Canadian Mining Statistics

Exploration expenditures in Canada have risen through the years as Canada's mineral output has risen because increased production has made it clear that Canada is an attractive exploration target and because increased mining profits from Canadian mines have provided more money for exploration. While Canada has produced base and precious metals for almost 150 years, by current standards of large-scale production, Canada did not become a major producer until more recently : of silver since the early 1900s; of lead and gold since the 1920s; of nickel and platinum group metals since the 1930s; of cobalt since about 1955, with a brief production peak after 1905 that resulted from peak production from the cobalt-nickel arsenide-rich native silver deposits at Cobalt, Ontario, where the initial discovery was made in 1903; of copper and zinc since the 1960s.(A History of Mining and Mineral Exploration in Canada, D.A.Cranstone,2002)

In 2006, Canadian mineral production was valued at $33.6 billion, a 22.7% increase from the $27.4 billion reported in 2005. This increase in the overall value of mineral production was due to significant growth in the value of metallic mineral production. The value of metallic mineral production for 2006 reached $21.2 billion, an increase of 45.4% from $14.6 billion in 2005. The value of nonmetallic mineral production decreased by 2.7% to $10.2 billion from $10.5 billion in 2005.

Metals

Overall, the value of metallic mineral production showed a significant increase of 45.4% in 2006. The value of copper boasted a significant increase of 78.8% over 2005, whereas the quantity produced showed a marginal increase of 3.1%. The average price of copper, in Canadian dollars, increased over 70% during 2006, causing the value of copper production to soar.

In 2006, iron ore saw its volume increase by 12.2% and its value by 10.5%. Although the volume of gold produced in 2006 decreased by 13.5% from 2005, its value saw a respectable increase of 8.4% to over $2.2 billion. The largest percentage increase for metals in 2006 was the value of zinc production, which grew by a remarkable 101.5% from 2005. Its value of production reached $2.1 billion, up from $1.0 billion the year before despite the fact that the volume of zinc in 2006 decreased by 4.0%.

Canadian diamond production in 2006 registered a 7.2% increase in volume and a 9.7% decrease in value compared to 2005. The 6.4% appreciation of the Canadian dollar versus the U.S. dollar contributed to the decline. Ontario continue to lead the country in its percentage share of Canada's mineral output in 2006.(Mineral Production, Information Bulletin March 2007)

The Advantages of Mining in Canada

Politically Stable: Canada offers a politically stable environment in which to operate a junior exploration company thereby reducing one of the business risks in operating such a company.

• Favourable Mining Laws: Canada is a resources country with a history of mining, which has led to laws being enacted to encourage mining.
• Government Exploration Data: Encouragement by the authorities extends to funding data surveys and providing exploration information at modest cost to companies to assist them with their search for resources.
• Tax Incentives: for Canadians investing in exploration have very generous tax incentives available to them. The exploration company effectively gives up its right to tax losses on the relevant expenditures in favour of the Canadian investor.
• Pool of Expertise: Canada is a leading mining country and has a huge pool of expertise and mining knowledge.

General Geology

The Southern Province rocks in the area comprise the Huronian Supergroup basinal sediments. only the uppermost of the four groups is represented in this area - the Cobalt Group. This group consists of the lower Coleman member, which is primarily conglomerate with interbedded argillites and wackes. Also represented are the finely bedded, grey to maroon coloured, shaley mudstones and siltstones with some coarser wackes of the Firstbrook member. This develops into a coarsening upwards sequences as it grades into the Lorrain Formation of arenites, arkoses and quartzites.

The Superior Province is characterized by mafic and intermediate to felsic metavolcanic rocks as flows, tuffs and breccias. Cherts and iron formations are found to the west near the Town of Temagami.

The Nipissing diabase is an intrusive sill undulating throughout the area. Many mineral occurrences, most notably the well-known silver-cobalt-arsenide vein deposits of the Cobalt area, the centre of which is approximately 30 km to the north of ADT's Temagami East property, are associated with either or both the upper and lower contact of this sill.

