510.3360390465Pyrox-Wehr-Mgt328111877012015.58.29256392706Pyrox-Mgt2742928801322.48.51231394578Wehrlite2631531000019259.36440394586Pyrox-Wehr-Mgt2115267801020.315540394593Pyrox-Wehr-Mgt1727121501112.0513.6374394588Pyrox-Wehr-Mgt15731980614.215532394582Pyrox-Wehr-Mgt147512180812.5514.75412394585Wehrlite11127447081714.4436394591Pyrox-Wehr-Mgt10342328091210.95345




Cannery Creek: Maps published by Ruckmick and Noble (1959) indicated the presence of sulfides along the beach north of Cannery Creek (Figure 3).  Initial work conducted in this area in 2003 revealed the presence of clinopyroxenite, hornblendite, hornblende clinopyroxenite and gabbro on the north side of Cannery Creek and phyllite on the south side of the creek.  Sulfides (pyrrhotite, chalcopyrite, pyrite) are observed north of Cannery Creek in heterolithic breccias containing hornblende clinopyroxenite and clinopyroxenite extending from the beach into the hills to the east.  Sulfide bearing rocks extend up a waterfall approximately 110 meters up Cannery Creek and over 300 meters into the hills north and east of the beach. The break in rock types along the prominent topographic expression occupied by Cannery Creek is interpreted to be an east-west trending high angle fault.  The north side of the fault apparently has been upthrown relative to the south side bringing ultramafic rocks to the present level of exposure on the north side of the drainage while only gabbro and Jurassic phyllite are exposed south of the creek in the South Mountain area.



Disseminated magnetite is present in clinopyroxenite rich rocks but does not appear to be related to sulfide or PGE-copper mineralization.  Significant Pt values were accompanied by Pd values in excess of the Pt values (Pt:Pd ratio average is 0.97 to 1). Results from the sampling returned values up to 330 ppb Pt with 385 ppb Pd (Table 11).  Copper values were also highly anomalous, averaging 481 and reaching up to 2,050 ppm with sulfur values reaching 3.65%.  Chromium values were anomalously low, reaching a maximum of only 673 ppm and averaging only 151 ppm.  The low Pt:Pd ratio, low chromium and high copper values in hornblende dominated rocks at Cannery Creek are similar to geochemical signatures seen in the Mt. Burnet South zone.  However the high sulfide content of rocks at Cannery Creek is suggestive of a contact-related phase of mineralization not recognized previously at Union Bay.  Sulfide mineralization remains open to expansion at Cannery Creek.

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Table 11: Rock geochemistry from the Cannery Creek zone.

Sample #Rock UnitPt_ppbPd_ppbPt:PdCr_ppmCu_ppmFe_percMg_percNi_ppm393910Hornblendite3303850.8571542117.057.3598466366Hornblendite2342680.873871409.67.1726393911Hornblendite1001570.6375419913.556.1540393943Pyrox62730.84939786310.9510.3180393948Hornblendite43450.95611712113.45.7566393903Olivine pyrox42510.82463620507.8610.45570393945Olivine pyrox40760.5266737066.8711.65207393930Hornblende pyrox34660.51512283115.057.5859393928Hornblende pyrox30530.56611372815.47.2266393905Hornblendite27261.038562913.35.6722393940e22191.15811427416.056.1511393921Pyrox19240.792319150512.610325393924Olivine pyrox17190.89595175516.97.22104393879Gabbro1262.0009114214.45.4354393927Hornblende pyrox10310.323965212.657.3538466367Gabbro10160.6251128813.652.5822393923Olivine pyrox9120.75085190515.87.0796393909Hornblendite890.889887213.35.2329393922Olivine pyrox890.889108202015.757.12106393929Hornblende pyrox871.1438793216.68.6864390453Pyrox723.5008026916.955.5634393926Hornblende pyrox7130.538563225.859.8996466363Hornblendite641.5004341113.456.5121393947Hornblendite580.6257917213.156.523393949Hornblendite551.0009511611.94.9827393904Hornblendite-51536710.34.311393906Hornblendite-52112605.21.5826393907Hornblendite-5-183564.981.526393908Hornblendite-563813913.556.1913393944Pyrox-52132174206.5212393946Hornblendite-556032112.456.0425466362Gabbro-5-1631089.553.542466364Hornblendite-52501013.56.5936466365Hornblendite-5291719.055.9547






Lexus Zone:The Lexus zone was discovered in float samples collected in 2001 and was slated for channel sampling and possible drilling in 2003 (Figure 3).  A total of 30 rock samples and 84 shovel soil samples were collected in the Lexus zone in 2003 (Table 12). Rock types in this mineralized area consist of mixed clinopyroxenite and wehrlite.  Magnetite is associated with the contact area between the clinopyroxenite and wehrlite but outcropping magnetite is rare due to heavy vegetation.  Magnetite occurrences at Lexus are similar to magnetite seen at North, Continental, Chevelle, and Mt. Burnett North. Previous sampling at Lexus returned highly

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anomalous Pt (4,726, 1,315, 1,227 ppb Pt) from magnetite-bearing float boulders (Avalon, 2001).



Table 12: Significant grab rock geochemistry from the Lexus zone

Sample #YearRockUnitPt_ppbPd_ppbCr_ppmCu_ppmFe_percMg_percNi_ppm4648972001Pyrox472628820000-1101.025583947732003Magnetite40402161000014256.16083904582003Vein1315761000049253.644954649062001Ol pyrox122735711227141104.322713947612003Pyrox5464251290159.319.651623947642003Wehrlite43725100009256.054823904572003Ol Pyrox, Pyrox3633882059415.258.01119




Due to the sparse outcrop a soil sampling program was conducted at 50 meter centers over the main boulder field where higher grade PGE values were obtained from grab rock samples.  Soil samples returned values ranging from <10 ppb to 818 ppb Pt with the higher values (+50 ppb) concentrated along the side slopes of the ridge making up the Lexus prospect.  Similar soil dynamics have been observed elsewhere in Alaska and suggest significant soil creep caused by the steep topography combined with wet conditions in summer and frost-heaving in winter.  Prospecting completed after receipt of soil results failed to discover an obvious bedrock cause for the higher soil Pt values.  As a result of these inconclusive results, no additional work was completed at Lexus in 2003.



Mt. Burnett North: Based on observations from mapping and sampling in 2003 the Mt. Burnett North zone has been broken out of the old Mt. Burnett zone discovered in 2001 (Avalon, 2001, Figure 3).  The northern part of the old Mt. Burnett zone is composed of mixed clinopyroxenite and wehrlite, the same rocks as those hosting PGE mineralization at Chevelle, Continental and Lexus.  Several prominent north-south trending high angle faults cut this ridge with minimal apparent offset. As at Chevelle, Continental and Lexus, magnetite at Mt. Burnett North occurs as discontinuous veins and pods associated with the contact between clinopyroxenite and wehrlite.  An area of large conspicuous magnetite with and without coarse diopside veins is located near the midpoint of the main east-west ridge forming the prospect.  Several anomalous PGE samples came from this area during 2001 outcrop sampling (332 to 1,098 ppb Pt) however these elevated Pt values could not be duplicated in 2003 outcrop sampling.  Additional sampling, particularly on the slopes to the north of the ridge, will be required to determine the significance of mineralization at Mt. Burnett North and it relationship, if any, to PGE mineralization in similar rocks at Continental and Chevelle.



Mt. Burnett South/Cobra West zones: Exploration conducted in 2003 has confirmed that Mt. Burnett North and Mt. Burnett South are separated from each other by the Sandy fault, a high angle west-northwest trending structure marked by a 20-40 meter wide zone of fine sandy material (fault gouge) with rare magnetite and clinopyroxenite cobbles.  The Cobra West zone, first outlined by PGE-bearing magnetite float boulders in 2001 (Avalon, 2001), is thought to be part of the same structural block and is now included in the Mt. Burnett South zone.



Lithologies present at Mt. Burnett South/Cobra West consists of clinopyroxenite, hornblende clinopyroxenite and hornblendite. Wehrlite is not observed in outcrop.  Magnetite

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veins and amorphous pods comprise up to 30% of these rocks and are best exposed along the cliff face directly below and south of the 2001 Mt. Burnett drill pads (Avalon, 2001).  Magnetite occurrences are roughly horizontal along the cliff face although individual pods and veins do not exhibit a preferred orientation.  Hornblende rich compositional layering, within the upper portion of the cliff face is sub-vertical and strikes approximately east-west.  A north-south oriented vertical fracture pattern is present throughout the cliff.



Rock samples collected in 2001 from the Sandy fault returned Pt + Pd values up to 11.5 gpt which prompted the drilling conducted in that area in September 2001.  Follow-up rock sampling in 2003 returned values up to 2,360 ppb Pt plus 152 ppb Pd (Table 13).  Pt:Pd ratios from these samples averaged 4.6:1, considerably lower than at North, Jaguar and Continental zones but nearly identical to those at Chevelle.  Perhaps more significant is the fact that chromium values from these samples average only 271 ppm whereas, with the exception of Cannery Creek, most other areas of the property that have been sampled in 2003 (4-acid digestion) returned chromium values well in excess of 1,000 ppm (Appendix 2).  Bismuth values also are slightly elevated at Mt. Burnett South compared to other areas of the property, reaching a high of 22 ppm.  It is unclear what these different Pt:Pd, bismuth and chromium values mean in relation to mineral zoning in the complex.

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Table 13: Significant grab rock geochemistry from the Mt. Burnett South prospect

Sample #YearRockUnitPt_ppbPd_ppbCr_ppmCu_ppmFe_percMg_percNi_ppm4649492001Hornb Pyrox99101605139842100.42244678972001Pyrox288578123414100.751834649232001Magnetite271719349612100.522573938762003Magnetite2360152124019254.342273943382003Ol Pyrox160510337110254.312274649442001Magnetite153912132321100.561884649472001Ol Pyrox, Pyrox132410827213100.781373945962003Magnetite84410145516251.732504649462001Ol Pyrox82711937140100.441943943412003Ol Pyrox812471969257.152013943402003Ol Pyrox7496438517253.452424678982001Pyrox672952188100.95144




Good exposures and lack of previous sampling prompted channel saw sampling of the magnetite-rich hornblende pyroxenite along the cliff face directly below and to the south of the 2001 Mt. Burnett drill holes.  Horizontal and vertical coarse grained hornblende veins, often with associated magnetite, occur in the channeled area.  Phlogopite occurs in the upper 30 feet of this rock package, as well as in the Sandy fault to the north. Pt and Pd values from channel samples averaged only 104 and 143 ppb, respectively and maximum values were only 261 ppb Pt and 338 ppb Pd.  Pt:Pd ratios were anomalously low, at 0.79, compared to most other PGE enriched areas of the project.  In addition, copper values in the Mt. Burnett channels averaged 150 ppm and ranged up to 752 ppm, far higher than copper values seen in previous years samples or from grab samples collected in 2003.  These values suggest the presence of discrete Cu-bearing minerals, possibly as sulfides.  Chromium values also were anomalously low, averaging 95 ppm and reaching a maximum of only 200 ppm.  Elevated Ba is present in channel samples, probably as a component of phlogopite while lower values of Ni and Co are due to the lower olivine content of these rocks.  The extremely low Pt:Pd ratio, higher Cu and lower Cr, Ni and Co values suggest that the magnetite-bearing rocks sampled by channel sampling are more evolved than those sampled farther north within this same zone which itself is considerably more evolved than PGE-bearing magnetite at North, Jaguar, Continental and Mt. Burnett North.  The results of rock and channel sampling at Mt. Burnett South may prove useful in determining mineral zonation at Union Bay.



East Cobra: The East Cobra zone is located approximately 0.5 km southwest of the Lexus zone and also was discovered in 2001 (Figure 3).  A total of 15 grab rock samples were taken at East Cobra.  This zone occurs on a cliff so sampling was limited to areas that could be reached from the base and along ledges.  All the mineralized samples are associated with magnetite veins and pods in clinopyroxenite to olivine pyroxenite.  Some of those samples exhibit magnetite veins with mica (phlogopite?) selvages.  Orientation of the magnetite veins is sub-parallel to the magmatic layering in the area which generally trends E-W.  One sample from this zone containing micas assayed at 8,853 ppb Pt + Pd.  This mica-bearing unit has been traced for over two miles to the west and may represent a PGE-enrich marker horizon within the Union Bay complex.

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The East Cobra pyroxenite is finer grained than other pyroxenites mapped in the North, Jaguar and Lexus zones. It also differs from the Lexus zone on the basis of geochemistry.  Samples from East Cobra show lower values than Lexus samples for Cr (avg. 234 ppm compared to 5700 ppm), Cu (avg. 10 ppm compared to 59 ppm), Mg (avg. 2.7% compared to 5.8%), Ni (avg. 153 ppm compared to 326 ppm) and Sb (avg. 0.4 ppm compared to 15.2 ppm). Geochemistry from East Cobra also exhibits a distinctive set of elements which link it to West Cobra and Mt. Burnett to the west and set it apart from the Lexus, Jaguar and North zones to the east.  These elements include elevated Nb, K, Na, Sc, Sr, Ti coupled with depleted levels of Mg.



Black Bear Creek: Twenty stream sediment samples were collected from small streams draining into Black Bear Creek from the south side of South Mt. (Figure 3, Table 14).  Analytical results for these samples returned values up to 92 ppb Pt with uniformly low Pd values (<3 ppb).  Copper values were anomalously high, averaging 58 ppm and reaching a high of 101 ppm.  These copper values are in contrast to the universally low copper values in pan concentrates collected in 2001 from the streams draining the predominantly ultramafic hosted North, Jaguar and Lexus zones (average 10 ppm, maximum 41 ppm). Host rocks at South Mt. are primarily unaltered gabbro or metasediments however, exposures within the steep drainages are limited and other rock types are possibly present.  No obviously mineralized rocks were noted during stream sediment sampling however the anomalous Pt and Cu and low Cr and Ni values suggests the presence of sulfide mineralization similar to that seen in the Cannery Creek area.



Table 14: Stream sediment results from South Mt. area.

