Geology Report


     

    


     

      
        

      

    

    


    


    


    


     

    


     

    SUMMARY
      GEOLOGY REPORT ON THE 

     

    WILLOWVALE
      PROJECT, 

     

    OMINECA
      MINING DIVISION, BRITISH COLUMBIA

     

    


     

    For

     

    SUSTUT
      EXPLORATION INC.

     

    


     

    


     

    By:

     

    George
      Nicholson, P.Geo.

     

    


     

    


     

    Vancouver,
      BC

     

    August,
      2006

     

    


     

    
      

    


    
      
         

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        

      

      
        	 	
                Page

              
	
                TABLE
                  OF CONTENTS

              	
                2

              
	 	 
	
                LIST
                  OF FIGURES

              	
                2

              
	 	 	 
	
                1.

              	
                INTRODUCTION
                  

              	
                3

              
	 	 	 
	
                2.

              	
                LOCATION/ACCESS/TOPOGRAPHY

              	
                4

              
	 	 	 
	
                3.

              	
                PROPERTY
                  DESCRIPTION

              	
                6

              
	 	 	 
	
                4.

              	
                HISTORY

              	
                8

              
	 	 	 
	
                5.

              	
                REGIONAL
                  GEOLOGY

              	
                9

              
	 	 	 
	
                6.

              	
                PROPERTY
                  GEOLOGY

              	
                12

              
	 	 	 
	
                7.

              	
                SOIL
                  GEOCHEMICAL SURVEY RESULTS

              	
                13

              
	 	 	 
	
                8.

              	
                ROCK
                  SAMPLE RESULTS - WILLOW PROPERTY

              	
                14

              
	 	 	 
	
                9.

              	
                CONCLUSIONS

              	
                16

              
	 	 	 
	
                10.

              	
                RECOMMENDATIONS
                  AND COST ESTIMATES

              	
                17

              
	 	 	 
	
                11.

              	
                STATEMENT
                  OF QUALIFICATIONS

              	
                18

              
	 	 	 
	
                12.

              	
                REFERENCES

              	
                19

              
	 	 	 


      

    

     

    
      List
        of Figures

       

      
        	
                Figure
                  1.     Location
                  Map

              	
                5

              
	
                Figure
                  2.     Claim /
                  Topographical Map

              	
                7

              
	
                Figure
                  3.     Regional
                  Geology

              	
                11

              
	
                Figure
                  4.     Rock Samples
                  Location Map

              	
                15

              


      

      


       

    

     


     

      
        

      

    

    

      
        
          Willowvale
            Project 

        

        
          Page2

          
            

          

        

        
          
          

        

      


      
        

      

    

     

    
      	
              1.

            	
              Introduction

            


    

     

    The
      Willowvale project consists of one mineral claim, the Willow, totalling 445.70
      hectares. The property is owned 100% by Terry Hughes as President in trust
      for
      Sustut Exploration Inc. The claims are located in the Omineca Mining Division,
      NTS map sheet 94D/10E. The property is 4.5 km east of the Sustut
      River.

     

    The
      Sustut copper deposit, 50,000,000 tonnes grading 1.25% copper, is located 7.0
      km
      to the northwest in a similar geological environment. Road access is via the
      Omineca mining access road located 14 km to the north.

     

    Previous
      work during the months of August and September, 1997 consisting of a program
      of
      geological mapping, prospecting, rock and soil sampling was completed. This
      report documents the 1997 exploration program and makes recommendations for
      the
      new owners to expand upon previous discoveries. A Phase I programme is
      recommended at $30,000.

     


    
      
        Willowvale
          Project


      

      
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              2.

            	
              Location/Access/Topography

            


    

     

    The
      Willowvale project is located in the Omineca Mining Division, map sheet NTS
      94D/10E, Lat. 56°33’N, Long. 126°35’W. The UTM zone is 9 and the location is 627
      0000 N and 648 000 E. The claims are located 3 km due south of Sustut
      Peak.

     

    Access
      is
      by helicopter from one of the bases in the vicinity. There are bases usually
      at
      Johansen Lake, 25 km to the east, or Bear Lake area, 40 km to the south. The
      closest road access is 14 km to the north by using the Omineca mining access
      road.