The Superior Province volcanic rocks are well exposed in the Temagami area in Strathy, Strathcona, Briggs, Phyllis, Banting, Best and over into Cassells Townships and trend in a northeasterly belt roughly paralleling the Grenville Front. In central South Lorrain Township, the Silver Centre silver mining camp, an outlying associated camp to the main Cobalt Camp, also has well exposed volcanic basement lithologies. The predominant trend of theses two volcanic assemblages are roughly on strike with one another separated by band of Huronian sediment approximately 17 km wide. The relatively flat-lying Huronian Supergroup sedimentary rocks lie unconformably over the near-vertical volcanic sequences. These two areas of volcanic exposure may well be continuous beneath the Huronian cover although poor mapping coverage, limited access and little deep exploration have hindered confirmation of this possibility. This main belt occurs within 5 km north of the ADT's Temagami East claim block. There is also volcanic basement exposed in southern South Lorrain Township on ADT claims. At least one company, Panterra Minerals Inc., has done some work to apparently try to define the extension of Archean lithologies beneath the Huronian cover. These results have not been interpreted. The high sensitivity magnetometer and spectrometer airborne survey was completed by Terraquest Ltd. in January, 1997.

Additionally, the structure in this area is very significant. The Lake Temiskaming Structural Zone (LTSZ) or the Lake Temiskaming Rift Valley is a part of the Ottawa-Bonnechere Graben system, which joins with the St. Lawrence Graben system, all of which have been related to the opening of the Atlantic Ocean.

A number of northwest trending faults in the Temagami East claim block area are associated with this structural zone, which, along with the Ottawa-Bonnechere Graben system, remains seismically active.

Because these structures are deep-seated, they form a major plumbing system and therefore conduits for not only kimberlite-associated rocks, but mineralizing fluids as well. This system of faults has been associated with kimberlitic and similar intrusions from Cobalt-New Liskeard through to Attawapiskat.

Infrastructure and Physiography

ADT's Temagami North, Cobalt South and Temagami East exploration properties are all located in an historical mining center with well developed infrastructure and easy access. The properties are surrounded by population centers, including North Bay, Ontario to the south, New Liskeard in the north, Notre Dame du Nord in Quebec, and Ville Maire, Quebec to the east. World-class mining centers such as Timmins and Sudbury, Ontario, and Rouyn-Noranda Quebec are within a 3 hours drive by highway from the properties. Cobalt, Ontario, which was the site of Canada's first underground mining, and continuous mine operations for more than 100 years is located between the Temagami North and Cobalt South properties as is the Haileybury School of Mines. The village of Temagami, which is famous as a summer cottage community, is located 10 km west of the Temagami East Property. Provincial highways 11 and 65 in Ontario crosses part of the properties, and numerous forestry and hydro power roads provide good access to most parts the properties.

The Temagami North claims are located mostly on flat farmland broken by small hills and forest. Summer field conditions extend from June through September. Winters are cold, but suitable for exploration operations such as drilling and geophysics. Break-up in the spring and freeze-up in the fall limit access to the area.

The climate features intermittently cold winters (-40C to +10C) and mild summers, although temperatures can reach +30C for short periods. Snow commonly reaches 1 to 1.5 m depth in winter, and summer rains average 3 to 5 cm per month. Work can continue throughout the year, with some types of work being better suited for winter, including ground geophysical surveys, and drilling (depending on local topographic conditions).

Timiskaming First Nations (TFN)

The TFN unextinguished Aboriginal Title to its traditional lands covers a large area in the Lake Timiskaming region, including the Temagami North and most of the Cobalt South and Temagami East properties. The TFN has never signed away rights to its traditional territory. Aboriginal Title has been recognized by the Supreme Court of Canada as a real property interest that requires the consent of the TFN for development.

Metal Exploration and Mining

More than half a billion ounces of silver have been mined from the Cobalt mining camp near the Temagami North property since the first discovery in 1903. Production records are incomplete, but also reportedly include 4,500,000 pounds copper, 24,800,000 pounds cobalt, 3,000,000 pounds nickel, and 1,200,000 pounds lead (Pb). These silver-cobalt-arsenide vein deposits are centered around the town of Cobalt. Mines have produced silver from west of ADT's Temagami North claims in Lundy, east to near the Quebec border, and south to Cobalt, and reappearing in South Lorrain Township, north of the Temagami East. A potentially similar silver vein occurrence, known as the Cooper Lake showing, occurs within Temagami East though is not part of ADT's current holdings. The majority of the production has been from the east half Coleman Township near the town of Cobalt. More detailed discussion of these occurrences is provided below.

Regional geologic mapping suggests rocks similar to those hosting Cobalt silver deposits might extend onto ADT's claims.