Sample #Pt_ppbPd_ppbCr_ppmCu_ppmFe_percMg_percNi_ppm39456592243685.721.942839456422345586.151.742339456320241506.11.762639456213338645.531.682439455912224413.921.11739455312131444.611.212339455810433725.471.321339456710352736.691.862339456910338885.91.872639455210223333.720.96153945689337795.91.62213945559234275.311.22153945579231514.341.17233945618335836.071.942239456683351016.761.9163945518135225.581.32173945547131514.71.13233945606245396.251.85173945566133404.771.2193945705336836.471.9220




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DRILLING



Drilling Summary: Prior to the drilling conducted by Quaterra in September 2001 there had been no previous drilling conducted on the Union Bay property. The 2001 diamond core drilling program at Union Bay consisted of 4 NQ drill holes totaling 1,168.2 feet (356 meters).  Two holes were drilled at the North Zone and two holes on Mt Burnett South. All 2001 drilling was conducted by Layne Drilling using an LF-70 diamond drill.



The 2003 diamond core drilling program at Union Bay consisted of 11 NQ2drill holes totaling 4,490 feet (1,368 meters).  Of this total, 3,086 feet (941 meters) of drilling was completed in 8 holes at the North zone while the remaining 1,404 feet (427 meters) of drilling was completed in three holes at the Jaguar zone (Table 12). All 2003 drilling was conducted by Connors Drilling using a modified Longyear 38 diamond drill.



All diamond core drilling completed during 2001 and 2003 was supported with a Hughes 500D helicopter supplied by Temsco Helicopters of Ketchikan.  The drill rig and support equipment were barged to Ketchikan and transported to Vixen Harbor via Boyer Towing along with the camp supplies.



Logging and saw cutting of core was conducted onsite by Avalon employees.  Core was sampled on a 3-5 foot nominal interval where geologic breaks (fractures, contacts, faults) did not otherwise dictate the segregation of sample intervals.  Half of the cut core remained for future use and was transported at the end of the field season to Avalon Developments warehouse facilities in Fairbanks.  Core samples from the 2001 drilling was shipped via surface freight to Bondar Cleggs sample preparation facility in Fairbanks.  Core samples from the 2003 drilling was transported from the Vixen Harbor base camp by float plane (DeHaviland Beaver), operated by Island Wings air service of Ketchikan to the Ketchikan International Airport.  The samples were then shipped via Alaska Airlines Air Cargo to Ferndale, Washington for pickup by ALS Chemex of Vancouver.



Summary of Rock Types:Based on experience gained in previous work on the project, a simplified lithologic library has been constructed for the Union Bay project (Avalon, 2003). Rock types mapped in core are based on relative modal percentages of olivine, clinopyroxene and hornblende.  Examination of the multi-element histograms from each hole show very good correlation between drill log lithologic mapping and multi-element geochemistry that clearly shows the chemical differences between each rock type. The major lithologies mapped in core were:



1.

Wehrlite: fine-grained, olivine content 65-85%, clinopyroxene content 15-35%.  Easily recognized in multi-element drill hole histograms because of its high Ni, Co, Mn and Mg content and generally lower Ca, V and Ti content.

2.

Olivine clinopyroxenite: fine-grained, olivine content 40-65 %, clinopyroxene content 35-60%.

3.

PxWh: A mixture of wehrlite and clinopyroxenite.  This rock is characterized by an irregular, angular texture referred to as cookie dough texture.  Wehrlite chunks

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appear to be broken up and included in the clinopyroxenite.  Olivine in the wehrlite commonly has undergone heavy serpentinization.

4.

Clinopyroxenite: Medium to coarse-grained, clinopyroxene content 60-90+%, olivine content 0-40%. Easily recognized in multi-element drill hole histograms because of its low Ni, Co, Mn and Mg content and generally higher Ca, V and Ti content.

5.

Hornblende: euhedral brown to black crystals, becoming larger in overall crystal size toward the margins of the Union Bay complex where pegmatitic phases have been observed.



Accessory minerals that occur in variable amounts in association with the above major rock types include:



1.

Serpentine: all the rocks mentioned above have been serpentinized to some degree, either in small micro-veinlets, or in more pervasive form observed mainly within wehrlite.  Serpentine varies in color from dark green and black to white or pastel light green.

2.

Magnetite: Volume, morphology and associated minerals vary throughout the drill holes.  The characteristics of magnetite present will be discussed in the appropriate section on each hole.

3.

Vein Diopside: Coarse-grained, pale colored late stage diopside veins are present in variable amounts in most of the holes drilled.  The extent and characteristics of these veins will be discussed in the appropriate section on each hole.

4.

Phlogopite: Coarse to medium-grained, average flake width of 2 centimeters.  The mica varies little in color from the typical rich dark brown.  Easily recognized in multi-element drill hole histograms because of its high Al, K, Na, Ca, Sr, Ba and Ti.

5.

Calcite: white to light green veins occur as fill on late stage fractures, commonly occurs with serpentine



North Zone Drill Hole Summaries: The following are significant observations from logging and geochemistry from each of the 2001 and 2003 drill holes in the North zone.  A summary of significant North zone geochemistry is presented in Table 15.



Table 14: Significant North zone drill hole intercepts

Drill Hole #From_ftTo_ftInterval_ftPt_ppbPd_ppbUB01-118.219.51.321814UB01-162.864.41.610590565UB01-164.4661.61859UB01-2164.4165.51.129915UB01-2165.5166.5155728UB0301192.8196.43.6265-1UB030299.4101.42130019UB0302231.8235.63.81191UB0306382.73863.3100511UB0306386389.73.74907UB030712212428515




UB01-1: Drill hole UB01-1 was drilled to test high grade Pt+Pd in the discovery outcrops of the North Zone.  Examination of raw geochemistry, drill logs and multi-element graphs reveal

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that high grade PGE values found at surface do extend to depth.  Two distinctive rock types occur in hole UB01-1:

1)

Fine grain foliated wehrlite with 75-90% olivine and 10-25% clinopyroxene.

2)

Coarse grain clinopyroxenite veins up to several feet thick, some of them containing magnetite, which cut the wehrlite.



High grade Pt + Pd intercepted in the upper part of hole UB01-1 is correlative with surface grab samples and high grade intervals in channel samples.  The rocks in drill hole UB01-1 contain significant amounts of Ni (to 1282 ppm), Cr (to 2046 ppm), Fe (to + 10%) and Mg (to +10%).  Significant PGE mineralization is spatially associated with clinopyroxenite veins and is accompanied by elevated Cr.  Clinopyroxenite veins, regardless of PGE content, contain lower levels of Ni, Zn, Co, Fe, Mn and Mg than the host wehrlite.  This observation is thought to be primarily a function of silicate geochemistry since Ni, Zn, Co, Mn and Mg are all concentrated in olivine, a mineral species that is distinctly lacking in massive clinopyroxenite dikes.  The mineralized dike from 62.8 to 64.4 feet contains approximately 6% magnetite and contained 10,590 ppb Pt and 565 ppb Pd.  Comparison of this interval with sample 468829 from Channel 1 containing 10,872 ppb Pt + Pd indicate that these values are hosted by the same pyroxenite  magnetite vein swarm.  Pt:Pd ratios in hole UB01-1 range up to 20:1 in mineralized areas consistent with samples collected during surface sampling.  A distinctive coarse grain magmatic(?) breccia unit which is compositionally indistinguishable from wehrlite is present in two intervals of UB01-1 but does not appear to be related to or associated with PGE mineralization.. Serpentinized and highly magnetic fault zones were noted at several intervals in hole UB01-01 however these structures do not appear to be associated with PGE mineralization.



UB01-2: This hole was designed to test for either flat-lying or west-dipping mineralization in the North zone. Examination of raw geochemistry, drill logs and multi-element graphs reveal that mineralization is east-dipping and that surface outcrops of PGE mineralization in Channel 1 were intercepted between 164.4 and 166.5 feet (Table 15). Three distinctive rock types occur in hole UB01-2:

1)

Fine grain foliated wehrlite with 55-80% olivine and 20-45% clinopyroxene.

2)

Pyroxenite to olivine pyroxenite with 60-90% clinopyroxene and 10-40% olivine.

3)

Clinopyroxenite ± magnetite veins up to 2.1 feet wide.



Units 1 and 2 have similar geochemistry but are mineralogically slightly different with the olivine pyroxenite containing slightly less chromite.  The hole contains elevated Ni (to 1467 ppm), Cr (to 512 ppm), Fe (to + 10%) and Mg (to +10%).  A thick clinopyroxenite vein was encountered between 164.4 and 166.5 feet.  This interval contains anomalous amounts of Pt (to 557 ppb), no significant Pd (to 28 ppb) and has a Pt:Pd ratio of approximately 20:1.



UB03-01:Rock types observed include wehrlite, olivine clinopyroxenite, Px/Wh and clinopyroxenite. In UB03-01, magnetite is found only in small widely spaced veins.  Often magnetite is associated with chlorite and together they can appear almost bluish.  It is thought that the mix of fine magnetite veins and chlorite is a late stage event.  Chlorite-magnetite veins do not contain the elevated Pt or Pd grades seen in other types of magnetite. Diopside veins often cut the major rock-types.  These veins can be so numerous that they constitute large percentages of a given sample.  Diopside veins commonly have sharp contacts with the rocks they intrude.  UB03-01 did not intercept significant PGE values however the bottom half of the hole did encounter elevated As, Bi and S values in conjunction with Pt and Pd values normally less than

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detection limits.  The highest value is a 4-foot interval of wehrlite at 192-196 feet that contained 265 pbb Pt and no appreciable Pd.  The Pt was probably sourced from two stringer veins of magnetite noted near the top of the sample interval.



UB03-02:Rock types observed include wehrlite, Px/Wh and clinopyroxenite.  Clinopyroxenite observed in UB03-02 varies from fine grained to coarse grained.  Pervasive serpentinization locally creates fine grained black rock.  In this hole magnetite is only found in veins that are commonly associated with chlorite.  Because of some low angle to core axis intercepts with magnetite veins, the content can be very high in a given sample (up to 10% of a sample).  Diopside veins are common with variable grain size and morphology (cookie dough texture).  The interval from 99.4 to 101.4 feet intersected 1,300 ppb Pt and 19 pbb Pd.  This intercept did not contain any discernable magnetite but did contain one 2 centimeter wide diopside vein. As in hole UB03-03, this hole intersected anomalous As and Sb in the bottom half of the core.  In contrast to UB03-01, UB03-02 encountered consistently anomalous Bi in the upper half of the hole where PGE grades were the highest.



As might be expected, there is a strong rock type and PGE correlation in the first 250 feet of holes UB03-01 and UB03-02 (Plate 3).  Clinopyroxene content increases below 250 feet while wehrlite content decreases.  The last 40 feet of hole UB03-02 intercepted a massive wehrlite unit that is not found at that same level in UB03-01.  Although PGEs in these two holes are elevated in the top half of each hole, there is no obvious higher grade interval in hole UB03-01 that correlates with the 1,300 ppb Pt interval encountered in UB03-02.  Furthermore, check assays of the 1,300 ppb Pt interval returned only 55 ppb Pt, casting some doubt on the reliability of the original assay.



UB03-03: Easting: Rock types observed include wehrlite, Px/Wh and clinopyroxenite. UB03-03 did not encounter significant magnetite concentrations except for small bluish mixtures of magnetite and chlorite.  There are two intervals where disseminated magnetite is seen in diopside veins that have an alteration halo of chlorite.  There are no appreciable grade Pt or Pd intervals in UB03-03.



UB03-04:Rock types observed include wehrlite, Px/Wh and clinopyroxenite. Coarse diopside crystals occur with mixedclinopyroxenite and wehrlite near the bottom of this hole.  The majority of the magnetite found in this hole is in or very near the mixed clinopyroxenite and wehrlite units.  Magnetite is found in discrete veins associated with chlorite.  There are no appreciable grade Pt or Pd intervals in hole UB03-04.



Correlation is good between rock types in holes UB03-03 and UB03-04 with the upper 200 feet of each hole consisting primarily of massive wehrlite and the bottom 100 feet of each hole containing mixed wehrlite and clinopyroxenite.

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UB03-05:Rock types observed include wehrlite, Px/Wh and clinopyroxenite. Magnetite is more common in the second half of the hole and is often found associated with areas with abundant serpentine. These magnetite veins are often found associated with chlorite or late stage serpentine.  Despite the high quantity of magnetite veins there is no significant Pt or Pd grade in UB03-05.  The drillers reported numerous clay seams toward the end of the hole just prior to becoming stuck in the hole.  The hole was abandoned at 280 feet in this clay rich zone which is suspected to be serpentinite.



UB03-06:Rock types observed include wehrlite, Px/Wh and clinopyroxenite. The bulk of the magnetite is found within the wehrlite or the mixed Px/Wh units.  Coarse grained clinopyroxenite found in the second half of this hole is very hard and dense.  The interval from 382.7 to 386 feet intersected 1005 ppb Pt followed by 490 ppb Pt from 386 to 389.7 feet.  Both of these samples contain small magnetite veins approximately 1 mm wide.  Check assays of these intervals returned 1,455 and 429 ppb Pt, respectively.



The upper 50 feet of holes UB03-05 and UB03-06 correlate well with respect to lithologies.  After that point neither the lithologies nor the PGE contents correlate well.  UB03-05 was lost short of its target depth and the elevated Pt grades found near the bottom in UB03-06 can not be correlated with intervals in hole UB03-05.



UB03-07:Rock types observed include wehrlite, Px/Wh and clinopyroxenite. Magnetite occurs as blebs or veins in the wehrlite rich rocks.  Blebs are small with sharp contacts against late stage serpentine.  Magnetite veins are normally less than 1 centimeter in width and are associated with chlorite or serpentine.  Diopside veins are conspicuous by their near-absence in this hole. Phlogopite is associated with late-stage serpentine and magnetite and is easily recognized in multi-element histograms.  Hornblende is observed at the 127.8-130.5 level.  The mixed pyroxenite and wehrlite interval at 122 to 124 feet averaged 851 ppb Pt.  This sample interval contained no discernable magnetite.  Check assays of this interval returned only 25 ppb Pt.