     

    The
      property is located in steep mountainous terrain with steep serrated ridges
      and
      deep wide U-shaped glaciated valley bottoms. Elevation on the claim ranges
      from
      1,100 metres to 2,000 metres above sea level. Below treeline, approximately
      1,400 metres, the slopes are covered by dense coniferous forest.

     

     

     

     

     

     

     

     

    
      
        

      



    
      
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    FIGURE
      1. Location
      Map


    
      
        Willowvale
          Project


      

      
        Page5

        
          

        

      

      
        
        

      

    

     

     

      
        

      

    

     

    
 

    
      	
              3.

            	
              Property
                Description

            


    

     

    The
      Willow property is owned 100% by Terry Hughes, in trust for and as President
      of
      Sustut Exploration Inc. The claims were acquired from Richard Simpson,
      propsector, for a payment of $20,000 (USD) and a 21⁄2% Net Smelter Royalty. The
      property is comprised of 1 mineral claim comprising 445.70 hectares. The claims
      were staked using the British Columbia Mineral Tenure Online internet staking.
      The claims are located in the Omineca Mining Division, NTS 94D/10E. Claim
      details are as follows:

     

    
      	
              Claim
                Name

            	
              Claim
                Size (Ha)

            	
              Record
                #

            	
              Expiry
                Date

            
	
              Willow

            	
              445.70

            	
              530309

            	
              December
                13, 1997

            


    

     

     

    In
      British Columbia, to maintain the claims in good standing, $4.00 per hectare
      in
      work or cash in lieu is due annually for the first two years followed by $8.00
      per hectare annually thereafter.

     

     

    
      	 	
              N.B.

            	
              The
                moniker Willowvale project is used interchangeably with Willow property,
                the actual claim name.

            


    

     

     

     

     

     

    
      
        

      



    
      
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          Project


      

      
        Page6

        
          

        

      

      
        
        

      

    


    

    FIGURE
      2. Claim
      / Topographical Map


    
      
        Willowvale
          Project


      

      
        Page7

        
          

        

      

      
        
        

      

    


    
      	
              4.

            	
              History

            


    

     

    The
      first
      documented geological mapping in the vicinity of the Willow property was in
      1948
      by Lord, who documented several mineralized showings in the area during a
      regional geological mapping survey.

     

    The
      Sustut copper deposit, located 7 km to the northwest, was discovered late in
      the
      field season of 1971 by Falconbridge. This discovery triggered extensive
      prospecting and claim staking in the immediate area including the Willow
      property. The Willow mineralization was probably discovered at this time as
      Wesfrob, a subsidiary of Falconbridge, staked the property. The Willow showing
      is a large gossan at the base of a steep cliff so prospecting would have
      discovered the prospect.

     

    Wesfrob
      Mines Ltd., owner of the Willow prospect in 1973 was completing a major drill
      program on the Sustut copper deposit located on the northwest. During 1973
      they
      drilled two deep holes, due to the steep topography, totalling 3,100 feet to
      intersect the Willow mineralization. The results of these holes are unknown
      at
      this time.

     

    During
      1974 and 1975, N.B. Church completed regional mapping and property descriptions,
      including the Willow prospect, for the Department of Energy, Mines and Petroleum
      Resources.

     

    In
      1997,
      Sikanni Mine Development Ltd. undertook a rock and soil sampling programme
      on
      behalf of the owner at the time, Cross Lake Minerals Ltd. The property was
      subsequently allowed to lapse.

     

    There
      has
      been no other work completed on the Willowvale project to the author’s
      knowledge.

     


    
      
        Willowvale
          Project


      

      
        Page8

        
          

        

      

      
        
        

      

    


    
      	
              5.

            	
              Regional
                Geology

            


    

     

    The
      regional geology has been described in detail by Church, B.N.-1974/75 when
      he
      completed two years of geological mapping in the Willow showing area. The
      following is his interpretation of the regional geology:

     

    “The
      oldest rocks of the area are found on the spur east of Sustut Peak and the
      lower
      east side of Mount Savage. These are Late Palaeozoic strata which in the lower
      part consist of locally folded alternating coralline limestone and argillite
      beds. The rocks pass upward through several thousand feet of section into a
      more
      regular sequence of mainly greywacke and argillite plus a thick sequence of
      spherulitic rhyolite. Triassic basalt breccias and augite and plagioclase-rich
      volcanic sandstone rest on the Palaeozoic assemblage with little or no angular
      discordance.

