bird river project

Palladium/Platinum/Base Metals

The Bird River Project, which covers over 21 kilometres of the Bird River Sill Complex, is comprised of the Western (Ward’s - Coppermine) Extension; four separate blocks of the Sill – the National Ledin, the Chrome and its Extension, the Peterson and the Page Blocks; and the Ore Fault Zone. This complex carries significant concentrations of palladium and platinum along with nickel, copper, zinc and chromite. The Bird River Property is located about 40 km east of Lac Du Bonnet, Manitoba and, along the Sill, approximately 6 km west and northwest of Mustang Minerals’ Maskwa Deposit.

On March 26, 2007 the Company entered into an option and joint venture agreement on the Bird River Property with Marathon PGM Corporation (Marathon). Under the terms of the agreement, Marathon triggered the formation of a joint venture on August 25, 2008, by making a final $400,000 cash payment and having expended in excess of $3 million on the Bird River Project. To date, Marathon has expended about $4.8 million on the Project which includes the acquisition of a 100% interest in the Ore Fault Property, subject to a 1% net smelter return royalty.

Marathon undertook a major drill program at the eastern end of the Project during the winter and into the spring of 2008 with the goal of developing a NI 43-101 resource. The program which totaled 38 holes (6,938m) was comprised of 13 holes (2,047m) at the Page Block; 4 holes (583m) at the Galaxy Zone; and 21 holes (4,308m) at the Ore Fault North Zone.

Results from the 13 holes drilled at the Page Block confirm historic drill results and expand the known dimensions of the Page Zone mineralization. The current drill program has established that the Page Zone is actually much wider than previously thought with thicker intersections of mineralization extending further to the south. The mineralization outlined to date dips to the south at a shallow angle making it ideal for potential extraction by open pit mining. Currently the maximum thickness of the mineralized sequence is known to be 180 metres.

Marathon’s geological interpretation from the Ore Fault North Zone drilling reveals that there are two separate mineralized systems. Nickel-Copper-PGM sulphide mineralization is hosted within north-west trending and moderately dipping ultramafic units of the Bird River Sill and north trending VMS-type Zinc-Silver-Copper mineralization is hosted within near vertical quartz veins and associated chlorite-garnet schist.

Based on the results of the Winter 2008 Drill Program and prior drill data, NI 43-101 compliant resource estimates were completed by independent mining consultants and Qualified Persons, F.H. Brown C.P.G., Pr.Sci.Nat., and Antoine Yassa, P.Geo. of P&E Mining Consultants Inc.

A Winter 2009 Drill Program was completed with a total of 971m drilled in 7 holes designed to enhance the two known resources. Two holes (534m) were drilled at the Ore Fault North Zone and five holes (437m) were drilled at the Page Block. All of these holes are within the current resource pit shell and will add to the existing resource base. Highlights of the drill program included a 2.8m intersection of Ni-Cu-PGM mineralization grading 2.66% nickel, 2.10% copper, 15.25 gpt silver and 2.03 gpt PGM + gold in a sulphide lens at the Page Block within hole MP-09-17 and a 2.5m intersection of Cu-Zn-Ag mineralization grading 2.23% zinc, 0.74% copper and 50.47 gpt silver in a sulphide lens at the Ore Fault Zone within hole MF-09-27.

A Spring 2009 Drill Program was completed on the Coppermine Zone located at the western end of the Bird River Project consisting of 6 holes (549m). Lenses of sulphides were intersected in 5 holes along an 800 metre long mineralized strike length. A single hole at the Coppermine Zone was drilled by Canex Placer Ltd in 1973 which contained a 12.2m intersection grading 0.24 % nickel, 0.42 % copper, 1.02 gpt platinum and 1.19 gpt palladium.
Upon the triggering of the joint venture with Marathon expending $3 million on the Project, both parties each had a double deemed joint venture interest of $6 million for the purposes of calculating dilution.

On October 28, 2008, Gossan contributed $27,069 to the $823,551 of exploration expenditures incurred by Marathon beyond the $3 million required to earn a 50% interest in the Property, in order to hold an even 47% interest in the Project. Gossan funded $122,168 of the joint venture’s Summer-Fall-2008 exploration program to maintain its 47% interest in the Property. Gossan elected not to contribute to the Winter 2009 Drill Program. Subsequent to the fiscal 2009 year-end on May 11, 2009, Gossan contributed $70,540 to the Spring 2009 Drill Program to hold an approximate 45.4% interest in the Project.

During fiscal 2009, Gossan received two $50,000 advance net profits or advance NSR royalty payments from Marathon which are payable each September and March until commercial production is acheived.