UB03-08:Rock types observed include wehrlite, Px/Wh and clinopyroxenite. Most of the pyroxenite samples lack alteration and contain little magnetite.  Magnetite is found mainly in the serpentinized wehrlite units as small-bluish veins associated with chlorite.  Diopside veins are common in serpentinized wehrlite in the first one third of hole UB03-08.  There are no appreciable grade Pt or Pd intervals in hole UB03-08.



North Zone Conclusions:based on the results of the eight drill holes completed at North zone in 2003 the following conclusions are warranted:



1.

Although 2001 drilling suggested continuity of PGE-bearing magnetite with depth, additional drilling suggests PGE mineralization in the North zone is discontinuous and unpredictable.

2.

High grade intercepts do not exhibit megascopic characteristics that separate them from non mineralized intercepts.

3.

The northern holes at the North zone exhibit reasonably consistent lithologic changes down-hole.  Holes UB01-01, UB01-02 and UB03-01 through UB03-06 all collar in wehrlite and are dominated by this lithology, with minor intervals of clinopyroxenite and

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mixed wehrlite clinopyroxenite to a depth of about 250 feet. Below this level, lithologies are primarily clinopyroxenite and mixed wehrlite clinopyroxenite with minor wehrlite.

4.

With one exception (1,005 ppb at 382.7-386 feet in hole UB03-06) significant Pt intercepts occur in the wehrlite-rich rocks.

5.

There does not appear to be any correlation between PGE grades and the intensity of late diopside veins or diopside replacement alteration.

6.

The presence of the clinopyroxenite below the mixed wehrlite clinopyroxenite and clinopyroxenite veins of the North zone indicates that the coarse grained clinopyroxenite may be the most altered of the rock type encountered in drilling.

7.

A majority of the North zone drill core has Pt values that are below detection limit.  Background concentrations of Pt in the ultramafic rocks of the complex range from 5-35 ppb Pt.  The lack of Pt combined with the replacement textures in both core and outcrop implies that there has been Pt depletion in the North zone and that the PGE have been remobilized to a peripheral area of the system.

8.

High grade Pt intercepts in the North zone may be either remnants of original mineralization or the start of precipitation of the remobilized PGE.  In support of the second hypothesis there is a crude 315° trend in drill holes with Pt values increasing from southeast to northwest.  This trend is not perfectly linear and there appears to be offset between the first 6 North zone holes and holes UB03-07 and UB03-08, possibly along an east-west trending structure separating the two.

9.

The southern two holes (UB03-07 and UB03-08) do not follow the same lithologic correlations as the northern six holes.  Although wehrlite is present in the tops of holes UB03-07 and UB03-08, clinopyroxenite and mixed Px/Wh dominate the bottom half of each hole.  The significant Pt intercept in hole UB03-07 (851 ppb, 122-124 feet) occurs near a contact between mixed Px/Wh and wehrlite.  The lithologic differences between the upper and lower holes at the North zone supports the hypothesis of an east-west structural break between the two areas.

10.

If further drilling in the North zone is conducted then it should be located further north and west of the present collar locations.  New holes should be drilled to the north from the northwestern extension of the ridge, as well as from the valley below.



Jaguar Zone Drill Hole Summaries: Initial drilling at Jaguar was completed in 2003. The following are significant observations from logging and geochemistry from each of the drill holes in the Jaguar zone. A summary of significant geochemistry from the 2003 drilling is presented in Table 16.



Table 16: Significant Jaguar zone drill hole intercepts from 2003 Union Bay drilling

Drill Hole #From_ftTo_ftInterval_ftPt_ppbPd_ppbUB030971.7753.341110UB03098690.34.33224UB0309288291.73.71331UB0310104107.83.880315UB0311124127.33.31041UB0311310313.73.736514UB031132232751657UB0311379.73833.31313UB031138338743074


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UB0311405.9409.73.87010143UB0311409.7413.43.71113UB0311442446.44.493410UB0311487.54924.51217UB031154254531151




UB03-09 :Rock types observed include wehrlite and Px/Wh.  The wehrlite samples in this hole contain virtually no serpentine alteration.  Diopside veins are rare in this hole and pyroxenite is completely absent.  Magnetite is found in both rock-types in small bluish veins that are chlorite rich similar to those in the North Zone.  At 184 to 187.3 feet a large pyroxenite vein has a magnetite vein over 10 centimeters thick associated with it.  Phlogopite and magnetite blebs occur at 379.1 to 383 feet down-hole.  PGE grades in this hole are relatively low however more consistent elevated Pt and Pd grades occur in the lower 150 feet of the hole.  These elevated PGE values are not correlative with lithologic variations or with magnetite veins.



UB03-10:Rock types observed include wehrlite, Px/Wh and pyroxenite. Pyroxenite is the dominant lithology observed in hole UB03-10.  Pyroxenite is bluish gray in color and extremely difficult to cut with the core saw.  There is very little magnetite or diopside veining in hole UB03-10.  The interval from 104 to 107.8 feet returned 803 ppb Pt in an area with no discernable magnetite.  Check assays of this interval returned 1,100 ppb Pt.



UB03-11:Rock types observed include wehrlite, Px/Wh and pyroxenite. Phlogopite is found mainly in small lenses or veins.  Magnetite commonly occurs in wehrlite and mixed Px/Wh lithologies except near the hole collar where magnetite is hosted in pyroxenite.  At 259.7 to 263.7 feet there is a large vein of diopside containing magnetite with no significant PGEs.  At 310 to 313.7 feet a similar magnetite-bearing diopside vein returned 365 ppb Pt.  There were ten intercepts of over 100 ppb Pt in hole UB03-11 with four over 300 ppb.  The interval from 405.9 to 409.7 feet returned 7,010 ppb Pt (the check assay returned 9,450 ppb Pt) however, there was no discernable magnetite in this sample interval.  The interval from 442 to 446.4 feet returned 934 ppb Pt also with no associated magnetite.  The check assay from this interval returned only 61 ppb Pt.



Jaguar Conclusions: Based on the results of the three drill holes completed at Jaguar zone in 2003 the following conclusions are warranted:

1.

Drilling in the Jaguar zone identified the contact between mixed wehrlite  clinopyroxenite and more massive clinopyroxenite and PGE mineralization appears to be associated with this contact.

2.

Mixed Px/Wh zones appear to be the most favorable host for PGE mineralization.

3.

Lithologic patterns seen in holes UB03-09, UB03-10, and UB03-11 suggest that pyroxenite dominated rocks on the east grade into wehrlite and mixed Px/Wh lithologies to the west and at increasing depth.

4.

Pyroxenite intercepted near the bottom of hole UB03-11 is located north of the trace of hole UB03-09 and suggests the contact between mixed Px/Wh and clinopyroxenite is sub-parallel to the drill plane.

5.

Based on the geometry of the drill holes the contact between clinopyroxenite and wehrlite is sub-vertical while the contact between wehrlite and mixed Px/Wh appears to be

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dipping to the west and possibly pinching out to the east where it intersects hole UB03-10 at about 290 to 310 feet down hole.

6.

Significant PGE intercepts occur in all three holes with the most persistent PGE anomalies occurring in hole UB03-11 from 200 to 602 feet (TD).

7.

Extensive phlogopite  magnetite  diopside alteration observed in hole UB0309 (180 to 390 feet down hole) did not return significant PGE values suggesting this alteration style is not a reliable guide to elevated PGE mineralization.

8.

The extremely low PGE values in pyroxenites and to a lesser degree in wehrlites could imply that the PGEs have been scavenged from these rocks.  If the same PGE remobilization front that is hypothesized for the North zone also affected the Jaguar zone, then future drilling should be concentrated to the northwest of 2003 drill collars.



Mt. Burnett Drill Hole Summaries:Initial drilling at Mt. Burnett was completed in 2001. One vertical hole (UB01-03) and one north directed angle hole (UB01-04) were completed from the same drill pad to test what subsequent work has shown to be the Mt. Burnett South zone near the collar and the Mt. Burnett North zone in the bottom of hole UB01-04.  The following are significant observations from logging and geochemistry from each of the drill holes in the Mt. Burnett zone. A summary of significant geochemistry from the 2003 drilling is presented in Table 17.



Table 17: Significant Mt. Burnett zone drill hole intercepts from 2001 Union Bay drilling

Drill Hole #From_ftTo_ftInterval_ftPt_ppbPd_ppbUB01-323.51.5134102UB01-33.551.5149224UB01-3572175182UB01-378.51.520029UB01-38.5112.518655UB01-31112.51.5156162UB01-34849.51.5113190UB01-349.5511.5173285UB01-355.5571.578156UB01-3201.52031.5137157UB01-3203204.31.3138156UB01-3204.3205.51.25361UB01-3205.5206.20.77583UB01-3206.2207.81.687132UB01-434.51.575167UB01-44.561.5178388UB01-4682221390UB01-48102215362UB01-41011.51.5236393UB01-411.5131.5108171UB01-41314.51.563117UB01-414.5161.587150UB01-42021.51.5113231UB01-421.5231.53583UB01-42324.51.561116


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UB01-424.5261.5105165UB01-42627.51.590147UB01-439.5411.569151UB01-44142.51.573147UB01-442.5441.552128UB01-44445.21.22848UB01-445.2471.853117UB01-44748.71.770105UB01-448.7501.352129UB01-4939411007155UB01-49495.51.59237UB01-495.5971.531037UB01-4135.5136.30.8281271




UB01-3: Drill hole UB01-3 was collared in outcrops of hornblende pyroxenite cut by large irregular veins and pods of magnetite (UB2 horizon) which can be traced for several hundred feet to the east of the drill collar. Examination of raw geochemistry, drill logs and multi-element graphs reveal that PGE mineralization is south to southeast dipping and hosted within magnetite-rich stratigraphy in the top 60 feet of the hole (Table 17). Three distinctive rock types occur in hole UB01-3:

1)

From 0 to 64.5 feet the rock is composed of highly magnetic hornblende pyroxenite with 55-85% clinopyroxene, 10-45% hornblende and 5-10% magnetite veins and pods.

2)

From 64.5 to 209.3 feet there is highly magnetic hornblende pyroxenite with 30-60% clinopyroxene, 5-30% hornblende and 25-30% disseminated magnetite interstitial to the diopside crystals.

3)

From 209.3 to 248 feet the hornblende pyroxenite has 45-95% clinopyroxene, 5-35% hornblende, 0-20% magnetite with up to 10% white mica (phlogopite?).



Unit 1 contains significantly higher Pt and Pd values than the following units and are separated from them by a thick clinopyroxenite dike.  This unit hosts two distinct anomalous PGE areas within magnetite veins. The first area from 2 to 14 feet contains slightly more Pt (avg. 153 ppb) than Pd (avg. 126 ppb).  This zone is associated with increased Cr (to 661 ppm) and Fe (to +10%).  The second anomalous area is from 48 to 51 feet and contains less Pt (avg. 143 ppb) than Pd (avg. 238 ppb).  Pt:Pd ratios vary up to 6.9:1 but average less than 1:1.  These ratios are in stark contrast to the Pt-enriched ratios observed at North zone and Jaguar.



The unit extending from 64.5 to 209.3 feet contains significantly less Pt and Pd. It contains large amounts of disseminated magnetite (up to 45%) within clinopyroxenite and hornblende pyroxenite interstitial to diopside crystals.  This interval does not contain significant PGE mineralization although Pt:Pd ratios and associated element geochemistry generally similar to the unit extending from collar to 64.5 feet.



A third anomalous PGE zone begins at approximately 200 feet and extends to approximately 220 feet.  This interval averages  Pt (avg. 79 ppb) and Pd (avg. 85 ppb).  Below this anomalous zone, rock geochemistry changes radically with the interval from 209.3 to 248 containing strongly elevated levels of Cr and Mg and depleted Fe, V and Ti.  This lithology is

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correlated with surface exposures of the Sandy fault which physically separates the Mt. Burnett North and South zones.  Pt:Pd ratios vary up to 5:1 and show a modest but steady increase down hole beginning at 182.5 feet.  Hole UB01-03 did not penetrate far enough to reach the down-dip projection of the UB1 horizon, a mixed pyroxenite  wehrlite package identical to that seen at the adjacent Chevelle and Continental zones.



UB01-4: Drill hole UB01-4 was collared at the same location as UB01-3 but angled to the north to intercept the UB2 horizon (hornblende rich), Sandy fault and UB1 horizons (Px-Wh rich). Examination of raw geochemistry, drill logs and multi-element graphs reveal that PGE mineralization correlates well with surface mapping and sampling in the area. Four distinctive rock types occur in hole UB01-4:

1)

From 0 to 98.3 feet the rock is composed of highly magnetic hornblende pyroxenite with 55-85% clinopyroxene, 5-30% hornblende and 10-35% disseminated and vein type magnetite.

2)

From 98.3 to 228.6 feet there is weakly magnetic mica bearing hornblende pyroxenite with 65-90% clinopyroxene, 5-50% hornblende, 2-10% mica and 2-10% magnetite.

3)

From 228.6 to 284.6 feet there is highly magnetic hornblende pyroxenite with 40-65% clinopyroxene, 20-30% hornblende and 10-30% magnetite in veins and pods.

4)

From 284.6 to 405 feet there is an alternating mixture of wehrlite and pyroxenite similar to that seen in surface outcrops at Continental and Chevelle.



The upper-most mappable unit contains higher Pt and Pd values than the rest of the hole and correlates with the highly magnetic UB2 horizon encountered in hole UB01-3.  It contains two anomalous PGE zones within magnetite veins.  The first zone is located from 3 to 13 feet.  It contains comparatively less Pt (avg. 172 ppb) than Pd (avg. 312 ppb).  The second zone is from 93 to 97 feet and contains significantly more Pt (avg. 470 ppb) than Pd (avg. 76 ppb).  Pt:Pd ratios in this interval average less than 1:1 and are similar to the upper portion of hole UB01-3.



The second unit corresponds to the Sandy fault identified on the surface and contains white to yellow phlogopitic micas throughout.  This rock type is elevated in K and Mg relative to the upper portion of the hole. Pt:Pd ratios are highly variable, ranging up to 24:1 but consistently average more than 2:1.