     

    The
      Mesozoic pile is readily subdivided into three fundamental rock stratigraphic
      units. The lowest unit, about 7,000 feet thick, is identified as mainly a
      submarine deposit consisting primarily of augite porphyry basalt with local
      intercalations of aphanitic basalt and coarse feldspar porphyry basaltic
      andesite. Massive volcanic breccia deposits predominant in this part of the
      section although lava flows, bedded breccia, and pillow lavas are locally
      conspicuous. The middle unit consists of about 3,500 feet of what is believed
      to
      be mostly subaerial deposits of mixed andesite and basalt volcaniclastic rocks,
      lahars, tuff breccia, volcanic sandstone, and conglomerate beds - which rest
      on
      relatively thin fossiliferous Triassic tuffaceous argillite, chert, and
      carbonate beds. The uppermost unit, about 4,000 feet thick, comprises locally
      well-layered maroon and grey welded and non-welded ash flow tuffs, and volcanic
      breccias ranging from basalt to rhyolite in composition.

     

    These
      strata are cut by a series of plutons referred to generally as the Omineca
      intrusions, a wide assortment of stocks, sills, and smaller bodies of mostly
      granitic composition and Jurassic age.

     

    A
      varied
      development of folds and faults is evident in the map area. The belt of Hazelton
      and Upper Takla rocks flanking the northeast side of Willow Creek, extending
      through to Two Lake Creek, is characterized by gently undulating beds cut by
      minor faults. In marked contrast, the Palaeozoic and lower Takla rocks on the
      spurs northwest of Sustut Lake and on the north part of the Mount Savage display
      some spectacular folds, major dislocations, and a faulted repetition of the
      strata.”

     


    
      
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          Project


      

      
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    FIGURE
      3. Regional
      Geology


    
      
        Willowvale
          Project


      

      
        Page10

        
          

        

      

      
        
        

      

    


    
      	
              6.

            	
              Property
                Geology

            


    

     

    The
      Willow property is underlain by the Upper Triassic Takla Group. The Group
      consists of the Savage Mountain Formation overlain by the Moosevale Formation.
      The Savage Mountain Formation consists of basic augite porphyry basalt flow,
      breccia, pillow breccia, tuff and interbedded bladed feldspar porphyry. The
      Moosevale Formation is comprised of andesitic and basaltic volcanic
      conglomerate, breccia, sandstone, tuff and argillite.

     

    A
      major
      fault lies in the Willow creek valley and strikes northwest-southeast and cuts
      the south end of the Sustut property 7 km to the northwest. This fault parallels
      the Moose Valley fault to the northeast.

     

    The
      geology of the Willow property is similar to the Sustut cooper geology to the
      northwest but the mineralized beds occur at a lower horizon and are in a
      different lithological unit of the Takla Group. The Takla augite porphyry
      breccias are overlain by a sequence of thinly bedded aphanitic basalt lavas,
      and
      in turn they are overlain by a few hundred feet of fossiliferous shales, chert,
      and carbonate beds, and, uppermost, a thick volaniclastic unit. The strata
      are
      offset locally by faults subparallel to a set of strong set of cross joints
      striking 025 degrees and dipping 85 degrees southeast.

     

    The
      Willow mineralization is in the few hundred feet of sediments in a thin
      tuffaceous argillite bed just below the base of the volcaniclastic unit. This
      volcaniclastic unit outcrops in the steep cliffs above the mineralized bed.
      Limonitic argillite beds which outcrop at the base of the cliffs above the
      talus
      slopes have an orientation of 150/30S. Fine grained diabase dykes 1.0 to 2.0
      m
      are oriented subparallel to local faults and trend roughly 015/80E.

     

    The
      two
      drill hole collars from the 1973 Wesfrob drilling program were located at UTM
      Northing of 6270725 and an Easting of 646420 and an elevation of 1,860 metres.
      