The silver deposits occur in steeply dipping veins and associated wallrock. The principle ore assemblage is silver-cobalt-nickel arsenides within a gangue of calcite and dolomite +/- quartz and chlorite. Native silver is the main ore mineral with a number of accessory minerals such as: sulphides, antimonides, arsenides, silicates, oxides and native minerals. The veins range in width from 1mm to 1m and crosscut Archean, Huronian and Nipissing-age rocks. The majority of the early production came from veins within the Coleman member of the Huronian sediments in Cobalt and from the Nipissing sill in Gowganda. Later production extended into the Archean basement volcanic rocks.

Native silver generally occurs in carbonate veins (+/- quartz) associated with a variety of mineral assemblages that are rare in other settings, such as Ni- Co-Fe arsenides, Ni-Co-Fe-Sb sulpharsenides and bismuth minerals. Most often, only some of these minerals are present. The classic examples of this type of deposit typically contain significant Ag-Ni-Co (Lefebure, 1996). Cobalt-silver-arsenide deposits generally occur in areas underlain by continental crust and are generally believed to have formed late or post-tectonically. In some cases the veins appear related to basinal subsidence and continental rifting. These conditions are present in the Cobalt embayment, which fits the classic model of this deposit type.

Productive veins are both shear and dilatant in nature and many continue for great distances and depths. The ore, however, is localized in irregular shoots ranging up to 50m vertically and over 100m horizontally. These ore shoots have yet to be found more than 200m vertically away from either the upper or lower contact of the Nipissing sill. Generally speaking, the ore shoots below the sill have high-grade silver and nickel-cobalt arsenides at the top of the shoot whereas the ore shoots above the Nipissing sill have the high-grade mineralization at the bottom of the shoot (Petruk et al, 1972). The most productive areas within the veins are typically at either inflection points within the structures or at intersections of two or more structures.

The ore minerals occur in pods, bands, dendrites, plates, wire, leafs and zoned rosettes.

Significant amounts of copper and nickel have been economically produced from several of the Cobalt area mines, although none were economic deposits in and of themselves. These associated base metal sulphides are common in the Archean volcanic rocks of the area, particularly within the graphitic interflow units of schist, chert, tuff and breccia and even pillow selvages. In these instances, the deposits consisted of massive pyrite, pyrrhotite, and chalcopyrite. In one mine, over 30,000 tons of 1.75% Cu were delineated and mined. Values of Pb, Zn, Ni and Cu mineralization have been reported from over 77 of the mines and occurrences in the camp. The base metals commonly occur adjacent to and within late carbonate veins, particularly where these veins have been emplaced along interflow sedimentary units. Their presence is therefore often used as an exploration tool as they often occur vertically below the cobalt-silver mineralization within the near vertical veins proximal to the unconformity.

Canadian Diamonds

After 10 years of discovery, development and new mining, diamond exploration remains very strong. Active exploration in the NWT, Nunavut, Alberta, Saskatchewan, Manitoba, Ontario and Quebec are underway at various stages of financial commitment and geological understanding. Although the current level of activity is somewhat below that of the frenetic early 1990's more of Canada is being explored for diamonds today than at any time in its history.

Diamond exploration in Canada has been highly successful. Soon Canada will produce over 15% of the world's gem quality stones. Canada is already a world-class producer. Diamonds occur predominantly in kimberlites and over 300 kimberlites have already been discovered in Canada. Normally about 30% of kimberlites contain diamonds and some 0.5% of these may be economic. So far about 5% of Canada's newly discovered kimberlites are economic - the highest proportion in the world. This makes Canada the best place to explore for diamonds. Conditions for major Canadian exploration are now excellent.

Scientific and Exploration Discipline are Now Widespread.

The growth in parochial knowledge of Canadian diamonds is huge and ready to be exploited. Canadian diamonds are certifiable and in great demand internationally, particularly because of their disciplined certification and clear non-conflict origin.

The De Beers Victor pipe is in a corridor that extends north-westwards from the Wawa area. In 1993 a local gold prospector panning for gold on the eastern shores of Lake Superior near Wawa, Ontario found three diamonds. This instigated exploration by local prospectors and junior companies to find the source. The area lies at the southern end of the Temiskaming structural zone, a 500km long structural corridor extending north-westwards from the Wawa area. This corridor contains not only newly discovered kimberlites in the Timmins area but also De Beers' diamondiferous Victor pipe currently being evaluated - 36Mmt inferred resource at 0.43ct/tonne.

The Ontario Geological Survey completed a regional stream sediment heavy mineral programme for Kimberlite Indicator Minerals (KIM : open file report 6088) and located numerous such minerals in drainages of the Temagami area. Subsequent exploration has located diamonds in kimberlites in the Wawa area (Band Ore's GQ property and Pele Mountain's adjoining claims).