From 228.6 to 284.6 feet corresponds to the highly magnetic horizon identified within the Sandy fault in surface sampling.  This interval also contains a gold enriched zone from 270.2 to 274.6 feet with an average Au value of 54 ppb and exhibits elevated Cu values (to 412 ppm). A biotite rich zone occurs from 251.1 to 264.8 feet and contains elevated Al, Na, K, Li, Ca, Sr and Sc values.  The biotite rich zone has different geochemistry from the overlying phlogopite zone but the relationship between the two zones is unclear.  Pt:Pd ratios are consistently less than 1:1.



From 284.6 to 405 feet the core is composed of alternating pyroxenite and wehrlite corresponding to surface exposures observed north of the Sandy fault in the Mt Burnett North prospect.  The geochemical signature of this unit varies considerably because of the intrusion of late(?) olivine rich wehrlite into clinopyroxenite. As was seen in the North zone, olivine rich wehrlite contains elevated Ni, Cr, Fe and Mg while pyroxenite units are enriched in elements such as Ca, Sr and Ti. Pt and Pd values in this unit are generally low while Pt:Pd ratios range up 21:1 and are highly variable but elevated relative to the more Pd-enriched Sandy fault and UB2 horizons.

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Mt. Burnett Conclusions: Based on the results of the two drill holes completed at Mt. Burnett in 2001 the following conclusions are warranted:



1.

Three distinctive rock units were observed in drilling that correlate well with surface mapped rock type: 1) UB1 horizon is a mixed Px-Wh rock unit containing elevated Pt:Pd ratios and lacking significant hornblende; 2) Sandy fault is a granular-weathering fault zone containing elevated phlogopite and biotite micas along with dismembered blocks of PGE-bearing magnetite, and; 3) UB2 horizon hosted by magnetite-rich hornblende pyroxenite with abundant massive to disseminated magnetite and Pt:Pd ratios near parity.

2.

The UB1 horizon at Mt. Burnett is correlative with PGE-enriched magnetite-bearing Px-Wh rock discovered at Chevelle and Continental in 2003.

3.

Extensive phlogopite  magnetite alteration observed in hole UB01-03 did not return significant PGE values suggesting this alteration style is not a reliable guide to elevated PGE mineralization.

4.

Massive magnetite pods and veins intercepted in U01-03 do not contain significant PGE mineralization, an observation supported my more extensive surface saw channel sampling completed in 2003.





SAMPLING METHOD AND APPROACH



Following discovery of elevated PGE values in magnetite-bearing rocks on 2000, subsequent reconnaissance grab rock sampling was conducted with emphasis on magnetite bearing rocks.  More reliable sampling was initiated in 2001 with hand-held saw channel sampling in 4 channels at the North zone and expanded to the Jaguar, Mt. Burnett and Continental zones in 2003 (Table 1).  These channels were sampled at intervals varying between 30 and 100 centimeters.  In 2001 pan concentrate samples were collected from the six major north-south creeks crossing the property as well as from Cannery Creek and Auger soil samples were taken in the flat area north of the North Zone to evaluate the placer potential of the area.  A test shovel soil grid was completed the Jaguar zone in 2001 and a second was placed over the Lexus zone in 2003.  The North, Jaguar and Mt Burnett targets were diamond drilled in 2001 and 2003.  Limited zoning samples collected at Continental, North and Jaguar zones in 2003 and were spaced at nominal 25 meter centers and were designed to be collected on set coordinates without regard to rock type, alteration or other geologic parameters.  These samples were collected to test whether PGE depletion haloes exist on these prospects.



Sample description data for all rock samples were collected in field and then transferred to the camp computer on a regular basis.  GPS coordinates were taken at each site and downloaded to the project computer for inclusion in GIS databases.  All field data was then summarized and included in the existing project databases.   Except for the zoning samples, all rock samples were accompanied by a lithology sample that was retained for reference purposes.



Channel sampling was conducted at the North zone in 2001 and at the Jaguar, Mt. Burnett and Continental zones in 2003.  Channels were cut using a 14 inch Partner rock saw powered by a portable gasoline engine and supplied with water from surrounding ponds and

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creeks.  Channels were cut in two parallel cuts spaced about 10 cm apart.  Individual samples were then selected and cross-cuts at right angles were made at sample boundaries to insure precise extraction of individual samples.  Standard sample width was 1 meter but varied according to outcrop geometry and geologic parameters.  Saw channel samples were then bagged and treated in the same manner as rock and core samples.  The start and finish of each channel line was marked with GPS points while sample widths were measured directly using a metric tape measure to insure accurate sample width information for inclusion in geochemical and GIS databases.



Core samples were selected using geological parameters derived from detailed core logging done on-site.  Once core logging was completed and sample intervals marked for cutting, digital photos were taken of each box of core and saved in a digital library for future reference purposes.  Core was then cut using a gasoline powered 14 inch rock saw located near the core logging facility.  Pertinent details were then input into the project database.



Stream sediment samples were collected in the South Mt. area in 2003 and consisted of 500 gram samples collected from the high energy environment of individual streams.  The extreme gradient of the South Mt. streams and the high rainfall rate in this part of Alaska made collection of samples difficult due to repeated flushing of the drainages.  Sample material was stored in water-tight Ziploc bags which were in turn enclosed in a canvas outer bag to prevent seepage and spillage during shipment.  All sample sites were tied to hand-held GPS coordinates and included in the project database.



All soil samples collected in 2001 and 2003 were taken with shovels at top of bedrock.  Thin soils cover most of the uplands in the project area however, discontinuous glacial outwash and morainal deposits occur at lower elevations on the project making consistent collection of samples at the bedrock interface critical to reliable geochemical results. Approximately 500 grams of soil was collected at each sample site and stored in water-tight Ziploc bags which were in turn enclosed in a canvas outer bag to prevent seepage and spillage during shipment.  All sample sites were tied to hand-held GPS coordinates and included in the project database.





SAMPLE PREPARATION, ANALYSES AND SECURITY



All rock samples collected during the 2000 and 2001 field programs were marked in the field using hand-held GPS units.  Sample location data and field notes were entered into an on-site computer on a regular basis and copied to CD for archival and back-up security purposes.  Each grab rock sample collected for geochemical analysis was accompanied by a separate hand sample retained by Avalon for reference purposes.  In 2001 samples destined for geochemical analysis were placed in double nylon shipping sacks and sent via Alaska Airlines air freight to Fairbanks.  Avalon Developments expediter collected the samples at Alaska Airlines and once Avalon Development inspected the sample shipping containers and the samples within the containers, all samples were picked up at Avalons secured warehouse by representatives of BondarClegg Ltd. of Fairbanks.  Samples were then crushed at Bondar Cleggs Fairbanks preparation facility to 80% passing 10 mesh and then pulverized to +95% passing 150 mesh. Sample rejects were retained in Fairbanks and returned to Avalon Development.  Sample pulps were shipped by Bondar Clegg via air freight to their main analytical facility in North Vancouver, British Colombia.  All samples were analyzed for Pt + Pd + Au by 30 gram lead

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collection fire assay techniques with an inductively coupled plasma (ICP) finish.  In addition, each sample was analyzed for a suite of 36 trace elements using a two acid digestion procedure followed by ICP techniques with an atomic emission spectrographic finish. Pulps were retained by Bondar Clegg until year end at which point they were shipped via air freight to Fairbanks.  The pulps and rejects are stored in Avalon Developments secured warehouse in Fairbanks.



All sample preparation and geochemical analyses conducted for the Union Bay project in 2003 were completed by ALS Chemex in Vancouver, British Columbia.  Each reconnaissance rock sample collected for geochemical analysis was accompanied by a separate hand sample retained by Avalon for reference purposes.  One-half of the diamond drill core was retained for future use while the other half was shipped for analysis.



The entirety of each rock, channel and core sample collected  2003 was crushed to 70% passing 2 millimeter (10 mesh) and a 250 gram split was taken and pulverized to +85% passing 75 microns (200 mesh).  All samples were analyzed for Pt + Pd + Au by 30 gram lead collection fire assay techniques with an inductively coupled plasma (ICP) finish.  In addition, each sample was analyzed for a suite of 27 trace elements using a four acid digestion procedure followed by ICP techniques with an atomic emission spectrographic finish. Fire assay and ICP processes were adjusted by ALS Chemex to account for the high concentrations of iron, magnesium, and chromium associated with ultramafic rocks.  Pulps and rejects were retained in Vancouver during the field season and will be returned to Pacific North West Capitals Vancouver warehouse for permanent storage at the end of the year.



The entirety of each stream sediment and soil sample was dried, sieved through a 180 micron (80 mesh) screen and pulverized to +85% passing 75 microns (200 mesh).  All samples were analyzed for Pt + Pd + Au by 30 gram lead collection fire assay techniques with an inductively coupled plasma (ICP) finish.  In addition each sample was analyzed for a suite of 27 trace elements using a four acid digestion procedure followed by ICP techniques with an atomic emission spectrographic finish. Pulps and +180 micron fraction were retained in Vancouver and will be returned to Pacific North West Capitals Vancouver warehouse for permanent storage at the end of the year.



All geochemical data completed in 2001 and 2003 were transmitted electronically by Bondar Clegg and ALS Chemex to Avalons Fairbanks office for verification and archiving.  Hard copies of each analytical certificate were delivered to Avalon with invoices.  At year-end in 2003 portable document file (pdf) digital data was sent to Avalon for permanent digital storage of each certificate issued to the Union Bay project in 2003.  Avalons digital data are backed up on a weekly basis with archived tape back ups stored off-site in a fire-proof safe.





DATA VERIFICATION



A total of 60 sample blanks were inserted into the geochemistry stream in 2001.  All blanks were composed of Browns Hill Quarry basalt from the Fairbanks Mining District, Alaska and were inserted on a 1 for 25 basis into the sample sequence. Extensive previous analysis of this same blank rock type has given Avalon a large geochemical database for use on a comparative basis.  Analyses performed by Bondar-Clegg on the 2001 blanks from the Union Bay project indicate no unusual or spurious sample results.  No reliable standards for PGE

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mineralization were available during 2001.  To verify the analysis results from Bondar Clegg, the pulps from 50 grab rock samples were submitted to ALS Chemex for check assay.  The samples sent to ALS Chemex returned similar Pt, Pd and Au values therefore the analytical results from Bondar Clegg are thought to be both precise and accurate.



A total of 127 sample blanks composed of Browns Hill Quarry basalt from the Fairbanks Mining District, Alaska were inserted on a 1 for 25 basis into the sample sequence during all phases of the 2003 program. Analyses performed in 2003 by ALS Chemex on blanks from the Union Bay project indicate no unusual or spurious sample results.



Prior to the beginning of the 2003 field season, Avalon Development contracted with the University of Alaskas Mineral Industry Research Laboratory (MIRL) to create two standard samples from existing rock and drill core material from the Union Bay project.  One standard was set at 2.5 grams of Pt per metric tonne while the second was set at 0.5 grams of Pt per metric tonne.  Avalon provided the rock material and labor while Dr. Ted Wilson of MIRL provided the equipment, training and oversight of the standard preparation.  Crushing, grinding and sieving equipment provided were new.



Rock material used to make the standards was already in reject form and was derived from samples collected from the Union Bay project in 2001.  Prior to pulverizing the ring mill container was scoured with unmineralized quartz sand and then thoroughly cleaned, including removal of the O-ring seal.  Four hundred grams of dry pulped ore was then placed in the ring mill and pulverized for 7 minutes. To reduce higher grade PGE contamination, the lower-grade standard was prepared first.  The process was repeated for the higher grade standard.  Once each bulk standard was created, the sample was roll-homogenized and 9 separate samples collected from each of the two standards for round-robin assay work at ALS Chemex and SGS  Xral.  Both labs were instructed as to analytical techniques required, which were the same as those used throughout the 2003 season (see above).  The results of the blind check assays are presented in Table 18.



Initial analytical results from the sample standard testing indicated good accuracy and repeatability within the labs at ALS Chemex and SGS Xral.  Values returned from the labs for the higher standard (2.5 gpt Pt) ranged from 2,240 to 2,830 and averaged 2,488 ppb Pt.  Values returned from the labs for the lower standard (0.5 gpt Pt) ranged from 419 to 743 and averaged 517 ppb Pt.  Except for gold and silver values, Chemex values are consistently but not significantly higher that those coming from Xral.  All standards were analyzed by the same methods currently used for project samples analyzed in 2003 (Au, Pt, Pt by lead collection fire assay with multi-element data by ICP using 4 acid digestion).



Table 17: Comparison of blind standard sample assays for the 2003 Union Bay standards.

StandardStandard
Pt_ppbLabPt_ppbPd_ppbCr_ppmCu_ppmFe_percMg_percNi_ppm493972500Chemex743164100002415.813.95610493973500Chemex516154100002515.6513.6618493976500Chemex509150100003515.5513.7599493977500Xral472132351024.714.0413.83491493979500Xral419132410023.413.7413.34486


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493982500Xral438132367023.91413.8493DUP493977500Xral527143333023.714.0713.94964939712500Chemex281057079201413.7156254939742500Chemex234053081905113.9156394939752500Chemex230052580303013.65156194939782500Xral2240509376014.611.32155014939802500Xral2410519395014.711.73155014939812500Xral283051039701511.5815504




A total of 33 selected grab rock samples from the 2003 reconnaissance rock sampling were re-submitted to ALS Chemex for duplicate Pt, Pd and Au fire assay analyses.  While blanks submitted at the time of original assay suggest nothing abnormal about the results, significant values were re-assayed as a matter of internal quality assurance/quality control.  Table 19 is a summary of the samples re-submitted from the 2003 reconnaissance sampling program.



Table 19 Comparison of Pt and Pd rerun values from rock samples

submitted for check assay

Pt Reruns% ChangePd Reruns% ChangeAverage1.7%Average1.3%Maximum78.7%Maximum77.2%Minimum-44.7%Minimum-33.0%Stand Dev23.0Stand Dev20.0




Examination of the check assays conducted by ALS Chemex indicate that rerun rock samples returned consistently higher values for both Pt and Pd.  In addition, the standard deviation for the samples rerun were extremely high at 23 for Pt and 20 for Pd. The ranges above and below the mean were asymmetrical for both Pt and Pd with the range above the mean for Pt being nearly double the range below the mean while the range above the mean for Pd was over twice that of the range below the mean.  Closer examination of the actual data (Appendix 2) indicates that sample 394503, a magnetite vein from the Continental zone, had the single largest standard deviation in rerun samples (78 for Pt, 77 for Pd).  Eliminating this one sample also eliminates the asymmetry in the ranges seen but does not radically change the standard deviation between original and rerun samples.  There is no coherent or consistent pattern that explains where the differences occur between original and rerun samples.  Some of the smallest percentage changes were seen in the highest grade Pt and Pd samples while mid-range Pt and Pd values (500-1,000 ppb) produced the largest percentage changes.  In conclusion, ALS Chemex analytical techniques for resubmitted rock samples appear to be accurate (mean of the percentage change is relatively small) but not precise (the standard deviations of the percentage change are widely variant).  Additional research into sample variability is planned for 2004.