     

     


    
      
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        Page11

        
          

        

      

      
        
        

      

    


    
      	
              7.

            	
              Soil
                Geochemical Survey Results

            


    

     

    Previous
      soil sampling occurred outside of the current claim boundaries. There are no
      known silt or soil geochemical values obtained within the current
      claims.

     

     

     

     

     

     

     


    
      
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          Project


      

      
        Page12

        
          

        

      

      
        
        

      

    


    
      	
              8.

            	
              Rock
                Sample Results - Willow
                Property

            


    

     

    A
      total
      of six rock samples were collected from the Willow showing by previous
      operators. The reason that many of the samples are “grabs” is that the terrain
      is extremely steep to traverse right along the Willow showing (refer to Figure
      4
      for results and locations). The descriptions and results are as
      follows:

     

    
      	
              Sample
                No.

            	
              Cu

              (%
                or ppm)

            	
              Ag
                

              (g/t
                or ppm)

            	
              Description

            
	
              92004

            	
              4.94
                %

            	
              35.4
                g/t

            	
              Grab,
                Willow showing, Diss. Bornite in shale. Outcrop. Elev = 1,635
                metres

            
	
              92005

            	
              451
                ppm

            	
              <0.2
                ppm

            	
              Grab,
                silicified green mafic tuff. Diss. Py, Aspy?

            
	
              92006

            	
              245
                ppm

            	
              <0.2
                ppm

            	
              2
                metre chip. Pyritic tuffaceous sediments. Elev = 1,675
                metres

            
	
              92007

            	
              6.28%

            	
              44.8
                g/t

            	
              Grab
                of float boulder, trace bornite. Argillic seds. Elev = 1,550
                metres

            
	
              92008

            	
              467
                ppm

            	
              <0.2
                ppm

            	
              Grab
                silicified shears CPY, mal in 10-15 cm shears, 10 metre talus boulder.
                Elev = 1,400 metres

            
	
              92009

            	
              6,169
                ppm

            	
              1.6
                ppm

            	
              Grab
                float boulder. Mal Stained green mafic
                tuff

            


    

    


     


    
      
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    FIGURE
      4. ROCK SAMPLES LOCATION MAP


    
      
        Willowvale
          Project


      

      
        Page14

        
          

        

      

      
        
        

      

    

     

     

      
        

      

    

    
 

    
      	
              9.

            	
              Conclusions

            


    

     

    The
      results of the earlier exploration programs justify further exploration work
      on
      the Willow property. The geology and mineralization, although at a lower
      stratigraphic horizon, are similar to the Sustut copper deposit located 7 km
      to
      the northwest.

     

    The
      property has not had any detailed geological exploration work completed upon
      it
      other than two deep drill holes. The results of the talus sampling below the
      Willow showing and the results of the reconnaissance talus/soil sampling
      indicate that the prospect and anomalies could be expanded in size.

     

     

     

     

     

     

    
 

    
      
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          Project


      

      
        Page15

        
          

        

      

      
        
        

      

    

     

     

      
        

      

    

    
 

    
      	
              10.

            	
              Recommendations
                and Cost Estimates

            


    

     

    A
      phased
      exploration program is recommended to further explore the Willow property.
      The
      results of previous soil/talus sampling indicate that this exploration method
      should be used as the first phase. This phase would be concentrated upon the
      south facing slope covering the southern half of the Willow claim. The sample
      lines should be sampled north-south in the timbered slopes at 25 metre intervals
      with lines at 100 metre spacing. There should be approximately 8 lines to test
      this slope. Included in this first phase a program of detailed rock talus
      sampling and mapping should be completed over the known Willow showing to
      delineate the size and grade of the prospect.

     

    Depending
      upon the results of the first phase an Induced Polarization survey may be
      contemplated over any soil anomalies on the soil grid. Blast trenching of any
      soil/geophysical anomalies and the Willow prospect, depending on the results
      of
      the sampling and mapping program, would follow.

