manigotagan property

Silica

At Manigotagan, 170 km northeast of Winnipeg, Gossan continued to develop a silica sand deposit on the east shore of Lake Winnipeg. The Property, which encompasses 297 hectares, is directly across from Black Island where silica sand was extensively quarried prior to the island becoming a Provincial Park.

In May of 2008, Gossan conducted a 26-hole sonic drill program to test the eastern border of the Property towards an open pit where the silica sand formation outcrops near surface; to assess the known area of the silica formation to the south; and to investigate the southern portion of the Property. This initial program of sonic drilling has yielded near-perfect 10-foot core sections with excellent recovery. The quality of the sampling will have important economic implications for assessing the Property. A number of holes could not be completed to depth.

Drilling to date has been successful in outlining substantial zones of silica sand with a thickness exceeding 5 metres and ranging to over 15 metres. These zones, with lengths known to exceed 400m and 600m, are both open on one or more sides.

Manigotagan silica sand has potential uses in foundries and smelters; in the production of float or container glass; and in the oil & gas industry as frac sand. Silica sand from the property has been subjected to a variety of tests that indicate it is of a high purity with few contaminants and that it is similar to the silica sands previously quarried at nearby Black Island. A composite of 19 samples, returned a silica content of 94.2% without sizing or treatment. Sizing, washing or other simple treatments significantly improve the purity. Tests to date indicate that a component of these silica sands meet the requirements for frac sand in shallow gas wells and metallurgical flux.

Sample preparation and analysis takes considerable time. Recent test results of various samples of Manigotagan silica sand have exceeded all of the minimum standards for frac sand used by the oil and gas industry. Testing for use as frac sand in the Spring of 2009, conducted by PropTester Inc., resulted in samples of 20/40 mesh silica sand meeting ISO standards for quality 20/40 mesh Proppant – Class ISO 7K Proppant. Samples of 30/50 mesh silica sand also achieved ISO standards for quality 30/50 mesh Proppant – Class ISO 6K Proppant. Additional tests are ongoing to further improve the ratings of these two sand fractions as well as other commercial grades. Results from this analysis may lead to a scoping study giving initial consideration to markets and logistics.

In July of 2009, Gossan purchased a 0.5% gross production royalty that was outstanding on the Manigotagan Property.