A total of 55 selected samples from the 2003 channel sampling were re-submitted to ALS Chemex for duplicate Pt, Pd and Au fire assay analyses.  While blanks submitted at the time of original assay suggest nothing abnormal about the results, significant values were re-assayed as a matter of internal quality assurance/quality control.  Table 19 is a summary of the samples re-submitted from the 2003 channel sampling program.

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Table 19 Comparison of Pt and Pd rerun values from channel

samples submitted for check assay

Pt Reruns% ChangePd Reruns% ChangeAverage-8.0%Average-5.9%Maximum41.2%Maximum33.3%Minimum-150.0%Minimum-90.0%Stand Dev34.2Stand Dev20.0




Examination of the check assays conducted by ALS Chemex indicate that rerun channel samples returned slightly lower average values for both Pt and Pd.  The average percentage change was 8% for Pt and 6% for Pd.  Standard deviations of the percentage change were substantial at 34 and 20 for Pt and Pd, respectively however, examination of the individual rerun assays results indicates the majority of this variance occurs in samples where Pt and Pd values were near or at the lower detection level where analytical inaccuracies are normally higher. In conclusion, ALS Chemex analytical techniques for resubmitted channel samples appear to be accurate (mean of the percentage change is relatively small) but not precise (the standard deviations of the percentage change are widely variant).  Additional research into sample variability is planned for 2004.



A total of 51 selected core samples from the 2003 drilling at the North and Jaguar zones were re-submitted to ALS Chemex for duplicate Pt, Pd and Au fire assay analyses.  While blanks submitted at the time of original assay suggest nothing abnormal about the results, significant values were re-assayed as a matter of internal quality assurance/quality control.  Table 20 is a summary of the samples re-submitted from the 2003 drilling program.



Table 20: Comparison of Pt and Pd rerun values from drill core samples

submitted for check assay.

Pt Reruns% ChangePd Reruns% ChangeAverage768.8%Average1755.1%Maximum360.4%Maximum400.0%Minimum-97.1%Minimum-84.2%Stand Dev88.4Stand Dev120.6




Evaluation of the results from re-assayed drill core are hampered to some degree by the fact that a fair percentage of samples re-submitted contained less than detection limit values for Pt and/or Pd.  As a consequence, original or rerun samples with values less than detection limit were removed from the dataset prior to statistical analysis.  Unlike rerun rock samples, rerun core samples showed an extremely large average percentage change in values for both Pt (768%) and Pd (1,755%).  In addition, core samples showed an extreme asymmetry about the mean with the range for Pt above the average percentage change nearly 4 times the range below the mean while the range for Pd above the average percentage change was over 4 times the range below the mean.  Standard deviations of the percentage change for Pt (88) and Pd (120) also were extremely large.  In conclusion, ALS Chemex analytical techniques appear to be neither accurate nor precise for drill core samples from the Union Bay project.  Additional research into sample variability is planned for 2004.

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ADJACENT PROPERTIES



The only mineral properties adjacent to the Union Bay claim block are the patented claim block covering the old Union Bay iron oxide deposit, two unpatented federal mining claims covering the same mineralization along the west coast of the project (Jankowski claims) and a patented homestead at the mouth of Cannery Creek (Figure 2).  The iron oxide property, located on the western side of the Union Bay PGE prospect, was drilled by Columbia Iron Mining, a subsidiary of U.S. Steel, in the 1950s.  A portion of the property was patented in the early 1970s and has subsequently been sold to private owners living outside Alaska.  These owners control both the surface and mineral rights covering the patented mining claims.  The patented mining claims cover an area of approximately 322 acres. The unpatented federal lode claims are owned by Benny Jankowski, a local prospector living on the claims.  One grab rock sample was collected on the Jankowski claims in 2001 but no other work has been completed on the Jankowski claims since that time. The Cannery Creek homestead covers the old salmon cannery that once occupied this area and is owned by a Ketchikan resident.





MINERAL PROCESSING AND METALLURGICAL TESTING



Preliminary petrographic analysis by scanning electron microscope (SEM) and electron microprobe (EMP) of a limited number of samples from Union Bay indicate the presence of several PGM and sulfides hosted in stratiform horizons containing up to 14 distinct "events" in a given horizon (CSMA Consultants, 2000; Jedwab, 2001).  PGMs identified include: PtFe alloys, erlichmanite (OsS2), hollingworthite (RhAsS), native Os, Os-Ir alloys, Ir-Pt alloys, Rh-Fe alloys, PtSb, a possible PtIr sulfide, as well as trace pyrite and chalcopyrite (Maas et. al, 1995, J. Jedwab, per. Comm., 2001). Additional EMP and backscatter electron imaging work conducted by Van Treeck and others (2003) indicates PGMs from the North zone contain a PtFe rich composite core (Pt from 64-81%, Fe from 14-18%) which is surrounded by Fe-Mg-Al-Cr spinel.  The cores also have minor amounts of Pd and Cu while the rims of these grains contain neither of these elements.  No other PGM beneficiation or recovery studies have been undertaken at Union Bay.



A limited number of 6 element nickel-sulfide PGE analyses were completed on samples collected in 2000 and 2001 (Table 21). These samples indicate that PGE mineralization at Union Bay is significantly depleted in Ir relative to chondrite normalized Ir values from other Ural Alaska type complexes around the world (Van Treeck, written comm., 2003).  Given that Ir is relatively immobile during hydrothermal alteration processes, the depleted Ir values at Union Bay suggest PGEs were not deposited in a magmatic setting but rather were concentrated during a later hydrothermal event.  An additional 15 six-element PGE analyses from selected 2003 core and rock samples were being analyzed at the time this report was completed.

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Table 21:Six element PGE analyses from the Union Bay project, 2000 and 2001.

Sample #Os_ppbIr_ppbRu_ppbRh_ppbPt_ppbPd_ppbYear493327700233-5017039612895200049332813068-5048105295200049334722077-507242231802200049334814072-505630374122000493349380154-5016015910139720004933519831-502953310720004933524423-5022454236200049336412061-504724489220004933681212-5081922000493369260112-50561373551200049337116073-50755030284200046496620872.639710691661200146496710143.72514030310200146497129089.8198024801760200146497613449.544441501342001464980269.1101170372001464966D18468.5393108376732001






MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES



There currently are no mineral resources or mineral reserves on the Union Bay project. Columbia Iron outlined mineral resources at the Union Bay iron deposit on an adjacent property (see Adjacent Properties) that were estimated at 900 million tons grading 18-20% Fe and 2% Ti (Maas and others, 1995). The 900 million ton Union Bay magnetite deposit is thought to be a type 2 magnetite occurrence (see Geologic Setting).





OTHER RELEVANT DATA AND INFORMATION



The are no other data available to the author that bear directly on the PGE potential of the Union Bay project.





INTERPRETATION AND CONCLUSIONS



The Union Bay project is a platinum group element exploration target hosted in a Ural  Alaska complex that intrude Gravina Belt assemblage rocks of the Alexander Platinum Belt of southern Southeast Alaska.  PGE mineralization was discovered on the 15,000 acre Union Bay project in 2000 with follow-up discoveries and limited drilling in 2001.  Additional discoveries of highly anomalous PGE mineralization occurred in 2003. Platinum group element mineralization at Union Bay appears to be genetically related to late-stage magnetite mineralization hosted in pyroxenite and wehrlite units stretching from the North zone on the

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eastern end of the property to at least the Continental zone on the west, a distance in excess of 6 kilometers.  The highest PGE values are associated with irregular magnetite veins in a mixed pyroxenite - wehrlite unit although elevated PGE values have been encountered in pyroxenite and hornblende pyroxenite.  The PGE mineralization is genetically associated with Al-Cr-Ti spinels which are referred to as magnetite in the field.  Other physical forms of magnetite, ranging from euhedral disseminated magnetite to massive podiform magnetite also occur on the project but normally have considerably lower PGE values.  Mineralized magnetite veins contain Pt:Pd ratios around 10:1 while ratios approach parity in the host rocks immediately adjacent to the veins.  Elevated Cr, Ti and V values often are associated with PGE mineralization and sporadic As, Sb, Bi and Cu are present locally. Cu-enriched PGE mineralization with Pt:Pd ratios closer to parity has been identified in two areas of the property and suggests metal zonation may have occurred during PGE deposition.  Subsequent structural dissection has resulted in juxtaposition of primitive ultramafic units with more evolved mafic  ultramafic units. A significant portion of the property has yet to be explored on a reconnaissance basis and only three of the eight known PGE-enriched zones have received drilling.  The Union Bay property has potential to host significant accumulations of PGE mineralization and warrants additional work.





RECOMMENDATIONS



Based on field, laboratory and literature studies completed to date, the following recommendations for future work are warranted at Union Bay:



1.

Acquire digital elevation model data over the project area to allow construction of accurate topographic and shaded relief maps with contour intervals down to 3 meters. Current USGS DEM data are accurate only to 30 meters, far too coarse for prospect scale work at Continental, Chevelle, North, Jaguar and Cannery Creek zones.  Unless this task can be completed from existing photogrammetric, radar or LIDAR databases, it will require airborne collection of the data prior to commencement of field activities. Depending on the method used to complete this work, the estimated maximum cost of this work is $75,000.

2.

A low level, closely spaced airborne magnetic gradiometer and multi-channel electromagnetic survey should be flown over the Union Bay property to identify new areas containing high quantities of magnetite and/or sulfide that do not outcrop or that could not be investigated due to steep terrain in some areas.  This program should be conducted in March or April to allow reduction and interpretation of the data prior to commencement of field activities. The estimated cost of this work is $175,000.

3.

Following completion of airborne geophysical surveys, reconnaissance-scale mapping, rock and saw channel sampling and zoning sampling should be conducted to the south, west and north of the Continental zone, at Chevelle, on the north side of Mt. Burnett and in the area north and west of the North and Jaguar zones to determine the extent and PGE content of the mixed pyroxenite  wehrlite package.  This program should be conducted from an on-site base camp in April - May to insure that collection, analysis and interpretation of rock sampling data are completed prior to commencement of additional drilling. The estimated cost of this work is $140,000.

4.

Drilling should be conducted on the Continental zone following completion of airborne geophysical surveys and reconnaissance ground surveys to determine the

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geometry and grade of mineralization discovered in 2003.  Drilling should be concentrated on east-west lines with both vertical and west-directed angle holes to test all of the structural blocks mapped in this area of the project. This program should commence in mid-June and will be supported from the Vixen Harbor base camp with full time helicopter support. The estimated cost of this work is $1,300,000.

5.

Grid-controlled soil and rock sampling should be conducted over the Cannery Creek prospect following completion of airborne geophysical surveys.  Consideration should also be given to ground electromagnetic and possible gravity geophysics.  This program should commence after mid-June and will be supported from the Vixen Harbor base camp with helicopter support.  The estimated cost of this work is $25,000.

6.

Reconnaissance-scale mapping and geochemical sampling should be extended to other parts of the property not previously investigated. Refinement of exploration target areas may be possible with the aid of airborne magnetic and EM data.  This program should commence after mid-June and will be supported from the Vixen Harbor base camp with helicopter support.  The estimated cost of this work is $25,000.





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REFERENCES CITED



Avalon, 2000, Summary report for the Union Bay PGE property, Ketchikan mining district, Alaska: Geol. Rept. UB00-1, unpublished final report for 2000 prepared by Avalon Development Corp. for Intl. Freegold Mineral Development Inc., 12p.



Avalon, 2001, 2001 summary report for the Union Bay PGE prospect, Ketchikan Mining District, Alaska: Geol. Rept. UB01-1, unpublished final report for 2001 prepared by Avalon Development Corp. for Quaterra Resources Inc., 27p.



Avalon, 2003, 2003 Final report for the Union Bay PGE prospect, Ketchikan Mining District, Alaska: Geol. Rept. UB03-1, unpublished final report for 2003 prepared by Avalon Development Corp. for Pacific North West Capital and Freegold Ventures, 66p.



Berg, H.C.; Elliot, R.L.; Koch, R.D.; Carten, R.B. and Wahl, F.A., 1976, Preliminary geologic map of the Craig D1 and parts of the Craig C1 and D2 quadrangles, Alaska: U.S. Geol. Surv. Open File Rept. 76-30, 1 map.



Bittenbender, P.E., K.M. Maas, J.C. Still, and E.C. Redman, 1993, Mineral investigations in the Ketchikan mining district, Alaska, 1992: Ketchikan to Hyder areas. BuMines OFR 114-93, 86 pp., 7 maps.



Clark, A.L., and W.R. Greenwood, 1972, Geochemistry and distribution of platinum-group metals in mafic to ultramafic complexes of southern and southeastern Alaska.  U.S. Geol. Surv. Prof. Paper 800-C, pp. C157-C160.



CSMA Consultants, 2000, Initial SEM Mineralogy  Platinum Samples, Union Bay project, Alaska: Internal Report for Intl. Freegold Mineral Development, 2 p.



Dahlin, D.C., Rule, A.R., and Brown, L.L., 1981, Beneficiation of potential platinum resources from southeastern Alaska. BuMines RI 8553, 14 pp.



Dodin, D.A., Chernyshev, N.M., and Yackevich, B.A., 2000, Platinum-metal deposits in Russia: Russian publisher unknown, 729 pages.



Elliott, S.J. and Martin, A.R., 1991, Alaskan-type intrusive complexes of the Fifield belt, central New South Wales in Elliott, S.J. and Martin, A.R., editors, Geology and Mineralization of the Fifield platinum province, New South Wales: Geol. Soc. Australia, Sixth Intl. Platinum Symp., pp. 4-11.