     

    A
      cost
      estimate to complete the Phase I program of soil/talus sampling and rock
      sampling and mapping of the Willow prospect is as follows:

     

    
      	
              Item
                Description

            	
              Cost
                Estimate

            
	
              Helicopter
                support (6 hrs x $1,000/hr)

            	
              $6,000

            
	
              Labour
                (2 tech. x 7 days @ $350/day)

            	
              $4,900

            
	
              Sample
                Analyses (100 soil + 50 rock @ $30/sample)

            	
              $4,500

            
	
              Room
                and board

            	
              $2,000

            
	
              Mob./Demob.
                + truck + fuel

            	
              $3,000

            
	
              Report
                and drafting

            	
              $5,000

            
	
              10%
                contingency

            	
              $2,500

            
	
              Total

            	
              $27,900

            
	
               

            	
              ROUNDED
                = $30,000

            


    

    


     

    Success
      contingent, Phase II would consist of blast trenching along strike at an
      estimated cost of $80,000.

     


    
      
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              11.

            	
              Statement
                of Qualifications

            


    

     

    I,
      GEORGE
      E.
      NICHOLSON,
      of
      21910 - 61st Avenue, Langley, British Columbia hereby certify that:

     

    
      	 	
              1.

            	
              I
                am a graduate of the University of British Columbia with a degree
                in
                Geology (B.Sc., 1986);

            


    

     

    
      	 	
              2.

            	
              I
                have practiced my profession as a Geologist continuously since graduation;
                

            


    

     

    
      	 	
              3.

            	
              I
                am a director of Nicholson and Associates Natural Resource Development
                Inc., a private geological consulting company, and a director of
                United
                Exploration Management Inc., a private resource management and research
                company;

            


    

     

    
      	 	
              4.

            	
              I
                am a member of the Association of Professional Engineers and Geoscientists
                of the Province of British Columbia (No.
                19796);

            


    

     

    
      	 	
              5.

            	
              I
                am a Fellow of the Royal Geographic Society (No.
                423161);

            


    

     

    
      	 	
              6.

            	
              There
                are no material facts or material changes in the subject matter of
                this
                report that would mislead the
                reader;

            


    

     

    
      	 	
              7.

            	
              I
                have no interest, direct or indirect, in the properties or common
                shares
                of Sustut Exploration Inc., nor do I expect to receive
                any;

            


    

     

    
      	 	
              8.

            	
              I
                have prepared this summary report from existing public files and
                from my
                own knowledge of working in the area;
                and,

            


    

     

    
      	 	
              9.

            	
              I
                hereby grant my permission for Sustut Exploration Inc. to use this
                Report
                for any corporate use normal to their
                business.

            


    

     

    DATED
      at
      Vancouver, British Columbia this _____ day of August, 2006.

     

    ____________________________________

    George
      E.
      Nicholson, P.Geo., FRGS

     


    
      
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              12.

            	
              References

            


    

     

    Assessment
      Report #5060-5064, 5109, 5110 - Diamond Drilling Reports on Wesfrob Mines Ltd.,
      Sustut Deposit by G. Harper and D.H. Brown 1973-1974.

     

    Church
      N.B., 1974: Geology of the Sustut Area; Geology Exploration and Mining in
      British Columbia; in 1973. Brit. Columb. Dept. Mines Pet. Resources, p.
      411-455.

     

    Church
      N.B., 1975: Geology of the Sustut Area; Exploration and Mining in British
      Columbia in 1974; Brit. Columb. Dept. Mines Pet. Resour.

     

    Lord
      C.S., 1948: McConnell Creek Map-Area, Cassiar District, British Columbia; Geol.
      Surv. Canada, Memoir 251.

     

    Melville
      D.M. September 1992: NTS 094D McConnell Creek, Geological Survey
      Branch.

     

    Miller-Tait,
      J.; Church, C. 1997: Report on the 1997 Exploration Program on the Willow
      Property, Omineca Mining Division, British Columbia; for Sustut Exploration
      Inc.

     

    Minfile
      Reports #094D 038, #094D 054, #094D 057, #094D 063, #094D 077, #094D 078, #094D
      079, #094D 081, #094D 082, #094D 088: Geological Survey Branch, Mineral Resource
      Division. Ministry of Energy, Mines and Petroleum Resources.

     

    Richards
      T.A., 1975: McConnell Creek Map Area 94D/E Geology.

     

     

     

    Page
      18