Fechner, S.A., 1988, Bureau of Miners Mineral Investigation of the Goodnews bay Mining District, Alaska: U.S. Bur. Mines, Open File Rept. OFR1-88, 230 p.



Foley, J.Y., Burns, L.E., Schneider, C.L., and Forbes, R.B., 1989, Preliminary report of platinum group element occurrences in Alaska: Alaska Division of Geological and Geophysical Surveys PDF 89-20, 33 pp.

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Foley, J.Y., Light, T.D., Nelson, S.W. and Harris, R.A., 1997, Mineral occurrences associated with mafic-ultramafic and related alkaline complexes in Alaska: Econ. Geol. Monograph 9, pp. 396-449.



Foley, J. Y, 1990, Clarence Strait field report: U.S. Bur. Mines, unpublished report, Juneau office, 9 p.



Freeman, C.J., 2002, Summary report for the Duke Island Cu-Ni-PGE property, Ketchikan mining district, Alaska: Geol. Rept. DK02-01, Unpub. Internal Rept., Quaterra Res., 19 p.



Gehrels, G.E. and Berg, H.C., 1988, A review of the regional geology and tectonics of southeastern Alaska: U.S. Geol. Surv. Open File Rept. 88-659,  24p., 1 sheet.



Gehrels, G.E. and Berg, H.C., 1994, Geology of southeastern Alaska in Plafker, G and Berg, H.C., 1994, Geology of North America, Vol. G-1, the Geology of Alaska: Geol. Soc. Amer., pp. 451-467.



Goles, G.G, 1979, Trace elements in ultramafic rocks: in Ultramafic and related rocks, P.J. Wyllie, editor, pp. 352-362



Himmelberg, G.R. and Loney, R.A., 1995, Characteristics and petrogenesis of Alaskan-type ultramafic  mafic intrusions, southeastern, Alaska: U.S. Geol. Surv. Prof. Paper 1564, 47p.



Hinderman, T.K. and Ellis, W., 2001, Bristol Bay Native Corporations Kemuk Prospect, Southwestern Alaska: Alaska Earth Sciences, internal report, 5 p.



Irvine, T.N., 1974, Petrology of the Duke Island ultramafic complex, southeastern Alaska: Geol. Soc. Amer., Memoir 138, 240 p.



Jedwab, J., 2001, Union Bay data: Email correspondence to Avalon Development, March 28, 2001, 1 p.



Kennedy, G.C. and Walton, M.S., 1946, Geology and associated mineral deposits of some ultrabasic rock bodies in southeastern Alaska: U.S. Geol. Surv. Bull. 947-D, pp. 80-83.



King, P., 2000, SEM data, Union Bay project, Alaska: unpub. Private report, CSMA Consultants, Cornwall, England, 4 p.



Maas, Kenneth M., Bittenbender, Peter E., Still, Jan C., 1995, Mineral Investigations in the Ketchikan mining District Southeastern Alaska. U.S. Bur. Mines Open File Report 11-95, pp. 175-182.



Malich, K.N., 1991, Petrographic association of platinum-bearing ultramafics in concentrically zoned plutons of the Siberian craton: Dolkady Akademii Nauk USSR, Vol. 3318, pp. 1452-1457.

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Mertie, J. B., 1969, Economic geology of the platinum metals: U.S. Geol. Surv. Prof. Paper 630, 120p.



Mogessie, A., Belette, K., Hoinkes, G. and Ettinger, K., 1999, Platinum mineralization in the Yubdo ultramafic rocks, western Ethiopia.



Nixon, G.T., Cabris, L.J., and Laflamme, J.H.G., 1990, Platinum-group element mineralization in lode and placer deposits associated with the Tulameen Alaska-type complex, British Columbia; Can. Mineral, Vol. 28, pp. 503-535.



Plafker, G. and Berg, H.C., 1994, Overview of geology and tectonic evolution of Alaska, in Plafker, G. and Berg, H.C., eds., Geology of Alaska: Geol. Soc. America, Geology of North America, V. G-1, pp. 989-1021



Razin, L.V., 1976, Geologic and genetic features of forsterite dunites and their platinum-group distribution; Econ. Geol., V, 71, pp. 1371-1376.



Rubin, C.M. and Saleeby, J.B., 1992, Tectonic history of the eastern edge of the Alexander Terrane, southeast Alaska: Tectonics, V. 11, pp. 586-602.



Ruckmick, J.C., and Noble, J.A., 1959, Origin of the ultramafic complex at Union Bay, southeastern Alaska.  Geol. Soc. Am. Bull., V 70, No. 8, pp. 981-1018.



Streckheisen, A., 1973, Plutonic rocks: classification and nomenclature recommended by the International Union of Geological Scientists Subcommittee on the systematics of igneous rocks: Geotimes, V.18, pp. 26-30.



Taylor, H.P., Jr., 1979, Zoned ultramafic complexes of Southern Alaska: in Ultramafic and related rocks, P.J. Wyllie, editor, pp. 97-118.



Tolstyhk, N.D., Siderov, E.G., Laajoki, K.V.O., Krivenko, A.P. and Podlipskiy, M., 2000, Association of platinum-group minerals in placers of the Pustaya River, Kamchatka, Russia: Canadian Mineral., Vol. 38, pp. 1251-1264.



Tistl, M., 1994, Geochemistry of platinum group elements of the zoned ultramafic Alto Condoto complex, northwest Columbia: Econ. Geol., Vol. 89, pp. 158-167.



USGS, 1977, Aeromagnetic map of the Ketchikan, Prince Rupert and northeastern Craig quadrangles, Alaska: U.S. Geol. Surv., Open File Rept. 77-359, 1 map.



Van de Poel, W. I. and Hinderman, T. K., 2001, Summary report on lode platinum exploration, 2001, Goodnews Bay, Alaska: Corral Creek Corp., Internal Report, 2 p.



Van Treeck, C. J, Newberry, R.J and Freeman, C.J, 2003,
PGE enriched magnetite of the Union Bay Alaskan-type intrusive complex and its hydrothermal origin: Intl. Symposium of Society of Geol. Applied to Ore Deposits, Athens, in press, 5 pp.

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Van Treeck, 2004, PGE enriched magnetite of the Union Bay Alaskan-type intrusive complex: unpub M.Sc. thesis, Univ. of Alaska  Fairbanks, in press.



Zohan, Z., 2002, Alaskan-type complexes and their platinum-group element mineralization in Cabri, L.J., editor, Geology, geochemistry, mineralogy and mineral beneficiation of the Platinum group elements: Canadian Institute of Mining, Metallurgy and Petroleum, Spec. Vol. 54, pp 669-719.





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STATEMENT OF QUALIFICATIONS



CURTIS J. FREEMAN

Avalon Development Corporation

P.O. Box 80268, Fairbanks, Alaska  99708

Phone 907-457-5159, Fax 907-455-8069, Email Avalon@alaska.net





I, CURTIS J. FREEMAN, Certified Professional Geologist #6901 HEREBY CERTIFY THAT:



I am currently employed as President of Avalon Development Corporation, P.O. Box 80268, Fairbanks, Alaska, 99708, USA.



2. I am a graduate of the College of Wooster, Ohio, with a B.A. degree in Geology (1978).  I am also a graduate of the University of Alaska with an M.S. degree in Economic Geology (1980).



3. I am a member of the American Institute of Professional Geologists, the Society of Economic Geologists, the Geological Society of Nevada, the Alaska Miners Assoc. and the Prospectors and Developers Assoc. of Canada.



4.  From 1980 to the present I have been actively employed in various capacities in the mining industry in numerous locations in North America, Central America, South America, New Zealand and Africa.



5. I have read the definition of Qualified Person set out in National Instrument 43-101 (NI43-101) and certify that by reason of my education, affiliation with a professional organization (as defined by NI43-101) and past relevant work experience, I fulfill the requirements to be a Qualified Person for the purposes of NI43-101.



6. I am responsible for preparations of all sections of the report entitled Executive Summary Report for the Union Bay PGE Property, Ketchikan Mining District, Alaska and dated April 6, 2004 (the Technical Report) relating to the Union Bay platinum group metal deposit.  I have worked on this property on numerous occasions between May 2001 and September 2003 for durations ranging from 1 to 21 days.



7. I have not had prior involvement with the property that is the subject of the Technical Report.



8. I am not aware of any material fact or material change with respect to the subject matter of this Technical Report that is not reflected in the Technical Report, the omission to disclose which would make the Technical Report misleading.



9. I am not independent of the issuer apply all of the tests in section 1.5 of NI43-101.  I own controlling interest in Avalon Development Corporation which owns 29,000 common shares of Freegold Ventures Limited which were issued to Avalon Development as part of a finders

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fee agreement for work conducted by Avalon Development for Freegold between 1993 and 2003. I also own 23,500 common shares of Pacific North West Capital Corp. which were purchased on the open market in 1998.  I own controlling interest in Anglo Alaska Gold Corporation which owns 800,000 common shares of Freegold Ventures Limited which were issued to Anglo Alaska as part of a finders fee agreement for work conducted by Anglo Alaska for Freegold between 2001 and 2003. I own no other interest in any company or entity that owns or controls an interest in the properties which comprise the Union Bay project.



10. I have read NI43-101 and Form 43-101F1 and the Technical Report has been prepared in compliance with that instrument and form.



11. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and the publication by them, including publication of the Technical Report in the public company files on their websites accessible by the public.



















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EXHIBIT A:

UNION BAY PROJECT

KETCHIKAN RECORDING DISTRICT

FEDERAL MINING CLAIMS



No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num1MB 170S87E30Copper River824392MB 270S87E30Copper River824403MB 370S87E29Copper River824414MB 470S87E30Copper River824425MB 570S87E30Copper River824436MB 670S87E29Copper River824447MB 770S87E1930Copper River824458MB 870S87E1930Copper River824469MB 970S87E2029Copper River8244710MB 1070S87E19Copper River8244811MB 1170S87E19Copper River8244912MB 1270S87E20Copper River8245013MB 1370S87E19Copper River8245114MB 1470S87E19Copper River8245215MB 1570S87E20Copper River8245316MB 1670S87E19Copper River8245417MB 1770S87E19Copper River8245518MB 1870S87E20Copper River8245619MB 1970S87E19Copper River8245720MB 2070S87E19Copper River8245821MB 2170S87E20Copper River8245922MB 2270S87E19Copper River8246023MB 2370S87E19Copper River8246124MB 2470S87E20Copper River8246225MB 2570S87E19Copper River8246326MB 2670S87E19Copper River8246427MB 2770S87E20Copper River8246528MB 2870S87E20Copper River8246629MB 2970S87E20Copper River8246730MB 3070S87E2021Copper River8246831MB 3170S87E19Copper River8246932MB 3270S87E19Copper River8247033MB 3370S87E20Copper River8247134MB 3470S87E20Copper River8247235MB 3570S87E20Copper River8247336MB 3670S87E2021Copper River8247437MB 3770S87E19Copper River8247538MB 3870S87E19Copper River8247639MB 3970S87E20Copper River8247740MB 4070S87E20Copper River8247841MB 4170S87E20Copper River82479


AVALON DEVELOPMENT CORPORATION

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42MB 4270S87E2021Copper River82480No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num43UB 170S87E29Copper River8248144UB 270S87E2829Copper River8248245UB 370S87E28Copper River8248346UB 470S87E28Copper River8248447UB 570S87E28Copper River8248548UB 670S87E29Copper River8248649UB 770S87E2829Copper River8248750UB 870S87E28Copper River8248851UB 970S87E28Copper River8248952UB 1070S87E28Copper River8249053UB 1170S87E29Copper River8249154UB 1270S87E2829Copper River8249255UB 1370S87E28Copper River8249356UB 1470S87E28Copper River8249457UB 1570S87E28Copper River8249558UB 1670S87E29Copper River8249659UB 1770S87E29Copper River8249760UB 1870S87E2829Copper River8249861UB 1970S87E28Copper River8249962UB 2070S87E28Copper River8250063UB 2170S87E28Copper River8250164UB 2270S87E29Copper River8250265UB 2370S87E29Copper River8250366UB 2470S87E2829Copper River8250467UB 2570S87E28Copper River8250568UB 2670S87E28Copper River8250669UB 2770S87E28Copper River8250770UB 2870S87E29Copper River8250871UB 2970S87E29Copper River8250972UB 3070S87E2829Copper River8251073UB 3170S87E28Copper River8251174UB 3270S87E28Copper River8251275UB 3370S87E28Copper River8251376UB 3470S87E29Copper River8251477UB 3570S87E29Copper River8251578UB 3670S87E2829Copper River8251679UB 3770S87E28Copper River8251780UB 3870S87E28Copper River8251881UB 3970S87E28Copper River8251982UB 4070S87E29Copper River8252083UB 4170S87E29Copper River8252184UB 4270S87E2829Copper River8252285UB 4370S87E28Copper River8252386UB 4470S87E28Copper River8252487UB 4570S87E28Copper River82525


AVALON DEVELOPMENT CORPORATION

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88UB 4670S87E27Copper River8252689UB 4770S87E27Copper River8252790UB 4870S87E27Copper River82528No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num91UB 4970S87E2029Copper River8252992UB 5070S87E2029Copper River8253093UB 5170S87E2021Copper River8253194UB 5270S87E2128Copper River8253295UB 5370S87E2128Copper River8253396UB 5470S87E2128Copper River8253497UB 5570S87E2227Copper River8253598UB 5670S87E2227Copper River8253699UB 5770S87E2227Copper River82537100UB 5870S87E20Copper River82538101UB 5970S87E20Copper River82539102UB 6070S87E2021Copper River82540103UB 6170S87E21Copper River82541104UB 6270S87E21Copper River82542105UB 6370S87E21Copper River82543106UB 6470S87E22Copper River82544107UB 6570S87E22Copper River82545108UB 6670S87E22Copper River82546109UB 6770S87E20Copper River82547110UB 6870S87E20Copper River82548111UB 6970S87E2021Copper River82549112UB 7070S87E21Copper River82550113UB 7170S87E21Copper River82551114UB 7270S87E21Copper River82552115UB 7370S87E22Copper River82553116UB 7470S87E22Copper River82554117UB 7570S87E22Copper River82555118UB 7670S87E20Copper River82556119UB 7770S87E20Copper River82557120UB 7870S87E2021Copper River82558121UB 7970S87E21Copper River82559122UB 8070S87E21Copper River82560123UB 8170S87E21Copper River82561124UB 8270S87E22Copper River82562125UB 8370S87E22Copper River82563126UB 8470S87E22Copper River82564127UB 8570S87E20Copper River82565128UB 8670S87E20Copper River82566129UB 8770S87E2021Copper River82567130UB 8870S87E21Copper River82568131UB 8970S87E21Copper River82569132UB 9070S87E21Copper River82570133UB 9170S87E22Copper River82571


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

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134UB 9270S87E22Copper River82572135UB 9370S87E22Copper River82573136UB 9470S87E20Copper River82574137UB 9570S87E20Copper River82575138UB 9670S87E2021Copper River82576No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num139UB 9770S87E21Copper River82577140UB 9870S87E21Copper River82578141UB 9970S87E21Copper River82579142UB 10070S87E22Copper River82580143UB 10170S87E22Copper River82581144UB 10270S87E22Copper River82582145UB 10370S87E22Copper River82583146UB 10470S87E22Copper River82584147UB 10570S87E22Copper River82585148UB 10670S87E27Copper River82719149UB 10770S87E27Copper River82720150UB 10870S87E27Copper River82721151UB 10970S87E27Copper River82722152UB 11070S87E27Copper River82723153UB 11170S87E27Copper River82724154UB 11270S87E27Copper River82725155UB 11370S87E27Copper River82726156UB 11470S87E27Copper River82727157UB 11570S87E27Copper River82728158UB 11670S87E27Copper River82729159UB 11770S87E27Copper River82730160UB 11870S87E27Copper River82731161UB 11970S87E27Copper River82732162UB 12070S87E27Copper River82733163UB 12170S87E27Copper River82734164UB 12270S87E27Copper River82735165UB 12370S87E27Copper River82736166UB 12470S87E27Copper River82737167UB 12570S87E27Copper River82738168UB 12670S87E27Copper River82739169QTUBL 170S87E21Copper River82988170QTUBL 270S87E21Copper River82989171QTUBL 370S87E21Copper River82990172QTUBL 470S87E21Copper River82991173QTUBL 570S87E21Copper River82992174QTUBL 670S87E21Copper River82993175QTUBL 770S87E21Copper River82994176QTUBL 870S87E21Copper River82995177QTUBL 970S87E22Copper River82996178QTUBL 1070S87E21Copper River82997179QTUBL 1170S87E21Copper River82998


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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180QTUBL 1270S87E21Copper River82999181QTUBL 1370S87E2122Copper River83000182QTUBL 1470S87E22Copper River83001183QTUBL 1570S87E1617Copper River83002184QTUBL 1670S87E1621Copper River83003185QTUBL 1770S87E1621Copper River83004186QTUBL 1870S87E1621Copper River83005No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num187QTUBL 1970S87E1516Copper River83006188QTUBL 2070S87E1522Copper River83007189QTUBL 2170S87E1617Copper River83008190QTUBL 2270S87E16Copper River83009191QTUBL 2370S87E16Copper River83010192QTUBL 2470S87E16Copper River83011193QTUBL 2570S87E1516Copper River83012194QTUBL 2670S87E15Copper River83013195QTUBL 2770S87E1617Copper River83014196QTUBL 2870S87E16Copper River83015197QTUBL 2970S87E16Copper River83016198QTUBL 3070S87E16Copper River83017199QTUBL 3170S87E1516Copper River83018200QTUBL 3270S87E15Copper River83019201QTUBL 3370S87E1617Copper River83020202QTUBL 3470S87E16Copper River83021203QTUBL 3570S87E16Copper River83022204QTUBL 3670S87E16Copper River83023205QTUBL 3770S87E1516Copper River83024206QTUBL 3870S87E1617Copper River83025207QTUBL 3970S87E16Copper River83026208QTUBL 4070S87E16Copper River83027209QTUBL 4170S87E16Copper River83028210QTUBL 4270S87E15Copper River83029211QTUBL 4370S87E2627Copper River83030212QTUBL 4470S87E26Copper River83031213QTUBL 4670S87E2223Copper River83033214QTUBL 4770S87E2326Copper River83034215QTUBL 4970S87E2223Copper River83036216QTUBL 5070S87E23Copper River83037217QTUBL 5270S87E2223Copper River83039218QTUBL 5370S87E23Copper River83040219QTUBL 5570S87E2223Copper River83042220QTUBL 5670S87E23Copper River83043221QTUBL 5870S87E2223Copper River83045222QTUBL 5970S87E23Copper River83046223QTUBL 6170S87E2223Copper River83048224QTUBL 6270S87E23Copper River83049225QTUBL 6470S87E2223Copper River83051


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

69



226QTUBL 6570S87E23Copper River83052227QTUBL 6770S87E22Copper River83054228QTUBL 6870S87E22Copper River83055229QTUBL 6970S87E2223Copper River83056230QTUBL 7070S87E23Copper River83057231QTUBL 7270S87E22Copper River83059232QTUBL 7370S87E22Copper River83060233QTUBL 7470S87E2223Copper River83061234QTUBL 7570S87E23Copper River83062No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num235QTUBL 7770S86E26Copper River83064236QTUBL 7870S86E26Copper River83065237QTUBL 7970S86E2526Copper River83066238QTUBL 8070S86E25Copper River83067239QTUBL 8170S86E25Copper River83068240QTUBL 8270S86E25Copper River83069241QTUBL 8370S87E30Copper River83070242QTUBL 8470S86E26Copper River83071243QTUBL 8570S86E26Copper River83072244QTUBL 8670S86E2526Copper River83073245QTUBL 8770S86E25Copper River83074246QTUBL 8870S86E25Copper River83075247QTUBL 8970S86E25Copper River83076248QTUBL 9070S87E30Copper River83077249QTUBL 9170S86E26Copper River83078250QTUBL 9270S86E26Copper River83079251QTUBL 9370S86E2526Copper River83080252QTUBL 9470S86E25Copper River83081253QTUBL 9570S86E25Copper River83082254QTUBL 9670S86E25Copper River83083255QTUBL 9770S87E30Copper River83084256QTUBL 9870S86E26Copper River83085257QTUBL 9970S86E26Copper River83086258QTUBL 10070S86E2526Copper River83087259QTUBL 10170S86E25Copper River83088260QTUBL 10270S86E25Copper River83089261QTUBL 10370S86E25Copper River83090262QTUBL 10470S87E30Copper River83091263QTUBL 10570S86E26Copper River83092264QTUBL 10670S86E26Copper River83093265QTUBL 10770S86E2526Copper River83094266QTUBL 10870S86E25Copper River83095267QTUBL 10970S86E25Copper River83096268QTUBL 11070S86E25Copper River83097269QTUBL 11170S87E30Copper River83098270QTUBL 11270S86E2526Copper River83099271QTUBL 11370S86E25Copper River83100


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

70



272QTUBL 11470S86E25Copper River83101273QTUBL 11570S86E25Copper River83102274QTUBL 11670S87E30Copper River83103275QTUBL 11770S86E2526Copper River83104276QTUBL 11870S86E25Copper River83105277QTUBL 11970S86E25Copper River83106278QTUBL 12070S86E25Copper River83107279QTUBL 12170S87E30Copper River83108280QTUBL 12270S86E2526Copper River83109281QTUBL 12370S86E25Copper River83110282QTUBL 12470S86E25Copper River83111No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num283QTUBL 12570S86E25Copper River83112284QTUBL 12670S87E30Copper River83113285QTUBL 12770S86E2324Copper River83114286QTUBL 12870S86E2425Copper River83115287QTUBL 12970S86E2425Copper River83116288QTUBL 13070S86E2425Copper River83117289QTUBL 13170S87E1930Copper River83118290QTUBL 13270S86E24Copper River83119291QTUBL 13370S86E24Copper River83120292QTUBL 13470S86E24Copper River83121293QTUBL 13570S87E19Copper River83122294QTUBL 13670S86E24Copper River83123295QTUBL 13770S86E24Copper River83124296QTUBL 13870S86E24Copper River83125297QTUBL 13970S87E19Copper River83126298QTUBL 14070S86E24Copper River83127299QTUBL 14170S86E24Copper River83128300QTUBL 14270S86E24Copper River83129301QTUBL 14370S87E19Copper River83130302QTUBL 14470S86E2324Copper River83131303QTUBL 14570S86E24Copper River83132304QTUBL 14670S86E24Copper River83133305QTUBL 14770S86E24Copper River83134306QTUBL 14870S87E19Copper River83135307QTUBL 14970S86E2324Copper River83136308QTUBL 15070S86E24Copper River83137309QTUBL 15170S86E24Copper River83138310QTUBL 15270S86E24Copper River83139311QTUBL 15370S87E19Copper River83140312QTUBL 15470S86E2324Copper River83141313QTUBL 15570S86E24Copper River83142314QTUBL 15670S86E24Copper River83143315QTUBL 15770S86E24Copper River83144316QTUBL 15870S87E19Copper River83145317QTUBL 15970S86E2324Copper River83146


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

71



318QTUBL 16070S86E24Copper River83147319QTUBL 16170S86E24Copper River83148320QTUBL 16270S86E24Copper River83149321QTUBL 16370S87E19Copper River83150322QTUBL 16470S86E2324Copper River83151323QTUBL 16570S86E24Copper River83152324QTUBL 16670S86E24Copper River83153325QTUBL 16770S86E24Copper River83154326QTUBL 16870S87E19Copper River83155327QTUBL 16970S86E2326Copper River83156328QTUBL 17070S86E26Copper River83157329QTUBL 17170S86E26Copper River83158330QTUBL 17270S86E26Copper River83159No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num331QTUBL 17370S86E26Copper River83160332QTUBL 17470S86E2324Copper River83161333QTUBL 17570S86E2324Copper River83162334QTUBL 17670S86E24Copper River83163335QTUBL 17770S86E24Copper River83164336QTUBL 17870S86E23Copper River83165337QTUBL 17970S86E23Copper River83166338QTUBL 18070S86E23Copper River83167339QTUBL 18170S86E23Copper River83168340FGUBL 170S87E30Copper River84686341FGUBL 270S87E30Copper River84687342FGUBL 370S87E29Copper River84688343FGUBL 470S87E30Copper River84689344FGUBL 570S87E30Copper River84690345FGUBL 670S87E29Copper River84691346FGUBL 770S87E30Copper River84692347FGUBL 870S87E30Copper River84693348FGUBL 970S87E29Copper River84694349FGUBL 1070S87E30Copper River84695350FGUBL 1170S87E30Copper River84696351FGUBL 1270S87E29Copper River84697352FGUBL 1370S87E29Copper River84698353FGUBL 1470S87E30Copper River84699354FGUBL 1570S87E30Copper River84700355FGUBL 1670S87E29Copper River84701356FGUBL 1770S87E29Copper River84702357FGUBL 1870S87E30Copper River84703358FGUBL 1970S87E30Copper River84704359FGUBL 2070S87E29Copper River84705360FGUBL 2170S87E29Copper River84706361FGUBL 2270S86E35Copper River84707362FGUBL 2370S86E35Copper River84708363FGUBL 2470S86E3536Copper River84709


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

72



364FGUBL 2570S86E36Copper River84710365FGUBL 2670S86E36Copper River84711366FGUBL 2770S86E36Copper River84712367FGUBL 2870S87E31Copper River84713368FGUBL 2970S87E31Copper River84714369FGUBL 3070S87E31Copper River84715370FGUBL 3170S87E32Copper River84716371FGUBL 3270S87E32Copper River84717372FGUBL 3370S86E35Copper River84718373FGUBL 3470S86E35Copper River84719374FGUBL 3570S86E3536Copper River84720375FGUBL 3670S86E36Copper River84721376FGUBL 3770S86E36Copper River84722377FGUBL 3870S86E36Copper River84723378FGUBL 3970S87E31Copper River84724No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num379FGUBL 4070S87E31Copper River84725380FGUBL 4170S87E31Copper River84726381FGUBL 4270S87E32Copper River84727382FGUBL 4370S87E32Copper River84728383FGUBL 4470S86E35Copper River84729384FGUBL 4570S86E3536Copper River84730385FGUBL 4670S86E36Copper River84731386FGUBL 4770S86E36Copper River84732387FGUBL 4870S86E36Copper River84733388FGUBL 4970S87E31Copper River84734389FGUBL 5070S87E31Copper River84735390FGUBL 5170S87E31Copper River84736391FGUBL 5270S87E32Copper River84737392FGUBL 5370S87E32Copper River84738393FGUBL 5470S86E35Copper River84739394FGUBL 5570S86E35Copper River84740395FGUBL 5670S86E3536Copper River84741396FGUBL 5770S86E36Copper River84742397FGUBL 5870S86E36Copper River84743398FGUBL 5970S86E36Copper River84744399FGUBL 6070S87E31Copper River84745400FGUBL 6170S87E31Copper River84746401FGUBL 6270S87E31Copper River84747402FGUBL 6370S87E32Copper River84748403FGUBL 6470S87E32Copper River84749404FGUBL 6570S86E35Copper River84750405FGUBL 6670S86E35Copper River84751406FGUBL 6770S86E3536Copper River84752407FGUBL 6870S86E36Copper River84753408FGUBL 6970S86E36Copper River84754409FGUBL 7070S86E36Copper River84755


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

73







410FGUBL 7170S87E31Copper River84756411FGUBL 7270S87E31Copper River84757412FGUBL 7370S87E31Copper River84758413FGUBL 7470S87E32Copper River84759414FGUBL 7570S87E32Copper River84760415FGUBL 7670S86E35Copper River84761416FGUBL 7770S86E35Copper River84762417FGUBL 7870S86E35Copper River84763418FGUBL 7970S86E36Copper River84764419FGUBL 8070S86E36Copper River84765420FGUBL 8170S86E36Copper River84766421FGUBL 8270S87E31Copper River84767422FGUBL 8370S87E31Copper River84768423FGUBL 8470S87E31Copper River84769424FGUBL 8570S87E32Copper River84770425FGUBL 8670S87E32Copper River84771426FGUBL 8770S86E35Copper River84772No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num427FGUBL 8870S86E35Copper River84773428FGUBL 8970S86E3536Copper River84774429FGUBL 9070S86E36Copper River84775430FGUBL 9170S86E36Copper River84776431FGUBL 9270S86E36Copper River84777432FGUBL 9370S87E31Copper River84778433FGUBL 9470S87E31Copper River84779434FGUBL 9570S87E31Copper River84780435FGUBL 9670S87E32Copper River84781436FGUBL 9770S87E32Copper River84782437FGUBL 9870S86E35Copper River84783438FGUBL 9970S86E35Copper River84784439FGUBL 10070S86E3536Copper River84785440FGUBL 10170S86E36Copper River84786441FGUBL 10270S86E36Copper River84787442FGUBL 10370S86E36Copper River84788443FGUBL 10470S87E31Copper River84789444FGUBL 10570S87E31Copper River84790445FGUBL 10670S87E31Copper River84791446FGUBL 10770S87E32Copper River84792447FGUBL 10870S87E32Copper River84793448FGUBL 10970S86E35Copper River84794449FGUBL 11070S86E3536Copper River84795450FGUBL 11170S86E36Copper River84796451FGUBL 11270S86E36Copper River84797452FGUBL 11370S86E36Copper River84798453FGUBL 11470S87E31Copper River84799454FGUBL 11570S87E31Copper River84800455FGUBL 11670S87E31Copper River84801


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

74



456FGUBL 11770S87E32Copper River84802457FGUBL 11870S87E32Copper River84803458FGUBL 12270S87E2627Copper River84807459FGUBL 12370S87E26Copper River84808460FGUBL 12670S87E2627Copper River84811461FGUBL 12770S87E26Copper River84812462FGUBL 13070S87E2627Copper River84815463FGUBL 13170S87E26Copper River84816464FGUBL 13470S87E2627Copper River84819465FGUBL 13570S87E26Copper River84820466FGUBL 13870S87E2627Copper River84823467FGUBL 13970S87E26Copper River84824468FGUBL 14270S87E2627Copper River84827469FGUBL 14370S87E26Copper River84828470FGUBL 14670S87E2627Copper River84831471FGUBL 14770S87E26Copper River84832472FGUBL 15070S87E34Copper River84835473FGUBL 15170S87E34Copper River84836474FGUBL 15270S87E3435Copper River84837No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num475FGUBL 15370S87E35Copper River84838476FGUBL 15670S87E34Copper River84841477FGUBL 15770S87E34Copper River84842478FGUBL 15870S87E3435Copper River84843479FGUBL 15970S87E35Copper River84844480FGUBL 16170S87E34Copper River84846481FGUBL 16270S87E34Copper River84847482FGUBL 16370S87E3435Copper River84848483FGUBL 16470S87E35Copper River84849484FGUBL 16670S87E34Copper River84851485FGUBL 16770S87E34Copper River84852486FGUBL 16870S87E3435Copper River84853487FGUBL 16970S87E35Copper River84854488FGUBL 17170S87E34Copper River84856489FGUBL 17270S87E34Copper River84857490FGUBL 17370S87E3435Copper River84858491FGUBL 17470S87E35Copper River84859492FGUBL 17570S87E34Copper River84860493FGUBL 17670S87E34Copper River84861494FGUBL 17770S87E3435Copper River84862495FGUBL 17870S87E35Copper River84863496FGUBL 17970S87E34Copper River84864497FGUBL 18070S87E34Copper River84865498FGUBL 18170S87E3435Copper River84866499FGUBL 18270S87E34Copper River84867500FGUBL 18370S87E34Copper River84868501FGUBL 18470S87E3435Copper River84869


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

75





502FGUBL 18570S87E34Copper River84870503FGUBL 18670S87E34Copper River84871504FGUBL 18770S87E3435Copper River84872505FGUBL 18870S87E89Copper River84873506FGUBL 18970S87E89Copper River84874507FGUBL 19070S87E9Copper River84875508FGUBL 19170S87E9Copper River84876509FGUBL 19270S87E9Copper River84877510FGUBL 19370S87E89Copper River84878511FGUBL 19470S87E916Copper River84879512FGUBL 19570S87E916Copper River84880513FGUBL 19670S87E916Copper River84881514FGUBL 19770S87E1617Copper River84882515FGUBL 19870S87E16Copper River84883516FGUBL 19970S87E16Copper River84884517FGUBL 20070S87E16Copper River84885518FGUBL 20170S87E15Copper River84886519FGUBL 20270S87E1617Copper River84887520FGUBL 20370S87E16Copper River84888521FGUBL 20470S87E16Copper River84889522FGUBL 20570S87E16Copper River84890No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num523FGUBL 20670S87E15Copper River84891524FGUBL 20770S87E1617Copper River84892525FGUBL 20870S87E16Copper River84893526FGUBL 20970S87E16Copper River84894527FGUBL 21070S87E16Copper River84895528FGUBL 21170S87E15Copper River84896529FGUBL 21270S87E15Copper River84897530FGUBL 21370S87E1617Copper River84898531FGUBL 21470S87E16Copper River84899532FGUBL 21570S87E16Copper River84900533FGUBL 21670S87E16Copper River84901534FGUBL 21770S87E15Copper River84902535FGUBL 21870S87E15Copper River84903536FGUBL 21970S87E15Copper River84904537FGUBL 22070S87E15Copper River84905538FGUBL 22170S87E15Copper River84906539FGUBL 22270S87E15Copper River84907540FGUBL 22370S87E15Copper River84908541FGUBL 22470S87E15Copper River84909542FGUBL 22570S87E15Copper River84910543FGUBL 22670S87E1522Copper River84911544FGUBL 22770S87E78Copper River84912545FGUBL 22870S87E8Copper River84913546FGUBL 22970S87E8Copper River84914547FGUBL 23070S87E8Copper River84915


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

76



548FGUBL 23170S87E7Copper River84916549FGUBL 23270S87E78Copper River84917550FGUBL 23370S87E8Copper River84918551FGUBL 23470S87E8Copper River84919552FGUBL 23570S87E8Copper River84920553FGUBL 23670S87E718Copper River84921554FGUBL 23770S87E718Copper River84922555FGUBL 23870S87E78Copper River84923556FGUBL 23970S87E817Copper River84924557FGUBL 24070S87E817Copper River84925558FGUBL 24170S87E817Copper River84926559FGUBL 24270S86E13Copper River84927560FGUBL 24370S87E18Copper River84928561FGUBL 24470S87E18Copper River84929562FGUBL 24570S87E1718Copper River84930563FGUBL 24670S87E17Copper River84931564FGUBL 24770S87E17Copper River84932565FGUBL 24870S87E17Copper River84933566FGUBL 24970S86E13Copper River84934567FGUBL 25070S87E18Copper River84935568FGUBL 25170S87E18Copper River84936569FGUBL 25270S87E1718Copper River84937570FGUBL 25370S87E17Copper River84938No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num571FGUBL 25470S87E17Copper River84939572FGUBL 25570S87E17Copper River84940573FGUBL 25670S86E13Copper River84941574FGUBL 25770S87E18Copper River84942575FGUBL 25870S87E18Copper River84943576FGUBL 25970S87E1718Copper River84944577FGUBL 26070S87E17Copper River84945578FGUBL 26170S87E17Copper River84946579FGUBL 26270S87E17Copper River84947580FGUBL 26370S86E13Copper River84948581FGUBL 26470S87E18Copper River84949582FGUBL 26570S87E18Copper River84950583FGUBL 26670S87E1718Copper River84951584FGUBL 26770S87E17Copper River84952585FGUBL 26870S87E17Copper River84953586FGUBL 26970S87E17Copper River84954587FGUBL 27070S86E13Copper River84955588FGUBL 27170S87E18Copper River84956589FGUBL 27270S87E18Copper River84957590FGUBL 27370S87E1718Copper River84958591FGUBL 27470S87E17Copper River84959592FGUBL 27570S87E17Copper River84960593FGUBL 28370S87E17Copper River84968


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



---

77



594FGUBL 27770S86E13Copper River84962595FGUBL 27870S87E18Copper River84963596FGUBL 27970S87E18Copper River84964597FGUBL 28070S87E1718Copper River84965598FGUBL 28170S87E17Copper River84966599FGUBL 28270S87E17Copper River84967600FGUBL 27670S87E17Copper River84961601FGUBL 29070S87E17Copper River84975602FGUBL 28470S86E13Copper River84969603FGUBL 28570S87E18Copper River84970604FGUBL 28670S87E18Copper River84971605FGUBL 28770S87E1718Copper River84972606FGUBL 28870S87E17Copper River84973607FGUBL 28970S87E17Copper River84974608FGUBL 29770S87E17Copper River84982609FGUBL 29170S86E13Copper River84976610FGUBL 29270S87E18Copper River84977611FGUBL 29370S87E18Copper River84978612FGUBL 29470S87E1718Copper River84979613FGUBL 29570S87E17Copper River84980614FGUBL 29670S87E17Copper River84981615FGUBL 30470S87E1720Copper River84989616FGUBL 29870S86E1324Copper River84983617FGUBL 29970S87E1819Copper River84984618FGUBL 30070S87E1819Copper River84985No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num619FGUBL 30170S87E1718Copper River84986620FGUBL 30270S87E1720Copper River84987621FGUBL 30370S87E1720Copper River84988622FGUBL 30570S87E32Copper River84990623FGUBL 30670S87E3233Copper River84991624FGUBL 30770S87E33Copper River84992625FGUBL 30870S87E33Copper River84993626FGUBL 30970S87E33Copper River84994627FGUBL 31070S87E34Copper River84995628FGUBL 31170S87E32Copper River84996629FGUBL 31270S87E3233Copper River84997630FGUBL 31370S87E33Copper River84998631FGUBL 31470S87E33Copper River84999632FGUBL 31570S87E33Copper River85000633FGUBL 31670S87E34Copper River85001634FGUBL 31770S87E32Copper River85002635FGUBL 31870S87E3233Copper River85003636FGUBL 31970S87E33Copper River85004637FGUBL 32070S87E33Copper River85005638FGUBL 32170S87E33Copper River85006639FGUBL 32270S87E34Copper River85007


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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78







640FGUBL 32370S87E32Copper River85008641FGUBL 32470S87E3233Copper River85009642FGUBL 32570S87E33Copper River85010643FGUBL 32670S87E33Copper River85011644FGUBL 32770S87E33Copper River85012645FGUBL 32870S87E34Copper River85013646FGUBL 32970S87E32Copper River85014647FGUBL 33070S87E3233Copper River85015648FGUBL 33170S87E33Copper River85016649FGUBL 33270S87E33Copper River85017650FGUBL 33370S87E33Copper River85018651FGUBL 33470S87E34Copper River85019652FGUBL 33570S87E32Copper River85020653FGUBL 33670S87E3233Copper River85021654FGUBL 33770S87E33Copper River85022655FGUBL 33870S87E33Copper River85023656FGUBL 33970S87E33Copper River85024657FGUBL 34070S87E34Copper River85025658FGUBL 34170S87E32Copper River85026659FGUBL 34270S87E3233Copper River85027660FGUBL 34370S87E33Copper River85028661FGUBL 34470S87E33Copper River85029662FGUBL 34570S87E33Copper River85030663FGUBL 34670S87E34Copper River85031664FGUBL 34770S87E32Copper River85032665FGUBL 34870S87E3233Copper River85033666FGUBL 34970S87E33Copper River85034No.Claim_NameTownshipRangeSection-1Section-2MeridianAA_Num667FGUBL 35070S87E33Copper River85035668FGUBL 35170S87E33Copper River85036669FGUBL 35270S87E34Copper River85037670FGUBL 35370S87E32Copper River85038671FGUBL 35470S87E3233Copper River85039672FGUBL 35570S87E33Copper River85040673FGUBL 35670S87E33Copper River85041674FGUBL 35770S87E33Copper River85042675FGUBL 35870S87E34Copper River85043676FGUBL 35971S87E6Copper River85044677FGUBL 36071S87E6Copper River85045678FGUBL 36171S87E6Copper River85046679FGUBL 36271S87E5Copper River85047680FGUBL 36371S87E5Copper River85048681FGUBL 36471S87E5Copper River85049682FGUBL 36571S87E45Copper River85050683FGUBL 36671S87E4Copper River85051684FGUBL 36771S87E4Copper River85052685FGUBL 36871S87E4Copper River85053


AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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79



686FGUBL 36971S87E3Copper River85054687FGUBL 37071S87E3Copper River85055688FGUBL 37171S87E3Copper River85056689FGUBL 37271S87E6Copper River85057690FGUBL 37371S87E6Copper River85058691FGUBL 37471S87E6Copper River85059692FGUBL 37571S87E3Copper River85060693FGUBL 37671S87E3Copper River85061694FGUBL 37771S87E3Copper River85062695FGUBL 37871S86E2Copper River85063696FGUBL 37971S86E12Copper River85064697FGUBL 38071S86E1Copper River85065698FGUBL 38171S86E1Copper River85066699FGUBL 38271S86E1Copper River85067700FGUBL 38371S86E2Copper River85068701FGUBL 38471S86E12Copper River85069702FGUBL 38571S86E1Copper River85070703FGUBL 38671S86E1Copper River85071704FGUBL 38771S86E12Copper River85072705FGUBL 38871S86E1Copper River85073706FGUBL 38971S86E1Copper River85074707FGUBL 39071S86E1Copper River85075708FGUBL 39171S86E1Copper River85076709FGUBL 39271S86E1Copper River85077710FGUBL 39371S86E1Copper River85078711FGUBL 39471S86E1Copper River85079




AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net



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80

UNION BAY PROJECT

KETCHIKAN RECORDING DISTRICT

FEDERAL MINING CLAIMS

No.Claim NameTownshipRangeSectionMeridianADL#1QTUBST 170S86E14Copper River6044282QTUBST 270S86E14Copper River6044293QTUBST 370S86E14Copper River6044304QTUBST 470S86E14Copper River6044315QTUBST 570S86E14Copper River6044326QTUBST 670S86E13Copper River604576






AVALON DEVELOPMENT CORPORATION

P.O. Box 80268, Fairbanks AK  99708

907-457-5159  Fax: 907-455-8069  avalon@alaska.net